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Morning Express
09 January 2015
Focus of the Day
Indices
Chow Tai Fook (1929.HK)
Neutral
Disappointing 3Q; forecast and TP pared
Phoebe WONG
Last Closing: HK$11.0
phoebe.wong@bocomgroup.com
Downside: 13%
LT
BUY
BUY
SELL
Stock
Target Price: HK$9.6↓
Chow Tai Fook (CTF) reported a 10% revenue decrease with 18% SSS decline in 3Q15,
worse than our and the market’s expectations, mainly due to the disappointing
performance in both HK and China markets. For HK & Macau, revenue decreased 16%
(2Q -20%) with SSS -21% (2Q -29%). While the sector-wide slowdown of traffic dragged
by over 2 months of HK protests was a key attributing factor, we believe the adverse
impact of CTF’s store cannibalization amid its rich network also took a bigger toll. For
China, revenue decline widened once again in 3Q, to 6% (2Q -2%), with SSS -15% (2Q
-12%). Another surprise was the negative sales mix, with 3Q gem-set jewelry SSS down
12%, a sharp reversal from its improvement trend as seen in the previous few quarters,
mainly affected by the weakness of the HK & Macau market prolonged into the Christmas
season (particularly higher-priced jewelry). Looking ahead, despite the removal of the HK
traffic overhang and easier comps, we believe CTF’s recovery pace will continue to lag
behind peers amid the sustained bigger store cannibalization impact and cost base both
for its HK and China markets. Management made its second downward revision for the
full-year FY15E revenue guidance (in less than 2 months) to a double-digit decline from
previously single-digit decline, which further echoes our cautious view. We cut our net
profit forecasts by 7%/8% in FY15/ 16E due to our lower SSS assumption (now putting us
6/10% below consensus), prompting us to pare our TP from HK$10 to HK$9.6 (based on
13.4x FY16E PE, continuing at a 10% premium to consumer peers). Reiterate Neutral. We
continue to favor Luk Fook (590HK, Buy), our 2015E retail sector top pick, in view of its
better scope for growth, in terms of both margins and China market expansion.
Download our reports from Bloomberg: BOCM〈enter〉
Close
HSI
23,836
H Shares
12,024
SH A
3,451
SH B
293
SZ A
1,516
SZ B
1,062
DJIA
17,908
S&P 500
2,062
Nasdaq
4,736
FTSE
6,570
CAC
4,260
DAX
9,838
Source: Bloomberg
1d %
0.65
0.27
-2.39
-0.58
-0.44
0.12
1.84
1.79
1.84
2.34
3.59
3.36
Ytd %
0.98
0.33
1.82
0.84
2.54
3.26
0.48
0.16
0.00
0.06
-0.29
0.33
Close
50.96
1,207.88
16.37
6,115.00
119.79
1.51
1.18
3m %
-44.23
-1.34
-5.75
-8.32
-9.98
-6.40
-7.08
Ytd %
-11.11
1.94
4.22
-2.94
-0.01
-3.15
-2.52
bps change
HIBOR
0.38
US 10 yield
2.02
Source: Bloomberg
3m
0.01
-0.30
6m
0.01
-0.53
Indicators
Brent
Gold
Silver
Copper
JPY
GBP
EURO
HSI Technical
HSI
50 d MA
200 d MA
14 d RSI
Short Sell (HK$m)
Source: Bloomberg
23,836
23,606
23,459
56
9,475
Morning Express
09 January 2015
Hang Seng Index (1 year)
26,000
Transportation Sector
25,000
Weekly transportation news wrap
Geoffrey CHENG, CFA
24,000
23,000
geoffrey.cheng@bocomgroup.com
Weekly
22,000
21,000
In terms of sector, we highlight some notable updates for the transportation industry this
week as follows:
Source: Company data, Bloomberg
Global dry bulk market: The Baltic Dry Bulk Index (BDI) remained on a downward trend,
reaching its lowest point in five months.
HS China Enterprise Index (1 year)
13,000
12,000
Logistics: China LPI recorded steady growth in December.
11,000
Transportation: NDRC announced the removal of price control on 24 commodities and
services, including the prices of railway bulk cargo, parcels, domestic air cargo, and port
service charges.
Logistics: China’s express delivery volume reached 14 billion in 2014, ranking first
worldwide.
