1. business and industrial
2. energy
3. renewable energy

Morning Express
22 October 2014
Focus of the Day
Indices
Renewable Energy Sector
China wind power operators on an upward path
Louis SUN
[email protected]
MP
UP
OP
The China wind power industry has great potential.
Hurdles to industry development are being removed.
Industry leaders enjoy greater potential.
Issues to watch: on-grid tariff cut for wind power and other policies critical to the
industry.
Close
HSI
23,089
H Shares
10,276
SH A
2,449
SH B
259
SZ A
1,390
SZ B
968
DJIA
16,615
S&P 500
1,941
Nasdaq
4,419
FTSE
6,372
CAC
4,081
DAX
8,887
Source: Bloomberg
1d %
0.08
-0.19
-0.72
-0.96
-0.76
-0.62
1.31
1.96
2.40
1.68
2.25
1.94
Ytd %
-0.93
-4.99
10.61
2.26
25.95
11.48
0.23
5.03
5.82
-5.58
-5.00
-6.96
Close
86.22
1,248.87
17.52
6,669.00
107.00
1.61
1.27
3m %
-19.93
-4.41
-16.37
-5.07
-5.18
-5.59
-5.60
Ytd %
-22.18
3.58
-10.01
-9.39
-1.58
-2.69
-7.50
bps change
HIBOR
0.38
US 10 yield
2.22
Source: Bloomberg
3m
0.00
-0.24
6m
0.01
-0.49
Indicators
Top pick: Huaneng Renewables
This is the summary translation extracted from the Chinese report entitled “中国风电运营行业步入上升通道” dated
October 22, 2014.
Huaneng Renewables (958.HK)
Neutral
High-quality assets and stronger growth potential
Louis SUN
Last Closing: K$2.55
[email protected]
Upside: +26.7%
LT
BUY
BUY
SELL
Stock
Target Price: HK$3.23
Accelerating capacity growth and improving profitability;
Efficient operation and sound financial structure;
Initiate at Buy.
This is the summary translation extracted from the Chinese report entitled “华能新能源：资产质量优良，具备更大的
成长潜力” dated October 22, 2014.
Download our reports from Bloomberg: BOCM〈enter〉
Brent
Gold
Silver
Copper
JPY
GBP
EURO
HSI Technical
HSI
50 d MA
200 d MA
14 d RSI
Short Sell (HK$m)
Source: Bloomberg
23,089
24,212
23,148
39
4,945
Morning Express
22 October 2014
Hang Seng Index (1 year)
China Longyuan (916.HK)
Neutral
The leading Chinese wind power operator with steady
growth and long-term investment value
26,000
LT
BUY
SELL
25,000
BUY
24,000
23,000
22,000
Louis SUN
Last Closing: HK$7.57
[email protected]
Upside: 2.5%
21,000
Stock
Target Price: HK$7.76
Source: Company data, Bloomberg
Unshakable leadership in the wind power market.
Apart from onshore wind, Longyuan has an edge in offshore wind power and
overseas market development.
HS China Enterprise Index (1 year)
13,000
12,000
Initiate at LT-Buy.
11,000
This is the summary translation extracted from the Chinese report entitled “龙源电力：中国风电运营行业领头羊，发
展稳健，具备长期投资价值” dated October 22, 2014.
10,000
9,000
8,000
Source: Company data, Bloomberg
Datang Renewables (1798.HK)
Neutral
Excessively high gearing weighs on its ability to
expand
Louis SUN
Last closing: HK$1.04
[email protected]
Upside: +5.8%
LT
BUY
BUY
SELL
Shanghai A-shares (1 year)
2,600
2,400
Stock
2,200
Target Price: HK$1.10
2,000
Capacity expansion may re-accelerate.
1,800
Financial risk of excessive gearing.
Source: Company data, Bloomberg
Initiate coverage at Neutral.
This is the summary translation extracted from the Chinese report entitled “大唐新能源：负债率过高，扩张能力承压”
dated October 22, 2014.
China Macro
Deflation risk is manageable
Miaoxian LI
[email protected]
Economics
China’s GDP growth slowed to 7.3% YoY in the third quarter. Nevertheless, the industrial
output gap remains near zero, suggesting a state of full employment. Therefore, we
believe the deflation risk of China is manageable and a full-scale monetary easing is
unlikely. However, we believe the PBoC will continue to inject liquidity through targeted
easing in view of the continued capital outflow from emerging markets.
Download our reports from Bloomberg: BOCM〈enter〉
Shenzhen A-shares (1 year)
1,500
1,400
1,300
1,200
1,100
1,000
900
800
Source: Company data, Bloomberg
Morning Express
22 October 2014
OOIL (316.HK)
Neutral
Company update - concerns over cargo cost hike and
port congestion ahead
Geoffrey CHENG, CFA
Last Closing: HK$42.25
BUY
SELL
[email protected]
Upside: +19.5%
LT
BUY
Stock
Target Price: HK$50.50→
We have visited OOIL lately. Management said the load factors of its vessels on the
major East-West tradelanes rebounded in a robust manner after the National Day
holidays of mainland China. Despite the high expectation at the start of the year,
volume growth on the Transpacific tradelanes headhaul voyages was 4.9% YoY only
Y-T-August. Overcapacity remains the major overhang for the industry. While the
continual weakness of bunker price will be positive for the industry overall, OOIL is
concerned about the rising cargo cost as well as port congestion. We maintain our BUY
recommendation and earnings forecast at the moment.
Tiangong International (826.HK)
Neutral
Four new products and technologies passed
evaluation
Zhiwu LI
Last Closing: HK$2.08
[email protected]
Upside: +73.1%
LT
BUY
BUY
SELL
Stock
Target Price: HK$3.60→
Event:
Tiangong International (826.HK) announced that four of its new products and
technologies self-developed and joint-developed with scientific research institutes have
successfully passed evaluation by industry experts and authorities. The “New Product and
Technology Evaluation Meeting” was jointly organized by the Jiangsu Economic and
Information Technology Commission and the Zhenjiang Science and Technology Bureau,
and jointly hosted by the Zhenjiang Economic and Information Technology Commission
and the Zhenjiang Science and Technology Bureau. Experts and professors from the
Jiangsu Metallurgy Association, Jiangsu Metal Society, Central Iron & Steel Research
Institute, Nanjing University, and Nanjing University of Aeronautics and Astronautics,
along with representatives from the Information Technology Commission and technicians
from the company, attended the meeting. Attendees evaluated and unanimously
approved the four products, including “Rare earth M42 Bi-metal Blade Material”, “Rare
Earth High Sulphur Content High Speed Steel”, “High Strength & Wear Resistant
Cold-Work Die Steel For Precision Moulding”, and “High Tropism Hot-Work Die Steel For
Precision Moulding”.
Comments:
1) All four products are world-class advanced technologies. “Rare earth M42 Bi-metal
Blade Material” and “Rare Earth High Sulphur Content High Speed Steel” are
high-speed steel products, while “High Strength & Wear Resistant Cold-Work Die
Steel For Precision Moulding” and “High Tropism Hot-Work Die Steel For Precision
Moulding” are die steel products. The fact that they passed the evaluation reflects
Tiangong’s world-class advanced technologies and technological leadership in China.
