Daily Market Commentary

Morning Express
20 January 2015
Focus of the Day
Indices
Energy Sector
Lower oil erodes benefit of higher Special Upstream Levy threshold;
New crude oil price forecast spells caution and leads to downgrade
Fei WU
fei.wu@bocomgroup.com
MP
UP
OP
Although the lowering of the Special Upstream Levy threshold to US$65/bbl at the start
of 2015 spelled good news to the upstream players, CNOOC and PetroChina (net profit
forecasts up 18% and 14%, respectively), the recent sharp oil price drop has eroded the
benefits.
We adjust our 2015/16 Brent forecasts down to US$55/60/bbl reflective of the new
supply and demand dynamics, and at this level, upstream struggles to be profitable. The
recent cost breakeven level stands at US$50-60/bbl for oil companies. We also adjust
down company earnings and downgrade CNOOC to SELL. We maintain LT-BUY on
Sinopec as it is the least affected given its downstream-heavy operation and its reform
from the marketing segment listing in 2015.
Jiangnan Group (1366.HK)
Neutral
Commentary of State Grid’s planned investment of
RMB420.2 bn in 2015
Zhiwu LI
Last Closing: HK$1.43
lizhiwu@bocomgroup.com
Upside: +88.8%
LT
BUY
BUY
SELL
1d %
-1.51
-4.98
-7.72
-3.91
-3.39
-3.53
1.10
1.34
1.39
0.54
0.35
0.73
Ytd %
0.57
-4.25
-3.66
-3.07
0.93
0.64
-1.75
-1.92
-2.15
0.30
2.86
4.45
Close
48.84
1,276.27
17.70
5,715.00
117.70
1.51
1.16
3m %
-43.31
2.35
1.50
-12.77
-9.13
-6.66
-9.41
Ytd %
-14.81
7.71
12.70
-9.29
1.77
-3.13
-4.15
bps change
HIBOR
0.38
US 10 yield
1.84
Source: Bloomberg
3m
0.01
-0.35
6m
0.01
-0.64
Indicators
Brent
Gold
Silver
Copper
JPY
GBP
EURO
Stock
Target Price: HK$2.70→
Event:
As reported by the media, State Grid had convened an annual work conference recently,
which it indicated plans to invest RMB420.2 bn in 2015, mainly for the purpose of
ultra-high voltage (UHV) and power grid connection. This year, in particular, it plans to
approve the commencement of construction of ‘‘six cross-sectioned and eight straight
grids’’ which involves a total of 14 lines, which will surpass the plan of ‘‘six
cross-sectioned and four straight grids’’ in 2014.
Comments:
1) The amount of investment in 2015 surged by 24% YoY. The planned investment of
RMB420.2 bn for 2015 was a record high, representing a significant growth of 24% as
compared with approximately RMB338.5 bn in 2014.
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Close
HSI
23,738
H Shares
11,476
SH A
3,265
SH B
282
SZ A
1,492
SZ B
1,035
DJIA
17,512
S&P 500
2,019
Nasdaq
4,634
FTSE
6,586
CAC
4,395
DAX
10,242
Source: Bloomberg
HSI Technical
HSI
50 d MA
200 d MA
14 d RSI
Short Sell (HK$m)
Source: Bloomberg
BOCOM Int'l Corporate Access
22 Jan
SAIC Motor (600104 CH)
23,738
23,646
23,544
50
15,632
Morning Express
20 January 2015
2) UHV construction has been launched rapidly in a massive scale. UHV and power grid
connection is the main theme of investment in 2015. In terms of planning, the
company approves to commence construction of ‘‘two cross-sectioned and one
straight grids’’ in Q11, ‘‘three straight grids’’ in Q2 and ‘‘four cross-sectioned and
four straight grids’’ in 2H. Besides, it plans to complete the feasibility study of ‘‘one
cross-sectioned and four straight grids’’ by the end of the year, and will commence
the preliminary construction of four international UHV DC grids. The rapid launch of
massive UHV construction meets our expectation.