10,000
9,000
8,000
Source: Company data, Bloomberg
Shanghai A-shares (1 year)
3,500
Geely Auto (175.HK)
Neutral
Principal business improving, but uncertainties loom
over exchange loss
Wei YAO
Last Closing: HK$2.72
wei.yao@bocomgroup.com
Upside: +16.5%
3,000
LT
BUY
2,500
BUY
SELL
2,000
Stock
Target Price: HK$3.17→
1) Geely Auto sold 54,900 cars in Dec, up 23.4% MoM but down 9.7% YoY. A total of
418,000 cars were sold from Jan to Dec, down YoY 24%, and accomplishing 97.1% of its
yearly target. Car sales saw a strong rebound in Dec as compared with Nov, mainly driven
by the sales growth of new products ‘‘Xindihao’’ and ‘‘New Vision’’; 2) Product structure
and utilization rate improved in 2H; 3) The sales target set for 2015 is conservative; 4)
There are still uncertainties looming over the exchange issue; 5) The renewable energy JV
is a new long-term bright spot; 6) We maintain Neutral. In general, we believe that the
data in Dec show that the company’s sales are still recovering, with strong demand from
the domestic market, and its principal businesses are improving. In light of the current
development trend, we are of the opinion that the sales target of the company looks
conservative. We estimate FY15/16 sales volume to be 542,000 cars/591,000 cars. We
expect EPS of FY2014/15/16 to be RMB0.15/0.28/0.32. Though the principal business is
thriving, the company will still face uncertainties over exchange loss as the prospect of
the ruble remains uncertain. We keep our Neutral rating and TP unchanged.
Download our reports from Bloomberg: BOCM〈enter〉
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
09 January 2015
Last Closing: HK$11.0
Downside: 13%
Target Price: HK$9.6↓
Consumer Discretionary Sector
Chow Tai Fook (1929.HK)
UP
MP
OP
Disappointing 3Q; forecast and TP pared
Financial Highlights
March year ended
FY12
FY13
FY14
FY15E
FY16E
Revenue (HK$m)
56,571
Revenue growth (%)
61
Net profit (HK$m)
6,341
EPS (HK$)
0.685
vs Consensus (+/-%)
na
EPS growth (%)
na
PER (x)
16.1
DPS (HK$)
0.100
Yield (%)
0.9
Source: Company data, BOCOM Int’l estimates
57,434
2
5,505
0.551
na
-20
20.0
0.220
2.0
77,407
35
7,272
0.727
na
32
15.1
0.360
3.3
67,373
-13
6,380
0.638
-6
-12
17.2
0.316
2.9
75,026
11
7,173
0.717
-10
12
15.3
0.355
3.2
Chow Tai Fook (CTF) reported a 10% revenue decrease with 18% SSS decline in 3Q15,
worse than our and the market’s expectations, mainly due to the disappointing
performance in both HK and China markets. For HK & Macau, revenue decreased 16% (2Q
-20%) with SSS -21% (2Q -29%). While the sector-wide slowdown of traffic dragged by
over 2 months of HK protests was a key attributing factor, we believe the adverse impact
of CTF’s store cannibalization amid its rich network also took a bigger toll. For China,
revenue decline widened once again in 3Q, to 6% (2Q -2%), with SSS -15% (2Q -12%).
Another surprise was the negative sales mix, with 3Q gem-set jewelry SSS down 12%, a
sharp reversal from its improvement trend as seen in the previous few quarters, mainly
affected by the weakness of the HK & Macau market prolonged into the Christmas season
(particularly higher-priced jewelry). Looking ahead, despite the removal of the HK traffic
Neutral
LT
BUY
BUY
SELL
Stock
Stock data
52w High
14.48
52w Low
9.50
Market cap (HK$m)
110,000
Issued shares (m)
10,000
Avg daily vol (m)
6.1
1-mth change（%）
6.8
YTD change（%）
5.8
50d MA
10.5
200d MA
11.0
14-day RSI
61.8
Source: Company data, Bloomberg
Performance chart
HSI
20%
1929.HK
10%
0%
overhang and easier comps, we believe CTF’s recovery pace will continue to lag behind
peers amid the sustained bigger store cannibalization impact and cost base both for its HK
-10%
-20%
-30%
and China markets. Management made its second downward revision for the full-year
FY15E revenue guidance (in less than 2 months) to a double-digit decline from previously
-40%
Jan-14
Apr-14
Jul-14
single-digit decline, which further echoes our cautious view. We cut our net profit
forecasts by 7%/8% in FY15/ 16E due to our lower SSS assumption (now putting us 6/10%
below consensus), prompting us to pare our TP from HK$10 to HK$9.6 (based on 13.4x
FY16E PE, continuing at a 10% premium to consumer peers). Reiterate Neutral. We
continue to favor Luk Fook (590HK, Buy), our 2015E retail sector top pick, in view of its
better scope for growth, in terms of both margins and China market expansion.
