Morning Express 12 November 2014 Focus of the Day Indices China Property Sector Constrained valuation amid sales recovery Toni HO, CFA [email protected] MP UP OP Developers generally recorded solid sales performance in October, along with the rebound of the property market. October sales revenue and ASP soared 17.7% and 2.1% MoM, respectively, for 27 major developers. We expect the sales recovery to be sustained in 4Q14, given the increasing supply and keen take-up. However, we anticipate some of the developers to trail their full-year targets, including Country Garden (2007 HK), Shimao (813 HK), Longfor (960 HK) and Agile (3383 HK). Also, we expect a gradual narrowing of the sector discount, but may only see a major breakthrough if the market shows signs of price recovery. Therefore, we maintain "Market perform" sector rating. China Everbright Bank (6818.HK) Neutral Anticipation of actual integration upon the establishment of a financial holding platform Shanshan LI Last Closing: HK$3.80 [email protected] Upside: +22.1% LT BUY SELL BUY Stock Target Price: HK$4.64→ Event: CEB issued a notice on the progress of the restructuring and reforms of China Everbright Group, upon which CE Group will become the substantial shareholder of China Everbright Bank. Comments: On 1 Aug 2014, the State Council had approved the proposed restructuring and reforms of China Everbright Group. According to the announcement of the company, MOF and Huijin Limited entered into the Founder Agreement on the Promotion of the Establishment of China Everbright Group Ltd. on 6 Nov 2014. Pursuant to the agreement, MOF will make capital contributions by its 100% equity interest in CE Beijing while CE Beijing will transform from a state-wholly-owned enterprise to a joint stock limited company, the name of which will be changed to China Everbright Group Ltd. (i.e. CE Group). MOF will make capital contributions to CE Group by injecting (1) the 100% equity interest in CE Hong Kong; and (2) a loan and its interest accrued to CE Beijing. Huijin Limited will make capital contributions to CE Group by (1) its existing equity interest representing approximately 19.28% equity interest in CEB; (2) the existing 100% equity Download our reports from Bloomberg: BOCM〈enter〉 Close HSI 23,808 H Shares 10,652 SH A 2,586 SH B 260 SZ A 1,385 SZ B 963 DJIA 17,615 S&P 500 2,040 Nasdaq 4,661 FTSE 6,627 CAC 4,244 DAX 9,369 Source: Bloomberg 1d % 0.27 0.34 -0.16 -0.88 -2.93 -1.15 0.01 0.07 0.19 0.24 0.50 0.18 Ytd % 2.15 -1.52 16.79 2.32 25.47 10.88 6.26 10.35 11.59 -1.80 -1.21 -1.92 Close 81.67 1,162.47 15.71 6,665.00 115.86 1.59 1.25 3m % -21.98 -11.22 -21.16 -4.72 -11.74 -5.29 -6.70 Ytd % -26.29 -3.58 -19.32 -9.44 -9.11 -3.84 -9.24 bps change HIBOR 0.37 US 10 yield 2.36 Source: Bloomberg 3m 0.00 -0.09 6m 0.00 -0.30 Indicators Brent Gold Silver Copper JPY GBP EURO HSI Technical HSI 50 d MA 200 d MA 14 d RSI Short Sell (HK$m) Source: Bloomberg 23,808 23,829 23,198 55 8,935 BOCOM Int'l Corporate Access 14 Nov 18 Nov 20 Nov SciClone Pharma (SCLN.US) Central China Securities (1375.HK) Yutong (600066.CH) Morning Express 12 November 2014 interest in China Everbright Industrial; and (3) the principal and interest of the loans from PBOC, where the right of such debt had been transferred to