标题：Wanfeng Auto WheelCore business further improved; generous bonus shares
发布日期：2016-03-30 15:05:24
内容： Earnings in line In 2015, Wanfeng Auto generated revenue of Rmb8.48bn and net profit of Rmb800mn (+47.1% YoY after adjustmentfor M&A). It proposed a cash dividend of Rmb0.5 (tax included), two bonus shares from profits (tax included) and eightshares from capital reserve per ten shares. Trends to watch Gross margin driven by optimized product mix. In 4Q15, gross margin fell 1.8ppt from 24.4% in 4Q14 to 22.6%,mainly due to consolidation of Meridian. After adjustment, full-year gross margin was 24.3%, up 3.45ppt from 2014,mainly driven by the rising gross margins of auto wheel hub business (+3.92ppt YoY) and magnesium alloy business(+4.54ppt YoY); gross margin of motorcycle wheel hubs expanded 1.03ppt YoY. Meridian business visibly beat; continued improvement in auto hub business. Earnings of Meridian business,consolidated in 2015, greatly beat expectation (net profit +90.8% YoY to Rmb200mn vs. the promised Rmb130mn),mainly thanks to products’ rising gross margins and effective cost control. Thanks to the product mix upgrading, grossmargins of coating wheels and buffing wheels both maintained 20~30% growth. Continued expansion across China; M&A merit attention. The new plants in Jilin and Chongqing will likely driveup wheel hub profits in 2016. Backed by the broad transport strategy, M&A in general aviation and high-endmanufacturing still merit attention. Earnings forecast We maintain 2016/17e net profit forecast of Rmb961mn/Rmb1.18bn. Valuation and recommendation Considering the visible improvement in the traditional core business mix and the Meridian business on track, wemaintain BUY and lift TP by 21.4% to Rmb42.5, implying 40x 2016e P/E. Risks Overseas integration disappoints.
发布日期：2016-03-30 15:05:24
内容： Earnings in line In 2015, Wanfeng Auto generated revenue of Rmb8.48bn and net profit of Rmb800mn (+47.1% YoY after adjustmentfor M&A). It proposed a cash dividend of Rmb0.5 (tax included), two bonus shares from profits (tax included) and eightshares from capital reserve per ten shares. Trends to watch Gross margin driven by optimized product mix. In 4Q15, gross margin fell 1.8ppt from 24.4% in 4Q14 to 22.6%,mainly due to consolidation of Meridian. After adjustment, full-year gross margin was 24.3%, up 3.45ppt from 2014,mainly driven by the rising gross margins of auto wheel hub business (+3.92ppt YoY) and magnesium alloy business(+4.54ppt YoY); gross margin of motorcycle wheel hubs expanded 1.03ppt YoY. Meridian business visibly beat; continued improvement in auto hub business. Earnings of Meridian business,consolidated in 2015, greatly beat expectation (net profit +90.8% YoY to Rmb200mn vs. the promised Rmb130mn),mainly thanks to products’ rising gross margins and effective cost control. Thanks to the product mix upgrading, grossmargins of coating wheels and buffing wheels both maintained 20~30% growth. Continued expansion across China; M&A merit attention. The new plants in Jilin and Chongqing will likely driveup wheel hub profits in 2016. Backed by the broad transport strategy, M&A in general aviation and high-endmanufacturing still merit attention. Earnings forecast We maintain 2016/17e net profit forecast of Rmb961mn/Rmb1.18bn. Valuation and recommendation Considering the visible improvement in the traditional core business mix and the Meridian business on track, wemaintain BUY and lift TP by 21.4% to Rmb42.5, implying 40x 2016e P/E. Risks Overseas integration disappoints.
