A-share research

Transcription

A-share research

Shenyin Wanguo Research (HK) Ltd
18/F, 28 Hennessy Road, Admiralty, Hong Kong
+852 2509 8333
http://www.sywg.com.hk
Daily Insight: Wednesday, 10 December, 2014
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In the news . . .
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3.1%
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1.2%
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0.2%
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 6136:HK – Kangda International Environmental – BUY (Initiation)
 1816:HK – CGN Power – BUY (Initiation)
 384:HK – China Gas Holdings – Trading BUY
A-share reports . . .
 Strategy: Fixed Income
 600617:CH – Shanxi Guoxin Energy – BUY (U/G EPS)
 000035:CH – China Tianying – BUY
 Central Economic Work Conference starts on 09 December in
Beijing; 2015 GDP growth target likely to be lowered to 7% YoY.
(Sina)
 Beijing municipal government allows investment worth
Rmb130bn from private and public sources in 61 public utility
projects. (Tencent)
 State Council calls for unified approach to preferential tax
policies by local governments. (Sina)
 Foreign exchange reserves regulator to facilitate financial
institutions’ entry into interbank forex market. (Tencent)
 Ministry of Finance announces supportive policy for the
financing of public-private-partnership (PPP) projects. (Sina)
Company news
 601169:CH – Bank of Beijing plans to issue Rmb15bn preferred
stocks at Rmb9.13/share. (nbd.com)
 600726:CH – Huadian Energy plans to acquire an 80% stake in a
coal miner, Beijing Youbang Investment for Rmb280m.
(Securities Times)
 000333:CH – Midea Group rumoured to cooperate with Xiaomi
Corporation. (Guangzhou Daily)
A share premium
%
H-share reports . . .
1D
-2.3%
-4.6%
Source: Bloomberg
10
Bringing China to the World
5
 601788:CH – Everbright Securities receives regulatory approval
to offer financing for equity incentive schemes. (Quanjing)
0
-5
 600499:CH – Keda Industrial’s board of directors plans to
purchase an additional 5m shares at Rmb22/share over the next
six months. (Securities Times)
-10
8/12/2014
8/11/2014
8/9/2014
8/10/2014
8/8/2014
8/7/2014
8/6/2014
8/5/2014
8/4/2014
8/3/2014
8/2/2014
8/1/2014
8/12/2013
-15
Source:
Bloomberg
The
company
does not hold any equities or derivatives of the listed compan
 600132:CH – Chongqing Brewery subsidiary halts 16-year long
R&D into hepatitis B vaccines. (Securities Times)
+852 2509 8333
Click the videos to watch SWS analysts
give their latest views on the market
 600839:CH – Sichuan Changhong Electric to sell its 45% stake in
GuoHong Electronic Group Company; Sichuan Changhong
Electric's Hong Kong subsidiary will sell its 13.5% stake in
Chongqing Guohong Technology Development and a 13.5%
stake in Shenzhen Kaihong Mobile Communication, to reduce
losses. (Securities Times)
 600519:CH – Kweichow Moutai rumoured to form separate
company to market its 53 Degree Moutai product. (Securities
Daily)
Anthony Hu, H-share Strategy
 600396:CH – Shenyang Jinshan Energy (600396:CH) to buy 51%
stake in Shenyang Jinshan Energy (600396:CH) and 49% stake in
Liaoning Huadian Power Generation. (nbd.com)
Today’s H-share research
6136:HK – Kangda International Environmental – BUY (Initiation)
Dimi Du [email protected] +86 21 23297818
Turning on the taps
Titus Wu, Automobiles
Kangda International Environment is a rapidly growing player in the private
wastewater treatment (WWT) market, with total capacity expected to double
to 4m tonnes by 2015 (with market share rising from 1% to 2%). We believe
organic pipeline growth, new bid projects and M&A activities will lead its
expansion.
1816:HK – CGN Power – BUY (Initiation)
Vincent Yu [email protected] +86 21 23297818
Energy king
We initiate coverage of China Guangdong Nuclear Power Corp subsidiary CGN
Power with a BUY rating after the country's largest nuclear power operator,
with a 53% market share, completed a HK$24.5bn IPO priced at the top of its
range at HK$2.78/share.
384:HK – China Gas Holdings – Trading BUY
Albert Miao [email protected] +86 21 23297818
Key to growth
On 8 December, the China General Administration of Quality Supervision,
Inspection and Quarantine (AQSIQ) issued draft safety guidance in the
conversion of oil to gas vehicles. This permits the use of new gas-fuelled
vehicles and forbids oil-to-gas refits on existing oil-fuelled cars. With a
deadline of 30 December, the decision to execute or phase out the draft
policy will be made early next year. We believe the policy is unlikely to receive
approval, since it conflicts with the State Council’s, National Development and
Reform Commission’s (NDRC’s) and local government’s existing supportive
policies. We believe safety concern measures are overdone.
+852 2509 8333
Today’s A-share research
Strategy: Fixed Income
Dong Liang [email protected] +86 21 23297818
Tighter grip
On 08 December, the China Securities Depository and Clearing Corporation
(CSDC) announced a circular to tighten the urban investment bond repo
market. The CSDC will no longer review new bond repo applications from
urban investment companies (the financing vehicles of local governments). In
addition, bonds with a rating lower than AAA will no longer be used as a
pledge for financing. According to our calculations, the new regulations will
weigh heavily on the liquidity of urban investment bonds (worth Rmb1.25tn),
accounting for over 60% of exchange-traded urban investment bonds. We
expect the yields of relevant urban investment bonds to rise over 100bps due
to the tighter regulatory grip.
600617:CH – Shanxi Guoxin Energy – BUY (U/G EPS)
Acting in concert
Shanxi Guoxin Energy announced plans to raise Rmb1.01bn via a private
placement of 45m shares at Rmb22.51/share. The new shares will be subject
to a three-year lock-up period. The funds raised will be used to repay its bank
loans and enhance working capital. By reducing financial costs, we believe the
private placement will boost Shanxi Guoxin Energy’s 15E net profit by 7.9%.
We revise up our net profit forecasts to Rmb440m in 14E, Rmb700m in 15E
and Rmb1.02bn in 16E, representing diluted EPS of Rmb0.69 in 14E, Rmb1.10
in 15E and Rmb1.61 in 16E. Maintain BUY.
000035:CH – China Tianying – BUY
Green dream
China Tianying has secured a contract with the Junan County local
government in Shandong Province to build a waste-to-energy (WTE) project
with a daily treatment capacity of 600 tonnes. Separately, the company
announced that its fully owned subsidiary Jiangsu Tianying S.T Environmental
Protection Energy Group plans to establish a joint venture with Shanghai
Debin Environmental Protection Technology focused on developing a
construction waste disposal businesses. We forecast EPS of Rmb0.27 in 14E,
Rmb0.42 in 15E, Rmb0.59 in 16E and Rmb0.80 in 17E. Maintain BUY.
Utilities | Company Research
10 December 2014
BUY
Turning on the taps
Initiation of Coverage
KANGDA INTERNATIONAL ENVIRONMENT (6136:HK)
Market Data: Dec, 09
Financial summary and valuation
Closing Price (HK$)
3.26
Price Target (HK$)
4.5
HSCEI
11,332
HSCCI
52-week High/Low (HK$)
4,335
4.23/2.47
Market Cap (US$m)
869
Market Cap (HK$m)
6,740
Shares Outstanding (m)
2,068
Exchange Rate (Rmb-HK$)
1.26
Price Performance Chart:
Revenue (Rmbm)
YoY (%)
Net income (Rmbm)
YoY (%)
EPS (Rmb)
Diluted EPS (Rmb)
ROE (%)
Debt/asset (%)
Dividend Yield (%)
PE (x)
PB (x)
EV/Ebitda (x)
2012
999.32
35.98
196.54
25.27
0.13
0.13
21.90
71.21
27.22
4.79
18.99
2013
1,339.68
34.06
231.56
17.82
0.15
0.15
18.91
71.30
23.10
3.95
17.04
2014E
1,839.72
37.33
292.73
26.42
0.16
0.16
13.81
57.67
18.27
1.84
13.17
2015E
2,093.92
13.82
410.77
40.33
0.20
0.20
13.22
60.76
13.02
1.60
12.14
2016E
2,429.58
16.03
561.67
36.73
0.27
0.27
15.79
59.19
9.49
1.40
9.80
Note: Diluted EPS is calculated as if all outstanding convertible securities, such as convertible preferred shares, convertible
debentures, stock options and warrants, were exercised. P/E is calculated as closing price divided by each year’s EPS.
Investment Highlights:
Source: Bloomberg
Analyst
Dimi Du A0230514070005
BEE282
[email protected]
(8621)23297818×7203
Rong Ye A0230512110001
AYZ033
Daniel Huang
A0230513030001
BDQ227
Related Reports
The company does not hold any equities or
derivatives of the listed company mentioned
"Kangda
international（6136HK）in this report
(“target”), but then we shall
provide financial
services subject
Capacity,
costsadvisory
and competition"
Sep
to the relevant laws and regulations. Any
18,2014
affiliates of the company may hold equities
of the target, which may exceed 1 percent
of issued shares subject to the relevant
laws and regulations. The company may
also provide investment banking services to
the target. The Company fulfills its duty of
disclosure within its sphere of knowledge.
The clients may contact
[email protected] for relevant
disclosure materials or log into
www.swsresearch.com under disclosure
column for further information. The clients
shall have a comprehensive understanding
of the disclosure and disclaimer upon the
last page.
Cleaning up. Kangda International Environment is a rapidly growing player in the private
wastewater treatment (WWT) market, with total capacity expected to double to 4m tonnes
by 2015 (with market share rising from 1% to 2%). We believe organic pipeline growth,
new bid projects and M&A activities will lead its expansion.
Upgrades buoy tariffs. Thanks to WWT project upgrades and rising standards for new
projects, we expect Kangda’s water tariffs to see steady growth from end-2014 onwards.
The company’s average water tariff remained flat at Rmb1.03-1.04/t in 2011-13. However,
by end-2013, 460,000t of capacity (c.33% of its 1.39m tonne total) met the national Grade
1A discharge standard. In 2014, 120,000t worth of new 1A capacity began operations and
345,000t worth of old capacity began the upgrading process (from 1B to 1A). In 2015,
most new capacity will be generated in Shandong and Jiangsu provinces, where water
tariffs remain high.
Making the grade. Driven by stricter water pollution policies, the industry is promoting
project upgrades. In early 2012, of over 3,000 WWT plants, c.23% met the national Grade
1A discharge standard. With supportive policies and WWT plant upgrades, the penetration
of plants operating at Grade 1A is expected to reach 60% by the end of the 12th Five Year
Plan (FYP) in 2015 (40% Cagr). Higher standards equate to higher tariffs, most WWT
plants increased their tariff by 20-40% after upgrading from the Grade 1B to 1A standard.
Policy support in place. The action plan for water-based environmental protection calls
for Rmb2tn in sector investment. The current market is fragmented with numerous
players suffering from low operational and financial efficiency. This brings significant
opportunities for leading companies to expand and consolidate.
Go with the flow. Our base-case scenario assumes that Kangda will complete 80% of
150-200m tonnes M&A capacity. We forecast earnings of Rmb293m in 14E (+27%),
Rmb413m in 15E (+40%) and Rmb561m in 16E (+37%), a 38% Cagr from 2014-16E. The
company is trading at 13x 15E PE (vs peer average of 18x 15E PE). Given the cheap
relative valuation, solid earnings growth profile and limited downside risk, we initiate
coverage of Kangda with a BUY rating. Our target price of HK$4.5 represents 18x 15E PE
and implies 38% upside.
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
投资要点：

公司产能进入高速扩张期。我们预计康达环保 2015 年底总产能实现翻倍至 400
万吨。目前公司市场份额约占 1%。公司的扩张主要依靠收购，新投标项目以及目前现
有项目投产来实现。公司预计上市后至 2015 年年底完成 150-200 万吨新收购以及新投
标项目。

提标改造下，水价上涨提升公司盈利。我们预计公司平均水价从 2014 年年底开
始将有较大增幅。公司平均水价从 2011 年的 1.03 人民币/吨增长至 2013 年 1.04 人民
币/吨，增幅较低。2013 年年底，公司 46 万吨产能达到 1 级 A 标准，占运营产能 33%。
2014 年年中提标改造至 1A 完成的产能有 12 万吨，另外有 34.5 万吨在提标产能。明
年剩余产能也将进行提标改造。另外，公司 14/15 年已有项目新投产的大部分是 1 级 A
标准，并集中于平均水价较高的山东以及江苏地区。随着高水价的 1 级 A 项目比例明显
增加，公司平均水价将有明显涨幅，带动盈利增长。

行业提标改造进入高速建设期，推升污水处理费。由于水污染治理重视程度不断增
加，政府积极推动污水处理厂提标改造建设，提升污水处理质量。2012 年，3000 多家
污水处理厂中，只有 23%的处理厂达到了 1A 标准。我们预计 2015 年末该比例将上升
至 60%。更高的标准带来更高的污水处理费以及盈利水平。大部分水厂在升级过后污水
处理费有 20%-40%的涨幅。

水十条发布在即，污水处理市场迎高速增长。预计水十条将引导 2 万亿投资进入水
污染治理领域，污水处理将会是重点领域。目前行业格局分散，低效的污水处理厂众多，
我们认为在政策推动下，行业整合将拉开大幕。目前的行业龙头将迎来持续扩张的机会。

首次覆盖给予买入评级。我们假设康达完成收购扩张目标 150 万吨的 80%，作为
我们的基本预测。我们预计公司 2014/15/16 年利润为 2.93 亿人民币(+27%),4.11 亿人
民币(+40%),以及 5.61 亿人民币(+37%)， 2014-16E 复合增长率 38%。公司股价目前
反应 13x 15 年 PE，行业平均 PE 接近 18 倍。公司估值具有很大安全边际，下行风险有
限。考虑到公司未来的高增长预期，我们给予公司买入评级。目标价 4.5 港币，反应 38%
上行空间。
Please refer to the last page for important disclosures
Page 1
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
China’s wastewater volume
According to the National Bureau of Statistics in 2012, the amount of
wastewater discharged in China reached 68.5bn tonnes, greater than the
58bn m3 of annual flow of the Yellow River. The total length of China’s
wastewater pipes reached over 414,000km and is considered 10x the
Earth’s equator of 40,075km. The volume of wastewater discharged
represents a 65% growth rate since 2000 and shows a positive relationship
with the rise in urbanisation from 36% to 53% in 2000-12. In addition,
domestic wastewater discharge appears to have a higher growth trend than
industrial wastewater discharge, accounting for 68% of total wastewater
discharge in 2012. The urban WWT rate in 2010 was 77.5% and by
end-2015 is expected to reach 85% in the cities such as Tianjin, Hefei and
Jilin etc (as stated in the 12th FYP). In order to manage the growing problem
of water pollution and improve the WWT infrastructure, the government
has increased investment in the WWT industry by 20% to Rmb430bn.
The rapid growth of domestic wastewater discharged and increasing efforts
and funding provided by the government indicate significant industry
upside and high profitability potential among operators such as Kangda.
Kangda at a glance
Founded in 1996, Kangda International Environmental is the largest
non-state-owned player in China’s WWT market, offering customised and
integrated WWT services to customers via build-operate-transfer (BOT) and
transfer-operate-transfer (TOT) models. After 18 years development,
Kangda has 48 projects related to WWT and plant construction covering 27
cities in nine provinces. Of which, 33 are BOT projects and 15 are TOT
projects. According to Frost & Sullivan, Kangda has the largest total daily
capacity among privately-owned operators (1.46m tonnes operating
capacity and 457,000t pending operating capacity) in 1H14, currently
making up 1% of the municipal WWT industry market share. Customers of
Kangda are mostly municipal, district or county level governments in China.
Figure 1: Shareholder structures
Mr. Zhao Sizhen
100%
Kangda Holdings
Company
52.96%
Public
shareholders
Baring
19.59%
Kangda
International
Environmental
Company
Source: Bloomberg, SWS Research
Page 2
27.45%
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
Experience and expansion
With 18 years experience, Kangda has accumulated rich technology and
management expertise. The company has received multiple awards from
various institutions, proving its excellence in the WWT market. This has
generated a positive reputation among customers. As one of the few
privately owned operators granted national Grade A qualifications for
municipal and industrial WWT, Kangda will have more opportunities to
expand in large-scale WWT projects.
Figure 2: Awards and certificates
Year
Award/Certificate
Awarding body
2012
Certificate for Enterprise AAA Credit Grade
China Association of Environmental
Protection Industry
2012
Vice President Unit of the Fourth Council of China Association of
Environmental Protection Industry
Protection Industry
2011
2010 Core Enterprise of China Environmental Protection
Industry
Protection Industry
2008
2008 Top 10 Enterprise of Chongqing Municipal Environmental
Protection
Chongqing Municipal Association of
2007
2006 Core Enterprise of China Environmental Protection
Industry
Protection Industry
2006
Member Certificate (Vice President Unit) of Chongqing
Municipal Association of Environmental Protection Industry
2006
2005 Chongqing Bayu Cup Quality Engineering Award (for
Chongqing Municipal Qianjiang District Main City Wastewater
Treatment Plant
Chongqing Municipal Construction
Committee
Chongqing Construction Industry
Association
2005
Top 10 Enterprise of Chongqing Municipal Environmental
Protection Industry
2004
Advanced Unit of Chongqing Municipal Environmental
Protection
Chongqing Municipal Environmental
Protection Committee
Benefitting from its rich management experience and strong market
position, Kangda has developed effective expansion capabilities. Since its
first WWT project in Shandong Province in 2004, Kangda has undertaken a
further 22 projects and accumulated ample local knowledge. This enables it
to develop strong competitive advantages in the local market and take full
advantage of standard upgrades.
Kangda’s daily operating capacity and pending operating capacity grew from
1.69m tonnes in mid-2013 to 1.92m tonnes in mid-2014, while the number
of projects rose from 42 to 48. Meanwhile, operating capacity has risen from
1.39m tonnes in 2013 to 1.46m tonnes in 1H14. Owing to its good
reputation and rich experience, customers prefer Kangda as their WWT
service provider.
Page 3
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
Figure 3: Project allocations
Figure 4: Pipelines set to start in 2014-15
11%
46%
43%
BOT put into operation by 2014
BOT put into operation by 2015
TOT put into operation by 2014
Source: Company data, SWS Research
Figure 5: Projects locations by numbers
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Canada
Russia
Australia
US
Japan
UK
China
Water resources per capita (m3)
Organic pipeline growth in 2014-15
By 1H14, Kangda operated 19 BOT projects and 14 TOT projects with total
daily capacity of 1.46m tonnes. By 2014-15, current pipelines will contribute
additional daily capacity of 457,000t. Kangda’s capacity growth will
therefore reach 18% in 14E and 11% in 15E.
Figure 6: Key financial data for 1-3Q14
BOT
Daily capacity (tonnes)
Start date
Standard
Location
Shandong Danxian
40,000
2014
1A
Shandong
Shandong Jining
25,000
2014
1A
Shandong
Shandong Wendeng
25,000
2015
1B
Shandong
Shandong Guangrao
25,000
2014
1A
Shandong
Shandong haiyang
20,000
2014
1A
Shandong
Shandong fangbinhai
10,000
Shandong
Page 4
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
TOT
Shandong Gaomi III
25,000
2014
1A
Shandong
Shandong Rushan
20,000
2014
1A
Shandong
Rongcheng II
30,000
2015
1A
Shandong
Liangshan Development zone
20,000
2016
1A
Shandong
Henan Jiyuan A
20,000
2015
1A
Henan
Henan Shangqiu Liangyuan
20,000
2014
1A
Henan
Henan Bihe
15,000
2015
1A
Henan
Jiaozuo II
50,000
2015
1B
Henan
Haerbing II
100,000
2015
1B
Heilongjiang
Shandong Dongyin
50,000
2015
1A
Shandong
Huadian
30,000
2014
1B
Jilin
Opportunities: Action plan for water pollution
The Secretary-general of the China Environment Service Industry
Association, Jianhua Luo, announced an action plan for the prevention and
control of water pollution. The plan was submitted to the State Council in
1H14 at the 7th National Conference on Environmental Chemistry (NCEC).
With growing concerns over China’s pollution problem, the market looks
forward to the introduction of the action plan. The government is expected
to invest Rmb2tn (US$320bn) in order to improve water quality and prevent
pollution. This includes the management and treatment of industrial
wastewater, the development of municipal water systems and improving
standards of sewage disposal. The action plan will benefit companies in the
sewage treatment industry.
Water scarcity and pollution issues in China
In 2011, the volume of available water resources per capita in China was
2,100 m3, just 28% of the global average. The annual average water shortage
reached 50bn m3. Two-thirds of China’s cities are short of water, while 11
out of 34 provinces are water scarcity provinces with freshwater resources
per capita below the threshold of 1,000 m3. In areas experiencing the most
severe fresh water pollution (including Beijing, Tianjin, Hebei and Ningxia),
water resources per capita stand at less than 200 m3. Currently, c.300m
people in the rural population do not have access to clean drinking water.
Figure 7: Water resource per capita
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Canada
Russia
Australia
US
Japan
Water resources per capita (m3)
Source: National Bureau of Statistics, SWS Research
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Figure 8:
Water scarcity
6
5
4
3
2
1
Xinjiang
Gansu
Ningxia
Shanxi
Yunnan
Sichuan
Guizhou
Hainan
Chongqing
Guangxi
Guangdong
Hubei
2011 water resource per capita in Chinese provinces (k m3)
Hunan
Henan
Jiangxi
Shandong
Anhui
Fujian
Jiangsu
Zhejiang
Shanghai
Jilin
Heilongjiang
Liaoning
Hebei
Shanxi
Tianjin
Beijing
0
Threshold value of water scarcity
Source: :National Bureau of Statistics, SWS Research
The current quality standard for ground water was introduced in 1994 by
the Ministry of Environmental protection. This classifies the quality of
ground water into Grade I-V.
Figure 9: Quality standard for ground water (applying to ordinary ground water)
Grade
Standard
Pollution level
Reflecting low natural background value in chemical composition
of ground water;
Suitable for various purposes
Reflecting natural background value in chemical composition of
ground water;
Suitable for various purposes
Based on human health benchmarks;
Mainly suitable for centralised drinking water as well as industrial
and agricultural water
On a basis of agricultural and industrial water demands;
Suitable for agricultural and part of industrial water; can be used
for drinking after appropriate treatment
Nearly unpolluted
V
Not suitable for drinking; may be used for other purposes
Moderate polluted
Worse
than V
Polluted water; Not suitable for any purpose
Heavily polluted
I
II
III
IV
Free of pollution
Lightly pollution
Source: Ministry of Environmental protection, the municipal environment monitoring center, SWS Research
In urban areas, the discharge of untreated industrial and domestic
wastewater to rivers, lakes and groundwater polluted the already limited
amount of freshwater. According to the Ministry of Environmental
protection (data collected in 2013), less than 50% of fresh water in China is
suitable for drinking, while 25% of groundwater is highly polluted and
banned from industrial use. China’s Geological Survey claimed that 90% of
groundwater was polluted (60% of which suffered from heavy pollution).
Continuous data monitoring of 118 cities showed that about 64% of urban
groundwater was heavily polluted and 33% was lightly polluted.
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Figure 10: Pollution level of main rivers in China by 2011
River
Grade I-III
Water quality
Grade IV-V
Grade V+
YangTze
80.9%
13.8%
5.3%
Yellow River
69.8%
11.6%
18.6%
Pearl River
Songhua
River
Huai River
84.8%
12.2%
3.0%
45.2%
40.5%
14.3%
41.9%
43.0%
15.1%
Hai River
31.7%
30.2%
38.1%
Liao River
40.5%
48.7%
10.8%
Source: Ministry of Environmental protection, SWS Research
The government attaches great importance to the growing threat of water
shortages and pollution. By implementing strategies and goals throughout
the 12th FYP and increasing municipal WWT, strong signals point towards
the government’s commitment to tackle pollution and water resource
governance, particularly in the WWT market. We anticipate the release of
stricter policies during the 13th FYP (2015-19).
Figure 11: 12-FYP targets
Targets and goals of WWT industry set by 12-FYP
3
3
Increasing 45.69 m /d of WWT capacity to 208.05 m /d
Add WWT plants and enhance WWT capacity
(particularly in areas with low per-capita water
allocation and high water resource
development rate)
Add 159k km of pipeline infrastructure to existing 325k km
Reach 85% of WWT rate in cities of China (+7.5% from
2010)
Accelerate upgrade of WWT plants in towns and
cities
3
Upgrade 26.11m m /d of WWT plants
Target 15% of reclaimed water utilisation (up >5% from
2010)
Add 26.76m m3/d of reclaimed water utilising facilities to
3
existing 38.85m m /d, of which:
3
Eastern China (12.58m m /d)
Encourage utilisation of reclaimed water
3
Central China (7.06m m /d)
3
Western China (7.12m m /d)
Strengthen regulatory capacity
Source: MOHURD, MEP, NDRC, State Council, SWS Research
Figure 12: 12-FYP Targets investment
Increasing in investment on WWT industry breakdown (Rmbbn):
244.3 (57.2%)
Compared to investment on WWT spent
during 11-FYP (2006-10):
3.30%
Adding WWT capacity in cities and towns
104 (24.4%)
32.80%
Upgrading WWT plants
13.7 (3.2%)
0.70%
Reclaimed water utilisation facilities
30.4 (7.1%)
162.10%
Sludge treatment and disposal facilities
34.7 (8.1%)
-5.20%
427.1
13.40%
Pipeline infrastructure
Total
Source: MOHURD, MEP, NDRC, State Council, SWS Research
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With China’s rising urban population and higher-than-average disposable
income, the consumption of water will continue to grow. With a total
population of 1,374m, China’s urban population is expected reach 55% of
total population (755.9m people) by 2015. The average annual urban
disposable income per capita is expected to reach Rmb34,125 (a 10-year
Cagr of 12.52%).
Figure 13: Urbanisation rate
800
0.6
0.5
700
0.4
600
0.3
500
0.2
400
0.1
300
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E
Urban population (m)
Urbanisation rate (%)
Figure 14: Average annual urban disposable income per capita
40000
16.00%
35000
14.00%
30000
12.00%
25000
10.00%
20000
8.00%
15000
6.00%
10000
4.00%
5000
2.00%
0
0.00%
2010
2011
2012
2013
2014E
Annual urban disposable income per capita (Rmb)
2015E
YoY (%)
In line with the pace of China’s urbanisation and growing disposable income,
annual water consumption is expected to rise steadily at 461.41t per capita
by end-2015. Meanwhile, daily water consumption among urban residents
will remain stable at the 10-year average of c.190l per capita per day.
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Figure 15: Annual water consumption grows steadily
640
5.00%
630
620
610
600
2.50%
590
580
570
560
550
0.00%
2007
2008
2009
2010
2011
2012
2013 2014E 2015E
Annual water consumption (bn m3)
YoY (%)
Source: Ministry of water resources, SWS Research
Figure 16: Urban water consumption per capita
250
200
150
100
50
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014E
2015E
Urban daily water consumption per capita (liters/d)
Source: Ministry of water resources, SWS Research
Since 2002, the volume of municipal wastewater discharge has grown at a
10-year average of 7.15%. The portion of growth of municipal wastewater
discharge on the total volume has risen since 2008. In 2012, of the 68.48bn
tonnes of total wastewater discharged, 46.27bn tonnes (67.6%), was made
up of urban sewage. The volume of municipal wastewater discharge is likely
to be 56.9bn tonnes (76.6% of the total discharged) by 2015.
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Figure 17: Municipal wastewater discharge growth since 2008
70
80%
60
75%
70%
65%
60%
55%
Municipal WW discharged (bn t)
2015E
2014E
2013E
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
50%
2002
F50
r40
a30
g20
10
m
0
e
n
Industrial WW discharged
C
% of total WW discharged
u
r Ministry of water resources, State environmental protection administration, National statistics, SWS
Source:
Research
Market consolidation and competition
Currently, the Chinese WWT industry exhibits a fragmented market. At
end-2012, the top 10 WWT operators made up 25.03% of the total market
share, while the top three accounted for less than 15%. The decentralisation of
the industry implies further opportunities to consolidate and integrate. We
believe WWT operators with low profitability, including inefficient SOEs, will
be forced out of the industry.
Figure 18: Market share of WWT operators
15%
10.03%
74.97%
Others
Top 3 WWT operators
Remaining 7 WWT operators
Source: Frost &Sullivan, Company data, SWS Research
Since operators require substantial start-up costs for machinery and plants,
and with the high costs of WWT and equipment depreciation, many WWT
plants operate at a loss. In Urumqi and numerous other cities, the majority
of WWT treatment plants are operating at a loss and do not meet the
qualified grade standard. For example, one WWT plant in Urumqi requires
investment of Rmb106m, with a designed capacity of 50,0000m3 cubic
metres running at an average daily capacity of 13,000m3 at a 26% loading
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rate. Excluding equipment depreciation costs, the average cost per cubic
metre is Rmb3.4. At the standard price of Rmb0.8/t, this generates a loss of
Rmb2.6/m3 of wastewater treated and an annual loss of Rmb4.16m. WWT
operators running at low utilisation rates and high costs are likely to exit the
market.
In the municipal WWT industry, over 50% are state owned enterprises
(SOEs) occupying the largest market share of 69%. These SOEs benefit from
stable funding and extensive social sources. However, issues including a lack
of profit-making incentives and inefficient management led to operating
losses for most SOEs. With local government debt rising sharply, we believe
cash strapped municipalities will accelerate the divestment of loss-making
businesses, such as WWT operations.
Figure 19: 2014 market share of WWT industry by ownership (in capacity)
23%
8%
69%
SOEs
Privately-owned operators
Foreign companies
Source: Frost &Sullivan, company data, SWS Research
Furthermore, as a result of effective operation and strong initiative to
engage in business development, the market share of privately owned WWT
plants is steadily rising. The ongoing process of privatisation will bring
about more business opportunity, particularly for mid- to large-privately
owned operators such as Kangda.
By 2013, almost 30% of projects were carried out by privately-owned WWT
plants. In contrast, the capacity of privately-owned plants represented just
23.5% of total WWT capacity. Projects operated by privately-owned firms
are thus smaller in capacity, providing significant exploration potential.
The privately owned municipal WWT market is decentralised and
fragmented. Based on data from Frost & Sullivan in 2013, the top five
privately owned WWT companies collectively made up 20.1% of daily WWT
capacity in operation. During the process of consolidation and development,
unprofitable privately-owned WWT operators, those suffering from
financing and resource shortages or aging equipment and lagging
technology, will eventually be eliminated from the industry and are likely to
be taken over by leading WWT operators.
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Figure 20: 2013 market share of top 5 privately owned WWT operators by
daily capacity in operation
20.10%
79.90%
Others
Top 5 privately owned WWT operators
Source: Frost & Sullivan, company data, SWS Research
The advantages of top-level privately owned WWT operators are reflected in
their successful funding channels and opportunities to acquire other small
scale WWT plants. Further M&A will enhance the market share of these
privately owned operators within the municipal WWT industry and enable
them to achieve greater economies of scale and business opportunities.
Long-term growth driver
The State Council’s 12th FYP laid out targets to add 26.1m m3/day of WWT
plants and enhance treatment capacity by 42m m3/day at end-2015. In
accordance with the target, the number of WWT plants increased
substantially from 2,496 in 2010 to 3,622 in 1Q14. In addition, the daily
treatment capacity of WWT plants grew steadily from 125m m3/day in 2010
to 153m m3/day in 1Q14. Daily WWT capacity is expected to grow steadily
at a 6% Cagr and reach 167m m3/day by 2015.
Figure 21: WWT capacity
170
7%
165
6%
160
5%
155
150
4%
145
3%
140
2%
135
1%
130
125
0%
2012
2013
2014E
WWT capacity (m m3/d)
2015E
YoY (%)
Source: State Environmental Protection Administration, SWS Research
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Rising water tariffs will be a key driver of long-term growth. Increasing
water tariffs will be driven by the upgrade of water treatment standards.
Upgrading discharge standards from Grade 1B (or below) to Grade 1A thus
introduces new development opportunities in the municipal WWT industry.
In order to achieve more stringent emission standards, WWT companies will
need to increase their capital expenditure via the transformation and
construction of WWT plants, and thus expand the treatment capacity of
WWT companies and boost the industry’s development.
In early 2012, of more than 3,000 WWT plants, c.700 (c.23%) met the Grade
1A standard at a treatment capacity of 21m m3/day (21% of total WWT
plants and 15.5% of total treatment capacity). Along with policy
implementation and WWT plant transformation, discharge standards will
improve rapidly and are expected to reach c.60% by the end of 12-FYP (a
Cagr of 40%).
Figure 22: Rate of WWT plants reaching 1A discharge standards
60%
44%
43%
42%
41%
40%
39%
38%
37%
36%
35%
34%
33%
50%
40%
30%
20%
10%
0%
2012
2013
2014E
Rate of WWT plants at 1A discharge standard (%)
2015E
YoY (%)
Source: State Council, SWS Research
In line with increased capital expenditure, WWT plants require higher WWT
tariffs from local governments to meet the increased costs for return. The
average tariff of 36 major cities in China rose from Rmb0.78/t in 2010 to
Rmb0.81/t in 2012 (a Cagr of 3%). The average cost of WWT at the 1B
standard is Rmb0.8/t, while the upgrade of discharge standard (from 1B to
1A) is an additional Rmb0.2/t, reaching a total WWT cost of Rmb1.00/t. As a
result of strict implementation of minimum WWT tariff and recovering
WWT costs, which will further enhance the profitability of WWT industry,
the growth of WWT tariff is expected to accelerate at a Cagr of 13% from
Rmb0.91/t in 2013 to Rmb1.16/t 2015. For Beijing Enterprise Water Group
(371:HK, BEW), the average water tariff increase after the upgrade is 31%.
