Morning Express Focus of the Day China Property Sector

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$4.64→
Event:
CEB issued a notice on the progress of the restructuring and reforms of China Everbright
Group, upon which CE Group will become the substantial shareholder of China Everbright
Bank.
Comments:
On 1 Aug 2014, the State Council had approved the proposed restructuring and reforms
of China Everbright Group. According to the announcement of the company, MOF and
Huijin Limited entered into the Founder Agreement on the Promotion of the
Establishment of China Everbright Group Ltd. on 6 Nov 2014. Pursuant to the agreement,
MOF will make capital contributions by its 100% equity interest in CE Beijing while CE
Beijing will transform from a state-wholly-owned enterprise to a joint stock limited
company, the name of which will be changed to China Everbright Group Ltd. (i.e. CE
Group). MOF will make capital contributions to CE Group by injecting (1) the 100% equity
interest in CE Hong Kong; and (2) a loan and its interest accrued to CE Beijing. Huijin
Limited will make capital contributions to CE Group by (1) its existing equity interest
representing approximately 19.28% equity interest in CEB; (2) the existing 100% equity
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Close
HSI
23,808
H Shares
10,652
SH A
2,586
SH B
260
SZ A
1,385
SZ B
963
DJIA
17,615
S&P 500
2,040
Nasdaq
4,661
FTSE
6,627
CAC
4,244
DAX
9,369
Source: Bloomberg
1d %
0.27
0.34
-0.16
-0.88
-2.93
-1.15
0.01
0.07
0.19
0.24
0.50
0.18
Ytd %
2.15
-1.52
16.79
2.32
25.47
10.88
6.26
10.35
11.59
-1.80
-1.21
-1.92
Close
81.67
1,162.47
15.71
6,665.00
115.86
1.59
1.25
3m %
-21.98
-11.22
-21.16
-4.72
-11.74
-5.29
-6.70
Ytd %
-26.29
-3.58
-19.32
-9.44
-9.11
-3.84
-9.24
bps change
HIBOR
0.37
US 10 yield
2.36
Source: Bloomberg
3m
0.00
-0.09
6m
0.00
-0.30
Indicators
Brent
Gold
Silver
Copper
JPY
GBP
EURO
HSI Technical
HSI
50 d MA
200 d MA
14 d RSI
Short Sell (HK$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
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–––– 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
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Wei YAO
Morning Express
12 November 2014
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