20160824-招商证券_香港_-Morning_Express_17页_1mb

报告摘要

Core Performance: 1H16 net profit grew by 52% YoY to HK$154mn, matching estimates. The increase was driven by higher power sales and waste treatment fees, up 54% and 45% respectively.
Project Expansion: MSW processing capacity will reach 7,600 tonnes per day by year-end due to the completion of the Xingyi project. Full-year contribution from the upgraded Eco-Tech I is expected in 2016E.
Dividend Policy: Declared a maiden interim dividend of HK1.1 cents/share, representing a payout ratio of ~14%. Management expects a payout ratio of at least 15% in the coming years, leading to an estimated DPS of HK2.9 cents for 2016E.
Valuation: The stock is currently trading at ~19x FY16E P/E, which is higher than peers (~16x). The TP of HK$4.4 is based on a 3-stage DCF model and implies a 23x FY16E P/E.

1H16 Performance: Service revenue and net profit grew by 6.1% and 10.4% YoY, respectively, beating consensus due to stronger wireline growth. Mobile service revenue grew 6.4% YoY, while wireless service revenue grew 5.9% YoY.
Margin Pressure: EBITDA margin dropped to 32.6% from 34.5% in 1H15, driven by increased selling and network costs. Management expects continued pressure on broadband margins due to competition from China Mobile.
Future Outlook: Concerns about weaker growth in 2H16 due to intensified competition and lower ARPU for broadband. Management guidance suggests continued challenges.
Valuation: TP of HK$4.13 implies a 4.2x EV/EBITDA and 15.1x FY16E P/E. The stock is viewed as neutral due to uncertainties in future growth.

1H16 Results: Core net profit rose 19% YoY to RMB657mn, with revenue up 18% YoY to RMB4.1bn. GPM remained at 32.5%.
Project Pipeline: The company is expected to add RMB20bn in saleable resources in 2H16E, leading to a 54% YoY increase in contracted sales. Management targets a 24% and 12% profit growth in FY16E and FY17E, respectively.
Valuation: The stock is at 64% discount to FY16E NAV and offers an 8.3% yield. It is expected to be re-rated to trade at 56% NAV discount, with a revised TP of HK$3.0.
Financial Health: Net gearing ratio decreased to 75.4% from FY15 y.e., indicating improved balance sheet.

1H16 Performance: Net profit remained flat YoY at RMB212mn, despite a 15% increase in installed capacity. The decline in average on-gird tariff and lower utilization impacted profitability.
Regional Focus: Datang plans to add 1.3GW of wind capacity in Shanxi, which is less curtailed than other regions. This could be a future growth highlight.
Direct Sales Impact: Direct sales accounted for less than 3% of total power sales, but the tariff discount from these sales continues to affect average on-grid tariffs.
Valuation: The stock is at 14.8x 2016E P/E, slightly above the sector average of 14x. Earnings growth is expected to be slow in 2016E but rebound in 2017/18E. TP of HK$0.87 is based on 1x 2016E PEG valuation.

1H16 Performance: Core profit declined by 11% YoY to RMB826mn, despite a 30.4% YoY revenue growth. GPM dropped to a record low of 20%.
Sales and Margin: Contracted sales grew by 37% YoY in 1H16, with a >90% cash collection rate. Net gearing decreased by 15ppts HoH to 69%.
Future Outlook: GPM recovery is expected to be slow, with revised FY16/17E earnings estimates down by 10% and 13% respectively. Management believes GPM will improve to 25% and 26% in 2016E and 2017E.
Valuation: The stock is at 58% discount to FY16E NAV, close to its 7-year mean. TP of HK$4.6 is based on a 57% discount to FY16E NAV of HK$10.6/share.

Interim Results: Non-bank financial sector results slightly exceeded expectations, while the property sector benefited from the real estate recovery in 1H16.
Market Outlook: Capital inflows are slowing, and emerging markets may face a dull period again due to geopolitical uncertainties. The SZ-HK Stock Connect is a long-term positive for the market, though it may not provide significant short-term stimulus.
Investment Advice: Investors are advised to take profits on rallies, as late August results could be worse than early in the month. The upcoming events, including HK Legco elections and US elections, may create volatility.
Research Coverage: As of August 24, 2016, several companies in the Auto, Oil and Gas, and Property sectors have been reviewed with varying ratings and TP estimates.

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