20160728-新鸿基金融集团-INVESTMENT_DAILY_NOTE_15页_2mb

Investment Daily Note Summary

Core Content Overview

This document provides a comprehensive overview of the Hong Kong and Chinese stock markets, including index performance, market trends, corporate results, and sector analysis. It also includes insights into stock picks, valuations, and external market conditions such as interest rates, exchange rates, and commodities.

Main Market Trends

• HSI (Hang Seng Index) closed at 22,218, up 0.4% with a 1.4% year-to-date (YTD) increase.
• HSCEI (Hang Seng China Enterprises Index) closed at 9,115, up 0.6%, but with a -5.6% YTD change.
• Main Board turnover was HK$69.7bn, down 2.62%.
• The Federal Reserve left interest rates unchanged at 0.25% to 0.5%, and Japan announced a 28 trillion yen stimulus package, which could positively impact Asian markets.
• U.S. stocks ended mixed, with the Dow Jones down 1 point, S&P 500 down 2 points, and NASDAQ up 29 points.
• Oil prices fell due to increased supply, with NYMEX crude at US$41.92/bbl.
• Gold prices increased slightly, closing at US$1,325.90/oz.

Key Stock Highlights

Peak Sport (1968.HK)

• Last Close: HK$2.41
• Target Price: HK$2.60
• Reason for Buy: Strong share price rally, potential privatisation.
• Privatisation Offer: HK$2.60 per share, a 10.6% premium over the last close, and 35.4% higher than the previous mention.
• NAVPS: RMB2.04 or about HK$2.36.
• Ownership: Controlled by a shareholder and family with 61.19% stake.

Pico Far East (752.HK)

• Last Close: HK$2.42
• Target Price: HK$2.67
• Stop-loss: HK$2.29
• Reason for Buy: Strong share price rally and increased turnover.

Cowell (1415.HK)

• Last Close: HK$3.03
• Target Price: HK$3.36
• Stop-loss: HK$2.86
• Reason for Buy: Better-than-expected iPhone sales and still attractive valuation.

Sector Performance

• Top Performing Sectors:

  • Chinese Telecoms: 0.9% (5D), 6.2% (1M)
  • Logistics: 0.8% (5D), 1.7% (1M)
  • Local Banks: 0.8% (5D), 2.8% (1M)
  • HK Consumer Group: 0.8% (5D), 2.1% (1M)
  • Chinese Banks: 0.7% (5D), 1.0% (1M)
  • Handset and related accessories: 0.6% (5D), 3.5% (1M)
  • IPP: 0.5% (5D), 1.4% (1M)
  • Durable Consumables: 0.3% (5D), 3.3% (1M)
  • Chinese Insurers: 0.3% (5D), 0.9% (1M)
  • Medical: 0.3% (5D), 1.4% (1M)

• Major Stocks in Top Performing Sectors:

  • Chinese Telecoms: China Telecom (728), China Unicom (762), China Mobile (941)
  • Logistics: Kerry Log Net (636), SITC (1308)
  • Local Banks: Hang Seng Bank (11), BEA (23), Chong Hing Bank (1111), BOCHK (2388), Dah Sing Banking (2356)
  • HK Consumer Group: Sa Sa Int'l (178), Cafe De Coral (341), Luk Fook (590), Bonjour (653), I.T (999)
  • Chinese Banks: CCB (939), ABC (1288), ICBC (1398), BankComm (3328), BOC (3988)
  • Handset and related accessories: Tongda Group (698), AAC Tech (2018), Sunny Optical (2382), Coolpad Group (2369), TCL Comm (2618)
  • IPP: China Res Power (836), Huaneng Power Int'l (902), Datang Int'l Power (991), Huadian Power Int'l (1071), China Power Int'l (2380)
  • Durable Consumables: Welling Hldg. (382), Skyworth Digital (751), Hisense Kelon Elec (921), TCL Multimedia (1070)
  • Chinese Insurers: China Taiping Ins. (966), NCI (1336), CPIC (2601), Ping An (2318), China Life (2628)
  • Medical: Trad Chi Med (570), Sinopharm (1099), Sino Biopharm (1177), Fosun Pharma (2196), SH Pharma (2607)
  • Environmental and New Energy: China EB Int'l (257), BJ Ent Water (371), China Longyuan (916), Xinyi Solar (968), CGN Power (1816)
  • Department Store: NWDS China (825), Springland (1700), Intime (1833), Golden Eagle (3308), Parkson Group (3368)
  • REITs: Yuexiu REIT (405), Fortune REIT (778), Prosperity REIT (808), LINK Reit (823), Champion REIT (2778)
  • Infrastructure: China Railway (390), China Railway Cons. (1186), CSR Corp. (1766), China Comm. Cons. (1800), China Machinery Eng. (1829)
  • Steel: Angang Steel (347), Maanshan Iron (323), Shougang Res (639)

