Daily Market Commentary

Morning Express
18 December 2014
Focus of the Day
Indices
Baidu (BIDU.US)
Neutral
Baidu’s investment in Uber will not change the layout
of the taxi hailing industry
Yuan MA
Last Closing: US$220.06
BUY
SELL
[email protected]
Upside: +28.6%
LT
BUY
Stock
Target Price: US$283.00→
As reported by Techweb, Baidu made a strategic move to invest in Uber, the US car
hailing app, and it is estimated that Baidu will take up a 1.5% stake in the company. Such
investment partnership is more likely to be financial instead of strategic in nature, unless
more collaboration can be seen in the future, and the synergy is limited. If such move is
meant to be a strategic investment, given that Uber focuses more on the mainland
market, there is a greater chance for the company to tie up with Baidu Map and Baidu
Purse. In our view, Uber’s expansion into the Chinese market will not change the duopoly
in China’s taxi hailing market for now and the app may not simply serve as a means of
payment like Baidu Purse. The duopoly between the two players Alipay and Weixin
Payment in the mobile payment industry will not be affected at the moment. In the
meantime, the coach service market is growing rapidly and Uber can swiftly penetrate
the coach market through Baidu Map. We maintain Buy for Baidu and TP of US$283.
Qihoo 360 (QIHU.US)
Neutral
MIT- Martina Internet Talk:
Cooperating with Coolpad for foothold in smart
hardware
LT
BUY
BUY
SELL
Stock
Yuan MA
Last Closing:US$55.52
[email protected]
Upside: +99.9%
Target Price: US$111.00→
Event:
Qihoo will invest US$490mn to take a 45% stake in a joint-venture with Coolpad. The JV
will design, manufacture and sell smartphones under the “Dazen" brand. The phones will
mainly be sold on the Internet.
Comments:
The investment marks Qihoo’s second foray into smartphones in two years. Sun Zhengyi
predicted that by 2040, everything and every individual will be connected to the Internet.
Qihoo has been exploring hardware, such as the 360 Child Guard, a smart bracelet. The
Download our reports from Bloomberg: BOCM〈enter〉
Close
HSI
22,586
H Shares
11,269
SH A
3,207
SH B
288
SZ A
1,560
SZ B
1,017
DJIA
17,357
S&P 500
2,013
Nasdaq
4,644
FTSE
6,336
CAC
4,112
DAX
9,544
Source: Bloomberg
1d %
-0.37
1.19
1.32
-0.78
-0.71
-0.45
1.69
2.04
2.12
0.07
0.46
-0.20
Ytd %
-3.09
4.19
44.81
13.49
41.36
17.17
4.71
8.90
11.20
-6.11
-4.28
-0.08
Close
61.18
1,190.20
15.75
6,368.00
118.77
1.56
1.23
3m %
-38.18
-2.86
-15.04
-8.12
-8.49
-5.02
-4.57
Ytd %
-44.78
-1.28
-19.11
-13.48
-11.33
-5.94
-10.26
bps change
HIBOR
0.39
US 10 yield
2.14
Source: Bloomberg
3m
0.02
-0.47
6m
0.01
-0.44
Indicators
Brent
Gold
Silver
Copper
JPY
GBP
EURO
HSI Technical
HSI
50 d MA
200 d MA
14 d RSI
Short Sell (HK$m)
Source: Bloomberg
22,586
23,521
23,375
33
11,139
Morning Express
18 December 2014
cooperation with Coolpad marks a substantial move of Qihoo in hardware, and is likely to
create an ecosystem together with 360’s previous layout in TV, routers and smart home.
Smartphone resources allow Qihoo to gain a foothold in the mobile market by bolstering
its competitiveness in app distribution and mobile search. Coolpad has nearly 10,000
patents and conducts cross-licensing with other companies. Patents are very important
to smartphone manufacturers. Maintain Buy and TP of US$111.
