Summary of Document Content
Core Content
The document provides a comprehensive overview of the Chinese stock market performance and detailed analysis of two listed companies: Sunwoda Electronic (300207: SZ) and Shenzhen Kingdom Sci-Tech (600446: SH). It includes market indices, daily market review, sector performance, company news, financial forecasts, and investment recommendations.
Market Overview
- The Chinese stock market showed significant upward movement despite volatility, breaking the downward trend.
- SSE Composite closed at 2737.60, up 3.09%.
- SZSE Component closed at 9418.20, up 3.70%.
- ChiNext closed at 1994.07, up 4.60%.
- HSI closed at 19683.11, up 2.54%.
- HSCEI closed at 8241.36, up 2.65%.
- Total market volume reached CNY 429 billion.
- 2463 tickers rose, 83 tickers fell, indicating a strong positive trend.
Sector Performance
- Computer sector was the top performer, with an increase of 6.03%.
- Several companies in the sector hit the ceiling price, including:
- Beijing TRS Information Technology Co., Ltd. (300229): +10.02%
- Shenzhen Hirsun Technology Incorporated (300277): +10.01%
- Beijing VRV Software Corporation Limited (300352): +10%
- Non-bank sector also showed strong performance, with:
- Huatai Securities Co., Ltd. (601688): +10.04%
- Orient Securities Company Limited (600958): +9.98%
Daily Headlines
- The central bank is increasing open-market operations around the Lunar New Year, leading to a looser monetary environment.
- Efforts to prevent companies from dumping yuan are being intensified.
- A risk incident involving CNY 969 million was discovered at Citic Bank.
- The Yuan's exchange rate is stable, according to Premier Li Keqiang.
- China encourages local governments to study bond sales to individual and institutional investors.
Company News
- Chalco (601600.SH): Expects 200 million yuan net profit in 2015.
- China First Heavy (601106.SH): Sees a net loss of ~1.75 billion yuan in 2015.
- Citic Bank (601998.SH): Confirmed a risk incident at Lanzhou branch.
- Citic Securities (600030.SH): Net profit rose 74.9% year-on-year to 19.8 billion yuan in 2015.
- Great Wall Motor (601633.SH): FY net profit was 8 billion yuan, little changed from the previous year.
- Guangshen Rail (601333.SH): Expects FY net profit to rise 45%-65%.
Sunwoda Electronic (300207: SZ)
Investment Highlights
- Outperform rating initiated.
- Sustained CAGR of 168.32% since 2013.
- Phone battery business is a key driver of growth.
- Collaboration with Chery Automobile for new product development.
- Established a subsidiary in Qinghai for lithium battery production and BMS cooperation with Huawei and Schneider.
- Purchased a 6% stake in PowerWise Holding Co., Ltd. for advanced technologies.
Financial Forecast
- EPS forecast: CNY 0.54 (2015), CNY 0.93 (2016), CNY 1.34 (2017).
- Net profit forecast: CNY 339 million (2015), CNY 583 million (2016), CNY 844 million (2017).
- PE forecast: 35.7x (2015), 20.7x (2016), 14.3x (2017).
- Potential Risks: Slower demand for terminal devices, policy changes in new energy, and slower-than-expected growth in energy storage orders.
Key Financial Indicators
| FY |
2014 |
2015E |
2016E |
2017E |
| Revenue (Mn/CNY) |
4279 |
6656 |
9260 |
11177 |
| YoY (%) |
94.2% |
55.5% |
39.1% |
20.7% |
| Net Profit (Mn/CNY) |
168 |
339 |
583 |
844 |
| YoY (%) |
107.3% |
101.6% |
72.1% |
44.9% |
| Gross Margin (%) |
13.9% |
14.6% |
15.5% |
16.5% |
| Net Profit Margin (%) |
3.9% |
5.1% |
6.3% |
7.6% |
| ROE (%) |
11.6% |
18.4% |
24.1% |
25.8% |
Financial Ratios
| Ratio |
2014 |
2015E |
2016E |
2017E |
| PE |
74.9 |
37.2 |
21.6 |
14.9 |
| PB |
8.7 |
6.8 |
5.2 |
3.9 |
| EPS (CNY) |
0.27 |
0.54 |
0.93 |
1.34 |
| OCFPS (CNY) |
1.17 |
-0.93 |
0.51 |
0.90 |
| NAVPS (CNY) |
2.30 |
2.92 |
3.85 |
5.19 |
Shenzhen Kingdom Sci-Tech (600446: SH)
Investment Highlights
- Buy rating maintained.
