1. No category

[Table_MainInfo]
Equity Research Report
9 Oct 2014
[Table_Author]
Research Analyst
[Table_Title]
Jiangnan 1366.HK
Dennis Chien
852 3983 0835
[email protected]
[Table_Target]
Target Price
(HKD)
Potential Upside
The Fast Growing Cable System Supplier
2.52
43.2%
Company Data
(8 Oct 2014 mkt close)
Ticker
1366HK
Share Price
(HK$)
Market Cap
(HK$ mn)
5,975
Outstanding Shares
(mn)
3,395
52wk Low
(HK$)
1.00
52wk High
P/E
(HK$)
(x)
2.33
7.13
P/B
(x)
1.75
EV/EBITDA
(x)
8.41
Div yld
(%)
3.33
ROA
(%)
8.91
ROE
(%)
27.24
Gearing
Auditor
(%)
177.58
DELOITTE
1.76
Major Shareholders
Power Heritage Group
[Table_Summary]
 Bringing Electricity from Northwest to Southeast Regions through
UHV Cables. The Chinese government is planned to construct 8 UHV
grids by 2017 in order to transmit electricity from northwest areas like
Inner Mongolia and Shanxi province, which own various types of
power resources, to southeast cities where facing high energy
consumptions. The purpose of using UHV overhead cables is to better
manage of electricity loss during the transmission process.

EHV Cable is an Essential Part of UHV Grid System. EHV cable is used
as distribution lines of electricity that is built underground within a
city area. It has the same characteristic with UHV cable where it could
reduce a significant amount of electricity loss. However a relatively
higher technology is needed to prevent damages in underground area,
hence an average GPM of 30% is reachable. Currently Jiangnan has the
ability to produce 500kV EHV cables.

Expanding EHV Cables Capacity. Jiangnan is one of the 12 EHV cables
authorized suppliers for SGCC and CSG. The Group is planned to
expand their annual production capacity of 500kV EHV cables from
1,000km to 1,900km by the end of 2014.

New Application for Rubber Cable. The acquisition of Zhongmei Cable,
whom is an expert in rubber cable segment, is a strategic move that
could enhance the product portfolio of Jiangnan. While rubber cables
are normally been used in marine engineering, ship buildings and
wind turbines, it can also be used in electric vehicles (EV) charging
systems. Jiangnan has been well-positioned for relevant products to
cater this fast growing market, we expect this could become a
potential growing driver for the company profitability once the
upstream players of EV charging system execute their expansion plan.

Jiangnan trades at a 7.1x FY14E, 83.0% discounted from the peers’
average forward P/E of 41.0x. We predict the valuation discount will
be narrowed given by its improving GP margin and profitability. We
initiate buy on Jiangnan with a target price of HK$2.52, implied a 75%
discount on peers’ FY14E PE.
49.98%
Chu Hui
4.93%
Chen Wei Ping
3.32%
Share Price Chart (HKD)
Financial Data
Revenue
RMB (mn)
Growth y-o-y
Net profit
EPS
RMB (mn)
FY2012
FY2013
4,930
5,356
6,477
8.6%
20.9%
376
504
18.6%
34.0%
0.131
0.164
-1.5%
25.2%
15.7
7.0
15.4
7.78
317
(%)
RMB (mn)
Growth y-o-y
Gross Margin
Net Margin
FY2011
(%)
Growth y-o-y
Sources: Bloomberg, CIS(HK)
INITIATION
0.133
(%)
(%)
(%)
14.9
6.4
Source: Bloomberg, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
1H2013 1H2014
2,151
3,343
55.4%
149
248
67.1%
0.486
0.806
65.8%
16.0
6.9
15.8
7.4
Equity Research Report
1. Introduction
Company Background
Jiangnan Group (1366.HK), based in Jiangsu province, is the third largest
high-technology manufacturer of wires and cables for power transmission,
distribution systems and electrical equipment in China. Principle products
include i) power cables; ii) wires & cables for electrical equipment; iii) rubber
cables; iv) bare wires. The end products are widely used in power industry and
general industries (oil & gas, construction, transportation, ship buildings).
