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Morning Express
09 April 2015
Focus of the Day
Indices
China Macro
March economic data preview
Miaoxian LI
[email protected]
Economics
Despite the seasonal rebound in the CFLP PMI in March, we believe economic growth
continued to decelerate in March, while the 1Q GDP growth rate is likely to decline to 7%.
As the effect of CNY in boosting prices weakens, we expect a small decline in March CPI.
Nevertheless, we think CPI is unlikely to see negative growth given the labor market is
still stable. Given the economy continued to face downside pressure in 1Q or even early
April, and a lack of downward momentum in financing costs in the real economy, we
expect further monetary easing in China going forward.
HKEx (388.HK)
Neutral
Acceleration in market linkage and deep discount
spurred turnover growth in the HK stock market
Li WAN, CFA
Last Closing: HK$220.0
[email protected]
Upside: +13.05%
LT
BUY
SELL
BUY
Stock
Close
HSI
26,237
H Shares
13,397
SH A
4,188
SH B
316
SZ A
2,207
SZ B
1,179
DJIA
17,903
S&P 500
2,082
Nasdaq
4,951
FTSE
6,937
CAC
5,137
DAX
12,036
Source: Bloomberg
1d %
3.80
5.79
0.85
0.04
-0.71
-0.02
0.15
0.27
0.83
-0.35
-0.28
-0.72
Ytd %
11.15
11.78
23.55
8.58
49.25
14.59
0.45
1.12
4.53
5.66
20.22
22.75
Close
55.55
1,201.75
16.49
6,010.00
120.13
1.49
1.08
3m %
N/A
-1.70
-0.10
-1.54
-1.36
-1.87
-8.96
Ytd %
N/A
1.43
4.99
-4.60
-0.29
-4.50
-10.89
bps change
HIBOR
0.39
US 10 yield
1.91
Source: Bloomberg
3m
0.00
-0.04
6m
0.01
-0.41
Indicators
Brent
Gold
Silver
Copper
JPY
GBP
EURO
Target Price: HK$248.7↑
th
Shares of HKEx closed at HK$220 on 8 April, the highest since 2008. Turnover on the
Main Board also hit a historical high of HK$250bn. We attribute the rally to the share
price gap and valuation difference between the A-share and H-share markets, which
continued to attract mainland investors, and the lifting of restriction on institutional
investors investing in HK shares in late March. We believe these factors will continue to
attract fund flow into the HK stock market, making HK shares an important part of the
offshore portfolios of mainland retail and institutional investors. Instead of the turnover
under Shanghai-Hong Kong Stock Connect, a more important issue to watch is the
potential expansion of market linkage and how such expectation may stimulate turnover
in the HK stock market. Moreover, LME will start to make a meaningful profit
contribution to HKEx in 2015, while the expectation of the delayed US rate hike and a
slowdown in USD appreciation will also benefit the HK market. We raise our 2015-16E
ADT forecasts and lift our 15-16E earnings forecasts by 6.4%/6.0%. We lift our TP from
HK$195.3 to HK$248.7 (40x 15E P/E). The stock is trading at 35.1x/10.6x 15E PE/PB.
Maintain LT Buy.
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HSI Technical
HSI
50 d MA
200 d MA
14 d RSI
Short Sell (HK$m)
Source: Bloomberg
BOCOM Int'l Corporate Access
14 Apr
24 Apr
Austar (6118.HK)
Shunfeng (1165.HK)
26,237
24,569
24,028
81
20,526
Morning Express
09 April 2015
Hang Seng Index (1 year)
26,000
25,000
Banking Sector
24,000
Benefiting from favorable factors such as the loosening of offshore
investment by onshore mutual funds and insurance funds
23,000
22,000
21,000
Li WAN, CFA
[email protected]
UP
MP
OP
Source: Company data, Bloomberg
Event:
HSCI surged by 3.80% on 8 Apr, during which the performance of the banking stocks
exceeded that of the large caps. The stock prices of China Everbright Bank, China Cinda,
Bank of Chongqing, China CITIC Bank and Chongqing Rural Commercial Bank surged by
10.93%, 12.29%, 8.15% , 6.87% and 6.51%, respectively.
HS China Enterprise Index (1 year)
13,000
12,000
11,000
10,000
9,000
Comments:
8,000
The catalysts of the sector boom mainly came from the promulgation of the Guidance for
Public Securities Investment Fund in Transactions through SH-HK Stock Connect (
) by CSRC and the promulgation of CIRC’s
Notification of Adjustments to the Policies Relating to Foreign Investments of Insurance
Funds’’ (
) by CIRC, coupled
with favorable factors such as the weaker dollar and the A share boom. CSRC’s guidance
and CIRC’s notification directly benefited mid-to-large blue chips with greater discount in
H share prices and lower valuation, as well as stocks which have not yet been listed in the
A share market and are rather rare to the domestic institutions. The former refer to
banks trading at higher discount rates in H share, particularly China CITIC Bank (at a
discount rate of 53.7%) and China Everbright Bank (at a discount rate of 34.6%), while the
latter refer to China Cinda and Hanhua Financial Holding which are not yet listed in the A
share market, as well as Chongqing Rural Commercial Bank and Bank of Chongqing which
are not yet listed in the A share market and are trading at lower valuations as compared
with comparable banks in the Mainland.
Source: Company data, Bloomberg
Shanghai A-shares (1 year)
4,000
3,500
3,000
2,500
2,000
Source: Company data, Bloomberg
Shenzhen A-shares (1 year)
2,200
2,000
We maintain Outperform for the banking sector and Buy for Chongqing Rural Commercial
Bank, China Cinda and China Everbright Bank.
