Академический Документы
Профессиональный Документы
Культура Документы
15 March 2011
Company Rating: Outperform
(maintained)
Sector Rating:
Overweight
(maintained)
Price: Target:
HK$5.04 HK$7.00
(maintained)
Trading data
52-week range Market capitalization (m) Shares outstanding (m) Free float (%) 3M average daily T/O (m share) 3M average daily T/O (US$ m) Expected return (%) 1 year Closing price on 15 March 2011 HK$4.61 6.95 HK$10,573/US$1,365 2,098 31 4.8 3.1 43.1
6.5
6.0
5.5
5.0
4.5 15-Mar-10
15-May-10
15-Jul-10
15-Jan-11
15-Mar-11
Source: Bloomberg
Timothy Sun
(852) 2532 6746 timothysun@ccbintl.com
Please read the analyst certification and other important disclosures on last page
15 March 2011
Peak posted good FY10 earnings with a 31% rise in EPS. The reported net profit is 3% higher than our estimate due mainly to better-than-expected international sales. Solid gross margin of 38.3% was achieved in 2H10, compared with 37.0% in 2H09 despite mounting cost pressure. High 2H10 margins outweighed the slight margin dip in 1H10 to support full-year gross margin expansion to 38.0%, versus forecast of 37.8%. The company continues to target gross margin growth in FY11F and reiterates its long-term gross margin goal of 40%. 4Q11 orders are expected to be resilient following 23-25% growth in 1Q-3Q11 trade fair sales, according to management. Beyond FY11F, the company might reduce wholesale discounts offered to its distributors from 62% to 60%. Such a change, if successfully implemented, would demonstrate company pricing power and underpin ASP growth without sacrificing its competitiveness at the retail level, in our view. We note that Peak is amongst the very few operators that are in a position to consider cutting wholesale discount and we view this positively. 1,022 new stores were opened during FY10 bringing the total store count to 7,224. Pipeline for FY11 includes 800 net new openings. We are delighted to note the companys A/R turnover improved to 63 days as of end-2010, compared to 74 days in end-June 2010 and 70 days in end-2009. Peak A/R balance also decreased to RMB700m from RMB770m during FY10 in spite of increased sales. To support longer-term business growth, Peak plans to add a new production facility in Shangdong. Company estimates a capex rise of RMB400m over three years. We leave our FY11F EPS estimate largely unchanged as we conservatively adopt lower gross margin assumptions in light of sharply rising production costs, offsetting higher revenue projections. We increased FY12F due to reduced tax rate estimate.
15 March 2011
39.2
39.6
39.4
25
15 March 2011
15 March 2011
9 0 6 0 8 0 23
25 47 20 9 0 0 101
137 95 20 10 0 8 269
244 61 16 10 0 6 338
342 54 16 14 0 12 438
262 78 16 12 0 9 376
15 128 24 0 22 188
11 376 15 68 8 478
15 March 2011
15 March 2011
Valuation summary
Company Department stores Golden Eagle Parkson Group Intime Maoye Springland* NWDS China PCD Stores Shirble Store Average Sportswear brands ANTA Sports* Li Ning* China Dongxiang* 361 Degrees* Peak Sport* Xtep* Average Supermarkets CRE Lianhua Wumart Jinkelong Average 3308 HK 3368 HK 1833 HK 848 HK 1700 HK 825 HK 331 HK 312 HK 18.10 10.82 10.64 3.22 5.80 5.60 2.11 1.40 4,513 3,902 2,608 2,124 1,861 1,212 1,144 449 8 10 4 2 NA 1 2 1 30 22 28 18 55 12 31 11 26 28 22 26 38 25 7 30 20 25 24.3 21.6 23.3 20.9 20.2 14.1 18.7 12.0 19.4 18.9 17.6 18.6 15.2 16.2 13.2 14.4 10.0 15.5 0.8 1.0 0.8 1.2 0.4 1.2 0.6 1.1 0.9 1.7 2.1 1.7 1.3 1.5 2.9 1.9 2.5 2.0 7.1 4.9 3.9 3.1 2.8 1.7 2.9 1.7 3.5 32.3 24.6 17.0 15.3 14.6 13.1 16.9 14.9 18.6 6 9 Net debt Net debt Net debt 38 19 6 Net cash Net cash 0 45 118 Net cash Net cash Net cash Stock code Share price Market cap 3M average value traded (local currency) (US$m) (US$m) EPS growth (%)# CY11 CY12 PE (x) CY11 CY12 PE/G (x) CY11 Yield (%) CY11 P/B (x) CY11 ROAE (%) CY11 Net cash/ share (%) Net gearing (%)
12 11 7 4 3 2
15 (13) (6) 18 21 23 10
12 13 4 16 15 4 10
14 2 45 8 21 27
Net cash Net cash Net cash Net cash Net cash Net cash
14 2 2 0
29 19 23 13 21
25 1 18 11 14
(to be continued)
15 March 2011
China specialty retailers/other brands Belle* 1880 HK Gome* 493 HK Hengdeli* 3389 HK Bosideng 3998 HK Trinity* 891 HK Ports 589 HK China Lilang* 1234 HK Boshiwa 1698 HK Daphne 210 HK Pou Sheng 3813 HK Evergreen 238 HK China Nepstar NPD US Huiyin App 1280 HK Average # Calculated in HK dollar terms * Denotes CCBIS estimates Source: Bloomberg, CCBIS estimate
13.28 2.55 4.24 2.15 7.53 18.22 10.66 5.00 6.01 1.21 3.81 4.17 1.62
14,373 5,504 2,392 2,144 1,637 1,329 1,642 1,331 1,263 666 480 434 218
21 24 6 13 5 4 4 2 3 0 1 1 1
14 29 17 19 40 18 33 71 29 81 6 270 23 50
18 16 23 4 32 22 20 47 19 6 27 0 (35) 15
24.2 13.8 20.9 9.2 26.1 15.1 20.3 19.1 11.8 12.7 14.9 49.1 5.3 18.6
20.6 11.8 16.9 8.8 19.7 12.4 16.8 13.0 9.9 12.0 11.7 49.1 8.2 16.2
1.8 0.5 1.2 0.5 0.6 0.8 0.6 0.3 0.4 0.2 2.4 0.2 0.2 0.7
1.1 2.2 1.6 8.6 2.3 4.1 1.9 2.2 2.1 NA 2.0 0.8 0.0 2.4
4.8 2.5 3.5 2.0 5.4 4.8 4.9 2.7 3.0 0.8 2.0 2.4 0.9 3.1
0.0 0.0 18.8 20.7 20.1 34.6 26.3 15.1 28.2 6.9 12.9 4.6 12.9 15.5
5 1 0 39 Net debt 8 4 Net debt 11 Net debt Net debt 20 Net debt
Net cash Net cash Net cash Net cash 10 Net cash Net cash 58 Net cash 4 41 Net cash 40
15 March 2011
Rating definitions
Outperform (O) expected return 10% over the next twelve months Neutral (N) expected return between -10% to 10% over the next twelve months Underperform (U) expected return < -10% over the next twelve months
Analyst Certification:
