Gary Wong 黄家玮 +852 2509 2616 [email protected] 5 March 2015 2015 Government Work Plan on Infrastructure 2015 年政府基础建设的工作计划  Premier Li Keqiang presented a summary of the Government’s work in 2014 and plan for 2015 in the third meeting of the 12th National People's Congress on March 5. It was mentioned that 1)The investment as the key to stabilize economic growth, the focus on investment in affordable housing projects, agriculture, major irrigation, western railway, energy saving and environmental protection, social undertakings and other fields. 2) Comprehensively promote the "Three-Net" integration, accelerate the construction of fiber-optic network, significantly increasing the rate of broadband networks. 3) Promote economic zone and in the 21st century Silk Road and Silk Road construction maritime cooperation ("one belt one road plan"). Accelerate interoperability, customs clearance and large international logistics channel construction. 4) Railway investment to remain at more than RMB800 billion, the new completed mileage of 8,000 km or more. 5) Accelerating the construction of 57 major water projects started and commenced the construction of 27 new projects during 2015. Amount of major water conservancy investment under construction was more than RMB800 billion. 6) New start of 7.4 million units of affordable housing projects, of which 5.8 million units in shantytowns.  We think the plan was basically in line with expectations. We note that the Prime Minister repeatedly use the wordings "private investment", "should stimulate greater involvement of private investment", "to guide social capital", an indication of the higher importance of private capital for investment in the future compared with the past, and the government-led investment mode should change to government-guided mode. In addition, infrastructure investment should remain high, such as railway investment will remain at more than RMB800 billion, while the number of new affordable housing starts should reach 7.4 million units, 400,000 units higher than last year.  We think the plan was positive to the infrastructure sector overall, inducing more private investment in infrastructure projects and accelerating the construction progress of “one belt one road plan” were especially beneficial to the industry development. We are more positive about the outlook of transportation infrastructure construction contractors and the transportation equipment and machinery manufacturers. Maintain “Accumulate” ratings for China Railway Group (00390 HK, TP at HKD6.05), China Railway Construction (01186 HK, TP at HKD11.50), China Communications Construction Company (01800 HK, TP at HKD9.20), and “Buy” ratings for Zhuzhou CSR Times Electric (03898 HK, TP at HKD55.30) and CSR Corporation (01766 HK, TP at HKD11.90).  国务院总理李克强于 3 月 5 日的第十二届全国人民代表大会第三次会议上，对于 2014 年政府的工作做总结，并部署 2015 年工作计划。 GTJA Research 国泰君安研究快讯：基建行业 Infrastructure Sector 基建行业 Flash Note: Infrastructure Sector 会议提到 1)把投资作为稳定经济增长的关键，重点投向保障性安居工程、农业、重大水利、中西部铁路、节能环保、社会事业等领域。 2)全面推进“三网”融合，加快建设光纤网络，大幅提升宽带网络速率。3)推进丝绸之路经济带和 21 世纪海上丝绸之路合作建设(“一带一路计划”)。加快互联互通、大通关和国际物流大通道建设。4)铁路投资要保持在 8,000 亿元(人民币，下同)以上，新投产里程 8,000 公里以上。5)重大水利工程已开工的 57 个项目要加快建设，2015 年再开工 27 个项目，在建重大水利工程投资规模超过 8,000 亿元。 6)2015 年保障性安居工程新安排 740 万套，其中棚户区改造 580 万套。  我们认为计划大致与预期一致。我们留意到总理多次使用“民间投资”、“要更大激发民间投资活力” 、“引导社会资本”等用语，显示市场化以及私人资本对于未来投资的重要性较以往为高，政府主导投资模式将变更为政府引导模式。另外，今年基建投资维持高位，例如铁路投资仍将维持于 8,000 亿元以上，而保障房新开工数目更达到 740 万套，较去年增 40 万套。  我们认为计划整体对于基建行业影响偏正面，特别是引导更多民资参与基建投资，以及加快“一带一路”计划的推进对行业发展尤为有利。我们较为看好交通基建承包商以及相关设备制造企业的盈利前景。维持中国中铁(00390 HK，目标价 6.05 港元)、中国铁建(01186 HK，目标价 11.50 港元)、中交建(01800 HK，目标价 9.20 港元)的“收集”评级，及株洲南车时代电气(03898 HK，目标价 55.30 港元)及中国 Flash Note 南车(01766 HK，目标价 11.90 港元)的“买入”评级。 See the last page for disclaimer Page 1 of 2 Company Rating Definition The Benchmark: Hong Kong Hang Seng Index Rating Definition Buy Relative Performance >15%; or the fundamental outlook of the company or sector is favorable. Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable. Accumulate Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral. Reduce Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable. Sell Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable. 5 March 2015 Time Horizon: 6 to 18 months Sector Rating Definition The Benchmark: Hong Kong Hang Seng Index Time Horizon: 6 to 18 months Rating Outperform Definition Relative Performance >5%; or the fundamental outlook of the sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral. Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable. (1) (2) (3) (4) The Analysts and their associates do not serve as an officer of the new listing applicant mentioned in this Research Report. The Analysts and their associates do not have any financial interests in relation to the new listing applicant mentioned in this Research Report. Except for Shandong Chenming Paper Holdings Limited-H shares (01812), China All Access (Holdings) Limited (00633), Guangshen Railway Company Limited-H shares (00525), Guotai Junan International Holdings Limited (01788) and Binhai Investment Company Limited (02886), Guotai Junan and its group companies do not hold equal to or more than 1% of the issued share capital of the new listing applicant mentioned in this Research Report. Guotai Junan and its group companies have not had investment banking relationships with China Railway Group (00390 HK)/China Railway Construction (01186 HK)/China Communications Construction Company (01800 HK)/CSR Corporation (01766 HK)/Zhuzhou CSR Times Electric (03898 HK) mentioned in this Research Report within the preceding 12 months. Infrastructure Sector 基建行业 DISCLOSURE OF INTERESTS DISCLAIMER This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research reports, including investment banking, investment services and etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily). 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