3) We maintain Buy for Jiangnan Group (1366.HK). As the most profitable company in
China’s cable industry, Jiangnan Group (1366.HK) will benefit substantially from the
growth in the scale of investment of power grids. At present, given its unparalleled
strength in terms of the supply of UHV cables, as well as the fact that it will fully
benefit from the opportunities arising from the exponential growth of the UHV
market once upon completion of the acquisition of a UHV cable company, we
maintain Buy and a TP of HK$2.7.
Hang Seng Index (1 year)
26,000
25,000
24,000
23,000
22,000
21,000
Source: Company data, Bloomberg
HS China Enterprise Index (1 year)
13,000
12,000
11,000
10,000
9,000
8,000
Source: Company data, Bloomberg
Container Shipping Sector
Weekly container shipping commentary
Geoffrey CHENG, CFA geoffrey.cheng@bocomgroup.com
Shanghai A-shares (1 year)
4,000
UP
MP
OP
3,500
3,000
There are exporters calling for speeding up the vessels by the shipping operators as the
justification for slow streaming on high bunker price vanished. SCFI rose 4.8% WoW as
the freight rate on the major East-West tradelanes moved up on the back of demand
pick-up. To benefit from t the robust pre-Lunar New Year demand, shipping operators are
proposing new GRI for February implementation. We maintain our MARKET PERFORM
recommendation. The correction of A share market and the oil price rebound caused the
underperformance of the HK-listed container shipping companies.
2,500
2,000
Source: Company data, Bloomberg
Shenzhen A-shares (1 year)
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
900
800
Source: Company data, Bloomberg
Download our reports from Bloomberg: BOCM〈enter〉
20 January 2015
Energy Sector
Energy Sector
MP
UP
OP
Lower oil erodes benefit of higher Special Upstream Levy threshold;
New crude oil price forecast spells caution and leads to downgrade
Valuation summary
Company
Stock
name
ticker
PetroChina 857 HK
Sinopec
386 HK
CNOOC
883 HK
COSL
2883 HK
Shanghai
338 HK
Petrochem
Rating
Neutral
LT-BUY
SELL
BUY
BUY
TP
CP
–––– EPS –––– EPS Consensus
–––– P/E ––––
–––– P/B ––––
FY14E
FY15E
FY14E
FY15E
FY14E
FY15E
FY14E
FY15E
(HK$)
(HK$)
(RMB)
(RMB)
(RMB)
(RMB)
(x)
(x)
(x)
(x)
(%)
7.00
6.00
8.20
15.00
3.00
8.72
6.19
10.42
13.44
2.32
0.50
0.58
1.22
1.98
0.05
0.10
0.41
0.27
2.12
0.13
0.69
0.56
1.19
1.67
0.07
0.68
0.53
1.09
1.64
0.12
13.8
8.3
6.7
5.3
36.4
66.7
11.9
30.3
5.0
13.6
1.0
0.8
0.9
1.1
1.1
1.0
0.8
0.8
1.0
1.0
3.26
3.36
3.88
3.74
0.82
The Special Upstream Levy threshold
was lowered, benefiting PetroChina
and CNOOC the most.
Sharp oil price drop erodes benefit
from threshold change.
Brent forecasts are adjusted to
US$55/bbl in 2015 and US$60/bbl in
2016. Brokers are slow to
downgrade forecast.
A shares defied fundamentals and
shot up since Stock Connect, but the
two markets are not likely to
converge in the short term.
We remain cautious. Downgrade
CNOOC to SELL. Maintain Neutral
on PetroChina and LT-BUY on
Sinopec.
Yield
FY14E
Source: Company, BOCOM Int’l estimates
China increases Special Upstream Levy (SUL) threshold starting Jan 2015. China’s
Ministry of Finance lifted the threshold for upstream oil’s SUL from US$55/bbl to
US$65/bbl starting Jan 1. This is the second change in three years, following the previous
threshold adjustment from US$40/bbl to US$55/bbl in Nov 2011. Following the same
incremental tax system, the tax brackets are set from 20% to 40%, where a 5% increase in
the upstream tax bracket corresponds to every US$5/bbl increase in oil price. At the first
threshold of US$65, a 20% upstream levy would be applied in 2015. (Before 2015, a
30% levy was applied and prior to Nov 2011, a 40% levy was applied). As a % of per barrel
upstream revenue at US$65, the current scheme in 2015, the Nov 2011 and Mar 2006
schemes would fetch 1.4%, 5.4%, and 13.6% of the realized per barrel revenue,
respectively.
