SIIC ENVIRONMENT HOLDINGS LTD.
BHK.SI
SIIC Environment Holdings - 1Q17 Results Flash Note ~ Earnings Supported By Newly Acquired Entities
- 1Q17 result was in line with our expectation.
- 1Q17 PATMI of CNY120m met 20% of our full-year estimate.
- BUY, TP:0.96 SGD
Key takeaways:
A boost from previous acquisitions.
- 1Q17 revenue surges 78% to CNY1000m mainly due to contribution from newly acquired entities like Longjiang Group and Ranhill water.
- Moving into 2017, most of the new constructions would come from projects previously won by Longjiang group.
Net gearing surged to 1.4x.
- Longjiang group's high gearing ratio resulted in higher financing cost for SIIC.
- According to management, they have refinanced CNY3.5b of Longjiang debt with a lower interest cost of ~5% (previous: ~6%). SIIC will continue to refinance the remaining high-interest loans at lower interest rates.
Hong-Kong listing is still on the cards.
- SIIC would transfer some shares from Singapore Exchange to Hong Kong exchange for the dual-listing.
- It may also issue a small amount of introductory shares to facilitate liquidity. This should not result in a major dilution.
Juliana Cai CFA
RHB Invest
|
http://www.rhbinvest.com.sg/
2017-04-26
RHB Invest
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