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
22 October 2014
2) Import substitution is likely. China’s demand for high-end special steel remains
largely satisfied by imports. After years of R&D and product mix optimization,
Tiangong has become a manufacturer of high value-added products. The four
products passed evaluation by industry experts after trial production. This suggests
mass production could start soon and Tiangong’s products could substitute imported
ones.
3) Maintain “Buy”. Die steel is Tiangong’s major product category. Although it has had a
dominant market share in China in die steel, there is still room for improving the
added value of products. Maintain Buy rating and TP of HK$3.6.
China Mobile (941.HK)
Neutral
Lowest quarterly profit in six years
Zhiwu LI
Last Closing: HK$91.2
SELL
[email protected]
Upside: +12.5%
LT
BUY
BUY
Stock
Target Price: HK$102.6→
1) In 1-3Q 2014, revenue increased 3.9% YoY to RMB481.235bn; EBITDA fell 5.0% YoY to
RMB176.338bn; and net profit dropped 9.7% YoY to RMB82.602bn; 3) In the third
quarter, revenue dropped 2.1% YoY to RMB156.45bn, while net profit fell 12.5% YoY to
RMB24.86bn, the lowest quarterly profit since 2009; 3) ARPU was RMB63 in 1-3Q, down
4.5% from the same period last year and 1.6% from 1H14; 4) Monthly addition of 4G
users exceeded 10 million for the first time. China Mobile added 11.381mn 4G users in
September, up 24.6% MoM; 5) The VAT reform and interconnection settlement continue
to affect the company’s revenue and expense structures. We maintain “LT-Buy” rating
and TP of HK$102.6.
Energy Sector
Bocom Energy Weekly
Fei WU
[email protected]
UP
MP
OP
In the energy world, the attention continues to be on the low crude oil price - although
Saudi Arabia had decided not to cut production and thus gain market share. Brent futures
did bounce up from its four-year low on Oct 16 (up US$2.40/bbl) on EIA's news
announcement of a tight gasoline inventory, which dropped to the lowest level since Nov
2012. NDRC also adjusted down gasoline and diesel prices by approximately 4% on Oct
17. The company implication so far has been reflected in CNPC's statement that it would
be difficult to reach its profit target this year.
Download our reports from Bloomberg: BOCM〈enter〉
22 October 2014
Sector Report
Renewable Energy Sector
Renewable Energy Sector
MP
UP
China wind power operators on an upward path
OP
Valuation summary
Company name
Stock
Rating
TP
ticker
(RMB)
Huaneng Renew
958 HK
CP
EPS
EPS consensus
–––– P/E ––––
–––– P/B ––––
Yield
10/20 FY14E FY15E FY14E FY15E FY14E FY15E FY14E FY15E FY14E
(RMB) (RMB)
Buy
3.23
2.55
China Longyuan
916 HK LT Buy
7.76
Datang Renew
1798 HK Neutral
1.10
(RMB) (RMB)
(RMB)
(x)
(x)
(x)
(x)
(%)
18.5
10.3
1.2
1.1
1.1
0.109
0.196
0.133
0.185
7.57
0.292
0.383
0.361
0.453
20.5
15.6
1.5
1.4
1.0
1.04
-0.004
0.056
0.031
0.059
-205.9
14.7
0.6
0.6
0.0
Key points:
The China wind power industry has
great potential.
Hurdles to industry development are
being removed.
Source: Companies, BOCOM Int’l estimates
China wind power industry has great potential. The China wind power industry has
grown rapidly in recent years. Cumulative installed capacity surged from 12GW in
2008 to 91.4GW in 2013, and is expected to exceed 120GW by the end of 2015 and
200GW by the end of 2020. Pursuant to government planning, the minimum quota
of wind power consumption will increase from 248.3bn kWh to 446.6bn kWh in
2020, with a 5-year CAGR of 12.5%. By 2020, China targets to have wind power
provide at least 5.3% of total power consumption, still way below the levels of the
developed countries. Given China’s rich wind resources, we expect the ratio to
exceed 10% before 2030.
Improving industry environment. Rapid installed capacity growth and inadequate
grid capacity are the biggest industry hurdles. Installing new capacity at regions
without power curtailment is a short-term solution. Ultra-high voltage transmission
lines and renewable energy quota system are better longer-term solutions. We
expect both capacity and turbine utilization hours to improve starting next year, a
trend that we expect to last several years. Meanwhile, falling market interest rates
should benefit the highly leveraged players in the long run.
Industry leaders enjoy greater
potential.
Issues to watch: on-grid tariff cut for
wind power and other policies critical
to the industry.
Top pick: Huaneng Renewables
Sector valuation
(X)
FY14E weighted avg P/E
FY15E weighted avg P/E
FY14E weighted avg P/B
Source: Company, BOCOM Int’l
15.5
10.5
1.1
1-year sector performance
HSI
新能源行业
50%
40%
30%
20%
Favor the leaders. Industry concentration has declined due to the entry of small/
medium-sized players. However, the larger companies have advantages in project
reserves, efficiency, offshore wind power and overseas market development in the
long term. Thus, we expect industry concentration to increase starting from the early
th
part of the 13 Five-Year Plan period (i.e. 2016).
Risk factors: China targets to achieve grid parity for wind power in 2020. The
potential wind tariff adjustment may lower the expected investment return on new
capacity. However, falling power generation costs and increased power grid capacity
to take up wind power should offset the decline in on-grid tariffs.
Top pick: Huaneng Renewables. We have compared the operational data and
financial indicators of the stocks under our coverage, and taken their share price
movements into consideration. We initiate coverage on Huaneng Renewables at Buy
with a TP of HK$3.23, corresponding to 13x 2015E P/E, in light of its better asset
quality, management efficiency, and growth outlook. We initiate coverage on
Longyuan at LT-Buy with a TP of HK$7.76, and recommend adding on pullback, given
its technological advantage and stronger financials. We initiate Datang Renewables
at Neutral with a TP of HK$1.10, as we think it will need more time to improve
profitability and lower its financial risks.
This is the summary translation extracted from the Chinese report entitled “中国风电运营行业步入上升通道”
dated October 22, 2014.
Download our reports from Bloomberg: BOCM〈enter〉
10%
0%
-10%
-20%
-30%
Jun-13
Sep-13
Dec-13
Mar-14
Source: Bloomberg
Louis Sun
[email protected]
Tel: (86) 21 6065 3606
Jun-14
22 October 2014
Last Closing: K$2.55
Upside: +26.7%
Target Price: HK$3.23
Renewable Energy Sector
Huaneng Renewables (958.HK)
UP
High-quality assets and stronger growth potential
MP
OP
Initiation of coverage
Financial highlights
Revenue (RMB m)
Change (%)
Net profit (RMB m)
Change (%)
Basic EPS (RMB)
Change (%)
Vs. consensus (%)
P/E (x)
BVPS (RMB)
P/B (x)
DPS (RMB)
Yield (%)
Source: Company, BOCOM Int’l
2012
4,027
26.0
558
-45.5
0.066
-45.5
2013
5,798
44.0
888
59.1
0.098
48.8
30
1.40
1.4
0.01
0.3
20
1.54
1.3
0.02
1.0
2014E
6,608
14.0
980
10.4
0.109
10.4
-18.4
18.5
1.62
1.2
0.02
1.1
2015E
8,965
35.7
1,768
80.4
0.196
80.4
5.9
10.3
1.78
1.1
0.04
1.9
2016E
10,789
20.3
2,429
37.4
0.269
37.4
16.0
7.5
1.99
1.0
0.05
2.7
Neutral
LT
BUY
BUY
SELL
Stock
Accelerating capacity growth and
improving profitability;
Capacity growth is accelerating. Huaneng Renewables is likely to accelerate capacity
Efficient operation and sound
financial structure;
expansion in 2014 back to the high level in 2010, after it slowed its investment pace
for three consecutive years. We expect it to add about 2GW of installed capacity to
~8.5GW by end-2014. Morever, with 546.5MW of new projects approved in 1H14,
Initiate at Buy
new capacity is likely to commence operation much earlier than scheduled in 2015.
