深圳机场(000089.CN)

Shenzhen Airport:General Manager to act as chairman of the board

时间:16-10-18 00:00    来源:瑞银证券

Chairman under investigation for suspected serious discipline breaches

On 14 Oct, Shenzhen Airport (SAG) announced that it was reported on the website ofShenzhen CPC's Commission for Discipline Inspection that Wang Yang, its chairman ofthe board, is being investigated for suspected serious discipline breaches. On 17 Oct,SAG stated that its board of directors had given authorisation for Chen Fanhua, thegeneral manager, to be acting chairman and nominated Luo Yude, chairman of theparent company, as a candidate to be a non-independent director on SAG's board ofdirectors. The motion has to be passed by a shareholders' general meeting. We willkeep a close watch on the appointment of the new chairman. Currently, we believe theinvestigation into Wang Yang's suspected discipline breaches will have a limited impacton the company's operations, although the effect on sentiment towards the stock isobviously a risk.

September cargo/mail volume a bright spot with sustained >10% YoY growth

The company announced its September operating data: aircraft movements/passengervolume rose 3.9%/7% YoY, with both growth rates higher than in August. Notably,the cargo and mail volume rose 13.5% YoY, with the growth rate in double-digitterritory for the fourth month in succession and a new monthly high since 2013.

Increasing time slots are the key to SAG's future earnings growth

We estimate that the company is currently operating at a capacity utilisation rate ofc75%; its terminals and runways still have ample capacity; and the peak-hourmovements amount to 48 (with an upper limit of 60). Basically, it is ready to add newtime slots. We expect the company to allocate any new slots mainly to internationalroutes, in which case international passenger volume could account for 10% of totalpassenger volume in 2020, up from 4.2% in 2015. The company has plans to startbuilding satellite halls in 2018 and expects capex to exceed Rmb3bn. In the next twoyears, with the company not having other major capex, we estimate its core business topost profit CAGR of above 10%, with ROE likely to improve from 4.6% in 2015 to6.2% in 2018.

Valuation: Maintain Rmb11 PT and Buy rating

We maintain our DCF-based price target of Rmb11 (WACC 7.3%) and Buy rating.