Huijin Limited by PBOC. The substantial shareholder of China Everbright Bank will change from Huijin Limited to CE Group. Upon restructuring, CE Group will be held as to 44.33% by MOF and 55.67% by Huijin Limited. Previously, Huijin directly held 41.24% stake in CEB and indirectly held 4.38% interest through China Reinsurance, Life Reinsurance, China Everbright Industrial and China Everbright Investment. Upon the completion of the restructuring, Huijin’s direct shareholding will be reduced to 21.96% and it will indirectly hold 4.28% interests through China Reinsurance and Life Reinsurance. China Everbright AG will directly hold 24.01% stake (including Huijin Limited’s capital injection of 9bn shares/19.28% of total equity, and the 4.73% stake previously held by CE Beijing) and it will indirectly hold 4.21% interests through China Everbright (Hong Kong), China Everbright (International), China Everbright Holdings, China Everbright Industrial and China Everbright Investment. The shareholding of China Everbright AG will exceed Huijin Limited, thus becoming the largest shareholder of CEB. CEB will occupy a core position in the group’s integrated platform. Apart from CEB, China Everbright Holdings owns the interest in subsidiaries covering securities, insurance, asset management, futures, financial leasing and industrial businesses. It will become a comprehensive financial holding platform like CITIC Group, which will facilitate the group’s integration of the internal resources. By late 2013, the total assets of China Everbright Group reached RMB2.54tn and the total profit reached RMB374.36tn, while the total assets of CEB reached RMB242m and the net profit reached RMB34.421bn, accounting for over 95% and 90%, respectively. We maintain LT-Buy on the possible subsequent integration ahead. The establishment of the financial holding platform could help CEB achieve synergistic effects through the better use of the group’s resources and raise the growth potential of the capital market, but the subsequent integration will be the key for higher valuation. The counter is trading at FY14E 4.16x PE and 0.70x PB. We maintain LT-Buy with a TP of HK$4.64. Hang Seng Index (1 year) 26,000 25,000 24,000 23,000 22,000 21,000 Source: Company data, Bloomberg HS China Enterprise Index (1 year) 13,000 12,000 11,000 10,000 9,000 8,000 Source: Company data, Bloomberg Shanghai A-shares (1 year) 2,600 2,400 2,200 2,000 1,800 Source: Company data, Bloomberg Shenzhen A-shares (1 year) 1,500 1,400 1,300 1,200 1,100 1,000 900 800 Source: Company data, Bloomberg Download our reports from Bloomberg: BOCM〈enter〉 12 November 2014 Sector Update China Property Sector China Property Sector MP UP Constrained valuation amid sales recovery OP Valuation summary Company Agile Shimao Yuexiu CR Land R&F SinoOcean Greentown SOHO BCL CIFI Wuzhou CSC BBG 11 Nov Code Price (HK$) 3383.HK 813.HK 123.HK 1109.HK 2777.HK 3377.HK 3900.HK 410.HK 2868.HK 884.HK 1369.HK 1668.HK 4.18 16.44 1.46 17.30 8.48 4.56 8.02 5.69 2.73 1.51 1.82 3.88 Rating SELL BUY LT BUY BUY SELL Neutral SELL Neutral Neutral BUY BUY BUY Target Upside Price (HK$) (%) 4.17 21.30 2.00 22.00 7.40 4.70 6.00 6.50 2.90 2.00 2.08 5.60 (0.2) 29.6 37.0 27.2 (12.7) 3.1 (25.2) 14.2 6.2 32.5 14.3 44.3 NAV (HK$) NAV (disc) (%) 