1,800
1,600
1,400
1,200
Hanhua Financial Holding is trading at a higher PE of 10.23x. Given the company’s
dividend rate of 5.26%, which is not low, and a PB of 0.87x, which is not high, we
maintain LT-Buy.
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1,000
Source: Company data, Bloomberg
Morning Express
09 April 2015
Baidu (BIDU.US)
Neutral
MIT-the Martina Internet Talk:
Comments on withdrawal of ads by Putian: unlikely to
maintain the status growth; short-term revenue
growth impact
Yuan MA
Last Closing: US$203.87
LT
BUY
BUY
SELL
Stock
[email protected]
Upside: +14%
Target Price: US$232.00↓
Event:
The Putian Healthcare Industry Chamber of Commerce announced on 25 March and at its
member meeting on 4 April to stop placing ads on Baidu. As a result, Baidu’s share price
dropped 2.7% on 25 March and fluctuated downward in that week. Baidu’s shares
tumbled 2.4% on 6 April, when Qihoo’s share price rose 3.8%. On 7 April, Baidu said that
it will not compromise in the face of malignant tactics of rivals.
The incident is the result of the long-term struggle between Baidu and the Putian line of
hospitals. Also, while Baidu has not disclosed the exact proportion of healthcare ads since
the CCTV show, market participants generally believe that healthcare ads form an
important part of Baidu’s ads, and was a major area where Qihoo attacked Baidu. The
status quo is unlikely to be maintained because neither party has the incentive to do so.
Given the important position of Baidu in terms of traffic and the diverse views among the
Putian member hospitals, a division within Putian is likely. One possible outcome could
be Baidu making implicit compromise with some of the Putian hospitals. Or it may simply
be left unsettled. We expect the event to decrease Baidu’s 2Q15 revenue by 6% and our
forecast 2Q15 QoQ/YoY revenue growth from 27%/38% to 19%/29%. We lower our
2015E revenue forecast by 1% and 2015E revenue growth forecast from 41% to 39%. We
also trim our 2015E EPS estimate from US$7.2 to US$7.0, and lower our TP from US$236
to US$232.
Intime (1833.HK)
Neutral
1Q positive SSS in line; maintain Buy
Anita CHU
Last Closing: HK$7.12
BUY
SELL
[email protected]
Upside: +8%
LT
BUY
Stock
Target Price: HK$7.70↑
Intime posted 1% SSS growth in 1Q, in line with our and the market’s expectations. SSS
turned positive in 1Q, following the SSS decline in the past three quarters (-4%/-4%/-7%
in 4Q/3Q/2Q14), which we attribute to the stronger promotional effort during the CNY in
Feb, the gradual sales improvement in the renovated stores and SSS growth in younger
stores. Further, it is worth noting that the company’s rental income more than doubled
(+114% YoY) in 1Q, which was mainly due to the increased sales contribution from the
shopping malls (more leased area). Looking ahead, Intime plans to operate more
commercial properties in order to facilitate its expansion plan of the shopping mall
business. Following the 7 new shopping malls in FY14, the company plans to open 3 more
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Morning Express
09 April 2015
shopping malls in FY15E. As such, we expect the revenue contribution from rental income
to increase in FY15-16E. We fine-tune our earnings forecasts to reflect the slightly
slower-than-expected store expansion. Based on our new estimates, we expect Intime’s
core net profit growth to be 5%/9% in FY15/16E. Due to the higher sector valuation
benchmark, we revise up our TP to HK$7.7, based on 17x FY15E P/E (a 20% premium to
the retail sector average given its strategic cooperation with Alibaba, ongoing O2O story
and above-peers’ earnings growth). Maintain Buy.
Geely Auto (175.HK)
Neutral
High sales target achievement rate in 1Q15
Wei YAO
Last Closing: HK$4.2
BUY
SELL
[email protected]
Upside: +19%
LT
BUY
Stock
Target Price: HK$5.0↑
(1) Geely sold 48,500 vehicles in Mar, up 46.4% MoM and 39.5% YoY. Jan-Mar sales
jumped 56.8% YoY to 140,500 units. 1Q15 sales completed 31.2% of the full-year sales
target. The high sales target achievement rate in Jan-Mar period showed the strong sales
performance and the low market expectations. (2) Domestic sales remained the major
sales area. (3) New products sales were robust. (4) The overall product mix showed the
optimization features. (5) The new product launch schedule is clear. (6) Maintain Buy.
Overall, the strong Mar and 1Q15 sales were mainly due to the robust new product sales
and a low base, and we believe the strong growth could be sustained. Apart from the
sales of traditional vehicles and new products, new energy vehicle development, auto
finance business progress and the cooperation with Volvo are the key long-term
highlights. Given the strong sales performance, we slightly revise our FY15/16E sales
assumptions and raise our earnings estimates. Our revised FY15/16E EPS are
RMB0.29/0.37, up 1.7%/1.5%. Owing to the EPS revisions and the higher valuation
potentially enjoyed by the company as the subject under the SH-HK Stock Connect and
the leader of self-developed brands, we lift our TP to HK$5.0, equivalent to FY15/16E
12x PE. Maintain Buy.
Container Shipping Sector
Weekly container shipping commentary
Geoffrey CHENG, CFA [email protected]
UP
MP
OP
News of ordering 20,000-TEU ultra large container vessels dominated the headlines of
industry reports. The Shanghai Container Freight Index continued to weaken last week
while the container shipping companies postponed their proposed freight rate hikes.
