Pro-forma Profit Increased by 33.1% to RMB85.0 Million
HONG KONG, Aug. 31 /PRNewswire-Asia/ -- China ITS (Holdings) Co., Ltd. (1900.HK), a leading transportation infrastructure technology solutions and services provider in China, announced its 2010 interim results. Overall revenue rose by 36.9% YoY to RMB642.0 million, fueled by an 8.1% increase in Turnkey Solutions segment and a 49.6% increase in Specialized Solutions segment. Overall gross profit increased by 29.3% YoY to RMB192.5 million. Pro-forma profit was RMB85.0 million or a 33.1% increase.
Jiang Hailin, Chairman and CEO of CIC, said that the company has achieved a more diversified revenue mix with the highest Specialized Solutions interim revenue in the Group's history.
In the latter half of the year, driven by expected fixed assets investments build-out plan, there is increasing upgrade demand coming from the expressway operators. Also, in response to the Chinese government's plan to develop the urban traffic sector, particularly the rapid transit systems, strong market demands for urban traffic ITS solutions is expected to continue throughout the rest of 2010 and beyond. The Company is well positioned to capture these infrastructure upgrading and expansion opportunities. It will continue to focus on improving its business mix and overall profitability, as well as securing landmark projects with leading market influence to further strengthen its competitive advantage.
CCB International issued a research report saying that the 1H 2010 results of China ITS (CIC) were largely in line with their expectations. With railway projects remain key growth driver and revenue mix continued to optimize, it maintained an "outperform" rating and target price of HK$4.90.
Bank of America Merrill Lynch also issued a research report saying that China ITS is going to benefit from the investment opportunity in China's infrastructure market. It maintained a buy with price objective of HK$4.25, implying P/E of 16.4x.
BofAML said that China ITS has captured significant market share in China's ITS market. In view of the robust growth in the market, and strong long term infrastructure investment in the Mainland, it estimates an EPS 2010-12 CAGR of 21.2%, mainly backed by solid growth in new contract and backlog.
BofAML also said that benefited from the Value-added services business of higher gross margin, and its unique position in the fast growing China's ITS industry, it holds an optimistic view on China ITS' business.
BofAML estimates China ITS' 2010 and 2011 net profit as RMB325 million and RMB416 million respectively, EPS as RMB0.186 and RMB0.262. Estimated 2010 ROE to be 20.4%.
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