China Everbright Limited 0165

China Everbright Limited 0165

Postby winston » Sun Jan 25, 2009 6:09 pm

20090105 Macquarie China Everbright (Outperform)
All cashed up and raring to go

Event
We review China Everbright Limited’s (CEL) earnings and NAV outlook after the year end. We expect NAV would have fallen 17% HoH (21% YoY) and 2H08 earnings would be c.70% below 1H08. Continued difficult market conditions would mean a tough 1H09, but investors should take advantage of this to position for a market upswing in 2H09. We retain our OP recommendation with a new target price of HK$12 (previously HK$18).

ImpactValuation looking attractive: We value CEL using a sum-of-the-parts model. If we assume the HK business is valued at book and a stake in China Everbright Bank (CEB) at 1.3x book, the current implied value of the stake in China Everbright Securities (CES) is just 6.9x 2009 PER, compared to its peers at over 15.5x.

Credit risk replaces market risk as the determinant of NAV: The reduction in 2H08 NAV means that book value in HK should be relatively secure, with less than 29% of assets now classified as ‘market sensitive’ (43% at end June). The biggest risk to NAV now lies with the impact of deteriorating credit quality on the value of the CEB stake (16% of CEL’s total assets). Below 5% NPLs, there is limited impact but more than 15% NPLs, would see the investment wiped out. Note that we currently see even 5% NPLs as an outlier.

Near-term sentiment driven by market volumes and level but also an opportunity: Sentiment towards CEL is driven by market volumes and market levels. Our China strategist, Michael Kurtz expects both to suffer a set back in the near term before recovering later in 2009. This will impact CES’ near-term peer valuations and earnings outlook. However, it also provides CEL with an opportunity to invest; CSOF2 and the acquired Lehman Brother’s property team are doing just that, with possibly US$200–250m invested in the next 12 months.

Earnings revision
We have lowered earnings estimates in 2008 to reflect lower investment realisations and some asset impairment.

Price catalyst
12-month price target: HK$12.00 based on a Sum of Parts methodology.

Catalyst: Market recovery, 3Q09 IPO of CES and CEB

Action and recommendation
The expected dip in market activity and sentiment will provide an excellent opportunity to invest in CEL, as both business and rating are expected to benefit from any recovery. Were the market just to revalue China Everbright in line with peers currently, the stock would be worth at least HK$14/sh. We reiterate our OP recommendation
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Re: China Everbright Limited 0165

Postby eauyong » Thu May 28, 2009 8:39 am

Everbright seen as first to list after ban is lifted

Daniel Ren in Shanghai
Updated on May 28, 2009
Everbright Securities is tipped to become the first firm to launch an initial public offering on the mainland after a nine-month ban was lifted.

The Shanghai-based company passed through the regulator's pre-listing procedure in June last year, but the 11.5 billion yuan (HK$13.06 billion) offering was put off as Beijing halted new share listings to boost the weak market.

Everbright would be the first to float A shares since the China Securities Regulatory Commission announced last week that it was lifting the ban, the Securities Daily reported yesterday.

An Everbright spokesman would not confirm the report, saying the brokerage was awaiting the CSRC's final decision.

More than 30 companies have received the green light to launch initial share offers but have yet to kick off the fund-raising process since Beijing unofficially suspended new share sales in September last year.

Companies that receive listing approval still have to wait for the CSRC to give the go-ahead to start price consultation.

Everbright said last year it would raise as much as 11.5 billion yuan by offering 520 million shares.

It will become only the second mainland brokerage to secure a listing through an initial share offer after Beijing-based Citic Securities, the mainland's largest brokerage. The other eight publicly traded securities firms all obtained back-door listings.

The Everbright spokesman declined to say if the company would scale down its share sale size following a drop in profits last year.

"It will be decided after the CSRC gives new directions," she said.

The brokerage reported a net profit of 1.21 billion yuan, or 42 fen a share, last year.