13.90 30.40 3.70 31.40 18.50 7.90 15.10 10.00 5.70 4.90 4.62 12.90 (69.9) (45.9) (60.5) (44.9) (54.2) (42.3) (46.9) (43.1) (52.1) (69.2) (60.6) (69.9) –––– P/E –––– FY14E FY15E (x) (x) 2.4 5.0 6.6 8.3 3.8 7.5 3.2 11.4 2.9 3.4 10.8 8.1 2.2 4.1 6.4 7.0 3.0 6.1 2.8 18.2 2.2 2.7 7.6 6.2 –––– P/B –––– FY14E FY15E (x) (x) 0.3 0.9 0.4 1.1 0.4 0.6 0.5 0.6 0.5 0.7 1.7 1.0 0.3 0.8 0.5 1.0 0.4 0.6 0.5 0.6 0.4 0.6 1.5 0.9 –––– Yield –––– FY14E FY15E (%) (%) 10.5 5.6 5.7 3.0 8.5 4.9 7.2 5.6 10.4 5.9 2.8 3.1 October contracted sales revenue soared 17.7% MoM. We expect the 11.6 6.1 5.6 3.6 10.9 6.0 8.3 5.4 13.3 7.3 3.9 4.0 sales recovery is sustainable in 4Q14. We expect a gradual narrowing of the sector discount, but a valuation upgrade is unlikely until the turning point of property prices appears. Source: Company, BOCOM Int’l estimates Expect a sustainable sales recovery in 4Q14. Along with a more apparent sales rebound after the Golden Week holiday, developers were generally able to show solid sales performance, recording MoM growth in both sales revenue and volume in October. While it was somewhat within expectation, the surge of ASP was beyond our anticipation, given the continuous downtrend of property prices in general. We believe st it was mainly supported by higher ASP of new projects and projects in 1 -tier cities. Greentown (3900 HK, +92% MoM), Poly Real Estate (600048 CH, +30% MoM) and Agile (3383 HK, +147% MoM) recorded surprising growth in October sales revenue. 27 developers have announced contracted sales data thus far. Contracted sales revenue rose 17.7% MoM, or 18.9% YoY, on average. 20 out of 27 developers recorded MoM growth in sales revenue. Contracted ASP rose 2.1% MoM on average. 13 out of 27 developers recorded MoM increase in ASP. As a result, 10M14 sales revenue increased by 10.3% YoY. We expect developers to continue to launch more supply to tap the improved sentiment and keen take-up in the near term. Given more supportive policies from both banks and local governments, we anticipate the sales recovery to continue in 4Q14. Indeed, the sales volume maintained 19% MoM growth for 30 major cities in the first week of November. Sector valuation repair, but not upgrade. Despite the anticipated sales rebound, it should be noted that the 10M14 lock-in ratio was 78.2%, still lagging behind 82.2% achieved in 10M13. We expect some of the developers will likely miss the full-year target, including Country Garden (2007 HK), Shimao (813 HK), Longfor (960 HK) and Agile (3383 HK). It is mainly due to their aggressive sales targets and/or sluggish sales in 1H14. Also, we expect a gradual narrowing of the sector discount, but may only see a major breakthrough if the market shows signs of price recovery. Therefore, we maintain "Market Perform" sector rating. The sector is currently trading at a 53% discount to NAV. The resignation of chairman provides bargain hunting opportunity for CR Land (1109 HK), in our view. Download our reports from Bloomberg: BOCM〈enter〉 Relative performance of China Property Sector 20% HSI 10% 0% -10% -20% Sector -30% Nov-13 Feb-14 May-14 Source: Company data, Bloomberg Toni Ho, CFA, FRM [email protected] Tel: (852) 2977 9220 Alfred Lau, CFA, FRM [email protected] Tel: (852) 2977 9235 Aug-14 Morning