CNOOC and PetroChina are the biggest winners of the threshold change… The three
companies in total are expected to bring in Rmb93.9bn in upstream levy in 2014. With
the US$65/bbl threshold, however, the companies would see an 85% YoY reduction in the
tax in 2015 to Rmb14.3bn. This equates to a lift of 18% and 14% in 2015 net profit for
CNOOC and PetroChina, respectively. Sinopec, the more dominant downstream player,
should see a 7% lift in bottom-line as a result.
… However, the recent sharp oil price drop erodes benefit from levy threshold. We
adjust our 2015 and 2016 Brent forecasts down to US$55/bbl and US$60/bbl. The
recent oil price drop reflected the new reality of lower oil prices and a major recovery is
not in sight given the current global demand slowdown coupled with the increasing
supply growth from the US and sustained OPEC production. We adjust our forecasts
down from US$80/bbl and US$85/bbl in 2015 and 2016 to US$55/bbl and US$60.
Currently, among the 45 brokers, the mean oil forecasts for 2015 and 2016 are US$75 and
US$85/bbl, respectively, but we believe the downgrading trend has only started as over
10 brokers still have forecasts sitting at above US$90/bbl while the seven adjustments in
2015 averaged US$60/bbl. At this level, though the Special Upstream Levy would not
kick in, the upstream E&P would be mostly wiped away (cost per barrel is between
US$50-60/bbl in recent years). This would lead to an 80% and 72% reduction in 2015
EPS for PetroChina and CNOOC, respectively, while shaving 32% from Sinopec’s 2015
earnings.
Post-announcement reactions were wildly different for A and H shares. While
rebalancing opportunity exists, we flag caution and downgrade CNOOC to SELL. Since
the announcement on Dec 25, 2014, the A-share oils PetroChina and Sinopec saw shares
rising 25% and 9.7%, respectively, against SSE Index’s 5.3%, while the companies’ H-share
counterparts stayed flat with PetroChina, Sinopec and CNOOC’s shares moving 1.9%, 0.3%,
and -0.9%, respectively. Instead of the gap between A and H shares narrowing since the
start of the Stock Connect Program, the shares acted irregularly with PetroChina’s A-share
premium rising to 34%. We lower our earnings and target prices for the three oils and
base them on long-term oil price of US$70 and SoTP. Despite the exuberant reaction on
the A-share market, H-shares have performed based on fundamentals in the past and the
early days of the Stock Connect did not seem to have an indication that the market
differences would converge in the short-term. We remain cautious and downgrade our
recommendation for CNOOC to Sell. We maintain our LT-BUY on Sinopec as it is the
least affected given its downstream-heavy operation and its reform from marketing
segment listing in 2015.
Download our reports from Bloomberg: BOCM〈enter〉
One year (Relative sector performance)
40%
HSI
Oil&Gas
30%
Gas Utility(Covered companies)
Oil service(Covered companies)
20%
10%
0%
-10% Jan-2014
-20%
Mar-2014
May-2014
Jul-2014
Sep-2014
-30%
-40%
-50%
-60%
-70%
Source: Company data, Bloomberg
Fei Wu
fei.wu@bocomgroup.com
Tel: (852) 2977 9392
Tony Liu
xutong.liu@bocomgroup.com
Tel: (852) 2977 9390
Nov-2014
Jan-2015
20 January 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
19 Jan15
Rating Target
Price
+/-
–––––– PER ––––––
2013 2014E 2015E
–––––– PBR ––––––
2013 2014E 2015E
(LC)
(LC)
(%)
(X)
(X)
(X)
(X)
(X)
(X)
China COSCO
1919 HK
3.92 NEUTRAL
3.10
(20.9)
135.2
N.A.
