skyworth | 751 hkpg.jrj.com.cn/acc/res/hk_res/stock/2016/11/24/bfd...nov 24, 2016 · skyworth...
TRANSCRIPT
TECHNOLOGY | NOVEMBER 24, 2016
Analyst certifications and other important disclosures on last page 1
SKYWORTH | 751 HK China TV sales slow while overseas sales pick up
Soft 1H17 results
Internet revenue on track for HK$100m in 2017F
Maintain Outperform but cut target price to HK$6.42
Soft 1H17 results. Skyworth generated 1H17 revenue of HK$20.3b. This was
3.8% YoY higher than revenue earned in 1H16 and 1.1% below Bloomberg
consensus. China TV sales accounted for 46.2% of total revenue while
overseas TV sales accounted for 22.2%. As of 9M17, Skyworth’s
China/overseas TV sales volume had grown 17.2%/104.2% YoY to 5.2m/4.4m
units, achieving 47.5%/72.9% of the company’s FY17F sales target of
11m/6m. Gross margin remained flat YoY at 20.6%, in line with consensus. 4K
TVs made up 42% of TV sales volume out of the 5.2m units sold in China.
Blended China TV ASP for 1H17 was down 15.9% YoY to HK$2,123. Operating
margin contracted 0.3ppt to 6.5% due to higher marketing and
administrative expenses related to businesses acquired overseas.
Attributable profit was down 3.8% YoY to HK$836m. The company’s dividend
payout ratio remained a stable 33.8% after an interim dividend of 9.60 HK
cents per share was declared.
HK$100m internet revenue target for FY17F achievable. Skyworth booked
HK$50m in internet revenue in 1H17, of which 75% was from content revenue
sharing and 22% from advertising. We believe the company’s HK$100m
internet revenue target for 2017F is easily achievable and we expect
Skyworth to double that figure in 2018F. Skyworth’s DAU as of Oct 2016
reached 7m following the upgrade of its internet user data collection
system. We expect internet monetization to enter a rapid growth phase in
the next two-to-three years. We lower our DCF valuation for Skyworth’s
internet platform from HK$3.14 to HK$3.00 owing to the increased number of
shares.
Maintain Outperform but cut target price to HK$6.42. We cut our China TV
ASP assumption for 2017F/2018F by 8.6%/9.4% to reflect our cautious view on
the China TV market. However, we raise our overseas TV shipment
assumption for the same year by 80.0%/71.4% to reflect strong overseas
expansion. Our SOTP valuation assumes (1) DCF of Skyworth’s internet
revenue stream of HK$3.00, and (2) a HK$3.40 per share valuation for the TV
hardware segment. We cut our TV hardware target P/E multiple from 6x to
5x to reflect the more challenging China TV environment. Our new target
price of HK$6.42, down from HK$7.30, implies 30% potential upside and
translates to 9.3x/8.8x 2017F/2018F P/E.
Outperform (maintained)
Current price: Target:
HK$4.91 HK$6.42
(as at 23 Nov 2016) (down from HK$7.30)
Trading data
52-week range HK$3.81 – 6.45
Market capital (H-share)(m) HK$14,462/US$1,899
Shares outstanding (m) 2,994
3M average daily T/O (m share) 9
3M average daily T/O (US$ m) 6
Expected 12-month return (%) 31
Source: Bloomberg, CCBIS
Price vs HSCEI
Source: Bloomberg, CCBIS
Forecast and valuation
Year to 31 Mar 2014 2015 2016 2017F 2018F
Revenue (HK$ m) 39,480 40,135 42,695 44,942 49,055
YoY (%) 4.4 1.7 6.4 5.3 9.2
Net profit (HK$ m) 1,254 3,128 2,170 2,027 2,143
YoY (%) N/A 149.4 N/A N/A 5.7
Fully diluted EPS (HK$) 0.45 1.10 0.75 0.69 0.73
YoY (%) -18.0 147.7 -32.2 -7.9 5.7
P/E (x) 11.0 4.4 6.6 7.1 6.7
DPS (HK$) 0.15 0.21 0.24 0.23 0.24
Dividend yield (%) 3.1 4.2 4.9 4.7 5.0
P/B (x) 1.2 0.9 0.9 0.8 0.7
ROAE (%) 11.5 23.2 13.4 11.1 10.5
Net debt/equity (%) 23.6 Net cash 18.5 4.2 Net cash
Source: Company, CCBIS
Stock performance
Performance over 1M 3M 12M
Absolute -11.2 -14.0 -3.5
Relative (%) to HSCEI -11.0 -14.8 +2.0
Source: Bloomberg, CCBIS
Cheng Xing, CFA
(852) 3911 8265
Ronnie Ho
(852) 3911 8258
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Skyworth HSCEI (rebased)
8955203/21311/20161125 08:39
SKYWORTH (751 HK) | November 24, 2016
