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Weekly A-share Market Recommendations Summary

Core Content Overview

This document provides a weekly market recommendation report from the Industrial Securities Research Institute, dated February 22, 2016, focusing on several A-share companies. The report includes EPS forecasts, investment highlights, sector classifications, and potential risks for each listed company.

Top Stock Recommendations

Key Investment Highlights

Suzhou Boamax Technologies Group (002514: SZ)

• Sector: Mechanical Components
• Investment Highlights:
  • Subsidiary YZWISDOM is a pioneer in matrix flow meter manufacturing.
  • Expected to benefit from policy changes (sewage tax instead of sewage charge).
  • Collaboration with Elpanneteknik and CGN improves heat supply efficiency.
• EPS Forecast: CNY 0.40 (2015), CNY 0.64 (2016), CNY 0.93 (2017)
• Market Data:
  • Closing Price: CNY 21.59
  • Market Cap: CNY 5980.80 Mn
  • BVPS: CNY 3.57

Shen Zhen Mindata (002137.SZ)

• Sector: Media
• Investment Highlights:
  • Switched focus to digital marketing, aiming to provide professional enterprise services.
  • Strong growth potential in the cloud-based digital service market (projected to exceed CNY 1 trillion).
  • Plans to expand into SAAS, IAAS, and PAAS fields.
• EPS Forecast: CNY 0.11 (2015), CNY 0.29 (2016), CNY 0.17 (2017)
• Market Data:
  • Closing Price: CNY 17.14
  • Market Cap: CNY 9899.83 Mn
  • BVPS: CNY 0.87

Fujian Sunner Development (002299.SZ)

• Sector: Agriculture
• Investment Highlights:
  • Processes and markets poultry, including frozen chicken meat.
  • Strong growth due to cost reductions and industry inflection point.
• EPS Forecast: -CNY 0.29 (2015), CNY 1.29 (2016), CNY 2.2 (2017)
• Market Data:
  • Closing Price: CNY 22.50
  • Market Cap: CNY 24995.25 Mn
  • BVPS: CNY 4.74

Jiangsu Linyang Energy (601222.SH)

• Sector: Meters
• Investment Highlights:
  • High CAGR in earnings due to efficient power plant operations.
  • Strong Internet of Energy strategy with distributed PV systems.
  • Potential to become a leading electricity service provider in China.
• EPS Forecast: CNY 1.32 (2015), CNY 1.48 (2016), CNY 1.93 (2017)
• Market Data:
  • Closing Price: CNY 31.69
  • Market Cap: CNY 12885.20 Mn
  • BVPS: CNY 11.83

Zhejiang Jingxin Pharmaceutical (002020.SZ)

• Sector: Pharmaceuticals
• Investment Highlights:
  • Fastest organic growth among peers despite industry slowdown.
  • Strong growth through acquisitions.
  • Privately offered stocks at CNY 27.34, providing high margin of safety.
• EPS Forecast: CNY 0.54 (2015), CNY 0.9 (2016), CNY 1.26 (2017)
• Market Data:
  • Closing Price: CNY 28.53
  • Market Cap: CNY 9117.84 Mn
  • BVPS: CNY 4.69

Anhui Yingliu Electromechanical (603308: SH)

• Sector: Mechanical Components
• Investment Highlights:
  • Strong growth in nuclear and military defense markets.
  • Core business is expected to reach an inflection point.
  • Revenue and net profit from nuclear power business account for 30% and 40% respectively.
• EPS Forecast: CNY 0.26 (2015), CNY 0.66 (2016), CNY 0.98 (2017)
• Market Data:
  • Closing Price: CNY 23.35
  • Market Cap: CNY 9340.23 Mn
  • BVPS: CNY 4.67

Guangshen Railway (601333.SH)

• Sector: Rail
• Investment Highlights:
  • Expected to benefit from railway reform and fare hikes.
  • Potential for assets injection and rail land development.
  • Passenger flow diversion from Futian Railway Station may impact EPS.
• EPS Forecast: CNY 0.12 (2015), CNY 0.11 (2016), / (2017)
• Market Data:
  • Closing Price: CNY 4.03
  • Market Cap: CNY 28546.65 Mn
  • BVPS: CNY 3.85

Key Risks

• Suzhou Boamax Technologies Group: Slower-than-expected assets acquisition.
• Shen Zhen Mindata: Slower-than-expected M&A progress and uncertainties in future M&As.
• Fujian Sunner Development: Uncertainties in chicken price increase.
• Shanghai M&G Stationery: Management risk and slowdown in office supplies market expansion.
• Jiangsu Linyang Energy: Earnings may slip expectations; new business development might face challenges.
• Nanjing Xinlian Electronics: Electricity service cloud platform may develop at a slower-than-expected pace.
• Anhui Yingliu Electromechanical: Uncertainty regarding assets injection and policy changes.
• Guangshen Railway: Uncertainty around rail fare hike, land reform, and assets injection.

Disclaimer and Legal Information

• The report is issued by Industrial Securities Research Institute and is for the exclusive use of its clients.
• The views expressed in the report may change, and the company has no obligation to update the information.
• The report is based on public information and is not guaranteed for authenticity, accuracy, or completeness.
• The company may trade stocks of the companies mentioned and may provide investment banking services, which could affect the objectivity of the report.
• Unauthorized redistribution or use of the report is prohibited without prior written consent.