20180809-CIMB_SECURITIES_SNG_-九龙仓集团-00004.HK-Still_lacking_a_clear_strategy_10页_470kb

报告摘要

Hong Kong: Summary of Wharf Holdings Ltd Report

Core Content

Wharf Holdings Ltd has experienced a decline in its financial performance, with consensus ratings indicating a "Reduce" recommendation. The current share price is HK$24.80, and the target price has been revised downward to HK$22.50, reflecting a -9.3% downside. The company's market capitalization is US$9,625m (HK$75,554m), and the average daily turnover is US$12.52m (HK$98.29m). The company currently has 3,030 million shares outstanding, with a free float of 38.0%.

Key Changes in the Report

FY18F EPS: Decreased by 4%
FY19F EPS: Decreased by 3%
FY20F EPS: Decreased by 3%

The company's financial performance has been affected by various factors, including a slowdown in property sales and a lack of clear strategy. The company's core profit for the first half of 2018 dropped by 9% year-over-year (YoY), primarily due to fewer property sales bookings. The interim dividend per share (DPS) was HK$0.25, representing a 30% payout ratio.

China Contracted Sales

China contracted sales fell by 36% YoY to Rmb7bn in 1H18, achieving only 32% of its full-year target of Rmb22bn. The management attributes this slowdown to price control in China and reluctance to sacrifice price for volume. The company is unlikely to meet its full-year target, as tight policies are expected to persist. The company's investment property (IP) revenue increased by 29% YoY to HK$1.7bn, driven by the maturing Chengdu International Financial Square (IFS) and new contributions from Changsha IFS. The latter had 97% of its retail area leased out. Two hotels, Niccolo Changsha and Niccolo Suzhou, are scheduled to open in 4Q18 and 2019, respectively.

HK DP Portfolio and Vacancy Tax

Wharf Holdings' HK development property (DP) portfolio is focused on luxury properties. Projects such as Mount Nicholson at The Peak (22 units remaining), 11 Plantation Road, 77 Peak Road, and 1 Plantation Road (35 houses in total) are subject to vacancy tax. The company may need to sell these properties quickly or rent them out to avoid the tax burden.

Technology Stock Investments

The company holds an HK$28bn equity portfolio, with approximately 60% invested in technology stocks (six companies, each with an investment of approximately HK$3bn). This investment strategy is seen as not in line with the interest of minority shareholders, given the lack of expertise and potential high volatility in this sector.

Synergy with Wheelock

Collaborations with Wheelock on the HK DP business remain unclear, which limits potential synergies. The management has not provided a clear direction on the collaboration, suggesting that the partnership may not be as beneficial as expected.

Analysts

Raymond CHENG, CFA:
- Tel: (852) 2539 1324
- Email: raymond.cheng@cgs-cimb.com
Jeffrey MAK:
- Tel: (852) 2539 1328
- Email: jeffrey.mak@cgs-cimb.com
- Website: www.baogaoba

Financial Summary

Metric	Dec-16A	Dec-17A	Dec-18F	Dec-19F	Dec-20F
Total Net Revenues (HK$m)	46,627	43,273	26,174	29,622	31,549
Operating EBITDA (HK$m)	17,971	20,622	8,213	8,486	9,315
Net Profit (HK$m)	21,440	11,196	6,891	7,102	7,336
Core EPS (HK$)	4.54	5.28	2.27	2.34	2.42
Core EPS Growth	25.4%	16.4%	-57.0%	3.1%	3.3%
FD Core P/E (x)	5.47	4.70	10.93	10.60	10.26
DPS (HK$)	2.15	1.59	0.70	0.72	0.75
Dividend Yield	8.67%	6.41%	2.82%	2.91%	3.01%
EV/EBITDA (x)	4.48	1.89	8.21	7.51	6.35
P/FCFE (x)	4.21	NA	NA	10.13	10.81
Net Gearing (%)	7.3%	-6.4%	12.7%	9.9%	6.8%
P/BV (x)	0.24	0.53	0.51	0.50	0.48
ROE (%)	4.40%	6.98%	4.77%	4.76%	4.76%

Earnings Revisions

Metric	Old	New	Change %
Revenue (HK$ m)	22,541	22,341	-1%
EBITDA (HK$ m)	8,377	8,213	-2%
Pretax profit	12,549	12,208	-3%
Net profit	7,170	6,891	-4%
EPS	2.36	2.27	-4%

NAV and Target Price Changes

Metric	Old	New	Change %
NAV (HK$)	52.0	50.0	-4%
Discount to NAV (%)	50%	55%	5%
Target price (HK$)	26.0	22.5	-13%

Peer Comparisons

Short Name	Ticker	Share Price (HK$)	TP (HK$)	Rating	Mkt Cap (US$ m)	Disc. to NAV (%)	Upside (%)	P/E (x)
CK Asset	1113 HK	57.90	90.00	ADD	27,273	128.0	55	55
HLD	12 HK	42.45	67.00	ADD	23,801	96.0	56	58
Kerry	683 HK	38.80	45.00	ADD	7,192	75.0	48	16
NWD	17 HK	11.04	13.50	ADD	14,353	22.5	51	22
SHKP	16 HK	122.20	180.00	ADD	45,101	257.0	52	47
Sino	83 HK	12.96	18.20	ADD	10,902	28.0	54	40
Wharf Holdings	4 HK	24.80	22.50	REDUCE	9,625	50.0	50	-9
Wheelock	20 HK	54.30	72.00	ADD	14,162	120.0	55	16
HLP	101 HK	16.04	14.00	REDUCE	9,190	31.0	48	-8
HKL*	HKL SP	7.07	9.50	ADD	16,634	13.5	48	-5
Hysan	14 HK	42.10	54.60	ADD	5,611	84.0	50	-10
NWD	17 HK	11.04	13.50	ADD	14,353	22.5	51	-10
SHKP	16 HK	122.20	180.00	ADD	45,101	257.0	52	-10
Sino	83 HK	12.96	18.20	ADD	10,902	28.0	54	-10
Wharf REIC	1997 HK	56.35	68.00	ADD	21,796	80.0	30	-6

Key Drivers

Metric	Dec-16A	Dec-17A	Dec-18F	Dec-19F	Dec-20F
Investment properties rental margin (%)	82.9%	83.1%	52.3%	51.4%	51.3%
Residential rev / total rev (%)	21.4%	37.6%	67.1%	67.1%	69.0%

Disclaimer

This report is prepared by CGS-CIMB or CIMB Investment Bank Berhad and is not directed to, or intended for distribution to, any person or entity who is a citizen or resident of, or located in, any jurisdiction where such distribution would be contrary to law. The report is confidential and must not be copied, photocopied, duplicated, stored, or reproduced in any form without prior written consent. CGS-CIMB and CIMB disclaim all responsibility and liability for the views and opinions expressed in this report.

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