Store expansion in line with our expectation. The group opened 52 new stores (net)
in 3Q15. This brought the number of new stores (net) to 166 for 9M15 (83% of our
full-year estimate of 200), an 8% increase from FY14. As of end-Dec 14, the group
had a total of 2,243 stores.
Download our reports from Bloomberg: BOCM〈enter〉
Oct-14
Source: Company data, Bloomberg
Phoebe Wong
Phoebe.wong@bocomgroup.com
Tel: (852) 2977 9391
Jan-15
09 January 2015
Transportation Weekly
Transportation
Transportation Sector
Weekly transportation news wrap
The global dry bulk market reached its lowest point in five months. The downward
trend of global dry bulk market demand continued, with the Baltic Dry Bulk Index
th
(BDI) continuing to fall. As of 7 January 2015, the BDI plunged by 5.6% WoW and
60.3% YoY to 744, with the China Import Dry Bulk Freight Index (CDFI) down 4.7%
WoW, largely as a result of the weak freight rate performance of Capesize and
Panamax vessels, in our view. The Baltic Capesize Index (BCI) declined by 15.9%
WoW to 397. The Baltic Panamax Index (BPI) fell by 10.6% WoW and 53.9% YoY to
780. The Baltic Supramax Index (BSI) reached 843, representing a decrease of 6.0%
WoW and 30.0% YoY.
1-Year Sector Performance
In December, China LPI continued its upward trend, suggesting an acceleration in
the growth of logistics activities. In December, China LPI reached 57.5%, up 1.8%
MoM, according to China Federation of Logistics & Purchasing, indicating the robust
development of the logistics industry. The Total Business Volume index increased from
56.5% in November to 57.5%. Other indexes, including New Orders, Inventory
Turnover, and Equipment Utilization Rate stayed in the expansionary zone, compared
with the same period last year. However, the New Orders index dropped from 54.5% in
the previous month to 53.7%, but was 1.2 ppts higher than that of the same period last
year, indicating moderate new demand for logistics services. The Equipment Utilization
Rate index stayed at the same level as the previous month, and recorded an increase of
6.4 ppts on a YoY basis.
Geoffrey Cheng, CFA
NDRC has lifted price control on railway bulk cargo, parcels, domestic air cargo, and
port service charges. China’s National Development and Reform Commission (NDRC)
announced the removal of price control on 24 commodities and services. In order to
encourage private investment and invigorate the market, price control on the 24
commodities and services, including the prices of railway bulk cargo, parcels, domestic
air cargo, passenger transport on short-haul routes, and port service fees, will be
removed. The move is notably aimed at attracting private investors’ participation in
railway construction, and to facilitate the new round of price reform, according to the
media reports. Meanwhile, the lifting of price control on domestic air cargo and
passenger transport on short-haul routes enables flexible price adjustment and
enhanced competition among airlines, especially for the nascent low cost carriers.
China’s express delivery volume reached 14 billion in 2014, ranking first worldwide.
In 2014, China’s express delivery volume reached 14 billion, representing an increase of
52% YoY, according to the State Post Bureau of China. However, the rapid growth of
express delivery can still hardly satisfy the market demand, according to the
government report, as express delivery services are not available in some rural areas
and cold chain delivery services are only available in 20 cities. According to the State
Post Bureau, the forecasted express delivery volume will increase 40% YoY in 2015.
