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4 Mar, 2015 (Wednesday)

            
HC INTL(2280)
Analysis¡G
HC International (2280) focused on the B2B transactions, primarily through the platform ¡§hc360. Com¡¨ which provided Internet services, including Mai-Mai-Tong, Biao-Wang Search etc. Since Chinese SMEs were more willing to accept the Internet sale, HC would then be benefited. In the first three quarters of last year, the Group recorded sales revenue of RMB 599 million, an increase of 21% yoy; profit attributable to shareholders was RMB 160 million, an increase of 63%. Gross margin was 93%, up 1.3 percentage points. The estimated profit for 2014 is expected to reach RMB 280 million, with forecasted PE only around 12 times. (I do not hold the above stock)
Strategy¡G
Buy-in Price: $5.70, Target Price: $6.60, Cut Loss Price: $5.30

CPIC(2601)
Analysis¡G
China Pacific's profits increased strong benefited from the development of the market environment, and the performance was better than our previous expectation. By the end of 3Q2014, China Pacific's total assets increased by 15.1% to RMB832.74 billion compared with the end of 2013, and net assets was RMB111.421 billion, up 12.6%, equivalent to the BVPS of RMB12.30. During the period, investment gains grew 20.55% y-y to RMB28.538 billion. We expect its net profit would increase by 15% y-y approximately in 2014, and therefore we still have the confidence in its performance, and maintain Buy rating.
Strategy¡G
Buy-in Price: $39.35, Target Price: $50.00, Cut Loss Price: $33.50


New World China Land (917.HK) - Steady Operation, yet with a Lack of Sufficient Catalyzer

Summary

-Recently, New World China Land released its result of the first half (H1) financial year of 14/15 (up to December 31, 2014); the total income dropped 26.8% yoy to 8.7 billion HKD, and the profit applicable to shareholders dropped 55.4% yoy to HKD1.52 billion . The gross margin, compared to the same period's 50.9% in 2013, dropped by 10.5 ppts to 40.4%, yet still higher than the industry's average level.

-New World China Land recorded the real estate contracts` sales volume up to RMB7.23 billion, which dropped 22.4% yoy; saleable area of real estate up to 500 thousand square meters, which was mainly influenced by weak market sentiment and dropped 22.7% yoy. In the 2014/2015 financial year, the company's sales objective is 12.5 billion, 58% of which has been reported by the end of H1. We believe that lowered sales objective and relatively better sales completion rate reflect the company management's cautious expectation toward the real estate's prospect; the management is oriented in creating good products, improving asset operation efficiency, and thus stabilizing balance sheet.

-New World China Land's liability scale has been continuously rising. Up to the end of last year, the company's total liability had risen to 47.8 billion HKD from 39.4 billion at the end of June, increasing by 8.4 billion; the book cash assets increased from 17.4 billion to 20.5 billion; the scale of net debt kept growing to 27.2 billion, and the proportion of net debt increased from 36% to 43%. In general, New World China Land's financial leverage is going up, yet still lower than the industry's average level. As far as we`re concerned, the company's financing and debt paying are running steadily and the balance sheet is stabilized, making it possess enough financial resources to deal with the current industrial dilemmas and operational strategy adjustments.

-Currently, 78% of the land reservation possessed by New World China Land is concentrated in first-and-second-tier cities. Although the company stays cautious toward its prospect, first- and second-tier cities` quality residential property and commercial real estate will be the major developments of the company. In our opinion, New World China Land's profit-oriented sales strategy does not possess enough competitiveness in the current market, and the gross margin which is higher than the industry's average may be challenged, yet the strategy of balance development and stabilized balance sheet can effectively reduce operational risks. We believe that New World China Land's current price lacks sufficient attraction, which we rate it as "Neutral" the target price of 12 months is HKD5 , equivalent to 10 times of the 2015/2016 prospective price-earnings ratio.

Financials

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Recommendation on 4-3-2015
RecommendationNEUTRAL
Price on Recommendation Date$ 5.090
Suggested purchase priceN/A
Target Price$ 5.000
Writer Info
Chen Geng
(Research Analyst)
Tel: +8621 51699400-107
Email:
chengeng@phillip.com.cn

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Phillip Research - Hong Kong ½÷¥ß¬ã¨s³¡ ¡V ­»´ä¤Î¤¤°ê
Company Stock Code Last Update Suggestion Target Price Price on Recom
Mainland Financial Xingyu Chen (86) 2151698900-105chenxingyu@phillip.com.cn
BoCom332827/02/2015Buy8.26.71
CITIC Bank99811/02/2015Buy6.85.67
Transportation and Automobiles Zhang Jing (86) 2151699200-103zhangjing@phillip.com.cn
SAIC Motor60010425/02/2015BUY28.823.59
Air China75316/02/2015Neutral 6.76.63
Mainland Property Geng Chen (86) 2151699400-107chengeng@phillip.com.cn
New World China Land91704/03/2015NEUTRAL5.000.000
Beijing Capital Land286813/02/2015Accumulate43.64
Insurance Xingyu Chen (86) 2151699400-105chenxingyu@phillip.com.cn
CPIC260111/11/2014Buy33.728.1
New China Insurance133615/08/2014Buy36.628
Properties  
FORTUNE REIT77814/10/2014Accumulate7.326.92
Hysan Development001418/03/2014Accumulate36.833.35
Hotels and Entertainment Geng Chen (86) 2151699400-107chengeng@phillip.com.cn
Wisdom Group166105/01/2015BUY6.554.6
Galaxy Entertainment2719/11/2014Accumulate5651.75
New Energy  
Kangda Env613603/03/2015Accumulate4.053.37
Xinjiang GoldWind220823/02/2015Accumulate12.4511.64
Food, Beverage and Retail  
Kanion Pharmaceutical60055710/02/2015Buy29.5323.18
Lifestyle International121229/01/2015Accumulate16.515.16
Telecommunications  
ZTE76326/02/2015BUY21.2417.1
Semiconductor Manufacturing Int`l Corp98117/02/2015Accumulate0.810.72
Oil and Gas Geng Chen (86) 2151699400-107chengeng@phillip.com.cn
SPT Energy125124/02/2015Reduce1.51.74
CIMC ENRIC389927/10/2014Buy107.67
Software & Service  
Goldpac Group331518/02/2015N/A4.77
KINGDEE INT`L26802/12/2014Accumulate2.752.45

Information contained herein is based on sources that Phillip Securities (Hong Kong) Limited and/or its affiliates ( the ¡§Group¡¨) believe to be accurate. The Group does not bear responsibility for any loss occasioned by reliance placed upon the contents hereof. The Group (or its employees) may have interests in relevant investment products. For details of different products¡¦ risks, please view the Risk Disclosures Statement on http://www.phillip.com.hk.

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