China Wheel 中国车轮

臥龍先生

中国车轮

YHI 的競爭對手.

China Wheel Holdings Ltd is a Singapore-based investment holdingcompany. Through its subsidiaries, the Company specializes in thedesign, manufacture and sale of aluminum alloy wheels, withmanufacturing facilities in Qinhuangdao and Baoding cities in thePeople's Republic of China. China Wheel manufactures and sells morethan 300 models ranging from 12 to 24 inches in diameter. These aresold via a multi-channel sales network, which includes originalequipment manufacturing (OEM) sales to local automobile manufacturersand wheel manufacturers; retail sales to consumers through itsnationwide network of 40 distributors covering provinces in thePeople's Republic of China, and export sales to international wheeldistributors in the United States, Europe, Japan and South Korea. TheCompany has two subsidiaries, Baoding Lizhong Wheel Manufacturing Co.,Ltd and Qinhuangdao Dicamry Wheel Co., Ltd. In December 2006, itincorporated a new subsidiary, Tianjin Lizhong Wheel Limited.

[ 本帖最后由 臥龍先生 于 10-4-2007 04:03 PM 编辑 ]

臥龍先生

China Wheel Holdings Ltd

BUY: Price $0.725 Target $0.81
Secures a top-tier customer

Commences supply to China FAW Group Corporation. China Wheel Holdings (“CWH”) announced yesterday that it has signed a supply agreement with FAW Jilin, a subsidiary of China FAW Group Corporation (“the FAW Group”). This officially qualifies CWH as an approved supplier to the FAW Group and comes hot on the heels of last month’s announcement of the addition of Hyundai Kia Automotive Group as a new OEM customer.
The FAW Group is one of the largest automakers in China, with over 126,000 employees and fixed assets in excess of RMB110 billion. It sold 1.17 million vehicles (including 0.9 million passenger cars) last year, ranking it as the second largest automaker in China just behind Shanghai Automotive Group, which sold 1.22 million vehicles in 2006.
Plenty of scope for further collaboration. We are positive over the qualification of CWH as an approved supplier to the FAW Group. While the estimated 70,000 wheels to be supplied to FAW Jilin in FY07 is not significant, we see tremendous potential for CWH to leverage on this relationship and significantly increase orders from the FAW Group in future, through collaborations with the other subsidiaries (45 in total) of the FAW Group.
Reiterate BUY and Fair Value Estimate of S$0.81. We remain optimistic over the medium term outlook for CWH. The addition of the FAW Group to the customer base reinforces our view that CWH will be able to secure orders for the additional capacity from the Tianjin plant by tapping on its base of existing and new customers. We reiterate our BUY recommendation and Fair Value Estimate of S$0.81, based on the same relative valuation of 9x blended FY07/08 PER against a 3-year EPS CAGR of 24%.

臥龍先生

China Wheel Holdings Ltd

BUY: Current Price: S$1.01 Target Price: S$1.23
A proxy to China’s booming auto sector

China’s auto sector maintains strong growth momentum in 1st half of 2007. Total vehicle sales rose 23% YoY to 4.4 million units while total vehicle production grew 22% YoY to 4.5 million units (see Annex 1). Both vehicle sales and production are on track to reach the widely expected record figure of 8.5 million units by the end of the year. China Wheel Holdings (“CWH”), which generates more than 70% of total revenue from the sale of aluminium alloy wheels to the domestic OEM and retail markets, is in a sweet spot to ride on the robust demand driven by China’s booming auto sector.


Stable aluminium price should reduce downside risks to gross margin. CWH’s gross margin is highly vulnerable to a sustained hike in the price of aluminium (~70% of COGS). The price of aluminium in China has remained stable around the RMB20,000 level since the start of the year, compared with an average price of RMB20,400 in 2006 (see Annex 2). This trend is expected to continue for the rest of 2007, due to an estimated surplus in domestic supply of primary aluminum - the December 07 contract traded on Shanghai Futures Exchange settled at RMB19,290 per tonne yesterday.


Re-rate stock based on 12x FY08 PER; raise Fair Value Estimate to S$1.23. We remain positive over CWH’s medium term prospects and expect its EPS to increase at a 3-year CAGR of 25% (after adjusting for our share base dilution assumptions), underpinned by additional capacity from the new Tianjin plant. CWH is among a handful of Singapore-listed China companies that can offer investors substantial exposure to China’s auto sector. Over recent months, its value proposition as an appealing proxy to China’s booming auto sector has been attracting greater attention from the market, judging by the higher liquidity and steady uptrend in share price (+50% since our initiation on 2 April 2007). Compared to China auto parts makers listed in Hong Kong, which trade at an average FY08 PER of 14x (see Annex 3), our previous valuation of CWH (based on 9x FY08 PER) now looks overly conservative. We therefore raise our Fair Value Estimate from S$0.89 to S$1.23, based on a re-rated but still undemanding valuation of 12x FY08 PER. Maintain Buy.

臥龍先生

China Wheel Holdings Ltd BUY
Current Price: S$1.20
Target Price: S$1.36

Proposed issue of convertible bonds
Proposed issue of US$25 million 5-year convertible bonds. China Wheel Holdings (“CWH”) announced that it has entered into a subscription agreement with Lehman Brothers Commercial Corporation Asia Limited (“Lehman”) for the issue of US$25 million 5-year convertible bonds, which bear interest at 3% per annum and can be converted into shares at a conversion price of S$1.045 per share. Under the terms of the agreement, Lehman has agreed to subscribe and pay for, or procure subscription and payment for the bonds.
Net proceeds will be used to finance the construction of the new Tianjin plant. As mentioned in our initiation report of 2 April 2007, CWH expects to invest a total of about RMB780 million in the new Tianjin plant (RMB500 million for the construction of the plant and purchase of machinery and RMB280 million for working capital) through a combination of equity financing, bank borrowings and internal resources. CWH will use the net proceeds from the bonds issue to finance the construction of the Tianjin plant. Following the issue of convertible bonds, we expect CWH to finance its remaining investment in the Tianjin plant through bank borrowings and internal resources.
Maintain BUY and raise Fair Value Estimate to S$1.36. In our previous forecasts, we have assumed that CWH will tap the equity market for RMB150 million of funding by placing out new shares at S$0.90 per share in FY08. We have revised our share base dilution assumptions by factoring in a full conversion of the convertible bonds into shares during FY09, leading to increases in our EPS estimates for FY08 and FY09 by 11% and 2% respectively. Based on our revised forecasts, we now expect CWH to grow its EPS at a 3-year CAGR of 26%. CWH remains an appealing proxy to China’s booming auto sector. We maintain our BUY recommendation and raise our Fair Value Estimate from S$1.23 to S$1.36, based on the same relative valuation of 12x FY08 PER.

臥龍先生

China Wheel Holdings – The company, which is involved in the design, manufacture and sale of aluminium alloy wheels, has announced the issuance of US$25m worth of convertible bonds to Lehman Brothers. This is to help fund the construction of a new plant in Tianjin and the purchase of new equipment and machinery. The five-year bonds, which bear a coupon rate of 3% per annum payable half yearly, are convertible into China Wheel shares at $1.045 each. China Wheel shares closed at $1.24 yesterday. The construction of the plant comes amid rising demand as China has overtaken Japan to become the second largest car market in the world, after the US. The China Association of Automobile Manufacturers (CAAM) reported this month that China's car sales rose 25.9% in the first half of 2007, with 3.08m passenger vehicles sold. The plant is to be built in three phases, with the first slated to be completed by the first quarter of next year