CCBI SECURITIES 2
1H17 results review
Skyworth generated 1H17 revenue of HK$20.3b. This was 3.8% YoY higher than revenue
earned in 1H16 and 1.1% below Bloomberg consensus. China TV sales accounted for
46.2% of total revenue while overseas TV sales accounted for 22.2%. As of 9M17,
Skyworth’s China/overseas TV sales volume had grown 17.2%/104.2% YoY to 5.2m/4.4m
units, achieving 47.5%/72.9% of the company’s FY17F sales target of 11m/6m. Gross margin
remained flat YoY at 20.6%, in line with consensus. 4K TVs made up 42% of TV sales volume
out of the 5.2m units sold in China. Blended China TV ASP for 1H17 was down 15.9% YoY to
HK$2,123. Operating margin contracted 0.3ppt to 6.5% due to higher marketing and
administrative expenses related to businesses acquired overseas. Attributable profit was
down 3.8% YoY to HK$836m. The company’s dividend payout ratio remained a stable
33.8% after an interim dividend of 9.60 HK cents per share was declared.
Skyworth – 1H17 review
HK$ m 1H17 1H16 YoY (%) FY17F % of FY17F
1H17
consensus
vs. B’berg
consensus
Revenue 20,291 19,549 3.8 44,942 45 20,524 -1.1
COGS -16,121 -15,526 3.8 -35,686 45
Gross profit 4,170 4,023 3.7 9,256 45 4,224 -1.3
Gross margin (%) 20.6 20.6 0.0 20.6 20.6 0.0
Other income and gains 917 572 60.3 1,500 61
Selling and distribution costs -2,379 -2,236 6.4 -4,944 48
Administrative expenses -1,390 -1,040 33.7 -2,712 51
Operating expenses -3,769 -3,276 15.0 -7,655 49
Operating expenses (%) -18.6 -16.8 -1.8 -17.0
Operating profit 1,318 1,319 -0.1 3,100 43 837 57.5
Operating margin (%) 6.5 6.7 -0.3 6.9
Financing cost -174 -85 104.7 -324 54
Share of results of JCE -2 4 -150.0 4 -50
Share of results of associates 0 -2 -100.0 -3 0
Profit before tax 1,142 1,236 -7.6 2,777 41
Income tax -194 -251 -22.7 -550 35
Effective tax rate (%) -17.0 -20.3 3.3 -19.8
Profit after tax 948 985 -3.8 2,227 43
Minority interest -112 -116 -3.4 -200 56
Profit attributable to shareholders 836 869 -3.8 2,027 41
Net margin (%) 4.1 4.4 -0.3 4.5
Weighted number of shares (m) 2,940 2,877 2.2 2,940
EPS (diluted) (HK$) 0.28 0.30 -5.8 0.69 41
Recurring EPS diluted HK$ 0.28 0.30 -5.8 0.69 41
Dividend per share HK$ 0.096 0.097 -1.3 0.231 42
Source: Company, CCBIS
8955203/21311/20161125 08:39
SKYWORTH (751 HK) | November 24, 2016
CCBI SECURITIES 3
Skyworth – major forecast changes
Major changes FY16 FY17F FY18F
China TV sales ('000)
Old estimate 10,036 10,900 11,100
New estimate 10,036 10,300 10,400
Change (%) 0.0 -5.5 -6.3
Overseas TV sales
Old estimate 4,410 5,000 7,000
New estimate 4,410 9,000 12,000
Change (%) 0.0 80.0 71.4
Blended China TV ASP
Old estimate 2,404 2,408 2,393
New estimate 2,404 2,202 2,167
Change (%) 0.0 -8.6 -9.4
Overseas TV ASP
Old estimate 1,358 1,400 1,450
New estimate 1,358 1,050 1,100
Change (%) 0.0 -25.0 -24.1
Total revenue (HK$ m)
Old estimate 42,695 46,661 51,315
New estimate 42,695 44,942 49,055
Change (%) 0.0 -3.7 -4.4
Gross margin (%)
Old estimate 21.9 20.4 20.4
New estimate 21.9 20.6 20.6
Change (%) 0.0 0.2 0.2
Net profit (HK$ m)
Old estimate 2,170 2,029 2,152
New estimate 2,170 2,027 2,143
Change (%) 0.0 -0.1 -0.4
EPS (HK$)
Old estimate 0.75 0.70 0.74
New estimate 0.75 0.69 0.73
Change (%) 0.0 -1.5 -1.8
Source: CCBIS
8955203/21311/20161125 08:39
SKYWORTH (751 HK) | November 24, 2016
CCBI SECURITIES 4
HK$100m internet revenue target for FY17F is achievable
Skyworth booked HK$50m in internet revenue in 1H17, of which 75% was from content
revenue sharing and 22% from advertising. The company expects to achieve its 2017F full-
year target of HK$100m and double this target in 2018F. As of Oct 2016, Skyworth’s DAU
was 7m following the upgrade of its internet user data collection system. Management
expects internet monetization to enter a rapid growth phase in the next two-to-three years
and double by 2018F. We lower our DCF valuation for Skyworth’s internet platform from
HK$3.14 to HK$3.00 owing to the increased number of shares.
