20180117-兴业金融证券-伟仕佳杰-00856.HK-Expecting_Higher_Growth_9页_378kb

报告摘要

VST Holdings Ltd Summary

Core Content

VST Holdings Ltd is a major player in the IT distribution and enterprise systems business in China and Southeast Asia, offering products from brands like Seagate, Apple, and HP. The company has shown positive signs in its business and financial outlook, leading to an updated recommendation and target price.

Main Viewpoints

Positive Outlook: The company's enterprise systems unit is expected to experience faster revenue growth and margin improvements.
Expanded Market Reach: VST has been authorized to sell Huawei products in China and some overseas countries, which is expected to boost its operating leverage and margins.
Market Share Gains: VST is gaining market share due to its internal stability, focus on core business, and operational efficiency.
New Business Initiatives: VST is expanding into new areas such as supply chain, IT services, financing services, and internet loans. These are expected to contribute to its profit in the coming years.
Incentive Structure: New businesses are structured as separate legal entities, with management teams holding minority stakes, which is seen as a critical incentive for success.

Key Information

Financial Forecasts (HKDm)

Metric	Dec-15	Dec-16	Dec-17F	Dec-18F	Dec-19F
Total turnover	45,576	48,161	53,021	61,573	71,666
Reported net profit	450	552	676	902	1,087
Recurring net profit	472	618	676	902	1,087
Recurring EPS (HKD)	0.32	0.42	0.47	0.63	0.75
DPS (HKD)	0.12	0.12	0.14	0.19	0.23
Recurring P/E (x)	14.6	11.0	9.8	7.4	6.1
P/B (x)	1.81	1.72	1.46	1.22	1.02
P/CF (x)	12.1	6.8	14.3	25.3	18.9
Dividend Yield (%)	2.6	2.7	3.1	4.1	4.9
EV/EBITDA (x)	12.4	9.9	7.8	6.1	5.2
Return on average equity (%)	11.6	14.4	16.1	18.1	18.2
Net debt to equity (%)	62.5	58.6	34.6	27.9	21.8
Our vs consensus EPS (adjusted) (%)	-	-	13.5	18.0	6.9

Share Performance

Metric	Avg Daily Turnover (HKD/USD)	52-wk Price low/high (HKD)	Free Float (%)	Shares outstanding (m)	Estimated Return (%)
	8.21m/1.06m	2.00 - 4.91	35	1,446	22

Shareholders

Shareholder	Percentage
Mr Li Jia Lin and family	37.7%
Eternal Asia (HK)	17.1%
Fidelity Management and Research Co	10.0%

Investment Recommendation

Current Recommendation: Buy
Target Price (HKD): 5.63
Price: 4.60
Market Cap (USDm): 858
Bloomberg Ticker: 856 HK

Key Drivers

Enterprise systems business: Expected to drive faster revenue growth and margin improvements.
New businesses: Including internet loans, IT services, and supply chain, which are anticipated to contribute to profit.
Supply chain: Utilizing spare capacity to serve external customers and already signed with large clients.

Key Risks

Currency Depreciation: Greater-than-expected depreciation of Asian currencies against USD.
Investment Requirements: Higher-than-expected investments for new initiatives.

Financial Exhibits Summary

Income Statement Highlights

Revenue Growth: Expected to increase from 8.8% in FY16 to 16.4% in FY19.
Gross Profit: Projected to grow from 1,697 HKDm in FY16 to 3,003 HKDm in FY19.
Operating Profit: Expected to grow from 680 HKDm in FY16 to 1,519 HKDm in FY19.
Net Profit: Projected to increase from 450 HKDm in FY17 to 1,087 HKDm in FY19.
Net Margin: Expected to improve from 1.0% in FY16 to 1.5% in FY19.

Cash Flow Highlights

Cash Flow from Operations: Projected to fluctuate, with a peak of 995 HKDm in FY16.
Net Change in Cash: Expected to grow from 1,739 HKDm in Dec-15 to 1,131 HKDm in Dec-19.
Ending Balance Cash: Projected to increase from 3,234 HKDm in Dec-15 to 3,962 HKDm in Dec-19.

Balance Sheet Highlights

Total Assets: Projected to increase from 16,768 HKDm in Dec-15 to 23,941 HKDm in Dec-19.
Total Liabilities: Expected to rise from 12,949 HKDm in Dec-15 to 16,982 HKDm in Dec-19.
Shareholders' Equity: Projected to grow from 3,819 HKDm in Dec-15 to 6,959 HKDm in Dec-19.
Net Debt: Expected to decrease from 2,387 HKDm in Dec-15 to 1,514 HKDm in Dec-19.

Peer Comparison

Company	Ticker	Price (HKD)	Mkt Cap (USDm)	3-mth avg t/o (USDm)	P/E FY1 (x)	P/E FY2 (x)	EPS FY1 YoY%	EPS FY2 YoY%	3-Yr CAGR (%)	PEG (x)	Div Yield FY1 (%)	P/B FY1 (x)
VST Holdings Ltd	856 HK	4.60	684	1.1	10.8	9.8	28.0	22.5	20.7	0.5	2.7	1.7
Sector avg	-	-	-	-	12.9	11.5	-	-	14.2	1.1	2.5	1.8

Investment Rating

Buy: Share price may exceed 10% over the next 12 months.
Trading Buy: Share price may exceed 15% over the next 3 months, but longer-term outlook remains uncertain.

Conclusion

VST Holdings Ltd is viewed as a promising investment due to its expanding business segments, margin improvements, and new initiatives. Despite the risks of currency depreciation and higher investment requirements, the company's positive financial outlook and growth potential support the Buy recommendation with a target price of HKD5.63.

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