VST（856 HK） Strong Buy Sector：IT Hardware

股票报告网整理http://www.nxny.com
Initia tion Research Report
[Table_MainInfo]
14 April 2015
Strong Buy
VST（856 HK）
[Table_Title]
Sector：IT Hardware
[Table_Author]
Research Analyst
Leading IT product distributor in Asia-Pacific
Dennis Chien
[Table_Summary]
VST is principally engaged in the distribution of information technology products and the
provision of enterprise systems and IT services
(852) 3983 0835
[email protected]
Investment Highlights：
HK$ 3.87 (+21.7%)
3.18
Initiation
[Table_BaseInfo]
Basic Information
Total no. of shares
1,525mn
Free Floats
35.0%
Market Cap
HK$ 4,850mn
Trading Volume
1,026,023
Trading Turnover
HK$ 2,838,585
Aimed to involve more enterprise systems business. The enterprise systems
business segment of VST was growing at a CAGR of 20.0% between FY2010 to
FY2014. Enterprise systems in this segment refer to servers, cloud data storage, Share
[Table_QuotePic]
Price Performance
etc. We believe VST will be able to benefit from the ongoing development of cloud
856HK
Hang Seng Index
computing in PRC in terms of revenue and enhance GPM.
FY2014
FY2015E
FY2016E
FY2017E
Net Profit to com. Shareholder
41,893
4.1%
626
44,314
5.8%
674
46,001
3.8%
712
47,261
2.7%
745
YoY (%)
19.1%
7.7%
5.7%
4.6%
GPM (%)
ROE (%)
3.99%
17.0%
3.94%
16.0%
3.99%
15.0%
4.00%
14.0%
0.418
7.75
0.442
7.20
0.467
6.81
0.488
6.51
1.21
1.07
0.95
0.85
Revenue
YoY (%)
EPS (HK$)
P/E (x)
P/B (x)
20.0%
10.0%
0.0%
-10.0%
-20.0%
-30.0%
-40.0%
Please read the analysts and company disclosure and the disclaimer in the last page
14/3/2015
14/2/2015
14/1/2015
14/12/2014
14/11/2014
[Table_Report]
Related Research Reports
Source: CIS(HK), Bloomberg
[Table_MainInfo]
14/9/2014
-50.0%
14/10/2014
Financial Data
Unit：Million
(HK$)
[Table_Profit]
30.0%
14/8/2014
Strong Buy recommendation with target price of HK$3.87. VST trade at 7.20x
FY15E PE, implied a 30.1% discount from peers’ average of 10.31x. We predict
the valuation discount will be narrowed as VST has a much larger potential to grow
given i) the company has entered into many other Asian countries for the past 3
years, ii) just entered into gaming distribution in PRC, namely PS4 and Xbox One,
iii) exclusive distributorships of Yota phone in certain regions. We initiate Strong
Buy on VST with a target price of HK$3.87, implied a 15% discount of peers
FY15E PE.
14/7/2014

Current Price：
Change of Rating
14/6/2014

Regional player with excellent operating efficiency. VST is being unique as
they have presence in 9 countries with 33,000 reseller network. VST obtained
excellent operating efficiency among chosen peers, which justified by the gap
difference between GPM and OPM. We believe such result is mainly due to i)
good pick of its product portfolio, ii) corporate structure and culture that bring a
higher efficiency, iii) good in cost control. We believe GPM and OPM would be the
key factors for an I.T. products distributor to be success in the long term.
[Table_Target]
6－12m TP：
14/5/2014

E-commerce benefit VST while eliminate small players. While e-commerce is
becoming very popular in PRC, VST as a wholesaler has also been benefited
from this growing trend. Operating figures from VST showed the total turnover
from internet resellers (JD.com, Yixun, Gome, Suning, Amazon) increased 30%
yoy to HK$2.6bn in 2014. This suggested the topline of VST contributed by
internet resellers has been increased from 5.05% in 2013 to 6.32% in 2014. We
believe the e-commerce trend is speeding up the consolidation of I.T. products
distribution business, where larger players such as VST, Digital China and
Synnex, are going to gain larger market share.