Hang Seng Index (1 year)
26,000
25,000
24,000
23,000
22,000
21,000
Source: Company data, Bloomberg
Huaneng Renewable (958.HK)
Neutral
H-share placing; adjust earnings forecasts and TP
LT
BUY
HS China Enterprise Index (1 year)
BUY
SELL
13,000
12,000
Louis SUN
Last Closing: HK$2.44
11,000
[email protected]
Upside: +35.2%
Stock
10,000
Target Price: HK$3.30↓
9,000
8,000
1) Huaneng Renewables announced H-share placing. The company will issue 699mn
new shares, or 16.7% of the total number of H shares post issuance and 7.2% of the
total share capital, for the purpose of optimizing its financial structure and reducing
financial risks.
2) We expect the placing to lower its net gearing from 72.4% to 69.1% by end-2014. We
project capex of RMB13.6bn and RMB13.9bn in 2015 and 2016, respectively. We
expect net gearing to remain stable at 72.1% and 72.7% in 2015 and 2016,
respectively, in light of improving profitability and increasing operating cash flow.
Therefore, we believe both the amount and frequency of equity financing will be
much lower going forward.
3) Given the new shares will dilute EPS by about 5%, we adjust our 2014E/15E/16E EPS
estimates to RMB0.109/0.201/0.275. We adjust TP from HK$3.48 to HK$3.30,
corresponding to 13x 15E P/E. Maintain Buy. As the Nov wind power data of China
were lower than expected, the stock lacks short-term catalysts. However, we are
optimistic that the operating environment will improve next year.
Renewable Energy Sector
Highlights: The US announced final ruling on the anti-dumping and
countervailing investigations on the Chinese PV product exports to the
US; the wind turbine utilization hours fell sharply in Nov; The polysilion
prices declined at a faster pace
Louis SUN
[email protected]
UP
MP
OP
1) The US Department of Commerce announced the final ruling on 16 Dec. It ruled that
dumping and subsidization of the Chinese PV product exports to the US were found
and the US will impose anti-dumping and countervailing duties. It also ruled that
dumping acts for the Taiwanese PV product exports to the US were found and the US
will impose anti-dumping tax. It ruled that the dumping margin of the Chinese
manufacturers was 26.71% to 165.04% and the subsidy margin was 27.64% to
49.79%. According to the US trade remedy procedure, the US International Trade
Download our reports from Bloomberg: BOCM〈enter〉
Source: Company data, Bloomberg
Shanghai A-shares (1 year)
3,500
3,000
2,500
2,000
Source: Company data, Bloomberg
Shenzhen A-shares (1 year)
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
900
800
Source: Company data, Bloomberg
Morning Express
18 December 2014
Commission will make a final ruling on 29 Jan 2015. If this agency also makes such an
affirmative final ruling, the US Customs will officially levy the anti-dumping and
countervailing duties. We believe that the final ruling is no surprise to the market.
The Sino-US trade war on PV products is gradually intensified. The trade war will
raise the difficulties of exporting Chinese PV products to the US. The Chinese PV
manufacturers are expected to gradually expand its overseas investment, accelerate
global development and develop its businesses towards the downstream PV power
plant investment and operation.
2) From Jan to Nov, the cumulative average utilization hours of the national wind
power generation equipment were 1,685 hours, down 204 hours YoY, and the fall in
hours increased 19 hours compared with the previous month. From Jan to Oct, the
national new on-grid wind power capacity grew 24.7% YoY to 89.315GW, up 0.8 ppt
from the previous month. The significant fall in the wind turbine utilization hours
again in Nov reflected the lack of real improvement in the wind resources this year,
and the newly-installed capacity has maintained rapid growth.
3) The prices of polysilicon raw materials continued to fall WoW this week and the
decline expanded sharply. The prices of polysilicon wafers, cells and cell modules
declined slightly further this week. The prices of polysilicon raw materials /
polysilicon wafers / cells / cell modules were -3.51%/-0.23%/-0.31%/-0.16% WoW
this week. The product prices were 0.6%/-5.3%/-17.6%/-11.1% since early 2014. The
larger decline in the polysilicon prices was mainly due to the price cut by the Chinese
manufacturers to deal with the competition from silicon imports, while the fall in the
polysilicon wafer, cell and cell module prices was mainly due to the impacts of
weakened foreign demand. The PV product prices may fluctuate slightly some time
ahead.