Express 12 November 2014 Market Review Hong Kong stocks pared gains at close as dragged by the heavyweights. The Hang Seng Index rose 63 points, or 0.3%, to close at 23,808, after rising as many as 186 points. China Mobile (941.HK) dropped 1.9%. HSBC (5.HK) edged down 0.1%. Tencent (700.HK) rose 1.5% ahead of earnings release tomorrow. Lenovo (992.HK) jumped 3.2% as the best blue-chip performer. HKEx (338.HK) edged down 0.8%. Chinese financials led gains. BOC (3988.HK) rose 3% as the bank was named the sole settlement bank for SH-HK Stock Connect. CITIC Bank (998.HK) rose 2.4%. Shares with A/H arbitrage theme continued to fare well. Jingwei Textile (350.HK) soared 12.1%. GCL-Poly (3800.HK) rebounded 5.7%. US stocks were largely flat on Tuesday. The S&P 500 rose 1.42 points, or 0.07%, to 2,039.68. The DJIA was essentially unchanged at 17,614.90. European stocks rose, lifted by upbeat earnings reports including those of Vodafone and Henkel. The Stoxx Europe 600 added 0.4% to close at 338.93. News Reaction Xi Jinping: China to explore economic growth points through reforms and innovation, and expedite the development of free-trade zones in the Asia Pacific. As stated by China’s President Xi Jinping on Tuesday, instabilities and uncertainties on the recovery of the current global economy still loom and China should spare no effort in promoting reforms and innovative measures whilst identifying new growth points and drivers. In the meantime, China will deepen the development of free-trade zones in the Asia Pacific, in a bid to turn her vision into reality as early as possible. MIIT: China to implement a batch of major aerospace and aviation programs and projects. As reported, according to Xu Dazhe, the deputy minister of MIIT and head of the State Administration of Science, Technology and Industry for National Defense, PRC, China will carry forward a batch of major programs and substantial engineering projects going forward, among which 120 remote-sensing, telecommunication and navigation satellites will be launched. PBOC launched repurchase operations of RMB20 bn at a bid rate of 3.4%. As announced by PBOC, the bank conducted the 14-day repurchase operations totaling RMB20 bn (hereafter as RMB) on the open market on Tuesday, with the same bid rate as last Thursday, i.e. 3.4%. China and US achieved a breakthrough in talks on the free trade of information technology products. As expressed by United States Trade Representative Froman on Tuesday, China and US had reached a breakthrough in the negotiation on eliminating duties on information technology products. Taobao’s ‘‘Double Eleven’’ recorded record high sales at noon as compared with its full-day sales last year. Alibaba’s Taobao launched its ‘‘Double Eleven’’ campaign. By thirty-one minutes past one on Tuesday, the turnover had already hurdled over RMB36.2 bn (hereafter as RMB), the total turnover for the whole day last year. As for Tmall, 12 businesses recorded turnover of more than RMB100 mn, 42 businesses recorded more than RMB50 mn and 349 businesses recorded more than RMB10 mn in terms of turnover Download our reports from Bloomberg: BOCM〈enter〉 Morning Express 12 November 2014 by Tuesday noon, among which Xiaomi’s flagship store ranked the first with a single-store