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According to Sino Great Wall, the consortium formed by SinoGreat Wall and Wuchang Shipbuilding Industry Group won a totalof ——Rmb18.8bn worth of bids for the “Phnom Penh twin towersworld trade center （Cambodia） construction project” through an“F+EPC” model. Construction period would be 60 months; thecontract has yet to take effect.

Comments

Further progress in overseas expansion to improve earnings andextend influence. We estimate that its overseas revenue maydouble YoY in 2016 and grow >50% YoY over 2017——2018.

Project owners boast excellent capital strength; contractorsboast rich experience.

Driven by PPP projects, domestic businesses to resume highgrowth in 2017. We estimate its domestic businesses may turnaround in 2017 and may return to the 2015 level, implying 100%YoY growth.

More details on Page 3.

Valuation and recommendation

As it remains uncertain when the twin towers project contractwill take effect and the construction will start, we maintain2016/17e earnings forecasts. The stock is trading at 26x 2017eP/E, a historic low and below the price of its ESOP （Rmb11.8/sh），bringing good safety margin. As the company may maintain highearnings growth, policy support for PPP projects would continueand shareholders' equity reduction has largely come to an end,we reiterate BUY and TP of Rmb14.2 （33x 2017e P/E and26% upside）。

Risks

Share dilution due to private placement; risks of overseasbusinesses.