The A-H arbitrage buying triggered a big rally on 8th April. We maintain our Market
Perform recommendation at the moment.
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Morning Express
09 April 2015
Renewable Energy Sector
Highlights: Global wind power installed capacity will maintain stable
growth; Australia terminated the anti-dumping investigations against
Chinese PV products; The decline in polisilicon raw material prices
narrowed this week
Louis SUN
[email protected]
UP
MP
OP
1) According to the Global Wind Energy Council (GWEC) statistics, global wind power
installed capacity market resumed growth momentum in 2014 after experiencing the
sluggish environment for some time. The newly-installed wind power capacity
jumped 44.2% YoY to 51.5GW in 2014. In particular, the newly-installed wind power
capacity in China reached 23.2GW, accounting for 45.1% of the total global
nd
rd
newly-installed capacity. Germany and the US were the 2 and 3 biggest markets,
with the newly-installed capacity of 5.3GW and 4.9GW, respectively. The Council
expected the global newly-installed capacity to reach 53.5GW in 2015 and maintain
stable growth in the next few years. China will continue to lead the market growth,
while India, Latin America and other markets may grow rapidly.
2) After the 11-month investigation, the Australian Anti-Dumping Committee released
the preliminary ruling at its official website on 8 Apr, which proposed to terminate
the anti-dumping investigation against the imported PV panels from China. Australia
accounts for 5% of China’s PV product export markets at present. The tax levy will
affect exports of nearly US$400m. The Ministry of Commerce hoped the final
decision of the Australian authorities could benefit the development of PV industry
th
of the two countries. Australia is the 4 region imposing anti-dumping and
countervailing allegations on Chinese PV products after the EU, the US and Canada.
Once the Australia levies anti-dumping duties, it will pose a demonstrative effect on
China’s PV industry and increase the difficulties of exporting PV products from China.
3) PV product prices have been falling since Dec 2014. The prices of polysilicon raw
materials/polysilicon
wafers/solar
cells/battery
modules
were
-0.83%/-0.36%/-1%/-0.51%
this
week.
The
product
prices
were
-18.6%/-6.6%/-8.9%/-6.0% compared with the peak level in early Dec 2014. The fall
in polysilicon prices narrowed this week after reporting over 2% decline over the past
4 weeks. We expect PV product prices to start to recover in May.
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09 April 2015
Last Closing: HK$7.12
Upside: +8%
Target Price: HK$7.70↑
Consumer Discretionary Sector
Intime (1833.HK)
UP
1Q positive SSS in line; Maintain Buy
MP
OP
Financial Highlights
Revenue (RMBm)
Revenue growth (%)
Net profit (RMBm)
Net profit growth (%)
Net profit vs consensus (+/-%)
Core net profit (RMBm)
Core net profit growth %
Core EPS (RMB)
P/E (x)
DPS (RMB)
Yield (%)
FY12
FY13
FY14
FY15E
FY16E
3,907
25
973
18
na
819
12
0.41
14.1
0.19
3.3
4,510
15
1,594
64
na
939
15
0.47
12.1
0.21
3.7
5,251
16
1,121
-30
na
756
-20
0.36
15.6
0.22
3.9
5,829
11
1,223
9
25
791
5
0.35
16.1
0.22
3.9
6,412
10
1,292
6
26
862
9
0.38
14.5
0.23
4.1
Neutral
LT
BUY
BUY
SELL
Stock
Note: Intime restated the FY13 figures.
Source: Company data and BOCOM Int’l estimates
Intime posted 1% SSS growth in 1Q, in line with our and the market’s expectations.
SSS turned positive in 1Q, following the SSS decline in the past three quarters
(-4%/-4%/-7% in 4Q/3Q/2Q14), which we attribute to the stronger promotional
effort during the CNY in Feb, the gradual sales improvement in the renovated
stores and SSS growth in younger stores. Further, it is worth noting that the
company’s rental income more than doubled (+114% YoY) in 1Q, which was mainly
due to the increased sales contribution from the shopping malls (more leased area).
Stock data
52w High (HK$)
8.50
52w Low (HK$)
4.20
Market cap (HK$m)
15,469
Issued shares (m)
2,172
Avg daily vol (m)
23.1
1-mth change (%)
48.0
YTD change (%)
26.7
50d MA (HK$)
4.8
200d MA (HK$)
6.2
14-day RSI
85.2
Source: Company data, Bloomberg
Looking ahead, Intime plans to operate more commercial properties in order to
facilitate its expansion plan of the shopping mall business. Following the 7 new
1 Year Performance chart
shopping malls in FY14, the company plans to open 3 more shopping malls in FY15E.
HSI
As such, we expect the revenue contribution from rental income to increase in
10%
FY15-16E. We fine-tune our earnings forecasts to reflect the slightly
-1 0%
1833.HK
0%
-2 0%
slower-than-expected store expansion. Based on our new estimates, we expect
Intime’s core net profit growth to be 5%/9% in FY15/16E. Due to the higher sector
valuation benchmark, we revise up our TP to HK$7.7, based on 17x FY15E P/E (a
-3 0%
-4 0%
-5 0%
Apr-14
Aug-14
Nov-1 4
Source: Company data, Bloomberg
20% premium to the retail sector average given its strategic cooperation with
Alibaba, ongoing O2O story and above-peers’ earnings growth). Maintain Buy.
