Wasion Group （Wasion） reported solid 1H 2019 results with turnover growth andmargin improvement. It also declared its first-ever interim dividend.
Wasion’s results indicate that the Company has identified growth opportunities, aspower grid investment in China was down about 20% YoY in 1H 2019.
We still believe that power grid investment is likely to accelerate in 2019, as State Gridhas been promoting the development of Ubiquitous Electric Power IoT.
Wasion’s latest order backlog is about RMB2bn, which will support the Company’stop- and bottom-line growth in 2019.
Management clarified that spin-off of Willfar Information Technology （Willfar） on theSSE STAR market is on track and provided the latest financial figures.
We maintain our BUY rating with a new target price of HK$5.05, based on 13x 2019PER. The cut in the target price is mainly due to recent weakness in the RMB.