Download our reports from Bloomberg: BOCM〈enter〉
20%
Sector performance
HSI Index performance
15%
10%
5%
0%
-5%
-10%
-15%
Jan-14
Apr-14
Jun-14
Sep-14
Source: Bloomberg
geoffrey.cheng@bocomgroup.com
Tel: (852)2977 9380
Fay Zhou
fay.zhou@bocomgroup.com
Tel: (852) 2977 9381
Dec-14
Morning Express
09 January 2015
Market Review
Hong Kong stocks rose on Thursday. The Hang Seng Index gained 154 points, or 0.65%, to
finish at 23,845. Lenovo (992.HK) jumped 4% as the best blue-chip performer. China
Mobile (941.HK) added 2%. Tencent (700.HK) rose 2.3%, extending winning streak to the
fifth straight session. Wind power operators rallied. Longyuan (916.HK) jumped 6.7%.
Huaneng Renewables (958.HK) leapt 7%. Mainland developers fell. CR Land (1109.HK)
and COLI (688.HK) were the worst blue-chip performers, down 2.7% and 2.6%,
respectively.
US stocks posted strong gains on Thursday, as investors welcomed dovish comments by a
Federal Reserve member, while ignoring a slightly weaker-than-expected jobless claim
report. The S&P 500 gained 36.26 points, or 1.8%, to 2,062.14. The DJIA rose 323.35
points, or 1.8%, to 17,907.87. European stocks surged. The Stoxx Europe 600 jumped
2.7% to 342.10.
News Reaction
NDRC: to guide the investment of social capital in national construction projects instead
of stimulating financial investment. According to Luo Guosan, deputy director of the
NDRC’s Department of the Investment Office, the government’s policy direction of
national key construction now is to introduce innovative financing mechanisms to allure
social capital investment, rather than increasing fiscal investment to stimulate investors
or stabilize the economy through such measure.
Shenzhen Stock Exchange and Shanghai Stock Exchange narrowed the scope of criteria
for investors of private bonds and standardized the regulations on credit growth
guarantee. Since the introduction of China’s private bonds in 2012, the scale has
expanded steadily but there has been various risk incidents. Both exchanges also issued
relevant documents relating to the strengthening of risk control of private bond
placement by small and medium-sized enterprises so as to reinforce the management of
qualified investors and credit growth guarantee.
Shanghai’s free trade zone is the first to commence pilot development of parallel
import of cars but does not permit the import of old cars. Shanghai Commerce
Committee, China (中國上海市商務委員會), Shanghai Free Trade Zone Administration
Committee and other committees jointly issued an announcement on Wednesday,
pursuant to which Shanghai’s free trade zone is permitted to commence pilot
development of parallel import of cars. Hereafter, car distributors registered with
Shanghai’s free trade zone will be permitted to engage in the business of imported
foreign cars upon approval of MOF but will also be prohibited from importing old cars or
illegally modified cars.
Lenovo (992.HK) anticipates Motorola to boost the proportion of mobile sales to more
than 40%. As reported, Liu Jun, the President of the Mobile Business Group under Lenovo
group stated that with Motorola’s yet another attempt to penetrate China and other
markets, the smart phones of the brand will account for more than 40% of Lenovo’s
output volume of smart photo in the next fiscal year.
Xiaomi attempts to establish its presence in outlets in India, in a bid to stimulate its
mobile sales. Xiaomi, China’s smart phone manufacturer stated that if the outlet of Bharti
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
09 January 2015
Airtel Ltd, an operator, can sell an adequate number of Hongmi Note 4G mobiles, it can
then sell other types of mobile in the outlets of India. Xiaomi mainly fosters the sales
strategy of online purchase.