Valuation Analysis

Forward P/E and Valuations of Major Indices

• HSI: FY16E P/E 12.4, long-term average 11.0, deviation 12.8%, FY1 EPS growth -10.5%, FY2 EPS growth 10.8%
• HSCEI: FY16E P/E 7.9, long-term average 7.9, deviation -0.5%, FY1 EPS growth -8.9%, FY2 EPS growth 10.0%
• Shanghai Composite: FY16E P/E 13.8, long-term average 10.7, deviation 28.6%, FY1 EPS growth 20.0%, FY2 EPS growth 12.9%
• S&P 500: FY16E P/E 18.4, long-term average 15.3, deviation 20.4%, FY1 EPS growth 9.8%, FY2 EPS growth 13.2%

External Market Conditions

• Interest Rates:

  • U.S. 2-year Treasury yield: 0.7224%, up 4.46 bps in 5D
  • U.S. 10-year Treasury yield: 1.5062%, down 4.98 bps in 5D
  • HK 1-month HIBOR: 0.2420%, up 0.21 bps in 5D
  • SH 1-month HIBOR: 2.7770%, down 0.70 bps in 5D

• Exchange Rates:

  • USD/HKD: 7.7565, no change in 5D
  • USD/CNY: 6.6700, down 0.1% in 5D
  • EUR/USD: 1.1072, up 0.4% in 5D
  • USD/JPY: 104.83, up 0.9% in 5D

• Precious Metals and Commodities:

  • Comex Gold: US$1,339.40, up 0.6% in 5D
  • Comex Silver: US$20.365, up 2.9% in 5D
  • Nymex WTI Crude: US$41.97, down 6.2% in 5D
  • LME Copper: US$4,850.00, down 2.3% in 5D
  • LME Aluminum: US$1,592.00, down 2.0% in 5D

A-share Premium to H-share

• LUOYANG GLASS-H: H share price HK$4.44, A share price RMB26.14, premium 584.7%
• DALIAN PORT PD-H: H share price HK$1.64, A share price RMB6.02, premium 326.9%
• ZHEJIANG SHIBA-H: H share price HK$9.28, A share price RMB33.21, premium 316.2%
• SHENJI GROUP-H: H share price HK$2.25, A share price RMB6.24, premium 222.5%
• PETROCHINA-H: H share price HK$5.37, A share price RMB7.23, premium 56.6%
• CHINA SHIPPING-H: H share price HK$1.65, A share price RMB4.01, premium 182.6%
• CHINA VANKE-H: H share price HK$15.96, A share price RMB17.42, premium 26.9%

Key Information Summary

• Privatisation: Peak Sport (1968.HK) has a high likelihood of privatisation, with a target price of HK$2.60.
• Market Sentiment: The Hong Kong market showed resilience despite concerns over Chinese regulatory actions.
• Stock Picks: Pico Far East (752.HK) and Cowell (1415.HK) are highlighted for potential price increases.
• Sector Performance: Chinese Telecoms, Logistics, and Local Banks performed well in the previous trading day.
• Valuation Metrics: Forward P/E and earnings growth for major indices are provided to assess market valuations.
• Market Data: Both best and worst performers for the previous day are listed, along with their respective turnover and valuation data.
• Short Selling: Several stocks, including China Gas Holdings (384.HK) and China Pacific-H (2601.HK), showed high short-selling activity.
• Commodities and Metals: Crude oil and gold prices declined, while silver and some other metals saw increases.

Conclusion

The document outlines the recent market performance, highlights key stocks with potential for growth, and provides insights into valuation metrics and external factors that may influence the market. Investors are advised to monitor the privatisation plans, sector movements, and market valuations for informed decision-making.