Much of the new capacity is located in regions without power curtailment, and 92% of
the 1.9GW of projects included in China’s fourth batch of approved wind power
projects early this year are located in non-curtailed areas. The increase of quality
projects paves way for its earnings enhancement in the next few years.
Stock data
Competitive advantages. Huaneng Renewables has the highest profitability among
the three major wind power operators, indicative of its good project resources and
management capability. With a moderate debt ratio and smooth financing channels,
capital is unlikely to be a hurdle to its future development, in our view.
Short-term catalysts and risk factors. Anticipated new policies in renewable energy
quota and full purchase of renewable energy should offer compensation for wind
operators in regions with severe power curtailment. A short-term risk factor to watch
is whether wind resources will improve in 2H14.
52w High (HK$)
52w Low (HK$
Market cap (HK$m)
Issued shares (m)
Avg daily vol (m)
1-mth change (%)
YTD change (%)
50d MA (HK$)
200d MA (HK$)
14-day RSI
Source: Bloomberg
3.87
2.16
23,024
9,029.215
21.75
-7.61
-31.45
2.75
2.85
41.64
1-year performance chart
HSI
Forecasts and rating. Our EPS forecasts for 14/15/16 are RMB0.109/0.196/0.269, up
35%
10.4/80.4/37.4% YoY. We are optimistic that Huaneng Renewables will achieve high
15%
growth, and the stock is undervalued. We initiate coverage at Buy with a TP of
-5%
958.HK
25%
5%
-15%
HK$3.23, representing 13x 2015E P/E.
-25%
Oct-13
This is the summary translation extracted from the Chinese report entitled “华能新能源：资产质量优良，具备
更大的成长潜力” dated October 22, 2014.
Jan-14
Apr-14
Jul-14
Source: Bloomberg
Louis Sun
[email protected]
Tel: (86) 21 6065 3606
Download our reports from Bloomberg: BOCM〈enter〉
Oct-14
22 October 2014
Last Closing: HK$7.57
Upside: 2.5%
Target Price: HK$7.76
Renewable Energy Sector
China Longyuan (916.HK)
UP
The leading Chinese wind power operator with steady growth and
long-term investment value
MP
OP
Initiation of coverage
Financial highlights
Revenue (RMB m)
Change (%)
Net profit (RMB m)
Change (%)
Basic EPS (RMB )
Change (%)
Vs. consensus (%)
P/E (x)
BVPS (RMB)
P/B (x)
DPS (RMB)
Yield (%)
Source: Company, BOCOM Int’l
2012
17,288
4.2
2,593
0.6
0.323
-6.6
2013
19,123
10.6
2,049
-21.0
0.255
-21.0
19
3.66
1.6
0.01
0.1
23
3.85
1.55
0.05
0.8
2014E
18,830
-1.5
2,347
14.5
0.292
14.5
-19.1
20.5
4.08
1.46
0.06
1.0
2015E
21,262
12.9
3,079
31.2
0.383
31.2
-15.4
15.60
4.39
1.36
0.077
1.3
2016E
23,406
10.1
3,758
22.0
0.468
22.0
-12.1
12.8
4.76
1.3
0.09
1.6
Neutral
LT
BUY
SELL
BUY
Stock
Unshakable leadership in the wind
power market.
Solidified market leadership. Longyuan has maintained steady growth in recent years while
Apart from onshore wind, Longyuan
has an edge in offshore wind power
and overseas market development.
the other major wind operators have vastly slowed their capacity growth. This has not only
consolidated its market leadership but also paved way for sustained growth. We expect the
company to maintain high investment in the next few years, with installed capacity reaching
17.2GW by end-2016, up 44.1% from 11.9GW in 2013. Longyuan also has 5.3GW of approved
Initiate at LT-Buy.
projects with investment yet to be made and 9.6GW of projects included in the national plan.
Aggregate project reserves amount to 68.5GW.
Solid financials and risk resistance. Unlike its highly leveraged peers, Longyuan has kept its
net gearing within 60%. Its sound capital structure helps maintain the stability of the business
Stock data
operation and provide war chest for continued future expansion.
and full purchase of renewable energy should offer compensation for wind operators in regions
52w High (HK$)
52w Low (HK$
Market cap (HK$m)
Issued shares (m)
Avg daily vol (m)
1-mth change (%)
YTD change (%)
50d MA (HK$)
200d MA (HK$)
14-day RSI
Source: Bloomberg
with severe power curtailment. A short-term risk factor to watch is whether wind resources will
1-year performance chart
Competitive advantages. Longyuan is the domestic leader in technology R&D, project quality
control, financing expense control and emerging market development. Apart from onshore wind,
the company has an edge in offshore wind power and overseas market development.
Short-term catalysts and risk factors. Anticipated new policies in renewable energy quota
improve in 2H14.
10.32
7.12
60,835
8,036.389
15.49
-5.61
-24.22
8.05
8.55
29.45
HSI
916.HK
30%
Forecasts and rating. Our EPS forecasts for 14/15/16 are RMB0.292/0.383/0.468, up
14.5/31.2/22.0% YoY. While Longyuan is fairly valued, its strong comprehensive advantages
should give it more opportunities in the ever-changing environment. Therefore, we initiate
coverage at LT-Buy with a TP of HK$7.76, representing 16x 2015E P/E.
20%
10%
0%
-10%
-20%
Oct-13
Jan-14
Apr-14
Jul-14
Source: Bloomberg
This is the summary translation extracted from the Chinese report entitled “龙源电力：中国风电运营行业领头
羊，发展稳健，具备长期投资价值” dated October 22, 2014.
Download our reports from Bloomberg: BOCM〈enter〉
Louis Sun
[email protected]
Tel: (86) 21 6065 3606
Oct-14
22 October 2014
Last closing: HK$1.04
Upside: +5.8%
Target Price: HK$1.10
Renewable Energy Sector
Datang Renewables (1798.HK)
UP
Excessively high gearing weighs on its ability to expand
MP
OP
Initiation of coverage
Financial highlights
Revenue (RMB m)
Change (%)
Net profit (RMB m)
Change (%)
Basic EPS (RMB)
Change (%)
Vs. Consensus (%)
P/E (x)
BVPS (RMB)
P/B (x)
DPS (RMB)
Yield (%)
Source: Company, BOCOM Int’l
2012
4,368
14.1
112
-84.6
0.015
-84.6
2013
5,630
28.9
237
110.9
0.033
110.9
53
1.21
0.7
0.01
0.9
25
1.28
0.64
0.00
0.4
2014E
5,581
-0.9
-29
-112.3
-0.004
-112.3
-112.9
-205.9
1.27
0.64
0.00
0.0
2015E
6,869
23.1
405
-1497.2
0.056
-1497.2
-5.6
14.74
1.32
0.62
0.011
1.4
2016E
7,659
11.5
585
44.5
0.080
44.5
23.8
10.2
1.38
0.6
0.02
2.0
Capacity expansion may re-accelerate. After years of rapid development, the company’s
capacity expansion has slowed significantly since 2012. New capacity only amounted to
497MW in 2012 and 50MW in 2013. Insufficient wind power consumption at the project sites
was the main reason for the slowdown in investment. The company will accelerate investment
in regions without power curtailment in 2014. New capacity is expected to reach 700MW this
year, and the company will maintain a relatively high level of investment in the foreseeable
future.
