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请阅读最后一页信息披露和重要声明 公 司 研 究 公 司 深 度 研 究 报 告 Market Data Date (HK$) 2014-4-1 5 Close 1.17 Issued Shares 1,000M Free Floats 250M Market Cap 11.5B Free Float Market Cap 2.88B Equity 5.64B Total Asset 6.35B Equity/share 0.564 Source：Wind Related Reports Industrial Securities (HK) Equity Research Department TMT Analyst：Henry He （SFC:AZK406） Tel :（852）3509 5999 Email:hehp@xyzq.com.hk Equity Research Report PR Industry Buy Target Price: HK$ 1.78 Current Price：HK$ 1.17 Expected upside： 52% Key Statistics Fiscal Years FY2013A FY2014E FY2015E FY2016E Revenue（HK$1,000） 343,539 484,538 562,461 617,184 Revenue Growth 4.5% 41.0% 16.1% 9.7% Net Income（HK$1,000） 123,638 170,471 198,514 216,299 Net Income Growth 2.7% 37.9% 16.4% 9.0% Gross Margin 53.4% 45.0% 45.1% 44.7% Profit Margin 36.0% 35.2% 35.3% 35.0% ROE 24.4% 29.3% 29.3% 27.9% EPS（basic） 0.141 0.170 0.199 0.216 EPS（diluted） 0.141 0.170 0.198 0.214 P/E 8.6 6.9 5.9 5.4 Dividend Yield 6.1% 8.7% 10.2% 11.1% Source: WSFG, Industrial Securities Investment Highlights  With the initial coverage, we recommend a Buy rating and 12 month target price HK$ 1.78：Wonderful Sky Financial Group (WSFG) is the only listed financial communication company in Hong Kong. With 18 years of experiences, the company provides Five-In-One professional service: integrating public relations, investor relations, international roadshow, financial printing, and corporate branding. At the current price HK$ 1.17, the expected P/E of WSFG for 2014/15/16 would be only 6.9/5.9/5.5, which is much lower than the large international PR firms with an average P/E of 16/14.3/13.2. We expect WSFG’s dividend yield to be 8.7%/10.2%/11.1%, and combined with the relative low price, the downside risk is limited. WSFG is still quite different with the large international PR firm with its size and service focus; therefore, we initiate a buy recommendation and expect the 2015 P/E ratio to be 9 times, target price of HK$ 1.78 with 52% upside potential.  Plenty potential in the PR industry in Hong Kong and China: In the past 3 years, the global PR industry growth at around 8% annually. The 5 largest companies entitle to 45% of the total market shares, but with slower growing speed. The fast growing companies keep merging and acquiring in the industry (such as, Blue Focus in China). The total PR market in China had grown to 30.3 billion in 2012 from 1.5 billion in 2000. However, the industry is quite segmented, and among the overall PR industry, there are only 20ish recognized financial PR companies in mainland china. On the other hand, there are 1660 Hong Kong listed companies with 56.3% are Chinese companies would need the service from the financial PR firms.  A Leading Financial PR company: Among the 10 largest IPO in Hong Kong 2013, 7 of them are clients of WSFG, and for the past few years WSFG is able to capture at least 20% of the IPO market shares. The company’s clients are categorize into IPO, non-IPO, and international roadshow clients; IPO and non-IPO clients combined contribute 90% of the total revenues. Currently, non-IPO clients are over 150, and is steadily growing at 20-30 per year, as over 90% of the IPO clients become long-term non-IPO clients. For 2014 fiscal year, IPO clients have grown to 32 from 16 comparing to 2013. Wonderful Sky Financial Group（1260.HK） The only Hong Kong Listed Financial PR Firm 请阅读最后一页信息披露和重要声明- 2 - 公司深度研究报告  Comparative Advantages Over Competitors: WSFG have completed various flagship IPO project (such as, Agricultural Bank of China, China Everbright Bank, CCCC, PICC, China Cinda Asset Management, China Galaxy Securities), consolidating its leading position in theIPO PR industry. At the same time, WSFG has established a good relationship with many investment banks as well as other company, such as Ipreo, to expand its client base. Comparing to the large international PR firms, such as Brunswick and Hill+Knowlton, WSFG has a deeper understanding of the Chinese companies and communication culture; on the other hand, comparing to the HK local PR firm, such as IPR and SPRG, WSFG has more cross market experience, able to manage resources in both A stock and H stock market and provides a one stop solution to the listed companies, especially when the interconnection between Shanghai and Hong Kong becomes realized in 6 months later.  The financial status is pleasing, with a steady growth in revenue and sustainable gross/profit margin going forward. Up to 2013 fiscal year end, the company’s revenue has an annual compounded growth rate of 25%, and expected revenue