Since mainland initial share sales are normally priced at 20 to 25 times earnings, Everbright could offer shares at about 10 yuan each, less than half of the price at which it expected to sell last year.

"The share sale is a large one that could weigh down the market, but we don't think Everbright will cut the offering price since there are signs that the market has turned around," said Essence Securities analyst Liu Jun.

China Merchants Securities also received approval to launch a listing last year. It expected to net no less than 5 billion yuan from the offering.

The CSRC said flotations would resume after it finalised a new rule. It is seeking public opinion on the rule until June 5.

Copyright © 2009 South China Morning Post Publishers Ltd. All right reserved
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Re: China Everbright Limited 0165

Postby winston » Fri Dec 18, 2009 10:16 am

Not vested. From Phillips:-


Risks

The volatility of stock markets are larger then expectation, which affects the investment gains of CELï¼›

The process of the IPO of CEB is delayed.


Valuation

Due to the strong rebound of China economy and stock market, and sharp increase of the profits in both CES and CEB in 2009, especially after the listing of CES, the profits of CEL will increase significantly this year.

W estimate net profits of CEL will increase largely by around 88% yoy to HK$1.909 billion in 2009.

In addition, we have strong confidence of the Group's performance after CEB is listed in A-shares market successfully in future.

According to sub-part valuation method, we respectively give the P/B for CES, CEB and the Group's Hong Kong operations at 3x, 2x and 1.5x, estimate CEL's 12-month target price at HK$ 30.17, around 76% higher than its current price, equivalent to 25.2x P/E and 1.7x P/B in 2010 separately.

We upgrade CEL 's rating to “Buy”.
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Re: China Everbright Limited 0165

Postby winston » Fri Dec 18, 2009 10:22 am

DJ MARKET TALK: Citi Trims China Everbright Ltd Target To HK$25
October 12, 2009

1540 [Dow Jones] STOCK CALL: Citigroup trims China Everbright Ltd.'s (0165.HK) SOTP-based target price to HK$25.00 from HK$25.90 to better reflect current multiples in A-share comparables, but keeps at Buy.

"We continue to like CEL as it is the only financial holding company listed in HK through which investors can participate in the Chinese equity market activities through CEL's 33% investment in Everbright Securities, one of the top 2nd-tier brokerage houses in China."

Says, via recent IPOs, EBS has potential to grow, will remain key and expanding income contributor to CEL. Adds, listing of EBS, China Everbright Bank could result in more stable dividend income stream, stronger cash income.

Raises 2009 earnings forecast by about 147%, mainly on deemed disposal gain on EBS post-IPO, but 2010-11 earnings forecasts tilted downward due to lower EBS contributions as post-IPO equity stake to fall to 33% vs 39%.

Source: Dow Jones Newswire
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Re: China Everbright Limited 0165

Postby winston » Mon Jan 11, 2010 11:43 am

Not vested.

DJ MARKET TALK:China Everbright +8.4%;Citi Ups Target To HK$28.30

1129 [Dow Jones] China Everbright (0165.HK) +8.4% at HK$22.05, with near-term upside likely capped by intraday peak of HK$22.45; stock boosted by news of China's approval of stock index futures, short-selling, margin financing.

While market has been speculating on such approval in recent weeks, Citigroup says abrupt announcement "came to us as a positive surprise." House keeps Buy rating but raises target price to HK$28.30 from HK$25.00 to reflect recent share price rally of Everbright Securities (601788.SH), expects new businesses, when introduced, "will further support growth and earnings momentum in the long run."

Volume spikes to HK$422.9 million, making it ninth most heavily traded in HK.

Source: Dow Jones Newswire
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Re: China Everbright Limited 0165

Postby winston » Tue Jan 12, 2010 6:25 am

Not vested. From Dr. Check:-

China Everbright (0165) holds 33 percent of China Everbright Securities, the second biggest broker in the mainland.