Neutral
LT
BUY
BUY
SELL
Stock
Capacity expansion may
re-accelerate.
Financial risk of excessive gearing.
Initiate coverage at Neutral.
Ample project reserves with bright outlook. As of June 2014, the company had 1.06GW
of projects under construction. Controlling installed capacity that has started operation
amounted to 5.72GW, and approved capacity totaled 10.7GW. The capacity pending approval
but included in the national planning reached 1.24GW and total project reserves reached 97GW
by the end of 2013, which is enough for years of development. Meanwhile, 73.4% of projects
with total capacity of 4.96GW included in the national planning are located in regions without
power curtailment. The operation commencement of these projects will greatly optimize the
company’s asset quality.
Financial pressure has affected the speed of expansion. The rapid expansion in the
early stage and over-reliance on bank borrowings have resulted in a high gearing ratio.
Meanwhile, an excessive number of wind power projects under operation are located in regions
with severe power curtailment in northern China. Its poor profitability has dampened the stock
valuation, impairing its ability to do direct financing in the equity market. We believe private
placement to the major shareholders is an ideal way of improving capital structure.
Short-term catalysts and risk factors. Anticipated new policies in renewable energy quota
and full purchase of renewable energy should offer compensation for wind operators in regions
with severe power curtailment. Whether Datang Renewables, among the worst hit by
curtailment, will receive more compensation remains to be seen. A short-term risk factor to
watch is if wind resources will improve in 2H14.
Forecasts and rating. Our EPS forecasts for FY14/15/16E are RMB-0.004/0.056/0.08. The low
profitability and excessive gearing are unlikely to improve notably in the short term, but its rich
project reserves and the improving business environment may offer a turning point. Therefore,
we initiate coverage at Neutral with a TP of HK$1.10, equivalent to 0.66x FY15E P/B.
This is the summary translation extracted from the Chinese report entitled “大唐新能源：负债率过高，扩张能
力承压” dated October 22, 2014.
Download our reports from Bloomberg: BOCM〈enter〉
Stock Data
52w High (HK$)
52w Low (HK$)
Market cap (HK$ m)
Issued shares (m)
Avg daily vol (m)
1-mth change (%)
YTD change (%)
50d MA (HK$)
200d MA (HK$)
14-day RSI
Source: Bloomberg
1.77
0.98
7,565
7,273.701
2.88
-6.31
-36.59
1.15
1.25
35.1
1-year performance chart
HSI
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
Aug-13
Nov-13
3800.HK
Feb-14
May-14
Source: Bloomberg
Louis Sun
[email protected]
Tel: (86) 21 6065 3606
Aug-14
22 October 2014
Last Closing: HK$42.25
Upside: +19.5%
Target Price: HK$50.50→
Container Shipping Sector
OOIL (316.HK)
UP
MP
Company update - concerns over cargo cost hike and port
congestion ahead
OP
Financial Highlights
Y/E 31 Dec
Revenue (US$m)
YoY growth
Net profit (US$m)
YoY growth
EPS (US$)
BVPS (US$)
PB (x)
2012
6,459
7.4
296.4
63.2
0.474
11.4
0.75
2013
6,232
(3.5)
47.0
(84.1)
0.075
72.1
0.76
2014E
6,737
8.1
330.9
603.4
0.529
11.0
0.70
2015E
7,280
8.1
321.4
(2.9)
0.514
11.3
0.67
2016E
7,960
9.3
431.1
34.1
0.689
7.8
0.63
Neutral
LT
BUY
BUY
SELL
Stock
Source: Company, BOCOM Int’l estimate
Cautiously positive for 2H14. We have visited OOIL recently and below are some of
our key findings. Headhaul load factors on the vessels of OOIL plying the major
East-West tradelanes rebounded in the third week of October after the expected
weakness in the first and second weeks of the month due to the National Day
holidays in mainland China. In 1H14, roundtrip load factor of OOIL’s shipping
operation rose 5.0% ppts on a YoY basis to 77%. OOIL continues to exercise
stringent revenue management in order to sustain its margin performance (9.8%
GPM in 1H14 vs. 6.7% in 1H13). Hence, the continual volume decline of westbound
waste paper/plastics shipment from North America west coast ports does not affect
OOIL much (waste paper accounts for 2% of cargo volume for OOIL westbound
volume) while those carriers relying on them for revenue will likely be affected, given
waste paper/plastics represent the two largest cargo items heading Far East for the
overall industry.
Shipping volume disappointing on Transpacific route. In the first eight months of
the year, industry shipping volume on Transpacific eastbound headhaul voyages rose
4.9% YoY, while the growth rate in July and August decelerated (2.6% YoY and 3.1%
YoY, respectively). OOIL shares our concern that the base-rate guidelines
advocated by the Transpacific Stabilization Agreement (TSA) for adoption next year
may not be implemented by all container shipping companies. For Asia-Europe
westbound headhaul voyages, industry cargo volume increased 8.2% YoY in the first
eight months, while growth rate also decelerated in July and August. The weak
freight rate performance of Asia-Europe tradelanes was probably due to the
overhang of continual capacity expansion ahead, in our view. According to
Alphaliner, capacity on the Asia-Europe tradelane rose only 2.6% YoY for July and
August in aggregate. Newbuilding delivery of the industry could reach 1.82m TEU
capacity next year, up from an estimated 1.59m TEU this year.
We have visited OOIL lately. Management
said the load factors of its vessels on the
major East-West tradelanes rebounded in a
robust manner after the National Day
holidays of mainland China.
Despite the high expectation at the start of
the year, volume growth on the Transpacific
tradelanes headhaul voyages was 4.9%
YoY only Y-T-August. Overcapacity remains
the major overhang for the industry.
While the continual weakness of bunker
price will be positive for the industry overall,
OOIL is concerned about the rising cargo
cost as well as port congestion. We
maintain our BUY recommendation and
earnings forecast at the moment.
Stock data
52w High
52w Low
Market cap (HK$m)
Issued shares (m)
Avg daily vol (m)
1-mth change㧔%㧕
YTD change㧔%㧕
50d MA
200d MA
14-day RSI
Source: Company data, Bloomberg
48.30
32.05
26,439.8
625.8
31.5
(9.91)
8.5
45.4
39.7
39.5
1 Year Performance chart
(HK$)
65
OOIL
Rel to MSCI HK
60
125
55
115
50
105
45
40
95
35
We maintain our BUY recommendation. A continual weakness of bunker price, as
a result of crude oil price weakness, would augur well for the container shipping
industry. However, OOIL said the rising intermodal cost poses the biggest challenge
for its cost containment exercise. Global port congestion poses another secular
challenge ahead, according to OOIL. OOIL will release its 3Q14 operating data at
the end of this week.
