【Hankore U9E 交流专区】HANKORE ENVIRONMENT TECH GROUP

PaPerSoldier

公司官网：http://www.hankore.com/en/


From Nextinsight：

OSK-DMG's target is S$1.50 for HanKore following Everbright deal

Analyst: Sarah Wong

HanKore will buy China Everbright’s (CEI) pool of 25 WWT and reusable projects of 1.892m tonnes/day design capacity for CNY5.8bn, or SGD1.2bn.

The successful merger removes deal overhang and gives the combined entity gearing headroom to pursue growth via M&As. We ascribe HanKore a 36x FY16F P/E (excluding earnings growth forecast from M&As), a premium to the 30x peer average, given its low 9% gearing. Maintain BUY, with changed SGD1.50 TP.

 Purchase price higher than expected but within range of recent M&A transactions. The consideration of CNY5.8bn is higher than the initial expected figure of HKD4.0bn (or CNY3.3bn), but the price of CNY3,071/tonne of design capacity falls within typical M&A transactions prices of CNY2,500-3,000/tonne. As the merger will give HanKore distinctive state-backing advantages, we find the transaction price fairly decent.

The CNY5.8bn will be funded through the issuance of 1.94bn HanKore shares at SGD0.703 each (with adj. factor 0.889). CEI will own 78.0% of HanKore post share issuance, making the latter its subsidiary. The transaction represents a 1.56x NAV of CNY3.7bn.



OSK-DMG: "We value HanKore at a 36x FY16F P/E, higher than its state-backed peers’ average 30x, as its low gearing of 9% post consolidation places it in a prime position to acquire earnings-accretive WWT assets for longer-term growth." Photo: Company

 Merger lifts overhang; combined company to reap advantages and seek M&A-driven growth ahead. The transaction will boost HanKore’s waste water treatment (WWT) design capacity to 3.6m tonnes/day while the share issuance will lower the combined entity’s gearing to less than 9%. This may effectively give the group room to gear up for c. CNY2.6bn of funds (assume 40% gearing) for M&As that the company has intently expressed as its growth strategy in a consolidating WWT environment.

This could potentially add 1.0m tonnes/day design capacity to its portfolio, assuming transaction prices of c. CNY2,500/tonne.

 Maintain BUY, TP changed to SGD1.50. Based on our proforma estimates, we forecast the combined entity to make CNY0.205 EPS in FY16F (FYE June) based on its existing assets, without taking into account any M&A, owing to the lack of information. We value HanKore at a 36x FY16F P/E, higher than its state-backed peers’ average 30x, as its low gearing of 9% post consolidation places it in a prime position to acquire earnings-accretive WWT assets for longer-term growth.  

PaPerSoldier

再来一个maybak kim eng 的

Maybank KE: Bet on China's water sector (HANKORE, SIIC ENVIRONMENT)
Saturday, 31 May 2014 12:01
Excerpts from analysts' reports

Maybank Kim Eng says 'overweigh' China's water sector, buy HanKore and SIIC

Analyst: Wei Bin

analysts_water12.13Analysts checking out water-treatment facility of HanKore. File photo.Great interest in HanKore and SIIC

We met over 20 clients during our recent marketing trips in Singapore and Hong Kong.

Broadly, investors agreed with our investment thesis amid buoyant interest in China’s water sector.

There was greater interest in the municipal water players versus industrial water players, based on our deeper discussions on Hankore Environment and SIIC Environment.

Discussions focused on room for further expansion in sector ROE and how sustainable would industry consolidation be.

With stocks trading in excess of 20x one-year forward P/E, it was hardly surprising to note that the main pushback from investors was their high stock valuations.

Arguably, current high valuation can be justified by robust EPS growth and potential for more EPS-accretive M&As.


watermaybank5.14
In our view, the sector is poised for a golden era in the next three years, with rising water tariff, strong government policy support and industry consolidation fuelling rapid growth.

We believe sector ROE is on a structural uptrend supported by a 15% sector EPS CAGR over FY14E-16E.

We continue to prefer companies with high-quality assets that generate recurring income stream such as Hankore Environment (TP adjusted to SGD1.74 due to recent 10-for-1 share consolidation) and SIIC Environment.

Maintain our BUY rating on HanKore (TP adjusted to SGD1.74 due to recent 10-for-1 share consolidation) and SIIC (TP unchanged at SGD0.22).

We have a HOLD rating on UENV (TP unchanged at SGD1.43).

PaPerSoldier

还有CIMB的

CIMB lowers target for HanKore on higher-than-expected cost of acquisition of CEI

Analysts: Roy Chen & Gary Ng

What Happened

CEI_Ji-NanChina Everbright's water assets have been injected into HanKore for RMB5.8 billion. Photo: CompanyThe HanKore-CEI deal went through, at a price of Rmb5.8bn (S$1.2bn), a premium over two valuers’ valuations of Rmb5.4bn and Rmb5.6bn, respectively. This translates to 2.24x trailing P/BV or 27.3x CY13 P/E.

Some 1.94bn new shares will be issued to CEI. After the deal, CEI will hold c.79.2% of HanKore's enlarged issued capital.

What We Think

The purchase price not in favour of HanKore. While we acknowledge a number of positive factors from the deal, including the expected much lower interest cost and strong SOE backing, we think the economic surplus from the deal has been more or less fully captured by CEI.

Current share price very demanding. Investors should recognise the limitations of a concession business model and its profitability potential. The IRR of a typical municipal water treatment concession is 8-10%.

Hence, a company must gear up to have higher returns. Even if already optimally geared, HanKore could be worth S$1.15, not far from its current price.

What You Should Do

Reduce, with target price of S$0.91. We do not think we are conservative as our target price has factored in an EPS expansion by 5x in the next 5 years. A decision simply based on industry price multiples is not immune to a possible industry-wise overvaluation. Switch to China Merchants Pacific Holdings (toll road business, similar business model, higher project return - link to report).

PaPerSoldier

1.25 hold不了，1.16 hold 不了，
接下来就是0.95 了。。。