Skyworth – breakdown of Internet revenue in 2017F
Source: CCBIS
By end-Oct 2016, Skyworth’s cumulative/daily active users was only 5.0%/0.7% below that
of TCLM owing to a 17.6% QoQ jump in DAU growth in Oct 2016 that came about
because of an upgrade of Skyworth’s in-house internet user data collection system. The
upgrade has helped Skyworth close its DAU gap with TCLM (1070 HK, Neutral).
Skyworth – DAU growth
Source: Company, CCBIS
Start-up Ads
26%
Video Ads
5%
Paid movie
48%
Block Ads
5%
Gaming
4%
Education
4%
Shopping
4%Travel
4%
8.2 8.6 9.1 9.5 10.0 10.6 11.1 11.4 11.9 12.6 13.2 13.5 13.9 14.2 14.6 15.0 15.3 15.7 16.2
7.3 7.6 7.9 8.2 8.6 9.1 9.6 10.1 10.8
11.6 12.2 12.7 13.0 13.4 13.7 14.0 14.5 14.9 15.4
3.2 3.3 3.4 3.6 3.8 4.0 4.4 4.6 4.8 5.2 5.8 5.8 5.9 6.1 6.2 6.4 6.5 6.7 7.1
3.1 3.0 3.1 3.4 3.5 3.9 4.1 4.4 4.7 5.0 5.2 5.5 5.6 5.7 5.8 5.8 5.9 6.0 7.0
2
4
6
8
10
12
14
16
18
TCLM accumulated total active users Skyworth accumulated total active users
TCLM DAU Skyworth DAU
m
8955203/21311/20161125 08:39
SKYWORTH (751 HK) | November 24, 2016
CCBI SECURITIES 5
DCF valuation of Skyworth internet revenue
Internet revenue DCF 2015 2016 2017F 2018F 2019F 2020F
Accumulated activated TV users (m) 7.0 12.7 21.2 29.9 38.9 48.6
Year-end daily active users (DAU) (m) 3.2 5.5 9.5 14.2 21.0 28.0
Average DAU m -- 4.3 7.5 11.9 17.6 24.5
Start-up ads
Number of daily start ups -- 1.00 1.00 1.00 1.00 1.00
Annual start-up views (m) -- 1,580 2,730 4,325 6,424 8,943
Ad charge per 1,000 views (RMB) -- 10.0 10.0 10.0 10.0 12.0
Revenue (RMB m) -- 16 27 43 64 107
Skyworth’s revenue share -- 100 100 100 100 100
Skyworth’s revenue (RMB m) -- 15.8 27.3 43.3 64.2 107.3
% of internet revenue -- 40 26 34 41 50
Video ads
Daily number of video plays -- 0.90 0.90 0.91 0.92 0.93
Annual video ads views (m) -- 1,422 2,457 3,936 5,910 8,317
Ad charge per 1,000 views (RMB) -- 20 20 20 20 20
Revenue (RMB m) -- 28 49 79 118 166
Skyworth’s revenue share -- 10 10 10 10 15
Skyworth’s revenue (RMB m) -- 2.8 4.9 7.9 11.8 24.9
% of internet revenue -- 7 5 6 8 12
Paid movie revenue
Paying user penetration rate (%) -- 10 12 14 16 18
Yearly active paying users (m) -- 0.4 0.9 1.7 2.8 4.4
Viewing frequency per year -- 1.0 1.0 1.0 1.0 1.1
Yearly views (m) -- 0.4 0.9 1.7 2.8 4.9
Cost per view (RMB) -- 10.0 10.0 10.0 10.0 10.0
Revenue (RMB m) -- 4 9 17 28 49
Skyworth’s revenue share -- 5 5 5 10 10
Skyworth’s revenue (RMB m) -- 0.2 0.4 0.8 2.8 4.9
% of internet revenue -- 1 0 1 2 2
Incentives from content providers -- -- 50.0 51.0 52.0 53.1
As % of internet revenue -- -- 48 41 34 25
Front page block ads -- 4.8 5.0 5.3 5.6 5.8
As % of internet revenue -- 12 5 4 4 3
Other internet-related revenue -- 16.0 16.8 17.6 18.5 19.4
Gaming -- 4.0 4.2 4.4 4.6 4.9
Education -- 4.0 4.2 4.4 4.6 4.9
Shopping -- 4.0 4.2 4.4 4.6 4.9
Travel -- 4.0 4.2 4.4 4.6 4.9
As % of internet revenue -- 40 16 14 12 9
Skyworth's service revenue --
Skyworth's total service revenue (RMB m) -- 40 105 126 155 215
Labor and other costs -- -39 -60 -65 -75 -90
Gross margin (%) -- 1 32 36 39 44