For Hanke Environment, the average is c.40%.
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Figure 23: WWT tariff growth
1.2
14%
1
12%
10%
0.8
8%
0.6
6%
0.4
4%
0.2
2%
0
0%
2011
2012
2013
2014E
WWT traiff (Rmb/m3)
2015E
YoY (%)
Source: State Council, SWS Research
Existing facility upgrade raises revenue and profitability
In terms of operating capacity, 580,000t/d (out of 1.46m t/d) WWT capacity
has reached the 1A standard at end-1H14. Of the 905,000t/d capacity below
the standard, 345,000t/d capacity is in the process of being upgraded.
Furthermore, in order to meet the discharge standards, which requires total
investment of Rmb1,079m, the upgrade will take place. Kangda is likely to
fund at least 20% of the investment from internal sources including 35% of
its IPO funding, the remaining investment will be borrowed by the company.
By 30 June 2014, Kangda had ample credit to support project upgrade. The
expansion in WWT plants and technology advancement will lower the WWT
costs of Kangda by enjoying the benefit of economies of scale, thereby
increasing its WWT tariffs and enhancing its profitability.
Figure 24: Project upgrades
37%
23%
40%
1a
Undergoing upgrade
Page 14
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Increasing average water tariff from 2014
Kangda’s average water tariff rose from Rmb1.03/t in 2011 to Rmb1.04/t in
2013. At 10%, the growth was much lower than the national average. This
was mainly due to the company’s expansion in 2013 in Anhui Province,
where the average tariff of Kangda’s projects is Rmb0.91/t, much lower than
Shandong’s Rmb1.19/t. On the back of project upgrades, we expect Kangda’s
average water tariff to grow and exceed the market trend in the long-term.
By end-2013, 460,000t (c.33% of its 1.39m tonne total) reached the Grade
1A standard. In 1H14, 120,000t worth of new 1A capacity began operations
and 345,000t worth of old capacity began the upgrading process. Meanwhile,
most new capacity in 2014-15 will be seen in Shandong and Jiangsu
provinces, where water tariffs are high. We therefore expect Kangda’s
average water tariff to rise from 5% in 2014 and 10% in 2015.
Figure 25: Water tariff is high in Shandong and low in Anhui and Henan
2011
2012
2013
Shandong
1.22
1.21
1.19
Henan
0.84
0.89
0.89
Anhui
0.80
0.80
0.91
Jiangsu
0.98
1.07
1.10
Others
1.18
1.18
1.15
Average tariff
1.03
1.04
1.04
Figure 26: We expect Kangda’s average tariff to increase largely from 2014
1.30
1.25
1.20
1.15
1.10
1.05
1.00
0.95
0.90
0.85
0.80
2011
2012
2013
2014E
2015E
2016E
Water tariff (Rmb/t)
M&A expansion by 2015
Kangda takes the development of China’s WWT industry as an important
opportunity to seek further business expansion via M&A. By 1H13, Kangda
had successfully acquired Beijing Chang Sheng. The acquisition expanded
the WWT capacity of Kangda by six projects with a total capacity of 130,000t
(in operation and pending operation). An additional 20% equity interest in a
JV adds to Kangda’s daily operating capacity by 500,000t. The successful
acquisition enhanced Kangda’s market position and enabled it to implement
further M&A.
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Since July 2014, Kangda has posted four acquisition projects post-IPO. On 24
July 2014, Kangda acquired a 100% stake in Guodian Langxinming Puyang
for a total consideration of Rmb56.88m. Kangda also acquired a WWT plant
(daily capacity of 50,000t) which was operating a BOT project for the
Puyang second wastewater factory.
On 10 August 2014, Kangda announced that it had acquired a 90% stake in
four Shandong-based WWT plants from Shandong Guohuan. Together with
its BOT/TOT projects, daily WWT capacity reached 210,000t, of which,
140,000t are in operation and 70,000t tonnes are pending. During the same
period, after the open bidding process, Kangda announced its agreement
with Suihua Housing and Construction Bureau to operate local TOT (in the
first phase) and BOT projects (in the second phase) for Rmb93m.
In November 2014, Kangda acquired Tianjin Ninghe BOT phase II projects
with 30,000t capacity in Tianjin costing Rmb73.87m.
Kangda is expected to gain 150-200m tonnes worth of M&A capacity post
IPO and finance further M&A with IPO funding and Rmb6.26bn in bank
credit. Kangda exhibits a steady growth post IPO and plans to increase its
capacity by 1.5m tonnes to2m tonnes by 2015.
Based on its vast management experience, Kangda has developed a range of
assess criteria, including the evaluation of its consumers credit history,
availability of funding sources for projects, treatment technology research,
costs of projects and local WWT tariffs. The effective cost controls and
careful selection of projects ensure the stable and high organic growth
prospective of Kangda.
Figure 27: Active M&A activities since IPO this year
July 2014
Guodian Langxin
Liaoning
Total capacity
(tonnes) (including
pending operation)
50,000
100%
56.88
August 2014
4 plants of Guohuan
Shandong
210,000
90%
270.9
August 2014
New BOT projects in suihua
Heilongjiang
100,000
100%
93
November 2014
Tianjin Ninghe BOT II phase
Tianjin
30,000
100%
73.87
Date
Target
Location
Stake
Price (Rmbm)
Financial efficiency
Kangda’s BOT operating gross margin (including financial income) was
65.3% in 2013, slightly lower than BEW’s 68%, but much higher than that of
other peers in mainland China. The company’s efficient management team
has ensured effective cost controls during its nationwide expansion. From
2011-13, gross margin remained stabled at c.65%. In addition, since the
upgrade of treatment facility will increase the water tariffs, we see further
potential to increase the profitability.
Kangda’s account receivable days are one of the lowest in the industry,
dropping from 32.0 days in 2013 to 28.1 days in 1H14.
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Figure 28: Gross margin
70%
68%
66%
64%
62%
60%
58%
56%
54%
52%
50%
2011
2012
2013
2014E
2015E
2016E
Implied gross margin of WWT treatment (including finacial income)
Earnings forecast and valuation
In our base case scenario, Kangda will complete 80% of its 150-200m tonne
acquisition target by 2015. This means Kangda will win 60m in 2015 and
60m in 2016. This will imply further assumptions of 4m tonnes worth of
added daily operating volume in 2015 and 3m tonnes worth of added daily
operating volume in 2016.
Figure 29: Financial protections with key assumptions
2013
2014E
2015E
2016E
WWT Capacity
1,390
2,030
2,600
3,200
Average Daily Operating Volume
1,312
1,660
2,322
2,882
Average water tariff
1.04
1.07
1.17
1.26
BOT Revenue
499
679
989
1326
Construction Revenue
532
950
900
900
BOT Gross Margin
0.65
0.67
0.67
0.68
Construction gross margin
0.19
0.19
0.19
0.19
With more projects in the pipeline, we forecast the company’s operating
revenue (including finance income) to be Rmb679m in 14E and Rmb989m
in 15E. Meanwhile, we believe the company’s construction revenue will
reach Rmb950m in 14E and Rmb900m in 15E.
We forecast earnings of Rmb293m in 14E (+27%), Rmb411m (+40%) in 15E
and Rmb564m (+36%) in 16E, with a Cagr of 38% during 2014-16E.
Figure 30: Base case revenue and net profit in 2014-16E
Base Case
2013A
2014E
2015E
2016E
Revenue (Rmbm)
1,340
1,840
2,094
2,430
YoY (%)
34.1%
37.3%
13.8%
16.0%
232
293
411
564
17.8%
26.4%
40.3%
37.2%
Net Profit (Rmbm)
YoY (%)
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In our bull case scenario, we believe Kangda will gain projects worth
Rmb200m by 2015. Our earnings forecast Cagr is 48% from 2014-16E.
Figure 31: Bull case revenue and net profit in 2014-16E
Bull Case
2013A
2014E
2015E
2016E
Revenue (Rmbm)
1,340
1,840
2,222
2,614
YoY (%)
34.1%
37.3%
20.8%
17.6%
Net Profit (Rmbm)
YoY (%)
232
294
477
646
17.8%
27.1%
62.1%
35.3%
We believe Kangda has three key advantages that allow it to be valued in the
top-tier among environmental stocks. This includes the company’s relatively
small size vs BEW, implying easy access to high growth. Kangda plans to
double its capacity by 2015. In addition, Kangda is a pure WWT treatment
company. We believe WWT treatment businesses have the highest return
and profitability vs other related businesses in the environmental sector.
Furthermore, given its recent IPO in July, Kangda is still relatively new to the
market, we believe its operating efficiency is high and thus believe as more
M&A is released; the market will notice its execution capabilities and begin
investing on the back of its expansion potential.
Hong Kong-based environmental peers are trading at average c.22x 14E PE
and 18x 15E PE. Kangda’s current valuation is low vs other first-tier
environmental stocks, providing the company with more valuation upside
and low downside risks to its operation.
Figure 32: Valuation table
Code
Company
6136 HK
967 HK
PE (x)
PB (x)
ROE (%)
14E
15E
14E
15E
14E
15E
KANGDA INTERNATIONAL
17.9
13.0
1.8
1.58
13.8
13.22
SOUND GLOBAL
15.4
12.0
2.2
1.8
15.8
16.5
371 HK
BEIJING ENTERPRISES WATER GR
24.8
19.2
2.8
2.5
11.3
13.4
1363 HK
CT ENVIRONMENTAL GROUP
28.4
20.5
6.5
5.1
26.1
27.2
257 HK
CHINA EVERBRIGHT INTL
27.9
21.2
3.3
2.9
12.5
14.9
270 HK
GUANGDONG INVESTMENT
15.7
14.6
2.1
1.9
13.3
12.7
AVERAGE
22.4
17.5
3.4
2.9
15.8
16.9
Depending on the successful execution of its projects and future M&A
activities, we see significant upside to Kangda’s share price. Our target price
of HK$4.5 is based on 18x 15E PE. With 38% upside, we initiate coverage of
Kangda International with a BUY recommendation.
Risks
Projects progress slower than expected; M&A activities behind market
expectations, worsening local government debt may result in delayed WWT
payments to Kangda and dilution risk: Kangda may need to finance
additional funding from 2016 since current funding will support its
aggressive expansion plan by mid-2016.
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December
2014
Appendix
Consolidated Income Statement
Rmbm
Revenue
2012
2013
2014E
2015E
2016E
999.32
1339.68
1839.72
2093.92
2429.58
Cost of Sales
(557.54)
(826.26)
(1176.76)
(1235.38)
(1332.03)
Gross Profit
441.78
513.42
662.96
858.54
1097.55
10.13
48.46
25.00
40.00
40.00
Selling/General/Admi. Expenses
(81.25)
(112.57)
(129.22)
(160.19)
(185.86)
Ebitda
366.95
449.77
0.00
0.00
0.00
Ebit
362.95
443.77
565.74
744.36
959.68
(133.90)
(167.70)
(198.58)
(242.20)
(272.29)
Other Income
Finance Costs
Profit before tax
233.07
281.68
367.16
502.16
687.40
Income tax expense
(35.70)
(49.05)
(73.43)
(90.39)
(123.73)
Minority interests
0.83
1.07
1.00
1.00
2.00
Profit for the year
196.54
231.56
292.73
410.77
561.67
Consolidated Balance Sheet
Rmbm
Current Assets
Bank balances and cash
Trade and other receivables
Inventories
Other current assets
2012
2013
2014E
2015E
2016E
1,900.3
1,993.2
2,878.5
2,467.3
2,485.3
543.8
275.6
853.7
321.5
166.8
1,294.9
1,575.2
1,921.8
2,022.9
2,165.5
5.3
3.1
3.0
3.0
3.0
56.3
139.3
100.0
120.0
150.0
Non-Current Assets
1,976.5
2,720.6
4,008.7
6,025.7
6,879.7
Long-term receivables
1,828.4
2,571.3
3,857.0
5,871.0
6,722.0
73.0
80.3
81.9
83.5
85.2
1.0
1.0
1.0
1.1
1.1
Total Assets
3,876.8
4,713.8
6,887.2
8,493.0
9,365.0
Current Liabilities
1,222.0
1,381.2
1,817.0
2,356.0
2,715.0
Borrowings
768.2
785.3
1,126.0
1,534.0
1,792.0
Trade and other payables
447.7
590.9
681.0
810.0
908.0
6.1
4.9
10.0
12.0
15.0
Long-term liabilities
1,538.8
1,979.9
2,155.0
2,804.0
2,828.0
Total Liabilities
2,760.7
3,361.1
3,972.0
5,160.0
5,543.0
0.0
0.0
0.0
0.0
0.0
Shareholder Equity
1,116.1
1,352.7
2,915.0
3,333.0
3,822.0
Total Liabilities and equity
3,876.8
4,713.8
6,887.0
8,493.0
9,365.0
Rmbm
2012
2013
2014E
2015E
2016E
Profit before taxation
233.1
281.7
367.2
502.2
687.4
Finance cost
133.9
167.7
198.6
242.2
272.3
CF from operating activities
-382.4
-205.8
-435.5
-200.2
346.3
-37.0
-131.8
-523.0
-511.0
-600.0
CF from investing activities
71.0
-214.7
-523.0
-511.0
-600.0
CF from financing activities
611.8
30.2
1,556.0
179.0
99.0
Net cash flow
300.4
-285.6
597.5
-532.2
-154.7
Cash at beginning
245.8
543.8
256.1
853.7
321.5
Cash at end
543.8
256.1
853.7
321.5
166.8
PP&E
Intangible and other assets
Other current liabilities
Minority Interests
Consolidated Cash flow statement
Capex
Page 19
October
12, 2010
10
December
2014
Building Materials
| Company
Utilities
| CompanyResearch
Research
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October
12, 2010
10
December
2014
Building Materials
| Company
Utilities
| CompanyResearch
Research
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Page 21
Renewable Energy| Company Research
10 December 2014
BUY
Initiation of Coverage
Analyst
Vincent Yu
A0230513070005
BAM599
[email protected]
Energy king
CGN Power (1816:HK)
Revenue (Rmbm)
YoY (%)
Net income (Rmbm)
YoY (%)
Basic EPS (Rmb)
Diluted EPS (Rmb)
ROE (%)
Debt/asset (%)
Dividend Yield (%)
PE (x)
PB (x)
EV/Ebitda (x)
2012
17,575
11%
4977.4
-8%
0.17
21%
80%
17%
13.3
2.3
11.9
2013
17,365
-1%
5071.4
2%
0.15
16%
75%
1%
14.3
1.9
12.6
2014E
20,024
15%
6301.8
24%
0.13
12%
67%
5%
16.4
1.7
12.6
2015E
22,080
10%
8106.9
29%
0.16
11%
69%
2%
13.7
1.4
15.7
2016E
33,005
49%
11524.2
42%
0.21
15%
68%
3%
10.7
1.2
10.4
China's largest nuclear power plant goes public. We initiate coverage of China
Guangdong Nuclear Power Corp subsidiary CGN Power with a BUY rating after the
country's largest nuclear power operator, with a 53% market share, completed a
HK$24.5bn IPO priced at the top of its range at HK$2.78/share.
Strong outlook for nukes. Nuclear power has a levelised cost of energy (LCOE) of
under Rmb0.2/KWh, vs Rmb0.36/KWh for thermal power, Rmb0.24/KWh for
hydropower, Rmb0.7/KWh for photovoltaic power and Rmb0.38/KWh for wind power.
Whereas nuclear contributes 11.3% of power supplied in the US, Japan and Europe, in
China it accounts for just 2.1% at present. However, the State Council's strategic action
plan for 2014-2020 calls for raising the country's nuclear capacity from 48GW (19GW
in operation) at present to 88GW by the end of 2020, of which 58GW will be in
operation and the remaining 30GW under construction. This translates to operational
capacity compounding at 18% annually between 2014-20.
The company does not hold any equities
or derivatives of the listed company
mentioned in this report (“target”), but then
we shall provide financial advisory services
subject to the relevant laws and regulations.
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equities of the target, which may exceed 1
percent of issued shares subject to the
relevant laws and regulations. The
company may also provide investment
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Company fulfills its duty of disclosure within
its sphere of knowledge. The clients may
contact [email protected] for
relevant disclosure materials or log into
last page.
CGN Power growth. Based on the schedule released by CGN Power, we estimate CGNP
total installed capacity will reach 11.62GW in 14E, 16.04GW in 15E, 21.71GW in 16E
and 22.79GW in 17E, representing a four-year Cagr of 28.6%. We also estimate CGN
Power will have total equity capacity of 7.89GW in 14E, 9.94GW in 15E, 12.93GW in
16E and 13.78GW in 17E, a four-year Cagr of 21.8%.
Initiate with a BUY. In our base case scenario, we assume the 41% equity acquisition
for the Taishan nuclear plant deal will be completed on March, 2015 (as per its stated
intention in the company's IPO prospectus). We also anticipate a further three interest
rate cuts over the next three years, based on research by our SWS macro team. We do
not factor in the company's planned acquisition of the Fangcheng nuclear plant in the
near future given some ambiguity over the timing of the deal. We forecast EPS of
Rmb0.13 in 14E (-13% YoY), Rmb0.16 in 15E (+20% YoY), Rmb0.21 in 16E (+28%
YoY) and Rmb0.24 in 17E (+17% YoY). Using a discounted cash flow model, we derive
a target price of HK$4.54, which represents 22.4x 15E PE or 2.2x 15E PB. With 63%
upside, we initiate coverage of the company with a BUY rating.
投资要点：

中国最大的核电运营商上市。我们首次覆盖中国广东核电集团下属中广核电力，
买入评级，中广核电力是中国最大的核电运营商，市场份额 53%，上市募集资金
245 亿港元，IPO 定价以价格范围内最高价格成交，2.78 港元/股。

核电前景空间无限。核电是唯一比化石能源平准化发电成本低的清洁能源。中
国核电发电的平准化成本小于 0.2 元每千瓦时，而火电的发电成本约为 0.36 元每千
瓦时，水电的发点成本为 0.24 元每千瓦时，光伏为 0.7 元每千瓦时，风电发电成本
为 0.38 元每千瓦时。在美国、欧洲和日本等发达国家，平均核电发电量占全国总发
电量的 11.3%，而中国的核电目前只有 2.1%的比率。国务院发印的《能源发展战
略行动计划(2014-2020 年)》中提出，到 2020 年，核电装机容量目标达到 5800 万千
瓦，在建容量达到 3000 万千瓦以上。截至 2014 年 10 月底，中国仅有 1900 万千万
的核电装机容量和 2900 千万的在建容量，这意味着核电行业从 2014 年到 2020 年的
复合年增长率必须达到 18%来实现规定目标。

中广核核电成长迅速。结合公司公布的官方信息和我们的预测，中广核电力在
2014 年至 2017 年年底预计能达到 11.62GW，16.04GW，21.71GW 和 22.79GW 的总
装机容量，四年复合增长率为 28.6%，权益装机容量可分别达到 7.89GW，9.94GW，
12.93GW 和 13.78GW，四年复合增长率 21.8%。

首次覆盖，买入评级。在我们的中性假设条件下，即广东台山核电站 41%的股
权如期收购（2015 年 3 月初），贷款利率预计在三年内有三次下调（由申万国内
分析报告推断），广西防城核电站短期内不会被收购的情况下，2014 年至 2017 年
的每股收益预测分别为人民币 0.13 元（同比下降 13%），
0.16 元
（同比增长 20％），
0.21 元（同比增长 28％）和 0.24 元（同比增长 17％）。现金流折现模型预测 2015
年年初中广核核电目标价格为 4.54 港元，即 15E 22.4x 市盈率水平和 2.2x 市净率水
平。预计股价有 63%的上涨空间，我们首次覆盖建议买入。
China requires more power
The Chinese economy experienced average growth of 10.1% since 2001. It is
estimated 6-7% growth rate in next few years according to Asia Society
Policy Institute. Although China will focus on economic restructuring instead
of total economic growth, the increasing GDP is expected to drive the
growing demand for electricity. In the past 10 years, CARG of total electricity
consumption grows is 9.5% which is in line with GDP growth. Regarding the
future economic growth, there is significant room for future development of
electricity industry.
Figure 1: Electricity consumption remains high until 2020 in China
20
800,000
15
600,000
10
400,000
5
200,000
0
0
Total electricity consumption(GWh)
Growth
GDP Growth
Source: Asia Society Policy Institute, NBS, CEC, SWS Research
Nuclear Power to reduce CO2 emissions
Compared with other energy sources especially fossil energy such as
thermal power, nuclear power produces low carbon dioxide emissions. In
2011 the world's nuclear power plants supplied 2518 TWh of electricity. For
every GWh electricity produced by nuclear, nuclear produces 29 tonnes of
CO2, only 3.3% of that for coal.
Figure 2: Nuclear has low gas emissions versus other power sources (Tonnes CO2/GWh)
1400
1200
1000
800
600
400
200
0
Average Emissions …
Source: WNA, SWS Research
Non-fossil energy is crucial to China
China is the second largest country by CO2 emissions after the US. To deal
with global warming, together with US, the Chinese government has
announced U.S.-China Joint Announcement on Climate Change, which will
have legal force in China. In the announcement, by 2020, CO2 emission per
GDP will decrease by 40%-45%, non-fossil fuel makes up 15% total
consumption.
Meanwhile, China aims to reach carbon dioxide emission peak on or earlier
than 2030 by which time non-fossil fuel energy consists 20% of total
consumption. To reach the target, weight of non-fossil fuel is planned be
doubled in total consumption.
In addition, the Twelfth Five-Year Plan for National Economic and Social
Development of the government has put forward that the ratio of non-fossil
energy to primary energy consumption will increase to 11.4% by 2015; the
energy consumption and the carbon dioxide emission per unit of GDP will
decline by 16% and 17% respectively compared with that of 2010.
The following table estimates expected non-fossil fuel electricity generation.
At present, non-fossil fuel energy almost reaches the capacity as planned.
However, from 2015 onwards there will be continuously generation gap
between the target and the installed capacity.
Figure 3: Estimated Electricity Generation by Non-fossil Fuel Energy until 2030 indicates big room for non-fossil energy
2013
2014E
2015E
2020E
2030E
Total Energy Consumption (standard coal, mt)
375,000
388,461
402,404
480,000
560,000
9.80%
10.60%
11.40%
15.00%
20.00%
36,750
41,177
45,874
72,000
112,000
317
315
313
308
300
Non-fossil energy generation targets ( hundred million kwh)
11,593
13,072
14,656
23,377
37,333
Hydroelectricity
26,000
28,000
30,000
35,000
40,000
Hydroelectricity utilization hours
3,318
3,550
3,550
3,550
3,550
Nuclear installed capacity (10MW)
1,461
2,109
4,000
5,800
13,000
Nuclear utilization hours
7,893
8,000
8,000
8,000
8,000
Grid-connected Wind installed capacity (10MW)
7,548
9,300
11,300
20,000
40,000
Wind utilization hours
2,080
2,100
2,100
2,100
2,100
Photovoltaic installed capacity (10MW)
1,479
2,900
4,400
10,000
25,000
-
1,200
1,200
1,200
1,200
Non-fossil fuel (%)
Non-fossil fuel Consumption
average coal per KW (g/kWh)
installed capacity (10MW)
Photovoltaic utilization hours
Non-fossil fuel installed capacity (10MW)
36,488
42,309
49,700
70,800
118,000
Expected power generation of Non-fossil fuel (hundred million kwh)
11,350
13,928
16,751
22,465
36,000
243
-856
-2,095
912
1,333
-
-
-
4%
4%
Gap (hundred million kwh)
Gap (%)
Source: General Office of the State Council, BP, SWS Research
Nuclear energy will play a big role in China
In 2013, energy consumption in China grew 4.7%, 2.3% less than last year.
The decrease in growth mainly comes from coal (4%) and oil (0.6%) while
the growth of nuclear power ranks second over the worldwide. However,
compared to a world average of 15%, nuclear power generation in China
accounts for just 0.9% of consumption, which implies significant potential.
Figure 4: Nuclear power consumption remains low in China
standard coal, mt
2005
2006
2007
2008
2009
2010
2011
2012
2013
Total Energy Consumption
Coal Consumption
Oil Consumption
Natural Gas Consumption
Hydroelectricity
Consumption
Wind Consumption
Nuclear Consumption
Hydroelectricity, Nuclear
and Wind Consumption
Hydroelectricity
Consumption (%)
Wind Consumption (%)
Nuclear Consumption (%)
Non-fossil fuel Consumption
(%)
2360
1671
467
61
92
2587
1839
499
75
113
2805
1994
527
93
126
2914
2049
533
108
152
3066
2159
549
120
160
3249
2210
617
143
188
3480
2380
647
174
182
3617
2409
680
188
227
3750
2475
690
218
236
50
19
160
41
19
173
44
21
191
49
23
224
55
25
239
68
24
279
69
28
278
72
30
340
98
34
368
3.9
4.4
4.5
5.2
5.2
5.8
5.2
6.3
6.3
2.1
0.8
6.8
1.6
0.7
6.7
1.6
0.8
6.8
1.7
0.8
7.7
1.8
0.8
7.8
2.1
0.7
8.6
2.0
0.8
8.0
2.0
0.8
9.4
2.6
0.9
9.8
Source: BP, SWS Research
Nuclear has the largest potential to fill the gap. It’s more stable than
hydropower, wind, solar and other renewable energy sources with a large
generating capacity per generating unit. Natural gas is subjected to
long-distance transportation costs while wind and hydroelectricity and
wind are sensitive to weather conditions. In addition, the technical issue is
still a major problem to control costs. Furthermore, it’s not affected by
weather or seasonality, and a nuclear station can operate for an extended
period of time at its designed capacity.
In terms of levelised cost of energy (LCOE), nuclear power is less than
Rmb0.2/KWh, much lower than other energy sources.
Figure 5: Nuclear has the lowest LCOE versus other energy sources
7893
8000
7000
6000
5000
4000
3000
2000
1000
0
0.7
5012
0.36
3318
0.24
0.18
Annual Utilization Hours (2013)
1367
20460.38
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
LCOE (RMB/KWh)
Source: NEA, IRENA, SWS Research
By 2020, China will operate 58GW with another 30 GW under construction.
This is derived from the government's target of 40GW in operation with
18GW in construction in 2015, and 50GW in operation with 30GW in
construction by 2017. By 2030, a total of 150GW nuclear power plants is
expected to be in operation. To meet growing energy demand, to protect the
environment and to deal with global warming, nuclear power is to play an
important role in China soon.
Figure 6: Policy planning for installed capacity until 2030
2030
150
2020
58
2017
30
50
2015
30
40
Present
20
0
18
28
20
40
60
In operation
80
100
In construction
120
140
Source: NEA, SWS Research
By the end of October 2014, China owns 22 commercial nuclear plants in
operation (5% of world total) and 26 in construction (38% of world total).
Installed capacity in operation reaches 19GW and 29GW in construction. All
plants are managed and operated by CGNPC and CNNC. CPI Corporation has
minority interests in Hongyanhe nuclear plants.
Figure 7: Major NPP in operation and in construction in China (up to Oct.31 2014)
Company Name
CGNPC
CNNC
CPI Corp
Units in
operation
11
11
2*
Installed Capacity
(GW)
11.62
6.51
2.5
Units in
construction
11
10
2
Installed
Capacity (GW)
14.31
10.24
2.5
*: equity in Hongyanhe 1, 2
CGNPC = China Guangdong Nuclear Power Corporation
CNNC= China National Nuclear Corporation
CPI Corp = China Power Investment Corporation
However, the current nuclear capacity of 48GW (of which 19GW is in
operation and 29GW in construction) does not meet the 58GW operational
capacity target in 2020. The national energy bureau plans to restart
construction on eight plants in 2015 to fill this gap. By 2030, there will be
further gap of 92GW if no new capacity is added from 2015.
Nuclear
2%
others
3%
Others
Nuclear 5%
Hydroele
ctricity
17%
11%
Hydroel
ectricity
14%
Thermal
78%
China Elecetricity Production Structuure
Thermal
70%
World Electricity Production
Structure
Nuclear power plants to restart in China
Following the Fukushima accident in March 2011, the State Council
announced on March 16, 2011 that it would suspend approvals for new
nuclear power stations and conduct comprehensive safety checks of all
nuclear projects with an immediate halt required on any not satisfactory,
including those under construction.
In May 2012 a new safety plan for nuclear power was approved in principle.
The Ministry of Environment made public the Twelfth Five Year Plan for
Nuclear Safety and Radioactive Pollution Prevention and the 2020 Vision and
a report on civil nuclear facilities including changes made since the
Fukushima accident. On eighth China International Conference of Nuclear
Energy, Deputy Secretary-General of China Nuclear Energy Association Xu
Yuming indicated that new approvals of nuclear plants might restart in June.
Chinese Academy of Science researcher He Zuoxiu stated that the
government aims to add 30GW by the end of the Twelfth Five-Year Plan
(2011-15), which would reach 70GW total with expected investment of
Rmb79.8bn. The nuclear restart is certain and the only problem is time.
On 24 October 2012 the executive meeting of State Council adopted the
Nuclear Security Plan (2011-2020) and Long-Term Nuclear Power
Development Plan (2011-2020), signaling that approvals for new plants
could recommence. Together with Twelfth Five Year Plan for Nuclear Safety
and Radioactive Pollution Prevention and the 2020 Vision compiled by the
Ministry of Environment, the three documents together constitute a
prerequisite condition for China's nuclear restart. But plans for inland
plants would be put on hold until 2015 according to the plan. By end-2012,
four nuclear power plants had restarted construction.
In January this year, the National Energy Board in the 2014 Energy Work
Guidance made clear 8.64GW new installations in 2014. In March, Premier
Li Keqiang put forward clearly in the Government Work Report that China
would for certain start a series of nuclear power projects. In May, the
National Development and Reform Commission issued the Work Program of
Energy Industry to Strengthen Air Pollution Control, making it certain to
increase installed capacity in 2015 to 40GW, of which 18GW would be
under construction, and strive to achieve 50GW with another 30GW under
construction by 2017. In June, President Xi Jinping at the Central Financial
Work Leading Group meeting called for accelerated construction of coastal
nuclear projects under the highest international safety standards. On 27
August, the State Council Executive Meeting decided to start construction of
a series of coastal nuclear power projects in two years.
Recently, at the annual meeting of the Chinese Society of Electrical
Engineering Nuclear Power Branch, officials claimed that they had
developed a list of start projects, Hongyanhe Units 5 & 6, Shidaowan and
Fuqing Units 5 & 6 are most likely to be approved in the near future. But for
inland plants, officials close to the NEA indicated little possibility in the next
two years. Meanwhile, the NEA is working on the Thirteenth development
plan of nuclear. By 2030, the WNA forecasts total capacity to reach 130GW
while chairman of CNEA Zhang Huazhu proposes a more positive goal of
150-200GW, c.10% of total electricity production at a world nuclear
average level.
Figure 9: Recent news on restart of the nuclear power plants in China indicates booming
Time
Event
Plan
May-12
Brought up of nuclear restart
70GW by 2015
Oct. 2012
Nuclear Security Plan (2011-2020), Long-Term Nuclear Power
Development Plan (2011-2020)
prerequisite condition for China's
nuclear restart
Jan. 2014
2014 Energy Work Guidance
8.64GW new installation
Mar. 2014
Government Work Report
Start a series of nuclear power
projects
May-14
Work Program of Energy Industry to Strengthen Air Pollution
Control
40/18GW in 2015
50/30GW in 2017
Aug. 2014
State Council Executive Meeting
New construction in 2 years
Nov. 2014
Thirteenth development plan of nuclear (on compiling)
Probably 53GW instead of 58GW
WNA
134GW
CNEA
150-200GW
Future in
2030
Source: Various public sources, SWS Research
CGNP is the largest nuclear power
operator in China, one of the only two
CGN power, the main listed body of CGN Power Group, is the largest nuclear
power generation company in China by total installed capacity. Main
business includes operating nuclear power plant, selling electricity,
managing and monitoring construction of new plants, R&D and supporting
services related to nuclear.
The five force model suggests the company is unique with high certainty of
business operation.
Figure 11: Five force model
Threat of new
entrancts:
Low, super high
barrier with huge
capex and
knowhows. China
has only two nuclear
operators and there
won't be more.
Bargin Power of
suppliers:
Competitive
Rivalry:
Medium, CGPN has
its own Uranium
supplier company
and long term
contracts have been
signed
NO competitors
as the industry is
monoplized
Bargaining Power
of Buyers:
High, demand of
electricity is rigid
Threat of
Substitute
products:
Medium, nuclear
power has the
lowest LCOE which
makes other
energy sources
such as solar or
wind hard to
compete
Source: SWS Research
All of the installed nuclear capacity in China services markets which are
economically developed but lack primary energy or clean energy sources,
such as Guangdong Province, Fujian Province, Liaoning Province and Hong
Kong. CGNP operated and managed the following 11 nuclear power
generating units with a total installed capacity of 11,624MW:
Figure 12: Nuclear Plants in operation of CGNP
Name
Daya Bay 1
Daya Bay 2
Ling'ao 1
Ling'ao 2
Lingdong 1
Lingdong 2
Yangjiang
Ningde 1
Equity
owned
Tariff
Rmb/kWh
Installed
Capacity
(MW)
75%
0.42
984
100%
0.429
990
93.20%
0.429
984
78.20%
32.29%
0.429
0.429
1086
1089
Location
Daya Bay Base, Shenzhen,
Guangdong
Yangjiang, Guangdong
Fuding, Fujian
Commercial
Start Date
Feb-94
May-94
May-02
Jan-03
Sep-10
Aug-11
Mar-14
Apr-13
Ningde 2
Hongyanhe 1
Hongyanhe 2
38.15%
0.429
1119
Dalian, Liaoning
May-14
Jun-13
May-14
Source: Company Data, SWS Research
Figure 13: CGNP operating period
Feb-94
Feb-94
May-94
Daya Bay 1
Daya Bay 2
Ling'ao 1
Ling'ao 2
Lingdong 1
Lingdong 2
Yangjiang
Ningde 1
Ningde 2
Hongyanhe 1
Hongyanhe 2
Figure 14: CGNP geographic footprint
Source: Company, SWS Research
Sep-14
May-02
Jan-03
Sep-10
Aug-11
Mar-14
Apr-13
May-14
Jun-13
May-14
Besides the current 11 nuclear power projects in operation, there are 11
other units under construction. Of the 22 units, 14 projects are under the
consolidated subsidiaries of CGN Power (including two Taishan nuclear
units which assumed to be acquired on March, 2015), four projects in Joint
Venture and four units under the Associate Company. The following figure
lists some key assumptions and general information about the 22 projects.
