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To Summerize

- The Ministry of Science and Technology Government set goal to install total 3m LED lamps nationwide by 2012.

- Contractor-government-bank model allows local governments pay LED projects by using saved electricity bills later on, which may largely accelerate their accepting and adopting LED technology.

- Synergy is emerging between TCI (PCB know-how, manufacturing facilities and listing status) and OOS (LED technology and associated experience).

- The JV has secured contracts for 55,000 street lamps, 40,000 of which will be delivered in 2010.

- The JV can possibly earn RMB14.6m and RMB22.7m, respectively, in FY12/10F and FY12/11F, translating into HK$10.2m and HK$15.9m net profit contribution to TCI.

- An undemanding 15.0x FY12/10F P/E valuation gives the JV a market value of HK$340.5m. HK$238.3m belongs to the listco, versus its HK$170.4m increase in market capitalization since announcement of the JV agreement.

TC Interconnect:Setting up a JV to tap into high-voltage LED lighting market

to summarize…

- NOE is the biggest LPG importer and exporter in China.

- NOE is growing from market consolidation benefiting from its efficient operation Chain and management

- Gross profit increased 105.3% YoY due to the lower international LPG price for 1H FY12/09A.

- Leveraging the facility in Zhuhai to develop the higher margin LPG business in HK and Macau. And it is expected to bring significant profit contribution. 

- Expanding Zhuhai Terminal to have throughput capability of 1.6m tons a year, which is expected to complete at the end of 2010.

- The capex for 2010 would be around HK$157.0m, which could be funded by NOE’s own funds.

- NoE would still keep its electronic business as a profit contributor, however, it is possible to be disposed in the future.

- The counter is currently trading at 60.8% discount with 9.1x FY12/10F P/E based on our back of pad estimate.

NOE: growing from market consolidation

to summarize…

- Sustainable automobile market in 2010 after extension of favourable policies.

- 31.0% top-line growth in 1H backed by SGMW’s 49.2% increase in car sales and DHWL’s own 87.8% jump in specialized vehicle segment.

- Capacity shortage dragged down gross margin by 0.8pcp to 6.2% in 1H but improvement is expected following Qingdao plant’s scaling up.

- Impressing progress achieved in specialized vehicle division by exporting 100 electric cars to America and getting one model chosen by the government.

- Extra funding is needed to meet capital contribution commitment to the JV and, thereafter, will be used for capacity expansion.

- Earnings to hit RMB118.1m in FY12/10F and RMB183.8m in FY12/11F.

- Fair value estimated at HK$1,341.2m, containing 25.0% valuation discount to peers.

DH Wuling: get the show on the road