20160218-招商证券_香港_-CMS_HK__Research_Highlights_13页_1mb_1mb

Morning Express Summary

Core Content

This document provides a comprehensive equity research summary from China Merchants Securities (HK) Co., Ltd., covering various sectors including property, oil and gas, automobile, and others. It includes financial forecasts, valuation analysis, and market outlooks for multiple listed companies.

Key Financial Highlights

KWG Property (1813 HK)

• Current Price: HK$5.07
• Rating: BUY
• Target Price (TP): HK$5.7
• Dividend Yield: 8.6%
• Dividend per Share: HK$0.435
• Core Net Profit (FY15E): RMB2.828bn (+10% YoY)
• Gross Margin (FY15E): 37.2% (+1.7ppts YoY)
• Net Gearing (FY15E): 63.4%
• NAV Discount: 68% (1SD below 6-year mean)

CNOOC (883 HK)

• Current Price: HK$7.79
• Rating: BUY
• TP: HK$10.8
• % Upside: 39%
• Dividend per Share (2015): HK$1.35
• EPS (2016E): HK$0.45
• P/E (2016E): 13.9
• Market Cap (US$mn): 44,866

Market Outlook and Analysis

Oil and Gas Sector

• Current Oil Price: US$30/bbl
• China Oil Producers' Breakeven Price: US$40-45/bbl
• US Shale Breakeven Price: US$60/bbl
• Risks: Low oil prices and rising borrowing costs threaten US shale companies, with Chesapeake seeing a 62% drop in its stock price.
• Recommendation: Accumulate oil majors, especially CNOOC, with TP of HK$10.8.

Automobile Industry

• Policy Support: The government supports new energy vehicles and used vehicles through financial measures and encourages securitization of loans.
• Strategic Directions: New energy vehicles, used vehicles, "Made in China 2025," and related industries are key areas for investment and innovation.
• Recommendation: Reiterate "BUY" rating for the industry and recommend leading enterprises and market leaders in the sector.

Valuation and Investment Opportunities

• KWG Property is undervalued with a 68% NAV discount, which is considered attractive compared to historical levels.
• Dividend Payout Ratio: Expected to remain between 35-38% based on core profit.
• Net Gearing: Lower than its peers at 63% (vs. 70% average), indicating better financial stability.
• Property Sector: KWG Property's TP of HK$5.7 is based on a 64% discount to 1-year forward NAV of HK$15.7/share, equivalent to its 6-year mean.

Research Coverage Highlights

Property

• China Resources Land (1109 HK): BUY, TP HK$23.8, % Upside 29%, P/E 8.0
• Yuzhou Property (1628 HK): BUY, TP HK$2.4, % Upside 39%, P/E 4.0
• Agile Property (3383 HK): BUY, TP HK$4.6, % Upside 23%, P/E 3.7
• Greentown China (3900 HK): BUY, TP HK$7.3, % Upside 17%, P/E 4.4
• Country Garden (2007 HK): NEUTRAL, TP HK$2.7, % Upside -9%, P/E 5.1
• Shimao Property (813 HK): BUY, TP HK$17.7, % Upside 75%, P/E 3.7
• China Merchants Land (978 HK): BUY, TP HK$1.5, % Upside 38%, P/E 4.6

Oil and Gas

• Sinopec Oilfield Service (1033 HK): NEUTRAL, TP HK$2.7, % Upside 69%, P/E 14.9
• China Oilfield Services (2883 HK): NEUTRAL, TP HK$8.7, % Upside 63%, P/E 43.0
• CNOOC (883 HK): BUY, TP HK$10.8, % Upside 39%, P/E 9.5

Technology, Media & Telecom

• Tencent (700 HK): BUY, TP HK$174.0, % Upside 26%, P/E 34.1
• NetDragon (777 HK): BUY, TP US$93.0, % Upside 79%, P/E 520.8
• Linekong Interactive (8267 HK): NEUTRAL, TP HK$5.33, % Upside 33%, P/E 20.1

Economic and Market Data

Stock Market Indices

• Hang Seng Index (HSI): Down 1.03%
• Hang Seng Finance Index: Down 1.37%
• Hang Seng Property Index: Down 0.58%
• CSI 300: Up 0.87%
• Shanghai Composite Index: Up 1.08%

Commodity Prices

• Brent Oil: Up 6.59%
• COMEX Gold: No change
• COMEX Copper: Up 0.85%
• LME Copper: Up 0.77%
• BDI: Up 2.03%

Exchange Rates

• USD/RMB: Up 0.21%
• USD/HKD: Down 0.06%
• EUR/USD: Down 0.04%
• 1Y RMB NDF: Up 0.36%
• 3M Shibor: Down 0.5%
• 10Y US T-Note Yield: Up 2.3%

What to Watch

Economic Data

• U.S. API Weekly Crude Stocks: 2016/02/18
• China PPI YY: Forecast -5.40%
• China CPI YY: Forecast 1.90%
• U.S. Initial Jobless Claims: Forecast 269k
• U.S. Philly Fed Business Indx: Forecast -2.9
• U.S. EIA Weekly Crude Stocks: 2016/02/19
• Germany Producer Prices MM: Forecast -0.30%
• U.S. CPI MM, SA: Forecast -0.10%
• U.S. Core CPI YY, NSA: Forecast 2.10%
• Euro Zone Consumer Confidence Flash: Forecast -6.7

Company Events

• ReOrient Group Ltd. (0376 HK): Financial Results (Y.E.31/12/15)
• Semiconductor Manufacturing International Corporation (0981 HK): Results (3-MTH-END31/12/15)
• Langham Hospitality Inv (1270 HK): Financial Results & Dividend (Y.E.31/12/15)
• Major Holdings Ltd. (1389 HK): Interim Dividend (Y.E.31/03/16)
• MGM China Holdings Limited (2282 HK): Financial Results & Dividend (Y.E.31/12/15)
• Neo Telemedia Ltd. (8167 HK): Financial Results & Dividend (Y.E.31/12/15)

Summary

This report highlights investment opportunities across multiple sectors, with a focus on KWG Property and CNOOC. It provides financial forecasts, valuation analysis, and market outlooks, emphasizing the importance of policy support and long-term growth potential. The document also includes key economic and market data, as well as upcoming company events and research coverage for a range of listed companies.