yizheng chemical
2010年10月16日 星期六
my chinese typing is bad, anyway give my views in english as brief as i can.
share outstanding of yizheng (1033.hk/600871.ch) is 4000m shares. after sharp rise in H share to 3.14 it implies in h share valuation 12560m hkd market capitalization
such valuation is still very reasonable compared with a share price of 9.82 rmb, a 71% discount.
i am not sure why the discount is so large. without any narrow of valuation gap some points can be noted
1) out of 4000m share outstanding, 1680m held by sinopec, 720m citic group, ccb fund holds 25m, boc fund holds 6.5m, senior management holds 7.12m, a investment co from shanxi holds 1.50m. turnover in hong kong H and shanghai A for this share last 3 days was huge. total share t/o is 313+35.52m=348.52m. this will arrive at 2753.12m shares. if assume the 'diehard' holder to be 2404m, which are the long term investors stated above, the % changed hand is 21% of shares that are actually transactable. is it merely a speculation for privitization? that is way too high a percent to be resulted if this is the only reason
2) petrochemical industry is favored by rise in RMB, 1% of rise in RMB will result in 6-12% rise in EPS, according to GS
3) oil price has stood above 84 usd/barrel which means the refinery margin by petrochemical industry can be reset, refinery margin goes to 8 usd level because the refined oil price will rise next week by 3%
4) 卢立勇 is newly appointed as president. shareholding structure of 934 has changed late last month. seems restructuring is happening within the group. a good article from findingalpha about food and chemical consolidation in china
http://bit.ly/m4VwET
5) capacity wise, PTA and EG price will have limited downside risk because the capacity expansion has been slow. the reason is because the sector was in terrible shape last 3 years. if you look at 1033 annual report, in 2008 it suffered a 1.9b hkd loss, largest in its history. however after the petrochemical rule has rolled out in 2009, the environment for petrochemical industry has been much improved. do remember yizheng is worlds largest manufacturer of polymer and china's largest.
6) use of PTA is mostly for manufacturing of PET, main material for making of plastic bottles which has been experiencing tremendous growth in last 5 and probably next 10 to 20 years because of accumulation of middle class and urbanization acceleration
7) another material they make is polyester fiber strips 绦纶短纤. historically, the difference in pricing between PFS and cotton is only 3k-5k rmb/tonne, because cotton has gone up so much these 2 months, the spread is now 11k. very likely therefore PFS will also increase which improve 1033 margin
8) valuation of 1033.hk is np1h 432 ne1h 7344 which means 1.51x PB and 12.9x PE, because of raw material rise very likely this year PE will come down to 10x PE and only single digit next year. the best case for yizheng will be for oil price to steadily rise, e.g. 10% in six months, rmb appreciates gently, cotton price flat or steadily rises, weather to become cold/extremely cold. for sinopec, it will be best if they can privitize this company as early as possible. previously because of leakage of information, they have spent an additional 5b rmb to privitize jilin chemical and beijing chemical
9) there is notice from a share exchange that a share reform may be happening next week or by end of october
http://bit.ly/izIYjY
2011年7月2日 星期六
veeko 1173.hk
veeko 1173.hk
2010年12月15日 星期三
at 0.475 hkd, market cap 970m
-seasonality implies sales 1H:2H is 1:3, probably net profit FY10/11 is 80m-100m
-same store sales similar to luk fook, but much quicker than bonjour and sasa
-networkwise, it has more outlets already then bonjour, second in hong kong
-gross margin expansion: colder weather will give higher ASP for their wanko, veeko apparel; by having more self-owned brands; by having more exclusive brand names
-operating margin expansion:when SKU increases from the 17,000 units level; when there are more customers visiting per shop; one note that colourmix is very quiet compared to the incumbents, however their op growth yoy was already 90%
-secular trend where hk clients are displaced by chinese. ticket sales, chinese customers 600, hong kong 100. now only 30% of sales are chinese
-valuation wise, FY10/11 11x based on 88m profit, 80% dividend payout means 7.3%, 60% means 5%
-relative valuation, 0178.hk (5 hkd) is 25x PE for 40% growth, 0653.hk (1.52 hkd) is 20x PE for 30% growth, 1173.hk (0.475 hkd) is 11x PE for 90% growth
-in terms of sales mix, 1173.hk sells apparel in china, already making profit. sasa china business is LBIT until 2 years later (2013), bonjour has just started first cosmetic shop in guangzhou, even make profit first year, it will be small. and because SKU is lot (thus quarantine, distribution, etc), they need a lot more effort to replicate to other places in china.
