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Weekly A-share Market Recommendations Summary

Core Content Overview

This document provides a comprehensive analysis of several A-share companies, offering investment highlights, EPS forecasts, and potential risks for each. The recommendations are based on financial performance, growth prospects, and sector dynamics as of June 6, 2016. The report is issued by the Industrial Securities Research Institute and includes details on market data, business strategies, and valuation metrics.

Top Stock Recommendations

Main Points and Key Information

Beijing Homyear Capital Holdings (600240: SH)

• Sector: Diversified Finance
• Investment Highlights:
  • Engaged in medical supply chain finance with strong growth potential.
  • Real estate business has high value and strong profit margins.
  • Expected CAGR of 30% over the next few years.
• EPS Forecast:
  • 2015: CNY 0.84, 2016: CNY 1.04, 2017: CNY 1.16
• Potential Risks:
  • Property sales may not meet expectations.
  • Hospital operations or medical finance could face operational risks.

Shanghai M&G Stationery (603899: SH)

• Sector: Light Manufacturing
• Investment Highlights:
  • Strong institutional investor support and long-term investment value.
  • Expansion into high-end stationery and online sales channels.
  • Earnings growth expected to exceed 20%.
• EPS Forecast:
  • 2015: CNY 1.01, 2016: CNY 1.22, 2017: CNY 1.47
• Potential Risks:
  • Management risk.
  • Slowdown in office supplies market expansion.

Shenzhen Comix Group (002301: SZ)

• Sector: Stationery
• Investment Highlights:
  • Acquired FastMeeting, which has potential to become a leading SaaS company.
  • Strong platform for future expansion into VR and big data.
  • Clear business vision and commitment to e-commerce.
• EPS Forecast:
  • 2015: CNY 0.32, 2016: CNY 0.43, 2017: CNY 0.61
• Potential Risks:
  • Management risk.

Guangdong Haid Group Company (002311.SZ)

• Sector: Fodder
• Investment Highlights:
  • Strong revenue and earnings growth despite industry slowdown.
  • Competitive advantages in purchasing, formula development, and marketing.
  • Strategic acquisitions and overseas expansion.
• EPS Forecast:
  • 2015: CNY 0.51, 2016: CNY 0.77, 2017: CNY 1.02
• Potential Risks:
  • Natural disasters.
  • Overseas political risks.

Luzhou Laojiao (000568: SZ)

• Sector: Baijiu
• Investment Highlights:
  • Leading spirit producer with diversified operations.
  • Strong performance in high-end products and international markets.
• EPS Forecast:
  • 2015: CNY 0.95, 2016: CNY 1.38, 2017: CNY 1.63
• Potential Risks:
  • Slower industrial park development.
  • New project implementation risks.

Jiangsu Changjiang Electronics Technology (600584: SH)

• Sector: IC
• Investment Highlights:
  • Strong growth in semiconductor industry.
  • Benefiting from SMIC's investment and industry expansion.
  • Leasing business contributes significantly to earnings.
• EPS Forecast:
  • 2015: CNY 0.05, 2016: CNY 0.23, 2017: CNY 0.73
• Potential Risks:
  • Semiconductor industry downturn.
  • Integration with STATs ChipPAC may not meet expectations.

Shandong Hi-Speed Road & Bridge (000498: SZ)

• Sector: Road Transportation
• Investment Highlights:
  • Strong earnings resilience and asset injection potential.
  • SOE reform is expected to boost earnings.
  • Low stock price with high margin of safety.
• EPS Forecast:
  • 2015: CNY 0.39, 2016: CNY 0.46, 2017: CNY 0.54
• Potential Risks:
  • Macro economic downturn.
  • Assets integration risks.
  • Slower engineering progress.

Bank of Nanjing (Stock Connect) (601009: SH)

• Sector: Banking
• Investment Highlights:
  • Strong performance from fixed-income products.
  • Clients include local governments and SOEs, reducing bad loan risk.
• EPS Forecast:
  • 2015: CNY 2.1, 2016: CNY 2.5, 2017: CNY 2.8
• Potential Risks:
  • Systematic banking industry risks.

Shandong Chenming Paper (000488: SZ)

• Sector: Paper Making
• Investment Highlights:
  • Leasing business is a key earnings driver.
  • Preferred stock scheme approved, improving asset-liability structure.
  • SOE reform enhancing paper-making business performance.
• EPS Forecast:
  • 2015: CNY 0.52, 2016: CNY 0.68, 2017: CNY 0.87
• Potential Risks:
  • Slow SOE reform progress.
  • Economic downturn affecting leasing business.

Key Takeaways

• The report recommends OUTPERFORM for most companies, with BUY for Jiangsu Changjiang Electronics Technology.
• Companies are expected to maintain or increase earnings growth through strategic initiatives, market expansion, and technological upgrades.
• Risks include macroeconomic downturns, operational challenges, and sector-specific issues.
• Market data and EPS forecasts are provided for each company, reflecting their current financial standing and future expectations.