Anita Chu
[email protected]
Tel: (852) 2977 9205
Phoebe Wong
[email protected]
Tel: (852) 2977 9391
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Mar-15
09 April 2015
Container Shipping Weekly
Container Shipping Sector
Container Shipping Sector
UP
Weekly container shipping commentary
MP
OP
Container shipping companies - Valuation summary
Company
Name
BBG
code
Sh. Price
8 Apr 15
Rating Target
Price
+/-
–––––– PER ––––––
2013 2014 2015E
–––––– PBR ––––––
2013 2014 2015E
(LC)
(LC)
(%)
(X)
(X)
(X)
(X)
(X)
(X)
China COSCO
1919 HK
4.88 NEUTRAL
3.10
(36.5)
168.5
165.6
18.5
1.64
1.64
1.42
CSCL
NOL
2866 HK
NOL SP
3.02 NEUTRAL
1.01 NEUTRAL
2.1
0.94
(30.5)
(6.9)
N.A.
N.A.
25.6
N.A.
16.6
36.2
1.16
0.92
1.11
1.21
1.02
1.07
OOIL
316 HK
BUY
53.3
8.4
83.8
14.6
9.8
0.88
0.85
0.82
SITC
1308 HK
4.48 LT BUY
Source: Company, BOCOM Int’l estimates
4.78
6.7
13.2
12.3
8.5
1.87
1.76
1.58
49.15
News flow – Rush for ultra-large container vessels.
Notwithstanding the weak
News of ordering 20,000-TEU ultra
large container vessels dominated
the headlines of industry reports.
The Shanghai Container Freight
Index continued to weaken last week
while the container shipping
companies postponed their
proposed freight rate hikes. The
A-H arbitrage buying triggered a big
rally on 8th April. We maintain our
Market Perform recommendation at
the moment.
confidence amongst the industry incumbents as revealed in the recent survey done
by Moore Stephens, news of container shipping companies including CGM CMA and
OOIL ordering 20,000-TEU ultra-large container vessels for delivery in 2017 had
dominated the headline of the industry newspapers.
In addition to these
companies, MOL ordered 20,000-TEU vessels in March and Imabari Shipping of Japan
Geoffrey Cheng, CFA
had already revealed at the start of the year that an unidentified carrier has ordered
[email protected]
Tel: (852) 2977 9380
20,000-TEU vessels for delivery in 2018.
Mitigating the impact from lower freight
rates is the oft-quoted reason for ordering these vessels, which could reduce unit
cost further.
Reality – no sign of relief for the decline of SCFI.
As a result of weak demand, the
container shipping companies postponed the proposed freight rate hike on the
East-West tradelane.
As a result, the spot Shanghai Container Freight Index (SCFI)
continued to spiral down, losing another 5.1% WoW.
Freight rate on the
Transpacific tradelane was down 3.9% WoW for USWC destinations while freight rate
for the Asia-Europe tradelane tumbled 12.8% WoW.
Meanwhile, in anticipation of
demand recovery ahead, the Transpacific Stabilization Agreement advocated the
st
implementation of minimum market rate from 1 May (US$2050/FEU via California
ports and US$4100/FEU for US East ports).
Industry analysts expressed reservation
as to whether the rate hike can be implemented in full, given the current market
conditions.
We maintain our MARKET PERFORM recommendation. The A-H market arbitrage
buying spree after the long Easter holidays triggered a major rally on Wednesday,
notwithstanding a lack of obvious improvement of market fundamentals.
updating the earnings models of our coverage.
We are
For the time being, we maintain our
Market Perform recommendation.
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Morning Express
09 April 2015
Market Review
Hong Kong stocks skyrocketed on Monday. The Hang Seng Index soared 971 points, or
3.8%, to close at 26,236. Total turnover also hit a record high of HK$252.4 billion. HKEx
(388.HK) surged 12.2% as the top blue-chip performer, as the daily quota for southbound
trading under Shanghai-Hong Kong Stock Connect was used up for the first time.
Brokerage names also rallied. Haitong (6837.HK) soared 19%. CITIC Securities (6030.HK)
jumped 14%. Mainland financials advanced. China Life (2628.HK) leapt 6.9%. Ping An
(2318.HK) rose 4.4%. Cinda (1359.HK) gained 12%.
US and European stocks finished with moderate gains on Wednesday. The S&P 500 rose
5.57 points, or 0.3%, to 2,081.90. The DJIA added 27.09 points, or 0.2%, to 17,902.51. The
Stoxx Europe 600 rose 0.1% to 404.66.
News Reaction
Southbound Trading turnover hits new high, HKEx (388.HK) says. HKEx said several
indicators of Shanghai-HK Stock Connect set historical highs this morning. The turnover of
the program reached HK$15.044bn (approximately RMB12bn). The quota used for
Southbound Trading amounted to RMB7.814bn, accounting for 74% of the daily quota
(RMB10.5bn). The half-day total turnover of Northbound and Southbound Trading
reached RMB20bn. The turnover of Southbound Trading exceeded that of Northbound
Trading for the first time since the launch of Shanghai-HK Stock Connect. The turnover of
Southbound Trading this morning accounted for about 5.6% of the total turnover of the
HK stock market. The half-day total turnover of the HK stock market hit HK$133bn on the
first trading day after the Easter Holidays.
China’s 2014 daily investment in urban railway construction exceeds RMB780m; up 33%
YoY. According to the information obtained at the 2015 China’s International Railway
Transportation Exhibition, China invested a total of RMB285.7bn in about 3,300km
railway transportation projects in 36 cities, equivalent to a daily investment of over
RMB780m, up 33% YoY.