turnover of more than RMB1 bn. Download our reports from Bloomberg: BOCM〈enter〉 Morning Express 12 November 2014 Economic releases for this week - USA Date Time Event 12-Nov MBA mortgage applications 13-Nov Initial jobless claims (k) 14-Nov U of Michigan confidence Source: Bloomberg Economic releases for this week - China Survey Prior 280.0 87.5 -2.6% 278.0 86.9 Date Time 13-Nov 13-Nov Event Retail sales (YoY) Industrial production(YoY) Survey 11.6% 8.0% Prior 11.6% 8.0% Source: Bloomberg BOCOM Research Latest Reports Data 11 Nov 2014 11 Nov 2014 11 Nov 2014 11 Nov 2014 11 Nov 2014 10 Nov 2014 10 Nov 2014 10 Nov 2014 10 Nov 2014 10 Nov 2014 10 Nov 2014 07 Nov 2014 06 Nov 2014 06 Nov 2014 06 Nov 2014 05 Nov 2014 05 Nov 2014 05 Nov 2014 04 Nov 2014 04 Nov 2014 Report Container Shipping Sector - Weekly container shipping commentary Parkson (3368.HK) - 3Q14 results in line; Upgrade to Neutral on improving earnings visibility MTRC (66.HK) - MTRC's Shenzhen Tiara site visit Kingsoft (3888.HK) - 3Q results beat on fast-growing Cheetah Mobile revenue; one-time gain drove net profit China Market Strategy - Remaining Questions for SH-HK Connect Property Sector - HK/China property weekly - 7th November 2014 SMIC (981.HK) - Net profit slightly beat in the third quarter AAC Technologies (2018.HK) - Third quarter result missed again Lenovo Group (992.HK) - Net profit beat but top-line missed China Resources Enterprise (291.HK) - We estimate profit warning to continue into next year; reiterate Sell Sinotrans Limited (598.HK) - Still pursuing growth; unscathed by Liuzhou company debacle Transportation Sector - Weekly transportation news wrap HKEx (388.HK) - Results in-line with market consensus Alibaba Group (BABA.US) - Top-line results showed upward trends but continuous investment affected margin SH-HK Stock Connect - Renewable Energy Sector - Hong Kong stocks present long-term investment appeal Energy Sector - Bocom Energy Weekly Sohu (SOHU.US) - Sogou and mobile games as near-term drivers; lift TP on improving Sogou performance Summer Breeze - Reaffirm SELL on Want Want (151 HK) on market share loss risk COSL (2883.HK) - Take advantage of recent fall - Solid Q3 results point to real value; Re-iterate BUY Container Shipping Sector - Weekly container shipping commentary Source: Company data, BOCOM International Download our reports from Bloomberg: BOCM〈enter〉 Analyst Geoffrey Cheng, CFA Anita Chu, Phoebe Wong Alfred Lau, CFA, FRM Ma Yuan (Martina), Ph.D, Gu Xinyu (Connie), CPA Hao Hong, CFA Luella Guo, Alfred Lau, CFA, FRM, Toni Ho, CFA, FRM Miles XIE Miles XIE Miles XIE Phoebe Wong Geoffrey Cheng, CFA Ian Feng, Geoffrey Cheng, CFA Wan Li, CFA, Li Shanshan, CFA Ma Yuan (Martina), Ph.D, Gu Xinyu (Connie), CPA Louis Sun Fei Wu, Tony Liu Ma Yuan (Martina), Ph.D, Gu Xinyu (Connie), CPA Summer Wang Fei Wu, Tony Liu Geoffrey Cheng, CFA Morning Express 12 November 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$) 138.20 23.00 79.80 21.25 130.00 17.30 10.48 51.80 43.85 97.45 9.65 5.05 25.40 10.26 115.00 9.48 9.82 4.74 103.00 46.20 67.60 32.10 60.20 26.35 22.95 13.50 16.82 15.16 18.30 18.54 9.83 5.94 6.38 182.20 3.80 55.90 9.16 78.05 75.90 30.95 21.55 127.60 11.16 12.80 21.45 9.01 11.84 5.72 94.70 10.86 Mkt cap (HK$m) 320,094 103,162 97,706 