The expected commercial operating date for projects under construction is
basically based on the time period suggested by the “Major Completed
Milestones” table on the Global Offering of CGN Power. Tariff for each power
plant station in the forecasting period is assumed to be the same as the tariff
in 2013, which is based on the national nuclear benchmark on-grid tariff of
Rmb0.43/kWh, adjusted with local benchmark on-grid tariff for coal-fired
generating units, according to the official data. We use “Tariff excluding VAT”
for our calculation on sales for electricity in revenue. The company is
currently subject to a VAT rate of 17% in China.
Figure 15: General Information for all nuclear power units of CGNP
Projects
Status as of 2014/11
FCD
Actual or
Expected
Commercial
Operating
Date
Installed
Capacity
(MW)
Tariff
with
VAT
(2013)
Tariff
exclude
VAT
(2013)
Equity
Owned
Design
ed Life
(Years)
Consolidated Subsidiaries
Daya Bay Unit 1
Operating
Daya Bay Unit2
Operating
Ling'ao Unit 1
Operating
Ling'ao Unit 2
Operating
Lingdong Unit1
Operating
Lingdong Unit2
Operating
Yangjiang Unit 1
Operating
Yangjiang Unit 2
Under construction
Yangjiang Unit 3
Under construction
Yangjiang Unit 4
Under construction
Yangjiang Unit 5
Under construction
Yangjiang Unit 6
Under construction
Taishan Unit 1 *
Under construction
Taishan Unit 2 *
Under construction
1987.8
1987.8
1997.5
1997.1
2005.1
2006.6
2008.1
2009.6
2010.1
2012.1
2009.9
2009.1
2009.1
2010.4
1994.2
1994.5
2002.5
2003.1
2010.9
2011.8
2014.3
2015.7
2016.1
2017.7
2018.7
2019.7
2016.1
2016.7
984
984
990
990
1087
1087
1086
1086
1086
1086
1086
1086
1750
1750
0.42
0.42
0.43
0.43
0.43
0.43
0.43
0.43
0.43
0.43
0.43
0.43
0.43
0.43
0.36
0.36
0.37
0.37
0.37
0.37
0.37
0.37
0.37
0.37
0.37
0.37
0.37
0.37
75%
75%
100%
100%
93%
93%
78%
78%
78%
78%
78%
78%
51%
51%
40
40
40
40
40
40
40
40
40
40
40
40
60
60
* Acquisition at the beginning of March,2015
Joint Venture Company
Ningde Unit 1
Operating
Ningde Unit 2
Operating
Ningde Unit 3
Under construction
Ningde Unit 4
Under construction
2008.2
2008.1
2010.1
2010.9
2013.4
2014.5
2015.7
2016.7
1089
1089
1089
1089
0.43
0.43
0.43
0.43
0.37
0.37
0.37
0.37
32%
32%
32%
32%
40
40
40
40
Associate Company
Hongyanhe Unit 1
Hongyanhe Unit 2
Hongyanhe Unit 3
Hongyanhe Unit 4
2007.8
2008.3
2009.5
2009.8
2013.6
2014.5
2015.3
2015.7
1119
1119
1119
1119
0.4142
0.4142
0.4142
0.4142
0.35
0.35
0.35
0.35
38%
38%
38%
38%
40
40
40
40
Operating
Operating
Under construction
Under construction
Base case assumptions throughout our
analysis
For forecasting, analysis and valuation, we assume CGN Power would not
invest in any further nuclear projects. The 41% equity acquisition of Taishan
nuclear power joint venture has already been agreed upon two parties. We
expect Taishan nuclear will be acquired at the beginning of March, 2015 in
the light of our deduction. Accordingly, Taishan nuclear is included in our
current project projections. Fengcheng nuclear station is an acquisition
target of CGN Power as well, but without any formal contracts so far. We do
not include this power plant station in our analysis.
It is expected that there will be another three times of interest rate cut in the
near future. We have incorporated this expectation into our forecasts and
valuation.
Over-allotment option is embedded in the global offering of CGN Power
shares, in our analysis, we do not assume any of the over-allotment option
will be exercised in the foreseeable future.
We breakdown revenue, operating cost, investment cost and finance cost in
forecasting for income statement and predict related major assets in balance
sheet on account of historical financial data. Cash flow statement is derived
from the projections of the previous two statements. We will discuss our
methodology in the following analysis and subtract ratios of profitability,
liquidity, efficiency and solvency to give a general idea for the healthiness of
business operation of CGN Power in the future.
Our target price is based upon DCF valuation. All our valuation and forecasts
have taken account for the influence of capital injection from IPO and
acquisition of Taishan nuclear. .
IPO and Acquisition
CGN Power will be listed on Hong Kong Stock Exchange on 10 December,
2014, after raising Rmb19.4bn from its IPO at a price of HK$2.78 per share.
Figure 16: IPO Summary
IPO shares ('000'000)
IPO price (HK$)
Capital raised (Rmbm)
Exchange Rate
Capital raised (HK$ m)
Capital raised (HK$ m, after fees and commissions)
Domestic shares ('000'000)
H Shares converted from Domestic Shares and held by the NSSF ('000'000)
H Shares to be issued under the Global Offering ('000'000)
Ending shares in total ('000'000)
8825
2.78
19,423
0.7917
24,534
23,926
34,418
883
8,825
44,125
Figure 17: Intended use of net proceeds from IPO (under HK$2.78 IPO price)
(Rmbm)
Percentage
Acquisition additional 41% of the equity in Taishan nuclear
51.2%
Capital investment in under-construction nuclear power stations
32.0%
Support research and development activities
4.7%
Repay debts and supplement our working capital
7.0%
Expand into overseas markets
5.1%
Capital Injected
9,700
6,053
889
1,333
967
As the offer price goes into the high end of the stated Offer Price range,
the net proceeds will increase by approximately HK$1,470.1 million
compared to proceeds issued at mid-point HK$ 2.61 per share. CGN
Power intend to use such additional proceeds for capital expenditure
related payments in the nuclear power stations under construction, as
stated in its Global Offering, the percentage for intended uses of net
proceeds from IPO changed accordingly.
CGN Power already holds 10% of Taishan nuclear power joint venture,
and this time, it will acquire an additional 41% of equity, thus taking
control of 51% of this subsidiary. We assume all acquired assets go into
PP&E and liabilities are absorbed in bank borrowings in 2015 employing
merger accounting.
“Capital investment in under-construction nuclear power stations” is
taken into additions in PP&E in 2014. 8% of capital raised will be used to
repay the bank borrowing at the end of 2014, and the fund for expansion
to overseas market and for research and development activities is set to
be stored in cash currently. So that all the capital raised from IPO goes
into the financial statements in our forecasts according to the intended
use of net proceeds proposed in Application Proof of CGN Power.
“Over-allotment Option”: the option expected to be granted by CGN Power to
the International Underwriters exercisable by Joint Representatives under the
International Underwriting Agreement pursuant to which CGN Power may be
required by the Joint Representatives to issue up to an aggregate of
1,323,750,000 additional H Shares, representing in aggregate 15% of the
initial number of Offer Shares, at the Offer Price, to cover over-allocations in
the International Offering, if any
We do not assume any of the over-allotment option will be exercised in
the foreseeable future.
Installed Capacity
Due to different expected commercial operating date, the total installed
capacity at the end of the year will increase upon any completion of projects
under construction.
Figure 18 : Installed capacity at the end of the Year (Include JV and Associate)
30GW
25GW
21.7
20GW
16.0
15GW
10GW
11.6
5.5 6.1
5.5 6.1
2,011
2,012
6.3
8.3
7.9
12.9
13.8
25.0
23.9
22.8
14.6
15.5
25.0
15.5
9.9
5GW
GW
2,013
2014E
2015E
Equity Installed Capacity
2016E
2017E
2018E
2019E
2020E
Total Installed Capacity
Total installed capacity is estimated to reach 11.6GW and 16.0GW at the end of
2014 and 2015 respectively.
Figure 19: Installed capacity at the end of the year for each nuclear unit
(MW)
Actual
2011 2012 2013
2014
2015
984
984
984
984
984
Daya Bay Unit 1
984
984
984
984
984
Daya Bay Unit2
990
990
990
990
990
Ling'ao Unit 1
990
990
990
990
990
Ling'ao Unit 2
1,087 1,087 1,087 1,087
1,087
Lingdong Unit1
1,087 1,087 1,087 1,087
1,087
Lingdong Unit2
0
0
0
1,086
1,086
Yangjiang Unit 1
0
0
0
0
1,086
Yangjiang Unit 2
0
0
0
0
0
Yangjiang Unit 3
0
0
0
0
0
Yangjiang Unit 4
0
0
0
0
0
Yangjiang Unit 5
0
0
0
0
0
Yangjiang Unit 6
0
0
0
0
0
Taishan Unit 1 *
0
0
0
0
0
Taishan Unit 2 *
Estimates
2016
2017
2018
2019
2020
984
984
990
990
1,087
1,087
1,086
1,086
1,086
0
0
0
1,750
1,750
984
984
990
990
1,087
1,087
1,086
1,086
1,086
1,086
0
0
1,750
1,750
984
984
990
990
1,087
1,087
1,086
1,086
1,086
1,086
1,086
0
1,750
1,750
984
984
990
990
1,087
1,087
1,086
1,086
1,086
1,086
1,086
1,086
1,750
1,750
984
984
990
990
1,087
1,087
1,086
1,086
1,086
1,086
1,086
1,086
1,750
1,750
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
Ningde Unit 1
Ningde Unit 2
Ningde Unit 3
Ningde Unit 4
Associate Company
0
0
0
0
0
0
0
0
1,089
0
0
0
1,089
1,089
0
0
1,089
1,089
1,089
0
0
0
0
0
0
0
0
0
1,119
0
0
0
Sum for Consolidated
Subsidiaries
Sum for JV
Sum for Associate
Sum for JV and Associate
6,122
0
0
0
6,122
0
0
0
6,122
1,089
1,119
2,208
7,208
2,178
2,238
4,416
Sum for Total
6,122
6,122
8,330
11,624
Hongyanhe Unit 1
Hongyanhe Unit 2
Hongyanhe Unit 3
Hongyanhe Unit 4
1,119
1,119
0
0
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
8,294
3,267
4,476
7,743
12,880
4,356
4,476
8,832
13,966
4,356
4,476
8,832
15,052
4,356
4,476
8,832
16,138
4,356
4,476
8,832
16,138
4,356
4,476
8,832
16,037
21,712
22,798
23,884
24,970
24,970
Weighted average installed capacity is not a revenue factor, but most of the
costs go along with the increase of weighted average capacity of
consolidated subsidiaries, like administrative expenses, other expenses, etc.
We list it here as a reference. Weighted average installed capacity takes the
commercial operation date of each unit into consideration.
Figure 20: Weighted average capacity installed for each nuclear unit
(WM)
Actual
2011
2012
2013
2014
984
984
984
984
Daya Bay Unit 1
984
984
984
984
Daya Bay Unit2
990
990
990
990
Ling'ao Unit 1
990
990
990
990
Ling'ao Unit 2
1,087 1,087 1,087 1,087
Lingdong Unit1
362
1,087 1,087 1,087
Lingdong Unit2
0
0
0
815
Yangjiang Unit 1
0
0
0
0
Yangjiang Unit 2
0
0
0
0
Yangjiang Unit 3
0
0
0
0
Yangjiang Unit 4
0
0
0
0
Yangjiang Unit 5
0
0
0
0
Yangjiang Unit 6
0
0
0
0
Taishan Unit 1 *
0
0
0
0
Taishan Unit 2 *
2015
Estimates
2016
2017
2018
2019
2020
984
984
990
990
1,087
1,087
1,086
452
0
0
0
0
0
0
984
984
990
990
1,087
1,087
1,086
1,086
996
0
0
0
1,604
729
984
984
990
990
1,087
1,087
1,086
1,086
1,086
452
0
0
1,750
1,750
984
984
990
990
1,087
1,087
1,086
1,086
1,086
1,086
452
0
1,750
1,750
984
984
990
990
1,087
1,087
1,086
1,086
1,086
1,086
1,086
452
1,750
1,750
984
984
990
990
1,087
1,087
1,086
1,086
1,086
1,086
1,086
1,086
1,750
1,750
Ningde Unit 1
Ningde Unit 2
Ningde Unit 3
Ningde Unit 4
0
0
0
0
0
0
0
0
726
0
0
0
1,089
635
0
0
1,089
1,089
454
0
1,089
1,089
1,089
454
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
1,089
Associate Company
Hongyanhe Unit 1
Hongyanhe Unit 2
Hongyanhe Unit 3
0
0
0
0
0
0
560
0
0
1,119
653
0
1,119
1,119
839
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
1,119
0
0
0
0
466
1,119
1,119
1,119
1,119
1,119
Subsidiaries
Sum for JV
Sum for Associate
5,397
0
0
0
6,122
0
0
0
6,122
726
560
1,286
6,937
1,724
1,772
3,496
7,660
2,632
3,544
6,175
11,623
3,721
4,476
8,197
13,333
4,356
4,476
8,832
14,419
4,356
4,476
8,832
15,505
4,356
4,476
8,832
16,138
4,356
4,476
8,832
Sum for Total
5,397
6,122
7,408
10,433
13,836
19,820
22,165
23,251
24,337
24,970
13%
0%
13.3%
138%
217%
10%
53%
100%
52%
41%
26%
15%
17%
0%
8%
0%
0%
8%
0%
0%
4%
0%
0%
172%
77%
33%
8%
0%
0%
0%
Hongyanhe Unit 4
Capacity Growth-Consolidated
Capacity Growth-JV
Capacity Growth-Associate
Capacity Growth-Total
Weighted average equity installed capacity considers the equity owned by
CGN Power for each subsidiary, associate and joint venture, as well as the
timing of commercial operating date. This indicator is not necessary in our
revenue forecast, but it’s essential in our profit projection, as different
nuclear unit has different equity percentage and each unit will begin
commercial operation at different spot on the timeline. Profit to owners of
equity will change accordingly to different equity levels. Thus the
percentage of profit attributable to owners of equity out of total net profit is
determined by the percentage of weighted average equity capacity installed
of consolidated subsidiaries to total weighted average installed capacity of
consolidated subsidiaries for the year.
Figure 21: Weighted average equity capacity installed for each nuclear unit
(WM)
Actual
2011
2012
2013
2014
2015
738
738
738
738
738
Daya Bay Unit 1
738
738
738
738
738
Daya Bay Unit2
990
990
990
990
990
Ling'ao Unit 1
990
990
990
990
990
Ling'ao Unit 2
1,013 1,013 1,013 1,013 1,013
Lingdong Unit1
338
1,013 1,013 1,013 1,013
Lingdong Unit2
0
0
0
637
849
Yangjiang Unit 1
0
0
0
0
354
Yangjiang Unit 2
0
0
0
0
0
Yangjiang Unit 3
0
0
0
0
0
Yangjiang Unit 4
0
0
0
0
0
Yangjiang Unit 5
0
0
0
0
0
Yangjiang Unit 6
0
0
0
0
0
Taishan Unit 1 *
0
0
0
0
0
Taishan Unit 2 *
2016
Estimates
2017
2018
2019
2020
738
738
990
990
1,013
1,013
849
849
778
0
0
0
818
372
738
738
990
990
1,013
1,013
849
849
849
354
0
0
893
893
738
738
990
990
1,013
1,013
849
849
849
849
354
0
893
893
738
738
990
990
1,013
1,013
849
849
849
849
849
354
893
893
738
738
990
990
1,013
1,013
849
849
849
849
849
849
893
893
352
352
352
352
352
352
352
352
352
352
352
352
352
352
352
Ningde Unit 1
Ningde Unit 2
Ningde Unit 3
0
0
0
0
0
0
234
0
0
352
205
0
352
352
147
Ningde Unit 4
Associate Company
Hongyanhe Unit 1
Hongyanhe Unit 2
Hongyanhe Unit 3
Hongyanhe Unit 4
Subsidiaries
Sum for JV
Sum for Associate
Sum for Total
Equity / Total Capacity
-Consolidated
Equity / Total Capacity -JV
Equity / Total Capacity
-Associate
0
0
0
0
0
147
352
352
352
352
0
0
0
0
0
0
0
0
213
0
0
0
427
249
0
0
427
427
320
178
427
427
427
427
427
427
427
427
427
427
427
427
427
427
427
427
427
427
427
427
4,807
0
0
0
5,482
0
0
0
5,482
234
213
448
6,119
557
676
1,233
6,685
850
1,352
2,202
9,149
1,201
1,708
2,909
10,169
1,407
1,708
3,114
11,018
1,407
1,708
3,114
11,867
1,407
1,708
3,114
12,363
1,407
1,708
3,114
4,807
5,482
5,930
7,352
8,887
12,058
13,283
14,132
14,981
15,477
89%
90%
90%
32%
88%
32%
87%
32%
79%
32%
76%
32%
76%
32%
77%
32%
77%
32%
38%
38%
38%
38%
38%
38%
38%
38%
35%
35%
36%
35%
35%
35%
35%
35%
Equity / Total Capacity -Total
Revenue Breakdown
Revenue of CGN Power consists of three parts, “Sales of Electricity”, “Service
Revenue” and “Sales of Other Goods”, among which “Sales of Electricity”
takes about 95% of the total revenue. We will decompose forecasts of “Sales
of Electricity” in more detail in the following analysis.
Under our assumptions for commercial operating date of nuclear units
under construction, more than 4.6GW of capacity will be fully connected to
the grid in 2016, which we expect to result in a surge in revenue booked in
2016.
Figure 22: Revenue Breakdown
50bn
60%
50%
49%
40bn
30bn
20bn
10bn
11%
16 -1%19
15 0% 17
15%
21
10%32
36 14%39
44
42
8%
7%
40%
Sales of other goods
30%
Service revenue
20%
4%
bn
10%
0%
Sales of electricity
Growth rate of Revenue(YoY)
-10%
2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E
Installed capacity, utilization hours, on-grid tariff are the three major drivers
of sales of electricity. We forecast sales from every key driver for each of the
underlying projects within the company.
We assume that future utilization hours for all nuclear units equal 7700
hours a year, adjusted with commercial operating date in the middle of a
year.
Figure 23: Utilization hours for each nuclear unit
Utilization hours*
2,011
8,610
Daya Bay Unit 1
7,448
Daya Bay Unit2
7,879
Ling'ao Unit 1
8,049
Ling'ao Unit 2
5,998
Lingdong Unit1
3,365
Lingdong Unit2
Actual
2,012
2,015
Estimates
2,016 2,017 2,018
2,013
2,014
2,019
2,020
7,273
8,696
7,969
7,778
7,318
6,644
7,486
7,425
7,120
7,556
7,528
7,459
7,700
7,700
7,700
7,700
7,700
7,700
5,775
0
0
0
0
0
0
0
7,700
7,700
7,700
7,700
7,700
7,700
7,700
3,208
0
0
0
0
0
0
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,058
0
0
0
7,058
3,208
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
3,208
0
0
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
3,208
0
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
3,208
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
5,934
7,700
4,492
0
0
7,700
7,700
3,208
0
7,700
7,700
7,700
3,208
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
4,587
7,700
4,492
0
0
7,700
7,700
5,775
3,208
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
7,700
Yangjiang Unit 1
Yangjiang Unit 2
Yangjiang Unit 3
Yangjiang Unit 4
Yangjiang Unit 5
Yangjiang Unit 6
Taishan Unit 1 *
Taishan Unit 2 *
Ningde Unit 1
Ningde Unit 2
Ningde Unit 3
Ningde Unit 4
Associate Company
Hongyanhe Unit 1
Hongyanhe Unit 2
Hongyanhe Unit 3
Hongyanhe Unit 4
*Historical data calculated by dividing installed capacity from net generating power with on-grid factor
There is a difference between the net power generation and the actual
product results of average utilization hours and capacity. We set it as
on-grid factor, which is critical for our projections of net power generation
from 2014 to 2020. Based on historical financial data from 2011 to 2013, we
get the average on-grid factor as 0.9706.
Figure 24: On-grid factor
Net Power Generation (GWh)
Sales of electricity
Average on-grid tariff (Rmb/kWh)(excluding VAT)
Average capacity factor (%)
Average load factor (%)
Average utilization hours
Actual net power generation
2011
40,519
14,972
0.3695
91%
90%
7773
40944
2012
45,113
16,514
0.3661
90%
88%
7750
46441
2013
44,157
16,268
0.3684
87%
87%
7586
46441
0.99
0.97
0.95
On-grid factor
Estimated net power generation= utilization hours * installed capacity *
on-grid factor
Figure 25: Net power generation for each nuclear unit
(GWh)
Actual
2011
2012
2013
8,223
6,946
7,150
Daya Bay Unit 1
7,113
8,305
7,091
Daya Bay Unit2
7,571
7,657
6,842
Ling'ao Unit 1
7,734
7,474
7,261
Ling'ao Unit 2
6,328
7,721
7,942
Lingdong Unit1
3,550
7,010
7,870
Lingdong Unit2
Yangjiang Unit 1
0
0
Yangjiang Unit 2
0
0
Yangjiang Unit 3
0
0
Yangjiang Unit 4
0
0
Yangjiang Unit 5
0
0
Yangjiang Unit 6
0
0
Taishan Unit 1 *
0
0
Taishan Unit 2 *
0
0
2014
2015
2016
0
0
0
0
0
0
0
0
7,354
7,354
7,399
7,399
8,124
8,124
6,087
0
0
0
0
0
0
0
7,354
7,354
7,399
7,399
8,124
8,124
8,116
3,382
0
0
0
0
0
0
7,354
7,354
7,399
7,399
8,124
8,124
8,116
8,116
7,440
0
0
0
11,989
5,450
Estimates
2017
2018
2019
2020
7,354
7,354
7,399
7,399
8,124
8,124
8,116
8,116
8,116
3,382
0
0
13,079
13,079
7,354
7,354
7,399
7,399
8,124
8,124
8,116
8,116
8,116
8,116
3,382
0
13,079
13,079
7,354
7,354
7,399
7,399
8,124
8,124
8,116
8,116
8,116
8,116
8,116
3,382
13,079
13,079
7,354
7,354
7,399
7,399
8,124
8,124
8,116
8,116
8,116
8,116
8,116
8,116
13,079
13,079
Ningde Unit 1
Ningde Unit 2
Ningde Unit 3
Ningde Unit 4
0
0
0
0
0
0
0
0
6,272
0
0
0
8,139
4,748
0
0
8,139
8,139
3,391
0
8,139
8,139
8,139
3,391
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
8,139
Associate Company
Hongyanhe Unit 1
Hongyanhe Unit 2
Hongyanhe Unit 3
0
0
0
0
0
0
4,982
0
0
8,363
4,878
0
8,363
8,363
6,272
8,363
8,363
8,363
8,363
8,363
8,363
8,363
8,363
8,363
8,363
8,363
8,363
8,363
8,363
8,363
Hongyanhe Unit 4
0
0
0
0
3,485
8,363
8,363
8,363
8,363
8,363
40,519
45,113
44,156
51,841
57,252
86,865
99,643
107,759
115,876
120,610
Subsidiaries
Sum for JV
Sum for Associate
Sum for JV and
Associate
Sum for Total
0
0
0
0
6,272
4,982
12,886
13,241
19,669
26,483
27,808
33,452
32,555
33,452
32,555
33,452
32,555
33,452
32,555
33,452
0
0
11,254
26,128
46,152
61,260
66,007
66,007
66,007
66,007
40,519
45,113
55,410
77,969
103,404
148,125
165,650
173,767
181,883
186,618
Sales of Electricity is the product of net power generation and tariff of each
nuclear power unit.
Figure 26: Sales of Electricity (exclude VAT) for each nuclear unit
Rmbm
Actual
2011
2012
2013
2014
Daya Bay Unit 1
2,952
2,493
2,567
2,640
Daya Bay Unit2
2,553
2,981
2,545
2,640
Ling'ao Unit 1
2,776
2,808
2,509
2,713
Ling'ao Unit 2
2,836
2,740
2,662
2,713
Lingdong Unit1
2,326
2,838
2,919
2,986
Lingdong Unit2
1,305
2,576
2,892
2,986
Yangjiang Unit 1
0
0
0
2,237
Yangjiang Unit 2
0
0
0
0
Yangjiang Unit 3
0
0
0
0
Yangjiang Unit 4
0
0
0
0
Yangjiang Unit 5
0
0
0
0
Yangjiang Unit 6
0
0
0
0
Taishan Unit 1 *
0
0
0
0
Taishan Unit 2 *
0
0
0
0
2015
Estimates
2016
2017
2018
2019
2020
2,640
2,640
2,713
2,713
2,986
2,986
2,983
1,243
0
0
0
0
0
0
2,640
2,640
2,713
2,713
2,986
2,986
2,983
2,983
2,734
0
0
0
4,406
2,003
2,640
2,640
2,713
2,713
2,986
2,986
2,983
2,983
2,983
1,243
0
0
4,807
4,807
2,640
2,640
2,713
2,713
2,986
2,986
2,983
2,983
2,983
2,983
1,243
0
4,807
4,807
2,640
2,640
2,713
2,713
2,986
2,986
2,983
2,983
2,983
2,983
2,983
1,243
4,807
4,807
2,640
2,640
2,713
2,713
2,986
2,986
2,983
2,983
2,983
2,983
2,983
2,983
4,807
4,807
Ningde Unit 1
Ningde Unit 2
Ningde Unit 3
Ningde Unit 4
0
0
0
0
0
0
0
0
2,305
0
0
0
2,991
1,745
0
0
2,991
2,991
1,246
0
2,991
2,991
2,991
1,246
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
2,991
Associate Company
Hongyanhe Unit 1
Hongyanhe Unit 2
Hongyanhe Unit 3
0
0
0
0
0
0
1,764
0
0
2,961
1,727
0
2,961
2,961
2,220
2,961
2,961
2,961
2,961
2,961
2,961
2,961
2,961
2,961
2,961
2,961
2,961
2,961
2,961
2,961
Hongyanhe Unit 4
0
0
0
0
1,234
2,961
2,961
2,961
2,961
2,961
14,972
0
0
0
16,514
0
0
0
16,268
2,305
1,764
4,069
18,914
4,736
4,688
9,424
20,903
7,229
9,375
16,604
31,786
10,220
11,843
22,063
36,482
11,965
11,843
23,807
39,465
11,965
11,843
23,807
42,448
11,965
11,843
23,807
44,188
11,965
11,843
23,807
Subsidiaries
Sum for JV
Sum for Associate
Sum for Total
For JV
Profit share of CNG Power
Indicated total profit
Total profit % of Rev
For Associate
Profit share of CNG Power
Indicated total profit
Total profit % of Rev
14,972
16,514
20,337
28,338
37,507
53,849
60,290
63,273
66,256
67,996
2
(4)
144
444
19%
295
913
19%
450
1,394
19%
636
1,971
19%
745
2,307
19%
745
2,307
19%
745
2,307
19%
745
2,307
19%
151
(5)
149
461
396
1,225
791
2,450
999
3,094
999
3,094
999
3,094
999
3,094
999
3,094
26%
26%
26%
26%
26%
26%
26%
26%
“Sales of Electricity” for consolidated subsidiaries is the major contributor
for revenue. For joint venture and associate, only share of profit that belongs
to CGN Power counts.
CGN Power controlled 32% equity of the Joint Venture, and 38% as of the
Associate. All profits and investments are planted in the financial
statements of CGN Power employing equity method in accounting. In order
to get an approximate share of results for CGN Power, we use actual profit
margin in 2013, indicated equity ownership and our projected sales of
electricity in 2013 for Joint Venture and Associate to calculate the profit
margin for each of them. As the earliest commercial operating date for
nuclear units under those companies is in 2013, only 2013 profits could
provide us with an indication for projections. Therefore, we use 19% profit
margin for Joint Venture and 26% profit margin for the Associate so as to
estimate share of profit for Joint Venture and Associate from 2014 to 2020.
Cost Breakdown
“Cost of sales and services” is comprised of “Cost of Nuclear Fuel”,
“Depreciation of PP&E”, “Spent Fuel Disposal Fund” and “Others”. “Cost of
Nuclear Fuel” is directly associated with commercial operation of nuclear
power units, which increase with the growth of weighted average capacity
for consolidated subsidiary.
Figure 27: Cost of Sales and Services Breakdown
25bn
20bn
15bn
6.5
5.8
10bn
5bn
bn
2.9
0.8
2.2
2.1
2011
1.2
7.0
1.2
7.5
7.8
1.2
1.4
Others
Spent fuel disposal fund
Depreciation of PP&E
4.0
0.8
3.0
1.0
5.6
6.0
4.5
5.2
6.2
3.2
0.8
2.4
3.3
0.7
2.2
3.7
0.8
2.8
2.8
2.7
2.9
3.1
4.2
4.6
4.8
5.1
5.2
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
Cost of nuclear fuel
Others& Other Expenses
“Others” includes staff cost, operating maintenance cost and an
approximately RMB 600 million annual expense for provision of equipment
and services related to nuclear technology, research and development.
“Other Expenses” primarily consists of research development expenses, like
employee benefits, technology support, office expenses etc. All these other
expenses, staff cost, operating maintenance fee as well as selling and
distribution expenses and administration expenses go along with weighted
average capacity growth rate at the same time.
Cost of nuclear fuel
Since nuclear fuel was checked and filled twice out of every three years,
according to the chart on Global Offering, we add a 67% factor on the
original growth rate, which in line with the growth of weighed average
capacity.
Depreciation
All the nuclear units except for Taishan nuclear have a design life for 40
years. Depreciation for the year is assumed as the past-year-level plus with
40-year straight-line depreciation for the new capacity installed in that
year.
Spent Fuel Disposal Fund
“Provisions for spent fuel disposal fund” is subject to a charge of RMB 0.026
per kWh of the actual net power generation after 5 years of commercial
operation, according to the requirements of the “Interim Measures on the
Collection and Use of Funds for the Treatment and Disposal of Nuclear
Power Station Spent Fuel”. Our estimation for this part of cost has combined
all the charges for each unit in a year according to different commercial
operation date.
Investment Breakdown
We assume Rmb15/w as unit cost for construction of nuclear power plants,
based on the actual investments data from other nuclear power plants.
Figure 28: Construction Cost of Nuclear Power Plants in operation
Project
Fuqing
Fangjiashan
Yangjiang
Fangchenggang
Sanmen Phase I
Haiyang Phase II
Taishan
Daya Bay
Lingao
Tianwan
Qinshan Phase I
Qinshan Phase II
Qinshan Phase III
Construction Cost of Nuclear Power Plants
Installed Capacity Technology Total Investment $bn Unit cost ($/w)
2*108
CPR1000
27
12.5
2*108
CPR1000
26
12
6*108
CPR1000
69.6
10.8
2*108
CPR1000
25.6
11.85
2*125
AP1000
45
18
2*125
AP1000
45
16
2*177
EPR
50
14.1
2*984
M310
35.5
18
2*990
M310
29.4
14.8
2*1060
PWR
25.8
12.2
1*300
PWR
1.7
5.5
2*642
PWR
14.4
11.2
2*728
PHWR
23.4
15.5
For a typical CP1000 type project, total investment could be breakdown
into equipment, buildings and others.
Figure 29: Total investment of a CPR1000 nuclear plant
CPR 1000 Average Cost
Investment ($bn)
%
Equipment
7.2 60%
Nuclear Island
Steam Generator
Stabilizer
3.5
0.6
0.1
0.1
0.5
0.2
0.2
0.2
0.4
0.1
0.3
0.1
0.6
2.3
0.6
Safety injection tank
Containment
Pressure Vessels
Control rod
Reactor components
Main cooling pump
Main channel
Valve
Fuel delivery system
Others
Conventional Island
Turbine
30%
5%
1%
1%
4%
2%
2%
2%
4%
1%
3%
1%
4%
19%
5%
Generator
Moisture separator reheaters
Electric motor
Others
Accessory Equipment
0.5
0.2
0.2
0.8
1.4
4%
2%
1%
7%
11%
Buildings
Others
3 25%
1.8 15%
Figure 30 :CPR 1000 cost breakdown
15%
Nuclear Island
30%
Conventional Island
Accessory Equipment
25%
Buildings
19%
11%
Others
Figure 31: Conventional Island and Nuclear Island
Conventional Island
Nuclear Island
Turbine
13%
3%
26%
37%
Steam Generator
17%
4%
Generator
3%
10%
21%
5%
11%
Moisture
separator
reheaters
13%
3%
13%
7% 7%
7%
Stabilizer
Safety injection
tank
Containment
Pressure Vessels
The following figure analyzes the cost under different generation of
technology. AP1000 is the third generation technology, which cost about 15%
higher than the second-plus generation.
