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Summary of Document Content

Core Content Overview

The document provides a comprehensive review of the first-half of 2015 (1H15) results for several Hong Kong-listed companies, along with key economic updates and corporate news. It also includes market indices, upcoming economic data, and a list of research coverage for various stocks.

Key Company Results

Jiangnan Group (1366 HK, Buy)

• Revenue and net profit increased by 16.8% and 16.3% YoY to Rmb3,904.6m and Rmb288.2m respectively.
• Results matched expectations, with interim dividend of HK$2.5 cents per share declared.
• Revenue growth was driven by organic growth and the contribution of acquired subsidiaries (New Sun and Kai Da).
• Gross margin slightly decreased by 0.1 ppts to 15.7%, but net margin remained stable at 7.4%.

China Fiber Optic (3777 HK, Hold)

• Revenue and net profit declined by 10.0% and 6.9% YoY to Rmb885.4m and Rmb148.3m.
• Results were below expectations, and no interim dividend was declared.
• Gross margin improved by 3.3 ppts to 30.1%, driven by vertical integration and cost efficiencies.
• Selling and distribution expenses surged by 100.2% YoY, while administrative expenses increased by 27.8% YoY.

China Everbright International (257 HK, Buy)

• CEW, a subsidiary, acquired Dalian Dongda Water for no less than Rmb800m.
• Dongda Water operates 17 treatment plants with a contract volume of 1.125 million tons/day.
• The acquisition is expected to increase CEW's wastewater capacity to 4.6 million tons/day.
• This move aims to expand CEW's position in the Northeast China market.

Pa Shun (2038 HK, Buy)

• Net profit rose 13% YoY to HK$45m, excluding a one-off gain from convertible preferred shares.
• Revenue from wholesalers and rural hospitals grew 22% and 91% YoY, respectively.
• Self-operated pharmacies revenue fell 43% YoY due to store optimization.
• Pharmaceutical manufacturing revenue increased 23% YoY with a stronger sales team.
• Gross margin dropped by 2.1 ppts, and operating expenses rose 10% YoY.
• Net profit was 313% higher YoY due to the one-off gain, but excluding it, growth was 13%.

Changshouhua (1006 HK, Buy)

• Maintained flat revenue despite downward price pressure in the edible oil industry, due to 9% YoY sales-volume growth in own-brand corn oil.
• Non-brand oil sales dropped 43% YoY as the company focused on its own-brand products.
• Gross margin fell slightly to 21.7% from 22.1%, and net profit to shareholders declined 9.7% YoY due to dividend tax.
• Plans to invest in marketing and develop new oil products to strengthen market leadership.

CCCC (1800 HK, Buy)

• Revenue rose 11% YoY to Rmb175.8bn, driven by infrastructure construction and dredging.
• Gross margin remained stable at 10.6%, and net profit increased 13% YoY to Rmb6.812bn.
• Overseas business grew 18% YoY, with 31% of new contracts coming from overseas.
• Order backlog reached Rmb787.7bn or 2.15x FY14 revenue.

CRCC (1186 HK, Buy)

• Revenue was flat at Rmb262.9bn, due to mild growth in construction offset by declines in real estate and logistics.
• Net profit increased 3.3% YoY to Rmb5.33bn.
• New contracts decreased 18.4% YoY to Rmb317.9bn.
• Infrastructure construction revenue rose 2.5% YoY, and survey, design, and consultancy contracts increased 30% YoY, indicating potential for future projects.

CRG (390 HK, Buy)

• Revenue dropped 1% YoY to Rmb265bn, due to weak property and other segments, offset by infrastructure growth.
• New contracts fell 19% YoY to Rmb331.47bn due to government reforms.
• Survey, design, and consultancy new contracts rose 31% YoY, suggesting a positive outlook for future projects.
• Gross margin expanded 0.6 ppts to 8.14%.
• Net gearing at end-June was 134%, expected to decrease after A-shares issuance.

Uni Health (2211 HK, Buy)

• Revenue grew 26% YoY to Rmb2,571m, in line with expectations.
• Net profit missed expectations, but increased 9% YoY due to smaller minorities.
• Retail segment growth was 29% YoY, driving revenue.
• SSSG rose 10% YoY, but gross margin dipped 1.1 ppts due to product mix changes.
• Interim DPS of HK$1.5 cents was declared.
• Plans to trim dividend payout ratio to 46% to retain cash for acquisitions.

Emperor Watch & Jewellery (887 HK, NR)

• Interim revenue dropped 21% YoY to HK$2,420m, and gross margin fell 0.6 ppts to 24.5%.
• Net loss of HK$54m, with loss per share of HK$0.79 cents.
• Same-store sales declined 25% YoY due to anti-corruption campaign and decline in tourist spending.
• Jewellery business remains strong at 20% of revenue, but luxury watches continue to struggle.
• Plans to close one store in September and optimize Hong Kong retail network due to declining foot traffic.

Upcoming Economic Data

• Hong Kong

  • 3 Sep: Nikkei Hong Kong PMI (August)
  • 7 Sep: Foreign Reserves (August)

• China

  • 1 Sep: Manufacturing PMI (August)
  • 1 Sep: Non-manufacturing PMI (August)
  • 1 Sep: Caixin China PMI Mfg (August)
  • 1 Sep: Caixin China PMI Composite (August)
  • 1 Sep: Caixin China PMI Services (August)

• US

  • 4 Sep: Change in Nonfarm Payrolls (August)
  • 4 Sep: Two-Month Payroll Net Revision (August)
  • 4 Sep: Change in Private Payrolls (August)
  • 4 Sep: Change in Manufact. Payrolls (August)
  • 4 Sep: Unemployment Rate (August)
  • 4 Sep: Average Hourly Earnings MoM (August)
  • 4 Sep: Average Hourly Earnings YoY (August)
  • 4 Sep: Average Weekly Hours All Employees (August)

Key Economic Updates

• China's Economy is operating within an appropriate range, with continued world-leading growth.
• China removed the 75% loan-to-deposit ratio regulation, replacing it with a liquidity-monitoring indicator.

Market Indices (as of 31 August 2015)

Other News Highlights

• Legend Holdings reported a 209% profit increase to Rmb4.02bn, driven by property investment.
• China Construction Bank saw flat net profit due to rising bad loans, with non-performing loans increasing to 1.42%.
• CPIC reported 64.9% net profit growth due to investment income, but market share in insurance segments declined.
• Zoomlion recorded a net loss of Rmb310m in 1H15 due to overcapacity and weakening demand in the engineering machinery sector.
• Centa-City Leading Index for large units hit a record high, with luxury property prices expected to rise.
• DJIA surged 2.3% on Fed comments and stronger economic data.

Research Coverage Universe