NDRC sets 2015 target price for cotton in Xinjiang at RMB19,100/tonne. The National
Development and Reform Commission (NDRC) announced the trial of cotton target price
reform remained effective in Xinjiang this year and the 2015 target price for cotton in
Xinjiang was set at RMB19,100 per tonne, after taking into account the costs and benefits
of cotton production and market demand and supply.
GOME Online targets to become industry’s top 3 operators in 2015; platform sales
exceed RMB30bn. GOME Online announced the launch of 4.18 anniversary big sales,
offering cash gifts with a total value of RMB4bn. Meanwhile, GOME Online targeted to
establish a sales platform with transaction volume of RMB30bn, becoming the top 3
operators in the industry.
China Life (2628.HK) and Ping An (2318.HK) said to invest in Boston property project.
China Life and Ping An will invest in the US commercial real estate by purchasing a
majority interest in a US$500m project in Boston, according to the informed sources. The
project is located at Boston’s famous harbour area and occupies a large part of the Pier
#4 area.
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Morning Express
09 April 2015
Economic releases for this week - USA
Date Time
Event
7-Apr
Consumer Credit(US$ bn)
8-Apr
MBA mortgage applications
Source: Bloomberg
Economic releases for this week - China
Survey
13.50
-
Prior
11.56
4.6%
Date Time
Event
-
-
Survey
-
Prior
-
Source: Bloomberg
BOCOM Research Latest Reports
Data
1 Apr 2015
1 Apr 2015
1 Apr 2015
1 Apr 2015
1 Apr 2015
1 Apr 2015
31 Mar 2015
31 Mar 2015
Report
COSL (2883.HK) – Q4 oil price hurt earnings but valuation attractive
Parkson (3368.HK) – 1Q15E profit warning; no turnaround in sight; reiterate Sell
Digital China (861.HK) – System business back to positive growth in the fourth quarter
ENN Energy (2688.HK) –Normalized net profit up 21%; healthy growth for 2015; BUY
HK retail Sector – Jan-Feb retail sales trended lower as slowdown of Chinese tourist arrivals continued
The United Labs (3933.HK) - Revitalized earnings growth; Upgrade to BUY
China Property Sector - Nationwide policies to support sector re-rating
Property Sector – HK/China property weekly 20150327
31 Mar 2015
31 Mar 2015
30 Mar 2015
30 Mar 2015
30 Mar 2015
30 Mar 2015
30 Mar 2015
30 Mar 2015
30 Mar 2015
30 Mar 2015
27 Mar 2015
27 Mar 2015
China Southern Airlines (1055 HK) - FY2014 results review - Strong pickup in 2H14
Prada (1913.HK) – Challenges remain; reiterate Sell
China Resource Gas (1193.HK) – New projects, volume and price all aligned for a take-off; BUY
Shineway (2877.HK) - FY14 revenue missed; upcoming M&As to serve as re-rating catalysts
Lijun Int'l (2005.HK) - FY14 results missed on slower tendering; Upbeat 2015E guidance
Shanghai Pharma (2607.HK) - Favorable FY14 results largely in line; Reiterate "BUY"
CNOOC (883.HK) - Cost reduction delivered upside surprise but can't save 2015
Mengniu (2319 HK) –Take profit at HK$40.00 first
Air China (753.HK) – FY14 result review – Strong quarter above market expectation
China Market Strategy - One-Belt-One-Road and A New World Order
NetDragon (777.HK) – Positive on game and online education businesses; lift TP to HK$16.3
PetroChina (857.HK) - Cost saving in E&P but uncertainty still ahead - Maintain Neutral
Source: Company data, BOCOM International
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Analyst
Fei Wu, Tony Liu
Anita Chu
Miles XIE
Fei Wu, Tony Liu
Phoebe Wong
Milo Liu
Philip Tse, CFA, FRM, Alfred Lau, CFA, FRM
Luella Guo, Alfred Lau, CFA, FRM, Philip Tse, CFA,
FRM
Geoffrey Cheng, CFA
Phoebe Wong
Fei Wu, Tong Liu
Milo Liu
Milo Liu
Milo Liu
Fei Wu, Tong Liu
Summer Wang
Geoffrey Cheng, CFA
Hao Hong, CFA
Ma Yuan (Martina), Ph.D, Gu Xinyu (Connie), CPA