14.9
1.25
1.26
1.14
CSCL
NOL
2866 HK
NOL SP
2.38 NEUTRAL
0.97
SELL
2.1
0.73
(11.8)
(24.7)
N.A.
N.A.
260.9
N.A.
13.0
34.8
0.91
0.89
0.86
1.06
0.80
1.03
OOIL
316 HK
47.7
BUY
50.5
5.9
81.4
11.6
11.9
0.86
0.80
0.77
SITC
1308 HK
4.19 LT BUY
Source: Company, BOCOM Int’l estimates
4.78
14.1
12.4
10.9
8.0
1.87
1.69
1.48
News flow – New debate on slow steaming.
The container shipping industry has
revived the debate on the merits of slow-steaming in view of the recent slump of
crude oil and bunker prices.
There are exporters calling for
speeding up the vessels by the
shipping operators as the
justification for slow steaming on
high bunker prices vanished.
SCFI rose 4.8% WoW as the freight
rates on the major East-West
tradelanes moved up on the back of
demand pick-up. To benefit from
the robust pre-Lunar New Year
demand, shipping operators are
proposing new GRI for February
implementation.
We maintain our MARKET PERFORM
recommendation. The correction
of the A share market and the oil
price rebound had caused the
underperformance of the HK-listed
container shipping companies.
Exporters are hoping for faster voyages as bunker
prices come down and since slow steaming was originally introduced partly to solve
the problem of heightened bunker prices.
However, shipping operators want to
stay put as slow steaming helps absorb excess capacity which could only be solved by
Geoffrey Cheng, CFA
massive lay-up.
geoffrey.cheng@bocomgroup.com
Tel: (852) 2977 9380
Exporters also want to see more port coverage for the headhaul
voyage, which is not possible under the practice of slow steaming.
Other than the
absorption of surplus capacity, the other reason that shipping operators could not
speed up is because either old vessels have been modified for slow steaming or new
vessels are just not equipped to navigate above 22-23 knots (currently average slow
steaming speed at about 18 knots).
Reality – SCFI rebounded last week.
th
For the week ended 16 January, the SCFI
rose 4.8% WoW on the back of freight rate increase on the major East-West
tradelanes, as a result of successful implementation of the January GRI (General Rate
Increase).
Freight rate on the Asia-Europe tradelane (Europe base ports) crawled
back up above US$1,000/TEU to US$1,008/TEU, up 3.4%.
On the Transpacific
tradelane, freight rate reached back above US$2,000/FEU to US$2,089/FEU for West
Coast destinations, up 8.2% YoY.
Shipping operators are deliberating February GRI
to be implemented before the Lunar New Year to capture the potential strong
demand.
We maintain our MARKET PERFORM recommendation. The double whammy of A
share index selloff and oil price rebound on Monday depressed the share prices of
the HK-listed container shipping companies, which underperformed for the week
th
ended 19 January.
We maintain our MARKET PERFORM recommendation on the
sector.
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
20 January 2015
Market Review
Hong Kong stocks slumped on Monday. The Hang Seng Index slumped 365.03 points, or
1.51%, to 23,738.49. Brokers and financials led declines as CSRC cracked down on margin
trading. Ping An (2318.HK) dropped 8.04% and China Life (2628.HK) slumped 6.77%. CITIC
Securities (6030.HK) and Haitong Securities (6837.HK) both plummeted 16.5%. Guotai
Junan (1788.HK) fell 9.5%. Liquidity rotated into defensive names. Link REIT (823.HK) rose
2.15% as the best blue-chip gainer, followed by HK & China Gas (3.HK) which added
1.47%.
US stocks were closed for a holiday. European stocks rose, lifted by prospects of QE from
the ECB. The Stoxx Europe 600 rose 0.2% to 353.18.
News Reaction
Xiao Gan: to promote the business development of wealth management between
Mainland and Hong Kong. As stated by Xiao Gang, Chairman of CSRC on Monday, China
will further promote the reconciliation between funds of Mainland and Hong Kong,
improve the regimes of QRII and RQFII as well as QDII, in a bid to support and facilitate
the business development of wealth management business across the border in 2015 in
2015.
