汇丰银行维持中国信贷买入评级,目标价港币3.90元-.PDFVIP

FLASHNOTE 22 March 2016 THIS CONTENT MAY NOT BE DISTRIBUTED TO THE PEOPLE’S REPUBLIC OF CHINA (THE “PRC”) (EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG AND MACAO) ??? Credit China (8207 HK) Buy: Volume benefits from industry consolidation EQUITIES DIVERSIFIED FINANCIAL SERVICES China ?Profit grew by 47% driven by e-payment and P2P income, which contribute 74% to core business revenue ?P2P volume benefits from defaults like Ezubo as investors switch to more reputable platforms ?Remain Buy, we lift TP to HKD3.90 (from HKD3.60) as we raise e-finance growth assumptions Profit rose by 47% y-o-y in 2015 driven by 182% growth in e-finance business revenue, which largely offset the 45% decline in the traditional lending business. The earnings came in 3% below our estimates for 2015. What we liked: (i) Strong growth in the key e-finance business arms. E-payment and P2P revenue rose by 30% and 112% q-o-q respectively in 4Q15 as volume surged and fee rate was steady. By transaction volume its market share in the P2P space is over 2.3% with an active investor base of over 2.4m. Management saw increased investors to reputable platforms driven by defaults like Ezubo (see China e-finance: Ezubo’s default unveils P2P operational risks 2 February 2016). (ii) Overdue ratio for internet housing loan was well controlled at 0.1%. The loan portfolio is safeguarded by property collateral (loan-to-value ratio is below 70%), short tenure (90% loans under 6 months) and collateral quality (90% in first and second tier cities). (iii) Group cost efficiency improved by 20ppt in 2015 to 65%. What we disliked: (i) The traditional lending business remains challenging with the overdue ratio staying elevated at 35%, flat h-o-h. The group also deployed capital raised in 2015 intended for acquisitions awaiting approval into the entrusted loan book for short term lending, which may be subject to credit risk. Other points of interest: (i) Dividend payout was cut from 20% to zero as the company p