Shanghai Industrial Holdings’ (SIHL) 2016 results were in line with ourexpectations. Revenue reached HKD22,132 mn, up 12.4% yoy. Net profitreached HKD2,903 mn, up 2.7% yoy. EPS reached HKD2.673, up 2.6% yoy.DPS reached HKD0.92, up 13.5% yoy.
Key points: 1) The property segment recovered. SIHL’s propertysegment recovered. SIUD (00563 HK) and SID (600748 SH) contributedHKD522 mn and RMB592 mn to net profit, up 0.9% and 13.9% yoy,respectively. In FY16, SID's contracted sales might reach around HKD8.0bn. 2) New energy business grew fast. SIHL's solar business capacityreached 560MW and sold 557 mn KWH of electricity, up 65% yoy. 3) Tollbusiness and consumer business remained stable. Toll businesscontributed revenue of HKD2,242 mn in 2016, up 0.9% yoy.
Maintain TP at HKD25.00 and maintain investment rating at“Accumulate”. SIE’s listing in HK will be the largest catalyst to theCompany's stock price. Our FY17-FY19 earnings estimates are HKD3.149,HKD2.959 and HKD3.284. Our TP of HKD25.00 represents 10.7x 2017 PEand 0.7x 2017 PB.