SHCOMP dropped by 6.3% in early trading, with market sentiment dampened by
across-the-board decline in financial stocks under unfavorable news. SHCOMP of
China’s stock market slumped by 6.3% in early trading and the index opened low,
affected by the unfavorable news in weekend. Brokerage and insurance stocks were
almost down by their limit. According to analysts, the valuation of the financial sector had
basically been recovered and the regulatory requirements helped facilitate the correction
of the sector. In the meantime, the unfavorable news was a blow to the buoyant capital
investment in the future.
It was rumored that the parent company of Lenovo (992.HK) intends to go listing in
2H15, with an attempt to raise proceeds up to US$3 bn. According to insiders, the
parent company of Lenovo Group, i.e. Legend Holdings, plan to conduct IPO in Hong Kong
in 2H15, with an attempt to raise proceeds up to US$3 bn. CICC and UBS AG are
coordinating with the company for the IPO plan.
Wanda Group’s operating revenue up increased 30% and its income and profit from the
service industry are expected to surpass that of the property industry in the future.
Wanda Group, China’s large property and commercial group recorded an increase in
revenue by 30% in 2014, representing the nine consecutive increase of more than 30% in
revenue on a MOM basis. In the meantime, Wanda Group will promote business
transformation and the company will focus on the service industry. In the future, the
company’s income and profit from the service industry will surpass that of the property
business in the future.
Xiaomi agreed to acquire 3% equity interest of Kingsoft from Tencent. According to the
document submitted by Kingsoft on Monday, China’s mobile manufacturer Xiaomi had
agreed to acquire approximately 3% equity interest of Kingsoft from Tencent at a cost of
HK$527 mn (equivalent to US$67.99 mn).
Download our reports from Bloomberg: BOCM〈enter〉
Morning Express
20 January 2015
Economic releases for this week - USA
Date Time
21-Jan
22-Jan
23-Jan
23-Jan
Source: Bloomberg
Event
MBA mortgage applications
Initial jobless claims (k)
Existing Home sales (m)
Leading indicators
Economic releases for this week - China
Survey
5.05
0.4%
Prior
49.1%
316.0
4.93
0.6%
Date Time
20-Jan
20-Jan
20-Jan
23-Jan
Source: Bloomberg
Event
Retail sales (YoY)
Industrial production(YoY)
GDP YTD (YoY)
HSBC Manufacturing PMI
Survey
11.8%
7.4%
7.3%
-
BOCOM Research Latest Reports
Data
19 Jan 2015
19 Jan 2015
19 Jan 2015
16 Jan 2015
16 Jan 2015
15 Jan 2015
14 Jan 2015
13 Jan 2015
13 Jan 2015
12 Jan 2015
12 Jan 2015
12 Jan 2015
12 Jan 2015
Report
China South City Holdings Limited (1668.HK) - Slowdown in property sales, but new businesses still on track
Property Sector - HK/China Property Weekly 20150116
China Market Strategy – Margin Destruction. But Is 4,200 possible?
