20160222-招商证券_香港_-Morning_Express_16页_1mb

Morning Express Summary

Core Content

This document provides a comprehensive overview of financial analysis and market updates for several companies and indices as of February 22, 2016. It includes equity research highlights, market indices performance, global commodity trends, and macroeconomic indicators.

Key Companies and Analysis

KWG Property (1813 HK)

• Current Rating: BUY, with a target price of HK$5.7.
• FY15 Performance:
  • Core net profit: RMB2.596bn (+1% YoY), slightly below the forecast of RMB2.828bn.
  • Revenue: RMB16.5bn (+11% YoY), below the forecast of RMB12.493bn.
  • Net gearing: 69.0%, slightly higher than the forecast of 63.4%.
  • DPS: RMB0.29/share, representing a 34% pay-out ratio and a 6.6% dividend yield.
• Reason for Profit Slowdown: Strategy shift towards holding and renting prime-located properties rather than selling them, such as Shanghai Amazing Bay and Guangzhou Global Metropolitan Plaza.

Sinomax (1418 HK)

• Current Rating: BUY, with a target price of HK$0.92.
• Acquisition: Acquired 51% equity interest in Chengdu Xingang Sponge Co., Ltd. for RMB81.7mn (HK$97.3mn).
• Implications:
  • Acquisition price is 2x P/B and 80x P/E, but the impact on earnings is minimal (RMB2.5mn FY15 earnings).
  • The market remains focused on export growth to the US rather than the foam manufacturing segment.

Melco Crown (MPEL US)

• Current Rating: BUY, with a target price of HK$20.8.
• 4Q15 Performance:
  • Adj. EBITDA: US$208mn (-16% YoY, flat QoQ), beating estimates by US$42mn.
  • EBITDA margin dropped to 19.7% QoQ.
• Positive Outlook:
  • Studio City delivered positive EBITDA, while Manila showed a weakening trend.
  • Management is reviewing dividend policy and improving balance sheet.
  • Market sentiment is expected to improve with potential for higher dividend payouts.

MGM China (2282 HK)

• Current Rating: SELL, with a target price of HK$8.0.
• 4Q15 Performance:
  • Adj. EBITDA: HK$1,124mn (-24% YoY, +1% QoQ), slightly beating expectations.
  • Net revenue dropped 31% YoY to HK$3,866mn.
• Concerns:
  • High exposure to high-end gaming, which is contracting.
  • Losing market share due to competition from other properties in Cotai.
  • Delayed opening of MGM Cotai to 1Q17E is expected to hurt market sentiment.

Market Indices and Global Trends

Hong Kong Indices

Global Commodities

Exchange Rates and Interest Rates

What to Watch

Economic Data

• Japan: Nikkei Mfg PMI (2016/02/22)
• Germany: GDP Detailed QQ, Ifo Business Climate, Ifo Current Conditions, Ifo Expectations
• U.S.: CaseShiller 20 MM SA, Consumer Confidence, Existing Home Sales, Durable Goods, Initial Jobless Claims
• Euro zone: Inflation, Economic Sentiment, Industrial Sentiment, Services Sentiment, Consumer Confidence

Company Events

• 2016/02/22: Financial results and dividend announcements from several listed companies, including HSBC, Hang Seng Bank, NWS Holdings, New World Department Store China, Yuexiu Transport Infrastructure, and others.

Research Coverage List (as of February 22, 2016)