Fei Wu, Tong Liu
Morning Express
09 April 2015
Hang Seng Index Constituents
Company
name
CKH HOLDINGS
CLP HOLDINGS
HONG KG CHINA GS
WHARF HLDG
HSBC HLDGS PLC
POWER ASSETS
HANG SENG BANK
HENDERSON LAND D
HUTCHISON
SHK PPT
NEW WORLD DEV
SWIRE PACIFIC-A
BANK EAST ASIA
GALAXY ENTERTAIN
MTR CORP
SINO LAND
HANG LUNG PPT
KUNLUN ENERGY
CHINA MER HOLD
WANT WANT CHINA
CITIC
CHINA RES ENTERP
CATHAY PAC AIR
TINGYI
SINOPEC CORP-H
HKEX
LI & FUNG LTD
CHINA OVERSEAS
TENCENT
CHINA UNICOM
LINK REIT
CHINA RES POWER
PETROCHINA-H
CNOOC
CCB-H
CHINA MOBILE
LENOVO GROUP
HENGAN INTL
CHINA SHENHUA-H
CHINA RES LAND
COSCO PAC LTD
AIA
ICBC-H
BELLE INTL
SANDS CHINA LTD
PING AN-H
BOC HONG KONG HO
CHINA LIFE-H
BANKCOMM-H
BANK OF CHINA-H
Hang Seng Index
BBG
code
1 HK
2 HK
3 HK
4 HK
5 HK
6 HK
11 HK
12 HK
13 HK
16 HK
17 HK
19 HK
23 HK
27 HK
66 HK
83 HK
101 HK
135 HK
144 HK
151 HK
267 HK
291 HK
293 HK
322 HK
386 HK
388 HK
494 HK
688 HK
700 HK
762 HK
823 HK
836 HK
857 HK
883 HK
939 HK
941 HK
992 HK
1044 HK
1088 HK
1109 HK
1199 HK
1299 HK
1398 HK
1880 HK
1928 HK
2318 HK
2388 HK
2628 HK
3328 HK
3988 HK
Share
price
(HK$)
157.30
14.42
154.50
109.60
98.85
20.85
68.25
56.00
123.00
38.30
12.86
33.40
15.20
18.84
23.75
10.02
66.75
9.30
31.40
38.65
220.00
7.74
27.65
13.56
9.32
11.80
11.68
11.20
51.75
6.05
10.02
34.60
97.25
28.35
37.35
7.05
4.84
18.26
56.25
76.90
141.30
107.10
106.80
22.75
9.28
18.84
17.30
6.41
20.65
6.89
Mkt
cap
(HK$m)
364,333
359,106
1,448,162
2,244,056
121,033
501,986
1,315,649
168,019
353,250
223,407
77,984
85,686
36,805
74,114
155,107
84,511
168,641
82,709
82,054
164,337
257,028
64,709
226,010
324,722
2,726,813
526,840
129,749
32,933
623,337
2,222,396
84,511
279,161
919,673
299,738
1,338,097
574,334
1,597,303
191,951
170,495
164,125
270,143
456,607
156,560
102,041
122,114
74,114
96,951
968,016
99,073
1,732,688
5d
chg
(%)
0.0
9.9
8.9
9.7
9.4
10.8
1.3
3.9
2.2
5.5
2.9
15.2
1.1
6.2
8.4
14.4
-0.4
4.4
2.3
7.8
23.0
4.3
10.8
17.7
11.8
12.4
5.4
11.6
5.9
10.0
14.4
7.1
6.6
0.5
15.6
10.5
12.0
2.5
4.9
-1.2
0.5
-0.2
2.4
6.3
14.9
6.2
2.5
6.3
6.4
9.2
Ytd
chg
(%)
20.7
9.1
37.3
21.1
22.0
-9.2
-7.8
3.1
4.0
20.4
2.7
28.0
-6.4
11.5
16.1
14.9
-0.7
4.3
0.5
-11.5
28.1
6.6
20.0
30.4
8.4
13.0
14.5
1.6
19.9
6.9
14.9
-9.3
22.9
9.2
22.7
-2.6
10.8
2.8
0.4
2.2
9.4
20.0
5.7
4.6
-9.2
11.5
-2.4
2.6
3.3
8.2
26,237 16,281,840
7.1
11.1
Source: Bloomberg
Download our reports from Bloomberg: BOCM
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–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
162.00
123.20
16.88
12.60
155.00
93.00
109.80
68.60
99.80
74.05
24.40
18.62
84.40
64.35
57.20
40.46
129.40
93.65
38.55
28.30
14.16
10.82
33.45
22.75
24.55
14.04
18.88
13.56
23.90
13.62
10.04
7.26
69.85
60.05
10.48
7.77
34.45
29.00
71.79
32.80
220.00
130.20
10.70
7.06
27.70
17.66
14.22
9.98
11.70
7.93
15.88
9.72
12.70
8.17
11.92
9.97
51.85
36.70
6.05
4.56
10.04
7.26
65.20
29.50
97.95
55.60
28.55
22.05
37.40
19.72
7.36
4.75
4.85
3.36
18.90
15.47
63.90
49.50
82.80
65.10
148.40
123.20
109.50
85.90
108.00
88.50
26.45
20.90
13.10
7.69
18.88
13.56
23.25
16.02
8.23
5.90
24.90
18.02
6.90
5.25
26,247.6
21,680.3
–––––––––– PE –––––––––––
2014A
2015E
2016E
(X)
(X)
(X)
6.8
11.0
10.6
6.9
6.5
5.9
59.7
37.2
28.7
16.3
15.7
15.1
31.0
26.3
22.7
8.6
9.9
9.1
12.8
10.5
10.0
10.0
17.6
17.2
11.1
16.1
14.6
14.2
21.6
21.3
10.1
15.1
14.5
20.9
17.8
16.1
N/A
73.4
33.1
23.5
11.2
9.9
9.4
10.8
9.3
N/A
14.9
14.4
15.0
15.7
14.8
7.0
11.3
10.4
11.0
12.3
11.4
16.0
18.4
16.6
49.5
37.7
33.1
15.1
15.1
13.1
8.2
8.4
7.2
21.5
18.4
15.9
12.8
22.6
14.1
7.0
17.5
10.5
17.9
18.6
15.2
14.4
12.1
11.3
23.0
21.5
19.3
6.1
6.0
5.7
N/A
14.9
14.4
14.1
17.2
15.9
15.7
14.6
13.3
12.2
11.1
10.1
26.3
20.0
17.2
6.4
6.5
6.4
6.3
6.3
5.9
26.8
24.8
23.2
4.7
14.1
12.8
2.7
18.4