Insurance Sector - Don't miss the insurance bull market in 2015
Transportation Sector - Weekly transportation news wrap
Luk Fook Holdings (590.HK) - Continued to lead the sector recovery in 3Q
Energy Sector - Bocom Energy Weekly
Container Shipping Sector – Weekly container shipping commentary
Sa Sa (178.HK) - Weak 3Q; subdued near-term outlook remains
Property Sector - HK/China Property Weekly 20140109
Cheung Kong (1.HK) - Major restructuring to unlock value
China Resources Land (1109.HK) - Taking a breather
Summer Breeze「夏天小语」 - Cyclical margin expansion is not Want Want's lifebelt
Analyst
Alfred Lau, CFA, FRM
Luella Guo, Alfred Lau, CFA, FRM
Hao Hong, CFA
Li Wenbing
Geoffrey Cheng, CFA, Fay Zhou
Phoebe Wong
Fei Wu, Tony Liu
Geoffrey Cheng, CFA
Phoebe Wong
Luella Guo, Alfred Lau, CFA, FRM
Alfred Lau, CFA, FRM
Alfred Lau, CFA, FRM
Summer Wang
08 Jan 2015
08 Jan 2015
07 Jan 2015
06 Jan 2015
02 Jan 2015
31 Dec 2014
30 Dec 2014
30 Dec 2014
Chow Tai Fook (1929.HK) - Disappointing 3Q; forecast and TP pared
Transportation Sector - Weekly transportation news wrap
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
Phoebe Wong
Geoffrey Cheng, CFA, Fay Zhou
Fei Wu, Tony Liu
Geoffrey Cheng, CFA
Geoffrey Cheng, CFA, Fay Zhou
Geoffrey Cheng, CFA
Geoffrey Cheng, CFA
Li Wenbing
Source: Company data, BOCOM International
Download our reports from Bloomberg: BOCM〈enter〉
Prior
11.7%
7.2%
7.4%
49.6
Morning Express
20 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$)
140.30
21.20
81.95
21.40
130.70
20.05
11.00
52.45
44.85
97.50
7.61
5.45
25.75
9.87
119.60
8.89
9.14
4.39
103.30
35.55
68.50
30.80
81.20
26.10
29.60
13.32
15.54
16.92
17.90
17.44
8.63
6.35
6.06
174.70
4.18
59.25
7.25
69.95
78.95
33.25
23.70
123.00
11.64
12.34
20.55
8.50
10.56
6.14
97.00
10.30
Mkt
cap
(HK$m)
324,958
95,089
100,338
473,657
249,878
116,916
32,345
157,368
540,224
415,679
61,431
2,015,090
65,988
130,245
337,654
79,062
77,089
89,991
149,437
286,807
173,062
72,283
777,935
275,950
1,079,679
331,712
37,628
66,561
188,166
97,730
16,766
539,760
875,949
204,079
1,494,588
179,535
60,613
1,344,181
168,500
193,732
193,723
1,152,593
278,743
74,830
98,585
2,487,644
471,477
1,547,652
1,984,010
114,419
5d
chg
(%)
-2.0
0.0
1.9
-4.9
2.0
-8.7
-0.2
-1.9
4.3
-0.9
0.5
-4.0
-0.8
-1.3
0.1
-2.8
2.8
-7.0
2.0
-2.7
2.0
-1.3
-1.6
0.0
-2.6
-2.8
-1.5
-3.2
2.2
-1.9
-4.5
-5.8
-2.4
-2.2
-4.8
-2.9
0.4
-1.6
3.8
1.1
-2.3
-3.2
4.9
-0.2
2.5
-3.1
-0.8
-4.1
2.3
-4.3
Ytd
chg
(%)
7.7
-2.5
1.1
-6.8
1.2
-2.0
-0.2
-3.4
3.9
9.2
3.8
-3.7
