Company Research For ratings definitions and other important disclosures, refer to the Information Disclosures at the end of this report. 1 20 February 2014 DCH Holdings（1828.HK） NEUTRAL | Target price: HK$ 5.4 Remain cautious Auto DCH delivered better than expected results thanks to surge in other income. Segment margins in auto business were still weak and after-sales service growth slowed. Gearing ratio escalated to 56% due to weak operating cashflow and large capex for new store openings. We are still cautious on DCH’s growth prospects given its high exposure to Japanese brands.  Better than expected results thanks to surge in other income. DCH generated HK$ 42.2 bn revenue in 2013, down 12% compared to 2012. Net profit dropped by 13.8% to HK$ 901 mn, better than our expectation mainly due to a 24% surge in other income to HK$ 821 mn. Management attributed that to increase in commissions from auto unit sales and auto financing. We expect that growth in other income will stabilize in the coming years given the high base.  Weakening auto business margin and slowing after-sales service growth in mainland. In 2013, gross margin and operating margin decreased by 0.2 ppt and 0.3 ppt to 11.5% and 3.4% respectively. Segment profit from mainland auto business plunged 40% to HK$ 594 mn due to a 0.7 ppt decline in segment margin to 2.4%. Same store growth in after-sales service only increased by 7.1%, much slower than the 21.1% growth in 2012. This may be a result of intensifying competition in after-sales services among 4S shops.  A high net gearing of 56% with weak operating cashflow. 2013 year-end net gearing ratio shoot up 20 ppts to 56% from 36% in 2012 because of negative operating cashflow and capex. Operating cash flow was negative HK$ 512 mn, mainly due to increasing inventory and receivables. DCH ramped up new store openings in 2H13, raising the total number of mainland stores to 75 at the end of FY13. The company targets to add 10 to 15 dealerships in 2014. While the company maintained a relatively high dividend payout of 39% in FY13, full year dividend was cut to HK$0.19 from HK$0.21. With a high net gearing, we believe the company may be under slight funding pressure in 2014.  Revise up forecasts but remain Neutral. While the 2013 results were better than our expectation, we are still cautious on its growth prospects given that DCH has large exposures to Japanese brands. Assuming slight recovery in margins, we revise up our net profit forecast in 2014E/2015E by 12%/10% to HK$989mn and HK$1,175mn. Trading at 9x earnings and less than 10% earnings growth in 2014, we believe it’s fairly valued. Maintain Neutral and slightly adjusted our TP to HK$ 5.4 from HK$ 6.1, which represents 10x 2014PE. Financial Summary Year to Dec 2012A 2013A 2014E 2015E 2016E Revenue (HKD m) 48,014 42,261 46,378 50,690 55,565 Operating Profit (HKD m) 1,775 1,451 1,623 1,825 2,056 Reported Profit (HKD m) 1,045 901 989 1,175 1,340 Underlying EPS (HKD) 0.57 0.49 0.54 0.64 0.73 DPS (HKD) 0.21 0.19 0.22 0.26 0.29 BVPS (HKD) 4.89 5.12 5.46 5.87 6.33 P/E (x) 8.79 10.27 9.35 7.87 6.90 Dividend Yield (%) 4.09% 3.84% 4.28% 5.08% 5.80% P/B (x) 1.03 0.99 0.92 0.86 0.80 Source: Guosen Securities (HK) Analyst John Luo SFC CE No.: AVT 518 00852-2899 8300 John.luo@guosen.com.hk Performance Source: Bloomberg Key Data Price(HK$) 5.05 Shares Outstanding(m)* 1,832 Market Cap. (HK$ m)* 9,252 Free float (%) 29.6% Average Daily Turnover HK$18.5m 52 Week Range 9.18 / 4.27 Controlling Shareholder CITIC Pacific Limited (55.68%) BVPS (HK$) 5.12 Debt ratio (%) 56.7 024681005,00010,00015,00020,00025,00030,000201302201305201308201311HSIDCH Holdings 公司报告 国信证券（香港） 研究报告仅代表分析员个人观点，请务必阅读正文之后的免责声明。 2014年2月20日 大昌行集团（1828.HK） 中性 | 目标价: HK$ 5.4 保持谨慎 汽车行业 虽然大昌行2013年的业绩好于预期，但是这主要归功于其他收入的增长。2H13的汽车业务分部溢利率依然疲弱，售后业务增长也有所放缓。净负债率在疲弱的经营现金流以及资本开支扩大的情况下攀升至56%。我们依然对大昌行保持谨慎，因为公司的销售结构中日系品牌占比始终较高。  2013年净利润好于预期，主要由于其他收入大幅增加。大昌行2013年的利润达到422亿港元，比2012年下降12%。净利润下降13.8%至9.0港元，好于我们的预期。主要的原因是公司的其他业务收入大幅增长24%至8.2亿港元。其他收入占总收入的比重达到1.9%，是七年新高。管理层将其归功于汽车销量增长以及汽车金融业务的扩张，我们预期其他收入未来的增长可能会在高基数下放缓。  内地汽车业务利润率下滑，售后业务增长也在放缓。2013年，大昌行的毛利率以及经营利润率分别较2012年下降0.2和0.3个百分点至11.5%和3.4%。内地汽车业务的分布利润下跌0.7个百分点到2.4%，拖累分部业绩下降40%至5.94亿港元。售后业务收入同店增长仅为7.1%，较2012年21.1%的增速大幅放缓。这有可能是4S店之间售后业务竞争更加激烈导致的。  净负债率提升至56%。公司2013年年末的净负债率从2012年的36%大幅上升到56%，因为年内较强的经营现金流需求以及资本开支需求。经营现金流为-5.12亿港元，主要因为库存和应收账款大幅增加。公司在2H13重新加快新开门店步伐，年底内地门店总数达到75家，并且公司在2014年目标新增10至15家新门店。虽然公司2013年的派息率维持在39%的较高水平，每股派息却从2012年的0.21港元削减至0.19港元。在较高负债率的背景下，我们认为2014年公司可能面临轻微的资金压力。  提升盈利预期，然而维持中性。尽管大昌行2013年的净利润好于我们的预期，我们依然对公司的增长前景保持谨慎，原因是公司的销量结构中日系品牌占主导。在提升了利润率的假设后，我们将公司2014/2015年的盈利预期分别提高12%和10%至9.89亿港元和11.75亿港元。公司目前的估值相当于2014年9倍PE，而2014年预计利润仅有单位数增长，我们认为目前股价合理。维持中性评级，目标价从6.1港元下调至5.4港元，相当于2014年10倍PE。 盈利预测 截至31/12 2012A 2013A 2014E 2015E 2016E 营业额(港币百万) 48