China Eastern Airlines (670.HK)
Neutral
November operating data
Geoffrey CHENG, CFA
Last Closing: HK$3.74
LT
BUY
BUY
SELL
[email protected]
Stock
Target Price: HK$2.48→
What’s new?
China Eastern Airlines (CEA) reported November 2014 operating data. Overall RPK of CEA
rose 9.1% YoY but plunged 6.9% MoM. Cargo RFTK slid 5.8% YoY, but increased 2.1%
MoM.
Analysis:
Month of November:
RPK – overall up 9.1% YoY; domestic up 9.6% YoY; international up 8.2% YoY and regional
up 5.2% YoY
PLF – overall 78.4%, up 2.3 ppts YoY; domestic 79.4%, up 3.4 ppts YoY; international
76.5%, down 0.7 ppt YoY; regional 69.0%, down 4.3 ppts YoY
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
18 December 2014
Cargo RFTK – overall down 5.8% YoY; domestic down 11.8% YoY; international down 4.8%
YoY, and regional up 11.1% YoY
ASK – overall up 6.0% YoY; domestic up 4.9% YoY; international up 9.2% YoY and regional
up 11.7% YoY
YTD:
RPK – overall up 5.7% YoY; domestic up 6.3% YoY; international up 3.6% YoY and regional
up 9.6% YoY
PLF – overall 79.8%, up 0.4 ppt YoY; domestic 80.1%, up 0.6 ppt YoY; international 79.5%,
down 0.3 ppt YoY; regional 76.0%, up 1.4 ppts YoY
Cargo RFTK – overall down 1.2% YoY; domestic down 5.5% YoY; international down 0.3%
YoY and regional up 4.0% YoY
ASK – overall up 5.2% YoY; domestic up 5.6% YoY; international up 4.0% YoY and regional
up 7.6% YoY
The air passenger business of CEA in November reported 9.1% YoY growth, but a
decrease of 6.9% MoM. RPK on regional routes saw weaker growth of 5.2% YoY,
compared with other routes, while they reported the highest YoY growth on a YTD
basis. On the contrary, domestic and international RPK grew 9.6% YoY and 8.2%
YoY, respectively. In addition, on a MoM basis, RPK of CEA witnessed across-theboard decline with international RPK plunging the most, by 7.1%, underperforming
other routes.
In November, PLF on international and regional routes declined slightly on a YoY
basis as ASK increased more than RPK. Overall PLF was up 2.3 ppts YoY, to 78.4%.
However, on a MoM basis, domestic and regional PLF fell 1.6 ppts MoM and 5.0 ppts
MoM, to 79.4% and 69.0%, respectively.
Compared with the positive results of other PRC airlines, cargo RFTK of CEA in
November declined on both domestic and international routes on a YoY basis.
Overall cargo RFTK slid 5.8% YoY, but rose 2.1% MoM. International cargo RFTK
declined 4.8% YoY, but increased slightly by 1.9% MoM. Similarly, domestic cargo
RFTK was down 11.8% YoY, but increased 1.4% MoM, underperforming other routes.
On the contrary, regional cargo RFTK surged 11.1% YoY and 15.2% MoM, surpassing
others. On a YTD basis, cargo RFTK was still down 1.2% YoY.
Recommendation:
We have a NEUTRAL rating on the counter with a target price of HK$2.48 at the
moment.
On the last closing price of HK$3.74, CEA is trading at 17.5x PER and 1.3x PBR,
respectively, according to our FY14 forecast EPS and BVPS.