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
09 January 2015
Economic releases for this week - USA
Date Time
6-Jan
7-Jan
7-Jan
8-Jan
9-Jan
9-Jan
9-Jan
9-Jan
Source: Bloomberg
Event
Factory orders
MBA mortgage applications
Trade balance (US$ bn)
Initial jobless claims (k)
Consumer Credit(US$ bn)
Change in Non-farm payrolls(k)
Change in Private payrolls(k)
Unemployment rate
Economic releases for this week - China
Survey
-0.4%
-42.0
290.0
15.00
243.0
230.0
5.7%
Prior
-0.7%
0.9%
-43.4
298.0
13.23
321.0
314.0
5.8%
Date Time
8-Jan
9-Jan
9-Jan
Event
Trade balance (US$ bn)
CPI (YoY)
PPI (YoY)
Survey
46.0
1.4%
-3.1%
Prior
54.5
1.4%
-2.7%
Source: Bloomberg
BOCOM Research Latest Reports
Data
07 Jan 2015
06 Jan 2015
02 Jan 2015
31 Dec 2014
30 Dec 2014
30 Dec 2014
30 Dec 2014
24 Dec 2014
23 Dec 2014
22 Dec 2014
19 Dec 2014
19 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
Energy Sector – Bocom Energy Weekly
Container Shipping Sector - Weekly container shipping commentary
Transportation Sector - Weekly transportation news wrap
SITC (1308.HK) – Company update – management positive on 2015 outlook
Container Shipping Sector – Weekly container shipping commentary
Insurance Sector – Sector re-rating has started; add to undervalued insurance stocks
Golden Eagle (3308.HK) – Acquisition of property project in Suzhou; maintain Neutral
China Market Strategy – China: 5 Surprises in 2015
Container Shipping Sector - Weekly container shipping commentary
AAC Technologies (2018.HK) - Takeaways from plant visit in Changzhou
Alibaba (BABA.US) - “Double 12”, Alipay expands to offline payment
Transportation Sector - Weekly transportation news wrap
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
Source: Company data, BOCOM International
Download our reports from Bloomberg: BOCM〈enter〉
Analyst
Fei Wu, Tony Liu
Geoffrey Cheng, CFA
Geoffrey Cheng, CFA, Fay Zhou
Geoffrey Cheng, CFA
Geoffrey Cheng, CFA
Li Wenbing
Anita Chu
Hao Hong, CFA
Geoffrey Cheng, CFA
Miles XIE
Ma Yuan (Martina), Ph.D , Gu Xinyu (Connie), CPA
Geoffrey Cheng, CFA
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
Morning Express
09 January 2015
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$)
125.60
21.30
79.00
23.25
126.90
21.90
11.18
53.20
42.70
86.60
7.58
5.72
26.30
10.06
118.50
9.07
8.82
4.97
99.75
37.15
66.10
31.05
81.90
25.65
29.95
13.68
15.96
17.18
17.74
17.98
9.06
6.84
6.27
177.80
4.43
58.20
7.26
71.20
75.45
32.25
24.15
127.30
10.64
12.34
19.98
8.78
10.46
6.45
93.60
10.84
Mkt
cap
(HK$m)
290,910
95,537
96,726
539,423
242,613
127,704
32,874
159,618
514,327
369,208
61,189
2,104,135
67,398
132,752
334,548
80,663
74,390
105,390
145,623
299,715
166,998
72,870
763,468
271,192
1,053,976
340,677
38,645
67,583
186,484
100,755
17,602
559,363
953,039
207,688
1,478,855
176,353
60,696
1,368,201
161,030
187,847
