Dim Sum Express Summary
Core Content
This report provides an overview of market performance and investment insights across various indices and sectors. It includes data on market indices, Hong Kong ADRs, macroeconomic trends, A-Share Market dynamics, and sector-specific analyses, including ratings and recommendations.
Key Market Indices Performance
| Market |
1D Chg (%) |
1M Chg (%) |
YTD Chg (%) |
EPS 18E (%) |
EPS 19E (%) |
P/E 18E |
P/E 19E |
| HSI |
-0.3 |
-5.7 |
-11.9 |
36.4 |
11.2 |
10.8 |
9.7 |
| HSCEI |
-0.9 |
-4.9 |
-12.6 |
12.0 |
11.2 |
7.6 |
6.9 |
| MXCN |
-0.3 |
-8.0 |
-15.6 |
45.4 |
15.8 |
11.5 |
9.9 |
| SHSZ300 |
-0.7 |
-5.6 |
-20.6 |
32.8 |
15.5 |
10.9 |
9.5 |
| SHCOMP |
-0.3 |
-4.7 |
-19.7 |
36.5 |
13.6 |
10.7 |
9.4 |
| SZCOMP |
-0.4 |
-7.7 |
-26.1 |
69.5 |
21.9 |
15.9 |
13.1 |
| INDU |
0.1 |
3.2 |
5.2 |
44.1 |
9.4 |
16.6 |
15.2 |
| SPX |
0.0 |
2.4 |
8.1 |
48.4 |
10.3 |
17.9 |
16.2 |
| CCMP |
-0.2 |
1.7 |
15.2 |
84.6 |
16.0 |
23.7 |
20.4 |
| UKX |
0.6 |
-4.3 |
-4.9 |
171.7 |
7.6 |
13.1 |
12.2 |
| NKY |
-0.3 |
3.4 |
-0.7 |
67.1 |
12.5 |
15.9 |
14.1 |
- Most indices show negative performance over the past 1D, 1M, and YTD.
- EPS growth is positive for most indices, indicating improved earnings expectations.
- P/E ratios have declined across the board, suggesting valuation adjustments.
Hong Kong ADRs
| Company |
Local (HK$) |
Daily (%) |
ADR (US$) |
Daily (%) |
| 700 TENCENT |
308.4 |
0.13 |
39.8 |
-0.41 |
| 1398 ICBC |
5.4 |
-2.01 |
19.0 |
1.55 |
| 857 PETROCHINA |
5.8 |
0.35 |
73.7 |
0.37 |
| 939 CCB |
6.4 |
-1.85 |
16.2 |
-0.95 |
| 941 CHINA MOBILE |
75.8 |
-0.53 |
48.3 |
-0.39 |
| 5 HSBC |
66.7 |
0.53 |
42.9 |
0.28 |
| 2318 PING AN |
72.3 |
-1.37 |
26.9 |
-5.77 |
| 3988 BANK OF CHINA |
3.3 |
-1.19 |
5.6 |
1.46 |
| 386 SINOPEC |
7.5 |
0.27 |
27.1 |
0.84 |
| 1299 AIA |
62.8 |
1.29 |
13.9 |
-0.14 |
- ADRs show mixed performance, with some companies experiencing declines and others showing slight increases.
- The report suggests a focus on companies like Tencent, Fanhua, and China Literature for potential investment opportunities.
Macro Overview
- Fiscal Expenditure and Private Financing: Stabilizing but not expanding.
- Construction and Bond Financing: Easing in non-standard business and rebounding, reflecting policy impacts since June.
- M1 Decline: Indicates weakening business conditions and potential for cheap asset prices.
- Market Bottoming Out: Expected as share repurchases have reached new highs, supported by policy measures.
A-Share Market Insights
- Share Repurchases: Reached Rmb4bn in July and Rmb4.5bn in August, with sectors like household appliances, automobiles, and chemicals leading.
- Regulatory Changes: The China Securities Regulatory Commission proposed an improved share repurchase system, allowing board-level decisions and a treasury stock mechanism.
Sector Analysis
Non-Bank Financials
- Insurance Intermediaries: Bright outlook as the separation of insurance production and selling is underway.
- Fanhua (FANH US): A leader in the domestic insurance intermediary market, transitioning to life insurance and expanding online sales channels.
Building Materials
- New Off-Peak Production Guidance: Released in early August, emphasizing flexible implementation to combat air pollution in the Jingjinji region.
- Positive Outlook: On companies like Huaxin Cement (600801 CH) and Conch Cement (600585 CH / 914 HK).
Machinery
- Hangcha Group (603298 CH): Ranked 8th in the global forklift manufacturer ranking, with a strong presence in sales and technical personnel.
- Recommendation: Reiterate Buy due to its leadership position and growth potential.
Internet Sector
- Interim Results: 1H18 revenue up 37% YoY, but net profit down 5% YoY to Rmb68bn.
- Performance by Subsector:
- BAT (Baidu, Alibaba, Tencent): Revenue up 45% YoY, with net profit accounting for over 90% of the industry.
- JD.com, Pinduoduo, Huya: Dragged down net profit due to widening losses.
- Recommendations:
- Tencent Holdings (700 HK): Buy, with regulatory restrictions impacting games but advertising and mini-apps showing promise.
- IGG (799 HK): Buy, as its revenue is mainly from overseas and new games are expected in 4Q18.
- China Literature (772 HK): Worth attention.
Rating Definitions
Company Ratings
| Rating |
Definition |
| Buy |
Expected to outperform benchmark by more than 15% |
| Accumulate |
Expected to outperform benchmark by more than 5% but not more than 15% |
| Hold |
Expected relative performance ranges between -5% and 5% |
| Underperform |
Expected to underperform benchmark by more than 5% |
Sector Ratings
| Rating |
Definition |
| Positive |
Expected to outperform benchmark by more than 10% |
| Neutral |
Expected relative performance ranges between -10% and 10% |
| Cautious |
Expected to underperform benchmark by more than 10% |
Disclaimer
- This report is for informational purposes only and does not constitute an offer to buy or sell securities.
- The information and opinions are subject to change and should not be relied upon as investment advice.
- GF Securities (Hong Kong) and its affiliates may have financial interests in the securities mentioned.