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
18 December 2014
Tencent (700.HK)
Neutral
Comments on the registration completion of
Tencent’s Qianhai Weizhong Bank
Yuan MA
Last Closing: HK$105.3
[email protected]
Upside: +48.1%
LT
BUY
BUY
SELL
Stock
Target Price: HK$156.0→
Event:
Qianhai Weizhong Bank, mainly established by Tencent, completed its registration on 16
Dec. Its registered capital was RMB3bn. Tencent, Baiyeyuan and Liye Group (the major
shareholders) hold 30%, 20% and 20% stake in the bank, respectively. There are a total of
10 sponsor shareholders. Tencent could nominate 1 shareholder to the board of directors
and board of supervisors.
Analysis:
The business operations of Weizhong Bank mainly include the deposit and loan
businesses for the individuals and small and micro enterprises. Domestic and
international settlement, bill acceptance and discounting, issuance of financial bonds
and government bonds, agency issuance and trading are also included. In addition,
there are bank card and guarantee services. There are five major divisions, namely
the retail and small and micro finance division, credit card division, industry and
company business division, IT division and micro-finance division.
Unlike traditional banks, Weizhong Bank may have a small amount of outlets or it
may not establish any outlet. It conducts businesses mainly through the Internet
channel. Compared with traditional banks, Weizhong Bank is more like a platform. It
was established as the financial needs of many small and micro individuals and
enterprises are not fulfilled. Its initial positioning is to provide services in niche
markets to meet the needs of these small and micro individuals and enterprises.
Internet concept is mainly reflected in: 1) service orientation; 2) outlet establishment.
The target users are mainly those “diors users”, especially the blue-collar groups
such as young professionals, industrial workers and service practitioners, as well as
Internet users of the non-agricultural practitioners in small towns. Weizhong Bank
may leverage on Tencent’s existing personal user advantages to launch consumer
finance, credit cards and other retail business services. This positioning is similar to
the user positioning of Tencent’s QQ in the initial stage. Upon establishing sufficient
brand reputation, Weizhong Bank’s businesses will naturally extend upward.
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
18 December 2014
Market Review
Hong Kong stocks extended decline to a fifth consecutive session. The Hang Seng Index
dropped 84 points, or 0.4%, to 22,565. Casino operators were among the worst hit.
Galaxy Entertainment (27.HK) slumped 8.2% and Sands China (1928.HK) fell 6.2% as the
worst blue-chip performers. Technology companies retreated following the pullback of
their US-listed peers overnight. Tencent (700.HK) fell 2.5%. Kingsoft (3888.HK) dropped
6%. Auto makers fell. Geely (175.HK) plunged 17% after issuing profit warning expecting
about 50% decline in full-year net profit. Peers BYD (1211.HK) dropped 3.7% and Great
Wall Motor (2333.HK) shed 3%. Mainland lenders rose. Minsheng Bank (1988.HK) gained
4.6%. CITIC Bank (998.HK) rose 3.9%.
US stocks rose on Wednesday. The S&P 500 rose 40.15 points, or 2%, to 2,012.89. The
DJIA jumped 288 points, or 1.7%, to 17,356.87. European stocks rebounded. The Stoxx
Europe 600 rose 0.1% to close at 329.34.
News Reaction
CASS expects investment growth to drop to 10% during 13th FYP. Li Yang, vice director
of Chinese Academy of Social Sciences (CASS), said China’s investment growth will
continue to decline in the future, and the investment is estimated to maintain a growth
speed of around 10% during the 13th Five-year Plan. The role of investment serving as
the support for the economy will decline, media reported. The investment growth is
15.8% at present, the lowest level in nearly 13 years.
Export tariff rate for Chinese coal to cut to 3% in 2015. The Ministry of Finance
announced that in 2015, the provisional export tariff rate for the Chinese coal (including
anthracite, bituminous coal, coking coal, lignite, etc.) will be reduced to 3% from 10% in
2014.
US to impose high tariffs on solar products from China and Taiwan. The US confirmed
on Tuesday that it will impose high import duties on solar products from China and
Taiwan. This decision may intensify the already-tense trade relations between China and
the US.
