快讯：基建行业 Gary Wong 黄家玮 +852 2509 2616 gary.wong@gtjas.com.hk 21 October 2014 Jan.-Sep. 2014 Urban FAI Up 16.1% YoY, 0.1 ppts Below Expectation GTJA Research 国泰君安研究 Flash Note: Infrastructure Sector  According to the National Bureau of Statistics of China, Jan.-Sep. 2014 Urban FAI amounted to RMB357,787 billion, up 16.1% YoY, 0.1 ppts below expectation. The growth was 1.4 ppts lower than the 17.5% growth target set by NDRC for 2014. For Sep. only, Urban FAI increased 15.8% YoY to RMB5,200.1 billion, up 2.5 ppts from 13.3% YoY growth in August.  There are several points worth discussing. Firstly, tertiary industry FAI growth rate (17.4%) was still higher than the overall growth rate (16.1%), showing that investment structure adjustment remained in place. Secondly, we found that investment growth of transportation (19.4%) was higher than the overall growth rate (16.1%), and was still close to 20%, showing that transportation infrastructure investment was not affected by the investment structure adjustment, or might have even benefitted from that as some investment might now be transferred from over-capacity industries to under-capacity sub-sectors in the transportation industry, such as railway, whose investment increased 25.1%, compared with only 20.6% for first eight months. Thirdly, property development investment growth rate dropped 0.7 ppts compared with that of Jan.-Aug. to 12.5%, showing that investment atmosphere turned worse further. Finally, FAI growth of construction in progress was at 12.5% in Jan.-Sep., while FAI growth of new started projects was at 14.4%, up 0.1 ppts and down 0.4 ppts respectively compared with those of Jan.-Aug., showing that new start growth slowed down, however, growth of progress of previously started projects accelerated.  We think the statistics show that the government’s commitment in transportation infrastructure investment, not being affected by the investment structure adjustment objective. In addition, news reported that the railway investment target of RMB800 billion for this year can be completed without problems, while the investment target might be surpassed. Moreover, NDRC approved a few large new projects of railway lately. We think railway investment would become the most important tool for stabilizing the economy. As the market begins to seriously look at the determination of the Government in supporting the railway industry, there should be a revaluation of the sector, which is trading near historical low. We maintain “Accumulate” ratings for China Railway Group (00390 HK, TP at HKD4.90), China Railway Construction (01186 HK, TP at HKD9.50), China Communications Construction Company (01800 HK, TP at HKD6.15), and “Buy” ratings for Zhuzhou CSR Times Electric (03898 HK, TP at HKD40.00) and CSR Corporation (01766 HK, TP at HKD8.50).  据中国国家统计局的数字显示, 2014 年 1-9 月城镇固定资产投资额为 357,787 亿元(人民币,下同),同比增 16.1%,较预期低 0.1 个百分点。 Infrastructure Sector 基建行业 2014年1-9月城镇固定资产投资同比增16.1%,较预期低0.1个百分点这个增速较发改委定下的 2014 年固定资产投资增长目标 17.5%低 1.4 个百份点。以 9 月份计,城镇固定资产投资增速同比增 15.8%至 52,001 亿元,较 8 月 13.3%的同比增速提高 2.5 个百分点。  我们认为资料有几点值得讨论。首先,第三产业投资增速(17.4%)仍高于整体增速(16.1%),投资调结构的目标维持。第二,我们发现交通的基建投资增速(19.4%)整体固定资产投资增速(16.1%)为高,亦接近于 20%以上的增速,显示交通投资于调结构的过程里并没受到影响,更可能受惠,因部份投资从产能过剩产业转到产能过低的交通子行业去,如铁路,其增速为 25.1%,较首 8 月 20.6%的增速高。第三,房地产开发投资增速较 1-8 份跌 0.7 个百分点至 12.5%,投资气氛进一步转差。最后,1-9 月的施工项目投资增速为 12.5%;新开工的项目增速为 14.4%,较 1-8 份增 0.1 个百分点及跌 0.4 个百分点,反映新开工进度有所减慢,但此前开工项目则正有序推进。  我们认为统计数据所显示政府对于交通基建的投入相当落力,并没有受到投资调结构的目标影响。有报导指今年铁路投资完成 8,000 亿元的投资目标将没有问题,甚至可能会略超预期,加上最近发改委密集批覆新铁路项目,我们认为铁路将成为稳定经济投资最重要的一员。当市场开始认真的了解政府对铁路行业的支持的决心,将会对该行业有所重估,而当前估值则接近历史低位。维持中国中铁(00390 HK,目标价 4.90 港元)、中国铁建(01186 HK,目标价 9.50 港元)、中交建(01800 HK,目标价 6.15 港元)的“收集”评级,及株洲南车时代(03898 HK, See the last page for disclaimer Flash Note 目标价 40.00 港元),及中国南车(01766 HK,目标价 8.50 港元)的“买入”评级。 Page 1 of 3 Categories Urban FAI Investment (RMB ‘000 million) 357,787 YoY Growth +16.1% 8,642 150,180 198,965 +27.7% +13.7% +17.4% Property Development 68,751 +12.5% Infrastructure Investment In which: Transportation, Communications & Storage Electricity, Heat, Gas & Water Production Irrigation, Environment & Public Facilities Management 77,140 28,737 16,132 32,271 +20.9% +19.4% +17.5% +24.2% Primary Industry Secondary Industry Tertiary Industry 21 October 2014 Table 1: Summary of FAI Statistics of Jan.-Sep. 2014 Source: National Bureau of Statistics of China Table 2: YoY Growth of Different Sources of Capital Sources of Capital Government Budget Loans Foreign Capital Self-capital Others Total (RMB ‘000 million) 18,160 47,493 3,019 274,088 48,380 391,141 Jan.-Sep. Growth +14.1% +11.2% -7.0% +16.1% -3.0% +12.4% Flash Note Infrastructure Sector 基建行业 Source: National Bureau of Statistics of China See the last page for disclaimer Page 2 of 3 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. 21 October 2014 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) and China U-Ton Holdings Limited (06168), 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. DISCLAIMER Infrastructure Sector 基建行业 DISCLOSURE OF INTERESTS 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"). 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