20170120-兴业证券-A-Share_Daily_Express_12页_772kb

Summary of Industrial Securities Co., Ltd. Document

Core Content

The document provides an overview of the Chinese stock market performance on January 20, 2017, including key indices, sector analysis, company news, and investment recommendations. It also highlights future opportunities in the railway equipment and pharmaceutical industries, along with detailed financial data and outlooks for two major companies: China Merchants Shekou Industrial Zone (001979.SZ) and Wanhua Chemical Group (600309.SH).

Market Indices and Performance

• SSE Composite Index: Closed at 3123.14, up 0.70%.
• SZSE Component Index: Closed at 9906.14, up 1.41%.
• ChiNext Index: Closed at 1880.75, up 1.99%.
• Aggregate Market Volume: CNY 323 billion, up 8.41% from Thursday.
• Market Sentiment: Winners outnumbered losers by 2734-to-123.

Market Review Highlights

• The SHCOMP index rose steadily, reaching a weekly high.
• Five commercial banks were authorized to cut RRR by 1 percentage point to address liquidity issues during the Lunar Year holiday.
• The Central Bank injected 95 million yuan via open market operations, contributing to a weekly net injection of 1.13 trillion yuan.
• ChiNext rose 2.61% due to the outstanding performance of Leshi, which surged nearly 8%.
• Rumors of relaxing stock index futures trading are positive for small-cap stocks.

Sector Review

Winners

• Computer Industry:
  • Surfilter Network Technology Co., Ltd. (300311 SZ): +9.98%
  • Yonyou Network Technology Co., Ltd. (600588 SH): +5.01%
• Electronic Components:
  • Shenzhen Yitoa Intelligent Control Co., Ltd. (300131 SZ): +7.66%
  • Guangdong Fenghua Advanced Technology (000636 SZ): +7.22%
• Building Materials:
  • China West Construction Group Co., Ltd. (002302 SZ): hit ceiling price
  • Xinjiang Qingsong Building Materials and Chemicals (600425 SH): +4.05%
• Media Sector:
  • Leshi Internet Information & Technology Corp., Bei Jing (300104 SZ): +3.20%
  • Bluefocus Communication Group Co., Ltd. (300058 SZ): +2.95%

Daily Headlines

• China's GDP may have risen 6.7% in 4Q 2016, with data to be announced by the National Bureau of Statistics.
• Steven Mnuchin may label China as a currency manipulator during his Senate confirmation hearing.
• Fang Xinghai stated China has enough liquidity and key differences over index futures won't be easily resolved.
• Li Daokui warned of more difficulty in the Chinese economy in 2017 due to a slowing property market.
• Volkswagen AG expects final approval for a partnership with Anhui Jianghuai Automobile Co. in 2017.
• Alibaba Group will sponsor the Olympic Games through 2028 for $800 million.
• Cnooc Ltd. plans to increase capital spending after the crude oil crash in 2014.
• Hesteel Co. reported a profit surge of up to 179% due to steel price rally.
• Future Mobility Corp. plans to invest 11.6 billion yuan to build an electric vehicle factory in China.
• Hong Kong's unemployment rate remained at 3.3% for the three months ended December.
• Guangdong's GDP growth in 2016 passed 7.4%.
• Hong Kong Exchanges plans to start a spot commodities platform in Qianhai.

Investment Recommendations

Railway Equipment

• First Tender for High-speed Train in 2017: China Railway Investment Corporation (CRIC) published tenders for 50 high-speed trains.
• Estimated Total Purchases in 2017: 300 sets.
• Government Investment: CNY 3.5 trillion over the 13th Five-Year Plan (2016-2020).
• Recommended Stocks:
  • CRRC (601766.SH)
  • Zhejiang Yonggui Electric Equipment (300351.SZ)
  • Nanjing Kangni Mechanical&Electrical (603111.SH)
  • Beijing Dinghan Technology (300011.SH)
• Potential Risks: Less-than-expected investment in railway construction, political risk.

Pharmaceutical

• Positive Earnings Pre-announcement: Most listed pharmaceutical companies are expected to show steady growth.
• Recommended Stocks:
  • TONGHUA DONGBAO (600867.SH)
  • CHANGCHUN HIGH&NEW (000661.SZ)
  • HUADONG MEDICINE (000963.SZ)
  • LIVZON L (000513.SZ)
  • HENGRUI MEDICINE (600276.SH)
  • JUMPCAN (600566.SH)
  • SHANGHAI PHARMA (601607.SH)
  • JOINTOWN (600998.SH)
  • REALCAN (002589.SZ)
  • LAOBAXING (603883.SH)
  • Jiangsu Nhwa Pharmaceutical (002262.SZ)
  • Zhejiang Jingxin Pharmaceutical (002020.SZ)
  • China Resources Double-Crane Pharmaceutical (600062.SH)
  • Dong-E-E-Jiao (000423.SZ)
  • China Resources Sanjiu Medical & Pharmaceutical (000999.SH)
• Investment Strategy: Focus on companies with solid earnings, improving equity structure, and business operations. Avoid high PE ratio stocks and speculative investment themes.