Figure 32 : Cost compare CPR 1000 vs AP 1000
Main Nuclear Island
CPR 1000
Components
Quantit Unit Price
y
($/ton)
Steam Generator
3
180
Compar
e
AP 1000
Total
Price
243
Quantit
y
2
Unit Price
($/ton)
Total
Price
%
220
308
27
Pressure Vessels
1
150
50
1
160
67
34
Stabilizer
1
160
14
1
160
16
14
Main cooling pump
3
300
32
4
350
25
(22)
Main channel
3
1000
270
2
2000
280
4
Reactor components
1
200
1
250
25
946
17
All
809
Capex
With unit cost of Rmb15/w, we split total investment cost for each unit
under construction into 5 years before commercial operation. For the year
2014 and 2015, Capex forecasts have already given in the Global Offering of
CGN Power. 2015 Capex includes around Rmb10bn capital expenditure for
acquisition of Taishan nuclear and another Rmb6.15bn for PP&E investment
in Taishan.
Figure 33 : Capital Expenditure for 14E and 15E
Our Company (at corporate headquarters level)
787,018
Year ending December
31,2015
10,888,189(1)
GNPJVC (Daya Bay)
193,125
354,858
Ling’ao Nuclear
189,939
258,286
Capital Expenditure RMB’000
Nine months Ending December 31
Lingdong Nuclear
129,845
633,831
Yangjiang Nuclear
8,789,993
9,248,933
CNPRI
259,058
405,000
Suzhou Nuclear Power Research Institute
214,300
367,800
Taishan Nuclear
Others
Total
–
6,154,000(2)
118,096
139,457
10,681,374
28,450,354
(1) Including estimated capital expenditure for the Proposed Acquisitions.
(2) Estimated capital expenditure from the completion of the Proposed Acquisitions to the end of 2015.
Source: Company data
Under the formal estimation from CGN Power, GNPJV, Lingdong Nuclear and
Ling’ao Nuclear, each with two operating nuclear unit, has more than RMB
200 million CAPEX, equaling to RMB 100 million for each operating unit per
year at least, which we will include as an additional CAPEX charge for
operating units in our total CAPEX projections. Corporate level CAPEX,
excluding acquisition value, has an average round RMB 800 million per year,
included in our future CAPEX as well.
Additions for PP&E is assumed as a fixed percentage of CAPEX, adjusted
with new acquisitions. 80% of capital expenditure is expected to be
borrowed from bank.
Debt Structure and Finance Costs
Most of liabilities of CGN Power come from four parts, loans, bank
borrowings, notes payable and provisions.
Figure 34 : Debt Structure
160bn
1
9
1
9
140bn
1
5
1
5
1
5
120bn
100bn
80bn
60bn
40bn
3
9
Provisions
110
105
110
107
102
95
Notes payable
Bank borrowings
57
41
51
30
20
26
27
27
27
27
27
27
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
Loans
33
20bn
bn
2
9
2
9
2
9
2
2
17
2011
Effective interest rate
Effective interest rates on loans, bank borrowings, notes payable and
provisions respectively are initially based on the average of historical level.
Since central bank has lowered the leading rate in November 2014 by 0.4%,
effective interest rate on bank borrowings and loans dropped accordingly.
The 0.4% rate cut will only influence on debt with floating rate. About 25%
of bank borrowings are linked with floating-rate and 50% for loans. It is
expected that there will be another three times interest rate cut in the near
future. We incorporated this expectation into our assumptions, as the
lending rate will be cut as the same level as stated in 2014 in the coming
three years, effective from 2016 to 2018.
Bank borrowings
Bank borrowings increased more than 8% in 2015 due to the acquisition of
Taishan nuclear. 80% of Capex, except for capital used for acquisition, comes
from additions of bank borrowing. Repayment of bank borrowing is
estimated as past-year level plus with 13-year straight line repayment
schedule for newly borrowed fund occurred with the year.
Notes payables
CGN Power has 8.5 billion notes outstanding currently. The 2002 notes will
mature on November 22, 2017, 2007 notes on December 20, 2022 and 2010
notes on May 12, 2020. The respective interest rate is 4.5%, 5.9% and 4.6%
as stated, and all notes assumed to be paid on time and the company would
not issue further notes in the foreseeable future.
Provisions
Additions in provision are composed of movements in “Provision for Spent
Fuel Management”, “Provision for Low and Medium Level Radioactive
Waste Management” and “Provisions for Nuclear Power Plant
Decommissioning”. The latter two items are not substantial and quite
volatile. We forecasts new additions for provision as the sum of spent fuel
disposal fund for the year plus a fixed amount.
“Provisions for Nuclear Power Plant Decommissioning” takes about 90% of
total provisions historically, and this part of provision subjects to an
interest rate. We calculated the historical effective interest rate on provision
for nuclear power plant decommissioning and set it as 7.8% per year for
interest expense prediction.
Interest expense and finance cost
Interest expense comprised of all the interest expense on the above four
items of liabilities.
Figure 35 : Interest Expense Decomposition
9bn
8bn
7bn
6bn
5bn
4bn
3bn
2bn
1bn
bn
1.3
1.4
1.1
1.6
5.7
1.7
3.7
1.2
1.2
1.2
Interest on all loans
1.4
0.9
2.3
1.3
Interests relating to provision for
nuclear power plant
decommissioning
6.5
6.4
6.1
Interest on notes payable
5.8
5.4
3.5
Interest on bank borrowings
2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E
Construction in progress (CIP) & Capitalized interest expense
According to historical level, 97% of addition for PP&E goes into addition for
CIP, so that we assume the same as in the forecasts. Transfers could be a lot
higher in the year 2016, as three nuclear units owned by CGN Power
completed construction in the year 2016.
Capitalized interest rate since 2014 is set as 5.7% of CIP, according to
historical level. By deducting capitalize interest from interest expense, we
get the projected finance costs.
Tax (VAT & Corporate Tax)
Nuclear power companies in China are subject to preferential tax treatment.
There is a “refund-after-collection” for VAT within 15 years from the month
following the commencement of operations, with the refund gradually
decreasing in three phases. VAT is excluded in our sales of electricity in
revenue, while refunds are calculated at 75% of VAT tax paid for the first
five years since operation, 70% for the second five years and 55% for the
third five years, same as regulated.
In addition to this preferential tax treatment, nuclear power projects
approved on or after January 1, 2008 are exempted from PRC corporate
income tax for three years starting from the first year when electricity sales
generate revenue, and are entitled to a 50% reduction in PRC corporate
income tax for the subsequent three years. Therefore, we derived our
effective tax rate mainly from projects in operation adjusted with
preferential tax influence implemented by this treatment in the coming 6
years.
Figure 36 : Effective tax rate and VAT refunds
(Rmbm)
2011
2012
2013
VAT refunds
1,009
1,263
1,299
Effective Tax rate
18.29% 16.12% 16.68%
2014E
1,554
16.84%
2015E
1,807
16.43%
2016E
3,170
11.12%
2017E
3,743
11.56%
2018E
3,870
11.95%
2019E
3,996
14.31%
2020E
4,193
15.70%
Dividends
On Global Offering of CGN Power, the company stated that it expects to
distribute no less than 33% of its annual distributable net profits as
dividends in the future, so we set dividend paid out ratio as 33%. In 2014,
the company distributes a special dividend.
Profits
Net profit attributable to owner of the company is estimated at RMB 5.6
billion for 2014 and RMB 7.1 billion for 2015 under our assumptions, with
ROE at 12.7% and 14.6% respectively.
Figure 37: Net Profit and ROE for equity owners
14bn
12bn
27.1%
25.4%
10.58
12.53
13.28
18.2%
8bn
4.73
4.14
4.19
5.56
12.7%
7.07
14.6%
16.6%
30.0%
25.0%
9.07
10bn
6bn
11.68
20.0%
17.1%
16.8%
16.1%
15.3%15.0%
10.0%
4bn
5.0%
2bn
bn
0.0%
2011
2012
2013
2014E
2015E
2016E
Profit attributable to Equity Owners
2017E
2018E
2019E
2020E
ROE for equity owners
We conduct a sensitivity analysis on 2016 EPS with interest rate and unit
cost as variables.
Figure 38: Net Profit and ROE for equity owners
Bank Borrowing Interest rate (Loans interest rate associated)
2016 EPS % Change
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
15%
-4.4%
-8.8%
-13.2%
-17.6%
-22.0%
-26.4%
10%
4.7%
0.4%
-4.0%
-8.3%
-12.6%
-17.0%
5%
10.2%
5.9%
1.6%
-2.7%
-7.0%
-11.3%
Unit Cost
0
12.8%
8.5%
4.3%
0.0%
-4.3%
-8.5%
-5%
15.4%
11.2%
6.9%
2.7%
-1.6%
-5.8%
-10%
20.4%
16.2%
12.0%
7.8%
3.5%
-0.7%
-15%
27.1%
23.0%
18.8%
14.6%
10.5%
6.3%
7.5%
-30.8%
-21.3%
-15.6%
-12.8%
-10.1%
-4.9%
2.1%
Cash Flow
As our projections are based merely on current agreed projects, cash flow
from operating will flatten out after all construction completed in 2019, and
cash flow from investing and financing will decrease in absolute amount at
the same time with less expenditure demand.
Cash flow from financing and operating could always be good contributors
to cover surging investment needs in the coming 5 years. As a result, net
cash flow stays positive and accumulates into the future under our
predictions. This also allows the company either to expand both
domestically and internationally, or to distribute more dividends in the near
future.
Figure 39: Cash Flow Analysis
40bn
30bn
20bn
CFO
10bn
CFI
bn
2011
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
CFF
2020E
-10bn
-20bn
-30bn
Ratio Analysis
Profitability ratios
Gross profit margin, EBIT and EBITDA margin stays stable at above 48%,
53%, and 67% respectively. Growth rate for revenue and profit are
generally in consistent with the growth rate of weighted average installed
capacity and net power generation.
Figure 40: Profitability Ratio Analysis
Profitability
2011
Gross profit margin
EBIT margin
EBITDA margin
Profit before
taxation margin
ROA
ROIC
Growth rate
Growth rate of
Revenue(YoY)
Growth rate of
Profit(YoY)
DuPont Analysis
ROE
Net profit ratio
Asset turnover
Leverage ratio
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
48.3%
53%
70%
46.5%
51%
67%
46.9%
51%
65%
48.1%
53%
67%
49.2%
57%
71%
51.8%
60%
74%
52.3%
61%
75%
53.0%
60%
74%
53.6%
60%
74%
53.4%
60%
74%
40%
4.7%
33%
4.1%
7.9%
35%
4.0%
6.8%
38%
3.9%
6.8%
44%
3.5%
5.9%
39%
4.6%
8.0%
42%
5.3%
8.8%
43%
5.7%
9.1%
44%
5.9%
9.2%
45%
6.1%
9.2%
10.7%
-1.2%
15.3%
10.3%
49.5%
14.4%
8.1%
7.4%
4.1%
-7.8%
1.9%
24.3%
28.6%
42.2%
20.3%
10.3%
7.1%
5.9%
22.9%
34.0%
0.14
20.6%
28.3%
0.14
16.0%
29.2%
0.14
11.8%
31.5%
0.12
11.5%
36.7%
0.10
14.6%
34.9%
0.13
15.5%
36.7%
0.15
15.1%
37.5%
0.15
14.5%
37.4%
0.16
13.7%
38.0%
0.16
4.83
5.06
4.03
3.05
3.26
3.16
2.90
2.68
2.46
2.25
DuPont analysis indicates that a sudden drop in ROE in 2014 is mainly
caused by equity financing from IPO. The downward sloping trend of ROE
since 2017 is not a concern. Asset turnover and net profit ratio are
relatively stable in the forecasting period, while the leverage slopes down
slightly due to accumulation in equity and decreased borrowings with no
further projects (except current ones and intended ones) for investment
under our assumptions.
Liquidity and efficiency ratios
The soaring current ratio and quick ratio attribute to the accumulated cash.
Other efficiency ratios generally stay stable with 2013 level based on our
assumptions.
Figure 41: Liquidity and Efficiency Ratio analysis
Liquidity and Efficiency
2011
2012
Current Ratio
Quick Ratio
Inventory turnover
Inventory days
AP turnover
AP days
AR turnover
AR days
64.8%
39.9%
1.1
344.2
0.3
1,244.4
2.8
131.7
67.9%
41.3%
1.2
299.6
0.6
592.9
1.6
228.9
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
82.2%
36.7%
1.1
341.5
0.7
495.9
5.7
64.3
129.1%
87.4%
1.1
342.7
0.7
488.9
5.5
65.8
89.4%
49.5%
1.0
350.9
0.7
494.2
5.6
65.3
95.0%
48.8%
1.0
376.2
0.7
507.6
5.7
63.7
95.0%
46.6%
1.0
381.6
0.7
509.2
5.8
63.3
106.1%
56.3%
0.9
387.4
0.7
514.1
5.8
63.1
118.9%
67.7%
0.9
392.7
0.7
518.5
5.8
62.9
128.6%
76.5%
0.9
391.5
0.7
515.6
5.8
62.8
Solvency ratios
Debt ratios will be lowered to around 67% of assets after capital injection
from IPO. The company has adequate funding to cover its interest expense.
Figure 42: Solvency Ratio analysis
Solvency
2011
Net debt/Equity
Debt/Asset
Operating cash flow/NI
Interest Coverage
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
216.1%
79.3%
1.9
314.1%
80.2%
1.7
235.8%
75.2%
1.9
130.0%
67.2%
1.7
181.9%
69.3%
1.5
166.8%
68.3%
1.8
143.8%
65.5%
1.7
120.0%
62.6%
1.7
97.0%
59.4%
1.7
75.9%
55.5%
1.7
2.7
2.0
1.7
2.0
1.7
2.4
2.8
3.2
3.6
4.0
Valuation
DCF valuation
According to our FCFF model, CGN Power has a present value of HK$4.54
per share at the beginning of 2015 with Rmb158bn estimated equity value
and Rmb308bn enterprise value. Valuation is based on 7-year projections
and a terminal value thereafter. In line with our forecast assumptions,
perpetual growth rate for revenue is set as zero. WACC is derived with 3.8%
risk free rate, 6.39% market risk premium, 1.08 equity beta, 5.63% cost of
debt, 15% effective tax rate and 150% optimal debt to equity ratio.
We use a beta of 1.08 from China Longyuan Power Group Corporation
(916:HK) as a reference for CGN Power.
FCFF is negative from 2014 to 2015, as nuclear power stations generally
have 5 year period in construction before commercial operation, during
which sustainable profit earnings are delayed meanwhile large amount of
investments cannot be immediately covered with current operating cash
profits.
Figure 43: WACC
WACC
Risk-free Rate
Equity Risk Premium
Beta :
Cost of Equity(Ke)
Nominal Cost of Debt(Kd)
Debt to Equity Ratio:
Effective Tax Rate
3.80%
6.39%
1.08
10.70%
5.63%
150%
15.00%
WACC
7.15%
Figure 44: FCFF model
FCFF model (Rmbm)
Revenue
EBIT
Tax paid
NOPAT
Changes in WC
Cash NOPAT
Plus: D&A
Less: CAPEX
FCFF
TV
Total
2014 PV
2015 PV
2016PV
SYWG Research
SYWG Research
Bloomberg & Peer Selection
CAPM
Historical Average Data
Long-term capital structure judged by the analyst
Long-term value combined with current tax rate
Weighted Average Data
FY14E
20,024
10,609
-1,787
8,823
-1,435
7,388
2,850
-11,546
-1,308
FY15E
22,080
12,651
-2,079
10,573
-1,358
9,214
3,131
-28,450
-16,105
FY16E
33,005
19,854
-2,208
17,646
-1,721
15,924
4,627
-15,445
5,105
FY17E
37,746
22,860
-2,643
20,216
-1,430
18,786
5,278
-10,417
13,647
FY18E
40,784
24,635
-2,944
21,692
-1,363
20,328
5,695
-7,259
18,765
FY19E
43,819
26,424
-3,780
22,644
-1,349
21,295
6,112
-4,101
23,306
-1,308
286,880
308,805
348,221
-16,105
5,105
13,647
18,765
23,306
FY20E
45,616
27,418
-4,305
23,114
-1,293
21,821
6,359
-2,200
25,980
363,137
389,116
Figure 45: Target Price based on DCF valuation
At the beginning of
EV (Rmbm)
Cash (Rmbm)
Debt (Rmbm)
Minority (Rmbm)
Equity value (Rmbm)
Equity value (HK$m) *
Outstanding Shares (‘000’000)
Share Price(HK$)
*Exchange rate 0.79
2014E
286,880
24,051
-93,292
-9,383
208,255
263,614
41,562
6.34
2015E
308,805
13,576
-142,025
-22,008
158,348
200,441
44,125
4.54
2016E
348,221
14,916
-146,931
-24,460
191,745
242,715
44,125
5.50
Figure 46: DCF Sensitivity Analysis
2015 Share Price (HK$)
5.38 -0.15%
5.65%
7.01
WACC
-0.10%
7.09
Perpetual Growth Rate
-0.05% 0.00% 0.05%
7.19
7.28
7.37
0.10%
7.47
0.15%
7.57
6.15%
5.99
6.06
6.14
6.22
6.30
6.37
6.46
6.65%
5.13
5.19
5.25
5.32
5.38
5.45
5.52
7.15%
4.38
4.43
4.49
4.54
4.60
4.65
4.71
7.65%
3.73
3.78
3.82
3.87
3.92
3.97
4.02
8.15%
3.16
3.20
3.24
3.28
3.32
3.37
3.41
8.65%
2.66
2.69
2.73
2.76
2.80
2.84
2.87
Peer Table Analysis
We select comparable companies mainly by screening nuclear capacity
percentage. Only companies with more than 20% capacity from nuclear
power and reasonable trading history at a mature capital market are listed
in the below chart.
Figure 47: Peer Table Analysis
2014E
Company Name
Ticker
Nuclear Capacity %
of Total Capacity
2015E
2014E
PB
2015E
PE
US
Edison International
NYSE: EIX
59.255%
1.84
1.74
14.40
16.98
Exelon Corporation
NYSE: EXC
54.820%
1.25
1.20
14.78
14.09
Pacific Gas And Electric Company
NYSE: PCG
29.178%
1.54
1.45
14.93
12.38
Public Service Enterprise Group
NYSE: PEG
27.048%
1.64
1.56
14.39
14.50
Entergy Corperation
NYSE: ETR
23.932%
1.43
1.38
13.66
15.13
Firstenergy Corporation
NYSE: FE
22.680%
1.17
1.12
14.45
12.31
Duke Energy
NYSE: DUK
20.359%
1.34
1.31
17.25
16.55
Average
1.46
1.39
14.84
14.56
Medium
1.43
1.38
14.45
14.50
Japan
Kansai Electric Power Co.
TYO: 9503
26.300%
0.98
0.92
-
15.04
Kyushu Electric Power Co., Inc.
TYO: 9508
22.820%
1.29
1.13
-
8.72
100%
1.14
2.80
1.02
2.24
26.83
11.88
22.38
2.31
2.79
2.45
2.94
Average
CGN Power multiples based on DCF valuation (RMB)
CGN Power Price indicated by trading
multiples(Based on medium multiple in the US)
(RMB)
All comparable companies are not pure nuclear energy companies, so that
multiples generated from these comparable should be adjusted before
valuation of CGN Power. Edison International (EIX) and Exelon Corporation
(PCG) are the only two companies with more than 50% capacity from
nuclear energy. Apparently EIX have a higher P/B and P/E ratios above all
comparable and it is indicated that multiples might go up with increase in
nuclear power percentage of total capacity if the company possess unique
resources and market standings. Taking all the factors into consideration,
we believe it is sensible to assume above 2.0 P/B and above 20 P/E multiple
for CGN Power price target, given its monopoly standing with 53% market
share and the only one 100% nuclear energy power company in China going
to listed on stock exchange.
The following figure listed different share price within the range between
lower end of PER of 15x and higher end of PER of 20x.
Figure 48: Peer Valuation
Peer Valuation
2015 Net Profit (Rmbm)
PER
Equity Value (Rmbm)
Equity value (HK$m)
Outstanding Shares
Share Price (HK$)
2015E
7,075
20
141,497
179,110
44,125
4.06
2015E
7,075
15
106,123
134,333
44,125
3.04
2016E
9,071
20
181,430
229,658
44,125
5.20
2016E
10,576
15
158,633
200,801
44,125
4.55
Under PER of 20x for 15E, target price for CGN Power could reach HK$4.06,
representing a 46% upside potential.
Investment recommendation: Buy
Using a discounted cash flow model, we derive a target price of HK$4.54, which
represents 22.4x 15E PE or 2.2x 15E PB. With 63% upside, we initiate coverage
of the company with a BUY rating.
Higher than average multiples stem from its pure energy generation from
nuclear power. Downside risks are limited, as unpredictable catastrophe
serves as the only major threats to the operation.
Scenario Analysis
Our base scenario assumes 41% equity acquisition for the Taishan nuclear
plant deal to complete on March, 2015 and another three times interest rate
cut in the next three years.
For our best scenario, besides the assumptions on base one, Fangcheng
nuclear power plant will be acquired at the beginning of the year 2016.
There are two power plant units under Fangcheng pipeline, all assumed to
start commercial operation at the end of December on 2015. Fangcheng
nuclear station is currently constructed by CGN Group with a total installed
capacity of 2,160MW in Fangchenggang, Guangxi Province. CGN Power
stated that it will have a right of first refusal to acquire the equity interests
held by CGN Group in the owner of these nuclear power generating units
after they are substantially completed or ready for commercial operation.
Therefore, we assume these units complete construction as scheduled in
2015 and soon be acquired at the beginning of 2016. The acquisition price is
set same as its book value, with 70% debt to asset ratio, 51% ownership
and paid-out method as 50% cash and 50% capital from equity raising. All
assets go into PP&E, same as assumptions set out for Taishan acquisition.
As for the worst scenario, neither Taishan nor Fangcheng deal is included.
The revenue of CGN Power going forward comes from all the subsidiaries it
currently owned. CGN Power originally holds 10% of equity in Taishan
nuclear, which remains unchanged. Due to the cancel of Taishan deal, there
will be a deduction on Capex proposed by CGN Power in Application Proof.
2015 Capex will cut out approximately Rmb16.15bn related to Taishan deal
from the currently proposed level. Interest rate is assumed unchanged over
the years without any further deductions since 2015. Capital raised from
IPO associated with Taishan acquisition is predicted to be stored in cash.
ROE
Figure 49 : Scenario Analysis for ROE for equity owners
29.0%
27.0%
25.0%
23.0%
21.0%
19.0%
17.0%
15.0%
13.0%
11.0%
9.0%
2011
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
Best case
27.1%
25.4%
18.2%
12.7%
14.6%
18.1%
18.2%
17.7%
16.5%
15.6%
Base case
27.1%
25.4%
18.2%
12.7%
14.6%
16.6%
17.1%
16.8%
16.1%
15.3%
Worst case
27.1%
25.4%
18.2%
12.7%
13.5%
15.5%
14.0%
13.9%
13.9%
13.6%
Figure 50 : Scenario Analysis for net profit attributable to owners of equity
17bn
15bn
Net Profit
13bn
11bn
9bn
7bn
5bn
3bn
2011
2012
2013
2014E
2015E
2016E
2017E
2018E
2019E
2020E
Best case
4.73
4.14
4.19
5.56
7.07
10.49
12.06
13.25
13.90
14.71
Base case
4.73
4.14
4.19
5.56
7.07
9.07
10.58
11.68
12.53
13.28
Worst case
4.73
4.14
4.19
5.56
6.51
8.33
8.28
9.11
10.00
10.78
Under our best scenario, net profit attributable to owners of the company
for 14E, 15E and 16E is Rmb5.6bn, Rmb7.1bn, and Rmb10.5bn, with
indicated 15E/16E EPS of Rmb0.16/0.23 per share.
Figure 51 : Financial summary for best scenario
2012
Revenue (RMB million)
17,575
YOY (%)
11%
Net income (RMB million)
4977.4
YOY (%)
-8%
EPS (RMB)
0.17
Diluted EPS (RMB)
ROE (%)
21%
Debt/asset (%)
80%
Dividend Yield (%)
17%
P/E (x)
13.3
P/B (x)
2.3
EV/EBITDA (x)
11.9
2013
17,365
-1%
5071.4
2%
0.15
16%
75%
1%
14.3
1.9
12.6
2014E
20,024
15%
6301.8
24%
0.13
12%
67%
5%
16.4
1.7
12.6
2015E
22,080
10%
8106.9
29%
0.16
11%
69%
2%
13.7
1.4
15.7
2016E
38,938
76%
14100.3
74%
0.23
16%
69%
3%
9.7
1.1
9.8
2017E
43,679
12%
16576.5
18%
0.26
16%
66%
4%
8.4
1.0
8.7
Under our worst case scenario, net profit attributable to owners of the
company for 14E, 15E and 16E is Rmb5.6bn, Rmb6.5bn, Rmb8.3bn, with
indicated 15E/16E EPS of Rmb0.15/0.19 per share.
Figure 52: Financial summary for worst scenario
2012
2013
Revenue (RMB million)
17,575
17,365
YOY (%)
11%
-1%
Net income (RMB million)
4977.4
5071.4
YOY (%)
-8%
2%
EPS (RMB)
0.17
0.15
Diluted EPS (RMB)
ROE (%)
21%
16%
Debt/asset (%)
80%
75%
Dividend Yield (%)
17%
1%
P/E (x)
13.3
14.3
P/B (x)
2.3
1.9
EV/EBITDA (x)
11.9
12.6
2014E
20,024
15%
6301.8
24%
0.13
12%
67%
5%
16.4
1.7
12.6
2015E
22,080
10%
7456.9
18%
0.15
13%
67%
2%
14.9
1.7
11.5
2016E
26,596
20%
9720.9
30%
0.19
15%
66%
3%
11.6
1.5
9.5
2017E
28,132
6%
9706.6
0%
0.19
13%
64%
3%
11.7
1.3
9.1
Even in the worst case, CGN power has a return on equity around or over 12%
and expected Rmb6.5bn net profits attributable in 2015. Undoubtedly,
Fangcheng project could provide CGN Power with higher profits and better
returns to shareholders.
Multiples valuation comparison under different scenarios
Figure 53 : Scenario Analysis of share price with PER of 15x and 20x
PE ratio fixed, indicated Price target changed with EPS(HK$)
PER OF 20X
Worst
Base (acquire Taishan, interest rate cut three times more)
Best (acquire Taishan, Fangcheng deal the year after, interest rate cut three times)
2014E
3.39
3.39
3.39
2015E
3.73
4.06
4.06
2016E
4.78
5.20
5.76
PER OF 15X
Worst
Base (acquire Taishan, interest rate cut three times more)
Best (acquire Taishan, Fangcheng deal the year after, interest rate cut three times)
2.54
2.54
2.54
2.80
3.04
3.04
3.58
3.90
4.32
Under our different scenarios, in the worst case with 14E PER of 15x, target
price could be as low as HK$2.54, it also has potential to touch HK $5.76 in
the year 2016 under the best case with 16E PER of 20x. The stocks has
limited downside risk but with great upside potential in the coming two
years.
Figure 54 : Scenario analysis of share price with PER of 15x and 20x
PER of 15x
PER of 20x
Worst
6.HK$
Worst
4.5HK$
4.3HK$
5.5HK$
4.1HK$
5.HK$
Base (acquire
Taishan, interest
rate cut three times
more)
4.5HK$
3.9HK$
Base (acquire
Taishan, interest
rate cut three times
more)
3.7HK$
3.5HK$
3.3HK$
4.HK$
3.1HK$
Best (acquire
Taishan, Fangcheng
deal the year after,
interest rate cut
three times)
3.5HK$
3.HK$
2014E 2015E 2016E
2.9HK$
2.7HK$
2.5HK$
2014E 2015E 2016E
Best (acquire
Taishan, Fangcheng
deal the year after,
interest rate cut
three times)
Risk
Safety risk is present but minimal
Historically, there are three severe nuclear accidents took place around the
world with INES (International Nuclear and Radiological Event Scale) rating
ranging from LEVEL 5 to Level 7. These events caused severe harm to the
community and environment. Operator error, design deficiency,
irresponsibility of accident management and some force majeure are major
factors for the accidents.
Figure 55: Nuclear accidents in the history
Nuclear
Accidents
Impacts
Causes
Three
miles
Human oversight relating to ambiguous control
No fatalities; No contamination over
island accident,
room indicators in the power plant's user interface.
surroundings
LEVEL 5, 1979
Controlled by nuclear container.
Chernobyl
Disaster, LEVEL
7, 1986
47 fatalities and severe radioactive
contamination（equal to 14EBq or 5.2EBq
l-131）, directly and indirectly affected
over 500,000 workers with an estimated
cost over 18 billion dollars ultimately
Two causes: an operator error and the operating
instructions and design deficiencies. Operator closed
the emergency system and left only 7 control rods
with 211 required. The control rod is designed with
deficiency. Meanwhile, government didn’t react fast
to the accident.
Fukushima
Daiichi nuclear No fatalities but severe radioactive Force majeure (Earthquake); wrong location and
disaster, LEVEL contamination (equal to 630PBq l-131）
design deficiency.
6, 2011
Nuclear power industry is a high safety among energy generation sectors.
According to WNA, there are 64 accidents related to energy with a total
fatality of 242,000 people. Only one of the accidents is nuclear related, the
Chernobyl disaster, where 47 people were killed. Most of energy-related
fatalities in China are in coal mining industry. So far, there has been no
severe nuclear accident in China.
Figure 56: Nuclear accidents are present but rare
Location
Time
Death Toll
Note
1975
230000
Dam collapse (18 GW Loss)
1979
1980
1980
1980
1982
1983
1983
1984
1984
1984
1984
2500
1000
70
68
89
160
317
508
498
100
314
Chernobyl，Ukraine
1986
47+
Piper Alpha，Butterworth
Asha-ufa，Siberia
Dobrnja，Yugoslavia
Hongton，Shanxi, China
Belci，Romania
Kozlu，Turkey
Cuenca，Ecuador
Durunkha，Egypt
Seoul，Korea
Minanao，Philippine
Dhanbad，India
Taegu,Korea
1988
1989
1990
1991
1991
1992
1993
1994
1994
1994
1995
1995
167
600
178
147
116
272
200
580
500
90
70
100
Dam collapse
Dam collapse
Gas explosion
Coal mine gas explosion accident
Gas explosion
Dam collapse
Liquefied petroleum explosion
Oil fire
Liquefied petroleum explosion
Gas explosion
3 Coal mine accidents
Nuclear power plants accidents with
enormous pollution
Offshore oil platform explosion
Liquefied petroleum pipeline leak and fire
Coal mine accident
Coal mine accident
Dam collapse
Coal mine gas explosion
Coal mine accident
Fuel Depots were struck
Oil fire
Coal mine accident
Coal mine accident
Natural gas and oil explosion
Banqiao, Shimantan & others ， Heinan,
China
Machhu II，India
Hirakud，India
Ortuella，Spain
Donbass，Ukraine
Israel
Guavio，Columbia
Nile R，Egypt
Cubatao，Brazil
Mexico City，Mexico
Tbilisi，Russia
northern Taiwan
Spitsbergen，Ruassia
Henan, China
Datong, Shanxi, China
Henan, China
Fushun, Liaoning, China
Kuzbass，Russia
Huainan, China
Huainan, China
Guizhou, China
Donbass，Ukraine
Liaoning,China
Warri，Nigeria
Donbass，Ukraine
Donbass，Ukraine
Shanxi，China
Muchonggou，Guizhou，China
1996
1996
1996
1997
1997
1997
1997
1997
1997
1998
1998
1998
1999
2000
2000
2000
141
84
114
89
68
67
89
45
43
63
71
500+
50+
80
40
162
Coal mine accident
Zasyadko, Donetsk, E.，Ukraine
Jixi，China
Gaoqiao, SW，China
Kuzbass，Russia
Donbass，Ukraine
Henan，China
Chenjiashan,，Shanxi，China
2001
2002
2003
2004
2004
2004
2004
55
115
234
47
36
148
166
Sunjiawan，Liaoning，China
2005
215
Shenlong/Fukang，Xinjiang，China
2005
83
Xingning，Guangdong，China
2005
123
Dongfeng，Heilongjiang，China
2005
171
Coal mine flooding
Bhatdih, Jharkhand，India
2006
54
Ulyanoyskaya, Kuzbass，Russia
2007
150
Coal mine gas or dust explosion
Zhangzhuang，Shandong，China
2007
181
Zasyadko, Donetsk, E.，Ukraine
2007
101
Coal mine flooding
Linfen city，Shanxi，China
Tunlan，Shanxi，China
Sayano-Shushenskaya, Khakassia,Russia
Hegang city，Heilongjiang，China
2007
2009
2009
2009
105
78
75
108
Sangha, Bukavu，Congo
2010
235
Gasoline tanker accident and fire
Deepwater Horizon,Gulf of Mexico，US
2010
11
Well burst with enormous pollution
Pike River，New Zealand
2010
29
Liquefied petroleum pipeline leak and fire
Gas well explosion
Hydropower turbine disintegration
Source：WNA，SWS Research
Nuclear power plants have a low level of radiation during daily activities,
which does not constitute any harm to residents around or communities.
According to official data, residents live near nuclear power plants are
exposed to 0.01mSv of radiation annually, 1/75 radiation exposure from
brick houses.
Figure 57: Radiation during daily activities are low
Source of Radiation
Amount of Radiation
Medical CT
8 mSv/ a time
Brick Houses
0.75 mSv/yr
Fruits, food, vegetables and air
0.25 mSv/yr
Chest X ray
0.2-1 mSv/ a time
Soil
0.15 mSv/yr
Round flight trip from Beijing to Europe
0.04 mSv/yr
Living near nuclear power stations
0.01 mSv/yr
Source：SWS Research
Followed the requirements of nine indicators of safety measurements for
the nuclear power plants operation set by WANO (World Association of
Nuclear Operators), the performance for safety operation of nuclear power
stations has been substantially improved. The Unplanned Automatic Scrams
per 7000 hours has decreased from 1.8 in 1990 to 0.5 in 2010. Industrial
Safety Accident Rate lowered to 0.86 level compared to 5.2 in 1990.