Download our reports from Bloomberg: BOCMτenterυ
85
30
25
Oct-13
75
Dec-13
Mar-14
May-14
Aug-14
Source: Company data, Bloomberg
Geoffrey Cheng, CFA
[email protected]
Tel: (852) 2977 9380
Oct-14
22 October 2014
Energy Weekly
Energy Sector
Bocom Energy Weekly
MP
UP
Sector news around the block
OP
This week’s energy updates:
NDRC oil product prices adjusted down (Oct 17, 2014). NDRC’s latest product price
adjustment on Oct 17 saw gasoline and diesel prices adjusted down Rmb300/tonne
and Rmb290/tonne (Rmb0.22/liter and Rmb0.25/liter), decreasing 3.8% and 4.1%,
respectively. Prices have been cut six times since June 23; gasoline and diesel prices
dropped 1080 and 1040 Rmb/tonne.
NDRC oil product prices were
adjusted down on Oct 17, for the
sixth consecutive time.
CNPC may have trouble meeting
profit target amidst oil slump.
CNPC’s trouble in meeting profit target amidst crude oil price slump. China’s biggest
oil and gas producer said it might have difficulty in meeting its profit targets this year
because of crude oil’s slump this month. CNPC also denied reports that Shell would
cut investment in Sichuan shale gas projects that CNPC takes part in. CNPC said it was
not informed that its Dutch partner would downsize the investment in their jointly
explored shale gas projects.
Saudi Arabia and OPEC not cutting production to gain market share. Some said that
by refusing to lower production significantly and by cutting export prices, Saudi
Arabia has started a price war with cheaper cost of production and huge foreign
exchange reserve on its side. Lower oil price resulted from the supply side: a high
shale gas production from the US and sustained output from Libya and Iraq, as well
as the demand side: sluggish economic growth in Europe and Asia.
Crude jumped from a four-year low
on US gasoline inventory tightness.
Saudi Arabia and OPEC are not
cutting supplies.
Brent Crude Price
USD/bbl
Brent
120
115
110
105
100
95
Crude price jumped from a four-year low on EIA’s announcement of US gasoline
inventory tightness. After reaching a four-year low level of US$82.93 on Oct 16,
Brent futures jumped on EIA’s news of a tight gasoline inventory. Data showed that
gasoline inventory reduced by 3.99m barrels in the previous week, the lowest point
since Nov 2012. Brent has gained US$2.40/bbl since then to close at US$86.16/bbl.
Price
HSI
Shanghai
S&P 500
HSI Index
SHCOMP Index
SPX Index
85
80
75
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Source: Company data, Bloomberg
WTI Crude Price
Share price performance & commodities
Perfo rman ce
Last
O&G
PetroChina
857 HK Equity
Sinopec
386 HK Equity
CNOOC
883 HK Equity
Gas Utility
Hong Kong China Gas 3 HK Equity
ENN Energy
2688 HK Equity
China Resource Gas
1193 HK Equity
Tianlun Gas
1600 HK Equity
Chem
Shanghai Petrochemical338 HK Equity
Oil Services
COSL
2883 HK Equity
Hilong
1623 HK Equity
Comm odities
Brent
EUCRBREN Index
WTI
USCRWTIC Index
PGCRDUBA Index
Dubai
Cinta
APCRCNTA Index
Henry hub
NGUSHHUB Index
Index
90
1-D
1-Week
1-mth
3-mth
1H 2014
chg（%） chg（ % ） chg（% ） chg（%） chg (%)
1-yr
YTD
chg（%） chg（%）
USD/bbl
WTI
120
115
110
9.36
6.51
12.48
-0.4
-0.8
-0.5
-1.5
-2.1
-0.3
-11.0
-7.7
-11.5
-7.9
-9.8
-7.3
15.2
16.7
-3.5
3.5
4.8
-21.9
10.1
2.8
-13.5
105
100
17.86
54.05
22.50
9.15
0.4
1.0
-1.1
1.7
-0.1
0.2
-2.6
-0.5
3.1
-0.6
2.3
5.5
6.3
-4.4
-7.6
-8.4
-4.6
-2.9
-9.6
25.7
7.9
17.6
10.3
31.7
10.5
-5.8
-16.7
24.3
80
2.51
-2.7
-0.4
-8.1
8.2
-3.1
29.8
12.6
18.42
2.68
-0.3
-0.4
-3.4
-17.8
-11.9
-31.5
-5.0
-33.0
-22.5
-42.0
-11.7
-45.9
-23.4
-59.6
84.8
82.7
84.1
83.2
3.7
0.6
-0.1
-1.1
-1.0
-1.9
-0.3
-3.5
-3.6
-2.7
-5.7
-12.5
-10.5
-11.8
-12.0
-5.4
-20.4
-19.8
-19.0
-20.7
-6.6
1.1
13.1
-2.4
0.4
3.5
-23.0
-18.0
-21.1
-23.9
-1.8
-23.5
-16.0
-22.0
-24.2
-16.0
23089
2340
1904
0.1
-0.7
0.9
-5.0
0.4
-5.3
-1.3
13.9
-3.5
-1.5
5.0
9.1
-0.9
10.6
3.0
0.2
-0.8
1.6
Source: BOCOM Int’l, Bloomberg
Download our reports from Bloomberg: BOCM〈enter〉
-0.5
-3.2
10.9
95
90
85
75
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Source: Company data, Bloomberg
Fei Wu
[email protected]
Tel: (852) 2977 9392
Tony Liu
[email protected]
Tel: (852) 2977 9390
Morning Express
22 October 2014
Market Review
Hong Kong stocks finished a volatile session largely flat. The Hang Seng Index edged up
0.08% to close at 23,088.58, after rising as much as 161 points. Hong Kong developers led
gains. Sino Land (83.HK) rose 2.25% as the best blue-chip gainer. SHKP (16.HK) added
1.3%. New World Development (17.HK) edged up 0.7%. Renewable energy stocks rose as
market anticipates supportive policies for the sector. Singyes (750.HK) rose 2%. GCL New
Energy (451.HK) jumped 11% before trading halted. China Mobile (941.HK) fell 1.8% as
net profit dropped 9.7% in the first three quarters. China Telecom (728.HK) fell 1%.
US stocks gained. The S&P 500 climbed 37.2 points, or 2%, to 1,941.28. The DJIA added
215 points, or 1.3%, to 16,614.81. Shares of Apple rose 2.7% after the company reported
a 13% rise in profit. European stocks rose following media reports that the ECB may buy
corporate bonds to further stimulate the region’s economy. The Stoxx Europe 600 gained
2.1% to 323.74.
News Reaction
China 3Q GDP grew at the slowest pace in 5 and a half years, dragged by property
market correction and a high base. However, a recovery and a steady and fast growth
are expected in 4Q as the relevant policies take effect.
Ministry of Finance (MOF): fiscal income increased only 6.3% YoY in September;
expenditure grew 9.1%. MOF announced that China’s fiscal income increased 6.3% YoY
to RMB995.3bn, continuing the slow growth in August. According to the MOF, the slow
growth of central fiscal income was mainly due to increased export tax rebate, and the
weak growth of domestic VAT tax and import taxes. Local fiscal income grew at a similar
pace as August, but lower than the same period last year, mainly dragged by a slowdown
in property related taxes, among others. Fiscal expenditure increased 9.1% YoY to
RMB1.4trn in September.