14/4/2014

股票报告网整理http://www.nxny.com
Initiation Research Report
2015 年 4 月 14 日
伟仕控股（856 HK）
强烈推荐
行业：资讯科技硬件
[Table_Title]
[Table_Author]
作者
[Table_Summary]
署名人：钱仲霖
(852) 3983 0835
[email protected]
亚太区领先的资讯科技产品分销企业
伟仕控股主要业务为分销资讯科技产品以及供应企业系统及资讯科技服务
投资要点：



伟仕控股受益于电子商务，小型竞争对手将被淘汰。电子商务于中国日益
流行，伟仕控股作为资讯科技产品分销商得以亦受惠于该增长趋势。从伟
仕控股的经营数据显示，公司供货给电商(包括京东商城, 易迅网, 国美，
苏宁，亚马逊中国)的总营业额在 2014 年同比增长 30％，增加至港币 26
亿。该互联网电商贡献伟仕控股的营业额占比从 2013 年的 5.05%上升至
2014 年的 6.32%。我们相信电子商务的趋势正在加快资讯科技产品分销
商的整合，其中较大的分销商，如伟仕控股、神州数码及联强，将会获得
更大的市场份额。
区域分销商，拥有良好的运营效率。伟仕控股拥有区域优势，于 9 个国家
设有办事处，共 33000 经销商网络。目前伟仕控股是我们挑选的同行中运
营效率相对较高的，这能体现在毛利率与营业利润率之间的差距。我们相
信这样的结果主要是因为 i）产品组合；ii）企业结构和文化带来了更高的
效率；iii)良好的成本控制。我们相信毛利率和营业利润率将是资讯科技产
品分销商在长期取得成功的关键因素。
涉及更多企业系统业务。 伟仕控股的企业系统业务在 2010 至 2014 财年
之间，营业额複合年均增長达 20.0％。企业系统主要包括商业用途的服务
器，云数据存储等等。我们相信伟仕控股未来将能够从国内云计算产业持
续发展中获益，并提高毛利率水平。
[Table_Target]
6－12 个月目标价：3.87
(+21.7%)
当前股价：
3.18
评级调整：
首发报告
[Table_BaseInfo]
基本资料
总股本(百万股)
1,525
流通量
35.0%
总市值(百万元)
4,850
成交量(百万股)
1,026,023
成交额(百万元)
2,838,585
[Table_QuotePic]
股价表现
恒指
856HK
30.0%
净利润同比(%)
毛利率(%)
ROE(%)
每股收益(港元)
P/E
P/B
资料来源：中投（香港），彭博
19.1%
7.7%
5.7%
4.6%
3.99%
17.0%
3.94%
16.0%
3.99%
15.0%
4.00%
14.0%
0.418
7.75
0.442
7.20
0.467
6.81
0.488
6.51
1.21
1.07
0.95
0.85
14/3/2015
14/2/2015
14/1/2015
14/12/2014
-50.0%
14/11/2014
47,261
2.7%
745
-40.0%
14/9/2014
17 年预测
46,001
3.8%
712
-30.0%
14/10/2014
16 年预测
44,314
5.8%
674
-20.0%
14/8/2014
15 年预测
41,893
4.1%
626
0.0%
-10.0%
14/7/2014
14 年
营业收入
收入同比(%)
归属母公司净利润
10.0%
14/6/2014
财务数据
单位：百万港元
[Table_Profit]
20.0%
14/5/2014
建议评级为｢强烈推荐｣，目标价 3.87 港币。 伟仕控股目前市盈率为 7.20
陪 FY15E，比同行平均水平的 10.31 倍折让 30.1％。我们预测伟仕控股未
来的增长潜力将收窄估值折让，主要是因为 i）公司在过去的 3 年已进入许
多其他亚洲国家市场，期待有所增长 ii）刚进入中国的游戏分销市场，即
PS4 和 Xbox， iii）取得 Yota 电话在某些地区的独家分销权。我们评级伟
仕控股｢强烈推荐｣，目标价 3.87 港币，比同行平均水平折让 15.0％。
14/4/2014

[Table_Report]
相关报告
Please read the analysts and company disclosure and the disclaimer in the last page
2/14
股票报告网整理http://www.nxny.com
Initiation Research Report
1. Company Background
1.1 Top 3 IT Hardware Distributor in Asia Pacific
VST Holdings Limited was incorporated in 1991 and became listed on
the main board of the Stock Exchange of Hong Kong Limited in 2002 (HKSE:
00856.HK). In 2014, turnover of the Group amounted to HK$ 41.9 billion.
