Homepage
PR Newswire
04-03-2014, 09:20 AM
CMP, DBS Vickers maintained BUY with higher target of $1.32:
Cash cow that keeps giving
• FY13 earnings outperform due to strong
operating performance and forex gains; final
dividend of 4.25Scts also a positive surprise
• Firm cash flows and healthy balance sheet
provide room for potential acquisitions
• Valuations attractive as earnings growth has
outstripped share price re-rating; stock is
trading below book value and offers 7.5% yield
• Maintain BUY with higher TP of S$1.32 (DCF)
Earnings and dividends impress, as CMHP reported a
FY13 net profit of HK$614m, which was 16% higher
than our forecast. Earnings from toll road operations,
excluding the gain on disposal of Yuyao Highway in
2012, rose by 36% y-o-y to HK$571.2m. This was
driven by 7.9% y-o-y growth in traffic for CMHP’s road
portfolio and full-year consolidation of Beilun-Port
Expressway’s results (1.5 months in 2012). A S 4.25Scts
final DPS was proposed - 1.5Scts better than expected
Commitment to pay at least 50% of recurring
profit, which means the S 7cts DPS is sustainable and
even if the convertible bonds and RCPS are converted,
the resulting lower net debt-to-equity allows CMHP to
raise its payout to maintain this dividend payout.
Room for further acquisitions. With strong cash
flow generation, CMHP paid down over HK$800m in
loans and improved its net debt-to-equity from 0.45x as
at end FY12 to 0.29x as at end FY13, which leaves
significant debt capacity for it to embark on more valueaccretive
acquisitions. The sale of its NZ property
business for RMB290m will also strengthen its coffers.
TP raised to S$1.32 to reflect stronger operating
earnings and cash flow. CMHP’s core earnings has
climbed over 60% in the last two years, versus a less
than 50% increase in share price and hence, valuations
remain attractive at 8x FY14 PE (diluted for the RCPS),
less than 1x P/B and offering 7.5% dividend yield; BUY.
Cash cow that keeps giving
• FY13 earnings outperform due to strong
operating performance and forex gains; final
dividend of 4.25Scts also a positive surprise
• Firm cash flows and healthy balance sheet
provide room for potential acquisitions
• Valuations attractive as earnings growth has
outstripped share price re-rating; stock is
trading below book value and offers 7.5% yield
• Maintain BUY with higher TP of S$1.32 (DCF)
Earnings and dividends impress, as CMHP reported a
FY13 net profit of HK$614m, which was 16% higher
than our forecast. Earnings from toll road operations,
excluding the gain on disposal of Yuyao Highway in
2012, rose by 36% y-o-y to HK$571.2m. This was
driven by 7.9% y-o-y growth in traffic for CMHP’s road
portfolio and full-year consolidation of Beilun-Port
Expressway’s results (1.5 months in 2012). A S 4.25Scts
final DPS was proposed - 1.5Scts better than expected
Commitment to pay at least 50% of recurring
profit, which means the S 7cts DPS is sustainable and
even if the convertible bonds and RCPS are converted,
the resulting lower net debt-to-equity allows CMHP to
raise its payout to maintain this dividend payout.
Room for further acquisitions. With strong cash
flow generation, CMHP paid down over HK$800m in
loans and improved its net debt-to-equity from 0.45x as
at end FY12 to 0.29x as at end FY13, which leaves
significant debt capacity for it to embark on more valueaccretive
acquisitions. The sale of its NZ property
business for RMB290m will also strengthen its coffers.
TP raised to S$1.32 to reflect stronger operating
earnings and cash flow. CMHP’s core earnings has
climbed over 60% in the last two years, versus a less
than 50% increase in share price and hence, valuations
remain attractive at 8x FY14 PE (diluted for the RCPS),
less than 1x P/B and offering 7.5% dividend yield; BUY.