中船防务(600685)We expect re-rating as only A+H platform under C

浏览次数:收录时间:2020-09-17 19:56
【内容提要】中船防务(600685)We expect re-rating as only A+H platform under CSSC and CSIC

股票代码:600685股票名称:中船防务 行业:国防军工 相关概念:海工装备,高端装备,...报告类型:公司研究研报机构:中金公司研报作者:陈珺诚评级:增持  
We expect re-rating as only A+H platform under CSSC and CSIC

What's new Asset restructuring at China State Shipbuilding Corp. (CSSC) and in the wider shipbuilding industry affects COMEC. We update our view on the company in light of these developments. Comments COMEC to become listed platform for marine propulsion assets. According to a plan announced on May 10, COMEC plans to swap out its equity stake in Huangpu Wenchong and Guangzhou Shipyard International (GSI) (combined loss of Rmb10mn in 2017 and Rmb2.1bn in 2018). It plans to swap in a 100% stake in CSSC Marine Power and Hudong Heavy Machinery (HHM) and a controlling stake in CSPI and CMD (combined attributable net profit at Rmb150mn in 2017 and Rmb220mn in 2018). Following the deal, we expect COMEC to see significantly improved profitability. Restructuring between CSSC and CSIC to boost upside in COMEC as it would become only A+H platform in new shipbuilding group. CSSC and China Shipbuilding Industry Corporation (CSIC) announced a strategic restructuring on July 1. We estimate the pair’s combined total assets at Rmb805.2bn, with revenue at Rmb419.4bn, close to that of Aviation Industry Corporation of China (AVIC). Among China’s central SOEs in the aerospace and defense industry, AVIC has the highest asset securitization rate at over 66%, with 28 listed companies. Unlike AVIC, we note CSSC and CSIC lack a listed platform for their financial business. In 2018, the combined net profit of the pair’s financial and investment subsidiaries totaled Rmb2.87bn with net assets at Rmb33.57bn. Given that AVIC Capital (a comparable name) is trading at 15x 2018e P/E and 1.7x P/B, we estimate the financing business of CSSC and CSIC could be worth Rmb43–57bn. Following the strategic restructuring of CSSC and CSIC, COMEC would become the only listed A/H-share platform under the new group. We expect COMEC to play an important role in the new group. Valuation and recommendation Maintain earnings forecast unchanged. COMEC-A/H is trading at 2.3x and 0.9x 2019e P/B. Maintain OUTPERFORM and TP at Rmb21 (2.9x 2019e P/B with 29% upside) and HK$10 (1.2x P/B with 36% upside).




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