VST is a leading IT products and services supplier in the Asia Pacific,
which
integrates
global
information
industry
resources
to
create
value-added services to over 100 top global IT brands. The Group’s
business system consists of IT supply chain financial services, planning and
implementation of enterprise-class systems, IT value-added services and
distribution. Its products include cloud computing, mobile Internet, digital
peripherals, network infrastructure, storage solutions, software and
services, information security, IT products and distribution of related
accessories, as well as successfully expanded game business in 2014 .
The Group has over 33,000 channel partners serving a wide regional
customer base and 81 offices in nine countries, namely China, Thailand,
Malaysia, Singapore, Indonesia, Cambodia, Myanmar, Laos and the
Philippines.
Business segments of VST are divided into 3 categories: i) Distribution,
ii) Enterprise systems, and iii) IT services, contributing 73.0%/ 26.5%/ 0.5%
of turnover in FY2014, respectively.
Figure 1.1 Products range of VST
Source: Company, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
3/14
股票报告网整理http://www.nxny.com
Initiation Research Report
1.2 Product Portfolio
VST offers a wide range of IT products through direct non-exclusive
authorized distributorships from many hardware brands over the past 20
years, and more importantly the product portfolio include many 1st tier
international brands. In FY2014, Top 5 customers were Seagate, HP, WD,
Apple and Lenovo, where together contributed 65% of its revenue.
Figure 1.2 Comprehensive Products Line
Source: Company, CIS(HK)
1.3 Distribution Channels
Acting as a wholesaler, VST has built up an extensive regional network
with over 33,000 distribution network partners, spreading across Asia
Pacific regions. Notice that majority of the channel partners are classified
as direct/single layer resellers.
Figure 1.3 Extensive regional network
Source: Company, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
4/14
股票报告网整理http://www.nxny.com
Initiation Research Report
1.4 Milestones
VST has successfully diversified its product line and expanding their
distribution network over the past 20 years.
Figure 1.4 Milestones of VST
1991
VST Computers(H.K.) Limited was founded in Hong Kong
1993
Became the Seagate hard disks distributor in Hong Kong and Mainland China
1997
Became the AMD processors distributor in Hong Kong and Mainland China
1998
Became the largest distributor for Seagate in APAC
2002
VST (856.HK) listed on the Main Board in HKEx
2005
Became the Maxtor, Lexar and Corsair distributor in China
2006
Became the Western Digital and Patriot distributor in China
2007
Became the ADATA and ThinkPad distributor in China
August 2007
Acquired ECS Holdings Limited and became the top 3 IT distributor in Asia
Pacific
2008
Became the HITACHI Storage Business distributor in China
2009
Became the INTEL distributor in China
2010
Subsidiary ECS became the Apple iPad distributer in China
2011
VST, Foxconn, Chi Mei signed a strategic cooperation
2013
VST entered into joint venture agreement with Bodatong Technology
Source: Company, CIS(HK)
The acquisition of ECS Holdings Limited in Aug 2007 became one of
the key milestones which bought VST to become one of the top IT
distributors in Asia Pacific region.
