Shanghai Industrial Holdings Ltd. (SIHL)’s FY15 results were in line with our expectations. Revenue reached HKD19,694 mn, down 7.7% yoy. Net profit reached HKD2,770 mn, down 10.5% yoy. EPS reached HKD2.553, down 9.9% yoy. DPS reached HKD0.811, down 9.9% yoy, with dividend payout ratio of 31.8%, flat yoy.
Key points: 1) Sold Zhuhai Qi’ao project. SIUD sold Zhuhai Qi’ao project with consideration of RMB3.1bn, with net profit before tax of HKD1.2bn. In addition, SID completed placement of RMB3.9bn. 2) New energy business grew fast. SIHL has 47.5% share in its solar business, with 510MW capacity in operation. SIHL aims to expand its solar power generation capacity to 1GW. 3) Toll business growth might slow down as toll fees might decline.
Cut Target Price to HKD21.00 and investment rating at “Accumulate”. SIE’s listing in HK will be the largest catalyst of the Company's stock price. Our FY16-18 earnings estimates are HKD2.344, HKD2.456 and HKD2.633. Our TP of HKD21.00 represents 9.0x 2016 PER and 0.6x 2016 PBR.