| Company | Ticker | Rating | Share Price (Feb. 19) | 12-Month TP | % Upside | Mkt Cap (US$mn) | 2015 EPS | 2016E EPS | 2017E EPS | 2015 P/E | 2016E P/E | 2017E P/E |
|---------|--------|--------|------------------------|-------------|----------|------------------|----------|-----------|-----------|-----------|-----------|-----------|-----------|
| Brilliance China | 1114 HK | BUY | HK$6.73 | HK$12.5 | 86 | 4,375 | 1.07 | 0.86 | 0.99 | 5.0 | 6.3 | 5.5 |
| China ZhengTong Auto | 1728 HK | BUY | HK$2.91 | HK$3.5 | 20 | 830 | 0.36 | 0.29 | 0.39 | 6.4 | 8.0 | 6.0 |
| Geely Automobile | 175 HK | BUY | HK$3.12 | HK$4.6 | 47 | 3,556 | 0.16 | 0.25 | 0.34 | 15.5 | 10.0 | 7.4 |
| BAIC Motor | 1958 HK | NEUTRAL | HK$5.94 | HK$8.0 | 35 | 5,753 | 0.70 | 0.56 | 0.67 | 6.7 | 8.5 | 7.2 |
| Great Wall Motor | 2333 HK | BUY | HK$5.68 | HK$12.5 | 120 | 6,696 | 0.88 | 0.98 | 1.10 | 5.1 | 4.6 | 4.2 |
| Fuyao Glass | 3606 HK | BUY | HK$16.72 | HK$20.0 | 20 | 5,411 | 1.11 | 1.09 | 1.17 | 12.0 | 12.3 | 11.5 |
| China Harmony Auto | 3836 HK | BUY | HK$4.79 | HK$6.91 | 44 | 974 | 0.50 | 0.42 | 0.44 | 7.6 | 9.1 | 8.8 |
| Zhongsheng Group | 881 HK | NEUTRAL | HK$3.78 | HK$4.75 | 26 | 1,047 | 0.35 | 0.39 | 0.48 | 8.6 | 7.8 | 6.4 |
| Sinopec Oilfield Service | 1033 HK | NEUTRAL | HK$1.65 | HK$2.7 | 64 | 4,744 | 0.16 | -0.16 | 0.03 | 12.9 | N.A. | 70.0 |
| China Oilfield Services | 2883 HK | NEUTRAL | HK$5.98 | HK$8.7 | 45 | 3,681 | 0.97 | -0.64 | 0.10 | 4.9 | N.A. | 48.3 |
| CNOOC | 883 HK | BUY | HK$8.1 | HK$10.8 | 33 | 46,652 | 1.35 | 0.45 | 0.66 | 4.8 | 14.4 | 9.9 |
| China Resources Land | 1109 HK | BUY | HK$19.22 | HK$23.8 | 24 | 17,185 | 2.43 | 2.29 | 2.36 | 7.9 | 8.4 | 8.1 |
| Yuzhou Property | 1628 HK | BUY | HK$1.74 | HK$2.4 | 38 | 856 | 0.37 | 0.43 | 0.44 | 4.7 | 4.1 | 4.0 |
| KWG Property | 1813 HK | BUY | HK$5.24 | HK$5.7 | 9 | 1,971 | 1.10 | 1.17 | 1.27 | 4.8 | 4.5 | 4.1 |
| Country Garden | 2007 HK | NEUTRAL | HK$2.98 | HK$2.7 | -9 | 8,683 | 0.59 | 0.51 | 0.58 | 5.1 | 5.8 | 5.1 |
| Agile Property | 3383 HK | BUY | HK$3.84 | HK$4.6 | 20 | 1,940 | 1.40 | 0.90 | 1.00 | 2.7 | 4.3 | 3.8 |
| Greentown China | 3900 HK | BUY | HK$6.62 | HK$7.3 | 10 | 1,846 | 1.04 | 1.29 | 1.42 | 6.4 | 5.1 | 4.7 |
| China Overseas Land | 688 HK | BUY | HK$23.55 | HK$26.7 | 13 | 29,957 | 3.39 | 3.47 | 3.27 | 7.0 | 6.8 | 7.2 |
| CH OVS G OCEANS | 81 HK | BUY | HK$2.7 | HK$3.3 | 22 | 795 | 0.56 | 0.47 | 0.63 | 4.8 | 5.7 | 4.3 |
| Shimao Property | 813 HK | BUY | HK$10.42 | HK$17.7 | 70 | 4,668 | 2.63 | 2.65 | 2.74 | 4.0 | 3.9 | 3.8 |
| CIFI Holdings | 884 HK | BUY | HK$1.57 | HK$2.0 | 27 | 1,370 | 0.40 | 0.35 | 0.43 | 3.9 | 4.5 | 3.7 |
| China Merchants Land | 978 HK | BUY | HK$1.16 | HK$1.5 | 29 | 734 | 0.10 | 0.06 | 0.19 | 9.2 | 15.5 | 4.9 |

Additional Highlights

A-Share Research Highlights

• CPI and PPI (Jan 2016):
  • CPI rose 1.8% YoY and 0.5% MoM, driven by the Spring Festival.
  • PPI fell 5.3% YoY, narrowing from the previous month's decline, but still in the deflation region.
  • Weighting adjustment reduced inflation volatility and aligned with global practices.
  • Inflation is expected to remain low, with a 2016 forecast of 1.2%, 1.4% lower than 2015.

Hardware Technology

• Mobile World Congress 2016 (Day 1):
  • Smartphone Trends: Metal casings, dual cameras, and waterproof features.
    • LG G5: 8MP front-cam, 16MP + 8MP rear dual-cam.
    • Xiaomi Mi5: 26MP rear camera with PDAF and IOS features.
    • Samsung S7/S7 Edge: 12MP rear camera with dual-pixel sensor and f/1.7 aperture.
  • VR/AR Highlights: LG 360 Cam and LG 360 VR headset, HTC Vive with integrated phone functions.
  • Implications: Positive for camera lens/module leaders (Sunny Optical, Cowell), metal casing leader (Tongda), and waterproof acoustic leader (AAC Tech).

Conclusion

The report highlights a mix of buy and sell ratings for various sectors, including property, automotive, and technology. Key factors influencing the outlook include strategic shifts in property development, macroeconomic data, and commodity trends. The focus on export growth and the potential for increased dividends in the property sector are positive signs, while concerns over market share loss and economic recovery remain.