20160125-招商证券_香港_-Morning_Express_CMS_HK__Research_Highlights_14页_539kb

CMS(HK) Research Highlights Summary

Sands China (1928 HK, HK$23.25, BUY, TP HK$28.1)

• Core Content: Sands China announced an interim dividend of HK$0.99 per share, consistent with last year's dividend. The company is expected to pay a total dividend of HK$1.99 for FY15E, in line with management guidance, implying a 145% payout ratio.
• Main Points:
  • The dividend payment is stable and aligns with the previous guidance, removing concerns about a potential cut.
  • Operating cash flow remained healthy at HK$1,815 million, despite weakened earnings from Macau gaming.
  • The company's dividend yield is the most attractive among Macau casino operators.
  • The stock trades at a deep discount due to volatile market sentiment, but the company's strong dividend and stabilizing quarterly results support its valuation.
• Key Information:
  • Dividend yield: 10%
  • TP: HK$28.10
  • P/E: 16x FY16E
  • EV/EBITDA: 12x

China Medical System (867 HK, HK$8.98, BUY, TP HK$12.5)

• Core Content: China Medical System's management reaffirmed its growth potential, and recent tender results were better than expected.
• Main Points:
  • The company is expected to achieve high-teen growth for Deanxit in FY16E.
  • Ursofalk and Bioflor have successfully renewed their licenses, supporting growth.
  • The company's newly launched products are expected to contribute significantly to sales.
• Key Information:
  • TP: HK$12.50
  • P/E: 15.6x FY16E
  • The recent RMB devaluation negatively impacts earnings and assets in HKD terms, but the company has hedging solutions in place.
  • The stock is considered a top pick for high yield seekers.

PAX Global (327 HK, HK$6.97, BUY, TP HK$12.0)

• Core Content: PAX Global is poised for significant growth in U.S. sales, expected to double in FY16E.
• Main Points:
  • The rollout of multilane terminals PX5/PX7 marks a major breakthrough in the U.S. market.
  • PAX is confident in its ability to gain market share from Verifone and Ingenico due to its competitive advantages.
  • The company expects robust overseas growth with a 27% YoY increase in FY16E.
• Key Information:
  • TP: HK$12.0
  • P/E: 7.2x FY16E ex-cash
  • The stock is trading at a discount to global peers, reflecting its strong fundamentals.

Minsheng (1988 HK, HK$6.65, SELL, TP HK$6.33)

• Core Content: Minsheng's 2015 results were in line with forecasts, but asset quality remained a concern.
• Main Points:
  • Net profit for 2015 grew by 3.5% YoY to RMB46.1 billion.
  • NPL ratio increased to 1.60% in Q4 2015, indicating continued asset quality deterioration.
  • The company's share price is expected to face further downside due to RMB depreciation and asset quality issues.
• Key Information:
  • TP: HK$6.33
  • P/B: 0.56x FY16E
  • P/E: 4.16x FY16E

What to Watch

• Economic Data:
  • Germany: Ifo Business Climate (108.7), Ifo Current Conditions (112.8)
  • U.S.: Monthly Home Price MM (0.50%), CaseShiller 20 MM SA (0.80%), Consumer Confidence (96.5), Fed Funds Target Rate (0.38%)
• Company Events:
  • Pico Far East Holdings Ltd. announced financial results for the year ending 31 October 2015.

Research Coverage List (As of January 25, 2016)

• Auto & Auto Parts:
  • Brilliance China: BUY, TP HK$12.5
  • China ZhengTong Auto: BUY, TP HK$5.48
  • Geely Automobile: BUY, TP HK$4.8
  • BAIC Motor: NEUTRAL, TP HK$8.0
  • Great Wall Motor: BUY, TP HK$24.44
  • Fuyao Glass: BUY, TP HK$63.4
  • China Harmony Auto: BUY, TP HK$8.0
• Oil and Gas:
  • Sinopec Oilfield Service: NEUTRAL, TP HK$2.7
  • China Oilfield Services: NEUTRAL, TP HK$8.7
  • Petrochina: BUY, TP HK$8.3
  • CNOOC: BUY, TP HK$10.8
• Property:
  • China Resources Land: BUY, TP HK$23.8
  • Yuzhou Property: BUY, TP HK$2.4
  • KWG Property: NEUTRAL, TP HK$5.9
  • Country Garden: NEUTRAL, TP HK$2.7
  • Agile Property: BUY, TP HK$4.8
  • PAX Global: BUY, TP HK$12.0
• Technology, Media & Telecom:
  • Wisdom: BUY, TP HK$7.0
  • C CHUANGLIAN ED: BUY, TP HK$0.79
  • Kingsoft: BUY, TP HK$27.42
  • NetDragon: BUY, TP HK$41.3
  • Linekong Interactive: NEUTRAL, TP HK$5.33
  • Cheetah Mobile: BUY, TP US$40.0
  • 58.com: BUY, TP US$93.0
  • Tencent: BUY, TP HK$174.0
  • Lenovo Group: BUY, TP HK$9.2
  • Sky Light: BUY, TP HK$1.3
• Textile & Garment:
  • China Lilang: BUY, TP HK$8.04
  • 361 Degrees: BUY, TP HK$3.61
  • Xstep International: BUY, TP HK$4.88
  • ANTA Sports Products: BUY, TP HK$24.44
• Food & Beverage:
  • Jiashili Group: BUY, TP HK$4.6
• Retail:
  • Sinomax: BUY, TP HK$1.43
  • Cosmo Lady: BUY, TP HK$7.74
  • Intime Retail Group: BUY, TP HK$14.8
  • JD: BUY, TP US$47.3
• Alternative Energy:
  • GCL-Poly Energy: BUY, TP HK$1.94
  • China Longyuan Power: BUY, TP HK$6.9
  • Huaneng Renewables: BUY, TP HK$2.5
  • Xinyi Solar: BUY, TP HK$4.2
• Port & Shipping:
  • SITC: BUY, TP HK$4.85
  • China Merchants Hldg: BUY, TP HK$32.3
  • Orient Overseas: BUY, TP HK$55.5