Figure 1.5 Revenue trend since listed in HKEx
Source: Company, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
5/14
股票报告网整理http://www.nxny.com
Initiation Research Report
Figure 1.6 Net profit trend since listed in HKEx
Source: Company, CIS(HK)
1.5 Industry Supply Chain
VST act as an important link between I.T. product suppliers and
resellers. Upstream players, for example Western Digital and Seagate, are
normally focused on R&D and certain parts of manufacturing while they
will appoint 3-6 wholesalers to distribute their products at a specific region.
Downstream players refer to retail shops or online shops that provide the
products to end-user, such as individual store at retail outlet or electronic
chain stores, for example Gome, Broadway, TMall.
1.6 Business Model
VST, acting as a wholesaler, created three important values: (1)
Extensive Distribution Network: VST can be treated as the collective buyer
of I.T. products, saving the time and cost for I.T. products suppliers to build
their own distribution channel at minimum cost; (2) Stock Management
and Conversion of Cash: while upstream players are likely to focus more on
R&D and certain parts of manufacturing, they would also like to shorten
the time of cash conversion cycle by appointing a wholesaler (e.g. VST)
with sale target, and in exchange, a % fee commission will be given; (3) to
offer other related value-added services such as after-sales services,
warranty services, enterprise system & solutions services, training, etc.
Please read the analysts and company disclosure and the disclaimer in the last page
6/14
股票报告网整理http://www.nxny.com
Initiation Research Report
1.7 Revenue Model
VST is able to monetize its value which mentioned on the above
through charging a price difference between cost of purchasing
inventories from I.T. product suppliers and the price sold to resellers, often
express in % on top of the cost. Hence, gross profit, GPM and operating
expense would become the three important factors to judge the quality of
a wholesale, in our view.
GPM is highly fluctuated mainly contributed by different product mix.
However, we consider the revenue model of VST is quite safe, in terms of
making positive earnings, due to the fact that most I.T. products suppliers
do offer price protection in order to hedge against rapid price reduction of
the products sold to VST within the first 30-45 days, depending on each
case.
Figure 1.7 GPM and NPM of VST
GPM
5.00%
4.40%
NPM
4.64%
4.50%
4.00%
3.79%
3.77%
1.25%
1.31%
FY2012
FY2013
3.99%
3.50%
3.00%
2.50%
2.00%
1.56%
1.50%
FY2010
FY2011
1.50%
1.49%
1.00%
0.50%
0.00%
FY2014
Source: Company, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
7/14
股票报告网整理http://www.nxny.com
Initiation Research Report
2. Peers comparison
2.1 VST is a regional player with highest operating efficiency
We believe VST, Digital China, Synnex and Ingram Micro are some of
the listed leading I.T. product distributors in Asia Pacific / China / other
region.
Base on the FY2014 data below, Digital China achieved the highest
GPM of 7.05% mainly due to its revenue mix where only 53% of its revenue
is contributed by distribution of I.T. products. Base on the segments
breakdown, distribution segment of Digital China only achieved a GPM of
3.28% in FY2014.
VST obtained an excellent operating efficiency among chosen peers,
justified by the gap difference between GPM and OPM. We believe such
result is mainly due to i) good pick of its product portfolio, ii) corporate
structure and culture that bring a higher efficiency, iii) good in cost control.
We believe GPM and OPM would be the key factors for an I.T. product
distributor to be success in the long term.