197,402
1,192,581
254,796
74,830
95,851
2,652,703
467,012
1,626,722
1,908,988
120,418
5d
chg
(%)
-3.6
-2.1
-2.5
1.3
-1.8
7.1
1.5
-2.0
-1.0
-3.0
3.4
1.1
0.8
-1.6
0.2
1.7
1.1
2.3
-1.2
-2.6
-1.7
-0.6
3.5
-1.2
-1.6
3.5
-1.7
1.7
-0.1
1.5
-2.4
-5.5
0.3
3.6
1.4
3.9
0.0
-3.8
0.3
1.4
4.8
13.2
2.3
-1.4
-0.1
2.1
0.2
1.3
3.4
6.3
Ytd
chg
(%)
-3.6
-2.1
-2.5
1.3
-1.8
7.1
1.5
-2.0
-1.0
-3.0
3.4
1.1
0.8
-1.6
0.2
1.7
1.1
2.3
-1.2
-2.6
-1.7
-0.6
3.5
-1.2
-1.6
3.5
-1.7
1.7
-0.1
1.5
-2.4
-5.5
0.3
3.6
1.4
3.9
0.0
-3.8
0.3
1.4
4.8
13.2
2.3
-1.4
-0.1
2.1
0.2
1.3
3.4
6.3
23,835.5 14,714,497
1.0
1.0
Source: Bloomberg
Download our reports from Bloomberg: BOCM〈enter〉
–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
152.00
105.95
26.45
19.80
91.10
74.05
24.40
19.12
133.00
117.60
23.60
13.62
11.92
9.40
56.40
36.46
45.65
34.65
108.50
85.90
14.18
6.88
5.90
4.33
28.60
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
34.50
68.35
56.00
34.45
28.50
84.40
55.60
27.95
21.50
31.50
19.72
16.88
9.35
25.40
15.12
18.00
13.56
18.90
13.91
23.25
16.02
16.60
8.60
7.36
4.53
8.23
5.73
189.00
112.80
4.50
3.03
63.45
46.35
10.70
7.06
86.40
70.45
76.50
57.85
32.40
26.55
26.70
17.52
134.90
93.00
14.22
9.03
14.16
9.83
24.90
17.10
11.70
7.31
15.88
9.72
6.62
4.89
102.20
63.65
12.70
7.62
25,363.0
21,137.6
–––––––––– PE –––––––––––
2014A
2015E
2016E
(X)
(X)
(X)
6.7
8.2
8.5
12.5
13.8
15.2
26.7
25.6
21.3
8.6
9.4
9.3
14.6
14.4
13.0
8.4
11.4
9.7
14.4
12.6
11.4
8.9
17.1
16.7
27.0
20.8
18.4
7.8
10.9
10.7
9.6
9.7
9.1
5.8
5.8
5.5
15.2
15.6
14.2
24.6
24.5
20.9
9.5
15.1
14.2
6.8
10.6
10.0
N/A
13.1
12.5
38.3
62.2
34.9
11.4
14.3
13.3
14.6
14.7
14.7
18.5
15.8
15.5
10.5
11.2
10.9
16.4
14.0
12.8
11.7
11.0
10.0
25.3
19.8
17.0
9.7
9.7
8.2
21.0
81.0
45.6
23.0
19.7
12.0
26.8
25.3
23.5
31.1
28.3
23.0
82.9
51.5
27.3
6.3
6.3
6.0
8.6
9.1
10.1
44.2
40.6
30.2
5.9
6.0
5.5
7.4
14.9
13.1
9.3
14.9
12.8
11.5
10.5
9.9
2.6
17.9
18.1
12.6
18.1
16.7
7.9
8.6
7.4
43.0
39.6
30.0
16.2
15.7
13.7
8.3
14.0
13.6
8.2
7.9
7.3
9.8
10.5
11.4
6.7
7.2
8.9
5.7
5.6
5.3
13.0
13.8
13.6
16.1
17.3
14.9
10.1
10.7
9.8
Yield
P/B
(%)
2.8
3.5
2.3
4.9
4.3
2.1
2.7
1.9
1.0
2.7
3.0
N/A
2.9
2.7
2.8
4.6
N/A
2.0
3.6
4.7
3.9
3.6
1.1
3.9
1.3
1.9
1.6
1.5
1.9
1.6
0.8
N/A
4.8
2.0
5.5
3.0
6.5
5.3
3.4
2.9
2.0
0.2
1.9
4.1
3.8
4.5
5.4
5.8
3.3
2.2
(X)
0.8
0.8
5.9
1.3
2.2
1.5
0.9
0.6
2.4
0.9
1.2
1.1
1.0
9.1
0.8
0.5
2.3
0.6
0.7
7.4
1.8
1.1
2.5
1.6
2.8
0.6
0.8
1.1
3.7
4.3
1.0
0.9
1.0
10.1
1.0
0.6
1.6
0.9
1.3
1.2
1.7
12.8
0.9
0.7
1.4
1.1
1.0
1.1
1.8
4.7
3.7
1.3
Morning Express
09 January 2015
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
(%)
5.95
23.25
28.40
5.77
6.14
7.07
4.03
39.80
5.72
53.35
9.82
4.97
9.86
7.10
81.90
14.88
41.65
32.15
4.10
38.10
29.95
13.48
2.45
7.91
6.84
14.08
6.27
6.21
18.12
4.43
11.04
29.30
19.34
4.43
6.97
8.78
10.52
28.90
8.70
6.45
5.95
26,634.41
539,423.43
78,585.50
