报告名称：Sinomax(01418.HK)Multiple drivers continue to drive earnings growth
报告类型：港股研究
报告日期：2015-06-12
研究机构：招商证券(香港)
股票名称：盛诺集团
股票代码：01418
页数：11
简介：Lifting GPM by 0.5-0.8ppton oil price decline
Other than product/sales mix improvement, GPM will also improve slightly on raw material prices decline as prices of TDI and PPG (crude oil derivatives), which account for about 67% of the company's COGS, have declined 20%-30% YTD. As such, we lift our FY15E/16E GPM slightly by 0.8ppt/0.5ppt (refer to page 2 for forecast parameters and sensitivity analysis). We do not expect the impact to be large as the decline in raw material prices will primarily affect the retail segment (13% of total earnings) and only partially positive to export business (66% of earnings) as it is predominantly cost plus pricing but the lag time between the contract order and pricing negotiations will still give Sinomax a GPM boost for a part of their export sales. In addition, we expect the impact on GPM to be mainly in 2H given 2-3 month's inventory period and the rate of raw material price decline.
US factory to be set up
On 21 May, 2015, Sinomax placed 100mn shares at HKD1.06 per share (net proceeds HKD101.8mn) with minimal dilution on EPS (3%/6% for FY15E/16E based on weighted average). Part of the proceeds will be used for setting up its US factory which will give Sinomax advantages including: i) lower transportation cost for export business, especially with low priced items (labor cost is minimal as it is highly automated) and ii) client base expansion with "made in USA" products.
Maintain BUY TP unchanged at HKD1.49
We adjust our FY15E/16E earnings by +1%/-4%. Although we lift our FY15E/16E GPM, we have lowered FY15E export revenue growth from +17% to +12% YoY as US consumer/economic growth has been improving at a slower-than-expected pace. Maintain BUY, TP HKD1.49 based on an unchanged 10x FY15E target P/E, about 20% discount to Sinomax's closest HK-listed peer, Man Wah (1999 HK, Non-rated). The discount is justified by smaller market cap and scale of operations.

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