- Signed a strategic partnership with Ping An Insurance Group.
- Plans to raise CNY 2.74 billion through a private placement.
- Funds will be used for E-finance data center, Internet+ Cloud Platform, and asset management.
- Lianliyang, a sub-company of Ping An, will take over 6% of Shenzhen Kingdom's shares and increase its stake to 6.5%.
Key Financial Indicators
| FY |
2014 |
2015E |
2016E |
2017E |
| Revenue (Mn/CNY) |
2368 |
2904 |
3755 |
4577 |
| YoY (%) |
16.6% |
22.6% |
29.3% |
21.9% |
| Net Profit (Mn/CNY) |
153 |
225 |
342 |
481 |
| YoY (%) |
40.4% |
46.5% |
52.0% |
40.9% |
| Gross Margin (%) |
21.6% |
23.2% |
24.0% |
25.7% |
| Net Profit Margin (%) |
6.5% |
7.7% |
9.1% |
10.5% |
| ROE (%) |
18.3% |
22.4% |
25.4% |
26.4% |
| EPS (CNY) |
0.19 |
0.27 |
0.42 |
0.59 |
| OCFPS (CNY) |
0.12 |
0.09 |
0.25 |
0.41 |
Financial Ratios
| Ratio |
2014 |
2015E |
2016E |
2017E |
| PE |
34.4 |
24.5 |
18.7 |
15.5 |
| PB |
8.7 |
6.8 |
5.2 |
3.9 |
| EPS (CNY) |
0.19 |
0.27 |
0.42 |
0.59 |
| OCFPS (CNY) |
0.12 |
0.09 |
0.25 |
0.41 |
Key Financial Data for Shenzhen Kingdom Sci-Tech
| Metric |
Value (Mn/CNY) |
| Closing Price |
49.19 |
| Total Shares |
830.51 |
| Shares Outstanding |
796.91 |
| Market Cap |
40852.61 |
| Market Float |
39199.83 |
| Net Assets |
1153.36 |
| Total Assets |
2491.46 |
| BVPS |
1.39 |
Private Placement Details
- 65.04 million new shares issued at CNY 42.13/share.
- Funds raised: no more than CNY 2.74 billion.
- Lianliyang (Ping An's sub-company) will subscribe for 8.44 million shares (13% of private placement), increasing its stake to 6.5%.
- Feipeng Investment (100% held by Zhongzhi Enterprise Group) is the largest subscriber with 1424 million.
- Other institutional investors include Taoyun Investment, Wanliu Investment, Ze Hao Fund, and Huishi Shengshi Fund.
Investment Recommendation
- Buy rating is maintained due to its competitiveness in E-financial innovation.
- EPS forecast for 2016 and 2017 is CNY 0.42 and CNY 0.59, respectively.
- Potential risks include slower progress in Internet finance and failure to complete private placement.
Peer Review
| Ticker |
Name |
Mkt Cap (USD 1 Bn) |
PE (15E) |
PE (16E) |
PB |
EV/EBITDA |
| 600548:SH |
Shenzhen Expressway |
14.52 |
8.40 |
13.69 |
1.41 |
7.59 |
| 600377:SH |
Jiangsu Expressway |
37.36 |
13.43 |
12.91 |
1.83 |
11.74 |
| 600350:SH |
Shandong Hi-Speed |
23.48 |
8.54 |
7.66 |
1.07 |
7.16 |
Analysts
- LIU Liang: Analyst for Sunwoda Electronic.
- YUAN Yuming: Analyst for Shenzhen Kingdom Sci-Tech.
- QIAN Lufeng: Assistant to YUAN Yuming.
- LI Xing: Translator for both companies.
Conclusion
- Both companies show strong growth and strategic moves.
- Sunwoda Electronic benefits from its battery business and collaboration with major brands.
- Shenzhen Kingdom Sci-Tech is expanding into E-finance with Ping An Insurance Group, aiming to build an integrated E-finance cloud platform.
- The market is influenced by central bank policies and increased liquidity.
- The document highlights investment opportunities and strategic partnerships for both companies.
