Phillip Securities Group
Please note that the Day Light Saving of Europe and US will be effective on April 1st and March 11th respectively. The trading hours for those relevant contracts will be 1 hour earlier. Any questions, please contact us at 22776677.For details, please visit our foreign futures website or contact us at 22776677.Moreover,the spread of USD/JPY is low as one pip.Please click here for details
 
  Phillip Investor Notes

14-03-2024(Thu) 13-03-2024(Wed) 12-03-2024(Tue) 11-03-2024(Mon) 08-03-2024(Fri)
Page : 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 |
Investor Notes - Phillip Securities (HK) Ltd
Past Investor Notes  
Phillip Home Send to Friends Free Subscription Give Comments ¤¤¤åª©
18 May, 2020 (Monday)

            
CIRC(1763)
Analysis¡G
China Isotope & Radiation Corporation (1763) is primarily engaged in the research, development, manufacturing and sale of diagnostic and therapeutic radiopharmaceuticals and radioactive source products for medical and industrial applications, the provision of irradiation service for sterilisation purpose and EPC service for the design, manufacturing and installation of gamma ray irradiation facilities and the provision of independent clinical laboratory services to hospitals and other medical institutions. In terms of capacity building, the Group is accelerating arrangements for the network of pharmaceuticals centres, with proposed establishment and operation of a number of pharmaceuticals centres in 2020, laying a solid foundation for the formation of a network arrangement system covering major cities in China in 2022. (I do not hold the above stock)
Strategy¡G
Buy-in Price: $18.20, Target Price: $20.00, Cut Loss Price: $17.30


BYD COMPANY(1211)
Analysis¡G
The company's first-quarter net profit was 113 million yuan, a year-on-year decrease of 85%, ranging from the upper end of the guidance range of 50 million to 150 million yuan. The company expects that the net profit in the first half of this year will be between 1.6 billion and 1.8 billion yuan, meaning that the net profit in the second quarter will increase by 111% to 139% year-on-year. The company recently launched a new generation of blade battery products to solve the battery life problem and is expected to expand the proportion of external supply in the future. The spin-off of the company's battery, chip and commercial vehicle businesses is also underway.
Strategy¡G
Buy-in Price: $43.00, Target Price: $51.00, Cut Loss Price: $38.00


Itochu Advance Logistics Investment Corp (3493)
Established in 2018/5. A logistics facility REIT sponsored by Itochu Corp (8001) which has strengths in businesses related to daily consumption that have a strong connection with logistics. The flagship property is "i Missions Park Inzai" in Chiba Prefecture.For FY2020/1 (2019/8-2020/1) results announced on 16/3, operating revenues increased by 2.4% to 1.759 billion yen compared to the previous period (FY2019/7 period), operating income increased by 3.6% to 839 million yen, and distribution per unit including excess profit increased by 3.6% to 2,395 yen. In collaboration with the Itochu Group, the occupancy rate of all owned assets of 100% as of the end of 2020/1 had contributed to the business results.For FY2020/7 plan, operating revenue is expected to increase by 36.7% to 2.405 billion yen compared to the previous period (FY2020/1 period), operating income to increase by 39.9% to 1.173 billion yen, and distribution per unit including excess profit to decrease by 0.5% to 2,382 yen. Expected annual yield based on 7/5 closing price is 3.87%, with NAV (Net Asset Value) ratio at 1.09 times. With its conservative financial management, the strength of this investment corporation lies in its ability to maintain profitability even if interest rates were to rise.Target Price : 132,000 yenBuy Price : 116,000 yenCut-Loss : 109,000 yen



Weifu (000581.CH) - The main business is expected to benefit from the industry boom

Investment Summary

Slump in ROI Contributes to a Slight Decline at 5% in Last Year's Results

In 2019, Weifu High-Technology Group Co., Ltd. recorded total revenue of RMB8.78 billion, an increase of 0.7% yoy. The net profit attributable to the parent company reached RMB2.27 billion, down by 5.3% yoy, while net profit attributable to the parent company excluding non-recurring items reached RMB1.947 billion, down by 3.34% yoy. Earnings per share was RMB2.25. The figure was RMB2.37 in last year. The result was slightly (about 1%) above our expectation. The cash dividend per share was RMB1.1, with a dividend payout rate of 49%, maintaining a high dividend payout rate.

The ROI was RMB1.61 billion, down by 17% yoy. The ROI from Bosch Automotive Diesel Systems Co., Ltd. and Zhonglian Electronics Factory Co., Ltd. decreased by 11% and 24%, respectively, accounting for two-thirds of the company's total profit. The ROI contributed by wealth management plans fell to RMB240 million from RMB310 million in the previous year.