Company News

• Bocom (601328.SH): Plans to set up a 10 billion yuan debt-to-equity swap unit.
• CCB (601939.SH): Most debt-to-equity swap funds come from the market.
• Chalco (601600.SH): Profit surged due to aluminum rebound.
• Cangzhou Mingzhu (002108.SZ): Expected 2016 net profit of 485.9 million yuan.
• China Film (600977.SH): Plans to invest $15 million in 'Fast and Furious 8'.
• Citic Securities (600030.SH): 2016 net income of 10.4 billion yuan vs 19.8 billion yuan in 2015.
• Hainan Rubber (601118.SH): CRSC approved private share placement plan.
• Sealand Sec. (000750.SZ): Completed talks on seal issue.
• Hesteel (000709.SZ): Expected profit to jump up to 179%.
• Huatai Securities (601688.SH): Received notice of rectification measures.
• Huayi Brothers (300027.SZ): Expected 2016 net income of up to 1.02 billion yuan.
• Jonjee High-Tech (600872.SH): Expected 2016 net income to rise 40%–55% YoY.
• Risesun Real Estate (002146.SZ): Expected 2016 net income of 3.86 billion–4.34 billion yuan.

Company Highlights

China Merchants Shekou Industrial Zone (001979.SZ)

• Earnings: CNY 9.3–9.8 billion, up 34.92%–43.17% YoY.
• EPS: CNY 1.18–1.24.
• Sales Performance:
  • Dec 2016: Contracted sales of 524,800 square meters with sales value of CNY 8.26 billion.
  • 2016: Cumulative contract sales of 4.71 million square meters with total contract sales value of CNY 73.9 billion.
• Land Reserves: Total GFA will reach 876,000 square meters, with total land value of CNY 8.43 billion.
• Investment Recommendations: Strong Buy, with RNAV at CNY 24.5 per share and current share price implying deep discount.
• Potential Risks: Monetary tightening; slower-than-expected sales.

Wanhua Chemical Group (600309.SH)

• Earnings: Net profit of CNY 3505 million in 2016, up 117.7% YoY.
• EPS Forecast: CNY 1.62 in 2016, CNY 1.88 in 2017, CNY 2.35 in 2018.
• MDI Price Growth: Robust growth in off-season, contributing to strong earnings.
• Petrochemical Business: Running smoothly with decent profit, supported by rising crude oil prices.
• High-performance Materials: Rapid growth, with more high-value-added products coming into operation.
• Investment Recommendations: Strong Buy, with RNAV at CNY 24.5 per share.
• Potential Risks: Recovery of downstream demand may fail expectations; raw material price fluctuations.

Financial Data

• Wanhua Chemical Group:
  • Closing Price: 23.58 CNY
  • Total Shares: 2162.33 Mn
  • Market Cap: 50987.85 CNY/Mn
  • Net Assets: 13639.69 CNY/Mn
  • Total Assets: 51585.07 CNY/Mn
  • BVPS: 6.31 CNY
• Revenue Breakdown (CNY, Mn):
  • Polyurethane Series: 8,113.97 (65.9%)
  • Petroleum Chemicals: 3,716.04 (30.2%)
  • Others: 480.11 (3.9%)

Key Financial Indicators (FY)

Analysts and Contacts

• Railway Equipment:
  • Analyst: CHENG Shangwen (chengshangwen@xyzq.com.cn), SHI Mingxuan (shimingxuan@xyzq.com.cn)
  • Assistant Analyst: MAN Zaipeng (manzp@xyzq.com.cn), ZHANG Xinhe (zhangxinhe@xyzq.com.cn), LI Xing (lixingyj@xyzq.com.cn)
• Pharmaceutical:
  • Analyst: XU Jiaxi (xujiaxi@xyzq.com.cn), XIANG Jun (xiangjun@xyzq.com.cn), SUN Yuanyuan, ZHAO Lei
  • Assistant Analyst: HUO Ran, ZHANG Jiabo, PAN Mengchen (panmengchen@xyzq.com.cn)
• Real Estate:
  • Analyst: YAN Changming (yangchangming@xyzq.com.cn)
  • Assistant Analyst: QI Dong (qidong@xyzq.com.cn), CHEN Yong (chenyong@xyzq.com.cn), PAN Mengchen (panmengchen@xyzq.com.cn)
• Chemicals:
  • Analyst: TANG Jie (tangjie@xyzq.com.cn), XU Liuming (xuliuming@xyzq.com.cn), ZHENG Fangbiao (zhengfb@xyzq.com.cn)
  • Assistant Analyst: PAN Mengchen (panmengchen@xyzq.com.cn)