China’s 2014 game market revenue up 37.7% to RMB114.5bn. The 2014 China Game
Industry Annual Conference took place in Haikou, Hainan Province. According to the 2014
China’s Game Industry Report released at the conference, the game market in China
recorded actual sales revenue of RMB114.48bn in 2014, up 37.7% YoY. During the period,
the number of users increased 4.6% YoY to about 517m.
CITIC Securities (6030.HK) sets up REITs for store acquisition, Suning Appliance says.
Suning Appliance announced that CITIC Securities has established REITs asset-backed
special plans. The funds raised will be used to acquire the outlet properties directly or
indirectly held by Suning.
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
18 December 2014
Economic releases for this week - USA
Date Time
15-Dec
16-Dec
17-Dec
17-Dec
18-Dec
Source: Bloomberg
Event
Industrial Production(MoM)
Housing Starts(k)
CPI (MoM)
CPI ex food & energy (MoM)
Initial jobless claims (k)
Economic releases for this week - China
Survey
0.7%
1,035.0
-0.1%
0.1%
89.5
Prior
15-Dec
16-Dec
17-Dec
17-Dec
18-Dec
Date Time
16-Dec
Event
HSBC Manufacturing PMI
Survey
49.8
Prior
16-Dec
Source: Bloomberg
BOCOM Research Latest Reports
Data
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
Report
2015 Outlook - Introducing 2015 Top Picks; A Bright New Beginning
HK Property Sector - Downgrade to Market Perform; both prices and rents have overshot
Hysan (14.HK) - More opportunities than challenges in 2015
New World Development (17.HK) - High earnings visibility
Hang Lung Properties (101.HK) - Record profit in 2014E
Kerry Properties (683.HK) - Expanding its recurring income base
Auto (Outperform): Finding bright spots amid modest sector outlook
Transportation (Container Shipping: Market Perform); (Aviation: Outperform); (Logistics: Outperform): Still
challenging for container shipping; airlines to benefit from lower jet fuel prices
Telecom & Small/Mid Cap (Market Perform): Opportunities from the expansion of Shanghai-Hong Kong
Stock Connect
Technology (Market Perform): The rise of Chinese power
Steel (Market Perform): On the road to re-rating as sector bottoms out
Renewable Energy (Outperform): Improving operating environment to lift profitability
China Property (Outperform): Resetting market risk appetite
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
17 Dec 2014
Internet (Outperform): Penetration into traditional industries has just begun
Insurance (Outperform): Sector bottomed out with re-rating on the horizon
Healthcare (Outperform): Sustainable growth to continue