32,761.53
62,041.96
70,921.10
1,492,756.89
159,164.11
2,104,135.19
71,373.91
238,175.88
105,390.04
414,868.94
62,659.99
763,467.72
220,648.23
149,730.71
70,246.06
89,943.98
341,355.29
1,053,976.36
101,782.49
89,263.19
42,706.30
559,363.11
68,874.96
953,038.76
209,157.14
484,047.37
1,478,854.83
95,121.97
467,356.60
264,482.82
358,530.41
125,397.41
2,652,702.53
154,726.41
147,427.43
69,916.58
1,626,721.77
388,782.75
-5.0
1.3
3.5
8.5
3.9
7.6
2.8
1.7
1.1
1.4
5.3
2.3
-3.3
0.6
3.5
-1.3
-5.6
-1.7
14.2
-3.3
-1.6
0.1
11.4
4.9
-5.5
5.9
0.3
-2.7
-6.9
1.4
0.5
0.3
-0.9
-2.4
11.2
2.1
0.4
-0.5
7.8
1.3
-4.3
-5.0
1.3
3.5
8.5
3.9
7.6
2.8
1.7
1.1
1.4
5.3
2.3
-3.3
0.6
3.5
-1.3
-5.6
-1.7
14.2
-3.3
-1.6
0.1
11.4
4.9
-5.5
5.9
0.3
-2.7
-6.9
1.4
0.5
0.3
-0.9
-2.4
11.2
2.1
0.4
-0.5
7.8
1.3
-4.3
10.5
24.4
34.5
6.0
7.1
7.3
4.1
42.3
5.9
64.8
10.1
5.4
10.7
9.9
84.4
16.2
44.9
34.9
4.3
40.9
31.5
24.4
2.5
8.4
7.4
15.2
8.2
6.7
20.0
4.5
15.2
34.0
23.2
5.2
7.0
11.7
11.6
35.7
10.3
6.6
6.3
12,024
4,924,973
0.3
0.3
12,400.4
Source: Bloomberg
Download our reports from Bloomberg: BOCM〈enter〉
–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
––––––––––– PE –––––––––––
2014A
2015E
2016E
Yield
P/B
(X)
(X)
(X)
(%)
(X)
5.8
19.1
19.7
4.0
3.5
4.9
3.0
21.1
4.3
50.4
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
69.7
8.6
22.8
N/A
20.5
7.6
5.8
16.6
5.8
29.1
9.9
38.3
6.0
11.6
16.4
15.3
12.5
9.8
N/A
25.9
25.3
6.3
20.0
5.5
6.3
11.0
8.6
10.7
6.3
5.9
5.6
32.5
35.2
15.4
26.1
9.8
10.3
10.1
28.7
5.7
5.5
21.4
9.4
20.6
58.5
23.4
17.8
5.7
14.0
5.8
27.9
9.4
62.2
5.7
10.5
14.0
13.1
12.4
10.6
N/A
23.5
19.8
6.5
17.4
6.0
6.3
13.4
9.1
10.1
6.3
6.0
6.0
29.9
22.8
15.7
20.7
10.5
9.5
10.5
22.4
5.6
5.5
17.7
9.3
17.3
16.3
17.8
18.8
5.3
12.5
5.5
24.6
8.6
34.9
5.4
8.2
12.8
12.1
9.5
11.0
N/A
19.4
17.0
6.9
17.5
5.6
6.0
13.8
10.1
9.1
5.7
5.5
5.6
24.1
17.9
14.2
12.9
11.4
9.0
9.7
15.7
5.3
5.1
1.3
4.9
1.1
0.0
3.0
0.4
N/A
0.5
N/A
N/A
2.4
2.0
2.0
3.2
1.1
1.9
2.5
1.0
N/A
1.3
1.3
4.0
N/A
2.5
N/A
4.4
4.8
1.3
4.3
5.5
2.0
N/A
0.8
2.7
0.8
4.5
4.5
1.5
0.7
5.8
N/A
2.3
1.3
2.7
0.7
0.9
0.7
1.1
2.3
1.1
3.7
1.3
0.6
1.2
1.1
2.5
2.5
3.4
1.6
1.1
2.6
2.8
1.2
1.6
0.9
0.9
0.9
1.0
1.2
1.3
1.0
1.1
2.8
2.3
1.0
1.4
1.1
1.8
2.1
1.8
1.1
0.9
9,159.8
8.4
7.9
7.2
4.1
1.3
Morning Express
09 January 2015
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
Property
Phoebe WONG
(852) 2977 9391
phoebe.wong
Anita CHU
(852) 2977 9205
anita.chu
Summer WANG
(852) 2977 9221
summer.wang
Shawn WU
(852) 2977 9386
shawn.wu
(852) 2977 9387
milo.liu
(852) 2977 9389
liwenbing
Consumer Staples
Alfred LAU, CFA, FRM
(852) 2977 9235
alfred.lau
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
Renewable Energy
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
(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
09 January 2015
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