To meet customers specific needs, the company has the ability to provide
over 10,000 customized products with various functionalities, including flame
retardant, oil resistance, acid resistance, alkali resistance, low smoke low
halogen, 150°C heat resistant, LSZH flame retardant, rodent and termite proof,
all weather and radiation resistance, etc. Thanks to the strong research &
development capabilities which made Jiangnan became more than just a
traditional manufacturer of wires and cables.
Products are marketed and sold under “五彩” and “三开” which has been
used in many reputable infrastructure projects, for example Beijing Capital
International Airport, 2010 Shanghai World Expo, 2008 Beijing Olympic Games’
stadiums. In addition, Jiangnan is one of the sizeable players who has extensive
sales channel in overseas markets where their products have been exported to
more than 50 countries, for example South Africa, Vietnam, Ethiopia, Singapore,
UK, etc.
Figure 1.1 : Milestones of Jiangnan
Year
1997
2000
2004
2005
2006
2007
2008
2009
2011
2012
2013
Key Achievements
Wuxi Jiangnan established to engage in the manufacturing and sales of wire and
cable products
Our brand recognized as Jiangsu Province Renowned Trademark
XLPE power cables accredited as China Famous Products
Our products accredited as National Free of Inspection Products
Nuclear power plant cables passed the inspection test
Accredited as State Key High Technology Enterprise
Entered into five-year master supply agreements with Eskom(a state-owned
company in South Africa)
Obtained National Laboratory Accreditation Certificate
Obtained combined certifications including ISO 9001, ISO 14001, OHSAS 18001
Endorsed as a High and New Technology Enterprise and entitled to a reduced PRC
income tax rate of 15%
Commenced commercial production of high and ultra-high voltage cables with
rated voltage of 220-500kv
Secured a key account in Singapore
Listed on the Main Board of the HKExInvested in Alurninum-alloy and double
capacity wire
Established production lines in South Africa
Completed our first acquisition - acquired Jiangsu Zhongmei Calle Group
Open up new markets in Vietnam and Ethiopia
Source: Company data, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
2/13
Equity Research Report
Can Power Cable become a High Profit Margin Product?
In short, it is possible depending on the application needs and first mover
advantage. Power cables are mainly made of copper, aluminum, rubber and
various types of plastic. While traditional power cables are relatively easier to
manufacture and the market is facing excess of supply, however some of the
higher-end products (such as Extra High Voltage (EHV) cables and rubber cables)
may achieve a GPM of 20-30% in PRC because 1) customization needed for
some special projects and applications; 2) higher tech-know-how needed; 3)
supply shortage where the aggregate production capacity cannot catch-up with
demand at a short period of time.
Figure 1.2 : Principle Products of Jiangnan
Power Cables
Bare Wires
Applications:
Power transmission and distribution
systems for power grids and
infrastructures such as railways, etc
Applications:
Power transmission in overhead
power lines
Avg GP margin: 17%
Avg GP margin of EHV: 30%
Avg GP margin: 11%
Avg GP margin of UHV: 13%
Wires & Cables for Electrical Equipment
Rubber Cables
Applications:
Power supply system for property
and equipment and appliances
Applications:
Power supply system for marine
oil drilling platform, ship building,
wind power system, electrical
vehicle re-charging and mining,
etc.
Avg GP margin: 10%
Avg GP margin: 23%
Source: Company, CIS(HK)
Figure 1.3 : Revenue Breakdown of Jiangnan
Figure 1.4 : Gross Profit Margin of Jiangnan’s Products
Source: Company data, CIS(HK)
Source: Company data, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
3/13
Equity Research Report
Production Capacity & Utilization Rate
Current Capacity
Jiangnan’s production base is located in Yixing, Jiangsu Province in China and
has employed 2,880 labours where 69% of them are involved in production.