China property investments increased 12.5% YoY in Jan-Sept; construction starts
decreased 9.3%. National Bureau of Statistics said on Tuesday that investments in
property development increased 12.5% YoY in Jan-Sept, lower than 13.2% in the first
eight months. Construction starts (in terms of area) dropped 9.3% YoY in Jan-Sept. Sales
of commodity housing fell 8.6% YoY in terms of area and 8.9% in terms of value.
Ministry of Commerce (MOC) to simplify M&A procedures for cost-savings of
companies and banks. The MOC will expedite the review and approval procedures for
both domestic and overseas M&A deals. This will not only reduce legal costs of
companies but also indicate the future direction of the ministry.
China to announce detailed rules of Environmental Protection Law. The new
Environmental Protection Law, said to be“the toughest ever”, will come into force on 1
Jan 2015. The Ministry of Environmental Protection has started the drafting of 54 sets of
supporting document as well as related rules and regulations.
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
22 October 2014
Economic releases for this week - USA
Date Time
22-Oct
22-Oct
23-Oct
23-Oct
24-Oct
Source: Bloomberg
Event
CPI (MoM)
CPI ex food & energy (MoM)
Initial jobless claims (k)
Leading indicators
New Home sales (k)
Economic releases for this week - China
Survey
0.0%
0.2%
0.7%
470.0
Prior
-0.2%
0.0%
264.0
0.2%
504.0
Date Time
23-Oct
Event
HSBC China Manufacturing PMI
Survey
50.2
Source: Bloomberg
BOCOM Research Latest Reports
Data
21 Oct 2014
20 Oct 2014
20 Oct 2014
20 Oct 2014
17 Oct 2014
16 Oct 2014
16 Oct 2014
16 Oct 2014
16 Oct 2014
14 Oct 2014
14 Oct 2014
14 Oct 2014
14 Oct 2014
14 Oct 2014
13 Oct 2014
13 Oct 2014
13 Oct 2014
10 Oct 2014
10 Oct 2014
09 Oct 2014
Report
Container Shipping Sector - Weekly container shipping commentary
China Market Strategy - A Great Shift in Monetary Policy
Daphne (210.HK) - 3Q SSS improved but mainly on low base; margin and inventory pressure lingers
Huishang Bank (3698.HK) - A prominent player in central China riding on national strategy
BOCOM Int'l - Transportation Sector - Weekly transportation news wrap
Luk Fook Holdings (590.HK) –Eased 2Q SSS pressure; China’s Golden Week sales better than expected
Chow Tai Fook (1929.HK) –Narrowed 2Q sales decline, but catalyst remains absent
SITC (1308.HK) –Company update – 3Q14 could be affected by lower freight rate
BOCOM Research – Energy Sector –Bocom Energy Weekly
Brokerage Sector - Raising mainland brokers’ estimates ahead of anticipated strong 3Q
Telecom & Small/Mid-Cap Sector - Eyeing on the opportunities arising from valuation recovery of the
high-quality small/mid-caps
China Property Sector - Contracted sales rebounded, but valuation remains constrained
Container Shipping Sector - Weekly container shipping commentary
Anta (2020 HK) - Another good set of SSS and trade fair results; TP upped
China Market Strategy - The Dollar in Question
Agile Property (3383.HK) - Downgrade to “Sell” on heightened company-specific risks
Auto Sector - SH-HK Stock Connect - Eligible stocks are mainly mid-caps favored by investors
Transportation Sector - Weekly transportation news wrap
SH-HK Stock Connect - Technology - High-quality HK-listed industry leaders will likely be favored
SH-HK Stock Connect - Internet - A-share Internet stocks to gradually become more reasonably valued
Source: Company data, BOCOM International
Download our reports from Bloomberg: BOCM〈enter〉
Analyst
Geoffrey Cheng, CFA
Hong Hao, CFA
Phoebe Wong
Yang Qingli, Wan Li, CFA, Li Shanshan, CFA
Geoffrey Cheng, CFA, Ian Feng
Phoebe Wong
Phoebe Wong
Geoffrey Cheng, CFA
Fei Wu, Tony Liu
Jerry Li
Zhiwu Li
Toni Ho, CFA, FRM, Alfred Lau, CFA, FRM
Geoffrey Cheng
Phoebe Wong
Hao Hong, CFA
Toni Ho, CFA, FRM, Alfred Lau, CFA, FRM
Wei Yao
Ian Feng, Geoffrey Cheng, CFA
Miles Xie
Yuan MA, PhD, Connie GU, CPA
Prior
50.2
Morning Express
22 October 2014
Hang Seng Index Constituents
Company
name
Cheung Kong
Hang Lung Proper
Hengan Intl
China Shenhua-H
Hang Seng Bk
China Res Land
Cosco Pac Ltd
Henderson Land D
Aia Group Ltd
Hutchison Whampo
Kunlun Energy Co
Ind & Comm Bk-H
China Merchant
Want Want China
Sun Hung Kai Pro
New World Dev
Belle Internatio
China Coal Ene-H
Swire Pacific-A
Sands China Ltd
Clp Hldgs Ltd
Bank East Asia
Ping An Insura-H
Boc Hong Kong Ho
China Life Ins-H
Citic Pacific
China Res Enterp
Cathay Pac Air
Hong Kg China Gs
Tingyi Hldg Co
Esprit Hldgs
Bank Of Commun-H
China Petroleu-H
Hong Kong Exchng
Bank Of China-H
Wharf Hldg
Li & Fung Ltd
Hsbc Hldgs Plc
Power Assets Hol
Mtr Corp
China Overseas
Tencent Holdings
China Unicom Hon
Sino Land Co
China Res Power
Petrochina Co-H
Cnooc Ltd
China Const Ba-H
China Mobile
Lenovo Group Ltd
Hang Seng Index
BBG
code
1 HK
101 HK
1044 HK
1088 HK
11 HK
