报告名称：Hengdeli(03389.HK)2016 turning in losses Hold
报告类型：港股研究
报告日期：2016-03-23
研究机构：德意志银行
股票名称：亨得利
股票代码：03389
页数：14
简介：Chinese remain low profile and prefer to invest in property, with credit easing
Given the ongoing sss decline, we expect a loss of RMB15m for 2016 andrecovery to NP of RMB19m in 2017. Apart from DCF, we also make referenceto book value in a down-cycle. It is trading at 0.52x 16 P/B vs. its previoustrough 0.82x P/B seen in 2008. We believe the market is already expecting aneven worse situation than in 2008. With losses expected in FY16, a lowdividend payout, and a very conservative scenario priced into currentvaluations, we maintain Hold.
2016 and beyond
By our estimates, the next three years will remain very challenging forHengdeli, with the company likely reporting its first loss in 2016. We do notexpect any recovery in sss up to 2018. Management continues to engage instore rationalization, aiming to close 10-30 stores this year vs. our forecast of28 stores, depending on the outcome of its rental negotiations.
2015 NP down 71.3% to RMB145m on sales decrease of 9.9% to RMB13.3bn
Excluding Harvest Max, Hengdeli saw a 10.5% sales decline. Core NP dropped45.3%, when excluding exceptional loss, mainly including an impairment lossof RMB45m, goodwill related to Harvest Max and RMB63m in available-forsalesecurities – we believe that might be O Luxe Holding (860.HK NR,previously Ming Fung). This is in line with its profit warning announced onFebruary 17, 2016. The company did not propose any dividend.
Target price reduced from HK$1.23 to HK$0.56, implying 0.45x 2016E P/B
We lower our FY16/17 NP forecasts by 103/97%, and our TP by 55% toHK$0.56. Our DCF-derived target price is based on Deutsche Bank’s ChinaCOE of 9.5% and a higher beta of 1.3 to reflect the corporate governance risk.Downside risks: 1) macro slowdown; 2) working capital risk; 3) corporategovernance; and 4) the impact of anti-corruption policy in China. Upside risks:1) macro outlook improves with rising SSSg; and 2) brands increasing theirretail prices.
下载地址：Hengdeli(03389.HK)2016 turning in losses Hold