All severe damage and design deficiency are related to second-generation
nuclear power station. The technology has already advanced to second-plus
and third generation with all the nuclear power plants operating and under
construction in China and most power plants around the world. Safety is
highly secured with these technology improvements.
CGNP has only second plus or third generation nuclear reactors.
Figure 58: CGNP has all second plus or third generation nuclear reactors
Status
1
Daya Bay Unit 1
Guangdong nuclear Operating
2
Daya Bay Unit2
power joint venture
Operating
3
Ling'ao Unit 1
Operating
Lingao nuclear power
4
Ling'ao Unit 2
Operating
5
Lingdong Unit1
Lingdong
nuclear Operating
power
6
Lingdong Unit2
Operating
7
Yangjiang Unit 1
Operating
8
Yangjiang Unit 2
Under construction
9
Yangjiang Unit 3
Yangjiang
nuclear Under construction
power
10 Yangjiang Unit 4
Under construction
11 Yangjiang Unit 5
Under construction
12 Yangjiang Unit 6
Under construction
13 Taishan Unit 1 *
Taishan
nuclear Under construction
power joint venture
14 Taishan Unit 2 *
Under construction
* 2014 Investment target after Acquisition
15 Ningde Unit 1
Operating
16 Ningde Unit 2
Fujian Ninde nuclear Operating
power
17 Ningde Unit 3
Under construction
18 Ningde Unit 4
Under construction
Associate Company
19 Hongyanhe Unit 1
Operating
20
Hongyanhe Unit 2
21
Hongyanhe Unit 3
22
Hongyanhe Unit 4
Liaoning Hongyanhe
nuclear power
Source：Company, SWS Research
Model
M310
M310
M310
M310
CPR1000
CPR1000
CPR1000
CPR1000
CPR1000
CPR1000
ACPR1000
ACPR1000
EPR
EPR
Generation
Second Plus
Second Plus
Second Plus
Second Plus
Second Plus
Second Plus
Second Plus
Second Plus
Second Plus
Second Plus
Third
Third
Third
Third
CPR1000
CPR1000
CPR1000
CPR1000
Second Plus
Second Plus
Second Plus
Second Plus
CPR1000
Second Plus
Operating
CPR1000
Second Plus
Under construction
CPR1000
Second Plus
Under construction
CPR1000
Second Plus
There are three protections for nuclear power plants constructed in China.
First protection is the fuel pellet and cladding, the second protection is the
pressure vessel, the third is the containment, which successfully prevented
the release of radioactive materials in the Three Miles Island Accident.
Every nuclear power plant also has detailed regulations for operation,
adequate training of workers, effective contingency plans to deal with any
emergency occasion happened inside or outside the power plant.
China has shown unprecedented eagerness to achieve world's best
standards in nuclear safety. In 1998, the National Nuclear Safety
Administration was incorporated into the Ministry of Environmental
Protection of the People’s Republic of China, fully responsible for the
country's nuclear safety, supervision of radiation safety, and radiation
environment management. Law on the Prevention and Control of
Radioactive Pollution of China was passed on 2003 by National People’s
Congress. It also announced the Nuclear Security Plan in 2012 after the
Fukushima accident. The State Council promulgated regulations such as
Radioactive Goods Transportation Safety Management Regulations and The
Civil Nuclear Safety Equipment Supervision and Management Regulations in
2007 and 2009. In regards of international agreements, China and IAEA
have signed the agreements and additional protocol for the Application of
Safeguards in China. By stepping up investment in nuclear safety, improving
nuclear safety regulations and enhancing nuclear safety management, China
aims to form a sound legal system of nuclear which ensures the
development of nuclear power in safety.
Regardless of policy or technology, nuclear energy industry has an
extremely low operational risk under careful management and strict
regulations.
Fuel cost is significant but China can supply
Nuclear power generation comes from Uranium which is a naturally
occurring radioactive metal. For CGNP, such nuclear fuel cost accounts for
13.2%, 15.9%, and 15.3% of FY2011, 2012 and 2013 revenues.
The distribution of uranium in the world is highly concentrated. 13
countries consist of almost 90% of total Uranium sources until end of 2013.
In the subcategory of the most cost efficient Uranium type (cost
<US$40/kgU), China takes up nearly 10% of world total.
Figure 59: Identified uranium resources (in 1000tU)
0
200000 400000 600000 800000 1000000 1200000 1400000 1600000 1800000
Australia
Kazakhstan
Russian Federation
Canada
United States
Namibia
South Africa
Niger
Brazil
Ukraine
Greenland
China
India
others
1798300
875500
689200
650500
472100
455600
450800
404900
276100
222700
221200
199100
119900
799300
Source: NEA, IAEA, SWS Research
Figure 60: The most economically attractive IRU (in 1000tU)
0
Argentina
50000
100000
150000
200000
250000
300000
350000
2400
Brazil
137300
Canada
321800
China
65700
Kazakhstan
89300
Uzbekistan
66400
As a result of the exploration in 2011 and 2012, a total of about 44 000 tU,
categorized RAR (Reasonably assured Resource) and IR (Inferred
Resources), have been added to China’s uranium resource base. According
to statistical studies conducted by several institutes in China, 2 million tons
of potential uranium resources are predicted. Apart from conventional
uranium, China also has a rich preserve in unconventional uranium
including include phosphate, non-iron, carbonate rock, black schist, lignite
etc. China is the largest phosphate rock producer in the world and has been
dedicated to extracting uranium from phosphate. At present,
unconventional uranium costs relatively higher than conventional
resources.
Figure 61: Uranium resources in China (up to Jan. 2013)
No.
1
Location
Jiangxi
Xiangshan
Ganzhou
tU
32000
12000
2
Guangdong
3
4
5
Hunan
Guangxi
Xinjiang
6
Inner Mongolia
7
8
9
10
11
Hebei
Yunnan
Shanxi
Zhejiang
Liaoning
Total
Taoshan
Xiazhuang
Zhuguangnanbu
Heyuan
Lujin
Ziyuan
Yili
Tuha
Erdos
Erlian
Tongliao
Qinglong
Tengchong
Lantian
Dazhou
Benxi
Figure 62: Identified uranium resources (in 1000tU)
Other
countries,
27.7%
China,
36.9%
USA, 14.8%
Russia, 5.7%
Morocco &
W. Sahara,
14.8%
Phosphate
rock
production
for fertilizer
in 2010,
million
tonnes, 0
12500
15000
25000
4000
9000
11000
33000
10000
35000
40000
4000
8000
6000
2000
5000
2000
265500
APPENDIX
Rmbm
2012
2013
2014E
2015E
2016E
17,575
9,155
8,170
1,489
4
917
11,690
8,985
3,118
4,977
890
833
4,977
4,145
17,365
8,961
8,148
1,506
4
1,027
11,363
8,873
2,804
5,071
998
877
5,071
4,195
20,024
10,117
9,627
1,769
5
1,164
13,460
10,609
3,031
6,302
1,276
743
6,302
5,559
22,080
10,913
10,859
2,062
5
1,285
15,783
12,651
2,951
8,107
1,594
1,032
8,107
7,075
33,005
15,442
17,100
3,409
8
1,950
24,481
19,854
6,887
11,524
1,442
2,453
11,524
9,071
2012
2013
2014E
2015E
2016E
5,868
2,704
3,118
-666
-2,540
903
8,660
-13,522
6,070
2,490
2,804
-914
-1,168
793
9,493
-12,429
7,578
2,850
3,031
-899
-1,435
781
10,631
-11,546
9,701
3,131
2,951
-1,488
-1,358
781
12,124
-28,450
12,966
4,627
6,887
-1,867
-1,721
992
20,443
-15,445
-1,457
-14,979
4,078
20,554
-9,843
7,947
-4,482
2,708
428
-1,655
-6,178
-17,723
19,423
12,196
-4,175
1,936
-26,514
0
9,118
-2,335
1,128
-14,318
0
5,020
-2,994
-13,489
1,301
-5,018
-5,417
-3,937
1,075
-2,942
24,503
17,411
-2,868
3,915
-10,475
-6,811
-4,785
1,340
Revenue
Cost of Sales
Gross Profit
Other Income
Distribution expenses
Administrative expenses
Ebitda
Ebit
Finance Costs
Profit before tax
Income tax expense
Minority interests
Profit for the year
Profit attributable to owners
Consolidated Cash Flow Statement
Rmbm
Plus. Depr. and amortisation
Finance cost
Losses from investments
Change in working capital
Others
Capex
Other CF from investing
activities
Equity financing
Net change in liabilities
Dividend and interest paid
Other CF from financing
activities
Net cash flow
Rmbm
2012
2013
2014E
2015E
2016E
27,096
21,761
40,837
31,694
40,273
5,434
6,640
24,051
13,576
14,916
11,021
3,059
3,608
3,949
5,762
7,514
8,384
9,500
10,491
15,918
3,127
3,678
3,678
3,678
3,678
9,197
11,093
13,584
16,625
20,060
79,185
87,042
99,604
172,907
180,920
6,786
7,779
8,499
8,618
8,727
122,263
127,675
162,523
229,844
249,980
39,887
26,462
31,632
35,432
42,377
2,709
2,401
2,665
4,931
5,162
14,870
12,175
13,552
14,776
21,475
22,308
11,887
15,416
15,725
15,740
58,226
69,521
77,648
123,804
128,466
98,114
95,983
109,281
159,237
170,842
7,845
8,640
9,383
22,008
24,460
16,304
23,052
43,860
48,600
54,678
18,280
1,976
19,768
39,191
39,191
39,191
3,284
4,669
9,409
15,487
16,304
23,052
43,860
48,600
54,678
122,263
127,675
162,523
229,844
249,980
Current Assets
Inventories
Long-term investment
PP&E
Total Assets
Current Liabilities
Borrowings
Total Liabilities
Minority Interests
Shareholder Equity
Share Capital
Reserves
Equity attributable
Key Financial Ratios
2012
2013
2014E
2015E
2016E
0.17
0.17
0.60
0.38
0.96
0.15
0.15
0.16
0.03
1.16
0.13
0.13
0.43
0.10
1.28
0.16
0.16
0.60
0.05
1.60
0.21
0.21
0.32
0.07
1.79
7.9%
20.6%
46.5%
66.5%
51.1%
10.7%
-7.8%
80.2%
72.8%
14.4%
16.1%
17.3%
6.8%
16.0%
46.9%
65.4%
51.1%
-1.2%
1.9%
75.2%
54.8%
13.6%
16.7%
1.3%
6.8%
11.8%
48.1%
67.2%
53.0%
15.3%
24.3%
67.2%
37.6%
12.3%
16.8%
4.6%
5.9%
11.5%
49.2%
71.5%
57.3%
10.3%
28.6%
69.3%
31.3%
9.6%
16.4%
2.4%
8.0%
14.6%
51.8%
74.2%
60.2%
49.5%
42.2%
68.3%
41.7%
13.2%
11.1%
3.1%
13.3
2.3
7.9
11.9
14.3
1.9
8.3
12.6
16.4
1.7
8.5
12.6
13.7
1.4
11.2
15.7
10.7
1.2
7.7
10.4
Ratios per share (Rmb)
Earnings per share
Diluted EPS
Operating CF per share
Dividend per share
Net assets per share
Key Operating Ratios (%)
ROIC
ROE
Gross margin
Ebitda Margin
Ebit Margin
Growth rate of Revenue(YoY)
Growth rate of Profit(YoY)
Debt-to-asset ratio
Turnover rate of net assets
Turnover rate of total assets
Effective tax rate (%)
Dividend yield (%)
Valuation Ratios (X)
PE
PB
EV/Sale
EV/Ebitda
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reviewed or any third party has provided or agreed to provide any compensation or other benefits in connection with this report to any of the analyst, the
Company or the group company(ies). A group company(ies) of the Company confirm that they, whether individually or as a group (i) are not involved in
any market making activities for any of the listed corporation reviewed; or (ii) do not have any individual employed by or associated with any group
company(ies) of the Company serving as an officer of any of the listed corporation reviewed; or (iii) do not have any financial interest in relation to the
listed corporation reviewed or (iv) do not, presently or within the last 12 months, have any investment banking relationship with the listed corporation
reviewed.
shareholdings.
Disclaimer：
The materials, opinions and estimates contained herein only reflect the judgment of the Company on the day this report is released. The prices, values
and investment returns of the securities or investment instruments referred to herein may fluctuate. At different periods, the Company may release
reports which are inconsistent with the materials, opinions and estimates contained herein.
Company.
Disclaimer
months.
months.
5. As of the publication of this report Enclave Capital LLC, does not make a market in the subject securities.
recipients of the report are to contact the Singapore office of Shenyin Wanguo Singapore Private Limited at 65-6323-5208, or 65-6323-5209 in respect of
Utilities | Company Research
10 December 2014
Trading BUY
Key to growth
Unchanged
CHINA GAS HOLDINGS (384:HK)
Market Data: Dec, 09
Closing Price (HK$)
12.66
Price Target (HK$)
21.0
HSCEI
11,332
HSCCI
4,314
52-week High/Low (HK$)
16.22/10.08
Market Cap (US$m)
8,442
Market Cap (HK$m)
65,474
Shares Outstanding (m)
Exchange Rate (Rmb-HK$)
5,021
1.26
Price Performance Chart:
Revenue (HK$m)
YoY (%)
Net income (HK$m)
YoY (%)
EPS (HK$)
Diluted EPS (HK$)
ROE (%)
Debt/asset (%)
Dividend Yield (%)
PE (x)
PB (x)
EV/Ebitda (x)
2013
17,955.67
(0.05)
1,764.26
4.73
0.39
0.37
15.05
60.79
21.50
33.59
4.61
15.68
2014
26,008.00
0.45
2,575.51
20.85
0.54
0.52
18.49
59.89
22.50
24.26
3.47
12.33
2015E
36,494.07
0.40
3,441.19
26.17
0.68
0.63
17.51
55.99
20.00
19.26
3.15
9.62
2016E
47,141.71
0.29
4,365.15
24.34
0.84
0.80
18.96
50.83
20.00
15.60
2.63
7.94
2017E
61,431.40
0.30
5,456.64
27.22
1.04
1.00
19.94
46.89
20.00
12.60
2.22
6.53
Source: Bloomberg
Analyst
Albert Miao
A0230513050007 BDE609
[email protected]
(8621)23297818×7238
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"Pipe hype: China Gas Holdings
LTD(384 HK)" Nov 18,2014
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last page.
Draft guidance announced. On 8 December, the China General Administration of Quality
Supervision, Inspection and Quarantine (AQSIQ) issued draft safety guidance on the
conversion of oil to gas vehicles. This permits the use of new gas-fuelled vehicles and
forbids oil-to-gas refits on existing oil-fuelled cars. With a deadline of 30 December, the
decision to execute or phase out the draft policy will be made early next year. We believe
the policy is unlikely to receive approval, since it conflicts with the State Council’s,
National Development and Reform Commission’s (NDRC’s) and local government’s
existing supportive policies. We believe safety concern measures are overdone.
Support from the State Council and NDRC. Last month, the central government
promoted gas-fuelled vehicles in its energy development strategy action plan (2014-20).
Previously, the NDRC promoted compressed natural gas (CNG) and liquefied natural gas
(LNG) for public transport and freight ground transportation use, as well as water
transportation in its natural gas usage policy (effective 1 December 2012). In August 2014,
the China Gas Association reported a potential joint cooperation with the Ministry of
Public Security, Ministry of Transportation, Ministry of Finance and Ministry of Industry
and National Energy Administration to implement a new oil-to-gas standard in 2015,
demonstrating high probability of full support towards the conversion.
Local government support. Recently, we found several provinces that had converted taxi
and bus services from oil to gas. In addition, six provinces (including Xinjiang, Sichuan,
Shaanxi, Shandong and Inner Mongolia) and one provincial capital city (Hefei in Anhui
Province) have begun permitting oil-to-gas refits for private cars. As the AQSIQ’s draft
policy conflicts with some regional government’s existing policies, we expect to see more
negative feedback from regional governments towards this drafted policy.
Transportation is key. We forecast 32% gas demand Cagr in the transportation sector
from 13 billion cubic metres (bcm)/annum in 2013 to 89bcm/annum in 2020. Meanwhile,
benefiting from favourable policies and existing expansion plans, we assume China Gas’s
natural gas vehicle sales volume will enjoy a c.40% Cagr to 2.25bcm/annum by FY17 (15%
of total sales volume). In addition, with the highest dollar margin among gas downstream,
China’s Gas’s CNG business is becoming a key driver of growth. If the AQSIQ’s guidance is
passed, we forecast a declining vehicle demand Cagr from 32% to 10% by 2020, and
expect total demand growth cuts from 423bcm to 359bcm. In a worst case scenario, we
expect flat vehicle gas sales volume in China Gas in comparison with previous forecasts of
44% Cagr, and a halved dollar margin from Rmb1/cm to Rmb0.5. In our model, earnings
will mostly negatively impacted by 5.1% in 17E, slightly higher than previous years.
Maintain Trading BUY. We maintain our net profit forecast of HK$3.44bn (+34% YoY) in
FY15E (+5% vs BB consensus), HK$4.37bn (+27% YoY) in FY16E (+10% vs consensus)
and HK$5.46bn (+25% YoY) in FY17E (18% above consensus). We maintain our target
price of HK$21. With 66% upside, we maintain our Trading BUY recommendation.
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
投资要点：
征求意见稿公布。12 月 8 号中国国家质量监督检验检疫总局（AQSIQ）发布了征求意
见稿拟叫停机动车“油改气”。这一条款允许原装天然气汽车使用而停止在用机动车
“油改气”。由于 12 月 30 号为反馈的最终期限, 征求意见稿通过与否悬念将留到明
年。但是我们认为这一政策将不太可能被通过，因为这与国务院，发展改革委员会，
以及地方政府现有的支持政策背道而驰，并且我们认为国家质检总局过度担忧机动车
“油改气”所存在的安全隐患问题了。
国务院和发改委的大力支持。上个月中央政府在印发的能源发展战略行动计划(20142020 年)中指出将鼓励天然气汽车的发展。而之前，发改委在 2012 年也通过了天然
气利用政策（2012 年 12 月 1 日起生效）来鼓励压缩天然气和液化天然气用于陆上公
共交通，货运以及船舶运输。在 2014 年 8 月，中国燃气网报道称由公安部、交通
部、国家能源局、财政部和工信部一起力推的油改气标准将于 2015 年推出，油改气
有望得到全面支持。
地方政府大力支持。近期，我们了解到几个省份已经对出租车和公交车进行了“油改
气”。另外，5 个省份(新疆，四川，陕西，山东和内蒙古)和一个省会城市（安徽合
肥）已经开始允许私家车“油改气”。由于国家质检总局公布的征求意见稿与一些地
方政府的现有政策有冲突，我们预计会看到很多地方政府会对该征求意见稿持反对意
见。
交通运输板块是未来增长的关键点之一。根据我们的预测，交通运输板块的气量需求
将从 2013 年 130 亿立方米/年增长至 2020 年 890 亿立方米/年，年复合增长率达到了
32%。同时因受益于利好政策和现有的扩张计划，我们假设中国燃气在 17 财年车用气
销量将从现有的水平增长至 17 财年 22.5 亿立方米/年（等同于 15%总气量销售），
复合增长率高达 44%。另外，由于在燃气下游中具有最高的毛利额，这将使中燃的压
缩天然气业务逐渐成为未来利润增长的关键点。如果质检总局的征求意见稿被通过，
我们预计 2020 年行业车用气量增长将从原先 32%的年复合增长率大幅下降至 10%，受
其影响总气量需求增长也从原先预测的 4230 亿降至 3590 亿立方米。如果意见稿通
过，在最坏的情况下，我们预计中燃未来的车用气量增长将基本保持不变，较之前未
来三年 44%的年复合增长率相差甚远，而毛利也从原先的人民币 1 元/立方米降至 0.5
元/立方米。基于我们的模型，这将给 17 财年的净利润带来 5.1%的负面影响，略微
高于 15,16 财年的负面影响。
维持交易性买入。我们维持 15 财年净利预测为港币 34.4 亿（同比增长 34%，比彭博
市场一致预期高 5%），16 财年净利润预测为港币 43.7 亿（同比增长 27%，比彭博市
场一致预期高 10%），17 财年净利润市场预测为港币 54.6 亿（同比增长 25%，高于
彭博市场一致预期 18%）。我们维持目标价港币 21，针对当前股价仍有 66%的上行空
间。
Page 1
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
Confusing policy
Draft guidance announced. On 8 December, the China General
Administration of Quality Supervision, Inspection and Quarantine (AQSIQ)
issued draft safety guidance in the conversion of oil to gas vehicles. With a
deadline of 30 December, the decision to execute or phase out the draft
policy will be made early next year.
Define Oil-to-Gas. Oil-to-gas conversion will add a specialised CNG system
to light vehicles while maintaining the existing fuel supply system for CNG
(bi-fuel), or replacing the existing fuel supply system by LNG.
Safety concerns. The AQSIQ believes the current oil-to-gas refit is not under
strict and clear regulation. This may lead to safety concerns if the refit isn’t
taken under some qualified car service companies.
Conflicts of interest. We believe the policy is unlikely to receive approval,
since it conflicts with the State Council’s, National Development and Reform
Commission’s (NDRC’s) and local government’s existing supportive policies.
We believe safety concern measures are overdone, as there are more room
for policy improvement in terms of regulation during the refit process or
annual vehicle inspection, rather than to curb current growth.
Support from the State Council and NDRC
Existing plans. Last month, the central government promoted gas-fuelled
vehicles in its energy development strategy action plan (2014-20).
Previously, the NDRC promoted CNG and LNG for public transport and
freight ground transportation use, as well as water transportation in its
natural gas usage policy (effective 1 December 2012).
Potential policies. In August 2014, the China Gas Association reported a
potential joint cooperation with the Ministry of Public Security, Ministry of
Transportation, Ministry of Finance and Ministry of Industry and National
Energy Administration to implement a new oil-to-gas standard in 2015,
demonstrating high probability of full support towards the conversion.
Inconsistencies. We believe the sudden stop on oil-to-gas from AQSIQ is
inconsistent with the State Counsel’s and other department’s policies, as
well as China’s long-term energy outlook. We believe the draft policy will
face increasing challenges from the State Council and peer departments.
Fig 1: List of existing government policies that supports oil-to-gas
Date
Policy
December-12
Natural gas usage policy
November-14
Energy development strategy action plan (2014-20)
Local government support
Facts. Recently, we found several provinces that had converted taxi and bus
services from oil to gas. In addition, six provinces (including Xinjiang,
Sichuan, Shaanxi, Shandong and Inner Mongolia) and one provincial capital
city (Hefei in Anhui Province) have begun permitting oil-to-gas refits for
private cars. With a more open regional market, we saw rapid growth in gasfuelled vehicles. In 2013, gas-fuelled vehicles rose by 1.2m to 3.36m
Page 2
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
(+55.4% YoY). However, this only accounted for 2.4% of the total no of
vehicles in China with therefore saw large upside potential.
Fig 2: Provinces that support oil-to-gas conversion in private cars
Date
Policy details
Vehicle type
Province
January-13
Anhui province allowed "oil to gas" in private car for the first time
Private car
Anhui
April-13
New policies approved by Shaanxi province to allow "oil to gas"
cars to pass the inspection.
Private car
Shaanxi
May-14
Inner Mongolia allowed private car to install CNG/LNG Devices
Private car
Inner Mongolia
Fig 3: Shandong, Xinjiang and Sichuan accounted for 54% of total gas vehicles in China in 2013
Fig 4: Regionals with gas vehicles accounting for high percentage of total vehicles.
Reasons. More local governments began opening the oil-to-gas market in an
effort to improve local air conditions. This is one of the main criteria’s for
performance evaluations among the regional government. According to our
previous research, natural gas is much cleaner than energy and oil. In
particular, the local government will authorise oil-to-gas refits to private
vehicles, in addition to private transportation such as taxis.
Page 3
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
Fig 5: Fossil fuel emissions
Source: CEIC, SWS Research
Fig 6: Taxi is a small market comparing with private cars.
Government approval. As the AQSIQ’s draft policy conflicts with some
regional government’s existing policies, we expect to see more negative
feedbacks from regional governments towards this drafted policy. A fast
changing local government policy will hurt vehicle users that have refitted
their cars to a bi-fuel system. We therefore believe more regional
governments will provide negative feedback that will lead to an abortion of
this draft plan.
Page 4
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
Transportation is key
Faith in vehicle gas. We forecast of 32% gas demand Cagr in the
transportation sector from 13 billion cubic metres (bcm)/annum in 2013 to
89bcm/annum in 2020. Meanwhile, benefiting from favourable policies and
existing expansion plans, we assume China Gas’s natural gas vehicle sales
volume to enjoy a c.40% Cagr to 2.25bcm/annum in FY17 (15% of total
sales volume). In addition, with highest dollar margin among gas
downstream, China’s Gas’s CNG business is becoming a key driver of growth.
Fig 7: Overall gas demand in China will remain robust in China.
Fig 8: Natural gas consumption structure in 2013
Fig 9: Natural gas consumption structure in 2020E
The worst scenario If the AQSIQ’s guidance is passed, we forecast a declining
vehicle demand Cagr from 32% to 10% by 2020, and expect total demand growth
cuts from 423bcm to 359bcm. If passed, in a worst case scenario, we expect flat
vehicle gas sales volume in China Gas in comparison with previous forecasts of 44%
Cagr, and a halved dollar margin from Rmb1/cm to Rmb0.5. In our model, earnings
will mostly negatively impacted by 5.1% in 17E, slightly higher than previous years.
Page 5
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
Fig 10: In a worst case scenario, the earnings impact will be 5.1%
Base case
Total No. of cars
Growth rate
No. of cars using natural gas
% of total private cars
Annual gas consumption per vehicle (cum)
Total gas consumption for transport (m cum)
Total gas consumption (m cum)
2012
109,330,912
16.9%
2,170,968
2.0%
3,700
8,033
150,000
2013
126,701,435
15.9%
3,365,000
2.7%
3,800
12,787
175,000
2020E
313,167,992
Scenario 1
Total No. of cars
Growth rate
2012
109,330,912
16.9%
2,170,968
2.0%
3,700
8,033
150,000
2013
126,701,435
15.9%
3,365,000
2.7%
3,800
12,787
175,000
2020E
313,167,992
Scenario 2
Total No. of cars
Growth rate
2012
109,330,912
16.9%
2,170,968
2.0%
3,700
8,033
150,000
2013
126,701,435
15.9%
3,365,000
2.7%
3,800
12,787
175,000
2020E
313,167,992
Scenario 3
Total No. of cars
Growth rate
2012
109,330,912
16.9%
2,170,968
2.0%
3,700
8,033
150,000
2013
126,701,435
15.9%
3,365,000
2.7%
3,800
12,787
175,000
2020E
313,167,992
Base case for China Gas
Total natural gas sales volume (m cum)
Vehicle natural gas (m cum)
% of total natural gas
Net Profit （HK$ mn)
EPS
2014
8,045
759
9%
2,576
0.54
2017E
14,965
2,250
15%
5,457
1.04
14-17E CAGR
23%
44%
Worst-case for China Gas
Total natural gas sales volume
Vehicle natural gas
% of total natural gas
Dollar margin
Net Profit impact (%)
EPS impact (%)
2014
8,045
759
9%
1.0
-
2017E
13,574
759
6%
0.5
5.1%
5.1%
14-17E CAGR
19%
0%
13E-20E CAGR
14%
11,837,750
3.8%
7,500
88,783
423,000
20%
32%
13%
13E-20E CAGR
14%
6,363,630
2.0%
7,200
45,818
380,035
10%
20%
12%
13E-20E CAGR
14%
3,664,448
1.2%
6,800
24,918
359,135
1%
10%
11%
13E-20E CAGR
14%
2,841,556
0.5%
4,500
12,787
347,004
-2%
0%
10%
28%
Page 6
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
Appendix
Key Assumptions
Revenue breakdown
2012
2013
2014
2015E
2016E
2017E
Residential users
706
836
1,130
1,468
1,909
2,577
Commercial users
640
846
992
1,141
1,312
1,509
3,707
4,559
5,164
6,094
7,191
8,629
510
585
759
1,320
1,688
2,250
5,563
6,825
8,045
10,024
12,100
14,965
25%
23%
18%
25%
21%
24%
2,663.48
3,093.83
3,322.24
4,009.40
4,839.85
5,986.11
Bottled LPG (m tonnes)
0.89
0.89
1.77
2.39
3.22
4.35
YoY (%)
-9%
-1%
99%
35%
35%
35%
1,109,088
1,251,097
1,868,004
2,500,000
2,200,000
2,400,000
1,104,640
1,225,863
1,662,167
1,900,000
2,100,000
2,300,000
529,504
657,082
1,187,767
1,349,000
1,512,000
1,679,000
4,448
25,234
205,837
600,000
100,000
100,000
7,187,894
8,438,991
10,306,995
12,806,995
15,006,995
17,406,995
6,190
7,120
9,743
8,500
8,750
9,050
Volume
Gas sales volume (mm³)
Industrial users
Vehicle natural gas
Total natural gas sales volume
YoY (%)
Consolidated sales volume
Connection of Piped Natural Gas
Number of connected households
Additions
Consolidated Additions
Acquired
Accumulated (piped natural gas)
Number of connected C/I users
Industrial users
358
518
528
700
800
800
Commercial users
5,812
6,389
8,656
7,400
7,500
7,800
Additions
6,170
6,907
9,184
8,100
8,300
8,600
Acquired
20
213
559
400
450
450
44,930
52,050
62,193
70,693
79,443
88,493
Connectable urban population (m)
63
66
76
82
85
87
Connectable household (m)
19
20
23
25
26
27
Household/population
31%
31%
31%
31%
31%
31%
Natural gas penetration rate
37%
42%
44%
51%
57%
64%
6%
5%
15%
8%
4%
3%
133
170
353
550
750
1,000
4
3
3
2
2
2
Accumulated (piped natural gas)
Coverage & Gas Penetration Rate
Population growth
Pipelines & Stations
CNG/LNG stations
Gas sales volume per station (mm³)
Unit price
Gas connection fee (HK$/user)
3,005
3,152
3,231
3,250
3,313
3,350
Gas sales price (HK$/m³)
2.88
3.02
3.27
3.43
3.58
3.73
Residential (Rmb/m³)
2.12
2.18
2.26
2.30
2.30
2.30
Industrial (Rmb/m³)
2.36
2.45
2.56
2.71
2.86
3.01
Commercial (Rmb/m³)
2.46
2.48
2.85
3.00
3.15
3.30
CNG stations (Rmb/m³)
2.65
2.73
3.00
3.15
3.30
3.45
Page 7
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| Company
Utilities
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October
12, 2010
10
December
2014
LPG price (HK$/tonnes)
8,941
8,950
6,375
7,700
7,700
7,700
Piped Gas Dollar margin (HK$/m³)
0.53
0.56
0.60
0.61
0.61
0.62
Exchange rate(Rmb/HK$)
0.82
0.81
0.79
0.80
0.80
0.80
Gas connection
65%
68%
67%
67%
67%
68%
Piped gas
19%
19%
18%
18%
17%
17%
6%
6%
7%
7%
8%
9%
Selling and distribution/sales
-3.87%
-3.68%
-4.05%
-3.10%
-3.52%
-2.80%
Admin/sales
-4.96%
-6.19%
-4.93%
-6.28%
-4.62%
-4.00%
Dollar margin
Gross profit margin
LPG
Expense/Revenue
Page 8
Building Materials
| Company
Utilities
| CompanyResearch
Research
October
12, 2010
10
December
2014
HK$m
Revenue
2013
2014
2015E
2016E
2017E
17955.67
26008.00
36494.07
47141.71
61431.40
Gas connection
2709.50
3837.40
4384.25
5008.50
5624.65
Piped gas
7351.50
10872.20
13736.66
17329.45
22321.66
LPG
7886.70
11268.20
18373.16
24803.77
33485.09
Gross profit
3776.17
5286.31
6669.30
8292.30
10549.81
Gas connection
1839.75
2578.73
2937.45
3355.70
3824.76
Piped gas
1455.60
1989.61
2445.73
2952.31
3711.39
LPG
457.43
754.97
1286.12
1984.30
3013.66
Ebitda
3150.69
4410.66
5653.78
6846.17
8343.91
Ebit
2575.86
3699.31
4778.22
5886.67
7295.34
Finance Costs
-691.02
-614.97
-540.00
-420.00
-330.00
Profit before tax
2436.57
3720.60
5001.73
6344.69
7931.17
Income tax expense
-691.02
-614.97
-540.00
-420.00
-330.00
Minority interests
-271.81
-403.79
-560.19
-710.61
-888.29
Profit attributable to shareholders
1764.26
2575.51
3441.19
4365.15
5456.64
2013
2014
2015E
2016E
2017E
Consolidated Cash Flow Statement
HK$m
2436.57
3720.60
5001.73
6344.69
7931.17
Plus: DD&A
574.83
711.35
875.55
962.43
1035.22
Finance cost
691.02
614.97
540.00
420.00
330.00
0.00
0.00
0.00
0.00
0.00
212.58
-350.42
360.87
424.76
-723.96
Others
1418.02
2407.17
3237.88
4197.73
5379.11
2896.44
3383.07
5014.30
6004.92
6020.37
-2395.79
-3095.56
-2317.37
-2380.66
-2487.97
-179.82
-2045.51
-500.00
-300.00
-300.00
Losses from investments
Change in working capital
Capex
Other CF from investing activities
-2575.62
-5141.07
-2817.37
-2680.66
-2787.97
Equity financing
-53.00
0.00
0.00
0.00
0.00
Net change in liabilities
160.17
5227.15
1000.00
500.00
500.00
Dividend and interest paid
-970.45
-951.00
-1228.24
-1293.03
-1421.33
Other CF from financing activities
-112.45
-50.65
-100.00
-100.00
-100.00
-975.73
4225.50
-328.24
-893.03
-1021.33
584.16
254.70
2237.43
3109.79
3249.37
Net cash flow
Page 9
Building Materials
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Utilities
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October
12, 2010
10
December
2014
HK$m
2013
2014
2015E
2016E
2017E
9353.80
13932.21
17682.59
23038.43
29859.57
3959.19
6453.90
8322.59
10753.82
12964.88
3347.35
4736.60
5474.11
7542.67
10443.34
Current Assets
Inventories
952.10
1207.28
2061.19
2196.28
3379.78
1095.16
1534.43
1824.70
2545.65
3071.57
0.00
0.00
0.00
0.00
0.00
PP&E
13896.20
17834.62
17400.63
18180.70
18736.51
18598.84
27430.01
30653.59
32461.43
37448.57
Total Assets
32495.04
45264.63
48054.22
50642.12
56185.08
Current Liabilities
13017.14
12284.05
13306.44
15141.34
17744.44
Borrowings
8445.19
5760.68
5000.00
4000.00
3000.00
4405.27
6218.58
8006.44
10741.34
14244.44
Long-term investment
Total Liabilities
Minority Interests
Shareholder Equity
Share Capital
166.68
304.80
300.00
400.00
500.00
6735.11
14823.56
13600.00
10600.00
8600.00
19752.25
27107.62
26906.44
25741.34
26344.44
1258.15
2373.52
2610.88
2871.96
3446.36
11484.64
15783.49
18536.44
22028.56
26393.87
45.70
49.95
49.95
49.95
49.95
Reserves
11438.94
15733.54
18486.49
21978.61
26343.92
Equity attributable
11484.64
15783.49
18536.44
22028.56
26393.87
32495.04
45264.63
48053.75
50641.86
56184.67
2013
2014
2015E
2016E
2017E
Earnings per share
0.39
0.54
0.68
0.84
1.04
Diluted EPS
0.37
0.52
0.63
0.80
1.00
Operating CF per share
0.65
0.70
0.99
1.16
1.15
Dividend per share
0.08
0.12
0.14
0.17
0.21
Net assets per share
2.84
3.78
4.16
4.81
5.71
ROIC
6.70
7.70
8.91
11.19
13.69
ROE
15.05
18.49
17.51
18.96
19.94
Ebitda Margin
17.55
16.96
15.49
14.53
13.56
Ebit Margin
14.35
14.22
13.09
12.49
11.88
Growth rate of Revenue (YoY)
-0.05
0.45
0.40
0.29
0.30
4.73
20.85
26.17
24.34
27.22
60.79
59.89
55.99
50.83
46.89
1.56
1.65
1.97
2.14
2.33
Key Financial Ratios
Ratios per share (HK$)
Key Operating Ratios (%)
Growth rate of Profit (YoY)
Debt-to-asset ratio
Turnover rate of net assets
Turnover rate of total assets
0.55
0.57
0.76
0.93
1.09
Effective tax rate (%)
16.44
19.92
20.00
20.00
20.00
Dividend yield (%)
21.50
22.50
20.00
20.00
20.00
PE
33.22
24.41
19.32
15.50
12.53
PB
4.60
3.46
3.14
2.72
2.29
EV/Sale
3.50
2.42
1.72
1.33
1.02
16.26
12.79
9.98
8.24
6.77
Valuation Ratios (X)
EV/Ebitda
Page 10
October
12, 2010
10
December
2014
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| Company
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| CompanyResearch
Research
serves as an officer of nor has any financial interests in relation to the listed corporation reviewed by the analyst. None of the listed corporations reviewed
or any third party has provided or agreed to provide any compensation or other benefits in connection with this report to any of the analyst, the Company
or the group company(ies). A group company(ies) of the Company confirm that they, whether individually or as a group (i) are not involved in any market
making activities for any of the listed corporation reviewed; or (ii) do not have any individual employed by or associated with any group company(ies) of
the Company serving as an officer of any of the listed corporation reviewed; or (iii) do not have any financial interest in relation to the listed corporation
reviewed or (iv) do not, presently or within the last 12 months, have any investment banking relationship with the listed corporation reviewed.
shareholdings.
