标题：Huawu Brake2015 results off; expect more growth in wind turbine/rail brakes
发布日期：2016-03-01 7:13:47
内容： 2015 results slightly missed expectations In 2015, operating revenue fell 16.5% YoY to Rmb570mn; shareholder net profit grew 26.8% to Rmb52.10mn, belowthe average of its earnings guidance and 10% lower than our estimate. Dividend of Rmb0.5 per ten shares. 2015 revenue fell 16.5% YoY; GM surged 8.5ppt YoY to 37.0% thanks to rising contributions from industrialbrakes with high gross profit. Revenue from industrial brakes, rail transit brake systems and labor services up 24.3%,932.3% and 23.5% YoY; operating revenue from water supply & heating pipeline components and hydraulic &electro-hydraulic actuating devices fell 19.9% and 34.3%. Expense ratios rose YoY; net profit grew thanks to rising non-operating revenue. Economies of scaleweakened; selling and G&A expense ratios rose 1.9ppt and 4.1ppt YoY. Rising exchange gains kept financial expenseratio flat YoY. Non-operating revenue surged 211.8% on more government subsidies. Net margin up 3.1ppt to 9.2%. Net inflows up Rmb44.91mn YoY to Rmb106mn from OCF. Inventory balance, accounts receivable balance andaccounts payable balance rose by Rmb0.14mn, Rmb26.92mn and Rmb15.34mn from the start of the year. Trends to watch Wind turbine brakes gaining momentum; expect more market share. In 2015, revenue from industrial brakesgrew 24% YoY, mainly thanks to growth of installed wind capacity and market share gains. Wind capacity could see ahigh base in 2016. We expect further market share gain in wind to drive growth in all businesses. Rail transit brakeson track. In 2015, Huawu acquired Shanghai Pangfeng and turned the loss-making company into a profitable one forthe first time. Looking ahead, we expect breakthroughs in areas like light rail, urban rail and subway; its revenue fromrail transit brakes could double YoY in 2016. Earnings revisions Considering slowing wind power sector growth in 2016, we trim 2016e and 2017e EPS forecasts by 21% and26% to Rmb0.22 (+32% YoY) and Rmb0.32 (+42% YoY), respectively. Valuation and recommendation The stock is at 43.1x 2016e P/E and 30.3x 2017e P/E; given the Rmb19.5bn potential industrial brake + rail transit brakemarket, assuming Huawu manages to hold a 20% share, trim TP by 33% to Rmb12.70; maintain BUY. Risks Expansion of wind turbine brakes business disappoints; sharp decline in harbor machinery brakes.
发布日期：2016-03-01 7:13:47
内容： 2015 results slightly missed expectations In 2015, operating revenue fell 16.5% YoY to Rmb570mn; shareholder net profit grew 26.8% to Rmb52.10mn, belowthe average of its earnings guidance and 10% lower than our estimate. Dividend of Rmb0.5 per ten shares. 2015 revenue fell 16.5% YoY; GM surged 8.5ppt YoY to 37.0% thanks to rising contributions from industrialbrakes with high gross profit. Revenue from industrial brakes, rail transit brake systems and labor services up 24.3%,932.3% and 23.5% YoY; operating revenue from water supply & heating pipeline components and hydraulic &electro-hydraulic actuating devices fell 19.9% and 34.3%. Expense ratios rose YoY; net profit grew thanks to rising non-operating revenue. Economies of scaleweakened; selling and G&A expense ratios rose 1.9ppt and 4.1ppt YoY. Rising exchange gains kept financial expenseratio flat YoY. Non-operating revenue surged 211.8% on more government subsidies. Net margin up 3.1ppt to 9.2%. Net inflows up Rmb44.91mn YoY to Rmb106mn from OCF. Inventory balance, accounts receivable balance andaccounts payable balance rose by Rmb0.14mn, Rmb26.92mn and Rmb15.34mn from the start of the year. Trends to watch Wind turbine brakes gaining momentum; expect more market share. In 2015, revenue from industrial brakesgrew 24% YoY, mainly thanks to growth of installed wind capacity and market share gains. Wind capacity could see ahigh base in 2016. We expect further market share gain in wind to drive growth in all businesses. Rail transit brakeson track. In 2015, Huawu acquired Shanghai Pangfeng and turned the loss-making company into a profitable one forthe first time. Looking ahead, we expect breakthroughs in areas like light rail, urban rail and subway; its revenue fromrail transit brakes could double YoY in 2016. Earnings revisions Considering slowing wind power sector growth in 2016, we trim 2016e and 2017e EPS forecasts by 21% and26% to Rmb0.22 (+32% YoY) and Rmb0.32 (+42% YoY), respectively. Valuation and recommendation The stock is at 43.1x 2016e P/E and 30.3x 2017e P/E; given the Rmb19.5bn potential industrial brake + rail transit brakemarket, assuming Huawu manages to hold a 20% share, trim TP by 33% to Rmb12.70; maintain BUY. Risks Expansion of wind turbine brakes business disappoints; sharp decline in harbor machinery brakes.
