20180525-广发证券_香港_-Dim_Sum_Express_4页_492kb

Dim Sum Express Summary

Core Content Overview

This document provides a comprehensive market analysis and company-specific insights, primarily focusing on the performance of the Hong Kong and Chinese A-share markets, with an emphasis on the property sector and Yihai International (1579 HK).

Market Performance Summary

The document includes key index performance data for various markets, showing changes in price, earnings, and P/E ratios for the past 1 day, 1 month, and year-to-date (YTD). Here is a summary of the key markets:

• HSI and HSCEI showed positive performance over the short and medium terms, with HSI experiencing the highest YTD gain.
• MXCN and CCMP had the highest EPS growth expectations for 2018.
• SHSZ300, SHCOMP, and SZCOMP experienced declines in short-term performance, but showed strong EPS growth for 2018.
• UKX and NYK showed mixed performance, with some markets experiencing significant EPS growth.

Key Points on the Property Sector

Talent Policy Expansion

• The talent policy has been extended to non-key cities, with cities like Xinyu, Longyan, and Tangshan offering favorable policies for skilled workers.
• In contrast, cities like Shenyang, Qingdao, and Harbin have introduced restrictive housing policies.

Property Transactions

• Property sales in key cities declined by 10.9% YoY in April, with the decline narrowing compared to March.
• Sales in first-tier cities fell by 24.2% YoY, while third/fourth-tier cities saw a smaller decline of 1.4% YoY.
• New project launches increased significantly, indicating a shift in developers' strategies to boost supply and drive transaction growth.

Land Market Trends

• Land supply and demand continued to rise in April, with more land parcels being brought to market.
• Land prices in third/fourth-tier cities increased substantially, while first-tier cities saw a decrease in residential land supply.

Liquidity and Financing

• Property developers face tight financing conditions, but ABS and overseas financing are becoming important channels.
• Trust and corporate bond issuance costs have risen, indicating increased financing pressure.
• Mortgage rates have bottomed out, and we expect the effects of tight financing to ease gradually.

Yihai International (1579 HK) Analysis

Company Overview

• Yihai International is a subsidiary of Haidilao, a leading hot pot chain.
• As of May 8, 2018, Haidilao had 320 stores, a 17% increase from the end of 2017.

Store Expansion

• The company plans to open 180-200 new stores in 2018, which is expected to drive revenue growth.
• Store expansion growth for 2018 is projected to be between 65.9% and 80.6%, excluding closed stores.

Revenue Drivers

• Haidilao restaurants and new product lines are the dual earnings drivers.
• Connected transaction sales are expected to benefit from accelerated store expansion.

Financial Projections

• EPS estimates for 2018, 2019, and 2020 are Rmb0.35, Rmb0.44, and Rmb0.54, respectively.
• The stock is currently trading at a P/E of 25.59x (2018E), 20.44x (2019E), and 16.65x (2020E).

Rating and Target Price

• The company is rated Buy, with a target price of HK$12.53, corresponding to a 2018E P/E of 29.0x.

Risks

• Food safety risks at Haidilao restaurants.
• Intense competition in the hotspot condiment market.
• Potential underperformance in self-heating hotspot sales.

Rating Definitions

Important Disclosures

• The research analyst(s) certifies that all views expressed reflect their personal opinions.
• No part of the analyst's remuneration is directly or indirectly linked to the recommendations in this report.
• GF Securities (Hong Kong) and its affiliates do not hold any shares of the securities mentioned in the report.
• The report is for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities.
• The information and opinions are subject to change without notice.