瑞信-中国-消费品行业-中国耐用消费品&服装行业分析-2019.1.8-54页.pdf

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.8 January 2019Asia Pacific/ChinaEquity ResearchHousehold Durables China Consumer Durables&Apparel Sector TERMINATION OF COVERAGEResearch AnalystsCredit Suisse Asia Eq.Res.852 2101 6000asia.researchcredit-Termination of coverageDue to the departure of the coverage analyst,we are terminating coverage of the following China Consumer Durables&Apparel Sector stocks:Midea Group Co Ltd(000333.SZ),Gree Electric Appliances Inc of Zhuhai(000651.SZ),Joyoung Co Ltd(002242.SZ),Hangzhou Robam Appliances Co Ltd(002508.SZ),Zhejiang Semir Garment Co Ltd(002563.SZ),Suofeiya Home Collection Co Ltd(002572.SZ),Li&Fung(0494.HK),Yue Yuen Industrial Holdings Ltd(0551.HK),Hengan International(1044.HK),Haier Electronics Group Co.,Ltd.(1169.HK),Xtep International(1368.HK),Stella International Holdings Ltd(1836.HK),Samsonite International S.A.(1910.HK),Anta Sports Products Limited(2020.HK),Shenzhou International(2313.HK),Li Ning(2331.HK),Vinda International Holdings Ltd(3331.HK),China Dongxiang Group Co Ltd(3818.HK),Heilan Home Co Ltd(600398.SS),Qingdao Haier Co.,Ltd.(600690.SS).Effective with the termination of coverage,our final ratings,target prices and estimates for the four aforementioned companies are no longer in effect.Please refer the individual company pages in this report.Please refer to the Disclosure Appendix for the valuation methodology and risks associated with our last rating and target price for the company.8 January 2019China Consumer Durables&Apparel Sector2Asia Pacific/ChinaFootwear Anta Sports Products Limited(2020.HK/2020 HK)RatingOUTPERFORMPrice(08-Jan-19,HK$)34.95Target price(HK$)50.00Upside/downside(%)43.1Mkt cap(HK$/US$mn)93,837/11,972Enterprise value(Rmb mn)72,510Number of shares(mn)2,685Free float(%)38.552-wk price range(HK$)49.00-30.30ADTO-6M(US$mn)31.6Target price is for 12 months.Research AnalystsCredit Suisse Asia Eq.Res.852 2101 6000asia.researchcredit-Termination of coverageDue to the departure of the coverage analyst,we are terminating coverage of Anta Sports Products Limited(2020.HK).Effective with this termination of coverage,our final rating(OUTPERFORM),target price(HK$50.00)and estimates for the company are no longer in effect.Please refer to the Disclosure Appendix for the valuation methodology and risks associated with our last rating and target price for the company.Share price performancePrice(LHS)Rebased Rel(RHS)Jan-17Jul-17Jan-18Jul-18Jan-19204060100150200The price relative chart measures performance against the MSCI CHINA F IDX which closed at 7,288.64 on 08/01/19.On 08/01/19 the spot exchange rate was HK$7.84/US$1Performance1M3M12MAbsolute(%)(3.7)12.2(3.0)Relative(%)0.215.322.0Financial and valuation metricsYear12/17A12/18E12/19E12/20ERevenue(Rmb mn)16,692.523,307.828,893.834,254.1EBITDA(Rmb mn)4,239.05,925.07,123.98,358.9EBIT(Rmb mn)3,988.75,564.96,669.37,819.8Net profit(Rmb mn)3,087.84,093.94,936.55,770.1EPS(CS adj.)(Rmb)1.191.551.872.19Chg.from prev.EPS(%)n.a.0.00.00.0Consensus EPS(Rmb)n.a.1.51.852.23EPS growth(%)24.330.920.616.9P/E(x)25.819.716.314.0Dividend yield(%)2.74.25.12.9EV/EBITDA(x)17.112.210.28.6P/B(x)5.895.44.914.45ROE(%)26.628.631.533.4Net debt/equity(%)(65.5)(61.0)(55.3)(53.1)Source:Company data,Thomson Reuters,Credit Suisse estimates8 January 2019China Consumer Durables&Apparel Sector3Anta Sports Products Limited (2020.HK/2020 HK)Price(08 Jan 2019):HK$34.95;Rating:OUTPERFORM;Target Price:HK$50.00;Analyst:Credit Suisse Asia Eq.Res.Income Statement(Rmb mn)12/17A12/18E12/19E12/20ESales revenue16,69223,30828,89434,254Cost of goods