Sundart Holdings’ （01568 HK） FY16 revenue decreased 19.8% YoY toHKD3,313 million, whereas net profit increased 7.5% YoY to HKD410million. Results were below expectation. The increase in net profit wasmainly due to an increase in gross margin and no listing expense in FY16. Asat 31 December, 2016, total contract sum and value of remaining worksamounted to HKD4,442.2 million and HKD3,099.0 million, respectively.
　　Fitting-out works revenue dropped 21% to HKD2,777 million in 2016 and therevenue from the IDM segment increased 89.7% to HKD387 million. The IDMsegment recorded significant improvement mainly due to the new GRGproduction line, and revenue increased from HKD33 million in 2015 toHKD112 million in 2016. In addition, the Company announced thereacquisition of 100% Beijing Sundart. Although the trade wasn’t particularly abargain compared with the previous disposal, we think that it is likely to driveoverall profit growth of the Company in 2017-2019. Overall, we think thefundamentals of the Company remains solid.
　　Our EPS estimates for FY17-FY19 are HKD0.241, HKD0.279 and HKD0.292.We expect a strong recovery in fitting-out business in the coming year; also,the addition of GRG business has helped the IDM segment become a newprofit driver. Re-acquisition of Beijing Sundart will show significantcontribution in 2018. We slightly revise the TP to HKD4.90, representing20.3x/17.6x/16.8x FY17/FY18/FY19 PER. Maintain “Accumulate”。