20171018-广发证券_香港_-Dim_Sum_Express_4页_696kb

Dim Sum Express Summary

Key Index Performance (Oct 18, 2017)

The table shows the performance of various global and regional equity indices for the past day, month, and year-to-date, as well as the estimated earnings growth and P/E ratios for 2017 and 2018.

Hong Kong Market Analysis

Lonking (3339 HK, Buy)

• Rating: Buy
• Target Price (TP): HK $4.30
• Reasons for Buy Rating:
  • Beneficiary of the upcycle in China's construction machinery industry.
  • Product price increases are expected to enhance profitability.
  • Market share gains reflect strong competitiveness.
• Performance Forecast:
  • Net profit is expected to rise by 81% in 2017 and 24% in 2018.
  • Net profit CAGR is projected at 37% for 2016-19.
• Key Factors:
  • Construction machinery sales volume in China has been rising since 2H16.
  • Loader sales volume increased by 48% YoY in 9M17.
  • Excavator sales volume rose by 100% YoY in 9M17.
  • High utilization rates indicate strong downstream demand.
• New Facility:
  • A new forklift production facility with 15,000 units/year capacity is under construction in Yixing.
  • Expected to begin operation by the end of 2017.
• Overseas Growth:
  • The company targets 20% YoY revenue growth in its overseas business over the next few years.
• Key Risks:
  • Reliance on the Chinese economy.
  • Potential slowdown in fixed asset investment (FAI).
  • Weaker-than-expected replacement demand.
  • Increased cost pressure.

Haichang Ocean Park (2255 HK)

• Rating: Maintain
• EPS Estimates (2017-2019): Rmb0.070, 0.085, 0.105
• P/E Ratios (2017-2019E): 23.85x, 19.54x, 15.77x
• Performance Highlights:
  • Existing eight parks showed strong revenue growth during summer and national day/mid-autumn holidays.
  • Combined revenue increased by over 15% in Jul-Aug and nearly 20% during the national day holiday week.
  • Non-admission-fee income continued to expand.
• Tourism Industry Strength:
  • Domestic tourist trips rose by 13.5% YoY in 1H17.
  • Domestic tourism income increased by 15.8% YoY.
• Shanghai Project:
  • Proceeding as planned with a target trial launch in August 2018.
  • Expected to significantly boost earnings in 2019, similar to Shanghai Disneyland.
• Key Risks:
  • Potential slowdown in the tourism industry.
  • Slower-than-expected progress in the Shanghai project.

Rating Definitions

Analyst Certification

The analysts responsible for this report certify that:

1. All views expressed accurately reflect their personal opinions.
2. No part of their remuneration is directly or indirectly linked to specific recommendations.

Disclosure of Interests

• GF Securities (Hong Kong) and its affiliated companies do not hold any shares in the mentioned securities.
• No investment banking relationship with the companies in the past 12 months.
• Analysts and associates are not officers of the companies and have no financial interests in the securities.

Disclaimer

• This report is for informational purposes only and does not constitute an offer to buy or sell securities.
• The research report is intended solely for use by GF Securities (Hong Kong) clients.
• No action has been taken to permit distribution in jurisdictions where it is unlawful.
• GF Securities (Hong Kong) accepts no liability for losses arising from the use of this report.
• Past performance does not guarantee future results.
• Recipients should be aware that investment involves risks.