20151207-兴业证券-Weekly_A-share_Market_Recommendations_13页_381kb

Weekly A-share Market Recommendations Summary

Core Content

This report provides weekly stock recommendations from the Industrial Securities Research Institute, dated December 7, 2015. It includes detailed EPS forecasts, rating classifications, and investment highlights for several listed companies across different sectors.

Key Recommendations

Main Investment Highlights

Fiyta Holdings (000026: SZ)

• Sector: Jewelry
• Investment Highlights:
  • The company is investing in new watch designs, marketing network expansion, and e-commerce.
  • Earnings are expected to improve significantly next year with the self-owned brand facing an inflection point.
  • Governance structure is expected to improve due to SOE reforms.
  • Valuation is considered attractive.

Shenzhen Heungkong Holding (600162: SH)

• Sector: Property Development
• Investment Highlights:
  • As the only listed company in the group, it receives strong support from its major shareholder.
  • Assets injection is expected to provide growth opportunities.
  • Strong financial background and diverse business operations.
  • Valuation offers a high margin of safety.

Jiangsu King's Luck Brewery JSC (603369: SH)

• Sector: Baijiu
• Investment Highlights:
  • Transitioning to an integrated wedding service provider.
  • Expanding through M&A and building a platform across the wedding industry chain.
  • Acquisition of a match-making website is expected to increase client base.
  • Strong O2O and B2B models.
  • Potential Risk: Weak implementation of SOE strategy.

Xiangtan Electrochemical Scientific (002125: SZ)

• Sector: Inorganic Salt
• Investment Highlights:
  • Focus on transforming magnesium products and upgrading production.
  • Acquisition of a sewage plant may lead to a quick earnings rebound.
  • Management has participated in a private placement scheme.
  • Strong valuation and potential for growth.
  • Potential Risk: Assets consolidation may progress slower than expected.

Anhui Yingliu Electromechanical (603308: SH)

• Sector: Mechanical Components
• Investment Highlights:
  • Strong growth prospects in nuclear power and military defense sectors.
  • Earnings expected to face an inflection point next year.
  • Revenue and net profit from nuclear power business are expected to be significant.
  • High-margin growth opportunities.
  • Potential Risk: Raw material price volatility and possible delays in technology development.

YongXing Special Stainless Steel (002756: SZ)

• Sector: Special Steel
• Investment Highlights:
  • Attractive valuation with 30x PE.
  • Completed ESOP with a high offering price.
  • Plans for M&A and organic growth to expand product mix and improve margins.
  • Expected to benefit from the resumption of nuclear power construction.
  • Potential Risk: Raw material price volatility and technical development challenges.

Changzhou Xingyu Automotive Lighting Systems (601799: SH)

• Sector: Automotive
• Investment Highlights:
  • Strong growth potential with new partnerships and production expansion.
  • Products are more profitable compared to other auto parts.
  • Strategic efforts on technological upgrades.
  • Potential Risk: Slump in car industry demand and slower business development.

Softto (000662: SZ)

• Sector: Computer
• Investment Highlights:
  • Acquired Teamax, a leading smart city developer, through private placement.
  • New '1+N' EPC contract is expected to increase orders significantly.
  • Market cap is projected to rise to around CNY 19.5 billion.
  • Strong growth potential and M&A strategy.
  • Potential Risk: Slower smart city development and cash flow constraints.

Nanjing Xinlian Electronics (002546: SZ)

• Sector: Meter
• Investment Highlights:
  • Building an electricity services cloud platform through software-hardware integration.
  • Aiming to become a leading electricity service provider.
  • Potential Risk: Development of the cloud platform may be slower than expected.

Guangdong Sky Dragon Printing Ink Group (300063: SZ)

• Sector: Media
• Investment Highlights:
  • Transitioning into a digital marketing platform.
  • Acquired four digital marketing companies, extending into media industry.
  • Zoom Interactive, one of the acquirees, has advanced SEM technologies.
  • Market size is expected to grow significantly by 2018.
  • Potential Risk: M&A synergy may not meet expectations and macroeconomic downturns could impact the marketing industry.

Key Information

• Valuation: Most companies have attractive valuations, with some offering a high margin of safety.
• Growth Drivers: Diversification, M&A, technological upgrades, and sector-specific growth opportunities (e.g., nuclear power, smart cities, digital marketing).
• Risks: SOE strategy implementation, asset consolidation delays, market downturns, and cash flow constraints.
• Sector Focus: The report covers companies in Jewelry, Property Development, Baijiu, Inorganic Salt, Mechanical Components, Special Steel, Automotive, Computer, Meter, and Media sectors.
• Investment Strategy: Emphasis on long-term growth through strategic investments, business transformation, and expansion via M&A and organic growth.

Conclusion

The report highlights several companies with strong growth potential and attractive valuations. Investment recommendations are based on future earnings forecasts, strategic initiatives, and market conditions. However, potential risks such as slow implementation of strategies and sector-specific challenges are noted. Investors are advised to consider these factors before making decisions.