Figure 2.1 Comparison of peers
FY2014
VST China Digital
Synnex
Ingram Micro
IM US
856HK
861HK
2347TT
Market Capitalization
HKD mn
3,859
7,864
17,958
33,125
Turnover
HKD mn
41,893
68,343
84,817
360,497
Revenue Growth
%
4.11
(1.08)
0.39
9.24
Gross Margin
%
3.99
7.05
3.48
5.73
Operating Margin
%
2.01
1.78
1.34
1.05
Net Profit
HKD mn
607
701
1,285
2,068
Return on Common Equity
%
16.54
8.59
11.43
6.57
Asset Turnover
x
3.40
2.14
2.54
3.78
Leverage Ratio
x
3.36
3.91
2.97
3.03
Source: Company, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
8/14
股票报告网整理http://www.nxny.com
Initiation Research Report
3. Investment Thesis
3.1 E-commerce benefit VST while eliminate small players
While e-commerce is becoming very popular in PRC, VST as a
wholesaler has also been benefited from this growing trend. Operating
figures from VST showed the total turnover from internet resellers (JD.com,
Yixun, Gome, Suning, Amazon) increased 30% Y-o-Y to HK$2.6bn in
FY2014. This suggested the topline of VST contributed by internet resellers
has been increased from 5.05% in 2013 to 6.32% in 2014. We believe the
e-commerce trend is speeding up the consolidation of I.T. distribution
agents business, where larger players such as VST, Digital China and
Synnex, are going to gain higher market share.
In addition, we believe VST is one of the best in operating efficiency in
which the company should outperform its peers in the long term.
3.2 Aimed to Involve more enterprise systems business
The enterprise systems business segment of VST was growing at a
CAGR of 20.0% between FY2010 to FY2014. Enterprise systems in this
segment refer to servers, cloud data storage, etc. We believe VST will be
able to benefit from the ongoing development of cloud computing in PRC
in terms of revenue and enhance GPM.
Figure 3.1 Revenue contributed by Enterprise Systems business segment
Revenue from Enterprise Systems (HK$'000)
14,000
11,101
12,000
10,000
8,064
8,000
6,000
11,742
6,874
5,670
4,000
2,000
FY2010
FY2011
FY2012
FY2013
FY2014
Enterprise systems
Source: Company, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
9/14
股票报告网整理http://www.nxny.com
Initiation Research Report
3.3 Enter into gaming distribution segment
Gaming (refer to PC games, TV games, etc) in PRC was heavily
restricted due to country policies and yet the Chinese government finally
announced to lifted their boycott against foreign game consoles, such as
PlayStation and Xbox, in early 2014. We are pleased that VST has
successfully became the authorized distributor of PS4 and Xbox One’s
console & games in PRC at the end of 2014. We believe the two consoles
may benefit VST profitability for the next few years due to i) higher margin
against the average of existing product mix, ii) the sales performance for
the first 2 months are better than expected, iii) huge growth potential as
more reputable games are waiting for the approval of launch from the
Chinese authorities, and iv) PRC version of the consoles are different from
overseas version which provide more services.
3.4 Defensive play with dividend payout ratio not less than 30%
We believe the business model of VST is valuable and difficult for new
comers to copy from scratch. From the perspective of IT suppliers, almost
all of them must rely on 3rd party offline or online platform to distribute
their products. We believe VST is likely to be the better distribution agent
in Asia Pacific region due to its reseller scale, number of brands they
already have, industry leading position and regional coverage in terms of
online & offline channels and its presence in various countries. We believe
the sale of VST can achieve a stable single-digit growth.
Managements of VST promised to maintain a dividend payout ratio of
not less than 30% for the foreseeable future.
Please read the analysts and company disclosure and the disclaimer in the last page
10/14
股票报告网整理http://www.nxny.com
Initiation Research Report
4. Financial forecast and valuation
4.1 Financial forecast
We expect VST to report FY15E / FY16E / FY17E topline growth of 5.8%
/ 3.8%/ 2.7% YoY, representing HK$ 44.3bn / 46.0bn/ 47.2bn, mainly
contributed by a strong growth in enterprise systems business segment
and flat growth in distribution segment.
GPM will be stabilized at 3.94%/ 3.99%/ 4.00% for FY15-17E, given that
the increase in GPM in gaming and enterprise systems could offset the
decline in GPM of distribution segment. Note that any better-than-expect
growth in enterprise systems and gaming segment could lead to a upside
surprise.
Assuming the operating expenses are following the trend of past 3
years, we expect net profit of VST could achieve HK$674mn/ 712mn/
745mn in FY15E /16E /17E respectively, representing a growth of 7.7%/
5.7%/ 4.6%.
