20130902-DBS_Group-Chow_Sang_Sang_Latest_growth_remains_supportive_12页_261kb

报告摘要

Chow Sang Sang Summary Report

Core Content

Chow Sang Sang (CSS) is a leading jewellery retailer in Greater China, with a strong presence in Hong Kong, Macau, and mainland China. This report provides a 1H13 performance review and updates on the company's financials, growth, and valuation.

Key Financial Highlights

1H13 Revenue: Increased by 55% year-over-year (y-o-y) to HK$14.1 billion.
1H13 Earnings: Rose by 40% to HK$615 million.
Core Profit: Achieved a 45% increase to HK$731 million.
Dividend per Share (DPS): Increased by 40% to HK$0.14.
Net Profit Margin: Declined slightly to 4.4% in 1H13 from 4.8% in 1H12.
Earnings Per Share (EPS): Increased to HK$1.85 in 1H13, up from HK$1.45 in 1H12.
Core EPS: Also rose to HK$1.85 in 1H13.
ROAE: Increased to 17.0% in 1H13 from 14.7% in 1H12.

Growth Drivers

Mainland Chinese Tourism: The influx of more tourists into Hong Kong and Macau has been a key driver for growth.
Gold Prices: Supportive gold prices have positively impacted the company's performance.
Same-Store Sales Growth (SSSG): Achieved 65% in Hong Kong/Macau and 45% in China in 2Q13.
Store Expansion: Net addition of 2 stores in Hong Kong and 12 in China, reaching a total of 366 stores.

Valuation and Recommendations

Price Target: Revised to HK$24.71 for a 12-month period, up from HK$20.99.
Trading at Discount: The stock is trading at a 13% discount to the new price target.
PE Ratio: 10.5x 12-month rolling PE, with a PEG of <0.5x.
Dividend Yield: Attractive yield of over 3%.
Recommendation: Maintain a BUY rating.

Financial Forecasts

Metric	2012A	2013F	2014F	2015F
Revenue (HK$ m)	18,260	25,029	27,733	30,427
Net Profit (HK$ m)	985	1,254	1,422	1,632
EPS (HK$)	1.45	1.85	2.10	2.41
Core EPS (HK$)	1.37	1.85	2.10	2.41
Net Profit Growth (%)	-10.3	27.4	13.4	14.8
Core EPS Growth (%)	-11.9	35.0	13.4	14.8
P/Book Value (X)	1.9	1.7	1.5	1.5
Net Debt/Equity (X)	0.1	0.1	0.1	0.1
ROAE (%)	14.7	17.0	17.3	17.8

Segmental Performance

Jewellery Retail: Achieved 50% revenue growth to HK$10.9 billion and 45% profit growth to HK$731 million.
Precious Metals Wholesale: Recorded 77% revenue growth to HK$3.084 billion and 125% profit growth to HK$41 million.
Securities & Futures Broking: Minimal growth in revenue and profit, with a 6% increase in revenue to HK$17 million and 28% in profit to HK$17 million.
Other Businesses: Slight profit decline, with 61% revenue growth to HK$102 million.

Store Expansion

Hong Kong and Macau: Projected to reach 61 stores by FY13, with 62 stores expected by FY15.
China: Expected to grow from 232 to 364 stores by FY15.
Total Stores: Projected to increase from 310 to 447 by FY15.

Peer Comparison

Company Name	Code	Price (HK$)	Market Cap (HK$ million)	13F PE	13F P/Sales	13F Yield	13F P/Bk	13F ROE
Chow Sang Sang*	116 HK	21.4	14,486	11.5	0.6	3.3	1.9	17.0
Emperor Watch	887 HK	0.6	4,129	10.0	0.6	3.3	0.9	9.6
Hengdeli Holdings*^	3389 HK	1.81	8,693	11.4	0.5	1.6	1.1	9.6
Luk Fook Hdg*#	590 HK	25.5	15,022	11.3	0.9	3.5	2.1	19.5
Oriental Watch*^#	398 HK	2.34	1,335	14.5	0.4	1.7	0.6	4.1
Chow Tai Fook#	1929 HK	10.7	107,000	16.7	1.5	1.9	2.9	18.1

Dividend Policy

Dividend Payout Ratio: Maintained at around 37.8%.
DPS Growth: Expected to increase to HK$0.91 by FY15.

Capital Structure

Net Debt/Equity: Reduced to 0.1 by FY15.
Current Ratio: Maintained around 3.1.
Quick Ratio: Improved to 0.9 by FY13.
Shareholder's Equity: Increased from HK$6,355 million in FY12 to HK$9,686 million in FY15.

Cash Flow

Operating Cash Flow Per Share (CFPS): Increased to HK$2.09 in 2013.
Free Cash Flow Per Share (FCFPS): Rose to HK$1.30 in 2013.
Net Cash Flow: Positive in 2013 and expected to continue with a slight decline in subsequent years.

Sensitivity Analysis

Staff Cost +/- 1%: Net Profit changes by +/- 1%.
Rentals +/- 1%: Net Profit changes by +/- 0.5%.
Other Assumptions: May impact financial performance and growth projections.

Key Assumptions and Outlook

Store Growth: Continued expansion in China and Hong Kong.
Inventory Management: Expected to improve, reducing fixed costs.
Rental Renegotiation: More room for renegotiation in Hong Kong.
Gross Margin: Normalizing overall gross margin expected.
Growth Momentum: Steady growth is expected to continue into 2H13.

Risk and Disclaimer

Valuation Uncertainty: Forecasts are based on assumptions and may not materialize.
No Guarantee: No assurance is given that future results will match projections.
Disclosure: The report is for DBS Vickers clients only and not to be used for investment decisions without independent advice.

This report highlights the strong performance and growth potential of Chow Sang Sang, driven by increased tourism and supportive gold prices, with a continued focus on store expansion and improved financial metrics.

展开完整摘要