Operating cash flow after tax -- 0 33 46 60 94
Year -- -- -- 1 2 3
Discount factor (WACC = 9.4%) -- -- 1.00 0.92 0.85 0.79
Discounted cash flows -- -- 33.4 42.2 51.2 74.3
PV of FCF (RMB m) -- -- 3,599 -- -- --
NPV of terminal value (RMB m) -- -- 3,498 -- -- --
Enterprise value (RMB m) -- -- 7,098 -- -- --
Enterprise value (HK$ m) -- -- 8,872 -- -- --
Fully diluted shares m -- -- 2,940 -- -- --
Equity value per share (HK$) -- -- 3.02 -- -- --
Source: Company, CCBIS
8955203/21311/20161125 08:39
SKYWORTH (751 HK) | November 24, 2016
CCBI SECURITIES 6
Valuation
We cut our China TV ASP assumption for 2017F/2018F by 8.6%/9.4% to reflect our cautious
view on the China TV market. However, we raise our overseas TV shipment assumption for
the same year by 80.0%/71.4% to reflect strong overseas expansion. Our SOTP valuation
assumes (1) DCF of Skyworth’s internet revenue stream of HK$3.00, and (2) a HK$3.40 per
share valuation for the TV hardware segment. We cut our TV hardware target P/E multiple
from 6x to 5x to reflect the more challenging China TV environment. Our new target price
of HK$6.42, down from HK$7.30, implies 30% potential upside and translates to 9.3x/8.8x
2017F/2018F P/E.
Skyworth – sum-of-the-parts valuation
2017F HK$ per share
1. Hardware valuation (HK$ m) 9,968 3.4
Attributable profit 2,027 --
Profit from internet revenue 33 --
Recurring profit exclude internet revenue 1,994 --
Hardware valuation multiple (x) 5 --
2. Internet revenue valuation (HK$ m) 8,914 3.0
Equity value (HK$ m) 18,881 6.4
Number of shares (m) 2,940 2,940
Value per share (HK$) 6.42 6.42
Implied 2017F P/E (x) 9.3
Source: CCBIS
8955203/21311/20161125 08:39
SKYWORTH (751 HK) | November 24, 2016
CCBI SECURITIES 7
China TV sector valuation matrix
Stock code
CCBIS
Share
price*
Market
cap EPS growth (%) P/E
Company rating (LC) (US$ m) CY15 CY16F CY17F CY15 CY16F CY17F
China TV brands
Haier 1169 HK Not Rated 12.60 4,521 2.5 -3.9 -1.9 10.9 11.3 11.5
Hisense 600060 CH Not Rated 17.60 3,335 0.4 18.7 58.3 16.2 13.6 8.6
Changhong 600839 CH Not Rated 4.50 2,985 N/A N/A N/A N/A N/A N/A
TCL Multimedia 1070 HK Neutral 3.90 862 22.2 31.8 31.0 17.5 13.3 10.1
Konka 000016 CH Not Rated 30.20 1,463 N/A N/A N/A
Skyworth 751 HK Outperform 4.91 1,899 -32.2 -7.9 5.7 6.6 7.1 6.7
Average 12.8 11.3 9.2
Global TV brands
Samsung 005930 KS Not Rated 1,650,000 196,488 -3.1 14.3 10.6 12.3 10.8 9.7
Panasonic 6752 JP Not Rated 1,065 23,044 56.7 -3.1 -14.1 13.2 13.6 15.8
Sony 6758 JP Not Rated 3,334 37,148 24.7 -196.1 -39.3 -26.3 27.3 45.0
Toshiba 6502 JP Not Rated 406 15,183 -111.4 3786.2 -128.8 -139.0 -3.6 12.4
LG Electronics 066570 KS Not Rated 46,000 6,372 -51.4 89.1 22.5 19.3 10.2 8.3
Sharp 6753 JP Not Rated 189 8,307 -410.8 284.5 -83.7 -9.9 -2.6 -15.8
Average -21.7 9.3 12.6
* Closing price as at 23 Nov 2016
Source: Bloomberg, CCBIS estimates
Skyworth forward P/E
Source: Bloomberg, CCBIS
0
5
10
15
20
25
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Fwd PE Mean -sd +sd
7x
3x
11x
Unit
8955203/21311/20161125 08:39
SKYWORTH (751 HK) | November 24, 2016