4.2 Valuation and risks
VST trade at 7.20x FY15E PE, implied a 30.1% discount from peers’
average of 10.31x. Given by the fact that VST has a good GPM and achieve
excellent operating efficiency, we believe VST deserve only a very small
discount given that its revenue is smaller than peers. We predict the
valuation discount will be narrowed as VST has a much larger potential to
grow given 1) the company has entered into many other Asian countries
for the past 3 years, 2) just entered into gaming distribution in PRC, namely
PS4 and Xbox One, 3) exclusive distributorships of Yota phone in certain
region. We initiate Strong Buy on VST with a target price of HK$3.87,
implied a 15% discount of peers FY15E PE.
Figure 4.1 Peers’ valuation
Name
Ticker
Mkt Cap
Last Px
P/E
P/E
P/E
P/B
ROA
HK$ mn (Local Cur)
FY14
FY15E
FY16E
(x)
(x)
ROE Financial Leverage
(x)
(x)
WPG HOLDINGS
3702 TT
16,499
40.20
11.49
10.26
9.77
1.48
3.93
13.67
3.67
SYNNEX TECHNOLOGY
2347 TT
16,520
41.95
13.27
11.57
10.72
1.47
3.85
11.43
3.09
INGRAM MICRO
IM US
30,613
25.28
10.92
8.99
7.88
0.95
2.17
6.57
2.95
AVNET INC
AVT US
46,760
44.24
9.59
9.72
9.06
1.28
5.02
11.89
2.37
ARROW ELECTRONICS
ARW US
45,207
60.96
10.90
9.80
9.21
1.41
4.07
11.95
2.83
DIGITAL CHINA
861 HK
10,916
9.98
15.26
11.50
10.44
1.27
2.20
8.59
3.85
Simple Average
27,752
11.90
10.31
9.51
1.31
3.54
10.68
3.13
7.75
7.20
6.81
1.21
4.93
16.54
3.33
VST HOLDINGS LTD
856 HK
4,850
3.18
Source: Company, CIS(HK) estimate
Please read the analysts and company disclosure and the disclaimer in the last page
11/14
股票报告网整理http://www.nxny.com
Initiation Research Report
Risk

PRC economy slowdown

Worse-than-expected growth in Enterprise Systems segment

GPM erosion due to competitions
Please read the analysts and company disclosure and the disclaimer in the last page
12/14
股票报告网整理http://www.nxny.com
Initiation Research Report
Figure 5.1：Financial Data and Forecast
Income Statement (HK$ mn)
[Table_Finance]
Total Revenue
Cost of sales
Gross profit
Other income
Operating expense
Operating Profit
Associates & JV
Finance costs
Profit before tax
Income tax expense
Others
Net Profit to common.
EPS
No. of shares outstanding (mn)
Ratio Analysis
Growth YoY
Revenue
Gross Profit
Net Profit to common
EPS
No. of shares
Profitability
GPM
OPM
NPM
ROA
ROE
Liquidity & Solvency
Current Ratio
Quick Ratio
Cash Ratio
DuPont Analysis
Net Profit Margin
Asset Turnover
Leverage Ratio
FY2013
40,239
(38,722)
1,517
56
(866)
707
33
(81)
659
(134)
0
525
0.353
1,489
FY2014
41,893
(40,220)
1,673
15
(844)
844
30
(104)
769
(143)
0
626
0.418
1,497
FY2015E
44,314
(42,566)
1,747
40
(897)
890
32
(80)
842
(168)
0
674
0.442
1,525
FY2016E
46,001
(44,166)
1,835
31
(931)
935
35
(80)
890
(178)
0
712
0.467
1,525
FY2017E
47,261
(45,371)
1,890
40
(957)
973
38
(80)
931
(186)
0
745
0.488
1,525
FY2013
FY2014
FY2015E
FY2016E
FY2017E
8.5%
7.8%
13.1%
13.1%
0.1%
4.1%
10.3%
19.1%
18.5%
0.5%
5.8%
4.5%
7.7%
5.6%
1.9%
3.8%
5.1%
5.7%
5.7%
0.0%
2.7%
3.0%
4.6%
4.6%
0.0%
3.77%
1.76%
1.31%
4.91%
16.4%
3.99%
2.01%
1.49%
5.07%
17.0%
3.94%
2.01%
1.52%
4.98%
16.0%
3.99%
2.03%
1.55%
4.98%
15.0%
4.00%
2.06%
1.58%
4.95%
14.0%
1.5
1.1
0.1
1.3
1.0
0.1
1.4
1.1
0.2
1.4
1.1
0.2
1.5
1.2
0.2
1.3%
0.0
3.1
1.5%
0.1
3.2
1.5%
0.0
3.2
1.5%
0.0
3.0