Jiangnan has one of the largest production capacities for wires and cables in
China with annual capacity of approximately 100,000km for power cables,
833,500km for wires and cables for electrical equipment, 79,500km for bare
wires and 42,000km for rubber cables. It is estimated that the target production
capacity in 2014 will reach 130,000km for power cables, 1,125,000km for wires
and cables for electrical equipment, 138,900km for bare wires and 54,000km
for rubber cables.
Recent M&A
Jiangnan has entered into rubber cables segment through the acquisition of
Jiang Zhongmei Cable in 2013. Rubber cable refers to power cables that are
insulated by rubber instead of PVC or XLPE, meaning that the products can be
applied to more extreme environments. This type of power cables are usually
used in mining, wind turbines, marine and offshore oil platforms businesses.
Note that the acquisition of Jiang Zhongmei Cable was completed on July 2013,
which suggest the revenue from rubber cables segment only accounted for 5
months in FY2013.
Worth mentioning is that the company has successfully raised HK$607mn
cash from the capital market by issued 318mn of new shares at HK$1.95 on
19 Sept 2014. The company intends to establish new production facilities
and production lines in cable related business. We expect Jiangnan have
sufficient financial position to fund their expansion plan in short term.
Figure 1.5 : Annual Production Capacity & Utilization Rate
FY2009
36,000
Utilization rate (%)
79%
wires and cables for electrical eqpt (km) 535,000
Utilization rate (%)
54%
bare wires (km)
72,230
Utilization rate (%)
49%
rubber cables (km)
Utilization rate (%)
power cables (km)
FY2010
36,000
87%
535,000
77%
77,169
73%
-
FY2011
60,000
77%
540,000
85%
77,169
62%
-
FY2012
68,000
69%
580,000
95%
79,500
37%
-
FY2013
100,000
70%
833,500
85%
79,500
51%
42,000
70%
FY2014E
130,000
66%
1,125,000
69%
138,900
52%
54,000
80%
Source: Company data, CIS(HK) estimate
*Annual Production Capacities were calculated on the basis of 3 shifts per day of 8 hrs each and 300 working days
per year
*Bare wires volume is converted using scale of 1ton=1.54km.
Please read the analysts and company disclosure and the disclaimer in the last page
4/13
Equity Research Report
Diversified Customer Base
Jiangnan’s customer portfolios are well diversify with no single customer
contributing over 10% of the total sales due to the fact that power cables and
wires can be applied to nearly every industries. In general, the company’s sales
can be divided into four categories: energy sector, industrial sector,
infrastructure sector and property sector. As shown below, many of these sales
are investments from downstream players where government policy and
urbanization play a significant role.
Geographically over 94% of sales are generated from customers in PRC. It is
worth to mentions that Jiangnan is one of the few cables and wires
manufacturers who have overseas distribution channels as well as customers
that require international standard such as National Grid USA, Power Works
(Singapore), Eskom (Africa), EVN NPT (Vietnam).
Figure 1.6 : Customer Base of Jiangnan
Figure 1.7 : Distribution Channels
Source: Company data, CIS(HK)
Source: Company data, CIS(HK)
Figure 1.8 : Revenue Breakdown of Jiangnan
Figure 1.9 : Revenue Contributions
Source: Company data, CIS(HK)
Source: Company data, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
5/13
Equity Research Report
2. Industry Overview
Value Chain
The value chain for a power cable manufacturer begins with the upstream
metal (mainly copper and aluminum) and petroleum by-products (insulating
materials e.g. plastics) suppliers. Power cable manufacturer will usually procure
raw materials within a week once contract are signed with customers to avoid
price fluctuation of upstream supplies.
Power cable manufacturers belong to a capital extensive business model
where constant input in R&D, patents & certifications, production capacities are
required. In practice, power cable manufacturers usually have to deliver the
end-products to customers within 1-2 months.