CCBI SECURITIES 8
SKYWORTH | 751 HK – FINANCIAL SUMMARY
Profit and loss
FYE 31 Mar (HK$ m) 2014 2015 2016 2017F 2018F
TVs 29,484 30,141 30,112 32,130 35,740
Digital set-top-boxes 4,162 4,376 5,913 6,031 6,212
White appliances 2,532 2,358 2,366 2,484 2,609
Internet revenue 0 0 0 123 148
Other 3,302 3,260 4,304 4,174 4,347
Revenue 39,480 40,135 42,695 44,942 49,055
COGS (31,851) (32,112) (33,332) (35,686) (38,936)
Gross profit 7,629 8,023 9,363 9,256 10,119
Other income 748 1,128 1,356 1,500 1,200
Operating expenses (6,570) (6,571) (7,337) (7,655) (8,060)
EBIT 1,807 2,580 3,382 3,100 3,259
Net financial inc. (exp.) (87) (161) (239) (324) (324)
JVs and associates (20) 2 7 1 1
Other – 1,755 – – –
Profit before tax 1,700 4,176 3,150 2,777 2,936
Tax (267) (826) (623) (550) (581)
Total profit 1,433 3,350 2,527 2,227 2,354
Minority interest (179) (222) (357) (200) (212)
Net profit attributable to
shareholders
1,254 3,128 2,170 2,027 2,143
Core profit 1,254 1,766 2,170 2,027 2,143
Reported EPS (HK$) 0.45 1.10 0.75 0.69 0.73
Diluted EPS (HK$) 0.45 1.10 0.75 0.69 0.73
Core EPS (HK$) 0.45 0.62 0.75 0.69 0.73
Dividend (HK$ m) 421 583 594 669 707
Dividend per share (HK$) 0.15 0.21 0.24 0.23 0.24
Balance sheet
FYE 31 Mar (HK$ m) 2014 2015 2016 2017F 2018F
Cash and equivalents 3,023 3,317 5,023 7,292 8,795
Pledge dep., restrict. cash 1,572 423 493 493 493
Receivables 15,973 14,597 16,263 16,183 17,933
Inventory 4,188 4,342 5,494 5,182 5,760
Other current assets 1,424 2,382 4,703 4,703 4,703
Total current assets 26,180 25,061 31,976 33,853 37,684
Property, plant & equip. 4,436 5,223 5,818 6,354 6,033
JVs and associates 73 72 60 64 68
Other non-current assets 1,455 2,966 4,206 4,206 4,206
Total non-current assets 5,964 8,261 10,084 10,624 10,307
Total assets 32,144 33,322 42,060 44,478 47,992
Short-term borrowings 5,156 1,274 4,950 4,950 4,950
Trade and bills payable 13,335 13,989 15,614 15,551 16,969
Other current liabilities 1,010 806 737 737 737
Total current liabilities 19,501 16,069 21,301 21,238 22,656
Long-term borrowings 547 1,312 3,155 3,155 3,155
Other non-current liabilities 748 738 904 904 904
Total non-current liabilities 1,295 2,050 4,059 4,059 4,059
Total liabilities 20,796 18,119 25,360 25,297 26,715
Share capital 283 285 295 295 295
Reserves & retained profits 11,244 15,140 16,762 19,087 21,193
Shareholders' equity 11,527 15,425 17,057 19,382 21,488
Minority interest (179) (222) (357) (200) (212)
Total equity 11,348 15,203 16,700 19,181 21,276
Total equity and liabilities 32,144 33,322 42,060 44,478 47,992
Cash flow
FYE 31 Mar (HK$ m) 2014 2015 2016 2017F 2018F
Profit before tax 1,700 4,176 3,150 2,777 2,936
Amortization & depr. 396 443 675 848 1,021
Net financial charge adj. 87 (82) 239 324 324
Non-cash items adjusted 231 (1,813) 499 506 507
Chg in working capital 2,511 1,528 (1,109) 329 (910)
Tax paid (455) (453) (623) (550) (581)
Operating cash flow 4,470 3,799 2,831 4,235 3,297
Disposal of fixed assets 24 1,913 – – –
Capex (1,915) (1,116) (1,900) (1,000) (700)
Investment (626) (1,916) 189 (3) (3)