1.6%
0.0
2.8
Balance Sheet (HK$ mn)
PPE
Goodwill
Others
Total Non-Current Assets
Inventories
Trade and bills receivables
Cash at bank and on hand
Others
Total Current Assets
Trade payables
Borrowings
Others
Total Current Liabilities
Borrowings
Others
Total Non-Current Liabilities
Share capital
Total reserve
Non-controlling interests
Others
Total equity
FY2013
116
333
405
853
2,644
6,861
1,169
0
10,674
5,125
2,002
31
7,159
696
52
748
149
3,239
232
0
3,620
FY2014
118
324
450
892
3,085
7,658
1,495
0
12,238
5,496
3,557
39
9,092
0
44
44
153
3,802
38
(0)
3,993
FY2015E
124
324
454
901
2,979
7,883
2,161
0
13,022
5,745
3,557
43
9,345
0
48
48
153
4,326
51
0
4,530
FY2016E
130
324
456
910
3,313
8,249
2,197
0
13,759
5,919
3,557
45
9,521
0
50
51
153
4,881
65
0
5,098
FY2017E
137
324
458
919
3,150
8,324
3,019
0
14,493
6,063
3,557
47
9,667
0
53
53
153
5,461
78
0
5,692
Cash Flow (HK$ mn)
Profit beore tax
Depreciation in PPE
Change in working capital
Others
Cashflow from operating act.
Capex
Others
Cashflow from investment act.
Loan change
Dividend
Others
Cashflow from financing act.
Net cashflow
Year End Cash
FY2013
659
20
(584)
(80)
14
(15)
(2)
(17)
438
(99)
(93)
245
242
1,169
FY2014E
769
20
(868)
(77)
(156)
(24)
(25)
(49)
901
(120)
(159)
622
417
1,495
FY2015E
842
19
130
(16)
975
(25)
17
(8)
0
(131)
(80)
(211)
756
2,161
FY2016E
890
20
(528)
(31)
352
(27)
20
(7)
0
(139)
(80)
(219)
126
2,197
FY2017E
931
21
232
(42)
1,142
(28)
23
(5)
0
(145)
(80)
(225)
912
3,019
Source: CIS(HK) estimate
Please read the analysts and company disclosure and the disclaimer in the last page
13/14
股票报告网整理http://www.nxny.com
Initiation Research Report
Disclaimer
Investment Recommendation System
Company Rating：
Strong Buy：Expecting a relative return of over 20% against Hang Seng Index in coming 6-12months
Buy：Expecting a relative return of 10-20% against Hang Seng Index in coming 6-12months
Hold：Expecting a relative return of ±10% against Hang Seng Index in coming 6-12months
Avoid：Expecting a relative return of -10% or less against Hang Seng Index in coming 6-12months
Sector Rating
Outperform： Expecting a relative return of over 5% against Hang Seng Index in coming 6-12months
Neutral：Expecting a relative return of over ±5% against Hang Seng Index in coming 6-12months
Underperform：Expecting a relative return of - 5% or less against Hang Seng Index in coming 6-12months
The information, tools and material presented herein are provided for informational purposes only and are not to be used or considered
as an offer or a solicitation to sell or an offer or solicitation to buy or subscribe for securities, investment products or other financial
instruments, nor to constitute any advice or recommendation with respect to such securities, investment products or other financial
instruments. This research report is prepared for general circulation. It does not have regard to the specific investment objectives,
financial situation and the particular needs of any specific person who may receive this report. You should independently evaluate
particular investments and you should consult an independent financial adviser before making any investments or entering into any
transaction in relation to any securities mentioned in this report.