-1.3
-3.4
1.1
-0.3
4.8
-9.7
2.3
-6.8
1.9
-1.4
2.7
0.6
-2.8
0.8
-4.3
0.1
0.8
-1.6
-7.0
-12.3
-3.0
1.7
-4.3
5.8
-0.1
-5.5
4.9
4.6
2.8
9.3
11.9
-1.4
2.8
-1.2
1.1
-3.6
7.2
1.0
23,738.5 14,689,226
-1.2
0.6
Source: Bloomberg
Download our reports from Bloomberg: BOCM〈enter〉
–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
152.00
105.95
26.45
19.80
90.50
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
124.00
90.35
10.48
7.15
10.00
7.00
5.44
3.72
108.00
80.55
68.00
34.50
68.50
56.00
34.45
28.50
88.70
55.60
27.95
21.50
32.00
19.72
16.88
9.35
24.55
15.12
18.00
13.56
18.90
13.91
23.25
16.02
16.60
8.60
7.36
4.53
8.23
5.74
189.00
112.80
4.52
3.03
63.45
46.35
10.70
7.06
86.15
69.75
79.60
57.85
33.60
26.55
26.70
17.52
134.90
93.00
14.22
9.03
14.16
9.83
24.90
17.56
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)
7.5
9.2
9.6
12.5
13.9
15.3
27.7
26.7
22.2
7.9
8.7
8.6
15.0
14.9
13.4
7.6
10.4
8.9
14.1
12.6
11.2
8.8
16.8
16.4
28.3
21.8
19.2
8.8
11.6
12.1
9.7
9.9
9.5
5.5
5.5
5.3
14.9
15.3
13.9
24.1
24.5
20.9
9.6
15.3
14.4
6.7
10.6
9.8
N/A
13.6
13.0
33.9
55.0
31.5
11.8
14.8
13.7
14.0
14.2
14.6
19.2
16.3
16.1
10.4
11.2
10.9
16.3
13.9
12.8
12.0
11.2
10.2
25.0
19.0
16.3
9.4
8.5
7.3
20.4
73.6
45.2
22.6
19.1
11.8
27.1
25.6
23.8
30.2
27.8
22.5
79.0
51.1
26.7
5.9
5.8
5.6
8.3
9.1
11.7
43.5
39.7
29.7
5.6
5.6
5.3
7.5
15.2
13.4
9.3
15.1
12.8
11.3
10.2
9.7
2.7
18.9
18.9
13.0
18.5
17.6
7.7
8.4
7.3
41.6
38.6
29.4
17.7
17.1
15.2
8.3
14.0
13.6
8.5
8.2
7.5
9.5
10.3
13.7
6.8
7.3
10.4
5.4
5.3
5.0
13.5
14.4
14.3
15.3
17.5
15.3
10.1
10.9
9.8
Yield
P/B
(%)
2.5
3.5
2.3
5.3
4.2
2.2
2.8
1.9
1.0
2.4
3.0
N/A
3.0
2.7
2.8
4.6
N/A
2.3
3.5
4.9
3.8
3.6
1.1
3.9
1.3
2.0
1.6
1.5
1.8
1.6
0.8
N/A
4.9
2.0
5.8
3.0
6.5
5.4
3.3
2.8
2.1
0.2
1.7
4.1
3.6
4.7
5.4
6.1
3.2
2.3
(X)
0.9
0.8
6.1
1.2
2.3
1.4
0.9
0.6
2.5
1.0
1.2
1.1
1.0
8.9
0.8
0.5
2.4
0.5
0.7
7.1
1.9
1.1
2.5
1.6
2.8
0.6
0.7
1.1
3.7
4.1
1.0
0.8
1.0
9.9
0.9
0.6
1.6
0.9
1.4
1.2
1.6
12.4
1.0
0.7
1.5
1.1
1.0
1.0
1.9
4.5
3.7
1.3
Morning Express
20 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$m)
5d
chg
(%)
Ytd
chg
(%)
5.82
21.40
27.60
5.63
5.17
6.19
3.78
44.65
5.45
51.95
8.82
4.39
9.58
6.71
81.20
14.36
40.15
30.65
3.69
35.45
29.60
13.34
2.40
7.46
6.35
12.60
6.06
5.69
17.16
4.18
11.16
23.60
15.36
4.22
6.39
8.50
10.88
27.50
8.38
6.14
5.63
26,052.49
473,657.38
76,371.82
28,347.46
54,003.86
60,147.07
1,417,015.64
182,969.16
2,015,090.44
69,048.13
212,955.89
89,990.74
378,138.08
56,990.10
777,935.38
212,937.42
140,155.49
63,511.39
77,349.77
