0587.HK 6 30 EPS ( ) ( ) ( ) 05/04/03 HK$1.25 ROE (%) (x) (%) DPS ( ) 2000A 81,484 34,357 0.071 - NA 41.2 - - 2001A 160,958 72,156 0.150 110.0 NA 77.3 0.150 NA 2002A 173,176 75,869 0.172 14.7 NA 69.0 0.172 NA 2003E 204,300 83,582 0.147 (14.5) 8.5 53.2 0.044 3.5 2004E 265,590 94,448 0.166 13.0 7.5 47.2 0.050 4.0 2005E 292,000 108,615 0.190 14.5 6.6 50.4 0.060 4.8 2002 2007 17% 16%, DCF 2.07 / 12 1.76 15% 12 40% 2003 7.5 P/B 4.9 EV/EBITDA 5.8 Shares Outstanding (m) 568.0 (FY02) NBV (HK$) 0.37 Market Cap. (HK$ m) 710.0 / P/B (x) 3.38 Free Float (%) 45.97 52 / 52 Weeks Hi/Lo (HK$) 1.25/0.51 30.3% IPO price(hk$) 0.77 (%) 17.7% (Net gearing) Cash zhangly@ms.gtjas.com 86 755 82485666 exit 6215 1 / 18
HK 000 2000A 2001A 2002A 2003E 2004E 2005E 2006E 2007E 81,484 160,958 173,176 204,300 265,590 292,000 330,000 380,000 (%) 34.6 97.5 8.0 18.0 30.0 10.0 13.0 15.0 50,269 103,813 110,711 130,752 170,000 186,880 211,200 243,200 (%) 41.0 106.5 6.6 18.1 30.0 10.0 13.0 15.0 5,194 8,904 7,512 14,560 36,858 33,234 26,582 19,740 4,388 7,718 10,292 11,252 14,142 17,435 20,968 25,800 2,191 843 1,957 0 0 0 0 0 EBIT 42,878 88,034 94,864 104,940 119,000 136,211 163,650 197,660 (%) 72.1 105.3 7.8 10.6 13.4 14.4 20.0 20.8 2,448 2,529 2,842 3,200 4,000 4,000 5,000 5,000 40,430 85,505 92,022 101,740 115,000 132,211 158,650 192,660 4,916 10,787 13,778 15,261 17,278 19,831 23,800 28,900 35,514 74,718 78,644 86,479 97,722 112,380 134,850 163,760 1,157 2,562 2,775 2,897 3,274 3,765 4,512 5,480 34,357 72,156 75,869 83,582 94,448 108,615 130,338 158,280 (%) 67.0 110.0 5.1 10.2 13.0 15.0 20.0 21.4 EPS HK 0.071 0.15 0.172 0.147 0.166 0.19 0.23 0.28 PER X na na na 8.5 7.5 6.6 5.4 4.7 Gross margin(%) 61.7 64.9 63.9 64 64 64 64 64 Net margin(%) 42.2 44.8 43.8 40.9 35.6 37.2 39.5 41.7 EBITDA margin(%) 54.1 56.2 56.4 53.6 47.1 49.2 52.5 55.3 2 / 18
4 6 6 7 9 11 11 12 12 13 15 15 16 17 3 / 18
2003 2002 12 31 5589 56 2903 29 25.1% 3.8% 15.1% 10.2% 2.8% 43% 1997 2001 1.47 2008 4 1/5 100 2003 2903 4 / 18
13% 6% 42% 13% 26% Cancer-net.com 11% 10% 9% 31% 39% Cancer-net.com OTC 2002 2007 17% 16%, DCF 2.07 / 12 1.76 15% 12 40% 2003 7.5 P/B 4.9 EV/EBITDA 5.8 5 / 18
1992 7 1992 11 1994 2000 7 8 OTC 2002 12, 63.15% 36.85% Kertwell Bull s-eye Limited 5.89% 48.14% 45.97% 100% Intended Features Limited 96.65% 100% 100% 6 / 18
Lavish Ruby Limited 50% 95% SDA 2001 3.32 4 6 2 8 1992 58 1994 83 1997 114 1999 138 12 17% 42% 7 / 18
13% 6% 42% 13% 26% Cancer-net.com 40 40 10% 11% 9% 31% 39% Cancer-net.com OTC 1999 OTC 15% 2001 240 OTC 8 / 18
1999 2002 42% 56% 54% 2003 9982 17% 64% 6.4% % % % 1999 6051.6-3565.9 2491.8-2057.2-2000 8148.4 34.6 5026.9 4287.8 72 3435.7 67 2001 16095.8 97.5 10381.3 8803.4 105 7215.6 110 2002 17317.6 8.0 11071.1 9486.4 7.8 7586.9 5 2003 9981.7 17.2 6360,2 5161.1 11.6 4025 6.4 56 29 65.5 67.5 25.1% 3.8% 15.1% 10.2% 2.8% 43% 9 / 18
2001-2002 I 1997 2001 1.47 2008 4 1999 2000 8 1/5 5 50,000 40,000 30,000 20,000 10,000 0 2001 2002 2003 OTC 10 / 18
OTC OTC 2003 2003 10 20 100 11 / 18
5% 1999 6 6 2003 4 5 12.5 5.68 2002 0.133 9.4 25% ( ) (05/04/03) P/B ROE P/EBITDA ( ) (8069) 20.5 11.2 0.76 3.96 14.7 29.3 13.6 (8018) 10.5 1.69 0.14 1.29 12 11.3 4.3 (1093) 33 2.2 0.166 2.06 13.2 11.2 9.1 (874) 15 1.85 0.11 0.66 16.8 4.8 4.9 (719) 7.4 1.62 0.14 0.57 11.5 7 4.6 (399) 12 2.35 0.33 1.72 7 27.4 5 18.4 - - 1.71 12.5 15.2 6.9 12 / 18
