China Merchants Holdings Pacific

(17-10-2014, 12:25 AM)Tiggerbee Wrote: Added some shares at 89c today. Counter party 47 was on the sell side.

I added some at the same price as u too thou I doubt the recent rout is over yet.. But the 7c army shd provide some barrier for support I think..

DBS just raise their target price again

China Merchants Hldgs (Pacific): BUY S$0.89; CMH SP
Speeding ahead on Jiurui Expressway;
Price Target : 12-Month S$ 1.42 (Prev S$ 1.32)

By: Paul YONG CFA +65 6682 3712; paulyong@dbs.com


• Factoring in Jiurui E’way acquisition, we lift FY15F PATMI by 4% and introduce FY16F
• Acquisition will contribute to net profit immediately upon debt restructuring, while lengthening remaining toll concessions to 15 years for the Group
• Post CB conversion, there is room for further debt-financed acquisition(s) to drive expansion
• Maintain BUY with a raised TP of S$1.42


Jiurui E’way acquisition provides immediate boost. By restructuring the loans of Jiurui Expressway (borrowing offshore at less than 3% interest to repay onshore loans at over 6% interest), we expect Jiurui Expressway to begin making a small but positive contribution of c. HK$20m to the CMHP’s bottom line in 2015, while providing firm long term earnings growth prospects for the Group.

Potential for debt-financed acquisitions upon CB conversion. Assuming the convertible bonds are fully converted in 2015 (well in the money with a conversion price of S$0.826), the Group’s net gearing will stand at just 0.18x by end 2015. This gives the Group debt-headroom for acquisition deals of between Rmb 2.5bn to Rmb4bn (which would take FY15 net gearing to c. 0.5x to 0.7x), compared to an enterprise value of c. Rmb2.8bn for the Jiurui Expressway deal.

CMHP can easily pay 7Scts in dividends p.a. even when all the CBs are converted, translating to just over 70% payout.

Valuation undemanding at less than 10x FY15F PE and 7.9% dividend yield. We raise our DCF-based TP (10% WACC) to S$1.42 to factor in the Jiurui E’way acquisition, with further upside potential if the Group can make more value accretive toll road acquisitions.

Thanks a lot Jacmar.

I m pretty sure that CMP is on the prowl for the next accretive acquisitions especially towards Western inland China where vehicle and local economic growth rates are higher.

Vested
Core
GG

(17-10-2014, 09:44 AM)Jacmar Wrote: DBS just raise their target price again

China Merchants Hldgs (Pacific): BUY S$0.89; CMH SP
Speeding ahead on Jiurui Expressway;
Price Target : 12-Month S$ 1.42 (Prev S$ 1.32)

By: Paul YONG CFA +65 6682 3712; paulyong@dbs.com


• Factoring in Jiurui E’way acquisition, we lift FY15F PATMI by 4% and introduce FY16F
• Acquisition will contribute to net profit immediately upon debt restructuring, while lengthening remaining toll concessions to 15 years for the Group
• Post CB conversion, there is room for further debt-financed acquisition(s) to drive expansion
• Maintain BUY with a raised TP of S$1.42


Jiurui E’way acquisition provides immediate boost. By restructuring the loans of Jiurui Expressway (borrowing offshore at less than 3% interest to repay onshore loans at over 6% interest), we expect Jiurui Expressway to begin making a small but positive contribution of c. HK$20m to the CMHP’s bottom line in 2015, while providing firm long term earnings growth prospects for the Group.

Potential for debt-financed acquisitions upon CB conversion. Assuming the convertible bonds are fully converted in 2015 (well in the money with a conversion price of S$0.826), the Group’s net gearing will stand at just 0.18x by end 2015. This gives the Group debt-headroom for acquisition deals of between Rmb 2.5bn to Rmb4bn (which would take FY15 net gearing to c. 0.5x to 0.7x), compared to an enterprise value of c. Rmb2.8bn for the Jiurui Expressway deal.

CMHP can easily pay 7Scts in dividends p.a. even when all the CBs are converted, translating to just over 70% payout.

Valuation undemanding at less than 10x FY15F PE and 7.9% dividend yield. We raise our DCF-based TP (10% WACC) to S$1.42 to factor in the Jiurui E’way acquisition, with further upside potential if the Group can make more value accretive toll road acquisitions.

Hi

I created a map to mark the rough locations of CMP's roads for my own education
https://www.google.com/maps/d/edit?mid=z...EYRYRl8dUI

hi Buddy,

Thanks for your positive contributions.

Its good work.

Cheers
GG

(17-10-2014, 01:32 PM)gzbkel Wrote: Hi

I created a map to mark the rough locations of CMP's roads for my own education
https://www.google.com/maps/d/edit?mid=z...EYRYRl8dUI

(17-10-2014, 01:32 PM)gzbkel Wrote: Hi

I created a map to mark the rough locations of CMP's roads for my own education
https://www.google.com/maps/d/edit?mid=z...EYRYRl8dUI

Good job man ! I notice the roads are close to regional airports.

The DBSV report is timely. CM Pacific can easily swallow another toll road without stretching its balance sheet. I expect 7 cents dividend to be maintained.

(Vested)

(17-10-2014, 06:18 AM)greengiraffe Wrote: Counter party 47 is likely to be direct access foreign broker that professional traders used for passing the trade. Likely to be UBS (please correct me if I m wrong).

Through my accumulation over my last 2 months been meeting instinet, GS, UBS, MS, CSFB, BOA-ML and CLSA - literally most foreign broker.

GG

(17-10-2014, 12:25 AM)Tiggerbee Wrote: Added some shares at 89c today. Counter party 47 was on the sell side.

Yup. I confirmed it's UBS. Professional traders or instituitons?

I was lucky to pick up a bit more at 88.5 cents today. The market downturn has create opportunity to pick up stocks we want at a slight discount.

Hi GG & Nick, you are welcomed! Glad to be of some small help.
Your detailed coverage (and also by other members like Drizzt, etc) got me interested in CMP in the first place.

Now, if only I bought after XD instead
(vested)

No worries, pleasure always.

Like I always tell my mates, if it is market inefficiencies we are exploiting, it is perfectly fine. This forum is a platform for positive sharing (be it good or bad news and feel).

The last thing we want is to use it as a platform for manipulation (someone win and many LOSEs). However, having said that it is a good platform to share suspected share operations by sharks.

Anyway, analysts also think that CMP has good potential as they always are optimistic.

Fundamentally, CMP is a boring company with steady cashflow that is growing in line with Chinese vehicle population growth (in line with the restructuring of China economy towards domestic consumption) and the development of western hither land in China over time. It has strong parentage and backed by CM Group that carries China's international infrastructure flag.

In Communists Comrade Merchant Parties we trust.

Vested
Core
GG

(17-10-2014, 03:26 PM)gzbkel Wrote: Hi GG & Nick, you are welcomed! Glad to be of some small help.
Your detailed coverage (and also by other members like Drizzt, etc) got me interested in CMP in the first place.

Now, if only I bought after XD instead
(vested)