sold8,45111,35114,38417,204EBITDA4,2395,9257,1248,359EBIT3,9895,5656,6697,820Net interest expense/(inc.)16777Recurring PBT4,3115,7246,8237,967Profit after tax3,1594,1965,0495,894Reported net profit3,0884,0944,9365,770Net profit(Credit Suisse)3,0884,0944,9365,770Balance Sheet(Rmb mn)12/17A12/18E12/19E12/20ECash&cash equivalents9,5549,7209,71310,319Current receivables3,7334,4705,5416,569Inventories2,1551,9282,4432,922Other current assets0(0)0(0)Current assets15,44216,11817,69819,810Property,plant&equip.1,2031,2561,2641,238Investments0000Intangibles705705705705Other non-current assets1,7241,6611,5741,471Total assets19,07419,74021,24123,225Current liabilities4,4983,8333,7413,871Total liabilities4,7144,0493,9564,086Shareholders equity13,70614,93516,41618,147Minority interests654756869993Total liabilities&equity19,07419,74021,24123,225Cash Flow(Rmb mn)12/17A12/18E12/19E12/20EEBIT3,9895,5656,6697,820Net interest0000Tax paid(1,013)(1,528)(1,774)(2,073)Working capital(381)(694)(573)(565)Other cash&non-cash items586526616693Operating cash flow3,1813,8704,9385,876Capex(547)(350)(376)(411)Free cash flow to the firm2,6353,5204,5635,465Investing cash flow(1,579)(350)(376)(411)Equity raised0000Dividends paid(2,912)(3,347)(4,562)(4,852)Financing cash flow(3,368)(3,347)(4,562)(4,852)Total cash flow(1,765)1731613Adjustments(463)000Net change in cash(2,228)1731613Per share12/17A12/18E12/19E12/20EShares(wtd avg.)(mn)2,6052,6392,6392,639EPS(Credit Suisse)(Rmb)1.191.551.872.19DPS(Rmb)0.821.291.550.89Operating CFPS(Rmb)1.221.471.872.23Earnings12/17A12/18E12/19E12/20EGrowth(%)Sales revenue25.139.624.018.6EBIT24.539.519.817.3EPS24.330.920.616.9Margins(%)EBITDA25.425.424.724.4EBIT23.923.923.122.8Valuation(x)12/17A12/18E12/19E12/20EP/E25.819.716.314.0P/B5.895.404.914.45Dividend yield(%)2.74.25.12.9EV/sales4.43.12.52.1EV/EBITDA17.112.210.28.6EV/EBIT18.213.010.99.2ROE analysis(%)12/17A12/18E12/19E12/20EROE26.628.631.533.4ROIC70.373.771.369.3Credit ratios12/17A12/18E12/19E12/20ENet debt/equity(%)(65.5)(61.0)(55.3)(53.1)Net debt/EBITDA(x)(2.22)(1.62)(1.34)(1.22)Company BackgroundAnta engages in the design,manufacturing and marketing of its self-owned mass market ANTA brand sporting goods.It also owns and manages 85%of Fila PRC Trademarks and the entire equity interest of Fila Marketing(HK and Macau).Blue/Grey Sky ScenarioOur Blue Sky Scenario(HK$)52.00Our Blue Sky scenario implies earnings are 10%above our estimates due to better-than-expected sportswear market growth.Our Grey Sky Scenario(HK$)38.00Our Grey Sky scenario implies earnings are 10%below our estimates due to worse-than-expected sportswear market growth.Share price performancePrice(LHS)Rebased Rel(RHS)Jan-17Jul-17Jan-18Jul-18Jan-1920304050100125150175The price relative chart measures performance against the MSCI CHINA F IDX which closed at 7,288.64 on 08-Jan-2019On 08-Jan-2019 the spot exchange rate was HK$7.84/US$1Source:Company data,Thomson Reuters,Credit Suisse estimates8 January 2019China Consumer Durables&Apparel Sector4Asia Pacific/ChinaLeisure Products China Dongxiang Group Co Ltd(3818.HK/3818 HK)RatingOUTPERFORMPrice(08-Jan-19,HK$)1.17Target price(HK$)1.57Upside/downside(%)33.9Mkt cap(HK$/US$mn)6,887/878.60Enterprise value(Rmb mn)4,274Number of shares(mn)5,886Free float(%)54.852-wk price range(HK$)1.55-1.17ADTO-6M(US$mn)0.6Target price is for 12 months.Research AnalystsCredit Suisse Asia Eq.Res.852 2101 6000asia.researchcredit-Termination of coverageDue to the departure of the coverage analyst,we are terminating coverage of China Dongxiang Group Co Ltd(3818.HK).Effective with this termination of coverage,our final rating(OUTPERFORM),target price(HK$1.57)and estimates