20160119-招商证券_香港_-China_Macro,HK_Equity_Market,and_HK_China_Hardware_Technology_Outlook_113页_5mb

Summary of China Macro, HK Equity Market, and HK/China Hardware Technology Outlook

Core Content

This document provides an overview of China Merchants Securities (HK), highlighting its research capabilities, business structure, and market coverage in the context of the Hong Kong and China equity markets, as well as China's macroeconomic outlook and hardware technology sector potential. It outlines the firm's strengths, its role in the financial services industry, and the performance of specific listed companies it covers.

Main Points

1. China Merchants Securities (HK) Overview

• Leading Investment Bank: CMS is one of the top 10 investment banks in China and a major player in the Hong Kong market.
• Strong Research Team: The firm has a highly ranked equity research team, with multiple analysts covering various sectors.
• Comprehensive Services: CMS offers a wide range of services, including underwriting, financial advisory, M&A, securities sales and trading, equity research, leveraged financing, and direct investment.
• Global Reach: CMS has a strong presence in both the Hong Kong and China markets, with a focus on providing integrated financial services to institutional and corporate clients.

2. China Merchants Group (CMG)

• Historical Significance: CMG was founded in 1872 and is one of the four largest Chinese enterprises in Hong Kong with over 140 years of history.
• State-Owned Enterprise: It is a key state-owned enterprise directly managed by the PRC government.
• Diversified Businesses: CMG operates in transportation infrastructure, finance, real estate development, and other sectors. It is a controlling shareholder in over 20 listed companies, with a combined market cap exceeding USD 100 billion.
• Assets and Operations: By the end of 2014, CMG had total assets of RMB 624.2 billion and assets under management of RMB 5,350 billion.

3. HK Equity Market Strategy

• Sailing Against the Current: The strategy involves navigating the challenges and opportunities in the Hong Kong equity market.
• Research Coverage: CMS provides detailed equity research, with a focus on key sectors like banking, consumer, and energy.
• Performance Metrics: The firm analyzes and provides ratings on listed companies based on earnings, growth, and valuation metrics.

4. China Hardware Technology Sector

• Potential for Growth: The document suggests the potential for the hardware technology sector in China to become the next Silicon Valley.
• Focus Areas: It emphasizes the importance of the telecom and hardware technology sector, with Alex Ng leading the research in this area.
• Strategic Positioning: CMS positions itself to provide insights and investment advice in this emerging sector.

Key Information

5. Research Team and Coverage

• HK Research Team: The research team includes key analysts such as Sam Lee (Head of Equity Research), Cliff Zhao (Deputy Head), David Xie (Chief Economist), Lynn Song (Economist), Ivy Zhao (Equity Strategist), and Vincent Ji (Equity Strategist).
• Sector Coverage: The team covers a wide range of sectors including macroeconomic analysis, equity strategy, banking, consumer, environmental, auto, TMT, real estate, metals and mining, oil and petrochemicals, pharmaceuticals, alternative energy, machinery, and small/mid-cap.
• A-Share Research Team: CMS has over 120 analysts covering 33 sectors and more than 1,000 companies, making it one of the largest and most comprehensive research teams in China.

6. Notable Achievements

• Awards and Recognition: CMS has received numerous awards, including "China's Best Investment Bank", "Best China Local Investment Bank", "Best Investment Bank for SME", and "Most Innovative Investment Bank".
• Market Rankings: CMS has consistently ranked high in the securities and fund brokerage trading volume, underwriting amount, and bond underwriting in China.
• Hong Kong Market Recognition: It has been recognized as one of the Top 3 Chinese Research Houses and Best Overseas Research Teams in multiple surveys.

7. Listed Companies Under CMG

• SIPG: Market Cap: USD 24.8 billion
• China Merchants Holdings (International): Market Cap: USD 8.6 billion
• China Merchants Property Development: Market Cap: USD 14.9 billion
• CIMC: Market Cap: USD 6.4 billion
• Jiangsu Expressway: Market Cap: USD 6.8 billion
• Shandong Hi-speed: Market Cap: USD 4.9 billion
• China Merchants Energy Shipping: Market Cap: USD 14.9 billion
• Yahgee Modular House: Market Cap: USD 14.9 billion
• Shenzhen Chiwan Wharf: Market Cap: USD 14.9 billion
• Fujian Expressway: Market Cap: USD 14.9 billion
• Jilin Expressway: Market Cap: USD 14.9 billion
• China Merchants Holdings (Pacific): Market Cap: USD 14.9 billion

8. Key Performance Indicators (KPIs)

• Earnings Per Share (EPS): The document provides detailed EPS projections for various listed companies.
• Price-to-Earnings (PER) and Price-to-Book (P/B) ratios are used to evaluate the valuation of stocks.
• Return on Equity (RoE): CMS highlights the RoE of listed companies as a key performance metric.
• Target Price (TP) Upside: The TP Upside percentage is used to assess potential gains in the stock market.

Conclusion

The document outlines China Merchants Securities (HK) as a leading investment bank with a strong research team, comprehensive services, and a broad range of market coverage. It emphasizes the firm's strategic position in the Hong Kong and China equity markets, as well as its focus on emerging sectors like hardware technology. The China Merchants Group (CMG) is highlighted as a major conglomerate with a long history and significant market presence. CMS is positioned as a key player in the financial services industry, offering one-stop integrated financial services to institutional and corporate clients.