20150813-光大证券-Everbright_Spot_11页_125kb

Everbright Spot Summary

Core Content Overview

This document provides a summary of financial results and market insights for several Hong Kong-listed companies, as well as economic data and industry updates from China and Hong Kong. The report highlights performance trends, strategic initiatives, and potential future impacts on stock prices.

Company Performance Highlights

Dragon Crown (0935 HK)

• 1H15 Results: Revenue increased by 1% YoY to HK$131m, but gross profit declined 5% YoY due to rising service costs and depreciation expenses.
• EPS: Remained unchanged at HK$3.5 cents.
• Key Factors: Falling administrative and financing costs offset the decline in gross profit.
• Future Outlook: Plans to enhance customer mix and explore M&A opportunities to improve profitability.

NagaCorp (3918 HK)

• 1H15 Results: Revenue surged 39% YoY to US$265m, driven by a strong VIP market, steady mass market, and one-off entrance fees.
• EBITDA: Increased 53% YoY to US$132.8m.
• EPS: Jumped 50% YoY to US$4.45 cents.
• Dividend: Interim dividend of US$2.67 cents declared, with a 60% payout ratio.
• Growth Drivers: Overseas junket incentive programs are expected to support rolling growth.
• Challenges: Potential changes in gaming tax rates could affect share prices in the second half.

Strategic Collaborations and Business Developments

Xinyi Solar (0968 HK)

• Partnered with Xinyi Glass (0868 HK) via Xinhe Logistics to provide road and river transportation services for glass products.
• Expected to reduce administrative costs, which currently account for 6.6% of total revenue.

GCL-Poly (3800 HK)

• GCL New Energy (0451 HK) issued a positive earnings alert for 1H15, with net profit rising from HK$39.9m to HK$90.0m.
• Reason: Increased profits from solar farm operations.
• Capacity: Targeting to develop 2GW solar farms this year, with total capacity reaching 2.6GW.
• Forecast: Stronger results expected in the second half as more solar farms come online.

Economic Data and Market Trends

Indices Performance (1H15)

Upcoming Economic Data

• Hong Kong:
  • 18 Aug: Unemployment Rate SA, CPI Composite YoY
  • 19 Aug: Composite Interest Rate
• China:
  • 14–18 Aug: Foreign Direct Investment YoY CNY
  • 18 Aug: China July Property Prices, MNI August Business Indicator
• US:
  • 14 Aug: PPI Final Demand YoY, Industrial Production MoM, Capacity Utilization, Manufacturing (SIC) Production, U. of Mich. Sentiment
  • 17 Aug: Empire Manufacturing, NAHB Housing Market Index
  • 18 Aug: Net Long-term TIC Flows, Total Net TIC Flows, Housing Starts, Building Permits

Market and Industry Insights

Chinese Yuan Depreciation

• The yuan continued to fall, with the central parity rate weakening by 1.6% to 6.3306 against the USD.
• The PBOC reformed the exchange rate system to reflect market forces, and the IMF supports this move, expecting a floating exchange rate system within 2–3 years.

China Power Output

• July 2015: Power output fell 2% YoY to 509 billion kWh.
• Jan–Jul 2015: Total electricity output rose 0.4% YoY to 3.2 trillion kWh.
• Thermal Power: Down 3% YoY to 2.5 trillion kWh.
• Hydropower: Up 9.6% YoY to 534 billion kWh.

China Retail Sales

• July 2015: Retail sales rose 10.5% YoY to Rmb2.43tn (HK$383.8bn), slightly down from 10.6% in June.
• Online Sales: Grew 37% YoY in the first seven months.
• Rural vs. Urban: Rural sales outpaced urban growth, with 11.9% and 11.6% respectively.

Tencent & Ctrip Collaboration

• Ctrip.com International is strengthening its position in the internet travel sector through a partnership with Tencent (0700 HK).
• This alliance is expected to drive more online traffic and help Ctrip stave off competition.

China Property Investment

• Jan–Jul 2015: Property investment grew 4.3% YoY to Rmb5.26bn (HK$830.9bn), with a slower growth rate than the first half.
• Residential Investment: Up 3% YoY.
• New Housing Construction: Declined 16.8% YoY to 817.3 million sqm.
• Commercial Sales: Up 13.4% YoY to Rmb4.12tn, indicating nascent recovery in some cities.

Stock Performance Highlights

SJM Holdings (0880 HK)

• 1H15 Net Profit: Fell by more than 50% to HK$17.91bn.
• Revenue: Dropped 40.1% to HK$266.11bn.
• VIP Revenue: Down 48.7% to HK$142.26bn, accounting for 54.1% of total gaming revenue.
• Mass Market: Down 26.8%.
• Dividend: Declared 10 cents per share, down from 22 cents in the previous year.

HKEx (0388 HK)

• Interim Profit: Surged 73% YoY to HK$4.10bn.
• Revenue: Up 48% YoY to HK$6.85bn.
• EPS: Hit HK$3.47.
• Interim Dividend: Raised to HK$3.08 per share, up 68% YoY.
• Clearing and Settlement Fees: Increased 59%, driven by the Stock Connect program with Shanghai.

Other Notable News

• WH Group (0288 HK): Interim net profit dropped 43% to US$303m, due to a slowdown in the Chinese consumer market and falling US pork prices.
• Sun Art Retail (6808 HK): Net profit fell 13.7% YoY to Rmb1.476bn, driven by a 3.4% decline in SSS.
• China Everbright Research Limited Rating System:
  • Buy: Expected to outperform the benchmark index by >15%.
  • Accumulate: Expected to outperform by 5–15%.
  • Hold: Expected to outperform or underperform by <5%.
  • Reduce: Expected to underperform by 5–15%.
  • Sell: Expected to underperform by >15%.

Analyst Certification

The analysts certify that:

1. All views in the report reflect their personal opinions.
2. No compensation is directly or indirectly linked to the report's recommendations.
3. They are not supervised or report to investment banking functions.
4. They have not breached the quiet period restrictions.
5. They are not officers or directors of the companies covered in the report.

Summary of Key Information

• Financial Results: Dragon Crown and NagaCorp showed mixed performance, with NagaCorp outperforming due to strong VIP and mass market growth.
• Strategic Moves: Xinyi Solar and GCL-Poly are enhancing efficiency and expanding solar farm capacity.
• Economic Trends: The yuan continued to fall, power output declined, but retail and online sales showed growth.
• Market Dynamics: Ctrip's partnership with Tencent strengthens its position in the travel sector, while HKEx reported record profits.
• Industry Updates: Property investment slowed, and pork prices declined, impacting WH Group's profits.

Conclusion

The document offers a comprehensive view of the performance of several key Hong Kong-listed companies and highlights economic trends in China and Hong Kong. While some companies like NagaCorp and HKEx are performing well, others face challenges such as declining profits and market headwinds. Strategic collaborations and cost-cutting measures are being explored to improve profitability and growth.