Energy (Market Perform): Energy world under new crude price and Stock Connect environment
Consumer Discretionary (Market Perform): Upgrade to Market Perform, but upside catalysts remain absent
Brokerage (Outperform): 2015 growth well supported with bright long-term prospects
China Market Strategy - Outlook 2015: Re-pricing Risks
Consumer Staples (Market Perform): Being selective in a mixed bag in 2015E
17 Dec 2014
Source: Company data, BOCOM International
Download our reports from Bloomberg: BOCM〈enter〉
Analyst
Raymond Cheng, CFA, CPA, CA
Alfred Lau, CFA, FRM
Alfred Lau, CFA, FRM
Alfred Lau, CFA, FRM
Alfred Lau, CFA, FRM
Alfred Lau, CFA, FRM
Yao Wei
Geoffrey Cheng, CFA
Zhiwu LI
Miles XIE
Jovi Li
Louis Sun
Alfred Lau, CFA, FRM, Toni Ho, CFA, FRM, Luella
Guo
Yuan Ma Ph.D, Connie Gu, CPA
Li Wenbing
Johnson Sun, Milo Liu
Fei Wu, Tony Liu
Phoebe Wong, Anita Chu
Li Wenbing
Hao Hong, CFA
Summer Wang, Shawn Wu
Morning Express
18 December 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$)
125.90
21.10
79.05
21.85
125.30
19.18
10.56
50.65
40.95
86.05
6.99
5.31
25.85
9.66
110.60
8.69
8.40
4.72
98.50
37.95
64.75
29.45
73.35
25.45
26.95
13.20
15.22
16.84
17.14
16.24
8.68
6.72
5.98
168.70
4.14
54.40
7.58
72.55
71.65
31.10
21.65
105.30
10.26
12.16
19.42
8.25
9.87
6.07
87.90
9.93
Mkt
cap
(HK$m)
291,605
94,640
96,788
439,171
239,554
111,843
31,051
151,967
493,248
366,863
56,426
1,941,854
66,237
127,474
312,222
75,299
70,848
88,339
143,712
306,139
163,588
69,115
654,864
269,077
862,521
328,724
36,853
66,246
180,177
91,004
16,863
537,402
839,193
197,058
1,214,205
164,839
63,372
1,394,091
152,920
181,149
176,967
986,479
245,449
73,741
93,159
2,156,062
440,670
1,530,656
1,792,735
110,309
5d
chg
(%)
-7.0
-2.5
-1.1
-4.0
-1.3
-4.1
-0.4
-2.1
-6.7
-5.4
-2.6
-0.9
-2.6
-4.4
-2.6
-3.4
-1.4
-3.9
-4.3
-5.8
-1.1
-5.0
0.3
-4.1
-0.7
-4.1
-1.9
-2.3
-3.2
-7.7
-4.8
-1.3
-3.1
-5.5
-0.5
-1.2
-5.0
-5.1
-3.8
-0.2
-6.3
-8.8
-3.8
-1.5
-6.9
1.1
-3.4
-0.7
-4.2
-7.7
Ytd
chg
(%)
8.5
-13.9
-13.7
-10.6
-0.3
-0.2
-0.8
25.9
5.3
-12.7
-48.8
1.3
-8.7
-13.8
12.5
-5.7
-3.0
8.3
8.4
-39.3
5.6
-10.4
5.6
2.4
11.1
11.3
-40.9
2.7
6.0
-27.5
-41.9
22.9
-5.5
30.5
16.0
-8.3
-7.6
-13.8
16.2
6.0
-0.7
6.4
-11.6
14.7
5.7
-2.9
-31.6
3.8
9.3
5.3
22,585.8 13,946,976
-4.0
-3.1
Source: Bloomberg
Download our reports from Bloomberg: BOCM〈enter〉
–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
152.00
105.95
26.45
19.80
93.15
74.05
24.95
19.12
133.00
117.60
20.60
13.62
11.92
9.40
56.40
36.46
45.65
34.65
108.50
86.00
14.18
6.88
5.69
4.33
28.75
22.75
13.10
9.32
120.20
90.35
10.48
7.15