The information, tools and material presented herein are not directed at, or intended for distribution to or use by, any person or entity who
is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to
applicable law or regulation or which would subject China Investment Securities International Brokerage Limited and China Investment
Securities International Futures Limited (Collectively “ China Investment Securities (HK)) to any registration or licensing requirement
within such jurisdiction.
Information and opinions presented in this report have been obtained or derived from sources believed by China Investment Securities
(HK) to be reliable, but China Investment Securities (HK) makes no representation as to their accuracy or completeness and China
Investment Securities (HK) accepts no liability for loss arising from the use of the material presented in this report where permitted by law
and/or regulation. This report is not to be relied upon in substitution for the exercise of independent judgment. China Investment
Securities (HK) may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented
in this report. Those reports reflect the different assumptions, views and analytical methods of the analysts who prepared them.
The research analyst(s) primarily responsible for the preparation of this report confirms that (a) all of the views expressed in this report
accurately reflects his or her personal views about any and all of the subject securities or issuers; and (b) that no part of his or her
compensation was, is or will be, directly or indirectly, related to the specific recommendations or views he or she expressed in this report.
Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or
implied, is made regarding future performance.
China Investment Securities (HK), its directors and employees may have investments in securities or derivatives of any companies
mentioned in this report, and may make investment decisions that are inconsistent with the views expressed in this report.
General Disclosure
China Investment Securities (HK) and its officers, directors and employees, including persons involved in the preparation or issuance of
this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the
securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other
material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may
make markets in the securities mentioned in the material presented in this report. China Investment Securities (HK) may, to the extent
permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the
material is published. One or more directors, officers and/or employees of China Investment Securities (HK) may be a director of the
issuers of the securities mentioned in this report.
This research report is prepared for general circulation. It does not have regard to the specific investment objectives, financial situation
and the particular needs of any specific person who may receive this report.
The information contained herein is believed to be reliable, its completeness and accuracy is however not guaranteed. Opinions
expressed in this report are subject to change without notice, and no part of this publication is to be construed as an offer, or solicitation of
an offer to buy or sell any securities or financial instruments whether referred therein or otherwise. We do not accept any liability
whatsoever whether direct or indirect that may arise from the use of information contained in this report.
Regulatory Disclosures as required by the Hong Kong Securities and Futures Commission
Policies of China Investment Securities (HK):

Research analysts who publish investment research are not directly supervised by, and do not report directly to, investment banking
or sales and trading personnel.

Research analysts’ compensation or remuneration should not be linked to any specific investment banking function or to
recommendations in research.

Research analysts or their associates are prohibited from dealing in the securities or any derivatives of any companies the research
analysts review/analyse/cover.

Research analysts or their associates are prohibited from holding any directorship or other position in any company the research
analysts review/analyse/cover.
China Investment Securities (HK) is not a market maker in the securities of the subject companies mentioned in this report.
China Investment Securities (HK) does not have any investment banking relationship with the companies mentioned in this report within
the last 12 months.
China Investment Securities (HK) and the research analysts who publish investment research do not have any interests relationship with
the companies mentioned above.
China Investment Securities International Brokerage Limited
63/F, Bank of China Tower, 1 Garden Road, Central, Hong Kong
Tel：(852) 3983 0888 (Office)
(852) 3983 0808 (Customer Service)
Fax：(852) 3983 0899 (Office)
(852) 3983 0855 (Customer Service)
http://www.china-invs.hk/
Please read the analysts and company disclosure and the disclaimer in the last page
14/14