Disclaimer：
The materials, opinions and estimates contained herein only reflect the judgment of the Company on the day this report is released. The prices, values and
investment returns of the securities or investment instruments referred to herein may fluctuate. At different periods, the Company may release reports
which are inconsistent with the materials, opinions and estimates contained herein.
Page 11
October
12, 2010
10
December
2014
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Company.
Disclaimer
months.
months.
5.
As of the publication of this report Enclave Capital LLC, does not make a market in the subject securities.
recipients of the report are to contact the Singapore office of Shenyin Wanguo Singapore Private Limited at 65-6323-5208, or 65-6323-5209 in respect of
Page 12
A-share research
Tuesday, 09 December, 2014
Bond daily 09 December 2014
Tighter grip
On 08 December, the China Securities Depository and Clearing Corporation (CSDC) release
a circular stating that it is not accepting new bond repo applications from local
government financing vehicles. The circular also prohibits the use of bonds rated below
AAA as collateral for financing. According to our calculations, the new regulations will
weigh heavily on the liquidity of urban investment bonds (a market worth Rmb1.25tn).
We expect yields of urban investment bonds to rise over 100bps. In the short-term, we
expect a large-scale sell-off of government and convertible bonds and for investors in
bond funds to redeem their shares in expectation of further policy tightening. In the longterm, we believe government and higher-rated bonds will become attractive.
Policy changes and a bull stock market weighed heavily on the bond market and, in the
near-term, we expect negative sentiment to linger. However, for government and higherrated bonds, we believe the recent rise in yields will provide a good investment
opportunity for investors with long-term horizons.
Contact
Dong Liang
[email protected]
In particular, the amendment to the CSDC repo policy took the market by surprise. We
therefore believe a short-term overhang on the entire bond market is likely. Given the
regulator’s decision to suspend urban investment companies’ access to financing through
the repo market, we expect existing urban investment bond valuations to correct.
Government bond valuations are likely to recover after a short-term yield hike.
In the past, given higher requirements for pledged financing in the interbank market,
brokerage and fund companies favoured the exchange in terms of financing. However, the
new policy is expected to be a major setback for the financing of lower-rated bonds, while
higher-rated bonds will rise as the supply of eligible instruments tightens. In addition, we
believe certain brokers and fund companies will shift to the interbank market for
government and higher-rated corporate bonds.
In the medium-term, we believe rising bond yields may impact the bull market –
depressing the risk-free rate. If the stock market cools down, we expect bond market
liquidity to remain at a stable level. In addition, we believe regulators will take steps to
ease bond market liquidity since the new regulations on pledged repo do not synch well
with the government’s effort to lower financing costs within the real economy.
On 08 December 2014, the weighted interbank overnight repo rate was 2.66% (+4bps) and
the seven-day repo rate was 3.48% (+6bps); while the weighted exchange-traded
overnight repo rate was 3.75% (-1bps) and seven-day repo rate was 4.13% (+21bps). A
total of Rmb5bn 14-day repos are schedule to meet maturities. Given limited amount of
repo contracts that are expected to be due this week and relatively tight liquidity in the
interbank market, we expect the central bank to inject money via open market operations.
Investors should pay attention to the volume and the price that the PBoC offers through
open market operations.
In terms of the spot bond market, transactions remained weak because of a strong waitand-see sentiment. On 08 December 2014, with the stock market continuing to edge and
more investors selling their bonds, the yields of central government bonds increased by 58bps and policy bank bonds increased by 10-15bps. Specifically, the yield of ten-year
central government bonds recovered to c.3.8% while yields of the bond issued by China
Development Bank increased to c.4.35%.
In terms of the primary bond market, Agricultural Development Bank of China issued a
total of Rmb20bn bonds, with one-year bonds at 3.98%, three-year bonds at 4.16% and
five-year bonds at 4.25%, in line with the market’s expectations. On Tuesday, China
Development Bank is expected to issue a total of Rmb20bn bonds. We expect yields of
A-share research
between 4.22-4.24% for one-year notes, 4.40-4.42% for three-year notes, 4.46-4.48% for
five-year notes, 4.52-4.55% for seven-year notes and 4.57-4.60% for ten-year bonds.
On 08 December, the SWS High-Yield Bond Price Index declined by 0.22%, as the
corresponding SWS High-Yield Bond Yield Index increased by 3bps. Trading volume shrank
compared with the previous day. Among the 36 bonds in our SWS High-Yield Bond Pool,
only nine recorded clean price growth, with the top gainers being 2011 Chengdu Xinzhu
Road & Bridge Machinery (112053:CH) (+1.59%) and 2011 Anyang Iron & Steel (122105:CH)
(+0.74%). 2012 Xining Special Steel (122158:CH) recorded the highest decline of 0.9%.
Table 1: Government bond futures
Contract
Last Trading Day
CTD
Maturity
BPS
BNOC
IRR
CTD Yield
TF1412
12 December
2014
140024.IB
23 October
2021
0.546
0.544
-46.06%
3.86%
TF1503
13 March 2015
140024.IB
23 October
2021
0.111
0.190
3.27%
3.80%
TF1506
13 March 2015
140024.IB
23 October
2021
-0.256
-0.102
4.20%
3.75%
Source：Wind, SWS Research
A-share research
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no part of this report shall be copied, photocopied, replicated or redistributed to any other person in any form by any means, or be used in any other ways which will
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one shall have the right to use them at any circumstances without the prior consent of the Company.
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only at Relevant Persons. Other Persons who are not Relevant Persons must not act or rely upon this document or any of its contents.
A-share research
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A-share research
BUY
Shanxi Guoxin Energy (600617:CH)
Unchanged
Shanxi Guoxin Energy Corp Ltd
Sector: Financials
Industry: Real Estate Management & Devel
Sub-Industry: Diversified Real Estate Activi
Key data
Price (Rmb)
52wk High (Rmb)
52wk Low (Rmb)
Market Cap (Rmbm)
Market Cap (US$m)
Shares outstanding (m)
Free float
1M Return
6M Return
YTD Return
Dividend yield (FY13)
S&P
CSI 300
Inst Ownership (Top 5)
SHANXI GUOXIN ENERGY
TY HONGZHAN REAL EST
SHANXI TIANSEN GROUP
XJ SHUANGKUN EQUITY
CHINA UNIVERSAL ASSE
Acting in concert
27.88
30.09
17.46
15,561
2,515
563
23%
12.1%
54.1%
32.9%
0.0%
3106.91
38.2%
18.4%
18.4%
3.4%
1.3%
Source: Bloomberg
Shanxi Guoxin Energy announced plans to raise Rmb1.01bn via a private placement of
45m shares at Rmb22.51/share to its investors including China Insurance, Ping An Asset
Management, Shanghai Chengding Detong Equity Investment Fund, Shanghai Chengding
Yangzi Equity Investment Fund Management Partnership Enterprise and DT Capital
Partners. The new shares are expected to be subject to a three-year lock-up period. The
funds raised will be used to repay its bank loans, enhance working capital and reduce
financing costs. Shanxi Guoxin Energy will resume trading on 09 December.
The company has built a 3,647km pipeline network covering 11 cities in Shanxi Province.
In 3Q14, the company’s financial expenses reached Rmb160m, representing financial
expense to revenue ratio of 4.41% and asset liabilities reached 81.54%. At present, its
long-term loans exceed Rmb7bn and liabilities exceed Rmb10bn. Assuming the raised
funds will pay off the company’s bank loans (interest rate: 7%), we calculate its 15E net
profit to expand by 7.9%, higher than 7.6% EPS dilution by the private placement. Despite
that, we expect the company to integrate its industry chain and increase its return on
investment (ROI).
Among the investors, China Insurance, Shanghai Chengding Detong Equity Investment
Fund, Shanghai Chengding Yangzi Equity Investment Fund Management Partnership
Enterprise and DT Capital Partners have signed an acting-in-concert agreement with
Guoxin Group, a major shareholder of Shanxi Guoxin Energy. After this placement, Guoxin
Group’s stake in Shanxi Guoxin Energy will decline from 34.04% to 31.64% and acting-inconcert agreement partners will hold a total of 36.34%.
Contact
Dong Liang
[email protected]
We maintain our net profit forecasts of Rmb440m in 14E and revise up from Rmb670m to
Rmb700m in 15E, Rmb990m to Rmb1.02bn in 16E, representing diluted EPS of Rmb0.69 in
14E, Rmb1.10 in 15E and Rmb1.61 in 16E. Maintain BUY.
Volume
35
Price
14k
30
12k
25
10k
Source: Bloomberg
11/2014
10/2014
09/2014
08/2014
07/2014
06/2014
05/2014
04/2014
03/2014
02/2014
01/2014
12/2013
0k
11/2013
2k
0
10/2013
4k
5
09/2013
6k
10
08/2013
8k
15
07/2013
20
Financial Table
Rmbm
Operating revenue
Growth (%)
Net profit
Growth (%)
EPS (Rmb)
Growth (%)
Gross margin (%)
ROE (%)
PE (x)
13A
14E
15E
16E
4,393
19.8
308
43.6
0.52
N/A
21.8
26.9
58
6,741
53.4
443
43.8
0.69
33
19.8
27.9
40
9,719
44.2
703
58.9
1.1
59
21.7
30.7
25
13,007
33.8
1,024
45.6
1.61
46
22.4
30.9
17
A-share research
Earnings forecast
(Rmbm)
2012
2013
2014E
2015E
2016E
1.Operating revenue
3,668
4,393
6,741
9,719
13,007
2. Total cost of operations
3,416
3,986
6,216
8,791
11,642
Inc: Cost of operations
3,030
3,438
5,407
7,613
10,098
Business tax & surcharge
12
9
18
26
35
Selling expense
179
237
270
389
624
Administrative expense
100
127
182
262
351
95
172
340
499
532
Asset impairment loss
1
3
0
2
1
Income from fair value changes
0
0
0
0
0
Investment income
28
23
29
31
32
3. Operating profit
280
431
553
958
1,397
23
22
38
0
0
Financial expense
Add: Non-operating income
Less: Non-operating expense
4. Total profit
Less: Income tax
5. Net profit
Minority interest
5
35
7
7
6
299
419
584
951
1,391
69
109
139
242
356
229
309
445
710
1,035
15
2
3
6
10
Net profit attributable to common shareholders
214
308
443
703
1,024
Basic EPS (Rmb)
0.36
0.52
0.75
1.19
1.73
Fully diluted EPS (Rmb)
0.36
0.52
0.69
1.1
1.61
A-share research
terms as follows:
you are interested.
A-share research
Disclaimer：
services.
A-share research
Disclaimer :
1.
2.
4.
5.
contact the Singapore office of Shenyin Wanguo Singapore Private Limited at 65-6323-5208, or 65-6323-5209 in respect of any matters arising from, or in connection with,
the report.”
A-share research
BUY
China Tianying (000035:CH)
Unchanged
Green dream
China Tianying Inc
Sector: Information Technology
Industry: Communications Equipment
Sub-Industry: Communications Equipment
Key data
Price (Rmb)
52wk High (Rmb)
52wk Low (Rmb)
Market Cap (Rmbm)
Market Cap (US$m)
Shares outstanding (m)
Free float
1M Return
6M Return
YTD Return
Dividend yield (FY13)
S&P
CSI 300
Inst Ownership (Top 5)
CINDA INVESTMENT COR
CHINA CINDA ASSET MA
CHINA ORIENT ASSET M
ZHOU YICHENG
SH PUDONG DEV BANK-S
12.38
13.99
10.15
7,667
1,239
189
89%
-4.7%
20.5%
16.1%
0.0%
3106.91
2.0%
2.0%
1.7%
1.4%
0.8%
Source: Bloomberg
Contact
Dong Liang
[email protected]
China Tianying signed a build-operate-transfer (BOT) contract with Lvnan government
(Shandong Province) for a waste-to-energy (WTE) project, with a designed daily waste
treatment capacity of 600t. Including total investment of Rmb240m, we expect the project
to contribute significantly to 16E net profit after its completion in mid-2016. The new
project is expected to help China Tianying increase its total waste treatment capacity to
9700t/day (3000t/d capacity is already in operation). We expect the company to win two
to four new projects and become one of China’s top 10 waste treatment companies in
2015-16.
Given that three WTE projects (with total capacity of 2400t/day) are expected to start
operations in 1Q15, China Tianying’s actual waste treatment capacity will expand to
5400t/day (+80% YoY) in 2015. This, coupled with three new projects under construction,
will support strong earnings growth over the next two years.
In addition, the company’s subsidiary, Jiangsu T.Y. Environmental Energy, plans to
establish a joint venture (JV) with Shanghai Debin Environmental Protection Technology
(Debin), focused on developing a construction waste treatment business. Jiangsu T.Y.
invested Rmb24m for an 80% stake in the JV. Leveraging off of Debin’s advanced
technologies and experience in the field of construction waste disposal, we believe China
Tianying will successfully expand into the waste treatment and recovery market. This may
also help the company to optimise its business structure and thereby enhance its
competitiveness and profitability.
Given more stringent environmental regulations, we expect the WTE industry to enter a
golden age in the next three to five years. On top of a strong cash position, with a business
portfolio that includes a comprehensive waste industry treatment chain and advanced
waste incineration technologies, we expect China Tianying to win two to four new BOT
projects in 2014-16. This is expected to pave the way for organic growth over the next few
years. Meanwhile, the recently signed engineering-procurement-construction (EPC)
contract for a WTE project in Nantong (Jiangsu Province) is expected to further boost the
company’s earnings growth. Moreover, we expect China Tianying to continue expanding
its kitchen waste treatment and sludge disposal businesses in the near future.
In light of its aggressive expansion plans, high earnings visibility and favourable policies for
the environmental protection industry, we expect to see revaluation opportunities for
China Tianying. We maintain our EPS forecasts of Rmb0.27 in 14E, Rmb0.42 in 15E and
Rmb0.80 in 16E, implying a three year Cagr of 43%. Maintain BUY.
Volume
16
Price
30k
14
Financial Table
25k
Rmbm
12
20k
10
8
15k
6
10k
4
5k
2
Source: Bloomberg
11/2014
10/2014
09/2014
08/2014
07/2014
06/2014
05/2014
04/2014
03/2014
02/2014
01/2014
12/2013
11/2013
10/2013
09/2013
08/2013
0k
07/2013
0
Operating revenue
Growth (%)
Net profit
Growth (%)
EPS (Rmb)
Growth (%)
Gross margin (%)
ROE (%)
PE (x)
13A
14E
15E
16E
250
83.2
76
25.5
0.12
Na
63.2
3.2
105.8
416
66.6
170
123.9
0.27
125
58.3
6.7
47.2
653
56.9
263
54.6
0.42
56
55.6
9.4
30.5
907
38.9
367
39.6
0.59
40
54.8
11.6
21.9
A-share research
0000Earnings forecast
(Rmbm)
2012
2013
2014E
2015E
2016E
Operating revenue
139
250
416
653
907
Cost of operations
43
92
174
290
410
0
1
2
3
4
Business tax & surcharge
Selling expense
0
1
1
2
2
Administrative expense
18
37
48
52
66
Financial expense
22
48
45
45
45
1
1
1
1
2
Asset impairment loss
Operating profit
52
71
146
259
376
Non-operating income
9
10
39
41
46
Non-operating expense
0
0
0
1
5
Total profit
61
81
185
299
417
Income tax
1
5
15
36
50
Net profit
60
76
170
263
367
Net profit attributable to common shareholders
60
76
170
263
367
0.11
0.13
0.3
0.46
0.65
0.1
0.12
0.27
0.42
0.59
Basic EPS (Rmb)
Fully diluted EPS (Rmb)
A-share research
terms as follows:
you are interested.
A-share research
Disclaimer：
services.
A-share research
Disclaimer :
1.
2.
4.
5.
contact the Singapore office of ShenyinWanguo Singapore Private Limited at 65-6323-5208, or 65-6323-5209 in respect of any matters arising from, or in connection with,
the report.”
+852 2509 8333
PicturesBEST HSCEI PERFORMERS
Best Rank Name
Weichai Power Co Ltd
Air China Ltd
Huaneng Power International In
Tsingtao Brewery Co Ltd
Anhui Conch Cement Co Ltd
China National Building Materi
China Telecom Corp Ltd
China Coal Energy Co Ltd
Guangzhou Automobile Group Co
China Longyuan Power Group Cor
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
Source: Bloomberg
WORST HSCEI PERFORMERS
Worst Rank Name
Haitong Securities Co Ltd
New China Life Insurance Co Lt
CITIC Securities Co Ltd
China Merchants Bank Co Ltd
People's Insurance Co Group of
China Minsheng Banking Corp Lt
Ping An Insurance Group Co of
China Pacific Insurance Group
China Communications Construct
China Construction Bank Corp
-14.0%
Source: Bloomberg
+852 2509 8333
BEST CSI300 PERFORMERS
Best Rank Name
Southwest Securities Co Ltd
AVIC Aircraft Co Ltd
#N/A
Inner Mongolia Junzheng Energy
China Railway Construction Cor
People.cn Co Ltd
Hong Yuan Securities Co Ltd
Haining China Leather Market C
Haitong Securities Co Ltd
CITIC Guoan Information Indust
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Source: Bloomberg
BEST CSI300 PERFORMERS
Worst Rank Name
Shanxi Securities Co Ltd
China Fortune Land Development
Yanzhou Coal Mining Co Ltd
China Life Insurance Co Ltd
China Pacific Insurance Group
China CSSC Holdings Ltd
Aisino Co Ltd
New China Life Insurance Co Lt
Searainbow Holding Corp
Sealand Securities Co Ltd
-10.0%
Source: Bloomberg
-10.0%
-10.0%
-10.0%
-10.0%
-10.0%
-10.0%
-10.0%
-10.0%
+852 2509 8333
Macro Assumption
Macro Indicator
3Q13
4Q13
2013
1Q14
2Q14
2014E
7.8
7.7
7.7
7.4
7.4
7.4
Industrial Value Added Growth (%)
10.1
10.0
9.7
8.7
8.7
8.8
FAI (%)
20.2
19.6
19.6
17.6
16.5
17.9
Real Estate Investment Growth (%)
19.0
22.0
20.0
16.0
20.0
16.0
Retail Sales Growth (%)
13.3
13.5
13.1
12.0
--
12.2
Exports (%)
3.9
3.7
7.9
-3.4
--
5.5
Imports (%)
8.4
--
7.3
1.6
--
5.0
Real Estate Sales Area Growth (%)
16.0
13.0
18.0
-3.0
9.0
12.0
Automobile Sales Growth (%)
13.0
12.0
12.0
--
--
10.0
Electricity Output growth rate (%)
10.5
6.9
7.0
6.5
--
7.2
2.8
2.9
2.6
2.3
2.3
2.4
China's GDP
CPI
PPI
-1.8
-1.4
-1.9
-2.0
-1.6
-1.4
Renminbi Loan Balance Growth (%)
14.6
14.8
15.0
--
--
--
M2 (%)
14.2
13.6
13.6
12.1
--
13.2
Source: Bloomberg
HSCEI Index
12500
80
12000
70
11500
60
11000
50
10500
40
10000
30
9500
Volume (RHS)
4/4/2014
7/3/2014
21/3/2014
7/2/2014
21/2/2014
24/1/2014
10/1/2014
27/12/2013
13/12/2013
29/11/2013
1/11/2013
15/11/2013
4/10/2013
18/10/2013
6/9/2013
20/9/2013
9/8/2013
23/8/2013
26/7/2013
12/7/2013
28/6/2013
14/6/2013
31/5/2013
3/5/2013
0
17/5/2013
10
8000
5/4/2013
20
8500
19/4/2013
9000
PX_LAST
Source: Bloomberg
CSI300
3400
600
3200
500
3000
400
2800
300
2600
200
2400
Volume (RHS)
Source: Bloomberg
PX_LAST
5/4/2014
8/3/2014
22/3/2014
22/2/2014
8/2/2014
25/1/2014
11/1/2014
28/12/2013
14/12/2013
30/11/2013
2/11/2013
16/11/2013
5/10/2013
19/10/2013
7/9/2013
21/9/2013
24/8/2013
10/8/2013
27/7/2013
13/7/2013
29/6/2013
1/6/2013
15/6/2013
4/5/2013
0
18/5/2013
2000
6/4/2013
100
20/4/2013
2200
+852 2509 8333
2012
2013
45
2014
Historical avg
2012
2013
2014
Historical avg
2012
2013
Dec
Oct
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Feb
Jan
Dec
Oct
40
Jan
Sep
Jun
May
Historical avg
50
Nov
50
55
Sep
49
China input prices PMI
60
Jul
51
65
Aug
52
50
China input prices PMI
China non-manufacturing PMI
Jun
50
Dec
53
Oct
51
Nov
54
Jul
55
51
Aug
52
Apr
56
Mar
57
52
Jan
53
Feb
58
Apr
59
May
China manufacturing PMI
53
Mar
54
China non-manufacturing PMI
Feb
China manufacturing PMI
2014
Source: Bloomberg
CPI YoY growth
PPI YoY growth
GDP
10
5.0
CPI YoY % Growth
4.0
PPI YoY % Growth
%
9
4.5
3.0
8
4.0
2.0
7
3.5
1.0
3.0
0.0
2.5
-1.0
2.0
-2.0
2
1.5
-3.0
1
1.0
-4.0
6
5
Historical avg
2012
2013
3
2014
Historical avg
2012
2013
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q12
4Q11
3Q11
2Q11
Dec
Nov
Oct
Sep
Aug
Jul
Jun
Apr
May
Mar
Jan
0
Feb
Dec
Nov
Oct
Sep
Aug
Jul
Jun
Apr
May
Mar
Jan
Feb
4
China GDP
2014
Source: Bloomberg
2012
2013
2014
Historical avg
2012
2013
2014
Historical avg
2012
2013
Dec
Nov
Oct
Sep
Aug
May
Jun
Jul
-20
Jan
Dec
Nov
Oct
Sep
Aug
Jul
Jun
Apr
Historical avg
May
Mar
-20
Jan
-15
-40
Feb
-30
0
-10
Apr
-10
Mar
-20
10
Jan
0
-5
Feb
0
-10
20
Dec
5
Nov
10
China Import Trade YoY % Growth
30
Oct
10
Sep
15
20
Aug
20
30
50
40
Jul
40
China Export Trade YoY % Growth
Jun
25
Apr
30
May
Trade Balance (USbn)
50
China imports
Mar
60
China exports
Feb
Trade balance
2014
Source: Bloomberg
China FAI – Manufacturing
China CNY Monthly New Loan (Rmbbn)
35
China FAI – Ex rural
China FAI Real Estate Development Cumulative
24
China FAI ex Rural Cumulative YoY % Growth
23
24
30
22
22
21
20
25
20
18
19
20
16
18
14
17
15
12
16
Historical avg
Source: Bloomberg
2012
2013
2014
Historical avg
2012
2013
2014
Historical avg
2012
2013
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
15
Jan-Feb
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
10
Jan-Feb
10
Jan-Feb
26
China FAI – Real Estate
2014
+852 2509 8333
China M2 growth
New loans
China M2 YoY % Growth
19
18
Total social financing
China CNY Monthly New Loan (Rmbbn)
1,500
1,300
2,700
1,100
2,200
900
1,700
700
1,200
13
500
700
12
300
200
17
China Total Social Financing (Rmbbn)
3,200
16
Historical avg
2012
Historical avg
2012
2013
Historical avg
2014
2012
Dec
Oct
2013
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Jan
Feb
Dec
Nov
Oct
Sep
Jul
Aug
Jun
Apr
May
Jan
2014
Feb
Dec
Oct
2013
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Feb
Jan
14
Mar
15
2014
Source: Bloomberg
7-day repo rate
5-year lending rate
%
10
7.0
8
7
6.8
6
6.6
5
%
50.0
%
7.2
9
Product inventory
40.0
30.0
20.0
6.4
4
6.2
PX_LAST
8/2013
10/2013
6/2013
4/2013
2/2013
12/2012
10/2012
8/2012
6/2012
4/2012
2/2012
12/2011
10/2011
8/2011
6/2011
4/2011
10/10/2014
10/8/2014
10/6/2014
10/4/2014
10/2/2014
10/12/2013
10/8/2013
10/10/2013
10/6/2013
10/4/2013
10/2/2013
10/12/2012
10/10/2012
10/8/2012
10/4/2012
9/12/2014
9/11/2014
9/10/2014
9/9/2014
9/8/2014
9/7/2014
9/6/2014
9/5/2014
9/4/2014
9/3/2014
9/2/2014
9/1/2014
9/12/2013
0.0
-10.0
5.6
2/2011
5.8
0
10.0
12/2010
6.0
1
10/2010
2
10/6/2012
3
Product Inventory: YoY: Ferrous Metal Mining & Dressing
Product Inventory: YoY: Non Ferrous Metal Mining & Dressing
Product Inventory: YoY: Paper Making & Paper Product
PX_LAST
Source: Bloomberg
Industrial output: Steel
15
Industrial output: Copper
Industrial Output Steel Products YoY % Growth
30
13
Industrial output: Paper
Industrial Output Copper Prudcts YoY % Growth
22
Industrial Output Paper YoY % Growth
17
25
11
12
9
20
7
15
7
2
5
10
Historical avg
Source: Bloomberg
2012
2013
2014
Historical avg
2012
2013
2014
Historical avg
2012
2013
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
-8
Jan-Feb
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
5
Jan-Feb
1
Jan-Feb
3
-3
2014
+852 2509 8333
100%
6%
5%
80%
70%
4%
60%
3%
40%
2%
30%
Sector
Strategy
Commodities
Transportation & Diversified Finance
Commodities & Utilities
Gaming, Leisure & Travel
Property & Insurance
Oil & Gas
Pharmaceuticals
Capital Goods
Banks
Cement, Pulp & Paper
Renewable Energy
TMT
Non-Bank Financials
200
0
Monthly Minimu Wage Income in 2013
Shaanxi
2013
2012
2011
2010
2009
2008
2007
2006
Rural Population As % of Total Population (LHS)
Urban Population As % of Total Population (LHS)
China Urban Population YoY % Growth (RHS)
Source: Bloomberg
SWS Research team
Analyst
Anthony Hu
Dimi Du
Leo Fan
Daniel Huang
Roger Gu
Kris Li
Albert Miao
Ming Shi
Titus Wu
Vivian Xue
Rong Ye
Vincent Yu
Ashley Sheng
Yi Zhang
2005
2004
2003
2002
2001
0%
2000
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
China Urban Households Living Expenditure YoY % Growth
0%
Sichuan
1%
10%
0.00
600
400
20%
0.02
800
Henan
0.04
1,200
1,000
50%
0.06
1,400
Liaoning
0.08
%
Beijing
0.10
1,800
1,600
90%
0.12
Zhejiang
%
Monthly minimum wage
Guangdong
0.14
China population
Shanghai
China urban household living expenditure
9-Dec-14
Code
Company
Rating
Target
Price
Closing
Price
+/- (%)
EPS 2014E BPS 2014E
Market cap.
(Report
(Report
PE
(HK$m)
Currency) Currency) 2014E
PE
2015E
PB
2014E
PB
2015E
Auto & Components (Titus Wu)
1148 HK
XINCHEN CHINA POWER NeturalINGS
BUY
5.93
3.12
90.06%
4016.71
0.23
1.93
10.78
8.69
1.28
1.09
2333 HK
GREAT WALL MOTOR COMPANY-H
Outperform
32.8
40.55
-19.11%
41895.45
2.59
10.99
12.53
9.96
2.91
2.34
1114 HK
BRILLIANCE CHINA AUTOMOTIVE
Outperform
16.56
13.26
24.89%
66641.7
0.86
3.21
12.36
9.64
3.26
2.43
Outperform
9.34
9
3.78%
62402.21
1.38
8.47
5.22
4.63
0.84
0.65
Banks (Vivian Xue)
1988 HK
CHINA MINSHENG BANKING-H
3618 HK
CHONGQING RURAL COMMERCIAL-H
Outperform
4.13
4.48
-7.81%
11259.75
0.72
4.47
4.98
4.44
0.79
0.67
998 HK
CHINA CITIC BANK CORP LTD-H
Underperform
4.59
5.88
-21.94%
87507.1
0.9
5.53
5.23
4.84
0.84
0.71
1288 HK
AGRICULTURAL BANK OF CHINA-H
Outperform
3.95
3.73
5.90%
114655.8
0.58
3.14
5.15
4.49
0.94
0.79
3968 HK
CHINA MERCHANTS BANK-H
Underperform
13.45
16.24
-17.18%
74556.23
2.25
12.73
5.78
5.08
1.01
0.85
Capital goods (Titus Wu, Leo Fan, Rong Ye, Vincent Yu)
182 HK
CHINA WINDPOWER GROUP LTD
BUY
1.01
0.43
134.88%
3846.88
0.05
0.62
7.99
5.25
0.69
0.61
1829 HK
CHINA MACHINERY ENGINEERIN-H
BUY
7.12
5.21
36.66%
4732.09
0.53
3.18
7.93
5.21
1.29
1.09
750 HK
CHINA SINGYES SOLAR TECH
BUY
16.9
10.32
63.76%
7176.49
1
4.98
8.25
6.07
1.63
1.27
BUY
13.46
10.72
25.56%
48065.39
0.4
3.52
27
19.96
3.05
2.66
Commercial & Professional Serv (Daniel Huang)
257 HK
CHINA EVERBRIGHT INTL LTD
Consumer Services (Roger Gu)
27 HK
GALAXY ENTERTAINMENT GROUP L
BUY
62.9
46.4
35.56%
196962.9
2.74
9.87
16.94
15.13
4.7
3.93
1928 HK
SANDS CHINA LTD
BUY
51.94
39.9
30.18%
321869.95
0.33
0.81
15.61
13.52
6.38
6.18
Diversified Financials (Yi Zhang)
6881 HK
CHINA GALAXY SECURITIES CO-H
Outperform
7.72
9.61
-19.67%
16250.37
0.43
3.54
17.89
14.74
2.14
1.92
6837 HK
HAITONG SECURITIES CO LTD-H
BUY
18.9
19.62
-3.67%
29284.62
0.61
6.88
25.74
21.03
2.25
2.12
Energy (Albert Miao)
883 HK
CNOOC LTD
BUY
15.1
10.08
49.80%
450046.4
1.14
8.45
7.09
6.12
0.94
0.83
386 HK
CHINA PETROLEUM & CHEMICAL-H
SELL
4.9
6.23
-21.35%
158948.73
0.5
5.17
9.93
12.36
0.95
0.89
857 HK
PETROCHINA CO LTD-H
BUY
12.3
8.25
49.09%
174065.93
0.7
6.67
9.39
7.01
0.98
0.89
3337 HK
ANTON OILFIELD SERVICES GP
SELL
0.88
1.59
-44.65%
3516.34
0.04
1.09
31.82
17.77
1.15
1.09
Code
Company
Rating
Target
Price
Closing
Price
+/- (%)
EPS 2014E BPS 2014E
Market cap.
