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BBMG:Preliminary FY15results beat,likely due to better property segment;Maintain Buy

时间:2016-01-19    来源:美林证券

BBMG reported preliminary FY15 results on 14 Jan. BBMG expects FY15 NPAT to drop by 10-22% YoY, implying NPAT of Rmb 1.9-2.2bn, beating our estimate by 0-12% and 0-16% aboveconsensus. This implies 4Q15 NPAT of Rmb 828mn-Rmb 1.1bn, +22-64% YoY, vs. Rmb 14mnin 3Q15. BBMG booked property GFA of 1.3mn sqm in FY15, which implies 726k sqm of GFAbooked in 4Q15, +25% YoY. BBMG also announced cement sales for FY15 of 40mnt, largely inline with guidance – we expect 4Q15E GP/t of Rmb 11/t and FY15E at Rmb 18/t. We maintainour Buy rating on BBMG, as we are positive on cement prices in the BTH area, given nearly nocapacity addition, more closures and a demand recovery from 2016. We expect 70mnt ofincremental cement demand in the next five years in the BTH region, or 8% p.a. growth startingfrom 2H16. We expect BBMG’s ASP to rebound by 8%/2% in 2016/17F, driving GP/t back toRMB40 in 2016 vs. the historic low of RMB18/t in 2015. We prefer BBMG’s H-share, which iscurrently trading at a 56% discount to A-share, or just a 7x 16E P/E or 0.5x PB.

Better 2016E property sales, accelerated land conversion

We expect BBMG’s 2015 presales to reach RMB13.8bn, in line with guidance in Oct 15,given it delayed a few projects into 2016 to take advantage of the Beijing ASP upcycle.We expect booked revenue of RMB17bn in 2015, up 10% YoY, and GP% of 31%; and ofRMB20bn in 2016, up 17% YoY. Two self-occupied commodity housing projects thatwere sold in 2014 will likely be booked in 2016. These should contribute at least Rmb10bn (500k sqm) with over 50% GP margin, resulting in FY16E margin of over 45%, vs.Rmb 17bn at 36% for 2015E. BBMG holds 6.9mn sqm of industrial land (75% in Beijing),of which 1.7mn sqm is highly likely to convert into commercial/residual use. We believethe SOE reform and BTH integration should accelerate this conversion.。

HK$1.4-HK$4.2 upside risk to our valuation if land converted

The H-shares trade at a 7x 16E P/E and 0.5x 16E PB, undemanding vs. the historical averageof 9.8x/1x. If valued at cost, we estimate the 1.7mn sqm of industrial land would be worthRMB12bn, or HK$2.9/share, and we factor HK$1.4 into our PO (50% discount its NPV). If allthe land is converted, the NPV would be RMB24bn, or HK$5.6/share. Thus, the potentialupside risk to our valuation could range between HK$1.4 and HK$4.2 by applying a 0-50%discount to NPV.