报告名称：Beijing Enterprises Holdings Limited(00392.HK)Earnings upside of c.5% from Germa
报告类型：港股研究
报告日期：2016-02-05
研究机构：摩根大通
股票名称：北京控股
股票代码：00392
页数：5
简介：BEHs announced acquisition of German waste treatment company EEW implied a P/E multiple of 21.9x, which is higher than BEHscurrent 2015E P/E of 9.1x and at the high end of some recent transaction comps. This asset could add ~5% to BEHs 2016 EPS, on ourestimates, assuming earnings contribution began in March. BEH will fund the acquisition with a bridge loan, bringing net gearing to~70% by end-2016, on our estimates. While this transaction will add to earnings, we believe some investors may be concerned aboutthe price paid for the asset and BEH's plan to do more overseas acquisitions in the future.
1.4B acquisition in Germany. BEH has entered into an agreement to acquire EEW Energy from Waste, a waste-to-energycompany in Germany, for 1.4B. BEH will buy the asset from private equity fund EQT. EEW operates 18 incineration plants withannual treatment capacity of 4.4MM tons. EEW has a c.17% market share in Germany's waste treatment sector. EEW generates 70%of its revenue from waste processing fees and 30% from power generation. The overall utilization rate of EEWs projects is c.95%.The transaction is expected to be completed by the end of February and does not require approval from BEHs shareholders.
Acquisition price at the high end. The equity consideration of 1.4B represents a P/E multiple of 21.9x, which is higher thanBEHs P/E of 9x and at the high end of some recent transaction comps of 14-22x. BEH did not disclose the EV of the transaction.
~5% earnings upside. Assuming earnings contribution starts in March 2016, EEW may add c.5% to BEHs 2016 net profit, onour estimates. Management said EEWs 2015 revenue was c.550M, and EBITDA was c.190MM, both of which were similar to2014 levels. They added that the asset had limited growth potential.
Potential synergies. By acquiring EEW, BEH will bring the operation and technology expertise back to its c.17,000 tons/day ofwaste treatment projects in China (c.6,000 tons in operation now).
More deals in EU likely. BEH will use this acquisition as a stepping stone in Europe for future investments. It may co-invest withstrategic investors in future. Management is considering three potential investments in Europe: (1) solid waste PPP and BOT projectsin Eastern and Central Europe countries; (2) a solid waste plant in the Netherlands; and (3) project cooperation with German localgovernment.

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