-one note that most of their shops they are benefited from chinese 'free-walkers', e.g. causeway bay and canton road, are new only in 2010/2011 financial year
-investors now include VP and CAM. they have very strong track record in buying undervalued stocks. CAM top up price is 0.45 hkd
2010年12月15日 星期三
at 0.475 hkd, market cap 970m
-seasonality implies sales 1H:2H is 1:3, probably net profit FY10/11 is 80m-100m
-same store sales similar to luk fook, but much quicker than bonjour and sasa
-networkwise, it has more outlets already then bonjour, second in hong kong
-gross margin expansion: colder weather will give higher ASP for their wanko, veeko apparel; by having more self-owned brands; by having more exclusive brand names
-operating margin expansion:when SKU increases from the 17,000 units level; when there are more customers visiting per shop; one note that colourmix is very quiet compared to the incumbents, however their op growth yoy was already 90%
-secular trend where hk clients are displaced by chinese. ticket sales, chinese customers 600, hong kong 100. now only 30% of sales are chinese
-valuation wise, FY10/11 11x based on 88m profit, 80% dividend payout means 7.3%, 60% means 5%
-relative valuation, 0178.hk (5 hkd) is 25x PE for 40% growth, 0653.hk (1.52 hkd) is 20x PE for 30% growth, 1173.hk (0.475 hkd) is 11x PE for 90% growth
-in terms of sales mix, 1173.hk sells apparel in china, already making profit. sasa china business is LBIT until 2 years later (2013), bonjour has just started first cosmetic shop in guangzhou, even make profit first year, it will be small. and because SKU is lot (thus quarantine, distribution, etc), they need a lot more effort to replicate to other places in china.
-one note that most of their shops they are benefited from chinese 'free-walkers', e.g. causeway bay and canton road, are new only in 2010/2011 financial year
-investors now include VP and CAM. they have very strong track record in buying undervalued stocks. CAM top up price is 0.45 hkd
midland ic&i 0459.hk
midland ic&i 0459.hk
2011年1月6日 星期四
market capitalization: 847m hkd @ 0.102, note due to CB conversion there will be another 550m shares
background
-it used to be a unlisted subsidiary of midland co (1200.hk). in 2005, it was spun off and backdoor list by acquiring 8070 EVI education. consideration was 650m hkd, whereby 550m hkd is in terms of CB (mature 2012, strike 0.10 hkd) and 100m is cash
-it became a speculation vehicle after government announced additional stamp duty in december, which effective curb short term investment for residential property
valuation
-if based on 1H10 net profit, which was 40m, the PE10x will be 10.56x. this can only be fair given midland also only trading at single digit PE
-however if one uses december as a benchmark, whereby transaction surge 30% for c&i, it means an adjusted turnover in hong kong will be 130b, if there is 10% rise in quantity transacted, and 20% rise in asset value, it will become 169b and 220b; at 20% market share (calculation see others) and npm 18+2% (based on their latest financial statement +2% because of operating leverage), midland ic&i earns 135m in 2011, 180m in 2012, which is 6x PE11 and 7.8x PE12.
