20180608-交银国际证券-通达集团-00698.HK-Earnings_recovery_reaffirmed__maintain_Buy_5页_577kb

报告摘要

Tongda Group (698 HK) Summary

Core Content

Tongda Group (698 HK) is a company that has been analyzed by BOCOM Int'l Research for its financial performance and stock rating. The report highlights the company's earnings recovery, financial metrics, and stock performance, with a recommendation to maintain a "Buy" rating.

Main Points

Earnings Recovery

1H18 Earnings Rebound: Tongda Group expects a 40-50% YoY increase in 1H18 earnings, driven by:
- Revenue growth
- Decrease in impairment charges compared to 1H17
- Exchange gains from RMB appreciation
Alignment with Estimates: The positive profit alert aligns with the forecasted 43% YoY net profit growth for 1H18.
Quarterly Performance: The company sees stronger YoY revenue growth in 2Q18 (vs. 1Q18's 4%) due to demand recovery and new model launches, particularly from Xiaomi's Redmi and Mi 8.

Revenue and Profit Trends

1H18 Revenue: HK$9,880 million, showing a 15% YoY growth.
1H18 Net Profit: HK$1,293 million, indicating a 29% YoY growth.
EPS: 0.205 HK$ for 1H18, with a 1% increase from 1H17's 0.204 HK$.
P/E Ratio: 9.5x for 2018E, lower than the 5-year historical average of 10x.
Target Price: HK$2.20, based on 11x 2018E P/E.

Business Breakdown

Handset Casing:
- Revenue in 1H18: HK$2,739 million
- YoY growth: 16%
- Key drivers: Xiaomi Redmi and Mi 8
Handset Waterproof:
- Revenue in 1H18: HK$423 million
- Expected to ramp up in 2H18, leading to higher revenue contribution
- Margin improvement expected due to higher factory utilization
NB Casing:
- Revenue in 1H18: HK$122 million
- YoY growth: 3%
Electrical Appliances:
- Revenue in 1H18: HK$351 million
- YoY growth: 2%
Ironware Parts:
- Revenue in 1H18: HK$139 million
- YoY growth: 5%
Others:
- Revenue in 1H18: HK$624 million
- YoY growth: 15%

Stock Performance

52-Week High: HK$2.67
52-Week Low: HK$1.44
Market Cap: HK$11,800.86 million
Avg Daily Vol: 16.23 million
YTD Change: -2.50%
200-Day MA: HK$1.96
Stock Rating: BUY

Key Financial Metrics

Metric	2016	2017	2018E	2019E	2020E
Revenue (HK$ m)	7,825	8,563	9,880	11,110	11,782
YoY Growth (%)	29	9	15	12	6
Net Profit (HK$ m)	1,004	1,006	1,293	1,495	1,636
EPS (HK$)	0.161	0.160	0.205	0.237	0.259
YoY Growth (%)	39	-4	29	16	9
P/E (x)	12.1	12.2	9.5	8.2	7.5
P/B (x)	2.6	2.1	1.8	1.6	1.4
Dividend Yield (%)	2.7	2.7	3.1	3.6	4.0

Financial Ratios

Ratio	2016	2017	2018E	2019E	2020E
P/E (x)	12.1	12.2	9.5	8.2	7.5
P/B (x)	2.6	2.1	1.8	1.6	1.4
P/S (x)	1.6	1.4	1.2	1.1	1.0
EV/EBITDA (x)	9.9	8.7	8.5	6.7	6.0
Net Debt/Equity	0.5	0.5	0.5	0.4	0.3
ROE (%)	23.0%	19.2%	20.6%	20.6%	19.6%
ROA (%)	10.6%	8.7%	9.0%	9.5%	9.5%
ROIC (%)	14.5%	12.2%	12.6%	13.3%	13.3%

Analyst Certification

The authors of the report declare that all views expressed reflect their personal views.
No part of their compensation is directly or indirectly related to the recommendations.
No insider information was used in the report.
The authors have not traded in the stock covered in the report within 30 days prior to its issue.

Disclosure of Business Relationships

BOCOM International has investment banking relationships with several companies.
Certain subsidiaries hold more than 1% equity in companies such as Orient Securities, Everbright Securities, Guolian Securities, and Guotai Junan Securities.

Disclaimer

The report is confidential and for private circulation only.
The information may be subject to late delivery, interruption, and interception.
BOCOM International does not guarantee the accuracy or completeness of the information.
The report is general in nature and not tailored to specific investors.
The views and recommendations may change without notice.
Investors are advised to consult their financial advisors before making any investment decisions.

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