It also has a 6.23 percent stake in Everbright Bank, which may list in Hong Kong this year.

Citigroup recently revised its target for China Everbright up to HK$28.30. It closed 10.3 percent higher at HK$22.45. Dr Check recommends buying near HK$22.
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Re: China Everbright Limited 0165

Postby winston » Tue Oct 19, 2010 12:27 pm

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DJ MARKET TALK: China Everbright Faces Challenges On New Funds-GS
Oct 8, 2010

1249 [Dow Jones] STOCK CALL: Goldman Sachs says proceeds of China Everbright's (0165.HK) placement this week of 129 million shares to raise HK$2.3 billion could be used as seed capital for new private equity and venture capital funds and/or to support acquisitions of asset management firms.

But adds, may be challenge for firm to deploy new funds effectively near-term if acquisition can't be secured; estimates 2011-12 EPS diluted by about 4.0%, 4.8% if newly raised capital can't be deployed effectively before 2012.

House views new capital would be best deployed toward fee-generating asset management businesses, which typically command higher valuation, via either organic build up or quality acquisitions.

Keeps at Neutral on potential further commission rate pressure, valuation at 17.3X 2011 P/E, in line with A-share brokerage average; keeps target at HK$17.90.

Source: Dow jones Newswire
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Re: China Everbright Limited 0165

Postby winston » Tue Oct 19, 2010 12:31 pm

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DJ MARKET TALK: China Everbright Off 4% But Above Placement Price
Oct 6, 2010

1506 [Dow Jones] China Everbright (0165.HK) down 4.0% at HK$18.60 but stays firmly above placement price of HK$18.00, level at which company sold 129 million shares to raise net proceeds of HK$2.28 billion.

BOCI says impact on valuation limited, but key question is what company will do with cash raised; says excess cash suggests "a sizeable transaction may be in the pipeline," asset injections at substantial discount by holding company or acquisition of severely undervalued assets key risks to house's Hold call on stock, with target price being trimmed to HK$18 from HK$19 post-share placement.

Source: Dow Jones Newswire
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Re: China Everbright Limited 0165

Postby winston » Tue Oct 19, 2010 12:32 pm

DJ MARKET TALK: Everbright Off 3.8%; NAV Dilution Not Huge -KE
Oct 6, 2010

1132 [Dow Jones] China Everbright (0165.HK) off 3.8% at HK$18.64 on news it places 129 million shares at HK$18.00 each, which at bottom of HK$18.00-HK$18.70 indicative range, according to term sheet seen by Dow Jones Newswires.

Kim Eng says dilution to NAV "not huge"; according to SOTP valuations, new fair value of China Everbright will be HK$16.44 vs HK$16.60 before placement.

House currently has Hold call on stock, advises investors take profit on shares' recent strength.


Source: Dow Jones Newswire
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Re: China Everbright Limited 0165

Postby winston » Tue Oct 19, 2010 12:34 pm

DJ China Everbright Ltd: Raising US$299 Mln In Share Placement
Oct 6, 2010

HONG KONG (Dow Jones)--China Everbright Ltd. (0165.HK) said Wednesday it is raising US$299 million from a placement of new shares to develop its direct asset investment and management business.

The Hong Kong-listed company said it is selling 129.0 million shares, representing around 8.1% of its issued share capital, at HK$18.00 each, a discount of 7.1% to the stock's closing price Tuesday of HK$19.38.

The share placement was priced at the lower end of an indicative price range of HK$18.0 to HK$18.7, according to a term sheet seen by Dow Jones Newswires on Tuesday.

The company said it expects the net proceeds from the share sale to total HK$2.28 billion.

China Everbright said China International Capital Corp. is the sole bookrunner of the deal.

China Everbright is a financial services firm operating in both Hong Kong and mainland China. It is part of China Everbright Group.

Source: Jeffrey Ng and Joanne Chiu, Dow Jones Newswires
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