for the company are no longer in effect.Please refer to the Disclosure Appendix for the valuation methodology and risks associated with our last rating and target price for the company.Share price performancePrice(LHS)Rebased Rel(RHS)Jan-17Jul-17Jan-18Jul-18Jan-1911.52100150200The price relative chart measures performance against the MSCI CHINA F IDX which closed at 7,288.64 on 08/01/19.On 08/01/19 the spot exchange rate was HK$7.84/US$1Performance1M3M12MAbsolute(%)(5.6)(6.4)(16.6)Relative(%)(1.7)(3.3)8.4Financial and valuation metricsYear12/17A12/18E12/19E12/20ERevenue(Rmb mn)1,352.61,537.21,717.41,869.9EBITDA(Rmb mn)1,049.9876.8838.3940.9EBIT(Rmb mn)1,026.8853.3814.1916.0Net profit(Rmb mn)804.6718.6686.1770.7EPS(CS adj.)(Rmb)0.150.130.120.14Chg.from prev.EPS(%)n.a.0.00.00.0Consensus EPS(Rmb)n.a.0.130.130.13EPS growth(%)(8.1)(10.7)(4.5)12.3P/E(x)7.17.98.37.4Dividend yield(%)26.38.78.39.3EV/EBITDA(x)4.24.94.94.1P/B(x)0.590.580.570.55ROE(%)8.37.46.97.6Net debt/equity(%)(16.6)(17.8)(19.2)(20.8)Source:Company data,Thomson Reuters,Credit Suisse estimates8 January 2019China Consumer Durables&Apparel Sector5China Dongxiang Group Co Ltd (3818.HK/3818 HK)Price(08 Jan 2019):HK$1.17;Rating:OUTPERFORM;Target Price:HK$1.57;Analyst:Credit Suisse Asia Eq.Res.Income Statement(Rmb mn)12/17A12/18E12/19E12/20ESales revenue1,3531,5371,7171,870Cost of goods sold599681752812EBITDA1,050877838941EBIT1,027853814916Net interest expense/(inc.)79(30)(30)(30)Recurring PBT930866827929Profit after tax801719686771Reported net profit805719686771Net profit(Credit Suisse)805719686771Balance Sheet(Rmb mn)12/17A12/18E12/19E12/20ECash&cash equivalents1,8662,0212,1982,406Current receivables234257287313Inventories321243268289Other current assets2,1892,1892,1892,189Current assets4,6114,7094,9435,197Property,plant&equip.97114132147Investments0000Intangibles222211201191Other non-current assets5,9685,9685,9685,968Total assets10,89911,00311,24311,504Current liabilities862751786815Total liabilities1,3001,1891,2231,252Shareholders equity9,5999,81410,02010,251Minority interests13131313Total liabilities&equity10,91211,01711,25711,517Cash Flow(Rmb mn)12/17A12/18E12/19E12/20EEBIT1,027853814916Net interest0000Tax paid(120)(147)(141)(158)Working capital6562(39)(33)Other cash&non-cash items99913875978Operating cash flow1,0701,6811,5101,703Capex(41)(30)(31)(31)Free cash flow to the firm1,0291,6511,4791,672Investing cash flow1,155(30)(31)(31)Equity raised0000Dividends paid(1,509)(503)(480)(539)Financing cash flow(1,760)(503)(480)(539)Total cash flow4651,1489981,133Adjustments0000Net change in cash4651,1489981,133Per share12/17A12/18E12/19E12/20EShares(wtd avg.)(mn)5,5455,5455,5455,545EPS(Credit Suisse)(Rmb)0.150.130.120.14DPS(Rmb)0.270.090.080.10Operating CFPS(Rmb)0.190.300.270.31Earnings12/17A12/18E12/19E12/20EGrowth(%)Sales revenue(9.9)13.611.78.9EBIT1.1(16.9)(4.6)12.5EPS(8.1)(10.7)(4.5)12.3Margins(%)EBITDA77.657.048.850.3EBIT75.955.547.449.0Valuation(x)12/17A12/18E12/19E12/20EP/E7.17.98.37.4P/B0.590.580.570.55Dividend yield(%)26.38.78.39.3EV/sales3.32.82.42.1EV/EBITDA4.24.94.94.1EV/EBIT4.35.05.04.2ROE analysis(%)12/17A12/18E12/19E12/20EROE8.37.46.97.6ROIC11.78.88.39.4Credit ratios12/17A12/18E12/19E12/20ENet debt/equity(%)(16.6)(17.8)(19.2)(20.8)Net debt/EBITDA(x)(1.52)(1.99)(2.30)(2.27)Company BackgroundDongxiang is one of the top sportswear companies in China selling sportswear products in China and Japan.Its main brand is KAPPA.Blue/Grey Sky ScenarioOur Blue Sky Scenario(HK$)1.86Our blue sky scenario HKD1.9 implies a case where earnings is 15%above our estimates due to sucessful brand resturctureOur Grey Sky Scenario(HK$)1.27Our grey