Shanghai Industrial Holdings Ltd. (SIHL)’s 1H16 results were slightlybetter than our expectations. Revenue reached HKD9,229 mn, up 29.3%yoy. Net profit reached HKD1,506 mn, up 14.9% yoy. EPS reachedHKD1.387, up 24.4% yoy. DPS reached HKD0.45, flat yoy.
Key points: 1) Property segment recovered. SIHL’s property segmentrecovered. SIUD (563 HK) and SID (600748 SH) contributed net profit ofHKD312mn and RMB206mn, up 173.8% and 144.6% yoy, respectively. 2)New business grew fast. SIHL's solar business capacity reached 510MW,up 59.4% yoy, and sold 283mn KWH of electricity, up 48.9% yoy. 3) Tollbusiness and consumer business remained stable.
Slightly raise Target Price to HKD25.00 and maintain investment ratingat ‘Accumulate’. SIE’s listing in HK will be the largest catalyst to theCompany's stock price. Our FY16-FY18 earnings estimates are HKD2.342,HKD2.448 and HKD2.612. Our TP of HKD25.00 represents 10.7x 2016 PEand 0.7x 2016 PB.