Net int. received (paid) 63 199 – – –
Other (1,122) 1,261 (385) 10 10
Investment cash flow (3,576) 341 (2,096) (993) (693)
Change in borrowings 170 (3,112) 5,519 – –
Equity issues – 2 10 – –
Dividend paid (489) (503) (594) (548) (682)
Other 29 (222) (239) (424) (419)
Financing cash flow (290) (3,835) 4,696 (972) (1,101)
Change in cash flow 604 305 5,431 2,269 1,502
Cash & equivalents, begin 2,285 2,918 3,317 5,023 7,292
Forex 29 (6) – – –
Cash & equivalents, end 3,023 3,317 5,023 7,292 8,795
Free cash flow 2,555 4,596 931 3,235 2,597
Ratios
FYE 31 Mar 2014 2015 2016 2017F 2018F
Growth (%)
Revenue 4.4 1.7 6.4 5.3 9.2
EBITDA (4.1) 37.2 34.2 (2.7) 8.4
EBIT (9.5) 42.8 31.1 (8.3) 5.1
Net profit (16.5) 149.4 (30.6) (6.6) 5.7
Core net profit (16.5) 40.8 22.9 (6.6) 5.7
Profitability (%)
Gross margin 19.3 20.0 21.9 20.6 20.6
EBITDA margin 5.6 7.5 9.5 8.8 8.7
EBIT margin 4.6 6.4 7.9 6.9 6.6
Net margin 3.2 7.8 5.1 4.5 4.4
Core net margin 3.2 4.4 5.1 4.5 4.4
Tax rate 15.7 19.8 19.8 19.8 19.8
Efficiency (days)
Inventory turnover 53 48 54 55 51
Trades receivable 130 123 116 119 114
Trades payable 93 101 105 103 97
Returns & leverage (%)
ROAA 4.1 9.6 5.8 4.7 4.6
ROAE 11.5 23.2 13.4 11.1 10.5
Net debt (cash)/equity 23.6 (4.8) 18.5 4.2 (3.2)
Liquidity (x)
Current ratio 1.3 1.6 1.5 1.6 1.7
Quick ratio 1.1 1.3 1.2 1.4 1.4
Source: Company, CCBIS
8955203/21311/20161125 08:39
SKYWORTH (751 HK) | November 24, 2016
CCBI SECURITIES 9
Rating definitions:
Outperform (O) – expected return > 10% over the next twelve months Neutral (N) – expected return between -10% and 10% over the next twelve months Underperform (U) – expected return < -10% over the next twelve months
Analyst certification:
The author(s) of this document, hereby declare that: (i) all of the views expressed in this document accurately reflect his personal views about any and all of the subject securities or issuers and were prepared in an independent manner; and (ii) no part of any of his compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this document; and (iii) he receives no insider information/non-public price-sensitive information in relation to the subject securities or issuers which may influence the recommendations made by him. The author(s) of this document further confirm that (i) neither he nor his respective associate(s) (as defined in the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission issued by the Hong Kong Securities and Futures Commission) has dealt in or traded in the securities covered in this document within 30 calendar days prior to the date of issue of this document or will so deal in or trade such securities within 3 business days (as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) after the date of issue of this document; (ii) neither he nor his respective associate(s) serves as an officer of any of the companies covered in this document; and (iii) neither he nor his respective associate(s) has any financial interests in the securities covered in this document.
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