1109 HK
1199 HK
12 HK
1299 HK
13 HK
135 HK
1398 HK
144 HK
151 HK
16 HK
17 HK
1880 HK
1898 HK
19 HK
1928 HK
2 HK
23 HK
2318 HK
2388 HK
2628 HK
267 HK
291 HK
293 HK
3 HK
322 HK
330 HK
3328 HK
386 HK
388 HK
3988 HK
4 HK
494 HK
5 HK
6 HK
66 HK
688 HK
700 HK
762 HK
83 HK
836 HK
857 HK
883 HK
939 HK
941 HK
992 HK
Share
price
(HK$)
130.00
22.75
79.00
21.00
128.10
17.90
10.24
51.95
41.15
96.35
10.18
4.93
23.70
9.52
113.10
9.42
8.65
4.62
100.60
44.80
65.55
31.10
59.00
25.00
21.60
13.54
18.52
13.78
17.86
19.40
10.02
5.47
6.51
172.90
3.52
55.05
9.33
77.75
72.35
30.30
21.50
115.40
11.32
12.70
20.80
9.36
12.48
5.53
91.20
11.14
Mkt
cap
(HK$m)
301,101
102,040
96,917
381,198
244,907
104,379
30,093
155,847
495,657
410,776
82,177
1,605,018
60,365
125,626
308,628
81,624
72,956
72,307
146,992
361,375
165,609
72,987
433,029
264,320
561,188
337,191
44,700
54,208
187,809
108,697
19,466
400,860
758,182
201,951
957,034
166,809
78,003
1,491,851
154,414
176,345
175,740
1,080,834
270,686
76,399
99,770
1,772,915
557,200
1,378,853
1,858,612
117,968
5d
chg
(%)
-0.8
-0.7
1.3
-1.9
0.1
0.4
-1.5
1.2
-0.5
-0.4
-2.1
0.8
-1.3
-1.8
-0.3
1.7
-0.6
-2.1
0.6
8.3
1.3
-0.2
1.1
0.0
0.7
2.9
-1.9
-0.9
-0.1
2.3
-4.8
0.7
-2.1
1.2
0.6
-0.4
3.4
-1.1
0.3
-0.8
1.9
1.8
-1.2
2.4
0.0
-1.5
-0.3
0.7
-1.7
3.5
Ytd
chg
(%)
12.1
-7.1
-13.8
-14.1
1.9
-6.9
-3.8
29.1
5.8
-2.3
-25.5
-5.9
-16.3
-15.0
15.0
2.2
-3.6
6.0
10.7
-28.3
6.9
-5.3
-15.0
0.6
-10.9
14.2
-28.1
-16.0
10.5
-13.4
-32.9
0.0
2.8
33.7
-1.4
-7.2
13.7
-7.6
17.4
3.2
-1.4
16.7
-2.4
19.8
13.2
10.1
-13.5
-5.5
13.4
18.1
23,088.6 14,162,973
0.2
-0.9
Source: Bloomberg
Download our reports from Bloomberg: BOCM〈enter〉
–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
152.00
105.95
27.00
19.80
99.70
74.05
27.00
19.12
133.00
117.60
22.90
13.62
11.92
9.40
56.40
36.46
44.20
34.65
108.50
86.88
14.82
10.06
5.66
4.33
29.80
22.75
13.10
9.32
120.20
90.35
10.48
7.15
11.56
7.25
5.26
3.72
108.00
80.55
68.00
38.70
67.80
56.00
35.00
28.50
76.50
55.60
26.65
21.50
25.80
19.52
16.88
9.35
27.90
18.14
17.26
13.56
18.40
13.91
24.00
17.82
17.42
9.91
5.98
4.53
8.23
5.73
185.00
112.80
3.79
3.03
70.20
46.35
10.70
7.72
87.35
75.75
75.85
57.85
32.30
26.55
24.60
17.52
134.00
77.56
14.22
9.03
14.16
9.83
24.90
17.10
11.70
7.31
16.10
11.42
6.37
4.89
102.20
63.65
12.70
7.62
25,363.0
21,137.6
–––––––––– PE –––––––––––
2013A
2014E
2015E
(X)
(X)
(X)
7.0
8.5
8.8
13.4
17.3
16.3
26.7
25.4
21.1
7.7
8.2
8.1
14.7
14.2
13.2
6.8
9.1
7.7
13.1
11.8
10.5
8.7
16.4
16.5
26.0
20.2
17.6
8.7
12.2
11.3
12.9
12.6
11.2
5.0
5.0
4.7
13.7
14.1
12.8
23.2
22.7
19.8
9.1
14.8
13.8
7.1
10.9
10.4
12.8
13.1
12.4
35.1
35.4
23.5
11.5
14.4
13.4
17.6
16.8
15.0
18.4
15.7
15.4
10.5
11.2
10.6
11.7
10.5
9.2
11.5
10.8
9.8
17.9
14.7
12.6
9.6
9.2
7.9
24.4
33.9
27.3
18.4
16.1
10.9
27.0
25.0
23.1
22.2
27.5
22.5
91.7
31.7
20.4
5.0
4.9
4.7
8.8
8.8
8.4
43.7
38.5
29.3
4.7
4.7
4.4
7.0
14.0
12.3
12.0
18.2
15.8
12.7
11.0
10.1
2.5
17.7
17.8
11.9
17.0
15.6
7.0
7.6
6.6
41.8
34.7
26.2
18.0
16.2
13.9
8.5
14.2
14.1
8.6
8.1
7.5
10.3
10.0
9.4
7.9
7.8
7.5
4.9
4.7
4.4
12.5
13.1
13.0
17.4
17.7
14.4
10.1
10.6
9.8
Yield
P/B
(%)
2.7
3.3
2.3
5.5
4.3
2.5
3.0
1.9
1.1
2.4
2.3
N/A
3.2
2.8
3.0
4.4
1.2
2.2
3.6
3.9
4.0
3.6
1.5
4.0
1.8
2.0
1.3
1.9
1.8
1.5
0.7
N/A
4.7
2.1
7.1
3.2
5.1
4.9
3.6
3.0
2.3
0.2
1.8
3.9
3.6
4.3
4.6
N/A
3.5
2.2
(X)
0.8
0.8
5.9
1.2
2.2
1.2
0.8
0.6
2.3
1.0
1.6
1.0
0.9
8.6
0.7
0.5
2.3
0.6
0.7
8.9
1.8
1.1
1.8
1.6
2.0
0.6
0.9
0.9
3.7
4.9
1.2
0.7
1.0
9.1
0.8
0.6
2.1
1.0
1.3
1.1
1.5
12.2
1.0
0.7
1.5
1.2
1.2
1.0
1.8
4.6
3.7
1.3
Morning Express
22 October 2014
China Ent Index Constituents
Company
name
Shandong Weig-H
China Shenhua-H
Sinopharm-H
China Shipping-H
Zoomlion Heavy-H
Yanzhou Coal-H
Agricultural-H
New China Life-H
Ind & Comm Bk-H
Tsingtao Brew-H
China Com Cons-H
China Coal Ene-H
China Minsheng-H
Guangzhou Auto-H
Ping An Insura-H
Picc Property &
Great Wall Mot-H
Weichai Power-H
Aluminum Corp-H
China Pacific-H
China Life Ins-H
China Oilfield-H
Zijin Mining-H
China Natl Bdg-H
Bank Of Commun-H
Jiangxi Copper-H
China Petroleu-H
China Rail Gr-H
China Merch Bk-H
Bank Of China-H
Dongfeng Motor-H
Citic Securiti-H
Haitong Securi-H
China Telecom-H
Air China Ltd-H
Petrochina Co-H
Huaneng Power-H
Anhui Conch-H
China Longyuan-H
China Const Ba-H
China Citic Bk-H
Hang Seng China Ent Indx
BBG
code
1066 HK
1088 HK
1099 HK
1138 HK
1157 HK
1171 HK
1288 HK
1336 HK
1398 HK
168 HK
1800 HK
1898 HK
1988 HK
2238 HK
2318 HK
2328 HK
2333 HK
2338 HK
2600 HK
2601 HK
2628 HK
2883 HK
2899 HK
3323 HK
3328 HK
358 HK
386 HK
390 HK
3968 HK
3988 HK
489 HK
6030 HK
6837 HK
728 HK
753 HK
857 HK
902 HK
914 HK
916 HK
939 HK
998 HK
Share
price
(HK$)
Mkt
cap
(HK$m)
5d
chg
(%)
Ytd
chg
(%)
7.40
21.00
29.40
4.56
3.86
6.15
3.46
26.60
4.93
55.95
5.53
4.62
7.40
7.37
59.00
13.54
31.45
28.00
3.14
27.25
21.60
18.42
1.91
7.03
5.47