336,224.62
1,079,678.83
92,003.06
84,917.45
40,276.74
539,760.27
59,944.61
875,949.28
187,306.18
454,861.52
1,494,588.01
96,155.90
390,952.09
231,963.12
341,534.59
111,244.60
2,487,644.15
143,926.17
134,275.06
67,344.94
1,547,652.50
365,669.03
0.7
-4.9
-6.4
-2.6
-10.4
-5.8
-5.7
9.7
-4.0
-2.4
-9.7
-7.0
-7.2
-6.5
-1.6
-4.8
-4.3
-4.1
-6.6
-7.4
-2.6
-2.8
-0.4
-4.5
-5.8
-8.0
-2.4
-8.1
-7.4
-4.8
-3.1
-18.1
-18.2
-4.7
-9.7
-3.1
2.4
-6.1
-1.6
-4.1
-4.7
-7.0
-6.8
0.5
5.8
-12.5
-5.8
-3.6
14.0
-3.7
-1.2
-5.5
-9.7
-6.1
-5.0
2.7
-4.8
-9.0
-6.3
2.8
-10.0
-2.8
-0.9
9.1
-1.1
-12.3
-5.3
-3.0
-10.8
-11.8
-4.3
1.6
-19.2
-21.3
-7.0
1.9
-1.2
3.8
-5.3
3.8
-3.6
-9.5
10.5
24.4
34.5
6.3
6.8
7.3
4.1
45.3
5.9
64.0
10.2
5.4
10.7
9.9
88.7
16.2
44.9
34.9
4.3
40.9
32.0
24.4
2.5
8.4
7.4
15.2
8.2
6.7
20.0
4.5
15.2
34.0
23.2
5.2
7.4
11.7
11.6
35.7
10.3
6.6
6.3
11,476
4,696,080
-4.5
-4.2
12,400.4
Source: Bloomberg
Download our reports from Bloomberg: BOCM〈enter〉
–––– 52-week ––––
Hi
Lo
(HK$)
(HK$)
––––––––––– PE –––––––––––
2014A
2015E
2016E
Yield
P/B
(X)
(X)
(X)
(%)
(X)
5.7
19.1
19.7
4.0
3.5
4.9
3.0
21.1
4.3
50.4
4.9
3.7
5.9
6.6
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
68.3
7.9
22.1
N/A
17.3
6.6
5.5
18.7
5.5
28.3
8.9
33.9
5.8
11.0
16.3
14.8
12.1
9.4
N/A
24.1
25.0
6.2
19.6
5.2
5.9
9.8
8.3
9.8
6.0
5.6
5.7
26.3
28.0
14.7
24.0
9.5
10.6
9.6
27.7
5.4
5.2
20.9
8.7
20.1
53.2
19.6
15.0
5.3
15.5
5.5
27.4
8.4
55.0
5.5
10.2
13.9
12.6
12.1
10.1
N/A
21.5
19.0
6.5
16.9
5.7
5.8
12.1
9.1
9.3
6.0
5.6
6.1
23.2
17.7
14.9
18.7
10.3
10.0
10.0
21.8
5.3
5.2
17.4
8.6
16.9
15.2
15.1
18.2
5.0
13.9
5.3
24.2
7.7
31.5
5.2
7.9
12.8
11.6
9.2
10.5
N/A
17.9
16.3
7.2
17.4
5.3
5.6
12.8
11.7
8.3
5.4
5.3
5.8
18.6
13.9
13.4
11.0
13.7
9.4
9.3
15.2
5.0
4.9
1.3
5.3
1.2
0.0
3.6
0.4
N/A
0.4
N/A
N/A
2.7
2.3
2.1
3.3
1.1
1.9
2.5
1.0
N/A
1.4
1.3
4.0
N/A
2.7
N/A
4.9
4.9
1.4
4.5
5.8
2.0
N/A
1.0
2.8
0.9
4.7
4.4
1.6
0.7
6.1
N/A
2.2
1.2
2.6
0.7
0.8
0.6
1.0
2.6
1.1
3.6
1.2
0.5
1.2
1.0
2.5
2.5
3.3
1.6
1.0
2.4
2.8
1.2
1.5
0.9
0.8
0.8
1.0
1.1
1.2
0.9
1.1
2.2
1.9
1.0
1.3
1.1
1.9
2.0
1.7
1.0
0.8
9,159.8
8.1
7.7
6.9
4.1
1.2
Morning Express
20 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
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
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
Miaoxian LI
Oil & Gas/ Gas Utilities
Consumer Discretionary
Jerry LI
@bocomgroup.com
Automobile
Download our reports from Bloomberg: BOCM〈enter〉
Wei YAO
Morning Express
20 January 2015
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