Shimao may report 33.7pc earnings growth, plans acquisitions amid property slowdown

PUBLISHED : Monday, 21 April, 2008, 12:00am
UPDATED : Monday, 21 April, 2008, 12:00am

Shimao Property: Today

Shimao Property Holdings (813), owned by Hui Wing-mau, the mainland's third-richest entrepreneur, may report 33.7 per cent growth in last year's net profit to 3.05 billion yuan (HK$3.4 billion), according to Thomson Financial.

Most investors have been bearish on the mainland's property stocks since the central government launched a series of measures to restrict lending to the overheated real estate market. Before this, most property developers were relying on borrowings to acquire land.

Last month, Mr Hui said the company aimed to expand its land bank by 40 per cent this year to take advantage of reduced competition. 'Macroeconomic measures to cool the property sector have made it easier for us to bid for land,' he said.

Mark Lo, an analyst at BNP Paribas, said: 'Land bank acquisitions imply funding needs while less liquidity and more supply risks put pressure on developers' operations.' Mr Lo has lowered his recommendation on Shimao's bonds to 'reduce' from 'hold' because of its aggressive land acquisition strategy.

Goldman Sachs has a 'neutral' rating on Shimao's shares while recommending a 'buy' on Sino-Ocean Land Holdings and Agile Property Holdings, which have more cash on hand and higher net asset value.

Tingyi Holdings: Today

Net profit of Tingyi Holdings (322), the mainland's largest instant-noodle supplier, may have risen 34.2 per cent to US$200 million last year, despite rising raw material costs.

According to ACNielsen, the company has a 46 per cent market share in the mainland's instant-noodles market.

In the first half, the company's gross profit rose 34 per cent to US$491 million with gross margin maintained at 33 per cent on cost cutting.

Tai Fook Securities recommended a 'buy' on Tingyi shares.

China Cosco: Tomorrow

Profit at China Ocean Shipping (Group) Company or Cosco (1919), the world's sixth largest in terms of container fleet size and ninth largest in aggregate container volume, probably increased 802.95 per cent to 18.33 billion yuan, from 2.03 billion yuan a year ago, following an asset acquisition from its parent.

Sales may have risen 109 per cent to 106.5 billion yuan.

'The decrease in container-shipping rates on the mainland has slowed down recently due to a surge in demand,' said Castor Pang Wai-sun, a strategist at Sun Hung Kai Financial Group. 'This will help boost the company's profit this year and support its shares, which have been oversold in the past few months.'

Mr Pang recommended a 'buy' with a target price of HK$20.

Foxconn International: Tomorrow

Earnings of Foxconn International Holdings (2038), the world's biggest contract mobile-telephone maker, are likely to have surged 8.8 per cent to US$781 million last year on strong demand in the handset market.

Last month, Morgan Stanley upgraded Foxconn to 'overweight' from 'equal-weight'.

However, it cut the target price to HK$16.50 from HK$19 due to poor market sentiment.

Sinoma: Tomorrow

China National Materials or Sinoma (1893), the world's largest cement engineering service provider, may report a 50 per cent rise in last year's net earnings to 422 million yuan, according to Merrill Lynch, marking it a 'buy' with a target price of HK$7.90.

Look ahead: companies reporting this week


1st Quarter: Anhui Conch Cement

Final: Brilliance China Automotive Holdings, Celestial Asia Securities Holdings, China High-Speed Transmission Equipment Group, Global Sweeteners Holdings, Poly Investments Holdings, Shanghai Industrial Holdings, Shimao Property Holdings, Tingyi (Cayman Islands) Holdings, Tsingtao Brewery


1st Quarter: China Merchants Bank, China Shipping Development, Huaneng Power International, Jiangxi Copper

Final: Beijing Media, China Cosco Holdings, China National Materials, Foxconn International Holdings, Franshion Properties (China), Global Bio-chem Technology Group, Lingbao Gold, Qingling Motors, Xinao Gas Holdings


1st Quarter: Anhui Expressway

Final: China Water Industry Group, Chongqing Iron & Steel, Guangshen Railway, HKC (Holdings), New Smart Energy Group, Pegasus International Holdings, Sino Gas Group


1st Quarter: Beijing North Star, China Shenhua Energy, China Unicom

Final: Ajisen (China) Holdings, Apex Capital, China Railway Group, Haier Electronics Group, Hisense Kelon Electrical Holdings, Solargiga Energy Holdings, Suncorp Technologies