587 7.1 1.25 0.133 5.2 9.4 71 6.1 Bloomberg DCF WACC 4.5 9.5,beta 1.0 2008 3.5 WACC 5.0 15 4.25% 4.50 14.00 9.50 beta 1.0 14 80 20 ( ) 77,000 WACC 12.00% DCF DCF HK 000 2003 2004 2005 2006 2007 FCF 59499 61150 80279 82702 106811 13 / 18
1/4 5/4 9/4 13/4 17/4 57838 53072 62212 57221 65985 296,328 3.5% 803,472 1,099,800 77,000 1,176,800 ( ) 5.68 ( ) 2.07 : ( ) 14 / 18
HK 000 2000A 2001A 2002A 2003E 2004E 2005E 2006E 2007E 81,484 160,958 173,176 204,300 265,590 292,000 330,000 380,000 (%) 34.6 97.5 8.0 18.0 30.0 10.0 13.0 15.0 50,269 103,813 110,711 130,752 170,000 186,880 211,200 243,200 (%) 41.0 106.5 6.6 18.1 30.0 10.0 13.0 15.0 5,194 8,904 7,512 14,560 36,858 33,234 26,582 19,740 4,388 7,718 10,292 11,252 14,142 17,435 20,968 25,800 2,191 843 1,957 0 0 0 0 0 EBIT 42,878 88,034 94,864 104,940 119,000 136,211 163,650 197,660 (%) 72.1 105.3 7.8 10.6 13.4 14.4 20.0 20.8 2,448 2,529 2,842 3,200 4,000 4,000 5,000 5,000 40,430 85,505 92,022 101,740 115,000 132,211 158,650 192,660 4,916 10,787 13,778 15,261 17,278 19,831 23,800 28,900 35,514 74,718 78,644 86,479 97,722 112,380 134,850 163,760 1,157 2,562 2,775 2,897 3,274 3,765 4,512 5,480 34,357 72,156 75,869 83,582 94,448 108,615 130,338 158,280 (%) 67.0 110.0 5.1 10.2 13.0 15.0 20.0 21.4 EPS HK 0.071 0.15 0.172 0.147 0.166 0.19 0.23 0.28 PER X na na na 8.5 7.5 6.6 5.4 4.7 Gross margin(%) 61.7 64.9 63.9 64 64 64 64 64 Net margin(%) 42.2 44.8 43.8 40.9 35.6 37.2 39.5 41.7 EBITDA margin(%) 54.1 56.2 56.4 53.6 47.1 49.2 52.5 55.3 HK 000 2000A 2001A 2002A 2003E 2004E 2005E 2006E 2007E 16,688 28,280 52,212 72,410 99,080 128,880 169,310 217,850 4,386 4,999 4,222 6,120 8,120 10,120 11,120 13,120 0 12,560 1,920 72,500 39,000 10,000 0 0 21,074 45,839 58,354 151,030 146,200 149,000 180,430 230,970 2,638 5,345 2,677 4,677 7,677 12,677 18,677 25,677 15,840 42,804 58,515 63,515 68,515 75,515 83,515 96,515 6,392 16,356 16,980 17,980 19,980 20,980 22,980 26,780 97,137 12,476 0 4,200 7,300 9,300 13,300 18,300 15 / 18
5,249 50,948 59,652 56,000 65,000 75,000 80,000 80,000 127,256 127,929 137,824 146,372 168,472 193,472 218,472 247,272 2,788 3,754 2,250 4,250 5,250 6,250 9,250 13,250 42,131 36,804 31,009 50,000 55,000 55,000 60,000 60,000 19,969 29,500 29,990 30,990 31,990 32,990 35,990 66,990 64,888 70,058 63,249 85,240 92,240 94,240 105,240 140,240 62,368 57,871 74,575 61,132 76,232 99,232 113,232 107,032 0 0 15,794 15,000 20,000 20,000 25,000 30,000 0 494 275 0 0 0 0 0 0 494 16,069 15,000 20,000 20,000 25,000 30,000 83,442 103,216 116,860 197,162 202,432 228,232 268,662 308,002 HK 000 2000A 2001A 2002A 2003E 2004E 2005E 2006E 2007E EBIT 42,878 88,034 94,844 104,940 119,000 136,211 163,650 197,660 1,200 1,689 2,000 3,500 4,500 5,500 6,600 9,600 0 675 750 1,000 1,500 2,000 3,000 3,000 (6,950) (40,127) (10,600) (9,200) (11,000) (13,000) (16,000) (23,800) (36,467) (16,468) (72,156) (25,000) (35,000) (40,000) (50,000) (50,000) (4,544) 22,702 1048 59,499 61,150 80,279 82,702 106,811 16 / 18
( ) 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% EBIT margin & ROIC EBIT margin(lhs) ROIC(RHS) 00A 01A 02A 03E 04E 05E 06E 07E 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Sales & EBIT growth 120.0% 120.0% 100.0% 100.0% 80.0% 80.0% 60.0% 60.0% 40.0% 40.0% 20.0% 20.0% 0.0% 0.0% 00A 01A 02A 03E 04E 05E 06E 07E Sales growth(lhs) EBIT growth(rhs) EV/EBITDA & P/E 20.0 15.0 10.0 5.0 0.0 00A 01A 02A 03E 04E 05E 06E 07E 25.0 20.0 15.0 10.0 5.0 0.0 EV/EBITDA(LHS) P/E(RHS) 0.60 0.50 0.40 0.30 0.20 Capex/Sales 0.10 0.00 00A 01A 02A 03E 04E 05E 06E 07E Capex/Sales 17 / 18
( ) ( ) 18 / 18