20160729-兴业证券-A-Share_Daily_Express_13页_929kb

Summary of Industrial Securities Co., Ltd. Document

Core Content

This document provides a comprehensive market review and analysis for Chinese and Hong Kong stock indices, along with detailed financial performance and investment highlights for three listed companies: Cangzhou Mingzhu Plastic Co., Ltd. (002108.SZ), Beijing Originwater Technology (300070.SZ), and Shandong Hi-Speed (600350.SH). It also includes key financial data and analyst recommendations for these companies.

Main Market Indices Overview

• SSE Composite: Closed at 2979.34, down 0.50%.
• SZSE Component: Closed at 10329.44, down 0.64%.
• CSI 300: Closed at 3203.93, down 0.53%.
• ChiNext Index: Closed at 2122.41, down 0.81%.
• HSI (Hong Kong): Closed at 21891.37, down 1.28%.
• HSCEI (Hong Kong): Closed at 8958.97, down 1.36%.
• Market Volume: CNY 432 billion, down 23% from the previous session.

Market Review

• The Chinese stock market experienced a decline on Friday, with most stocks, especially mid and small-cap names, under sell-off pressure.
• The market showed a bearish trend, which deviates from previous expectations.
• A few well-operated companies remained relatively strong, but overall sentiment was negative.
• Losers outnumbered winners by 1823-to-759.

Sector Review

Winners

• Home Appliances: Qingdao Haier (+2.05%), Joyoung (+5.24%).
• Banks: China CITIC Bank (+2.04%), Ping An Bank (+1.32%).
• Healthcare: Beijing Tongrentang (+1.78%), Dong-E-E-Jiao (+2.71%).

Losers

• Military Sector: Avic Aircraft (-3.11%), AVIC Aviation Engine (-2.36%).
• Nonferrous Metals and Gold: Zijin Mining (-1.98%), Shandong Gold (-2.03%).
• Electronic Components: Dongxu Optoelectronic (-4.30%), Han's Laser (-3.92%).

Daily Headlines

• Regulators are tightening rules on refinancing activities, restricting the use of funds for land acquisition and working capital.
• The government is promoting private investment through joint mission teams.
• CBRC is drafting rules for wealth management products to mitigate sector risks.
• China's economy faces restructuring challenges.
• Banking regulators are resisting calls to reduce the minimum bad-loan provisions ratio.
• New regulations may be introduced on cross-border infant milk formula sales.
• China's CGN continues its UK nuclear plant project with EDF.
• Dongbei Special Steel creditors propose liquidation.
• Baidu missed revenue and profit forecasts due to government ad restrictions.
• Everbright Securities is testing investor interest for a HK share sale.
• Shanghai Fosun plans to acquire Gland Pharma for $1.26 billion.

Company Highlights

Cangzhou Mingzhu Plastic Co., Ltd. (002108.SZ)

• Performance: Revenue grew 25% YoY to CNY 1.22 billion, operating profit surged 160.5% to CNY 311 million, net profit rose 185.4% to CNY 257 million.
• EPS: CNY 0.42 for H116.
• Key Drivers: Growth in lithium battery separator and BOPA thin film sales, new production lines, and expansion of customer base.
• Production Capacity: 50 Mn sq.m. dry separator, 25 Mn sq.m. wet separator (Dezhou Mingzhu under construction).
• Investment Recommendation: Outperform.
• Earnings Forecast:
  • 2016E: Revenue CNY 2611 Mn, Net Profit CNY 421 Mn, EPS CNY 0.68.
  • 2017E: Revenue CNY 2959 Mn, Net Profit CNY 508 Mn, EPS CNY 0.82.
  • 2018E: Revenue CNY 3235 Mn, Net Profit CNY 583 Mn, EPS CNY 0.94.
• Valuation:
  • 2016E: 37.37x PE, 7.45x PB.
  • 2017E: 30.98x PE, 6.00x PB.
  • 2018E: 27.02x PE, 4.91x PB.

Beijing Originwater Technology (300070.SZ)

• Performance: Revenue reached CNY 2.35 billion, up 122.74% YoY; net profit CNY 270 million, up 76.16% YoY.
• Key Factors:
  • Rapid growth in PPP engineering business.
  • Advanced PPP model with increasing use of BOT.
  • Large order book (CNY 36 billion).
• Investment Recommendation: Outperform.
• Earnings Forecast:
  • 2016E: Revenue CNY 2.1 billion, 26x PE.
  • 2017E: Revenue CNY 2.9 billion, 19x PE.
• Potential Risks: Slower-than-expected project progress.

Shandong Hi-Speed (600350.SH)

• Performance: Expected to increase 2016 net profit by CNY 400 million (11%) via asset transfers.
• Key Factors:
  • SOE reform and industrial upgrading.
  • Expansion of real estate projects, expected to collect CNY 8.6 billion.
  • Potential toll rate increases.
• Earnings Forecast:
  • 2016E: Net profit CNY 400 million.
  • Expected pre-tax earnings of CNY 1.17 billion if returns remain the same.
• Investment Recommendation: Outperform.
• Potential Risks: Uncertainty in toll rate changes and project timelines.

Key Financial Data for Cangzhou Mingzhu Plastic Co., Ltd.

• Closing Price: CNY 25.46.
• Total Shares: 618.46 Mn.
• Shares Outstanding: 614.44 Mn.
• Market Cap: CNY 15745.94 Mn.
• Market Float: CNY 15643.61 Mn.
• Net Assets: CNY 1895.5 Mn.
• Total Assets: CNY 2747.95 Mn.
• BVPS: CNY 3.06.
• EPS:
  • 2015: CNY 0.35.
  • 2016E: CNY 0.68.
  • 2017E: CNY 0.82.
  • 2018E: CNY 0.94.
• Net Profit Growth Rate:
  • 2015: 28.4%.
  • 2016E: 96.3%.
  • 2017E: 20.6%.
  • 2018E: 14.6%.
• Profitability:
  • Gross Margin: 23.9% (2015), 29.2% (2016E), 29.9% (2017E), 30.4% (2018E).
  • Net Profit Margin: 9.9% (2015), 16.1% (2016E), 17.2% (2017E), 18.0% (2018E).
  • ROE: 12.0% (2015), 19.9% (2016E), 19.4% (2017E), 18.2% (2018E).
• Solvency:
  • Asset-liability Ratio: 26.4% (2015), 24.1% (2016E), 19.0% (2017E), 15.3% (2018E).
  • Current Ratio: 2.17 (2015), 2.57 (2016E), 3.79 (2017E), 5.07 (2018E).
  • Quick Ratio: 1.81 (2015), 2.15 (2016E), 3.30 (2017E), 4.47 (2018E).

Analysts and Translators

• Analysts:
  • LUO Yamei (S0190510120006)
  • WANG Wanting (S0190514070009)
• Translators:
  • LU Yang
  • PAN Mengchen

Conclusion

The document outlines the market's mixed performance, highlighting key sectors and companies with strong growth potential. Cangzhou Mingzhu Plastic, Beijing Originwater Technology, and Shandong Hi-Speed are all recommended as "Outperform" due to their strong financial results, strategic moves, and potential for future growth. The market environment is influenced by regulatory changes and economic restructuring, which have impacted investor sentiment and stock performance.