-if ex cash, it is 4.2x PE FY11, 3.15x PE FY12
environment fundamental
-effectively the fundamental environment has changed
1) government policy is likely to be long term. this is because residential supply is limited, and there will only be slight supply up to 2012. in that case it is the interests of politicians to show them they have exert greatest effort to curb residential price from rising; for c&i however, the bargaining powers are on the chalbol's hands. for example wharf, cheung kong. if government rises stamp duty for c&i too they will face huge pressure from these parties, since asset value of ic&i is based on large transactions which are possible only through larger developers/professional investors. therefore they will be quite dumb if officials decide to do any regulatory control over c&i as well
2) for commerical property (office space) hong kong is still low in value compared to tokyo, new york, london. and it will cause huge impact to hong kong has a free trading port should there be disincentive towards investing in real estates, in particular those they cause no direct impact to societal stability (as in residential); affordability is seen much higher for those Foreign Owned Enterprises which has global presence hence holistic approach towards rent payments across the world
3) The probability of mainland Chinese investing in C&I is high. although it does not reflect in current situation in hong kong yet, it is highly likely because the rule of games for residential is similar to ic&i
4) FOE has speeded process to increase investment in China through Hong Kong. This year one can see companies such as hedge funds, MNCs (Starbucks, Mcdonalds) have shown unprecedented effort to invest in China. In this case Hong Kong must benefit
5) land supply: for tier 1 office space it has almost no further increment, except 陸海通 luk hoi tong mansion in Central and the reconstruction of des voeux road mansion next to central market
6) commission is based on QxP which gives notional amount of property transacted. looking at P, it is likely to rise 20% for tier 1 commercial/retail for next 2 years, with at least 10% rise in quantity transacted due to 3 major reason (Chinese investor, Foreign investor, and residential investor going into the ic&i pool)
Financial fundamental
1) company has 285m cash as at 1H10; 12m short term debt; gross gearing 52.90%; net cash -272; net gearing -52.90% (net cash)
2) very high operating leverage, major operating items are labor cost which is 51 and 54% of cost, but it is highly adjustable in downside and grow less than top line in upswing in economy (staff benefit mostly through commission which is variable basis); 回佣 is very stable, for example 224m sales in 1H10 (138m sales in 1H09) but 回佣 was maintained at 17m in these 2 halves
3) after midland convert CB @0.10 hkd, it will have 285+550=835m cash on hand (and more given operating cash inflow). with this money on hand the company most likely will pay out special dividend. this cash if paid out half or 420m already represent a 30% annual dividend; alternative is acquire is chinese business in property dealing. which seems still to have a virgin land (many agencies in china, but well regulated with good network is very few). Anyway a special dividend is in good sense given midland will hold 71% of interests at c&i at that time
Others
1) no market share information. however if based on a rough estimate of turnover in hong kong &i has 100b hkd, and midland get 224m sales, it implies 20% market share; it is 25% larger than centaline so it is 20% and 16% for top 2. add together its still 36%, which means there is still room to grow at expense of smaller companies
2) property agents is close to a heterogeneous service provider (like value partners) than a homogeneous service provide (like brokerage). network and database is very important. that is how midland and centaline can always establish well presence in hong kong different districts because smaller agencies ought to rely on them to increase turnover, by referring good value properties to their clients, or by referring good customers to them
2011年1月6日 星期四
market capitalization: 847m hkd @ 0.102, note due to CB conversion there will be another 550m shares
background
-it used to be a unlisted subsidiary of midland co (1200.hk). in 2005, it was spun off and backdoor list by acquiring 8070 EVI education. consideration was 650m hkd, whereby 550m hkd is in terms of CB (mature 2012, strike 0.10 hkd) and 100m is cash
-it became a speculation vehicle after government announced additional stamp duty in december, which effective curb short term investment for residential property
valuation
-if based on 1H10 net profit, which was 40m, the PE10x will be 10.56x. this can only be fair given midland also only trading at single digit PE
-however if one uses december as a benchmark, whereby transaction surge 30% for c&i, it means an adjusted turnover in hong kong will be 130b, if there is 10% rise in quantity transacted, and 20% rise in asset value, it will become 169b and 220b; at 20% market share (calculation see others) and npm 18+2% (based on their latest financial statement +2% because of operating leverage), midland ic&i earns 135m in 2011, 180m in 2012, which is 6x PE11 and 7.8x PE12.
