20181207-广发证券_香港_-Dim_Sum_Express_3页_614kb

报告摘要

Dim Sum Express Summary

Core Content

The Dim Sum Express report by GF Securities provides an analysis of the macroeconomic outlook for 2019 and investment strategies across key sectors. It highlights the convergence of China and the US nominal GDP growth cycles, the potential for equity investment opportunities during the economic slowdown, and the anticipated performance of various sectors including New Energy Vehicles (NEV), Construction, Non-ferrous Metals, and Media.

Macro Outlook

2018 Macro Environment: Dominated by Sino-US trade tensions, proactive de-leveraging, and US interest rate hikes. These themes were underpinned by a divergence in the nominal GDP growth cycle between China and the US.
2019 Expectations: Nominal GDP growth in China and the US is expected to converge. China's economy is entering a second phase of slowdown, requiring more growth-stabilizing policies. The US may be nearing the end of its rate hike cycle, potentially easing yield spreads and allowing China to restore its monetary policy.
Equity Opportunities: Investment opportunities may arise later in the economic slowdown, as the government implements policies to improve the credit environment.
Growth Forecast: China's economic growth is expected to fall back to ~6.3% and stabilize by mid-2019. Policies will focus on stabilizing employment, the financial sector, foreign trade, domestic investment, and expectations.

Sector Analysis

New Energy Vehicles (NEV)

Sales Forecast: NEV sales are expected to exceed 1.2 million units in 2018, 1.8 million in 2019, and 1.5 million in 2020.
Power Battery Demand: Corresponding demand for power batteries is projected to be 56.3GWh, 90.6GWh, and 143.6GWh, respectively.
Market Trends: Rental cars and ride-hailing services may drive demand for compact cars in 2019. Policy support will focus on charging infrastructure and battery recycling.
Leadership Factors: Technological advantages will define leadership in the sector.
Recommended Companies: Easpring Material Technology (300073 CH), Putailai (603659 CH), and Capchem (300037 CH).

Construction

Valuation: The sector is currently at historical lows in terms of P/E and P/B.
Revenue Growth: Listed companies are expected to report ~23% YoY revenue growth in 2019, up from ~19% in 9M18.
Order Growth: SOE orders grew only 4.5% in 9M18, indicating the need for more policy support.
PPP Development: Policies supporting private enterprises and PPP regulations are expected to drive healthy and high-quality development in the PPP market.
Recommended Companies: Infrastructure design firms (JSTI, Anhui Transport Consulting & Design Institute), central SOEs (CRCC, China Railway Group, CCCC), and local infrastructure SOEs (Sichuan Road & Bridge, Shandong Hi-Speed Road & Bridge).

Non-ferrous Metals

Industrial Metals: Expected to continue recovery, with potential for earnings and valuations to rise in the second half of 2019.
Minor Metals: Cobalt and lithium prices may rebound due to demand from car manufacturers. Tungsten and molybdenum prices may increase due to stricter environmental regulations.
Precious Metals: Risk aversion remains the core driver due to US market fluctuations.
Metal Processing: Moderate growth is expected, with titanium processors potentially seeing more substantial earnings growth due to demand from defense and aviation sectors.
Recommended Companies: Zijin Mining (601899 CH), Tianqi Lithium (002466 CH), Xinye Mining (600426 CH), Yunnan Tin (000960 CH), Chihong Zinc & Germanium (600497 CH), Huayou Cobalt (603799 CH), and Western Mining (601168 CH).

Media

Sector Valuation: Trading at historical lows, with a new technology cycle not yet started.
Games: A-share leaders may have been oversold. Short-term focus on game license approvals and long-term on overseas sales.
Film and TV Content: Stringent regulations have not yet fully impacted the sector. Key costs are decreasing, but downstream platforms have more pricing power.
Cinemas: Content has become the main driver for box office success, while screen growth is slowing.
Books and Copyrights: Educational publication sector is undervalued. Legal copy promotion may benefit copyright companies.
Marketing and Advertising: May face pressure due to the macroeconomic downturn.
Education: Government policies are expected to become clearer, with more focus on A-shares.
Recommended Companies: Game leaders (Perfect World, G-bits), publication leaders (China South Publishing, Thinkingdom Media), and platform companies (Wanda Film, Mango Excellent Media, Enlight Media, East Money Information).

Rating Definitions

Company Ratings:
- Buy: Expected to outperform the Hong Kong Hang Seng Index 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%.

Disclaimer and Disclosure

The report is for informational purposes only and does not constitute an offer to buy or sell securities.
GF Securities (Hong Kong) and its affiliates do not hold any shares in the mentioned securities or have investment banking relationships with the companies.
Analysts' views are personal and not necessarily those of GF Securities (Hong Kong).
The report may contain conflicting views from other departments or professionals of GF Securities (Hong Kong).