报告名称：Beijing Capital International Airport(00694.HK)Overhang lifted growth trajectory
报告类型：港股研究
报告日期：2016-03-24
研究机构：摩根大通
股票名称：北京首都机场股份
股票代码：00694
页数：12
简介：Takeaways were upbeat at the analyst briefing and JPM live call, despite the inlineFY15 result. Among all, the key overhang associated with the airportconstruction fee has now been lifted as management has affirmed the currentretention ratio would be kept. We stay bullish on BCIA given the strong growthoutlook, potential upward tariff adjustment, and solid FCF generation whichpromises payout upside. We make earnings estimate revisions, while keeping ourDCF-based Dec-16 PT at HK$15.5.
Stock overhang related to the airport construction fee officially removed:Based on their discussions with the MoF and CAAC, management confirmedthe current policy and retention ratio with regards to the airport construction feehas been retained (i.e., BCIA will continue to retain c48% of the fee as revenue).
Partial tariff deregulation may take place before year-end: BCIA expectspart of the aeronautical fees to be deregulated within the year; although themagnitude of tariff hike may be small initially, this is significant given BCIAwould be allowed to set market-based rates for the first time.
Bullish guidance given on intˇl traffic growth and continued marginexpansion: (1) Intˇl business the priority: Management expects intˇl PAX togrow at 9~10% for this year, outpacing domestic PAX growth (the latter likelyat low-single-digits). This divergence in growth pace will continue to be drivenby resource prioritization as BCIA continues pushing out lower-yield domesticflights to nearby airports. (2) Profitability to further improve as managementexpects operating expenses to rise at c3% p.a., at a pace slower than revenuegrowth, allowing continued margin expansion.
Payout to rise potentially from this year in light of BCIA's improving FCFgeneration. The fourth runway is still under review by the government, whichif given approval is likely to be led by the parentco, while the listco will play anauxiliary role with no more than Rmb2~3B capex spending.
Earnings revisions: Factoring in FY15 result and latest guidance, we trim ourabove-consensus estimates for FY16-17 by c5% as we assume a lower retailsales growth given a weaker Rmb vs USD. We continue to view BCIA as one ofthe best cash-generating assets in China geared toward Chinese outboundtourism demand. Overall we project 21% EPS CAGR over FY15-17, while ourforecasts stay above consensus by 10~15%. Maintain OW.

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