393,930 248,540 100,880 30,816 155,418 528,178 415,465 77,899 1,715,106 64,704 135,391 313,917 82,144 82,824 76,236 150,184 372,681 170,788 75,334 449,267 278,593 608,901 336,195 40,597 59,637 192,371 103,893 19,098 442,007 778,699 212,819 1,099,010 169,384 76,581 1,497,672 161,990 180,215 176,149 1,195,270 266,878 77,000 102,889 1,813,573 528,626 1,427,896 1,930,898 120,640 5d chg (%) 2.0 -4.2 -1.2 -1.4 -0.8 -7.1 -1.1 -0.6 1.9 0.4 -5.2 -0.8 0.2 2.0 -0.3 -2.1 0.6 0.2 0.1 -1.3 1.5 -0.8 -4.0 2.1 -0.2 -0.6 -8.2 3.3 1.0 -2.6 0.0 2.2 -4.2 5.3 2.2 1.1 -1.3 -0.3 1.9 -0.6 -5.7 4.0 -2.8 1.1 -2.9 -6.1 -1.5 -0.7 -2.0 -4.7 Ytd chg (%) 19.1 -6.1 -12.9 -13.1 3.4 -10.0 -1.5 28.8 12.7 -1.1 -29.4 -3.6 -10.2 -8.4 16.9 2.9 9.5 8.7 13.3 -26.1 10.3 -2.3 -13.3 6.0 -5.4 13.8 -34.7 -7.6 13.2 -17.2 -34.2 8.6 0.8 40.9 6.4 -5.7 11.6 -7.2 23.1 5.5 -1.1 29.0 -3.8 20.8 16.7 6.0 -17.9 -2.2 17.8 15.2 23,808.3 14,583,795 -0.2 2.2 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 22.55 13.62 11.92 9.40 56.40 36.46 44.20 34.65 108.50 86.88 14.82 9.62 5.66 4.33 29.80 22.75 13.10 9.32 120.20 90.35 10.48 7.15 10.36 7.25 5.26 3.72 108.00 80.55 68.00 38.70 68.00 56.00 35.00 28.50 76.50 55.60 26.65 21.50 25.80 19.72 16.88 9.35 27.90 16.76 17.26 13.56 18.40 13.91 23.65 17.82 17.42 9.28 6.04 4.53 8.23 5.73 185.00 112.80 3.86 3.03 66.30 46.35 10.70 7.72 87.35 75.75 76.00 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 16.06 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) 7.4 9.0 9.3 13.5 16.8 16.2 27.0 25.7 21.3 7.8 8.3 8.2 14.9 14.6 13.4 6.6 8.7 7.5 13.5 12.0 10.6 8.7 16.4 16.5 27.7 21.5 18.7 8.8 12.3 11.5 12.3 12.2 11.2 5.0 5.1 4.8 14.7 15.2 13.8 25.1 24.5 21.3 9.2 14.9 13.9 7.1 10.8 10.5 14.6 14.4 13.6 36.0 40.3 25.1 11.8 14.8 13.7 18.2 17.6 15.9 18.9 16.2 15.9 10.8 11.6 11.0 11.9 10.3 9.1 12.1 11.3 10.3 19.1 15.5 13.3 9.6 9.6 8.1 22.1 32.5 26.0 20.3 17.7 12.0 27.7 25.6 23.6 30.2 26.6 21.5 90.0 31.5 20.0 5.4 5.3 5.1 8.6 8.9 9.0 45.3 41.6 30.9 5.0 5.1 4.7 7.1 14.2 12.5 11.8 17.9 15.5 12.6 11.2 10.4 2.6 18.3 18.7 12.1 17.4 16.0 7.0 7.6 6.6 46.2 38.6 29.1 16.7 16.3 14.2 8.6 14.5 14.1 8.8 8.4 7.7 9.9 10.0 9.6 7.5 7.8 8.0 5.0 4.9 4.6 13.0 13.8 13.7 16.2 17.7 14.6 10.3 11.0 10.2 Yield P/B (%) 2.6 3.3 2.3 5.4 4.2 2.6 2.9 2.0 1.0 2.4 2.4 N/A 3.0 2.6 2.9 4.4 1.0 2.2 3.5 3.7 3.8 3.5 1.5 3.8 1.7 2.0 1.5 1.7 1.8 1.5 0.7 N/A 4.8 1.9 6.5 3.1 5.2 4.9 3.4 3.0 2.3 0.2 1.8 3.9 3.5 4.5 4.8 6.6 3.3 2.2 (X) 0.8 0.8 5.9 1.2 2.3 1.2 0.9 0.6 2.4 1.0 1.5 1.0 1.0 9.2 0.8 0.5 2.5 0.6 0.7 9.2 1.9 1.1 1.8 1.6 2.1 0.6 0.8 1.0 3.8 4.7 1.1 0.8 1.0 10.3 0.8 0.6 2.1 1.0 1.3 1.1 1.5 13.5 0.9 0.7 1.5 1.1 1.1 0.9 1.8 4.8 3.6 1.3 Morning Express 12 November 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 (%) 7.67 21.25 31.60 5.44 4.66 6.76 3.58 29.45 5.05 53.60 7.01 4.74 7.98 7.36 60.20 13.70 37.85 29.80 3.56 28.45 22.95 15.06 2.13 7.29 5.94 13.66 6.38 4.99 14.70 3.80 11.08 20.15 14.24 4.89 5.34 9.01 8.91 25.05 8.20 5.72 5.21 34,333.77 393,929.62 81,158.07 24,080.43 46,309.25 47,450.59 1,111,415.64 107,042.13 1,715,106.38 69,364.43 127,254.16 76,236.47 288,669.92 58,190.38 449,267.05 191,579.64 121,467.11 54,348.96 62,311.46 243,222.66 608,900.88 93,498.78 64,861.09 39,358.90 442,007.02 55,260.10 778,699.14 112,307.72 355,273.91 1,099,009.76 95,466.61 201,352.55 140,701.43 395,759.28 