Downstream players mainly are construction companies that require the
use of power cables, for example power plants, railway companies,
infrastructure constructors, property developers, electric vehicle companies, etc.
Larger projects from these players usually go through bidding process while the
remaining smaller projects go through direct sales team without any middle
agents. The pricing strategy of Jiangnan’s power cable products mainly uses
mark-up approach on top of raw materials costs. Hence, increases in raw
materials prices may have a positive impact on revenue and vice versa, while
the gross profit margin remain stable.
Figure 2.1 : Value Chain of Power Cable Industry
Source: Company data, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
6/13
Equity Research Report
Where is the future demand of Power Cables?
i) Large CAPEX invested in Power Grids across China
The rapid development of power grids leads to strong demand for power
cables and bare wires. According to the latest statistics provided by World
Bank, the annual electric power consumption per capita in China was
3,298kWh in 2011, far less than most of the developed countries. With the
support by the Chinese government, the two state-owned power grid
companies in China, namely State Grid Corporation of China (SGCC) and
China Southern Power Grid (CSG), have planned to accelerate their
investment on power grids to RMB997bn in 2015. Jiangnan, being one of
the few qualified suppliers to SGCC and CSG, could enjoy the booming
industry for the upcoming years.
Figure 2.2 : Electric power consumption per capita in 2011
Source: World Bank, CIS(HK)
Figure 2.3 : Capex of CSG & SGCC
Source: SGCC, CSG, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
7/13
Equity Research Report
ii) Long Distance Transmission of Renewable Energy
The National Air Pollution Prevention Action Plan indicated that
renewable energy can be one of the solutions to reduce air pollution and
maintain sustainable growth for the Chinese economy. Given by the fact
that many of the solar & wind projects are located in northwest areas of
China, a long distance transmission is required to deliver electricity to the
southeast areas where demand are the highest. The development of UHV
and EHY grid is prerequisite for such purpose to reduce electricity loss
significantly. Note that with recent M&A for the acquisition of rubber cable
segment, we believe Jiangnan has built up an extensive product portfolio in
special cables area which is required in the renewable energy industry. We
expect Jiangnan will be beneficial from the rapid Capex growth from solar
energy sector as well as turnaround of wind energy sector.
Figure 2.4 : Solar PV installed in China
Source: EPIA, CIS(HK)
Figure 2.5 : Wind Energy capacity installed in China
Source: China Wind Energy Association, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
8/13
Equity Research Report
iii) High-Speed Railway & Urban Transit Systems
Jiangnan currently is a qualify supplier of power cables and bare wires to
Shenzhen Metro, Shanghai Metro and China Railway Construction Group.
Currently the transportation infrastructure in China is still relatively at an
nd
immature stage against many of the western countries, especially 2 and 3
rd
tier cities, yet official local railway authorities in many provinces had already
announced/started their construction works to expand their metro lines or
high-speed railway across provinces.
Figure 2.6 : Investment amount on national railway infrastructure
Source: China Railway Yearbook, CIS(HK)
iv) Electric Vehicle Cables
While rubber cables are normally been used in marine engineering, ship
buildings and wind turbines, it can also be used in electric vehicles (EV)
charging systems, this include (1) rubber cables that transfer electricity from
power stations to charging stations, (2) rubber cables that transfer
electricity from the charging stations onto vehicles, and (3) rubber cables
that link the electrical battery with vehicle’s engine system. These segments
require a relatively higher technologies for example shorten the speed of
charging time, voltage differences, etc. In fact, SGCC now has built 400
charging stations and 20,000 charging piles, it is expected that the number
of charging stations will reach 20,000 by 2020.