18.7
17.9
14.1
13.9
6.8
13.7
11.9
14.5
14.9
13.5
8.7
15.8
16.4
25.5
21.8
20.0
23.5
11.2
9.9
31.2
24.8
21.7
12.9
17.7
11.9
10.6
8.1
7.9
6.1
5.7
5.4
11.0
12.5
11.4
Yield
P/B
(%)
2.3
1.5
0.2
2.6
2.0
4.4
5.6
2.0
2.7
2.1
3.9
2.3
1.8
1.9
2.1
N/A
3.9
4.5
3.5
0.0
1.8
4.4
2.0
1.8
3.4
4.8
2.1
2.8
1.0
N/A
N/A
5.8
1.0
4.0
1.3
N/A
4.9
1.9
3.2
3.5
4.0
2.3
3.7
3.3
2.0
1.9
1.6
8.6
3.8
5.5
(X)
0.9
0.9
14.5
2.1
6.9
1.1
0.9
0.7
0.8
1.4
0.7
1.3
0.8
1.4
1.4
2.6
1.9
0.5
1.1
4.3
12.1
3.2
1.7
1.1
1.2
1.1
4.0
0.9
2.6
1.1
2.6
5.6
2.4
1.7
3.0
0.9
1.0
3.6
0.6
1.3
1.9
1.1
0.7
0.8
7.7
1.4
4.1
1.0
1.4
1.1
3.2
1.4
Morning Express
09 April 2015
China Ent Index Constituents
Company
name
TSINGTAO BREW-H
JIANGXI COPPER-H
SINOPEC CORP-H
CHINA RAIL GR-H
DONGFENG MOTOR-H
CHINA TELECOM-H
AIR CHINA LTD-H
PETROCHINA-H
HUANENG POWER-H
ANHUI CONCH-H
CHINA LONGYUAN-H
CCB-H
CITIC BANK-H
SHANDONG WEIG-H
CHINA SHENHUA-H
SINOPHARM-H
BYD CO LTD-H
ABC-H
NEW CHINA LIFE-H
PICC GROUP-H
CHINA CINDA-H
ICBC-H
CHINA COM CONS-H
CHINA COAL ENE-H
MINSHENG BANK-H
CHINA VANKE-H
GUANGZHOU AUTO-H
PING AN-H
PICC P&C-H
GREAT WALL MOT-H
WEICHAI POWER-H
GREAT WALL MOT-H
CHINA PACIFIC-H
CHINA LIFE-H
CHINA OILFIELD-H
CHINA NATL BDG-H
BANKCOMM-H
CM BANK-H
BANK OF CHINA-H
CITIC SEC-H
HAITONG SECURI-H
Hang Seng China Ent Indx
BBG
code
Share
price
(HK$)
Mkt
cap
(HK$m)
5d
chg
(%)
Ytd
chg
(%)
(X)
(X)
168 HK
358 HK
386 HK
390 HK
489 HK
728 HK
753 HK
857 HK
902 HK
914 HK
916 HK
939 HK
998 HK
1066 HK
1088 HK
1099 HK
1211 HK
1288 HK
1336 HK
1339 HK
1359 HK
1398 HK
1800 HK
1898 HK
1988 HK
2202 HK
2238 HK
2318 HK
2328 HK
2333 HK
2338 HK
2333 HK
2601 HK
2628 HK
2883 HK
3323 HK
3328 HK
3968 HK
3988 HK
6030 HK
6837 HK
54.75
17.08
6.41
9.66
13.50
5.66
9.33
9.32
9.62
30.90
9.32
6.89
6.38
7.01
20.85
34.60
47.50
3.99
50.50
4.32
4.57
6.05
14.54
5.00
9.97
18.82
8.34
97.25
16.68
58.05
31.85
58.05
40.50
37.35
16.38
8.48
7.05
19.72
4.84
34.15
23.75
74,312
81,114
968,016
322,673
116,318
458,077
153,487
2,726,813
149,456
159,510
74,899
1,732,688
407,386
31,379
501,986
95,741
156,317
1,522,044
201,012
183,272
165,693
2,222,396
351,235
103,526
414,179
192,579
74,091
919,673
247,340
198,661
77,632
198,661
392,342
1,338,097
116,528
45,784
574,334
494,044
1,597,303
483,630
316,239
5.9
28.2
6.3
42.5
12.9
17.4
34.4
11.8
9.6
8.2
14.8
9.2
13.1
7.8
10.8
16.9
29.1
6.1
25.9
10.2
23.8
10.0
45.8
24.4
9.0
5.7
18.1
6.6
6.0
12.1
15.6
12.1
13.9
15.6
34.5
12.9
10.5
7.1
12.0
26.0
32.2
4.1
28.4
2.6
51.4
23.0
24.7
48.8
8.4
-8.2
6.4
15.5
8.2
2.6
12.0
-9.2
26.0
56.5
1.8
29.0
19.0
20.9
6.9
55.8
2.9
-2.3
8.8
18.1
22.9
10.6
31.6
-2.6
31.6
2.8
22.7
21.7
12.5
-2.6
1.3
10.8
17.0
21.7
64.0
17.2
8.2
9.7
15.2
5.7
9.4
11.7
11.6
35.1
9.3
6.9
6.4
8.9
24.4
34.7
57.8
4.1
51.5
4.3
4.6
6.1
14.7
5.4
10.7
20.4
9.9
98.0
17.1
60.0
34.9
60.0
42.0
37.4
23.4
8.5
7.4
20.0
4.9
34.2
23.8
47.5
11.9
5.9
3.4
10.0
3.4
4.2
7.9
7.5
24.0
7.1
5.3
4.4
5.7
18.6
19.7
18.7
3.2
22.1
2.9
3.3
4.6
5.0
3.8
6.2
12.8
6.6
55.6
9.7
26.1
26.0
26.1
23.6
19.7
11.1
6.7
4.8
13.1
3.4
15.1
10.5
29.8
16.1
12.9
15.9
7.2
20.6
24.0
12.8
10.1
11.9
23.4
6.1
5.9
23.2
8.6
25.0
211.3
5.8
19.7
11.2
11.1
6.1
13.4
60.6
6.1
10.5
13.4
15.7
12.8
17.6
10.2
17.6
26.5
26.3
8.3
6.1
6.4
7.1
6.3
26.5
23.6
26.9
18.1
17.7
14.0
7.2
18.2
13.0
22.6
8.5
11.4
17.0
5.7
5.7
20.6
9.9
21.7
155.2
5.4
15.6
11.3
8.6
6.0
12.3
129.1
5.7
8.6
10.6
14.6
12.4
12.5
11.7
12.5
20.6
20.0
13.0
6.6
6.5
6.4
6.3
24.6
19.7
13,397
5,413,984
12.6
11.8
13,398.8
9,620.4
9.5
9.3
8.4
Source: Bloomberg
Download our reports from Bloomberg: BOCM
enter
–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
––––––––––– PE –––––––––––
2014A
2015E
2016E
Yield
P/B
(X)
(%)
(X)
24.2
16.4
11.9
12.7
6.6
15.9
11.4
14.1
8.7
10.5
14.7
5.4
5.2
18.2
9.1
17.8
47.7
5.2
13.3
9.8
7.1
5.7
11.0
51.3
5.2
7.4
8.8