12.78
6.51
4.25
13.36
3.52
12.14
18.62
12.72
4.73
4.62
9.36
8.65
25.15
7.66
5.53
4.84
33,125.15
381,198.29
75,507.83
19,853.76
43,604.12
44,781.06
1,022,778.77
92,764.11
1,605,017.61
70,990.66
92,793.39
72,306.94
265,589.07
59,205.91
433,029.03
184,200.02
110,435.11
51,758.90
57,777.42
226,791.69
561,188.06
101,095.37
62,613.16
37,955.15
400,860.04
52,908.92
758,182.16
86,307.94
332,345.72
957,033.74
104,599.70
186,218.49
124,065.34
382,810.13
66,640.15
1,772,914.92
111,497.94
118,470.91
61,558.74
1,378,852.63
259,981.06
-0.8
-1.9
9.7
-1.5
-9.0
-2.4
0.6
-0.7
0.8
1.4
1.1
-2.1
2.5
-0.3
1.1
-3.6
-0.8
-0.4
-1.3
-0.2
0.7
-3.4
-1.0
0.7
0.7
-0.6
-2.1
3.9
0.3
0.6
-3.0
4.5
6.0
1.5
-2.9
-1.5
-2.8
2.4
3.8
0.7
2.1
-29.3
-14.1
32.1
-24.3
-46.7
-13.1
-9.2
2.3
-5.9
-14.6
-11.5
6.0
3.1
-13.1
-15.0
17.7
-26.5
-10.4
16.3
-10.4
-10.9
-23.4
15.1
-15.7
0.0
-8.7
2.8
6.3
-19.1
-1.4
0.0
-12.0
-5.8
20.7
-20.2
10.1
23.4
-12.5
-23.3
-5.5
15.0
11.2
27.0
30.0
6.3
8.0
8.7
4.1
29.6
5.7
68.3
6.7
5.3
8.2
10.9
76.5
15.0
51.9
35.5
3.9
33.5
25.8
26.0
2.2
9.1
6.0
15.4
8.2
4.7
17.6
3.8
15.2
21.7
14.5
5.2
6.3
11.7
9.7
35.7
10.3
6.4
5.3
6.8
19.1
19.7
4.0
3.9
4.9
3.0
20.6
4.3
53.1
4.9
3.7
5.9
6.7
55.6
9.8
26.1
25.8
2.5
23.6
19.5
17.2
1.6
6.7
4.5
11.6
5.7
3.0
12.1
3.0
9.6
13.7
9.5
3.1
4.2
7.3
6.1
24.2
7.1
4.9
3.6
60.6
7.7
23.2
N/A
12.7
6.5
5.0
10.9
5.0
30.1
5.5
35.1
4.4
11.9
11.7
13.6
9.3
8.4
N/A
18.2
17.9
8.5
15.4
4.8
5.0
9.8
8.8
7.2
4.6
4.7
6.1
22.2
22.8
16.2
17.1
10.3
8.3
8.7
24.9
4.9
4.4
24.6
8.2
21.1
34.6
9.9
19.0
4.8
10.7
5.0
29.1
5.3
35.4
4.1
9.3
10.5
11.8
8.7
9.4
N/A
16.7
14.7
8.4
14.8
5.1
4.9
13.4
8.8
6.8
4.6
4.7
6.3
21.8
18.3
16.0
14.1
10.0
7.8
8.9
16.7
4.7
4.3
10,276
4,126,796
0.2
-5.0
11,638.3
9,159.8
7.2
7.0
Source: Bloomberg
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–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
––––––––––– PE –––––––––––
2013A
2014E
2015E
(X)
(X)
(X)
Yield
P/B
(%)
(X)
20.3
8.1
17.6
13.0
8.4
15.6
4.4
9.3
4.7
25.1
4.9
23.5
3.9
7.2
9.2
10.5
7.0
9.2
N/A
14.3
12.6
7.8
14.8
4.7
4.7
13.2
8.4
6.2
4.2
4.4
5.8
18.8
15.4
14.6
10.5
9.4
7.6
8.3
13.3
4.4
3.9
1.1
5.5
1.1
0.0
4.9
0.4
N/A
0.7
N/A
N/A
4.3
2.2
2.7
3.1
1.5
2.1
3.3
1.1
N/A
1.9
1.8
3.0
N/A
2.9
N/A
5.0
4.7
2.0
5.9
7.1
1.9
N/A
1.2
2.5
1.2
4.3
5.6
1.8
0.8
N/A
N/A
2.8
1.2
2.7
0.6
0.6
0.6
1.0
1.5
1.0
4.0
0.7
0.6
0.9
1.1
1.8
2.3
2.6
1.4
0.8
1.8
2.0
1.6
1.2
0.8
0.7
0.8
1.0
0.8
0.9
0.8
1.2
1.8
1.5
1.1
0.9
1.2
1.5
1.8
1.5
1.0
0.7
6.4
4.6
1.1
Morning Express
22 October 2014
BOCOM International
11/F, Man Yee Building, 68 Des Voeux Road, Central, Hong Kong
Main: + 852 3710 3328
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Rating System
Company Rating
www.bocomgroup.com
Sector Rating
Buy: Expect more than 20% upside in 12 months
LT Buy: Expect more than 20% upside but longer than 12 months
Neutral: Expect low volatility
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Underperform (“UP”): Expect more than 10% downside in 12 months
Research Team
Head of Research
@bocomgroup.com
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raymond.cheng
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hao.hong
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yangqingli
Shanshan LI, CFA
(86) 10 8800 9788 - 8058
lishanshan
Li WAN, CFA
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Wanli
Raymond CHENG, CFA, CPA, CA
Strategy
Economics
Hao HONG, CFA
Banks
Consumer Discretionary
miaoxian.li
Fei WU
(852) 2977 9392
fei.wu
Tony LIU
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xutong.liu
Alfred LAU, CFA, FRM
(852) 2977 9235
alfred.lau
Toni HO, CFA, FRM
(852) 2977 9220
toni.ho
Luella GUO
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luella.guo
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louis.sun
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lizhiwu
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miles.xie
Geoffrey CHENG, CFA
(852) 2977 9380
geoffrey.cheng
Ian FENG
(852) 2977 9381
Yinan.feng
(86) 21 6065 3675
wei.yao
Property
Phoebe WONG
(852) 2977 9391
phoebe.wong
Anita CHU
(852) 2977 9205
anita.chu
Consumer Staples
Renewable Energy
Summer WANG
(852) 2977 9221
summer.wang
Shawn WU
(852) 2977 9386
shawn.wu
Johnson SUN
(852) 2977 9203
johnson.sun
Milo LIU
(852) 2977 9387
milo.liu
(852) 2977 9389
liwenbing
Healthcare
Louis SUN
Telecom & Small/ Mid-Caps
Insurance
Zhiwu LI
Technology
Internet
Miles XIE
Transportation & Industrial
Yuan MA
(86) 10 8800 9788 - 8039
yuan.ma
Connie GU, CPA
(86) 10 8800 9788 - 8045
conniegu
(852) 2977 9243
jovi.li
Metals & Mining
Jovi LI
(86) 10 8800 9788 - 8043
Miaoxian LI
Oil & Gas/ Gas Utilities
Qingli YANG
Jerry LI
@bocomgroup.com
Automobile
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Wei YAO
Morning Express
22 October 2014
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