20180523-广发证券_香港_-Dim_Sum_Express_4页_478kb

Dim Sum Express Summary

Core Content

This document provides an equity research analysis focusing on the performance of key financial indices and the impact of environmental protection policies on the steel sector, as well as the development trends in the healthcare industry, particularly in the retail pharmacy sector.

Key Index Performance (May 23, 2018)

Main Points

Steel Sector

• Environmental Protection as a Driving Force: The ultra-low emissions reform is accelerating the elimination of outdated production capacity in the steel industry.
• Impact on Production: Upgrades in environmental protection technology, such as dust control, desulfurization, and denitration, are expected to reduce production capacity and stability.
• Cost Implications: Steel companies with outdated facilities face higher environmental protection costs, which may force them out of the market.
• Industry Leaders: Companies with strong environmental protection foundations will benefit from the reform. Recommended companies include:
  • Baoshan Iron & Steel (600019 CH)
  • Nanjing Iron & Steel (600282 CH)
  • Xinyu Iron & Steel (600782 CH)
  • Fangda Special Steel Technology (600507 CH)
  • Hunan Valin Steel (000932 CH)
  • SGIS Songshan (000717 CH)
• Policy Implementation: Various regions have issued plans for ultra-low emissions upgrades. By the end of October 2018, all steel companies must install relevant devices to avoid production restrictions during the heating season.

Healthcare Industry

• Retail Pharmacy Market: The retail chain pharmacy industry has surpassed independent pharmacies in 2017, indicating a shift towards consolidation.
• Market Trends: The industry is transitioning from a growth phase to a saturated phase. Chain pharmacies are expected to benefit from the consolidation and increased market share.
• Policy Drivers: Pharmacy administration reform is expected to accelerate the consolidation process, favoring big chain pharmacies.
• Recommended Companies:
  • Yixintang Pharmaceutical (002727 CH)
  • Yifeng Pharmacy Chain (603939 CH)
  • DaShenLin Pharmaceutical Group (603233 CH)
  • National Accord Medicines (000028 CH)
• Risks: Prescription outflow may be slower than expected, newly opened pharmacies may take longer to break even, and drug prices may fluctuate significantly.

Rating Definitions

• Buy: Expected to outperform the benchmark by more than 15%

• Accumulate: Expected to outperform the benchmark by more than 5% but not more than 15%

• Hold: Expected relative performance ranges between -5% and 5%

• Underperform: Expected to underperform the benchmark by more than 5%

• Sector Ratings:

  • Positive: Expected to outperform the benchmark by more than 10%
  • Neutral: Expected relative performance ranges between -10% and 10%
  • Cautious: Expected to underperform the benchmark by more than 10%

Analyst Certification

The research analyst(s) certifies that the views expressed in the report accurately reflect their personal views and that no part of their remuneration is directly or indirectly linked to specific recommendations.

Disclosure of Interests

• GF Securities (Hong Kong) and its affiliates do not hold shares in the mentioned securities.
• No investment banking relationship with the companies mentioned in the past 12 months.
• Analysts and their associates have no financial interests or shares in the mentioned securities.

Disclaimer

• This report is for informational purposes only and does not constitute an offer to buy or sell securities.
• It is intended solely for clients of GF Securities (Hong Kong).
• The report does not take into account the specific investment objectives, financial situation, or needs of any individual.
• The information and recommendations may change without notice.

Copyright

© GF Securities (Hong Kong) Brokerage Limited.
No part of this document may be copied or reproduced without prior written consent.