20140319-工银国际-VIEWPOINTS_EXPRESS_17页_503kb_503kb

Document Summary

Core Content

This document presents market reports and analysis for three Hong Kong-listed companies: New Environmental Energy (3989.HK), Golden Eagle Retail Group (3308.HK), and KWG Property (1813.HK), along with stock market performance and economic indicators as of 19 March 2014.

New Environmental Energy (3989.HK)

Main Points

• FY13 Results: NEE reported a net loss of HK$124.4mn, a 18% decrease from the previous year. The loss was primarily due to the fair value loss of CB.
• New Projects:
  • The first flagship ADT project in Beijing Dongcun is expected to start operation in 2Q 2014.
  • Nanchang and Huizhou projects are also expected to begin operations in 2014, contributing to future profit.
• WTE Business Growth:
  • Revenue from the waste-to-energy (WTE) business rose to HK$246.2mn, up from HK$17.6mn in 2012.
  • The gross profit margin was 43.4%, with a HK$83.3mn reversal of provisions for service concession arrangements.
• Financial Position:
  • Net gearing ratio at the end of 2013 was ~74%.
  • BJ Capital, the new largest shareholder, provided Rmb220mn in lending and helped secure a Rmb2bn credit facility.
• Future Outlook:
  • The ADT market demand is expected to remain strong.
  • New projects could drive profitability in 2014.
  • Overseas project injection in New Zealand is anticipated if the company's market value grows sufficiently.
• Valuation:
  • The company is expected to turn around to profit in 2014.
  • Long-term positive outlook is maintained, provided projects are delivered on time.

Key Financial Metrics

• Market Cap (HK$mn): 3,725
• Price (18 Mar): HK$0.80
• 52W High: HK$0.86
• 52W Low: HK$0.019
• Total Issued Shares (mn): 4,656
• Average 3mths Turnover (HK$mn): 23

Golden Eagle Retail Group (3308.HK)

Main Points

• FY13 Results:
  • Gross sales proceeds increased by 3.1% YoY to Rmb16,833mn.
  • Net income increased by 1.4% YoY to Rmb1,316.8mn, in line with market expectations.
• Performance:
  • Concessionaire rate decreased by 80bps YoY to 17.8%, due to higher sales of gold products.
  • Operating expenses remained stable at 9.5% of GSP, supporting a stable margin of 8.6%.
• Outlook:
  • Cautious on near-term performance due to a weak macroeconomic environment and e-commerce competition.
  • Positive on long-term growth with the shift to a "Lifestyle Centre" model, aiming to improve store traffic and services.
• Valuation:
  • Trading at 11.1x 2014F P/E, a 5-year low.
  • Valuation is attractive for long-term investors, given solid fundamentals and positive transformation.
  • Xinjiekou Phase II opening is a potential near-term catalyst.

Key Financial Metrics

• Price (18 Mar): HK$11.00
• 52W High: HK$15.1
• 52W Low: HK$9.5
• Market Cap (HK$bn): 20.22
• Total Issued Shares (bn): 1.83
• Avg. 3mths Turnover (HK$mn): 66.78

KWG Property (1813.HK)

Main Points

• FY13 Results:
  • Total revenue was Rmb9,468m.
  • Core net profit reached Rmb2,343m.
• Performance:
  • Net margin surged due to contribution from JV projects.
  • Concessionaire mix shifted due to less GFA recognized as subsidiary and more from JV.
• Future Plans:
  • Targets contracted sales growth of 31% YoY with a balanced launching schedule.
  • Focus on tier1 and tier2 cities with strong housing demand.
  • Aims to launch projects 8-10 months after land acquisition via product standardization.

Key Financial Metrics

• Total Issued Shares (bn): 1.83
• Market Cap (HK$bn): 20.22
• Market Cap (US$bn): 2.6
• Avg. 3mths Turnover (HK$mn): 66.78

Stock Market Performance

Hong Kong Equities

• Hang Seng Index (HSI): Price = 21,584, % change = 0.5%.
• H-share Index: Price = 9,342, % change = 0.1%.
• Turnover (HK$bn): 64.9, % change = 16.3%.
• -% from HSI: 37.2%.
• -% CBBC, wrnt: 17.6%.

China Equities

• CSI 300 Index: Price = 2,138, % change = -0.2%.
• Shanghai Composite Index: Price = 7,274, % change = -0.9%.
• Shenzhen Composite Index: Price = 1,100, % change = 0.3%.

Asian Equities

• Nikkei 225: Price = 14,411, % change = 0.9%.
• Korea KOSPI: Price = 1,940, % change = 0.7%.
• Taiwan TWSE: Price = 8,732, % change = 0.4%.
• India Sensex 30: Price = 21,833, % change = 0.1%.

US/European Equities

• DJIA: Price = 16,336, % change = 0.5%.
• S&P500: Price = 1,872, % change = 0.7%.
• NASDAQ: Price = 4,333, % change = 1.2%.
• UK FTSE 100: Price = 6,605, % change = 0.6%.
• Germany DAX: Price = 9,243, % change = 0.7%.
• France CAC40: Price = 4,313, % change = 1.0%.

Other Indicators

• WTI Oil: Price = $99.7, % change = 1.7%.
• Gold: Price = $1,360.3, % change = -0.8%.
• Copper Futures: Price = $6,480.0, % change = 0.0%.
• Aluminum Futures: Price = $1,724.5, % change = 0.0%.
• CRB Index: Price = 302.8, % change = 0.6%.
• Baltic Dry Index: Price = 1,518.0, % change = 2.5%.
• UST Yield 3m: 0.05%, change = 0.00%.
• UST Yield 10y: 2.67%, change = -0.02%.
• HIBOR 3m: 0.37%, change = -0.002%.
• USD LIBOR 3m: 0.23%, change = 0.000%.

Peer Comparison (Golden Eagle Retail Group)

Conclusion

• New Environmental Energy is expected to benefit from new project developments and the ADT market growth, with a long-term positive outlook.
• Golden Eagle Retail Group demonstrated resilience despite a weak macro environment and e-commerce competition, with a positive long-term transformation strategy and attractive valuation.
• KWG Property has a healthy financial position and is focusing on tier1 and tier2 cities for growth, with a strategy to accelerate project development.
• Market performance showed a mixed outlook, with some indices performing well and others showing a decline.
• Valuation of the companies is considered attractive for long-term investors, especially Golden Eagle Retail Group.