Please read the analysts and company disclosure and the disclaimer in the last page
9/13
Equity Research Report
3. Investment Thesis
Bringing Electricity from Northwest to Southeast Regions through
UHV Cables
The Chinese government is planned to construct 8 UHV grids by 2017 in
order to transmit electricity from northwest areas like Inner Mongolia and Shanxi
province, which own various types of power resources, to southeast cities where
facing high energy consumptions. The purpose of using UHV overhead cables is to
better manage of electricity loss during the transmission process.
Figure 3.1 : Investment amount on national railway infrastructure
Projects
Inner Mongolia - Shandong
Shanxi Yu Heng - Shandong Weifang
Huainan - Nanjing
West Innfer Mongolia - Tianjin
Inner Mongolia - Shandong
Xi Meng - Jiangsu
Ningxia - Zhejiang
Shanxi - Jiangsu
Cables required
1000kV UHV AC lines
1000kV UHV AC lines
1000kV UHV AC lines
1000kV UHV AC lines
+/-800kV UHV DC lines
+/-800kV UHV DC lines
+/-800kV UHV DC lines
+/-800kV UHV DC lines
Source: National Energy Administration, CIS(HK)
EHV Cable is an Essential Part of UHV Grid System
EHV cable is used as distribution line of electricity that is built underground
within a city area. It has the same characteristic with UHV cable where it could
reduce a significant amount of electricity loss. However a relatively higher
technology is needed to prevent damages in underground areas, hence an average
GPM of 30% is reachable. Currently Jiangnan has the ability to produce 500kV EHV
cables.
Expanding EHV Cables Capacity
Jiangnan is one of the 12 EHV cables authorized suppliers for SGCC and CSG.
The Group is planned to expand their annual production capacity of 500kV EHV
cables from 1,000km to 1,900km by the end of 2014.
New Application for Rubber Cable
The acquisition of Zhongmei Cable in 2013 is a strategic move that could
enhance the product portfolio of Jiangnan. While rubber cables are normally been
used in marine engineering, ship buildings and wind turbines, it can also be used
in electric vehicles (EV) charging systems. Jiangnan has been well-positioned for
relevant products to cater this fast growing market, we expect this could become a
potential growing driver for the company profitability once the upstream players
of EV charging system execute their expansion plan.
Please read the analysts and company disclosure and the disclaimer in the last page
10/1
3
Equity Research Report
4. Valuation
Jiangnan currently is trading at 7.1x FY14E, which is 83.0 % discounted from
the average 40.1x of the peers (Far East Smarter Energy, Hanhe Cable, Zhongchao
Cable, Baosheng Science, Tongguang Electron, Tong-Da Cable). We predict the
valuation discount will be narrowed given by its improving GP margin and
profitability with excellent prospect on huge investment in national infrastructure
spending for the upcoming years. We initiate buy on Jiangnan with a target price
of HK$2.52, implied a 75% discount on peers’ FY14E PE.
Figure 3.1 : Peers’ Valuation Table
Name
Ticker
FAR EAST SMARTER ENERGY
QINGDAO HANHE CABLE
JIANGSU ZHONGCHAO CABLE
BAOSHENG SCIENCE AND TECH
JIANGSU TONGGUANG ELECTRON
HENAN TONG-DA CABLE
600869 CH
002498 CH
002471 CH
600973 CH
300265 CH
002560 CH
JIANGNAN GROUP
1366 HK
Name
Ticker
FAR EAST SMARTER ENERGY
QINGDAO HANHE CABLE
JIANGSU ZHONGCHAO CABLE
BAOSHENG SCIENCE AND TECH
JIANGSU TONGGUANG ELECTRON
HENAN TONG-DA CABLE
JIANGNAN GROUP
600869 CH
002498 CH
002471 CH
600973 CH
300265 CH
002560 CH
Simple Avg.
1366 HK
Mkt Cap
(HK$ mn)
13,238
12,749
7,378
5,095
4,726
3,558
Last Price
(Local Cur)
10.58
9.40
11.51
9.80
27.70
20.14
Simple Avg.