(Report
(Report
PE
(HK$m)
PE
2015E
PB
2014E
PB
2015E
Materials (Albert Miao, Dimi Du, Rong Ye)
3323 HK
CHINA NATIONAL BUILDING MA-H
Underperform
5.8
7.46
-22.25%
21478.62
1.08
10.53
5.51
5.3
0.56
0.48
347 HK
ANGANG STEEL CO LTD-H
BUY
7.7
6.23
23.60%
6764.53
0.18
6.95
27.7
16.81
0.71
0.66
358 HK
JIANGXI COPPER CO LTD-H
Outperform
15.5
13.42
15.50%
18620.01
0.73
15.25
14.71
17.99
0.69
0.71
1818 HK
ZHAOJIN MINING INDUSTRY - H
Outperform
4.66
3.88
20.10%
3392.46
0.2
3.16
15.81
12.02
0.97
0.88
2689 HK
NINE DRAGONS PAPER NeturalINGS
BUY
8.4
6.4
31.25%
29863.81
0.37
5.14
13.91
10.03
0.98
0.9
914 HK
ANHUI CONCH CEMENT CO LTD-H
Outperform
29.5
27.1
8.86%
35219.16
2.08
12.76
10.43
9.86
1.68
1.45
Pharmaceuticals, Biotechnology & Life Sciences (Ming Shi)
587 HK
HUA HAN BIO-PHARMACEUTICAL H
BUY
2.7
2.28
18.42%
9336.78
0.09
1.3
25.5
14.28
1.75
1.66
1177 HK
SINO BIOPHARMACEUTICAL
BUY
8.23
7.11
15.75%
35133.79
0.27
1.83
26.79
21.72
3.88
3.08
BUY
7.9
6.99
13.02%
5638.27
0.27
1.48
21.1
16.09
3.72
3.16
Outperform
11.5
12.68
-9.31%
30619
0.06
0.24
29.53
23.31
6.7
5.7
2348 HK DAWNRAYS PHARMACEUTICAL Netural
867 HK
CHINA MEDICAL SYSTEM NeturalING
Real estate (Kris Li)
2007 HK
COUNTRY GARDEN NeturalINGS CO
Netural
3.22
3.08
4.55%
62683.61
0.57
2.8
4.33
4.3
0.87
0.8
960 HK
LONGFOR PROPERTIES
Outperform
10.82
10.1
7.13%
54969.18
1.66
8.6
4.88
4.65
0.93
0.81
813 HK
SHIMAO PROPERTY NeturalINGS LTD
BUY
21.8
18.34
18.87%
63686.95
2.88
14.14
5.09
4.12
1.02
0.85
1109 HK
CHINA RESOURCES LAND LTD
BUY
21.8
19.92
9.44%
116157.88
2.68
16.68
7.44
6.38
1.19
1.04
688 HK
CHINA OVERSEAS LAND & INVEST
Outperform
25.2
23.35
7.92%
190862.34
3.13
12.86
7.46
6.3
1.82
1.51
Semiconductors & Semiconductor equipment (Ashley Sheng, Vincent Yu)
3800 HK
GCL-POLY ENERGY NeturalINGS LTD
Netural
2
1.77
12.99%
27415.78
0.2
1.37
8.81
6.65
1.29
1.08
1385 HK
SHANGHAI FUDAN MICROELECT-H
BUY
7.8
6.57
18.72%
1592.11
0.25
1.4
20.79
16.46
3.71
3.12
Software & Services (Ashley Sheng)
777 HK
NETDRAGON WEBSOFT INC
BUY
19
12.2
55.74%
6210.83
0.71
8.22
13.84
12.25
1.17
0.94
700 HK
TENCENT NeturalINGS LTD
Outperform
142
115.8
22.63%
1084846.25
2.6
6.33
35.67
26.61
14.42
10.34
ZTE CORP-H
BUY
21.5
18.34
17.23%
11546.6
0.79
7.88
18.66
15.79
1.84
1.55
2382 HK
SUNNY OPTICAL TECH
Netural
10
13.24
-24.47%
14524.28
0.58
3.38
18.23
14.23
3.09
2.76
2018 HK
AAC TECHNOLOGIES NeturalINGS IN
Netural
48.5
42.05
15.34%
51637.4
0
0.62
N.A
N.A
53.71
45.97
Technology hardware & equipment (Ashley Sheng)
763 HK
Telecommunication Services (Ashley Sheng)
762 HK
CHINA UNICOM HONG KONG LTD
Outperform
12.56
10.66
17.82%
255018.01
0.61
9.49
13.95
11.34
0.89
0.84
728 HK
CHINA TELECOM CORP LTD-H
Outperform
5.4
4.59
17.65%
63697.31
0.26
3.62
13.97
11.58
1
0.92
941 HK
CHINA MOBILE LTD
Outperform
104
91.8
13.29%
1872276.61
5.82
42.83
12.62
11.13
1.69
1.53
Transportation (Titus Wu)
Closing
Price
+/- (%)
EPS 2014E BPS 2014E
Market cap.
(Report
(Report
PE
(HK$m)
Code
Company
Rating
Target
Price
PE
2015E
PB
2014E
PB
2015E
699 HK
CAR INC
BUY
14.6
11
32.73%
25932.63
0.18
2.57
47.82
27.01
3.37
2.93
916 HK
CHINA LONGYUAN POWER GROUP-H
Outperform
8.5
8.02
5.99%
26787.03
0.31
4.9
20.6
18
1.29
1.18
902 HK
HUANENG POWER INTL INC-H
Outperform
12.49
9.6
30.10%
37635.68
0.77
5.38
9.94
6.94
1.41
1.22
371 HK
BEIJING ENTERPRISES WATER GR
BUY
7.32
4.61
58.79%
40141.23
0.2
1.99
23.19
15.84
2.31
2.13
384 HK
CHINA GAS NeturalINGS LTD
Trading BUY
21.04
12.7
65.67%
63767.32
0.54
3.78
23.7
18.76
3.36
3.05
1363 HK
CT ENVIRONMENTAL GROUP LTD
Outperform
9.3
7.1
30.99%
10238.78
0.28
1.01
25.36
20.29
7
5.49
Utilities (Daniel Huang)
Core sales income of the banking sector refers to net sales.
Complete EXCEL Tables are availabe upon request.
SWS Research Co., Ltd. possesses all copyrights of this report. The clients should have comprehensive
understanding of the Share Investment Rating and the Disclosure on the 1st page.
9-Dec-14
Please refer to the notes below the table.
EPS 2012
(HKD)*
EPS
2013E
(HKD)*
EPS
2014E
(HKD)*
P/E
2012*
PE
2013E*
PE
2014E*
PB
2012
DPS
2013E
(HK$)*
DPS
2014E
(HK$)*
Benchmark
1.04
1.1
1.18
9.79
9.6
8.93
1.87
1.53
1.38
0.34
0.39
0.37
HSCEI
0.79
0.93
0.99
9.63
8.15
7.55
1.51
1.2
1.09
0.29
0.28
0.28
Automobiles & Components
0.47
0.68
0.71
18.89
14.61
14.05
2.72
2.4
2.11
0.1
0.13
0.12
Banks
0.85
0.99
1.07
6.61
5.71
5.29
1.33
1.06
0.94
0.34
0.28
0.28
Capital Goods
0.11
0.14
0.19
20.41
16.06
11.61
1.73
1.6
1.43
0.03
0.03
0.03
Commercial &
Professional Services
0.3
0.32
0.38
36.16
31.7
26.98
4.99
3.09
2.97
0.06
0.08
0.09
Consumer Services
0.09
2.06
2.42
30.89
19.02
16.14
1.22
6.13
5.58
0.07
1.74
2.03
Diversified Financials
0.41
0.41
0.69
38.09
32.54
22.74
2.6
2.64
2.5
0.21
0.12
0.15
Energy
1.24
1.21
1.06
7.08
7.29
7.93
1.11
0.99
0.95
0.4
0.45
0.36
Food, Beverage & Tobacco
Health Care Equipment
& Services
0.87
1.11
1.49
33.46
26.25
19.48
3.13
2.29
2.28
0.38
0.49
0.48
0.56
0.5
0.69
25.92
28.55
20.89
2.35
1.99
1.85
0.17
0.18
0.22
Insurance
1.21
1.58
2.04
26.44
20.25
15.73
2.33
1.98
1.74
0.29
Materials
0.55
0.53
0.55
9.14
9.81
9.42
1.07
0.98
0.91
0.19
0.12
0.13
Pharmaceuticals, Biotechnology
& Life Sciences
0.26
0.22
0.33
26.3
30.61
20.5
3.43
3.17
2.95
0.08
0.07
0.11
Real Estate
1.1
1.37
1.54
7.36
5.9
5.23
1.64
1.15
0.99
0.01
0
0
Retailing
0.35
0.5
0.59
14.12
9.85
8.26
2.52
2.07
1.75
0.1
0.15
0.18
Semiconductors &
Semiconductor Equipment
-0.04
0.13
0.2
-41.26
13.85
9.1
1.7
1.56
1.34
0
0
0
Software & Services
8.05
2.07
3.12
13.72
53.38
35.36
5.84
17.73
13.55
0.98
1.25
0.4
Technology Hardware
& Equipment
0.68
0.31
0.48
38.9
83.87
54.9
5
7.39
6.51
0.25
1.15
1.45
Telecommunication Services
2.96
2.98
2.94
12.73
12.65
12.8
1.77
1.6
1.5
1.27
1.27
1.25
Transportation
-0.24
0.13
0.16
-15.3
41.38
34.89
1.27
2.29
1.64
0
0
0
0.3
0.35
0.43
27.28
19.79
16.11
2.1
2.23
2.09
0.12
0.16
0.2
GICS II
PB
PB
DPS 2012
2013E* 2014E*
(HK$)
HSCCI
Consumer Durables & Apparel
Food & Staples Retailing
Household & Personal Products
Media
Utilities
Notes:
Companies Upgraded/Downgraded This Week presents the number of companyies with revised share investment rating.
Revised
items will
be Ltd.
marked
in red orall
green.
Green stands
UPGRADE.Red indicates DOWNGRADE.
SWS
Research
Co.,
possesses
copyrights
of thisfor
report.
The clients should have comprehensive understanding of the Share Investment Rating and the Disclosure on the 1st page.
9-Dec-14
Code
Company
Analyst
Closing price (Rmb)
Rating
Tu Yiting
Han Siyi
Cai Wenjuan
Jin Zefei
Chang Lu
Chang Lu
Chang Lu
Cai Wenjuan
Wang Yue
Jin Zefei
Jin Zefei
Jin Zefei
Jin Zefei
Wang Liping
Cai Wenjuan
Zhang Lu
Xiang Yucheng
Wang Liping
Liu Zhangming
Zhang Heng
Wang Yue
Jin Zefei
Liu Mingzhang
Tu Yiting
Lu Lingling
Wan Jianjun
Lu Lingling
Cai Wenjuan
Wang Yue
Zhou Haichen
Chen Jianxiang
Wu Xia
Liu Mingzhang
Qian Hao
Wan Jianjun
Zhang Heng
Jin Zefei
Zhang Heng
Cai Wenjuan
Chang Lu
Ye Peipei
Jin Zefei
Jin Zefei
Liu Mingzhang
Liu Zhangming
Zhou Haichen
Wang Liping
He Huacheng
Zhang Heng
Jin Zefei
Chen Jianxiang
Cai Wenjuan
Liu Mingzhang
Liu Mingzhang
Huang Ruijiao
Liu Mingzhang
Liu Mingzhang
Liu Zhangming
Tu Yiting
Zhao Ying
Xiang Yucheng
Chen Jianxiang
Chang Lu
Jin Zefei
Tu Yiting
6.57
24.7
6.95
31.56
28.06
16.2
34.8
10.62
18.87
8.8
10.26
8.66
9.57
16.7
25.67
10.54
11.68
13.77
31.12
24.9
7.9
16.2
8.29
18.45
23.61
15.13
32.45
37.94
19.69
39.66
30.12
8.19
16.24
28.64
27.85
25.37
21.97
11.93
21.41
13.99
16.42
#N/A N/A
13.05
7.98
10
10.15
4.54
38.26
11.62
12.39
18.31
21.2
23.03
21.49
8.76
8.49
19.58
5.63
12.12
16.44
8.62
38.64
40.94
14.58
4762.238
O-PF
BUY
BUY
O-PF
O-PF
BUY
BUY
O-PF
O-PF
O-PF
BUY
O-PF
O-PF
O-PF
O-PF
BUY
Neutral
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
BUY
BUY
BUY
BUY
BUY
Neutral
BUY
Neutral
O-PF
BUY
O-PF
BUY
O-PF
O-PF
BUY
BUY
O-PF
O-PF
O-PF
O-PF
O-PF
BUY
O-PF
O-PF
BUY
O-PF
BUY
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
Zhang Xuejiao
Tong Xun
Tong Xun
Zhang Xuejiao
Tong Xun
Zhou Yajie
Ye Jie
Ye Jie
Ye Jie
Zhou Yajie
Ye Jie
Tong Xun
19.38
29.66
22
19.74
32.19
30.45
19.02
32.15
12.52
20.01
13
67.2
O-PF
BUY
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
BUY
Consumer discretionary
000026 Shenzhen Fiyta
000069 Shenzhen Overseas Chinese Town
000333 Media Group
000417 Hefei Deparment Store
000550 Jiangling Motors Corporation
000581 Weifu High-Technology
000625 Chongqing Changan Automobile
000651 Gree Electric Appliances,Inc. of Zhuhai
000726 Lu Thai Textile
000888 Emei Shan Tourism
000978 Guilin Tourism Corporation
000987 Guangzhou Friendship Group
002024 Suning Commerce Group
002029 Fujian Septwolves Industry
002032 Zhejiang Supor
002241 GoerTek
002254 Yantai Spandex
002269 Shanghai Metersbonwe Fashion & Accessories
002277 Hn.F&A
002292 Guangdong Alpha Animation and Culture
002293 Luolai Home Textile
002306 BeiWang Jing Xiangeqing
002344 Haining China Leather Market
002345 Guangdong Chj Industry
002375 Zhejiang Yasha Decoration
002400 Guangdong Advertising
002482 Shenzhen Grandland Decoration Group
002508 Hangzhou Robam Appliances
002563 Zhejiang Semir Garment
002572 Suofeiya Home Collection
002594 BYD
002664 Xin Zhi Motor
002697 Chengdu Red Flag Chain
300005 BeiWang Jing Toread Outdoor Products
300027 Huayi Brothers Media Corporation
300133 Hangzhou Shunwang Technology
300144 Songcheng Tourism Development
300251 BeiWang Jing Enlight Media
600060 Hisense Electric
600104 Shanghai Automotive Industry Corporation
600114 NBTM New Materials
600138 China CYTS Tours Holding
600258 Beiijng Capital Tourism
600280 NanWang Jing Central Emporium
600327 Wuxi Commercial Mansion Grand Orient
600337 Markor International Furniture
600398 Henan Pinggao Electric
600507 Fangda Special Steel Technology
600637 BesTV
600655 Shanghai Yuyuan Tourist Mart
600660 Fuyao Glass Group Industries
600690 Qingdao Haier
600697 Chang Chun Eurasia
600729 Chongqing Department Store
600739 Liaoning Cheng Da
600778 Xinjiang Friendship
600858 Silver Plaza
600859 Beijing Wangfujing Department Store
600978 Guangdong Yihua Timber Industry
600983 Hefei Rongshida Sanyo Electric
601058 Sailun
601238 Guangzhou Automobile Group 601633 Great Wall Motor
601888 China International Travel Service
603008 Xilinmen Furniture
Consumer staples
000568 Lu Zhou Lao Jiao
000596 Anhui GuWang Jing Distillery
000848 He Bei Cheng De Lolo
000858 Wuliangye Yibin
000869 Yantai Changyu Pioneer Wine
000895 Henan Shuanghui Investment & Development
000998 Yuan Longping High-Tech Agriculture
002041 Shandong Deng Jianhai Seeds
002069 Dalian Zhangzidao Fishery
002216 Zhengzhou Sanquan Foods
002299 Fujian Sunner Development
002304 Yanghe Brewery
Market cap
(Rmbm)
Market cap
(US$m)
EPS (14E) EPS (15E) EPS (16E) 14E PE (x) 15E PE (x)
3,590.60
47,772.72
104,130.47
5,420.20
25,037.24
27,750.39
72,876.74
104,673.72
9,128.49
4,971.43
3,168.88
3,682.91
63,937.15
7,231.76
10,585.35
39,183.46
5,365.16
11,808.48
7,774.36
19,665.98
6,990.08
6,320.00
18,144.00
7,005.97
16,433.89
13,652.48
7,824.89
10,384.00
25,419.80
8,683.09
90,516.79
6,024.30
6,552.00
8,289.19
35,446.10
18,014.73
14,150.75
22,249.11
15,610.18
236,057.38
5,277.25
11,885.45
#N/A N/A
7,492.89
4,163.26
6,468.10
45,601.49
6,020.46
42,611.54
16,701.68
24,817.00
55,771.07
3,372.67
9,362.35
30,724.46
2,728.66
4,415.37
9,061.00
8,348.56
9,289.24
8,570.98
49,170.50
111,012.20
39,967.18
4,592.70
579.97
7,716.48
16,819.65
875.50
4,044.13
4,482.38
11,771.40
16,907.40
1,474.48
803.01
511.85
594.88
10,327.44
1,168.11
1,709.80
6,329.10
866.61
1,907.36
1,255.75
3,176.54
1,129.07
1,020.84
2,930.71
1,131.64
2,654.48
2,205.21
1,263.91
1,677.27
4,105.93
1,402.53
14,620.71
973.07
1,058.31
1,338.91
5,725.42
2,909.82
2,285.70
3,593.78
2,521.43
38,129.12
852.41
1,919.80
#N/A N/A
1,210.29
672.47
1,044.76
7,365.77
972.45
6,882.82
2,697.74
4,008.56
9,008.41
544.77
1,512.25
4,962.76
440.75
713.19
1,463.58
1,348.50
1,500.44
1,384.43
7,942.25
17,931.22
6,455.69
741.83
0.40
0.69
2.20
0.68
2.28
1.39
1.79
0.94
0.57
0.86
0.18
1.14
0.10
0.41
1.08
1.37
0.14
0.61
0.86
0.53
1.43
0.21
1.01
0.30
1.33
0.60
1.37
1.58
1.65
0.75
0.58
0.49
0.82
2.61
0.76
2.69
1.73
2.27
1.13
0.58
0.98
0.23
1.22
0.11
0.49
1.21
2.07
0.73
1.02
0.68
1.68
0.23
1.43
0.40
1.67
0.76
1.71
2.03
2.00
1.01
0.95
0.61
0.96
3.11
4.09
1.95
2.68
1.32
0.65
0.55
1.37
0.00
0.88
1.85
0.53
2.07
2.13
2.69
2.32
1.35
1.12
0.93
0.00
1.40
3.06
0.65
1.67
0.83
0.60
1.26
1.43
2.05
0.83
0.58
0.88
1.06
5.07
0.90
16.63
35.69
3.16
46.69
12.33
11.68
19.47
11.26
33.16
10.28
56.37
7.58
100.74
40.73
23.88
7.68
84.64
22.57
36.31
47.25
5.52
78.64
8.21
62.54
17.81
25.22
23.77
24.00
11.93
52.67
51.58
#DIV/0!
66.83
45.82
47.77
44.74
32.60
26.93
17.35
5.87
46.91
#VALUE!
21.43
5.13
29.85
7.89
9.08
79.38
#REF!
19.95
20.60
14.22
9.22
13.56
9.79
25.46
3.01
32.15
25.73
13.02
66.74
10.60
8.99
9319.45
13.44
30.31
2.66
41.69
10.42
9.38
15.33
9.44
32.31
8.94
45.20
7.10
88.61
34.08
21.16
5.10
#VALUE!
18.86
30.57
36.40
4.70
72.00
5.80
46.71
14.13
19.80
19.03
18.69
9.85
39.31
31.57
#DIV/0!
64.19
37.00
42.71
34.47
25.55
21.46
16.85
5.24
33.31
#VALUE!
18.94
3.59
23.70
6.40
6.68
69.19
11.50
12.76
15.05
11.65
10.53
7.83
12.02
11.03
21.31
2.75
25.57
22.07
#VALUE!
46.72
9.06
7.35
7044.73
0.24
0.63
0.58
0.57
0.67
0.44
1.23
2.38
0.35
0.50
0.61
1.56
0.34
1.29
0.50
0.48
0.80
0.92
1.03
1.62
1.83
2.33
0.65
0.87
0.77
1.87
0.38
0.64
0.66
0.58
3.86
1.62
0.51
0.25
0.77
0.65
0.74
0.86
0.56
1.27
2.67
0.49
0.60
0.69
2.22
0.42
1.59
0.68
0.55
1.01
0.97
1.22
1.82
2.19
2.74
0.73
0.77
0.92
2.05
0.47
0.75
0.83
4.52
1.99
0.68
27,175.65
13,464.79
11,040.19
74,932.38
19,286.26
67,007.61
18,945.82
11,316.80
8,903.12
8,046.20
11,841.70
72,335.42
4,389.54
2,174.90
1,783.27
12,103.44
3,115.21
10,823.39
3,060.22
1,827.94
1,438.08
1,299.66
1,912.73
11,683.96
0.04
1.56
0.88
1.60
1.56
2.22
0.40
1.08
0.19
0.58
0.21
4.44
0.05
2.07
1.05
1.72
1.78
2.68
0.49
1.31
0.38
0.76
0.43
4.77
0.06
2.64
1.27
1.92
2.05
3.06
0.66
1.58
0.70
0.87
0.55
5.39
523.78
19.06
25.09
12.35
20.65
13.72
47.55
29.77
65.55
34.80
61.90
15.13
403.75
14.36
20.91
11.51
18.05
11.37
38.50
24.54
33.21
26.36
30.23
14.10
002385
002511
002570
002582
002661
002714
300146
600298
600315
600438
600519
600559
600809
600872
600887
601933
603288
Energy
BeiWang Jing Dabeinong Technology
C&S Paper
Beingmate Scientific-Industrial- Trade Share
Haoxiangni Jujube
Kemen Noodle Manufacturing
Muyuan Foodstuff
By-health Co
Angel Yeast
Shanghai Jahwa United
Tongwei
Kweichow Moutai
Hebei Henshui Laobaigan Liquor
Shanxi Xinghuacun Fen Wine Factory
Jonjee Hi-Tech Industrial &Commercial Holding
Inner Mongolia Yili Industrial Group
Yonghui Supermarket
Haitian Flavouring and Food
Gong Yanhai
Tu Yiting
Tong Xun
Tong Xun
Zhang Xuejiao
Gong Yanhai
Zhou Yajie
Ye Jie
Wang Liping
Gong Yanhai
Tong Xun
Zhou Yajie
Zhang Xuejiao
Zeng Yuwen
Zhou Yajie
Liu Zhangming
Zeng Yuwen
14.16
9.94
16.5
19.51
36.82
48.5
27.4
18.7
35.69
9.26
172.86
35.37
21.27
10.26
26.79
8.48
40.01
BUY
O-PF
O-PF
O-PF
O-PF
Neutral
BUY
Neutral
BUY
BUY
BUY
O-PF
Neutral
BUY
BUY
O-PF
O-PF
23,218.54
4,031.66
16,871.58
2,879.68
3,162.84
11,737.00
18,029.50
6,164.13
23,996.77
7,566.44
197,405.77
4,951.80
18,416.59
8,173.50
82,094.50
27,597.61
59,894.97
3,750.37
651.21
2,725.18
465.14
510.88
1,895.82
2,912.21
995.66
3,876.07
1,222.17
31,885.93
799.84
2,974.74
1,320.22
13,260.30
4,457.70
9,674.52
0.55
0.23
0.81
0.79
1.15
0.12
0.90
0.47
1.45
0.56
13.97
0.59
1.32
0.36
1.50
0.29
1.33
0.71
0.32
0.97
0.90
1.30
0.83
1.21
0.57
1.73
0.71
15.41
0.66
1.67
0.47
1.85
0.35
1.62
0.95
0.43
0.96
1.22
1.60
1.18
1.60
0.60
1.98
0.92
17.27
0.77
1.94
0.60
2.25
1.95
25.70
42.48
20.37
24.60
31.93
418.10
30.51
39.53
24.61
16.42
12.38
59.95
16.14
28.74
17.91
29.34
29.99
20.09
30.97
16.98
21.77
28.37
58.72
22.68
32.98
20.63
13.01
11.22
53.51
12.77
21.97
14.52
24.02
24.76
000780
000937
000983
002353
300164
600028
600123
600157
600256
600348
600387
600583
601088
601666
601699
601808
601857
601918
Financials
Inner Mongolia PingZhuang Energy Resources
Jizhong Energy Resources
Shanxi Xishan Coal and Electricity Power
Yantai Jereh Oilfield Services Group
Tong Oil Tools
China Petroleum & Chemical Corporation
Shanxi Lanhua Sci-Tech Venture
Wintime Energy
Guanghui Energy
Yang Quan Coal Industry
Zhejiang Haiyue
Offshore Oil Engineering
China Shenhua Energy
Pingdingshan Tianan Coal Mining
Shanxi Lu'An Environmental Energy Development
China Oilfield Services
Petrochina
SDIC Xinji Energy
Xiang Zhihui
Liu Xiaoning
Xiang Zhihui
Huang Kui
Lin Kaisheng
Lin Kaisheng
Xiang Zhihui
Chen Chao
Lin Kaisheng
Liu Xiaoning
Lin Kaisheng
Lin Kaisheng
Liu Xiaoning
Liu Xiaoning
Xiang Zhihui
Lin Kaisheng
Lin Kaisheng
Xiang Zhihui
5.57
8.39
7.28
31.65
10.26
5.9
9.59
4.54
8.29
8.22
13.53
8.61
17.52
5.5
11.07
18.6
9.5
5.57
O-PF
BUY
O-PF
O-PF
BUY
BUY
O-PF
BUY
O-PF
BUY
BUY
O-PF
BUY
BUY
BUY
Neutral
5,649.69
22,804.97
22,940.74
30,380.34
3,900.44
665,500.66
10,955.62
16,049.44
43,285.61
19,769.10
5,223.93
38,067.86
351,211.50
12,986.41
25,473.00
73,925.21
1,676,257.22
14,429.32
912.56
3,683.57
3,705.50
4,907.18
630.02
107,494.86
1,769.60
2,592.38
6,991.70
3,193.20
843.79
6,148.90
56,729.36
2,097.63
4,114.52
11,940.75
270,757.10
2,330.69
1.55
0.72
0.40
1.60
0.22
0.70
1.15
0.25
0.49
2.87
1.23
0.78
2.71
0.33
0.80
1.75
0.80
0.13
1.78
0.74
0.44
2.21
0.37
0.78
1.27
0.26
0.70
4.05
2.37
0.90
2.72
0.32
0.85
2.05
0.88
0.22
2.04
3.05
0.49
0.88
0.72
5.50
3.80
1.04
2.35
0.99
-
3.60
11.65
18.34
19.83
46.43
8.48
8.34
18.53
17.06
2.87
11.04
11.00
6.47
16.47
13.84
10.65
11.83
43.18
3.13
11.40
16.62
14.31
28.03
7.58
7.56
17.60
11.88
2.03
5.72
9.59
6.45
17.30
13.04
9.06
10.77
25.67
000001
000002
000024
000402
000656
000718
000776
000861
002142
002146
002305
600000
600015
600016
600030
600036
600048
600340
600376
600383
600415
600663
600759
600837
600999
601009
601166
601169
601288
601318
601328
601336
601398
601601
601628
601688
601788
601939
601988
601998
Healthcare
Ping An Bank
China Vanke
China Merchants Property Development
Financial Street Holding
Jinke Property Group
Suning Universal
Gf Securities
Highsun Group
Bank of Ningbo
Risesun Real Estate Development
Wuhan Langold Real Estate
Shanghai Pudong Development Bank
Hua Xia Bank
China Minsheng Banking
CITIC Securities
China Merchants Bank
Poly Real Estate
China Fortune Land Development
BeiWang Jing Capital Development
Gemdale Corporation.
Zhejiang China Commodities City
Shanghai Lujiazui Finance & Trade Zone Development
Hainan Zhenghe Industrial
Haitong Securities
China Merchants Securities
Bank of NanWang Jing
Industrial Bank
Bank of BeiWang Jing
Agriculcture Bank of China
China Ping An
Bank of Communications
New China Life Insurance
Industrial and Commercial Bank
China Pacific Insurance
China Life Insurance
Huatai Securities
Everbright Securities
China Construction Bank
Bank of China
China CITIC Bank
Ni Jun
Han Siyi
Han Siyi
Han Siyi
Han Siyi
Han Siyi
He Zongyan
Liu Zhangming
Lu Yiwen
Han Siyi
Han Siyi
Ni Jun
Xu Bingyu
Ni Jun
He Zongyan
Ni Jun
Han Siyi
Han Siyi
Han Siyi
Han Siyi
Jin Zefei
Han Siyi
Huang Ruijiao
He Zongyan
Wang Ying
Ni Jun
Ni Jun
Xu Bingyu
Ni Jun
Sun Ting
Xu Bingyu
Sun Ting
Ni Jun
Sun Ting
Sun Ting
He Zongyan
Wang Ying
Ni Jun
Ni Jun
Ni Jun
13.71
11.42
18.5
9.35
13.2
5.75
24.97
8.81
13.08
13.33
6.68
12.65
10.82
8.33
26.54
13.04
8.2
32.28
7.09
9.07
11.09
32.31
10.11
21.17
26.74
12.34
12.8
9.11
3.05
59.32
5.69
39.58
4.2
25.36
24.55
24.13
28.22
5.52
3.33
6.35
BUY
BUY
O-PF
Neutral
O-PF
O-PF
O-PF
O-PF
O-PF
BUY
O-PF
BUY
Neutral
O-PF
O-PF
BUY
BUY
O-PF
O-PF
O-PF
O-PF
BUY
O-PF
O-PF
BUY
O-PF
BUY
BUY
Neutral
O-PF
O-PF
O-PF
O-PF
BUY
BUY
O-PF
O-PF
O-PF
156,635.31
129,130.90
44,926.51
27,946.49
15,292.73
11,748.36
147,804.70
10,432.26
42,507.76
25,280.32
6,455.91
235,966.41
96,348.24
275,184.90
288,546.34
328,688.44
87,983.91
42,702.56
15,895.87
40,737.57
30,182.62
50,751.14
12,335.39
194,315.58
155,309.56
36,636.64
243,869.91
96,203.34
987,695.94
497,036.60
412,629.00
110,454.90
1,484,027.89
234,897.26
670,773.68
135,128.00
96,455.96
1,214,535.47
930,196.89
271,767.58
25,300.49
20,857.84
7,256.74
4,514.05
2,470.15
1,897.65
23,874.12
1,685.07
6,866.06
4,083.40
1,042.79
38,114.43
15,562.63
44,449.18
46,599.79
53,091.33
14,211.58
6,897.52
2,567.58
6,580.13
4,875.24
8,197.57
1,992.47
31,386.78
25,086.34
5,917.73
39,391.04
15,539.23
159,497.73
80,283.73
66,649.81
17,841.20
239,707.30
37,941.73
108,346.58
21,826.52
15,580.03
196,177.59
150,249.86
43,897.20
1.69
1.64
1.99
0.00
1.02
0.56
0.26
0.42
1.83
2.01
0.80
2.52
2.03
1.34
0.70
2.42
1.22
0.35
0.90
1.06
0.33
1.03
0.46
0.50
0.43
1.70
2.50
1.46
0.57
4.31
0.89
1.73
0.81
1.23
1.16
0.45
0.35
0.94
0.63
0.97
2.07
1.88
2.45
0.00
1.08
0.75
0.33
0.49
2.24
2.63
0.97
2.86
2.32
1.56
0.73
2.81
1.49
0.47
1.12
1.29
0.38
1.22
0.78
0.51
0.48
1.92
2.84
1.60
0.64
5.15
0.98
2.13
0.88
1.45
1.41
0.52
0.48
1.00
0.70
1.13
2.41
2.19
2.34
0.00
1.17
0.88
0.41
2.24
3.34
1.41
3.29
2.73
1.86
0.85
3.22
1.77
0.68
1.40
1.49
1.43
0.77
0.56
0.55
2.22
3.27
1.88
0.71
5.63
1.07
2.54
0.97
1.75
1.58
0.53
0.59
1.10
0.78
1.35
8.13
6.97
9.32
#DIV/0!
