报告名称：China Merchants Holdings International(02880.HK)Dalian Port stake： investment fo
报告类型：港股研究
报告日期：2016-01-13
研究机构：美国银行美林公司
股票名称：大连港,大 连 港
股票代码：02880,601880
页数：7
简介：Stake purchase as part of a larger China network
While we understand the rationale behind CMH’s recently-announced HK$4.33bninvestment in Dalian Port (“DP”; 2880 HK; Not Rated) as part of its plans to control morehub ports in China over time, we believe the payback may take time given commodityweaknessand limited synergies near term. We maintain Buy on CMH as we believe theacquisition does not materially change our investment thesis: high-quality pick to rideout a global downturn; rising international earnings as investments bear fruits; and anattractive valuation at 7.0x 2016E adj EBITDA (vs. historical average of 10x).
Strategic rationale of Dalian port investment
We believe CMH has a long-term goal of controlling more key hub ports in China, apartfrom its existing investments in Shenzhen and SIPG (24%). While it has smallinvestments in Qingdao Port (3.2%; HK$450mn) and Ningbo Port (4%; HK$5bn), the 20%in DP would be the largest % stake it has taken. On the one hand, we believe controllingmore hub ports may strengthen CMH’s position when dealing with liner companies.From a defensive angle, such a position may also allow CMH to better protect itsaggregate volume long term should a diversion away from Shanghai take place followingrail network development. DP also seems to have an interest in better co-ordinate withnearby ports in the region (e.g. Yingkou).
Terms of investment in DP
CMH is essentially buying a 20% stake in DP for HK$4.33bn. The purchase price ofHK$3.67/H share implies 1) 1.0x 2014A BVPS (Rmb3.12/sh based on FX of 1.18), 2) 33xpro-forma FY14 P/E and 3) a 2.9% discount to DP’s last closing price. CMH’s 20% stakewill be just behind Dalian Port Corp at 41.65%. CMH will appoint two directors (out of amax total of 9) and one supervisor to DP. With a net gearing of 11% as of 1H15, wethink CMH has plenty of capacity to fund the investment. We estimate c.1% dilution toCMH’s earnings in 2016 from its DP stake (associate accounting).
Use of proceeds by Dalian Port
DP announced on 31 Dec 2015 to place up to 1,475.4mn new H shares. It intends to usethe proceeds for 1) developing its oil business , 2) making strategic investment inaccordance to the “One belt, One road” theme, 3) establishing the “Internet + Port”platform, 4) constructing logistics facilities and 5) general working capital.
Dalian Port at a glance
Dalian port was the No. 7 largest port in China in 2014 (based on 10mn container TEUs).It dominates the NE region and is a major oil port in China. In 11M15, Dalian’s containerthroughout (61%/39% foreign trade/domestic) was off 5% YoY. DP reported Rmb286mnof net profit in 1H15, up 0.6% YoY. Higher profits in the oil, container and value-addedservices segments offset the weaker bulk grain and ore segments. Under PRC GAAP,DP’s recurring net profit fell 17% in 9M15. Its container terminals are mostly heldthrough joint ventures with partners such as PSA, China Shipping, COSCO, NYK.
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