5,975
1.76
Revenue (RMB mn)
FY2011 FY2012 FY2013
10,968
9,851 11,538
3,757
3,724
4,790
1,812
1,874
4,439
6,930
8,560
9,796
646
795
765
964
973
966
4,179
4,296
5,382
4,930
5,356
6,477
ttm
33.9
22.1
34.9
40.0
89.4
40.9
43.5
7.1
P/E ratio
FY14E
27.1
n.a.
32.9
n.a.
60.2
n.a.
40.1
6.8
FY2011
16.1
16.4
16.2
6.7
28.6
12.9
16.1
14.9
GPM (%)
FY2012
16.6
14.8
15.7
8.4
28.0
13.2
16.1
15.7
FY15E
22.0
n.a.
29.5
n.a.
42.0
n.a.
31.2
5.6
P/B ratio
LF
3.5
2.5
3.7
2.0
4.9
2.0
3.1
1.7
FY2013
16.4
15.5
15.1
8.0
26.3
17.5
16.4
15.4
ROA
FY13
3.2
8.8
3.2
1.6
3.7
3.9
4.1
7.8
ROE
FY13
10.2
10.9
10.8
5.1
5.7
6.5
8.2
24.2
Total Debt
/Total Equity
FY13
3.1
1.3
3.3
3.6
1.5
1.4
2.4
3.3
Net Profit (RMB mn)
FY2011 FY2012 FY2013
329
(142)
303
286
258
434
80
54
165
18
101
99
44
64
42
54
56
59
135
65
184
317
376
504
FY2011
3.0
7.6
4.4
0.3
6.9
5.6
4.6
6.4
NPM (%)
FY2012
(1.4)
6.9
2.9
1.2
8.0
5.8
3.9
7.0
Source: Bloomberg, CIS(HK) estimate，as of 8 Oct 2014 market close
Risks
 China economy slump
 Failure to promote UHV cable, EHV cables and rubber cables
 Political risk in overseas markets expansion
Please read the analysts and company disclosure and the disclaimer in the last page
11/1
3
FY2013
2.6
9.1
3.7
1.0
5.5
6.2
4.7
7.8
Equity Research Report
Figure 3.2 : Financial Forecast Summary
Income Statement (RMB mn)
Total Revenue
power cables
wires and cables for electrical eqpt
bare wires
rubber cables
Cost of sales
Gross profit
SG&A expense
Finance cost
Other items
Profit before tax
Associates
Income tax expense
Minority interest
Others
Net Profit
Basic EPS (RMB cents)
No. of shares outstanding (mn)
Growth y-o-y
Revenue
Net Profit
Basic EPS
FY2012
5,356
3,701
1,327
328
0
(4,514)
842
(180)
(182)
(24)
456
(80)
0
376
0.13
2,874
FY2013
6,477
4,240
1,514
348
376
(5,477)
1,000
(243)
(195)
43
605
(102)
0
504
0.16
3,077
FY2014E
8,093
5,067
1,610
600
816
(6,802)
1,290
(295)
(259)
8
745
(131)
0
614
0.18
3,395
FY2015E
9,303
5,952
1,761
706
884
(7,778)
1,525
(343)
(279)
20
923
(159)
0
763
0.22
3,395
FY2016E
10,420
6,661
1,974
803
983
(8,725)
1,696
(383)
(302)
18
1,029
(177)
0
852
0.25
3,395
8.7%
18.5%
20.9%
33.9%
25.0%
24.9%
21.9%
10.5%
15.0%
24.3%
24.3%
12.0%
11.6%
11.6%
Balance Sheet (RMB mn)
PPE
Land use rights
Others
Total Non-Current Assets
Inventories
Trade and bills receivables
Pledged bank deposits
Cash at bank and on hand
Others
Total Current Assets
Trade payables
Bank borrowings
Tax payable
Others
Total Current Liabilities
Long-term bank borrowings
Deferred tax liabilities
Others
Total Non-Current Liabilities
Share capital
Total reserve
Total equity
FY2012
473
79
8
560
