Full-Year Results a Miss on Continued Weakness Across Business Segments

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Equity Bottom-Up

For interim 2016, Swire Pacific reported underlying profit of HKD 3.5 billion, down 27% year on year and below our estimates. Underlying EPS decreased to HKD 2.36, down 27% over the same period a year ago. The results were down across major segments. The company declared an interim dividend of HKD 1.00 per share, down 11% from 2015.Looking forward, we expect Property Division to recover due to higher completion of residential projects in Hong Kong and the U.S. Cathay Pacific is expected to continue to lag due to intensifying yield pressure and unfavourable fuel structure. The Beverage Division will likely face continued headwind in the greater China region. At the same time, the Marine Service Division will struggle due to limited exploration and production activities. We adjusted our model assumptions for the division to reflect lower revenue and margin for the full year, lowering our earnings estimates for 2016, 2017 and 2018 by 18%, 9% and 11%, respectively.Analyst: Phillip Zhong

For interim 2016, Swire Pacific reported underlying profit of HKD 3.5 billion, down 27% year on year and below our estimates. Underlying EPS decreased to HKD 2.36, down 27% over the same period a year ago. The results were down across major segments. The company declared an interim dividend of HKD 1.00 per share, down 11% from 2015.Looking forward, we expect Property Division to recover due to higher completion of residential projects in Hong Kong and the U.S. Cathay Pacific is expected to continue to lag due to intensifying yield pressure and unfavourable fuel structure. The Beverage Division will likely face continued headwind in the greater China region. At the same time, the Marine Service Division will struggle due to limited exploration and production activities. We adjusted our model assumptions for the division to reflect lower revenue and margin for the full year, lowering our earnings estimates for 2016, 2017 and 2018 by 18%, 9% and 11%, respectively.Analyst: Phillip Zhong

Swire Pacific's Half-Year Results Below Par Across Most Divisions

Swire Pacific (A)

Swire Pacific's Half-Year Results Below Par Across Most Divisions