20131106-招商证券_香港_-HongKongMorningDaily_14页_213kb

Research Highlights Summary

1. 361 Degrees (1361.HK) - Alliance with OW to explore new growth engine

• Core Content: 361 Degrees has formed a joint venture (JV) with Nordic outdoor sports brand One Way Sport (OW) to expand into the outdoor market in Greater China.
• Main Points:
  • The partnership aims to establish a stronger presence in the outdoor market, which is seen as a high-growth potential industry.
  • 361 Degrees contributes RMB12 million in cash, while OW provides its trademarks.
  • The JV is held by 361 Investment (70%) and OW (30%).
  • OW will be responsible for R&D, design, and international marketing, while 361 Degrees manages daily operations, production, quality, and legal compliance.
• Key Information:
  • The stock price increased nearly 10% following the announcement.
  • The company maintains a "Neutral" rating due to unresolved retail and inventory issues, the new business's limited impact on short-term earnings, and challenges in brand building in the outdoor market.
  • The new business is expected to break even within 3 years and contribute no more than 10% of total sales within 5 years.
  • The valuation is based on a 20% premium from the new business, with a 1-year target price of HK$1.71 (8.46x P/E 2014E).

2. ANTA Sports Products (2020.HK) - The first to have bottomed out means first mover advantage

• Core Content: ANTA Sports Products is seen as the first to bottom out in the sportswear industry, which provides it with a first-mover advantage.
• Main Points:
  • ANTA recorded high-single-digit growth in Trade Fair orders for two consecutive quarters.
  • Retail sales remained stable, and the company's management and product differentiation improved retailers' profitability.
  • The company is ranked 24th in terms of brand value in China with a brand value of RMB7.0 billion.
• Key Information:
  • The company's performance may have bottomed out, with a 1-year target price of HK$13.47 (19.8x P/E 2014E).
  • The revised revenue growth estimation for 2014-2015 is 10.2% and 15.2%, respectively.
  • The company's EPS for 2013-2015 is estimated at RMB0.49, RMB0.54, and RMB0.60.

3. Truly (732 HK) - Record revenue growth in October

• Core Content: Truly reported significant revenue growth in October 2013, driven by major customer product launches.
• Main Points:
  • Revenue in October increased 72% YoY to HK$2.054 billion.
  • Total revenue for the first 10 months of 2013 reached HK$16.612 billion, up 69.1% YoY.
• Key Information:
  • The company is expected to reach its 2013 revenue guidance of HK$20 billion.
  • The analyst reiterates a "BUY" rating with a 1-year target price of HK$7.15.
  • EPS for 2013-2015 is estimated at HK$0.56, HK$0.67, and HK$0.79.

4. Natural Gas Industry - Winter consumption peak looms

• Core Content: The natural gas industry is expected to see a peak in winter consumption, with a focus on long-term earnings growth.
• Main Points:
  • Natural gas consumption remained in a low season due to weather factors.
  • Domestic gas output grew slowly, while imports increased rapidly.
  • The sector's valuation improved due to expectations of tight supplies and smooth cost increases.
• Key Information:
  • Natural gas companies outperformed the CSI 300 Index in October.
  • The average 2013 P/E ratio was 29.29x, higher than in September.
  • Recommended to focus on high-quality companies such as Shenzhen Gas, PetroChina Jinhong Energy Investment, and Datang International Power Generation.

5. China Property Market - Stability and long-term mechanism are key words

• Core Content: The property market is showing signs of stability, with a focus on long-term regulatory mechanisms.
• Main Points:
  • The government is increasing land supply for housing and focusing on affordable housing projects.
  • A differentiated mortgage lending policy is being implemented to stabilize the market.
  • Leading players and high-turnover growth companies are still expected to see valuation gains.
• Key Information:
  • The property market's performance is expected to be stable with long-term mechanisms in place.
  • Recommended companies include China Vanke, Poly Real Estate Group, and Evergrande.

6. Stock Pool Update - Various sectors and companies

• Core Content: The research highlights a stock pool update with ratings and target prices for various sectors and companies.
• Main Points:
  • The update includes ratings and financial estimates for multiple sectors including Textiles, Metals & Mining, Auto, Oil & Gas, and Consumer Discretionary.
  • Different companies have varying performance and growth expectations.
• Key Information:
  • A variety of companies have been rated with target prices and upside potential.
  • The report includes detailed EPS and P/E estimates for each company.

7. Market Indices Overview

• Core Content: The report includes an overview of market indices in Hong Kong, the world, and the Asia-Pacific region.
• Main Points:
  • Hong Kong indices showed slight declines in October.
  • World indices showed mixed performance, with some showing positive growth and others negative.
  • Asia-Pacific indices also showed mixed results, with some declining and others showing minimal growth.
• Key Information:
  • The report includes price changes and percentage changes for each index.
  • The indices are sourced from Bloomberg.

8. Summary of Key Financial Data

• Core Content: The report includes a summary of key financial data for various companies.
• Main Points:
  • Companies across different sectors have varying financial performance and growth expectations.
  • The report includes a detailed breakdown of revenue, EPS, and P/E ratios.
• Key Information:
  • Financial data is presented in a structured format with target prices and upside potential.