The authors of this report, hereby declare that: (i) all of the views expressed in this report accurately reflect their personal views about any and all of the subject securities or issuers; and (ii) no part of any of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this report; and (iii) they receive no insider information/non-public price-sensitive information in relation to the subject securities or issuers which may influence the recommendations made by them. The authors of this report further confirm that (i) neither they nor their respective associate(s) (as defined in the Code of Conduct issued by the Hong Kong Securities and Futures Commission) has dealt in or traded in the securities covered in this research report within 30 calendar days prior to the date of issue of the report; (ii) neither they nor their respective associate(s) serves as an officer of any of the Hong Kong listed companies covered in this report; and (iii) neither they nor their respective associate(s) has any financial interests in the securities covered in this report.
Disclaimers:
This report is prepared by CCB International Securities Limited. CCB International Securities Limited is a wholly owned subsidiary of CCB International (Holdings) Limited (CCBIH) and China Construction Bank Corporation (CCB). Information herein has been obtained from sources believed to be reliable but CCB International Securities Limited, its affiliates and/or subsidiaries (collectively CCBIS) do not warrant its completeness or accuracy or appropriateness for any purpose or any person whatsoever. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Investment involves risk and past performance is not indicative of future results. Information in this report is not intended to constitute or be construed as legal, financial, business, tax or any professional advice for any prospective investors and should not be relied upon in that regard. This report is for informational purposes only and should not be treated as an offer or solicitation for the purchase or sale of any products, investments, securities, trading strategies or financial instruments of any kind. Neither CCBIS nor any other persons accept any liability whatsoever for any loss arising from any use of this report or its contents or otherwise arising in connection therewith. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors. The opinions and recommendations herein do not take into account prospective investors circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to any prospective investors. The recipients of this report shall be solely responsible for making their own independent investigation of the business, financial condition and prospects of companies referred to in this report. Readers are cautioned that actual results may differ materially from those set forth in any forward-looking statements herein. While all reasonable care has been taken to ensure that the facts stated herein are accurate and that the forward-looking statements, opinions and expectations contained herein are based on fair and reasonable assumptions, CCBIS has not been able to verify independently such facts or assumptions and CCBIS shall not be liable for the accuracy, completeness or correctness thereof and no representation or warranty is made, express or implied, in this regard. The recipients must make their own assessments of the relevance, accuracy and adequacy of the information contained in this report and make such independent investigation as they may consider necessary or appropriate for such purpose. Recipients should seek independent legal, financial, business and/or tax advice if they have any doubt about the contents of this report and satisfy themselves prior to making any investment decision that such investment is in line with their own investment objectives and horizons. CCBI group has investment banking relationship with Peak Sport Products Co., Limited (1968 HK) within the past 12 months. The recipients should be aware that CCBIS may do business with the issuer(s) of the securities covered in this report or may hold interest in such securities for itself and/or on behalf of its clients from time to time. As a result, investors should be aware that CCBIS may have a conflict of interest that could affect the objectivity of this report and CCBIS will not assume any responsibility in respect thereof. Where applicable and required, any relationship CCBIS may have with the issuers(s) of the securities or interests in such stocks(s) will be disclosed in this section of the report. The information contained herein may differ or be contrary to opinions expressed by other associates of CCBIS or other members of the CCBIH group of companies. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. This report is not directed at you if CCBIS is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that CCBIS is permitted to provide research material concerning investments to you under relevant legislation and regulations. In particular, this report is only distributed to certain US Persons to whom CCBIS is permitted to distribute according to US securities laws, but cannot otherwise be distributed or transmitted, whether directly or indirectly, into the US or to any US person. This report also cannot be distributed or transmitted, whether directly or indirectly, into Japan and Canada and not to the general public in the Peoples Republic of China (for the purpose of this report, excluding Hong Kong, Macau and Taiwan). Any unauthorized redistribution by any means to any persons, in whole or in part of this research report is strictly prohibited and CCBIS accepts no liability whatsoever for the actions of third parties in distributing this research report. Copyright 2011 CCBIS. The signs, logos and insignia used in this research report and company name CCB International Securities Limited are the trademarks of CCB and/or CCBIS. All rights are hereby reserved.
CCB International Securities Limited 34/F, Two Pacific Place, 88 Queensway, Admiralty, Hong Kong Tel: (852) 2532 6100 / Fax: (852) 2537 0097