1,003
1,831
755
1,138
4,727
1,405
1,935
33
1
3,373
28
5
33
25
1,856
1,881
FY2013
633
208
56
896
1,842
2,328
808
1,683
6,661
2,223
2,922
54
4
5,203
64
4
68
25
2,261
2,286
FY2014E
643
209
56
908
2,183
3,082
1,163
1,986
8,413
2,548
3,418
57
6,023
65
6
72
25
3,202
3,227
FY2015E
664
205
57
926
2,420
3,290
1,390
2,925
10,025
2,908
4,097
74
(0)
7,079
66
7
73
25
3,775
3,800
FY2016E
681
201
57
939
2,743
3,676
1,413
3,714
11,547
3,212
4,664
96
0
7,972
68
8
76
25
4,413
4,438
Ratio Analysis
Profitability
GPM
OPM
PBT Margin
NPM
ROA
ROE
Liquidity & Solvency
Current Ratio
Quick Ratio
Cash Ratio
Total debt to equity
Net debt to equity
Performance
AR days
Inventories days
AP days
Cash conversion cycle
ROE
Net Profit Margin
Asset Turnover
Leverage Ratio
FY2012
FY2013
FY2014E
FY2015E
FY2016E
15.7%
11.9%
8.5%
7.0%
7.1%
20.0%
15.4%
12.4%
9.3%
7.8%
6.7%
22.0%
15.9%
12.4%
9.2%
7.6%
6.6%
19.0%
16.4%
12.9%
9.9%
8.2%
7.0%
20.1%
16.3%
12.8%
9.9%
8.2%
6.8%
19.2%
1.4
1.1
0.6
1.8
2%
1.3
0.9
0.5
2.3
19%
111
73
119
65
20.0%
7.0%
1.0
2.8
117
76
121
73
22.0%
7.8%
0.9
3.3
122
108
128
102
19.0%
7.6%
0.9
2.9
125
108
128
105
20.1%
8.2%
0.8
2.9
122
108
128
102
19.2%
8.2%
0.8
2.8
FY2012
456
(29)
182
35
25
(403)
(68)
198
(93)
0
(273)
29
(51)
(388)
(194)
(47)
533
0
391
Proceeds on issue of shares
Others
(33)
Net financing activities cash flows
650
Net (decrease) / increase in cash
460
Exchange gains/(losses)
(0)
Cash at beginning of year
678
Cash at end of year
1,138
FY2013
605
(21)
195
48
(30)
(20)
(78)
700
(22)
(387)
104
21
(20)
(305)
(201)
(88)
452
0
0
2
166
560
(16)
1,138
1,683
FY2014E
745
(35)
259
50
15
(815)
(100)
119
(60)
0
(355)
35
(0)
(380)
(259)
(153)
496
0
481
0
564
304
0
1,683
1,986
FY2015E
923
(45)
279
58
22
(123)
(122)
992
(80)
0
(227)
45
0
(263)
(279)
(191)
679
0
0
0
209
939
0
1,986
2,925
FY2016E
1,029
(46)
302
63
17
(435)
(135)
795
(80)
0
(23)
46
0
(57)
(302)
(213)
567
0
0
0
52
790
0
2,925
3,714
Cash Flow (RMB mn)
Profit before tax
Interest income
Finance cost
Depreciation of PPE
Others
Changes in working capital
Income tax paid
Net operating cash flows
Purchase of PPE
Acquisition of subsidaries
Bank deposits pledged - Net
Interest received
Others
Net investing cash flows
Interest paid
Dividends paid
Bank borrwings - Net
Repyament of bills payable
1.4
1.4
1.4
1.0
1.1
1.1
0.5
0.6
0.6
1.9
1.9
1.8
8% Net Cash Net Cash
Source: Company data, CIS(HK)
Please read the analysts and company disclosure and the disclaimer in the last page
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Equity Research Report
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