10.00
7.00
5.44
3.72
108.00
80.55
68.00
37.80
68.35
56.00
34.45
28.50
77.30
55.60
27.95
21.50
28.80
19.72
16.88
9.35
26.40
15.20
18.00
13.56
18.90
13.91
23.50
16.02
16.60
8.62
7.13
4.53
8.23
5.73
189.00
112.80
4.35
3.03
63.45
46.35
10.70
7.55
86.40
72.40
76.50
57.85
32.30
26.55
24.60
17.52
134.90
91.80
14.22
9.03
14.16
9.83
24.90
17.10
11.70
7.31
15.88
9.72
6.42
4.89
102.20
63.65
12.70
7.62
25,363.0
21,137.6
–––––––––– PE –––––––––––
2013A
2014E
2015E
(X)
(X)
(X)
6.8
8.2
8.5
12.4
14.2
14.9
26.8
25.5
21.2
8.1
8.8
8.7
14.4
14.0
12.9
7.3
9.9
8.5
13.6
11.9
10.7
8.5
16.3
16.0
25.9
20.1
17.5
7.8
10.7
10.3
8.9
9.0
8.3
5.4
5.4
5.1
15.0
15.4
13.9
23.6
23.5
20.1
8.9
14.2
13.3
6.5
10.2
9.7
N/A
12.5
11.9
36.3
58.0
33.1
11.3
14.1
13.2
14.9
15.0
14.4
18.1
15.5
15.2
9.9
10.6
10.3
14.7
12.8
11.8
11.7
10.9
9.9
22.7
18.2
15.5
9.4
9.4
7.9
20.0
64.8
39.9
22.5
19.2
11.9
25.9
24.4
22.7
28.1
25.5
20.7
79.4
49.3
26.1
6.2
6.1
5.8
8.1
8.8
9.6
42.0
38.6
28.8
5.5
5.6
5.1
6.9
13.9
12.2
9.7
15.3
13.2
11.7
10.5
10.0
2.4
17.0
17.6
12.2
17.4
16.1
7.1
7.7
6.6
35.5
32.9
24.9
15.5
15.1
13.1
8.1
13.8
13.4
8.0
7.6
7.0
9.2
9.8
10.6
6.3
6.7
8.1
5.3
5.2
4.9
12.2
12.9
12.9
14.8
15.8
13.5
9.6
10.6
10.1
Yield
P/B
(%)
2.8
3.6
2.3
5.2
4.4
2.3
2.9
2.0
1.1
2.7
3.3
N/A
3.0
2.8
3.0
4.8
N/A
2.1
3.7
4.6
4.0
3.8
1.2
4.0
1.4
2.0
1.6
1.5
1.9
1.7
0.8
N/A
5.0
2.1
5.9
3.2
6.2
5.2
3.6
3.0
2.3
0.2
2.0
4.1
3.9
4.8
5.8
6.2
3.5
2.4
(X)
0.8
0.8
5.9
1.2
2.2
1.3
0.9
0.6
2.3
0.9
1.1
1.0
1.0
8.7
0.7
0.5
2.2
0.6
0.7
7.5
1.8
1.0
2.2
1.6
2.5
0.5
0.7
1.1
3.5
3.9
1.0
0.9
1.0
9.5
0.9
0.6
1.7
0.9
1.2
1.2
1.5
10.5
0.9
0.7
1.4
1.0
1.0
1.0
1.7
4.3
3.7
1.3
Morning Express
18 December 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
Share
price
(HK$)
Mkt
cap
(HK$m)
5d
chg
(%)
Ytd
chg
(%)
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
5.95
21.85
26.40
5.40
5.27
6.31
3.70
34.00
5.31
52.40
9.12
4.72
9.26
6.94
73.35
14.60
38.35
31.45
3.29
34.45
26.95
12.62
2.07
7.21
6.72
13.10
5.98
6.03
17.18
4.14
10.96
30.10
19.82
4.42
6.42
8.25
9.85
26.55
7.72
6.07
5.84
26,634.41
439,170.93
73,051.31
29,562.04
56,000.42
59,369.76
1,306,160.62
147,341.28
1,941,853.88
69,966.53
219,162.13
88,339.17
385,478.16
61,963.51
654,864.48
216,496.25
137,445.20
63,468.77
74,008.65
305,456.46
862,521.14
91,292.45
75,783.64
38,926.98
537,401.55
63,317.66
839,193.08
189,023.97
468,734.42
1,214,205.20
94,432.68
438,742.90
275,995.67
357,721.09
110,994.21
2,156,061.60
141,908.48
133,321.59
62,040.92
1,530,655.94
373,222.75
-4.6
-4.0
-4.7
18.2
0.6
-4.2
-1.3
0.4
-0.9
-4.9
11.2
-3.9
0.2
-2.8
0.3
-2.7
-5.0
-4.0
-3.2
2.7
-0.7
-5.0