sky scenario HKD1.3 implies a case where sportswear segment further derates to 8x P/E and market gives more discount to Alibaba investments.Share price performancePrice(LHS)Rebased Rel(RHS)Jan-17Jul-17Jan-18Jul-18Jan-1911.21.41.61.82100120140160180200The price relative chart measures performance against the MSCI CHINA F IDX which closed at 7,288.64 on 08-Jan-2019On 08-Jan-2019 the spot exchange rate was HK$7.84/US$1Source:Company data,Thomson Reuters,Credit Suisse estimates8 January 2019China Consumer Durables&Apparel Sector6Asia Pacific/ChinaHousehold Durables Gree Electric Appliances Inc of Zhuhai(000651.SZ/000651 CH)RatingNEUTRALPrice(08-Jan-19,Rmb)36.34Target price(Rmb)42.00Upside/downside(%)15.6Mkt cap(Rmb/US$mn)218,612/31,885Enterprise value(Rmb mn)53,977Number of shares(mn)6,016Free float(%)72.852-wk price range(Rmb)57.40-35.68ADTO-6M(US$mn)256.9Target price is for 12 months.Research AnalystsCredit Suisse Asia Eq.Res.852 2101 6000asia.researchcredit-Termination of coverageDue to the departure of the coverage analyst,we are terminating coverage of Gree Electric Appliances Inc of Zhuhai(000651.SZ).Effective with this termination of coverage,our final rating(NEUTRAL),target price(Rmb42.00)and estimates for the company are no longer in effect.Please refer to the Disclosure Appendix for the valuation methodology and risks associated with our last rating and target price for the company.Share price performancePrice(LHS)Rebased Rel(RHS)Jan-17Jul-17Jan-18Jul-18Jan-1920406080130180The price relative chart measures performance against the Shanghai Shenzhen CSI300 index which closed at 3,054.30 on 08/01/19.On 08/01/19 the spot exchange rate was Rmb6.86/US$1Performance1M3M12MAbsolute(%)(0.4)(5.1)(24.0)Relative(%)3.61.82.6Financial and valuation metricsYear12/17A12/18E12/19ERevenue(Rmb mn)148,507194,435203,277EBITDA(Rmb mn)28,048.834,626.236,285.3EBIT(Rmb mn)26,015.832,078.333,621.5Net profit(Rmb mn)22,401.629,568.031,527.4EPS(CS adj.)(Rmb)3.724.925.24Chg.from prev.EPS(%)n.a.0.00.0Consensus EPS(Rmb)n.a.4.834.88EPS growth(%)45.332.06.6P/E(x)9.87.46.9Dividend yield(%)0.08.18.7EV/EBITDA(x)4.91.61.1P/B(x)3.332.32.01ROE(%)37.536.830.9Net debt/equity(%)(120.7)(170.2)(162.5)Source:Company data,Thomson Reuters,Credit Suisse estimates8 January 2019China Consumer Durables&Apparel Sector7Gree Electric Appliances Inc of Zhuhai (000651.SZ/000651 CH)Price(08 Jan 2019):Rmb36.34;Rating:NEUTRAL;Target Price:Rmb42.00;Analyst:Credit Suisse Asia Eq.Res.Income Statement(Rmb mn)12/17A12/18E12/19ESales revenue148,507194,435203,277Cost of goods sold99,759136,684142,407EBITDA28,04934,62636,285EBIT26,01632,07833,622Net interest expense/(inc.)(1,386)(2,533)(3,356)Recurring PBT26,61735,11737,444Profit after tax22,50929,70931,678Reported net profit22,40229,56831,527Net profit(Credit Suisse)22,40229,56831,527Balance Sheet(Rmb mn)12/17A12/18E12/19ECash&cash equivalents99,610182,713197,486Current receivables40,21349,90352,172Inventories16,56817,19717,917Other current assets15,14313,37013,458Current assets171,535263,183281,033Property,plant&equip.18,48820,00521,591Investments2,8022,8082,815Intangibles3,6043,8384,082Other non-current assets18,53919,28220,056Total assets214,968309,116329,578Current liabilities147,491211,909218,413Total liabilities148,133212,572219,097Shareholders equity65,59595,163108,950Minority interests1,2401,3811,532Total liabilities&equity214,968309,116329,578Cash Flow(Rmb mn)12/17A12/18E12/19EEBIT26,01632,07833,622Net interest(2,205)(3,186)(3,992)Tax paid(4,373)(5,734)(6,109)Working capital(5,188)16,779(840)Other cash&non-cash items(1,129)44,72610,815Operating cash flow13,12184,66233,495Capex(2,425)(4,2