12.89
10.34
95.67
21.08
7.14
6.62
8.40
5.03
5.33
6.23
37.86
5.39
6.73
93.29
7.84
8.57
33.81
31.40
22.03
42.77
62.33
7.24
5.13
6.24
5.31
13.77
6.39
22.94
5.19
20.57
21.13
53.74
79.94
5.88
5.28
6.53
6.64
6.07
7.55
#DIV/0!
12.18
7.69
75.90
17.98
5.85
5.06
6.88
4.43
4.67
5.36
36.41
4.64
5.52
69.12
6.32
7.05
28.88
26.55
12.98
41.35
55.25
6.43
4.51
5.69
4.78
11.52
5.83
18.56
4.77
17.47
17.36
46.67
59.29
5.51
4.73
5.61
Shenzhen Accord Pharmaceutical
Shan Dong Dong-E E-Jiao
Yunnan Baiyao
Huadong Medicine
China Resources Sanjiu Medical and Pharmaceutical
Huapont-Nutrichem
Hualan Biological Engineering
Shanghai Kehua Bio-engineering
Luo Jiarong
Tu Weiying
Tu Weiying
Luo Jiarong
Luo Ying
Xiang Yucheng
Luo Jiarong
Luo Jiarong
45.51
36.43
60
50.62
22.5
17.65
33.36
22.75
O-PF
BUY
BUY
O-PF
O-PF
Neutral
O-PF
O-PF
15,539.20
23,826.00
62,483.98
21,972.12
22,025.25
11,925.40
19,392.33
11,199.31
2,509.97
3,848.49
10,092.71
3,549.04
3,557.62
1,926.25
3,132.34
1,808.97
1.87
2.08
2.46
1.72
1.44
0.79
1.02
0.79
2.23
2.41
2.95
2.10
1.71
1.25
0.92
2.65
2.94
3.57
2.85
2.04
1.52
1.12
24.38
17.51
24.37
29.50
15.67
22.34
32.80
28.94
20.40
15.15
20.37
24.09
13.17
#VALUE!
26.71
24.62
000028
000423
000538
000963
000999
002004
002007
002022
002223
002294
002332
002589
300003
300015
300171
300273
300298
600079
600085
600161
600196
600201
600267
600276
600332
600436
600511
600518
600521
600535
600587
600867
Industrials
000039
000049
000157
000338
000400
000619
000786
002051
002081
002140
002202
002309
002310
002325
002509
002531
002551
002573
002635
002671
002672
300024
300058
300070
300124
300198
300203
300207
300224
300257
300263
300274
300334
300351
600009
600017
600018
600026
600029
600031
600066
600089
600115
600118
600125
600153
600261
600312
600350
600366
600377
600406
600416
600517
600522
600546
600548
600686
600761
600787
600805
Jiangsu Yuyue Medical Equipment & Supply
Shenzhen Salubris Pharmaceuticals
Zhejiang Xianju Pharmaceutical
Shandong Realcan Pharmaceutical
Lepu Medical Technology (Beijing)
Aier Eye Hospital
Shanghai Tofflon Science and Technology
Hokai Medical Instruments
Changsha Sinocare (300298)
Wuhan Humanwell Healthcare
BeiWang Jing Tongrentang
Beijin Tiantan Biological Products Corporation
Fosun Industrial
Inner Mongolia Jinyu
Zhejiang Hisun Pharmaceutical
Jiangsu Hengrui Medicine
Guangzhou Pharmaceutical
Zhangzhou Pientzehuang Pharmaceutical
China National Medicines Corporation
Kangmei Pharmaceutical
Zhejiang Huahai Pharmaceutical
Tianjin Tasly Pharmaceutical
Shinva Medical Instrument
Tonghua Dongbao Pharmaceutical
Luo Ying
Luo Jing
Luo Jiarong
Lu Zhou
Qian Zhenghao
Luo Jing
Qian Zhenghao
Tu Weiying
Qian Zhenghao
Luo Jiarong
Luo Ying
Du zhou
Du zhou
Ye Jie
Luo Jiarong
Luo Jiarong
Luo Ying
Tu Weiying
Luo Jing
Tu Weiying
Luo Jiarong
Luo Ying
Qian Zhenghao
Luo Jiarong
25.89
35.71
10.15
32.68
23.8
25.02
24.03
22.63
34.87
26.1
21.68
26.5
21.15
33.41
17.08
35.82
27.11
89.16
29.5
16.5
15.36
41.87
33.8
16.37
O-PF
BUY
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
BUY
O-PF
O-PF
BUY
BUY
BUY
BUY
BUY
O-PF
China International Marine Containers
Shenzhen Desay Battery Technology
Technology Development
Weichai Power
XJ Electric
Wuhu Conch Profiles and Science
BeiWang Jing New Building Material Public
China CAMC Engineering
Suzhou Gold Mantis Construction Decoration
East China Engineering Science and Technology
Goldwind Science & Technology
Zhongli Science And Technology Group
BeiWang Jing Orient Landscape
Shenzhen Hongtao Decoration
TianGuang Fire-Fighting
Titan Wind Energy
Shenzhen Glory Medical
BeiWang Jing SPC Environment Protection Tech
Suzhou Anjie Technology
Shandong Longquan Pipeline Engineering
Dongjiang Environmental
Siasun Robot&Automation
Bluefocus Communication Group
BeiWang Jing Originwater Technology
Shenzhen Inovance Technology
Fujian Newchoice Pipe Technology
Focused Photonics (Hangzhou)
Sunwoda Electronic
Yantai Zhenghai Magnetic Material
Zhejiang Kaishan Compressor
Luoyang Longhua Heat Transfer & Energy Conservation
Sungrow Power Supply
Tianjin Motimo Membrane Technology
Zhejiang Yonggui Electric Equipment
Shanghai International Airport
Rizhao Port
Shanghai International Port
China Shipping Development
China Southern Airlines
Sany Heavy Industry
Zhengzhou Yutong Bus
TBEA
China Eastern Airlines
China Spacesat
China Railway Tielong Container Logistics
Xiamen C&D
Zhejiang Yankon Group
Henan Pinggao Electric
Shandong Expressway
Ningbo Yunsheng
Jiangsu Expressway
NARI Technology Development
Xiangtan Electric Manufacturing
Shanghai Zhixin Electric
Jiangsu Zhongtian Technologies
Shanxi Coal International Energy
Shenzhen Expressway
Xiamen King Long Motor
Anhui Heli
Zhong Chu Development & Trade Stock
Jiangsu Yueda Investment
Zhao Yi
Zhang Lu
Li Xiaoguang
Chang Lu
Zhou Xuhui
Wang Siyu
Qian Hao
Lu Lingling
Lu Lingling
Lu Lingling
Kong Lingfei
Li Xiaoguang
Lu Lingling
Lu Lingling
Zhao Yi
Gu Feng
Luo Jiarong
Gu Feng
Zhang Lu
Wang Siyu
Gu Feng
Zhao Yi
Wan Jianjun
Gu Feng
Wu Xia
Wang Siyu
Zhao Yi
Zhang Lu
Zhang Yan
Huang Kui
Zhao Longlong
Kong Lingfei
Gu Feng
Zhao Longlong
Zhang Xilin
Zhang Xilin
Zhang Xilin
Zhang Xilin
Zhang Xilin
Li Xiaoguang
Chang Lu
Zhou Xuhui
Zhang Xilin
Li Xiaoguang
Deng Jingdong
Deng Jingdong
Yu Bin
Wu Xia
Deng Jingdong
Zhang Yan
Deng Jingdong
Wuxia
Kong Lingfei
Cai Wenjuan
Wang Jing
Liu Xiaoning
Deng Jingdong
Chang Lu
Li Xiaoguang
Deng Jingdong
Chang Lu
20.4
35.35
5.84
24.66
21.31
8.06
22
26.5
16.05
17.23
11.67
18.49
17.24
10.43
#N/A N/A
14.13
24
22.01
30.05
9.86
32.89
37.06
23
31.9
26.8
8.39
19
26.1
29.11
34.7
18.34
16.41
21.3
37.53
18.32
4.43
6.03
6.3
4.9
8.21
20.98
11.1
5.21
24.88
8.04
9.89
9.22
15.13
4.29
16.39
6.57
15.91
11.84
#N/A N/A
16.07
5.51
6.93
12.3
12.6
9.95
11.59
Neutral
BUY
BUY
O-PF
O-PF
O-PF
O-PF
O-PF
BUY
O-PF
O-PF
BUY
O-PF
O-PF
O-PF
O-PF
BUY
O-PF
BUY
BUY
O-PF
O-PF
BUY
BUY
BUY
Neutral
BUY
BUY
BUY
BUY
BUY
O-PF
O-PF
O-PF
Neutral
BUY
O-PF
O-PF
Neutral
BUY
O-PF
BUY
O-PF
O-PF
BUY
O-PF
O-PF
BUY
O-PF
BUY
BUY
O-PF
O-PF
Neutral
O-PF
O-PF
13,763.29
23,345.77
5,197.82
7,120.82
19,325.60
16,349.57
7,627.55
12,945.98
6,976.09
13,801.09
28,425.58
13,659.87
49,056.78
9,550.41
16,491.28
53,873.02
33,164.84
14,344.47
14,124.60
36,278.79
12,067.63
43,245.12
13,626.18
16,862.75
2,223.11
3,770.92
839.58
1,150.19
3,121.56
2,640.86
1,232.04
2,091.10
1,126.81
2,229.22
4,591.44
2,206.41
7,923.89
1,542.63
2,663.75
8,701.83
5,356.94
2,316.99
2,281.47
5,859.92
1,949.22
6,985.16
2,200.97
2,723.75
0.61
1.58
0.30
0.87
0.62
0.44
1.03
0.47
0.99
0.87
0.62
0.75
1.05
1.26
0.81
0.99
1.00
3.29
1.06
1.10
0.41
1.36
2.51
0.25
0.83
1.92
0.39
1.12
0.74
0.57
1.25
0.68
1.16
1.08
0.74
0.84
1.26
1.61
0.91
1.26
1.23
4.10
1.30
1.38
0.51
1.67
2.77
0.33
1.09
2.29
0.51
1.43
0.86
0.77
1.49
1.02
1.42
1.35
0.90
0.99
1.52
2.00
1.05
1.62
1.45
5.13
1.55
1.68
0.66
2.07
3.29
0.47
42.58
22.63
33.72
37.69
38.64
57.12
23.42
48.15
35.22
29.86
35.14
35.19
20.14
26.45
21.19
36.37
27.19
27.12
27.86
15.00
37.74
30.85
13.44
66.28
31.34
18.64
25.96
29.07
32.34
43.97
19.22
33.13
29.96
24.12
29.18
31.47
16.79
20.82
18.75
28.54
21.97
21.74
22.78
12.00
29.88
25.10
12.21
49.01
45,327.33
7,255.36
42,555.63
50,048.11
21,487.45
2,901.60
15,553.80
20,504.08
28,283.41
7,685.18
30,034.94
10,507.72
17,390.19
8,360.30
#N/A N/A
5,814.50
8,634.60
11,726.93
5,439.95
4,374.84
10,421.49
24,268.82
22,189.98
34,144.69
20,948.11
3,491.32
8,455.00
6,567.05
6,986.40
14,886.30
7,024.18
10,818.87
5,559.30
5,752.22
35,301.88
13,625.15
137,213.73
18,117.27
42,513.18
62,531.50
26,652.20
35,965.48
56,409.06
29,420.33
10,496.40
28,040.13
8,925.60
17,210.16
20,639.90
8,432.62
33,735.32
38,644.65
7,204.46
#N/A N/A
13,864.67
10,923.33
12,863.59
5,443.94
7,771.89
18,505.29
9,861.87
7,321.49
1,171.92
6,873.79
8,084.01
3,470.76
468.68
2,512.32
3,311.92
4,568.47
1,241.35
4,851.39
1,697.26
2,808.95
1,350.40
#N/A N/A
939.19
1,394.70
1,894.19
878.69
706.65
1,683.33
3,920.02
3,584.23
5,515.21
3,383.64
563.93
1,365.69
1,060.74
1,128.48
2,404.51
1,134.58
1,747.52
897.96
929.13
5,702.13
2,200.80
22,163.42
2,926.39
6,866.93
10,100.39
4,304.99
5,809.32
9,111.46
4,752.11
1,695.43
4,529.18
1,441.71
2,779.87
3,333.86
1,362.08
5,449.09
6,242.07
1,163.70
#N/A N/A
2,239.49
1,764.39
2,077.79
879.33
1,255.35
2,989.06
1,592.94
0.86
1.76
0.59
2.38
0.46
0.34
0.08
1.15
1.20
0.74
0.40
1.15
1.17
0.49
0.29
0.54
0.29
0.69
2.07
0.38
1.39
0.59
0.67
1.15
1.06
0.31
0.45
0.87
0.50
1.12
0.59
0.56
0.64
0.60
1.12
0.28
0.28
0.07
0.07
0.59
1.66
0.55
0.11
0.38
0.28
1.19
0.36
0.70
1.04
0.85
0.58
0.86
0.13
0.39
0.66
1.01
0.34
1.34
0.86
0.27
1.64
1.21
2.52
0.69
2.62
0.68
0.37
0.10
1.44
1.56
0.96
0.53
1.61
1.58
0.68
0.41
0.90
0.48
0.88
3.01
0.50
1.69
0.80
0.77
1.71
1.43
0.42
0.56
1.42
0.60
1.52
0.78
0.80
0.87
0.80
1.29
0.30
0.31
0.14
0.17
0.74
1.94
1.38
0.25
0.46
0.32
1.47
0.46
0.97
1.00
0.87
0.59
1.08
0.25
0.58
0.76
1.01
0.37
1.64
0.82
0.22
1.97
1.56
0.00
0.71
2.59
0.81
0.44
0.13
1.73
2.02
1.25
0.68
1.81
2.14
0.97
0.56
1.08
0.71
1.14
0.00
0.60
2.28
1.06
2.31
1.71
0.53
0.63
0.00
0.78
1.96
0.97
1.07
1.22
1.02
1.49
0.33
0.35
0.17
0.30
0.35
2.32
1.84
0.27
0.41
0.36
1.69
0.60
1.14
0.95
0.62
1.30
0.33
0.76
0.87
0.38
1.72
1.21
0.25
2.32
23.72
20.04
9.85
10.36
46.63
24.06
261.90
23.00
13.40
23.35
29.32
16.13
14.70
21.42
#VALUE!
26.07
82.19
31.71
14.55
26.22
23.59
63.24
34.33
27.64
25.21
26.98
42.70
29.86
58.22
31.07
31.35
29.20
33.07
62.55
16.30
16.11
21.31
85.14
72.06
13.82
12.63
20.04
46.11
66.35
28.41
8.28
25.83
21.52
4.14
19.31
11.41
18.54
90.38
#VALUE!
24.39
5.48
20.32
9.17
14.63
36.72
7.07
16.82
14.01
8.45
9.42
31.29
21.67
217.82
18.40
10.31
17.95
22.10
11.50
10.89
15.29
#VALUE!
15.72
49.59
25.15
9.98
19.88
19.46
46.50
29.75
18.61
18.72
19.79
33.69
18.39
48.84
22.80
23.42
20.56
24.37
47.15
14.18
14.67
19.20
43.75
28.16
11.03
10.81
8.04
20.51
54.56
25.44
6.72
19.87
15.65
4.30
18.77
11.06
14.75
47.94
#VALUE!
21.17
5.46
18.73
7.49
15.37
45.02
5.87
600893 Xi'AN Aero-Engine PLC
600894 Guangzhou Guangri Stock
601006 Daqin Railway
601111 Air China
601186 China Railway Construction Corporation
601218 Jiangsu Jixin Wind Energy Technology
601222 Jiangsu Linyang Electronics
601299 China CNR Corporation
601333 Guangshen Railway
601390 China Railway
601636 Zhuzhou Kibing Group
601668 China State Construction Engineering
601766 China South Locomotive & Rolling Stock
601866 China Shipping Container Lines
601919 COSCO Holdings
Information Technology
000063
000725
000970
002049
002063
002138
002152
002236
002313
002368
002376
002410
002415
002456
002623
300002
300010
300104
300113
300115
300170
300288
300316
300370
600271
600401
600498
600588
600703
600718
601012
601231
601877
603000
603005
Materials
000012
000059
000401
000488
000629
000630
000703
000778
000792
000877
002014
002037
002067
002078
002206
002243
002271
002372
002391
002392
002411
002440
002460
002470
002493
002501
002539
002565
002648
002679
002701
300135
600005
600010
Li Xiaoguang
Zhao Yi
Deng Jingdong
Zhang Xilin
Zhang Jin
Kong Lingfei
Wu Xia
Zhao Yi
Deng Jingdong
Zhang Jin
Qian Hao
Lu Lingling
Zhao Yi
Zhang Xilin
Zhang Xilin
30.65
13.03
9.96
6.15
9.79
6.87
23.57
6.45
3.65
5.38
8.07
5.01
5.8
3.58
5.34
BUY
O-PF
BUY
Neutral
O-PF
O-PF
BUY
BUY
O-PF
O-PF
O-PF
O-PF
BUY
Neutral
O-PF
59,728.23
11,205.11
148,073.24
74,382.49
116,110.27
6,813.39
8,371.43
78,365.59
24,574.12
110,908.14
6,772.41
150,300.00
81,071.28
34,927.28
48,296.63
9,647.59
1,809.90
23,917.50
12,014.62
18,754.69
1,100.53
1,352.19
12,657.99
3,969.33
17,914.42
1,093.91
24,277.18
13,095.02
5,641.62
7,801.10
0.22
0.76
0.94
0.28
0.99
0.17
1.36
0.42
0.13
0.52
0.41
0.80
0.38
0.03
0.03
0.27
0.92
1.01
0.40
1.13
0.23
1.66
0.50
0.14
0.61
0.43
0.96
0.45
0.10
0.19
0.30
1.11
1.06
0.41
1.24
0.29
1.85
0.57
0.15
0.67
0.50
1.14
0.52
0.16
0.17
142.56
17.19
10.65
22.28
9.90
41.64
17.29
15.21
28.74
10.27
19.54
6.25
15.30
123.45
197.78
115.66
14.13
9.85
15.45
8.68
30.13
14.22
12.95
26.26
8.78
18.72
5.20
12.92
34.42
28.86
ZTE Corporation
BOE Technology Group
BeiWang Jing Zhong Ke San Huan High-Tech
Tongfang Guoxin Electronics
YGSOFT
Shenzhen Sunlord Electronics
GRG Banking Equipment
Zhejiang Dahua Technology
Sunsea Telecommunications
Taiji Computer Corporation
New Beiyang Information Technology
Glodon Software Company
Hangzhou Hik-Vision Digital Technology
Shenzhen O-film Tech
Changzhou Almaden
BeiWang Jing Ultrapower Software
Beijing Lanxum Technology
Leshi Internet Information and Technology
Hangzhou Shunwang Technology
Shenzhen Everwin Precision Technology
Hand Enterprise Solutions
Longmaster Information&Technology
Jingsheng Mechanical and Electrical
Beijing Echo Technologies
Aisino
Henan Pinggao Electric
Fiberhome Telecommunication Technologies
UFIDA Software
Sanan Optoelectronics
Neusoft Corporation
Xi'an Longi Silicon Materials
Universal Scientific Industrial(Shanghai)
Zhejiang Chint Electric
People.cn Co
China Wafer Level CSP
Wang Jing
Yu Bin
Zhang Yan
Lu Shijie
Gong Hao
Zhang Lu
Liu Yang
Liu Yang
Wang Jing
Liu Yang
Gong Hao
Gong Hao
Liu Yang
Zhang Lu
Qian Hao
Gong Hao
He Huacheng
He Huacheng
Wan Jianjun
Zhang Lu
Liu Yang
He Huacheng
Kong Lingfei
Huang Ruijiao
Gong Hao
Han Qiming
Wang Jing
Gong Hao
Yu Bin
Gong Hao
Wu Xia
Zhang Lu
Wu Xia
He Huacheng
Lu Shijie
16.99
3.04
16.35
28.02
19.72
18.84
18.8
23.73
12.97
47.5
11.02
23.98
21.7
20.79
22.5
16.17
18.5
37.03
22.3
19.04
13.22
186
23.76
40
27.16
7.63
15.44
25.03
14.43
15.01
16.38
30.77
31.29
47.92
43.39
BUY
O-PF
O-PF
BUY
BUY
O-PF
BUY
O-PF
BUY
BUY
O-PF
O-PF
O-PF
O-PF
BUY
BUY
BUY
BUY
BUY
O-PF
BUY
O-PF
BUY
O-PF
O-PF
Neutral
BUY
O-PF
-
56,888.02
106,001.19
17,416.02
17,003.04
9,106.11
6,979.64
16,857.67
27,778.30
4,046.64
13,034.56
6,612.00
18,039.16
87,151.93
21,426.42
3,600.00
21,401.59
5,425.92
31,149.27
6,475.92
9,824.64
7,258.65
19,864.80
9,505.19
3,889.26
25,079.54
12,017.09
14,925.92
29,151.33
34,532.22
18,426.19
8,821.02
33,476.58
31,548.32
26,492.36
9,836.38
9,188.83
17,121.82
2,813.12
2,746.41
1,470.86
1,127.39
2,722.93
4,486.88
653.63
2,105.40
1,068.00
2,913.77
14,077.20
3,460.90
581.49
3,456.89
876.42
5,031.38
1,046.02
1,586.92
1,172.45
3,208.66
1,535.32
628.21
4,050.97
1,941.06
2,410.91
4,708.66
5,577.81
2,976.29
1,424.81
5,407.30
5,095.84
4,279.17
1,588.82
0.59
1.21
0.37
0.69
0.97
0.59
0.97
0.98
0.94
0.87
0.75
0.87
0.90
0.56
0.77
0.57
0.62
0.00
0.64
0.75
0.37
0.00
0.35
0.65
1.34
0.02
0.82
0.88
1.83
0.35
0.51
0.74
1.82
0.00
0.00
0.67
1.34
0.46
0.91
1.23
0.68
1.17
1.28
1.15
1.08
0.67
1.12
1.00
0.58
1.09
0.69
0.00
0.00
0.84
1.08
0.47
0.00
0.74
0.85
1.71
0.13
1.06
1.13
2.19
0.41
0.78
0.00
2.15
0.00
0.00
0.00
1.43
0.59
0.00
1.44
0.00
1.40
1.71
0.00
1.17
0.85
1.44
1.12
0.00
1.24
0.76
0.00
0.00
0.00
0.56
0.00
1.71
1.04
2.06
0.35
0.00
1.38
0.48
1.03
0.00
2.48
0.00
0.00
28.75
2.51
44.19
40.85
20.29
31.72
19.36
24.16
13.83
54.79
14.73
27.66
24.22
36.93
29.26
28.37
29.79
#DIV/0!
34.84
25.45
36.02
#DIV/0!
68.47
61.73
20.24
508.67
18.88
28.41
7.89
43.26
32.05
41.58
17.19
#DIV/0!
#DIV/0!
25.40
2.27
35.62
30.86
16.06
27.58
16.05
18.52
11.28
44.02
16.52
21.45
21.79
35.72
20.57
23.50
#DIV/0!
#DIV/0!
26.64
17.66
28.37
#DIV/0!
31.98
46.84
15.89
60.56
14.59
22.21
6.60
36.52
21.11
#DIV/0!
14.55
#DIV/0!
#DIV/0!
CSG Holding
Liaoni Huajin Tongda Chemicals
Tangshan Jidong Cement
Shandong Chenming Paper Holdings
Pangang Group Steel Vanadium & Titanium
Tongling Nonferrous Metals
Hengyi Petrochemical
Xinxing Ductile Iron Pipes
Qinghai Salt Lake Industry
Xinjiang Tianshan Cement
Huangshan Novel
Jilian Industral Explosive Material Development
Zhejiang Wang Jingxing Paper Joint Stock
Shan Dong Sun Paper Industry Joint Stock
Zhejiang Hailide New Material
Shenzhen Beautystar
BeiWang Jing Oriental Yuhong Waterproof Technology
Zhejiang Weixing New Building Materials
Changqing Agricultureal and Chemica
BeiWang Jing Lier High-temperature Materials
Jiujiujiu Technology
Zhejiang Runtu
Ganfeng Lithium
Shandong Kingenta Ecological Engineering
Rongsheng Petro Chemical
Jilin Liyuan Precision Manufacturing
Shindoo Chemi-Industry
Shanghai Luxin Packing Materials Science & Technology
Satellite Petrochemical
Fujian Jinsen Forestry
Org Packaging
Shenzhen Everwin Precision Technology
Wuhan Steel Processing
Inner Mongolian Baotou Steel Union
Qian Hao
Lin Kaisheng
Wang Siyu
Zhou Haichen
He Huacheng
Ye Peipei
Xiang Yucheng
He Huacheng
Deng Jian
Wang Siyu
Zhou Haichen
Zhou Xiaobo
Tu Yiting
Zhou Haichen
Xiang Yucheng
Tu Yiting
Qian Hao
Wang Siyu
Xiang Yucheng
Qian Hao
Deng Jian
Deng Jian
Ye Peipei
Deng Jian
Xiang Yucheng
Ye Peipei
Deng Jian
Zhou Haichen
Lin Kaisheng
Zhao Jinhou
Zhou Haichen
Zhanglu
He Huacheng
He Huacheng
8.49
10.5
10.9
5.55
3.21
14.6
7.24
5.47
22
8.8
8.44
15.6
3.88
4.02
8.14
8.9
31.8
13.45
15.16
12.06
#N/A N/A
17.02
17.9
27.45
11.31
20.06
17.48
8.06
12.56
20.53
20.88
7.3
3.05
3.88
BUY
O-PF
Neutral
O-PF
O-PF
BUY
Neutral
O-PF
O-PF
O-PF
BUY
O-PF
O-PF
O-PF
O-PF
O-PF
BUY
O-PF
O-PF
BUY
BUY
O-PF
BUY
O-PF
Neutral
BUY
O-PF
O-PF
Neutral
BUY
Neutral
Neutral
14,665.26
12,605.32
14,688.00
8,746.20
27,573.08
27,917.08
8,351.97
19,928.89
34,991.20
7,744.89
2,749.40
5,106.94
4,244.53
9,240.13
3,643.31
3,248.05
13,239.19
5,896.29
4,780.03
7,227.31
#N/A N/A
13,054.34
6,381.36
21,450.06
12,576.72
9,388.08
5,786.58
5,615.72
10,111.89
2,847.10
12,806.54
3,737.60
30,786.03
62,100.11
2,368.80
2,036.07
2,372.48
1,412.73
4,453.74
4,509.30
1,349.05
3,219.01
5,651.95
1,250.99
444.10
824.90
685.60
1,492.51
588.48
524.64
2,138.46
952.40
772.09
1,167.39
#N/A N/A
2,108.60
1,030.75
3,464.72
2,031.45
1,516.41
934.68
907.08
1,633.32
459.88
2,068.57
603.72
4,972.71
10,030.71
0.68
0.12
1.15
0.46
0.13
4.54
0.40
0.03
0.66
0.41
0.60
1.11
0.01
0.21
0.38
0.03
1.31
0.71
0.72
0.43
0.12
1.50
0.32
1.12
0.35
0.80
0.46
1.10
0.37
1.32
0.21
0.07
0.06
0.71
0.33
1.31
0.57
0.14
5.28
0.03
0.69
0.59
0.72
1.25
0.02
0.26
0.06
1.86
0.90
0.69
0.44
1.62
0.44
1.27
1.03
0.60
1.32
0.41
1.89
0.25
0.09
0.11
0.76
0.47
1.54
6.81
0.16
6.25
0.94
0.71
0.88
0.02
0.32
0.07
2.28
1.10
0.92
0.63
1.84
0.60
1.32
1.30
0.77
1.59
2.72
0.37
0.10
0.14
12.54
86.07
9.45
12.09
25.28
3.22
18.10
202.59
33.33
21.57
14.09
14.03
388.00
19.61
21.42
269.70
24.20
19.08
21.14
27.92
#VALUE!
11.36
56.47
24.51
32.31
25.17
#VALUE!
17.60
11.41
54.89
15.85
34.27
42.96
69.29
12.03
31.72
8.35
9.69
22.29
2.76
#VALUE!
170.94
31.79
14.99
11.66
12.46
242.50
15.76
#VALUE!
161.82
17.12
14.93
#VALUE!
17.55
#VALUE!
10.49
41.15
21.60
#VALUE!
19.40
#VALUE!
13.52
9.49
49.59
11.03
29.44
33.15
36.26
600096 Yunnan Yuntianhua
600117 Xining Special Steel
600143 Kingfa Sci.&Tech.
600210 Shanghai Zi Jiang Enterprise
600309 Wanhua Chemical Group
600352 Zhejiang Longsheng
600426 Shandong Hualu-Hengsheng Chemical
600547 Shandong Gold Mining
600581 Xinjiang Ba Yi Iron & Steel
600585 Anhui Conch Cement
600596 Zhejiang Xinan Chemical Industrial
600720 Gansu Qilianshan Cement
600782 Xinyu Iron & Steel
600801 Huaxin Cement
601233 Tongkun Group
601992 BBMG Corporation
Telecommunication Services
600050
Utilities
000539
000598
000826
300055
600011
600021
600027
600236
600292
600674
600795
600863
600886
600900
601139
601991
Zhou Xiaobo
He Huacheng
Xiang Yucheng
Tu Yiting
Zhou Xiaobo
Zhou Xiaobo
Zhou Xiaobo
Ye Peipei
He Huacheng
Wang Siyu
Deng Jian
Wang Siyu
He Huacheng
Wang Siyu
Xiang Yucheng
Qian Hao
9.8
4.78
6.21
4.82
20.19
15.98
9.62
19.84
4.84
19.56
10.54
9.35
4.9
9.26
7.77
8.69
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
O-PF
Neutral
O-PF
O-PF
O-PF
O-PF
O-PF
11,064.97
3,543.03
15,897.60
6,925.07
43,657.54
24,448.86
9,173.87
28,233.76
3,709.61
106,411.97
7,158.61
7,258.31
6,827.90
12,662.67
7,487.17
37,131.84
1,787.27
572.29
2,567.86
1,118.57
7,051.77
3,949.10
1,481.81
4,560.45
599.19
17,188.17
1,156.29
1,172.40
1,102.87
2,045.33
1,209.36
5,997.71
0.34
0.05
0.51
0.14
1.42
2.04
0.75
0.45
0.09
0.13
0.56
0.77
0.09
0.94
0.40
0.88
0.40
0.08
0.19
1.85
2.41
0.86
0.40
0.13
0.00
0.68
0.95
0.14
1.05
0.97
0.43
0.15
0.24
2.31
2.45
0.95
0.46
0.19
0.00
0.75
1.13
0.18
1.25
1.10
28.99
101.70
12.08
34.68
14.19
7.82
12.83
43.99
56.28
154.02
18.72
12.16
56.32
9.85
19.43
9.88
24.56
58.29
#VALUE!
25.64
10.91
6.64
11.19
50.10
38.41
#DIV/0!
15.55
9.87
34.75
8.84
#VALUE!
8.95
China United Network Communications
Wang Jing
4.45
Neutral
94,324.85
15,235.80
0.20
0.25
0.00
21.92
17.52
Guangdong Electric Power Development
Chengdu Xingrong Investment
Sound Environmental Resources
Beijing Water Business Doctor
Huaneng Power International
Shanghai Electric Power
Huadian Power International Corporation
Guangxi Guiguan Electric Power
Chongqing Jiulong Electric Power
Sichuan Chuantou Energy
GD Power Development
Inner Mongolia Mengdian Huaneng Thermal Power
SDIC Huajing Power Holdings
China Yangtze Power
Shenzhen Gas Corporation
Datang International Power Generation
Liang Peng
Gu Feng
Gu Feng
Xiang Zhihui
Liang Peng
Liang Peng
Liang Peng
Liang Peng
Gu Feng
Liang Peng
Liang Peng
Liang Peng
Liang Peng
Liang Peng
Gu Feng
Liang Peng
6.53
6.02
24.93
43.2
7.29
7.49
5.4
4.7
21.75
18.31
3.38
3.61
8.21
9.26
8.11
5.2
O-PF
BUY
BUY
O-PF
BUY
O-PF
Neutral
Neutral
O-PF
Neutral
O-PF
O-PF
O-PF
O-PF
Neutral
27,126.73
17,977.04
21,031.36
10,586.66
106,819.88
16,026.65
46,802.55
10,718.12
13,063.67
40,301.60
58,237.44
20,965.96
55,713.25
152,790.00
16,061.50
63,091.81
4,381.64
2,903.74
3,397.09
1,710.01
17,254.06
2,588.70
7,559.77
1,731.24
2,110.11
6,509.71
9,406.79
3,386.52
8,999.07
24,679.37
2,594.33
10,190.89
0.66
1.27
0.80
0.78
0.78
0.60
0.53
0.24
0.48
0.87
0.40
0.43
0.75
0.65
0.45
0.35
0.67
1.43
0.94
0.98
0.79
0.74
0.57
0.24
0.55
0.97
0.40
0.44
0.88
0.66
0.56
0.44
0.81
1.63
1.26
1.27
0.84
0.85
0.59
0.25
0.72
1.14
0.41
0.48
0.88
0.66
0.67
0.49
9.92
4.75
31.01
55.74
9.35
12.48
10.15
19.92
45.03
21.05
8.45
8.40
10.95
14.25
18.10
14.86
9.69
4.22
26.66
44.13
9.26
10.15
9.56
19.42
39.26
18.80
8.45
8.17
9.29
13.97
14.61
11.93
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