GS 高盛：每日中国报告 09.04

China-Daily-Insights 09. 04 9页

Today’s focus
Suning Appliance Co. (002024.SZ): Strong 1H results show industry profitability continues to improve
Stella International Holdings (1836.HK): Is the market discounting too much? Maintain on Conv. Buy List
Headline news
China's major state-owned firms report 34% rise in profits (Xinhua)
China approves first stock-oriented QDII fund (Xinhua)
Shenzhen bourse asks dealers to normalize transactions (China Daily)
Coal, gas output record double-digit growth (China Daily)
China's Reserves Exclude U.S. Subprime Debt, Wei Says (Bloomberg)
Suning Appliance Co. (002024.SZ): Strong 1H results show industry profitability continues to improve, Joshua Lu
• What's changed: Suning (002024.SZ, Rmb69.50, Sell) reported 1H07 unaudited net profit of Rmb578mn, up 111% yoy. This was in line with management guidance in July that 1H earnings would rise 100-120% yoy. For 2Q, net profit rose 94% yoy. Revenue (+63% yoy) was higher than we projected. Adjusted gross margin (GP + other operating income) declined by almost 1ppt yoy to 13.7%, weaker than we had expected. This was offset by strong operating leverage, with SG&A/sales coming down by more than 2ppt yoy, resulting in a 1ppt expansion in operating margin to 4.7%. We have revised up our earnings by 11% in FY07E and 15% in FY08E, factoring