13.3
11.0
10.3
10.4
10.3
17.7
17.2
11.6
6.4
6.4
5.8
5.9
20.5
16.7
N/A
N/A
8.6
1.0
1.9
1.7
0.7
3.4
4.9
2.6
0.8
5.5
N/A
1.2
4.4
1.1
0.0
N/A
0.5
0.3
2.7
N/A
1.5
0.6
2.3
3.3
2.4
1.0
2.0
N/A
1.0
N/A
1.5
1.3
3.7
2.4
N/A
4.2
4.9
N/A
1.3
3.8
1.0
1.0
1.7
1.3
1.3
1.8
1.2
1.6
2.0
1.8
1.1
0.9
2.6
1.1
2.8
3.7
1.0
2.6
1.6
1.4
1.1
1.7
0.6
1.1
1.9
1.2
2.4
2.3
4.2
1.6
4.2
2.5
3.0
1.3
0.9
0.9
1.3
1.0
3.0
2.7
3.3
1.4
Morning Express
09 April 2015
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
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
Raymond CHENG, CFA, CPA, CA
(852) 2977 9393
@bocomgroup.com
raymond.cheng
Strategy
Economics
Hao HONG, CFA
Miaoxian LI
(852) 2977 9384
hao.hong
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yangqingli
Fei WU
(852) 2977 9392
fei.wu
Shanshan LI, CFA
(86) 10 8800 9788 - 8058
lishanshan
Tony LIU
(852) 2977 9390
xutong.liu
Li WAN, CFA
(86) 10 8800 9788 - 8051
Wanli
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(852) 2977 9235
alfred.lau
Philip TSE, CFA, FRM
(852) 2977 9220
philip.tse
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
Fay ZHOU
(852) 2977 9381
fay.zhou
(86) 21 6065 3675
wei.yao
Banks/Network Financials
Qingli YANG
miaoxian.li
Oil & Gas/ Gas Utilities
Consumer Discretionary
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
(852) 2977 9387
milo.liu
Healthcare
Louis SUN
Telecom & Small/ Mid-Caps
Milo LIU
Insurance & Brokerage
Zhiwu LI
Technology
Jerry LI
(852) 2977 9389
liwenbing
Jennifer ZHANG
(852) 2977 9250
yufan.zhang
Yuan MA, PhD
(86) 10 8800 9788 - 8039
yuan.ma
Connie GU, CPA
(86) 10 8800 9788 - 8045
conniegu
(852) 2977 9243
jovi.li
Internet
Miles XIE
Transportation & Industrial
Metals & Mining
Jovi LI
(86) 10 8800 9788 - 8043
Automobile
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Morning Express
09 April 2015
Analyst Certification
The authors of this report, hereby declare that: (i) all of the views expressed in this report accurately reflect their personal views about any
and all of the subject securities or issuers; and (ii) no part of any of their compensation was, is, or will be directly or indirectly related to the
specific recommendations or views expressed in this report; (iii) no insider information/ non-public price-sensitive information in relation to
the subject securities or issuers which may influence the recommendations were being received by the authors.
The authors of this report further confirm that (i) neither they nor their respective associates (as defined in the Code of Conduct issued by the
Hong Kong Securities and Futures Commission) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior
to the date of issue of the report; (ii)) neither they nor their respective associates serve as an officer of any of the Hong Kong listed companies
covered in this report; and (iii) neither they nor their respective associates have any financial interests in the stock(s) covered in this report.
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BOCOM International Securities Limited, and/or its associated companies, has investment banking relationship with Bank of Communications,
Hanhua Financial Holding Co., Ltd., Central China Securities Company Limited, China New City Commercial Development Limited, China Shengmu
Organic Milk Limited, Broad Greenstate International Company Limited, China National Culture Group Limited, Sichuan Development Holding Co.
Ltd., Austar Lifesciences Limited, BAIC Motor Corporation Limited, China Huinong Capital Group Limited, D&G Technology Holding Company
Limited, Guolian Securities Co. Ltd., GF Securities Co. Ltd., PuraPharm Corporation Limited, Chiho-Tiande Group Limited within the preceding 12
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