75,286.15 1,813,573.19 118,078.96 121,265.55 65,898.39 1,427,896.40 290,391.72 -2.9 -1.4 -0.2 -0.2 7.6 3.8 0.0 2.3 -0.8 -3.6 6.7 0.2 3.9 5.1 -4.0 0.4 4.7 -1.3 2.6 -1.4 -0.2 -2.5 7.0 0.1 2.2 -1.7 -4.2 -1.0 1.2 2.2 -1.8 4.6 7.6 -1.2 3.3 -6.1 -6.4 -2.0 0.0 -0.7 3.4 -26.7 -13.1 42.0 -9.6 -35.6 -4.5 -6.0 13.3 -3.6 -18.2 12.2 8.7 11.2 -13.2 -13.3 23.8 -11.6 -4.6 31.9 -6.4 -5.4 -37.4 28.3 -12.6 8.6 -2.4 0.8 24.8 -11.0 6.4 -8.7 -4.7 5.5 24.7 -7.8 6.0 27.1 -12.9 -17.9 -2.2 23.8 11.2 27.0 33.1 6.3 8.0 8.7 4.1 30.2 5.7 68.3 7.2 5.3 8.2 10.9 76.5 14.4 48.9 35.5 3.9 33.5 25.8 26.0 2.2 9.1 6.0 15.4 8.2 5.3 17.6 3.9 15.2 21.7 14.9 5.2 6.3 11.7 9.7 35.7 10.3 6.4 5.4 6.9 19.1 19.7 4.0 3.5 4.9 3.0 21.1 4.3 53.1 4.9 3.7 5.9 6.7 55.6 9.4 26.1 25.8 2.5 23.6 19.7 14.7 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 62.8 7.8 25.0 N/A 15.3 7.1 5.1 12.1 5.0 28.8 7.0 36.0 4.8 11.9 11.9 13.7 11.2 9.0 N/A 19.0 19.1 6.9 17.2 5.0 5.4 10.5 8.6 8.4 5.1 5.0 5.6 22.1 25.6 16.8 19.7 9.9 8.6 8.6 26.7 5.0 4.7 25.6 8.3 22.6 50.6 13.5 18.3 5.0 10.7 5.1 27.8 6.7 40.3 4.5 10.3 10.3 12.3 11.1 10.1 N/A 17.4 15.5 7.1 15.3 5.4 5.3 13.7 8.9 8.1 5.0 5.1 5.9 23.5 19.8 16.7 16.7 10.0 8.1 9.0 19.6 4.9 4.7 10,652 4,286,107 -0.7 -1.5 11,638.3 9,159.8 7.4 7.2 Source: Bloomberg Download our reports from Bloomberg: BOCM〈enter〉 –––– 52-week –––– Hi Lo (HK$) (HK$) ––––––––––– PE ––––––––––– 2013A 2014E 2015E (X) (X) (X) Yield P/B (%) (X) 21.0 8.2 18.9 15.5 11.3 16.7 4.6 9.7 4.8 24.4 6.2 25.1 4.2 8.0 9.1 11.2 8.7 9.7 N/A 14.9 13.3 7.0 15.2 5.0 5.1 13.8 9.0 7.3 4.6 4.7 5.5 20.4 16.9 15.1 12.1 9.6 7.9 8.3 14.4 4.6 4.3 1.0 5.4 1.0 0.0 4.1 0.4 N/A 0.6 N/A N/A 3.4 2.2 2.5 3.1 1.5 2.0 2.7 1.1 N/A 1.8 1.7 3.6 N/A 2.8 N/A 4.6 4.8 1.7 5.3 6.5 2.1 N/A 1.1 2.5 1.1 4.5 5.4 1.8 0.7 6.6 N/A 2.9 1.2 2.9 0.7 0.7 0.6 1.0 1.7 1.0 3.7 0.9 0.6 1.0 1.1 1.8 2.3 3.1 1.5 1.0 1.9 2.1 1.3 1.3 0.9 0.8 0.8 1.0 0.9 1.0 0.8 1.1 1.9 1.7 1.1 1.0 1.1 1.5 1.8 1.6 0.9 0.8 6.7 4.4 1.1 Morning Express 12 November 2014 BOCOM International 11/F, Man Yee Building, 68 Des Voeux Road, Central, Hong Kong Main: + 852 3710 3328 Fax: + 852 3798 0133 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 Sell: Expect more than 20% downside in 12 months Outperform (“OP”): Expect more than 10% upside in 12 months Market perform (“MP”): Expect low volatility Underperform (“UP”): Expect more than 10% downside in 12 months Research Team Head of Research @bocomgroup.com (852) 2977 9393 raymond.cheng (852) 2977 9384 hao.hong (852) 2977 9212 yangqingli Shanshan LI, CFA (86) 10 8800 9788 - 8058 lishanshan Li WAN, CFA (86) 10 8800 9788 - 8051 Wanli Raymond CHENG, CFA, CPA, CA Strategy Economics Hao HONG, CFA Banks/Network Financials Qingli YANG miaoxian.li Fei WU (852) 2977 9392 fei.wu Tony LIU (852) 2977 9390 xutong.liu Alfred LAU, CFA, FRM (852) 2977 9235 alfred.lau Toni HO, CFA, FRM (852) 2977 9220 toni.ho Luella GUO (852) 2977 9211 luella.guo (86) 21 6065 3606 louis.sun (852) 2977 9209 lizhiwu (852) 2977 9216 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 & Brokerage 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 Consumer Discretionary Jerry LI @bocomgroup.com Automobile Download our reports from Bloomberg: BOCM〈enter〉 Wei YAO Morning Express 12 November 2014 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