20180704-中国银河国际证券-China_Galaxy_A-Share_Morning_Comments__晨会纪要__4页_305kb
报告摘要
China Galaxy A-Share Morning Comments Summary (July 4, 2018)
Market Overview
The A-share market experienced a V-shaped rebound on July 4, 2018, with all major indices closing higher despite an early session decline. The SHCOMP fell to a two-year low of 2,722 but rebounded in the afternoon. The ChiNext also saw a decline but recovered, closing at 1,607.1 with a 1.18% increase. The turnover increased, indicating bargain hunting and market stabilization. The analysis suggests the index may have reached its bottom due to extremely low valuations.
Key Market Features
- Large Caps Weakness: Large-cap stocks continued to fill their down gap, showing continued weakness.
- Sectoral Impact: Sectors that had previously gained, such as brewery, food & beverages, and pharmaceuticals, saw capital outflow as sentiment turned pessimistic.
- Aviation Sector Decline: The aviation sector plunged due to RMB depreciation, with China Eastern Airlines (600115.CH), Air China (601111.CH), and China Southern Airlines (600029.CH) suffering significant losses.
- RMB Depreciation: The RMB depreciated since late June due to strong US economic outlook and rising USD Index. The PBOC's targeted RRR cut further increased depreciation pressure, negatively impacting the stock market.
Investment Recommendations
Media Sector
- Hengdian Entertainment (603103.CH): Recommended due to expectations of better box office performance during the summer holiday.
- Englight Media (300251.CH): Recommended as a media content leader.
- Game Sector: Potential for resumption of game licensing could boost game supply. Recommended stocks:
Property Sector
- Urbanization & City Clusters: Recommended stocks:
- Rental Market Support: Companies benefiting from government support for the rental market:
- Shenzhen World Union Properties (002285.CH)
- Tier-1/2 Developers: Recommended for demand growth in tier-2 cities:
Sector Analysis
Electronics
- Semiconductor Sector: Key companies trade at an average 2018E PER of 26x, indicating historical trough valuation.
- Government Support: The sector is expected to maintain a CAGR of around 30% over the next two years.
- Investment Themes: Focus on packaging and testing and design, materials, and equipment.
Recent Reports
- Strategy H2 2018 Outlook: Identifies stocks with attractive value and growth potential amid market reshaping.
- Healthcare: Recommends low valuation sub-segment leaders with strong growth potential.
- Media H2 2018 Outlook: Emphasizes content as a key growth driver in the post-traffic era.
- Quantitative Analysis: Notes increased exposure amid market declines.
- Bonds: Discusses RRR cut to ease liquidity risks and tight global liquidity limiting rate downside.
- TMT: Analyzes limited impact from the escalation of Sino-US trade conflicts.
- Property: Predicts sales volume and value to climb as de-inventory efforts begin to show effect.
Disclaimer and Risk Statement
- This document is issued by China Galaxy International Securities (Hong Kong) Co., Ltd. to institutional clients.
- No warranty or guarantee is made regarding the accuracy, correctness, or completeness of the information.
- The analysis does not consider individual client investment objectives, financial situations, or risk tolerance.
- Past performance is not indicative of future performance.
- Investment decisions should be made with independent financial advice.
Disclosure of Interests
- Financial Interests: Galaxy International Securities may have financial interests in the companies discussed, potentially equal to or exceeding 1% of market capitalization.
- Directors/Officers: One or more directors, officers, or employees may be involved with the mentioned companies.
- Investment Activities: Galaxy International Securities may participate in financing transactions, provide investment services, or seek mandates from the mentioned companies.
Copyright
- All rights reserved by Galaxy International Securities.
- Unauthorized reproduction, redistribution, or publishing is strictly prohibited.
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