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Dynagreen Env (1330.HK) - Positive Profit Alert Meeting Expectations

Thursday, February 11, 2016 Views10586
Dynagreen Env(1330)
Recommendation on  11 February 2016
Recommendation BUY
Price on Recommendation Date $3.500
Target Price $4.350

Announcement of the Company's Positive Profit Alert

The company announced Positive Profit Alert on 1 February 2015, stating that the company's annual net profit attributable to shareholders of the company witnessed a YoY growth of over 50% in 2015. The primary reasons for this growth include increases in 2015 operating revenues and corporate income tax rebates from five projects in Wuhan, Huizhou, Taizhou, Pingyang and Yongjia. Such data meet market expectations and may be slightly higher eventually.

Valuation

In 2015, the company was awarded two new contracts with a total scale of 3,300 tonnes. Size of individual project was greater, so the profitability is expected to be more favourable, which will make a positive contribution to enhancing the company's performance in the next two years. The company's operating performance remains satisfactory, but economic downturn may result in a shortage of funds in local finances, and thus the company's cash flow may be affected to a certain extent. Therefore, we lower the company's target price to HK$4.35 and the "Buy" rating is maintained. (Closing price as at 4 Feb 2016)

Financials

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This report is produced and is being distributed in Hong Kong by Phillip Securities Group with the Securities and Futures Commission (“SFC”) licence under Phillip Securities (HK) LTD and/ or Phillip Commodities (HK) LTD (“Phillip”). Information contained herein is based on sources that Phillip believed to be accurate. Phillip does not bear responsibility for any loss occasioned by reliance placed upon the contents hereof. The information is for informative purposes only and is not intended to or create/induce the creation of any binding legal relations. The information provided do not constitute investment advice, solicitation, purchase or sell any investment product(s). Investments are subject to investment risks including possible loss of the principal amount invested. You should refer to your Financial Advisor for investment advice based on your investment experience, financial situation, any of your particular needs and risk preference. For details of different product's risks, please visit the Risk Disclosures Statement on http://www.phillip.com.hk. Phillip (or employees) may have positions/ interests in relevant investment products. Phillip (or one of its affiliates) may from time to time provide services for, or solicit services or other business from, any company mentioned in this report. The above information is owned by Phillip and protected by copyright and intellectual property Laws. It may not be reproduced, distributed or published for any purpose without prior written consent from Phillip.
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