20141209-工银国际-VIEWPOINTS_EXPRESS_13页_813kb_813kb

Market Report Summary - 9 December 2014

Core Content

This report provides an overview of the market situation as of 9 December 2014, focusing on Wuzhou International (1369.HK), the TMT sector, and broader financial and commodity market indicators. It highlights the company's operational performance, strategic initiatives, and valuation, alongside market trends and key financial metrics.

Wuzhou International (1369.HK)

Key Projects and Operations

• Conducted a site visit to Wuzhou International in Wuxi, where three projects are in operation, with the longest operational history being 8 years.
• Projects include:
  • Wuzhou International Industrial Exhibition City: Two phases with total GFA of 180k sqm, Phase I has 7% rental yield and Phase II has 95% occupancy rate with 5% rental yield. The project also includes 4 shopping malls, 2 of which are operational, and a residential section with 6 phases.
  • Wuzhou International Columbus Plaza: A community commercial complex with total GFA of 200k sqm, divided into two phases. Phase I (120k sqm) has 90% occupancy, while Phase II (80k sqm) has 95% occupancy for its department store.
  • Wuzhou International Ornamental City: A large-scale wholesale market with over 900k sqm GFA, divided into 3 phases. Phase I (400k sqm) launched in 2006, Phase II (300k sqm) in 2009, and Phase III (220k sqm) is under development.

Strategic Initiatives

• Wuzhou is adopting a light asset model for logistics projects, which helps reduce financial pressure and enables economies of scale.
• Signed framework agreements with GLP and Ping An to explore warehouse and logistics business opportunities.
• The company has achieved Rmb5.2bn contracted sales for the first 10 months of 2014, locking in 80% of its annual target of Rmb6.5bn.

Valuation

• Trading at 7.7x/5.2x of FY14F/15F PE based on Bloomberg consensus, which is higher than the sector average.
• The company's diversified projects help balance its contracted sales, with the proportion from Jiangsu province decreasing from 53.7% in 2013 to 31.9% for the first 10 months of 2014.

TMT Sector Highlights

Key Developments

• WeChat and Foodpanda: Launched a partnership for food delivery services in Southeast Asia, including Hong Kong, Thailand, Singapore, Malaysia, Taiwan, Philippines, and India.
• China's Mobile Banking Users: Increased by 50% in 2014, reaching 43% of personal banking users.
• WiWide Nets US: Secured RMB300 million (US$49 million) in Series C funding from Tencent and Dianping.
• Qunar vs. Ctrip: Both companies are engaging in a potential price war, with Ctrip setting aside RMB1 billion for competitive pricing.
• New Investment Fund: Kingsoft, Xiaomi, Zhigu, and others established a $35 million investment fund to develop new intellectual property.

Stock Market Performance

HK Equities

• Hang Seng Index: Price at 24,048, with a 0.2% increase.
• H-share Index: Price at 11,873, with a 2.4% increase.
• Turnover: HK$123.0bn, representing 37.7% of HSI turnover.

China Equities

• CSI 300 Index: Price at 3,253, with a 4.1% increase.
• Shanghai Composite Index: Price at 10,555, with a 4.8% increase.
• Shenzhen Composite Index: Price at 1,467, with a 0.8% increase.

Asian Equities

• Nikkei 225: Price at 17,936, with a 0.1% increase.
• Korea KOSPI: Price at 1,979, with a 0.4% decrease.
• Taiwan TWSE: Price at 9,187, with a 0.2% decrease.
• India Sensex 30: Price at 28,119, with a 1.2% decrease.

US/European Equities

• DJIA: Price at 17,852, with a 0.6% decrease.
• S&P 500: Price at 2,060, with a 0.7% decrease.
• NASDAQ: Price at 4,741, with a 0.8% decrease.
• UK FTSE 100: Price at 6,672, with a 1.0% increase.
• Germany DAX: Price at 10,015, with a 0.7% increase.
• France CAC40: Price at 4,375, with a 1.0% increase.

Commodity Prices and Financial Indicators

Commodity Prices

• WTI Oil: $63.1 per barrel, down 4.2%.
• Gold: $1,193.4 per troy ounce, up 0.3%.
• Copper: $6,451.0 per metric ton, no change.
• Aluminum: $1,982.0 per metric ton, no change.
• Reuters/Jefferies CRB Futures: 248.1, down 1.7%.
• Baltic Dry Index: 982.0, no change.

Interest Rates

• HIBOR 3m: 0.38%
• USD LIBOR 3m: 0.24%
• SHIBOR 3m: 4.229%

Bond Yields

• US 3m Treasury Yield: 0.01%
• US 10y Treasury Yield: 2.26%
• China 2y Treasury Yield: 3.31%
• China 10y Treasury Yield: 3.68%

Conclusion

Wuzhou International demonstrates strong operational capabilities and a strategic shift toward a light asset model in logistics developments, which is expected to support its growth and scalability. The company has locked in a significant portion of its sales target and is well-positioned for the full year. In the TMT sector, there are notable developments such as WeChat's partnership with Foodpanda, surging mobile banking users, and investment in new IP. The broader market shows mixed performance across equities and commodities, with HK and China indices showing positive trends, while some Asian and US indices saw declines. The valuation of Wuzhou International is above sector average, suggesting potential for growth.