Increase in Sales Price Has Improved the Gross Margin though the Sales Volume Has Declined

The auto market in 2019 was affected by the economic downturn and the decline in consumer demand, with the overall sales volume declining. The sales volume of the company's main products is under pressure: The sales volume of fuel pumps fell by 2.8%, that of post-processing systems fell by 32%, and that of intake systems fell by 2.8%. However, profitability has improved as a result of higher average product prices brought by the upgrade of the China VI Emission Standards. Revenue from fuel injection systems was RMB4.87 billion, down by 3.1% yoy, and gross margin was 30.28%, up by 1.06 ppts yoy. Revenue from post-processing systems was RMB3.04 billion, up by 8.64% yoy, and gross margin was 14.3%, up by 2.3 ppts. Revenue from intake systems was RMB446 million, up by 1.26% yoy, and gross margin was 27.4%, down by 0.8 ppts. The overall gross margin also improved by about 1 ppt to 24%.

Net Profit Decreased by 20% in Q1 2020 under the Pandemic

In the first quarter of 2020, the company achieved a revenue of RMB2.772 billion, up by 22.11% yoy, and the net profit attributable to the parent company reached RMB550 million, down by 20.2% yoy. Gross margin fell by 4.3 ppts yoy to 18.81% under the pandemic, which is estimated to be mainly due to the increase of the revenue percentage of the post-processing system products with low gross margin. In the first quarter, the natural gas engine post-processing products produced by WFLD, the company's subsidiary, recorded a high growth, driven by a 25% increase in domestic sales volume of natural gas heavy trucks.

In addition, the pandemic affected the pace of sales of major affiliates in the first quarter. The declined short-term results resulted in the company's net ROI at RMB363 million, down by 18.5% yoy, which is also a significant factor. However, ROI is expected to gradually recover as the domestic auto market gradually recovers.

The Prosperity of the Heavy Truck Industry Is Expected to Continue under the Countercyclical Policy Environment

Aiming at boosting the economy, the government authorities are strengthening the countercyclical adjustment policies. Ministry of Finance has expanded the issuance scale of local government special bonds, and multiple provinces and municipalities an intensive range of investment plans. The growth of infrastructure is expected to be recovered, which will subsequently drive the demand for engineering heavy trucks. At the end of March, the State Council announced a policy of bonus for compensation from the central budget for supporting the phasing out of the diesel cargo trucks under or below the China III emission standard in key areas such as Beijing-Tianjin-Hebei. Meanwhile, a value added tax at the rate of 0.5% based on the sales revenue will be imposed from May 1 to the end of 2023 for the used vehicle sales of second-hand automobile dealers. A high drive of heavy truck sales is expected from the demand upgrade caused by the phasing out of diesel trucks and gears falling on or below the China III emission standard.

The company is expected to benefit from the competitive advantages in the core power system components of heavy truck engines, advanced exhaust treatment technology and abundant product reserves.

Presence in new fields of fuel cell components and automotive chips

The company recently announced the purchase of 66% of equity in IRDFuelCellsA/S for EUR7.26 million, and the joint investment of RMB200 million to set up a semiconductor device and integrated circuit enterprise. The former has a number of patents in the field of fuel cells, involving membrane electrodes and bipolar plates, and its products in Europe, the United States, China and other regions have stable technical partners and customers. The latter is in line with the "New Four" (electric, networking, intelligent, sharing), which is an upgrade trend in the automotive industry. We believe that these two extensive mergers and acquisitions are helpful for the company to cultivate new business growth points and achieve strategic transformation and upgrading of product lines.

Valuation

The company holds abundant cash flow and wealth management plans, with stable operation style, providing a foundation for the future merger and acquisition transformation and high dividend. As analyzed above, we expected diluted EPS of the Company to RMB 2.23 and 2.37 for 2020/2021. And we accordingly gave the target price to 25, respectively 11.2/10.6x P/E for2020/2021. "Accumulate" rating. (Closing price as at 14 May)

Financials

Click Here for PDF format...




Recommendation on 18-5-2020
RecommendationAccumulate
Price on Recommendation Date$ 21.200
Suggested purchase priceN/A
Target Price$ 25.000
Writer Info
Zhang Jing
(Research Analyst)
Tel: (+86 21 51699400-103)
Email:
zhangjing@phillip.com.cn

Local Index
       Index    Change   Change%

World Index
       Index    Change   Change%
  

A-H spread
Stock Code H share
Price
A share
Price
H share
discount


Oversea Research Reports


Investment Service Centre



Enquiry : 2277 6666 OR investornotes@phillip.com.hk
If you cannot read this e-mail in the proper format, please click here to view the web version.

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.

If you DO NOT wish to receive further marketing emails from us, please click HERE to opt-out.

ª©Åv©Ò¦³¡A ½¦L¥²¨s¡C

Copyright(C) 2020 Phillip Securities (HK) Ltd. All Rights Reserved.


Copyright © 2011 Phillip Securities Group. All Rights Reserved [ Risk Disclosures Statement ] [ Terms and Conditions ] [ Personal Data Policy ]