20171129-兴业证券-A-Share_Daily_Express_6页_460kb

Summary of Document Content

Core Information

• Company: Industrial Securities Co., Ltd.
• Address: 17F, East Tower, No.36, Changliu Road, Pudong New District, Shanghai, China, 200135
• Website: www.xyzq.com.cn
• Document Date: November 29, 2017
• Stock Code: 600409 (Tangshan Sanyou Chemical Industries)

Market Overview

• Market Indices:

  • SSE Composite: Closed at 3337.86, up 0.13%.
  • SZSE Component: Closed at 11082.13, down 0.08%.
  • ChiNext Index: Closed at 1787.38, down 0.36%.
  • HSI: Closed at 29623.83, down 0.19%.
  • HSCEI: Closed at 11647.98, down 0.49%.
  • Total Market Volume: CNY 457.07 billion (USD 69.25 billion), up 23.1% from the previous session.

• Market Performance:

  • Real estate and building material stocks performed well, lifting the benchmark index.
  • Tech and consumer stocks declined, dragging down other indices.
  • Losers outnumbered winners by 1768-to-1370.

Sector Performance

Winners:

• Real Estate: China Vanke Co. (000002) +9.98%; Poly Real Estate Group Co. (600048) +10.02%
• Building Materials: Anhui Conch Cement Co. (600585) +5.20%; China Jushi Co. (600176) +2.64%
• Steel Makers: Baoshan Iron & Steel Co. (600019) +3.29%; Hunan Valin Steel Co. (000932) +2.62%

Losers:

• Consumer Stocks: Qingdao Haier Co. (600690) -4.25%; Inner Mongolia Yili Industrial Group Co. (600887) -3.33%
• IT Stocks: Dawnning Information Industry Co. (603019) -4.48%; Navinfo Co. (002405) -3.59%

Daily Headlines

• U.S.-China Trade: The Trump administration initiated a probe into Chinese aluminum imports, potentially leading to tariffs.
• China Life Insurance: Focus on infrastructure and growth potential in China.
• North Korea: Fired an ICBM, marking a break from a two-month period of calm.
• Hengfeng Bank: Chairman Cai Guohua under investigation.
• Cathay United Bank: Approved to set up a subsidiary in China.
• Offshore Yuan: Weakens to above 6.60/dollar, reaching a 3-month low.
• Lenovo: Selling a land parcel and office building in Wuhan for 1.24 billion yuan.

Company News

• Beijing Capital (600008 CH): Secured HK$2 billion 3-year loan.
• China Overseas Land (688 HK): Closed HK$18 billion 5-year loan, drawing 15 banks.
• GCL-Poly Energy (3800 HK): Jiangsu Zhongneng to transfer 20% stake in Xinjiang GCL to Tianjin.
• Guangzhou Auto (601238 CH): Partnering with Denso on auto parts and smart driving.
• Prudential (PRU LN): M&G's Stiasny to lead income distribution fund as Hughes retires.

Tangshan Sanyou Chemical Industries (600409 SH)

Key Financial Highlights

• Strong Buy Rating: Maintained.
• Earnings Growth: Net profit increased significantly, with EPS raised to CNY 0.97, CNY 1.09, and CNY 1.18 for 2017-2019.
• Revenue Growth:
  • 2017E: Operating revenue of CNY 19,072 million, up 21.0% YoY.
  • 2016: Operating revenue of CNY 15,757 million.
• Profitability:
  • Gross Margin: Increased to 27.8% in 2017E.
  • Net Profit Margin: Rose to 10.5% in 2017E.
  • ROE: Increased to 19.7% in 2017E.
• Cost Efficiency:
  • Cost-Income Ratio: Fell 3.77 percentage points to 12.90%.
  • Financial Expenses: Decreased 30.35% YoY to CNY 341 million.

Production and Industry Position

• Integrated Production: Leading in viscose staple fiber, soda ash, organic silicon, and chlor alkali.
• Production Capacity:
  • Soda ash: 3.4 million metric tons.
  • Viscose staple fiber: 500,000 metric tons.
  • Chlor alkali: 400,000 metric tons.
  • Organic silicon monomer: 200,000 metric tons.
• Future Projects:
  • A 200,000 metric ton functional and differentiated viscose staple fiber project.
  • After completion, total viscose staple fiber capacity will reach 700,000 metric tons.
• Industry Outlook:
  • Supply and demand for viscose staple fiber are improving.
  • Prices of soda ash, PVC, chlor alkali, and organic silicon have risen significantly.
  • Limited production capacity expansion in key industries, leading to tighter supply and higher prices.

Key Financial Ratios

Risk Factors

• Potential Risks:
  • Lower-than-expected demand for viscose staple fiber.
  • Substantial fluctuations in raw material prices.

Investment Rating Definitions

Industry Investment Rating:

• Overweight: Industry outperforms the market.
• Neutral: Industry performs similarly to the market.
• Underweight: Industry underperforms the market.

Company Investment Rating:

• Buy: Stock outperforms the market by more than 15%.
• Outperform: Stock outperforms the market by 5% to 15%.
• Neutral: Stock outperforms or underperforms the market by less than 5%.
• Underperform: Stock underperforms the market by more than 5%.

Information Disclosure and Disclaimer

• The report is based on public information and is not guaranteed for authenticity, accuracy, or completeness.
• The report is for clients' reference only and does not constitute an invitation to buy or sell any securities.
• The Company reserves all rights to the report and prohibits unauthorized copying, redistribution, or use.
• The views in the report may change and are subject to the Company's possible conflicts of interest.

Analysts and Contact Info

• Analysts:
  • SUN Jiali (sunjiali@xyzq.com.cn)
  • XU Liuming (xuliuming@xyzq.com.cn)
• Assistant Analysts:
  • ZHUANG Weibin (zhuangwb@xyzq.com.cn)
  • PAN Mengchen (panmengchen@xyzq.com.cn)
• Global Markets Team:
  • LIU Yirong, Connie (liuyirong@xyzq.com.cn)
  • ZHANG Zhenlan, Lana (zhangzhenlan@xyzq.com.cn)
  • XU Hao, Howe (xuhao@xyzq.com.cn)
  • CHAN Chiwan, Rex (chanchiwan@xyzq.com.cn)
  • CHEN Junkai, Raymond (chenjunkai@xyzq.com.cn)
  • Aiden Shin (shensx@xyzq.com.cn)
  • Tseng Yachi, Sophie (zengyaqi@xyzq.com.cn)
  • Cai Mingzhu, Nikki (caimzh@xyzq.com.cn)