-2.8
-3.1
-1.3
-3.4
-3.1
4.7
1.5
-0.5
-3.7
3.1
-0.9
-2.2
4.2
1.1
3.0
-2.9
-5.0
-0.7
-0.7
-43.1
-10.6
18.7
-10.3
-27.2
-10.9
-2.9
30.8
1.3
-20.1
45.9
8.3
29.1
-18.2
5.6
32.0
-10.4
0.6
21.9
13.3
11.1
-47.5
24.7
-13.5
22.9
-6.4
-5.5
50.8
4.0
16.0
-9.7
42.3
46.8
12.8
10.9
-2.9
40.5
-7.7
-22.7
3.8
38.7
11.2
25.0
34.5
6.3
7.4
7.5
4.0
38.2
5.7
66.8
9.2
5.4
9.7
9.9
77.3
16.2
44.3
34.9
3.9
37.3
28.8
24.5
2.3
8.8
7.1
15.2
8.2
6.2
17.8
4.4
15.2
34.0
23.2
5.2
6.7
11.7
10.3
35.7
10.3
6.4
6.2
5.8
19.1
19.7
4.0
3.5
4.9
3.0
21.1
4.3
52.0
4.9
3.7
5.9
6.7
55.6
9.4
26.1
25.8
2.5
23.6
19.7
11.7
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
24.0
7.1
4.9
3.6
69.5
8.1
21.1
N/A
17.5
6.7
5.3
14.1
5.4
28.5
9.2
36.3
5.6
11.3
14.7
15.0
11.5
9.6
N/A
23.3
22.7
5.9
16.9
5.0
6.2
10.2
8.1
10.3
6.0
5.5
5.6
33.3
36.0
15.4
24.0
9.2
9.6
9.3
25.4
5.3
5.4
21.3
8.8
19.1
53.9
18.8
16.3
5.2
12.1
5.4
27.5
8.7
58.0
5.3
10.3
12.8
13.1
11.5
10.7
N/A
21.2
18.2
6.1
14.9
5.4
6.1
13.0
8.8
9.8
6.0
5.6
5.9
32.0
24.4
15.4
18.8
9.8
8.9
9.6
19.5
5.2
5.3
17.6
8.7
16.0
15.6
14.8
16.6
4.8
10.9
5.1
24.2
8.0
33.1
5.0
8.0
11.8
12.0
8.9
10.7
N/A
17.6
15.5
6.5
15.0
5.0
5.8
13.2
9.6
8.8
5.4
5.1
5.5
26.8
19.9
14.0
12.0
10.6
8.6
8.9
14.0
4.9
5.0
11,269
4,624,730
-0.9
4.2
11,950.0
9,159.8
7.9
7.8
7.3
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)
1.3
5.2
1.2
0.0
3.6
0.4
N/A
0.6
N/A
N/A
2.6
2.1
2.1
3.2
1.2
1.9
2.7
1.0
N/A
1.5
1.4
4.3
N/A
2.8
N/A
4.8
5.0
1.4
4.5
5.9
2.1
N/A
0.8
2.7
0.9
4.8
4.8
1.6
0.8
6.2
N/A
2.3
1.2
2.5
0.7
0.8
0.6
1.0
2.0
1.0
3.6
1.2
0.6
1.1
1.0
2.2
2.5
3.2
1.6
0.9
2.3
2.5
1.1
1.3
0.9
0.9
0.8
1.0
1.2
1.2
0.9
1.1
2.9
2.4
1.0
1.3
1.0
1.7
1.9
1.6
1.0
0.9
4.1
1.2
Morning Express
18 December 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
Raymond CHENG, CFA, CPA, CA
(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
Strategy
Economics
Hao HONG, CFA
Banks/Network Financials
Qingli YANG
(86) 10 8800 9788 - 8043
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
Fay ZHOU
(852) 2977 9381
fay.zhou
(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
(852) 2977 9387
milo.liu
(852) 2977 9389
liwenbing
Healthcare
Louis SUN
Telecom & Small/ Mid-Caps
Milo LIU
Insurance & Brokerage
Zhiwu LI
Technology
Internet
Miles XIE
Transportation & Industrial
Yuan MA, PhD
(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
Miaoxian LI
Oil & Gas/ Gas Utilities
Consumer Discretionary
Jerry LI
@bocomgroup.com
Automobile
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Wei YAO
Morning Express
18 December 2014
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