Xiangyu Dredging (00871 HK) 1H13 revenue revenue revenue 4.8% YoY TorMB505 million, net profit margin 4.6% YoY to RMB107 million, inline with earnings. 1H13 operating margin stable at 36.1%, while finance costs reduced 2.9x YoY to RMB17 million withheld debt. As at 30th Jun 2013, The Company had RMB577 million of borrowings, up 23.6% earned with at 31st Dec 2012; net gearing was 26.1%, up 2.7 ppts. 1H13 CRD revenue income 7.7% YoY to RMB230 Million. Operatingmargin reduced 1.9 ppts YoY to 42.6%. 1H13 EPD&WM revenue income 21.5% YoY to RMB175 million. Operating margin increased 1.5 ppts YoY to 30.9%. We expect that EPD could emerge as the key growth driver. Dealing debt is up fast, we expect that operation can dragdown net gearing starting next year. Reduce FY13-15 EPS earnings by 4.8%, 4.9% and 1.6%, relaxation, TorMB0.278, RMB0.298 and RMB0.339 with a reduced interest income. Raisethe TP to HK$2.50 based on expected salary in financial position, new TP motivation 7.0x FY13 PER, 6.6x FY14 PER and 0.7x FY12-15PEG. Maintain “Breathing”.
XIANGYU DREDGING(00871.HK)：SEEING SOME SIGHTS OF BOTTOM MAINTAIN“ACCUMULATE”
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