-if ex cash, it is 4.2x PE FY11, 3.15x PE FY12
environment fundamental
-effectively the fundamental environment has changed
1) government policy is likely to be long term. this is because residential supply is limited, and there will only be slight supply up to 2012. in that case it is the interests of politicians to show them they have exert greatest effort to curb residential price from rising; for c&i however, the bargaining powers are on the chalbol's hands. for example wharf, cheung kong. if government rises stamp duty for c&i too they will face huge pressure from these parties, since asset value of ic&i is based on large transactions which are possible only through larger developers/professional investors. therefore they will be quite dumb if officials decide to do any regulatory control over c&i as well
2) for commerical property (office space) hong kong is still low in value compared to tokyo, new york, london. and it will cause huge impact to hong kong has a free trading port should there be disincentive towards investing in real estates, in particular those they cause no direct impact to societal stability (as in residential); affordability is seen much higher for those Foreign Owned Enterprises which has global presence hence holistic approach towards rent payments across the world
3) The probability of mainland Chinese investing in C&I is high. although it does not reflect in current situation in hong kong yet, it is highly likely because the rule of games for residential is similar to ic&i
4) FOE has speeded process to increase investment in China through Hong Kong. This year one can see companies such as hedge funds, MNCs (Starbucks, Mcdonalds) have shown unprecedented effort to invest in China. In this case Hong Kong must benefit
5) land supply: for tier 1 office space it has almost no further increment, except 陸海通 luk hoi tong mansion in Central and the reconstruction of des voeux road mansion next to central market
6) commission is based on QxP which gives notional amount of property transacted. looking at P, it is likely to rise 20% for tier 1 commercial/retail for next 2 years, with at least 10% rise in quantity transacted due to 3 major reason (Chinese investor, Foreign investor, and residential investor going into the ic&i pool)
Financial fundamental
1) company has 285m cash as at 1H10; 12m short term debt; gross gearing 52.90%; net cash -272; net gearing -52.90% (net cash)
2) very high operating leverage, major operating items are labor cost which is 51 and 54% of cost, but it is highly adjustable in downside and grow less than top line in upswing in economy (staff benefit mostly through commission which is variable basis); 回佣 is very stable, for example 224m sales in 1H10 (138m sales in 1H09) but 回佣 was maintained at 17m in these 2 halves
3) after midland convert CB @0.10 hkd, it will have 285+550=835m cash on hand (and more given operating cash inflow). with this money on hand the company most likely will pay out special dividend. this cash if paid out half or 420m already represent a 30% annual dividend; alternative is acquire is chinese business in property dealing. which seems still to have a virgin land (many agencies in china, but well regulated with good network is very few). Anyway a special dividend is in good sense given midland will hold 71% of interests at c&i at that time
Others
1) no market share information. however if based on a rough estimate of turnover in hong kong &i has 100b hkd, and midland get 224m sales, it implies 20% market share; it is 25% larger than centaline so it is 20% and 16% for top 2. add together its still 36%, which means there is still room to grow at expense of smaller companies
2) property agents is close to a heterogeneous service provider (like value partners) than a homogeneous service provide (like brokerage). network and database is very important. that is how midland and centaline can always establish well presence in hong kong different districts because smaller agencies ought to rely on them to increase turnover, by referring good value properties to their clients, or by referring good customers to them
10 things about midland property
10 things about midland property (1200.hk)
2011-05-28
10 things about midland property
1. Property demand switched from hk internal to Chinese customers
2. Low interest rate persist, while stock market volatility increases due to capital flow, political uncertainty
3. Low PE
4. High dividend
5. Change in management
6. High beta after market correction
7. Actively monitored by long funds
8. Reliable management with long track record of maintaining market leadership
9. Strong balance sheet
10.Asset light business model
2011-05-28
10 things about midland property
1. Property demand switched from hk internal to Chinese customers
2. Low interest rate persist, while stock market volatility increases due to capital flow, political uncertainty
3. Low PE
4. High dividend
5. Change in management
6. High beta after market correction
7. Actively monitored by long funds
8. Reliable management with long track record of maintaining market leadership
9. Strong balance sheet
10.Asset light business model
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