20160504-新鸿基金融集团-INVESTMENT_DAILY_NOTE_15页_2mb

Investment Daily Note Summary

Core Content

This document provides an overview of the Hong Kong and global market conditions, including indices performance, sector analysis, stock highlights, and valuation data.

Market Trends

• The Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) are expected to continue their weakness, with the HSI possibly testing the 50-day and 100-day moving averages.
• The HSI closed at 20,676, down 1.9% from the previous day, and the HSCEI closed at 8,748, down 2.1%.
• The global market is under pressure due to lower-than-expected inflation figures and potential rate cuts by the Reserve Bank of Australia, which may impact the Hong Kong market if the Fed raises rates.

Market Conditions

• Global Market: US stocks fell to a three-week low due to worse-than-expected Chinese manufacturing data.
• External Market: ADRs dropped, effectively putting the HSI down 221 points.
• Commodities: Oil prices fell due to concerns over a global oil glut. New York crude oil futures closed at $43.65/bbl, down $1.13.
• Precious Metals: Gold futures closed at $1,291.80/oz, down $4.00.

Sector Performance

• Best Performing Sectors (1D % change):
  • Other Metals: 1.4%
  • Department Store: 1.1%
  • Toll Road: 0.6%
  • Dairy: 0.5%
  • REITs: 0.2%
• Worst Performing Sectors (1D % change):
  • Durable Consumables: -0.1%
  • Medical: -0.1%
  • Gas: -0.2%
  • Telecoms Equipment: -0.3%
  • Gaming: -0.5%
  • Agriculture: -0.5%
  • HK Telecoms: -0.6%
  • Chinese Property: -0.6%
  • Technology: -0.6%
  • Sports Accessories: -0.8%

Stock in Focus

Sino-Ocean Land (3377.HK)

• Last Close: HK$3.50
• Entry: HK$3.30
• Target: HK$3.65
• Stop-loss: HK$2.97
• YTD/1M/3M/12M % Change: -29.6% / -3.3% / -7.4% / -46.3%
• Market Cap: HK$26.30bn
• 3M Average Daily Volume: 11.84mn shares
• FY1 Forward P/E: 6.2
• Strategic Shift: The company is shifting focus from tiers 3 and 4 cities to tiers 1 and 2 cities, which are expected to see steady housing price increases.
• Financial Position: Net gearing ratio dropped to 59% in 2015 from 66% in 2014, indicating improved financial health.

Today's Top Picks

• Winsway (1733.HK):

  • Last Close: HK$0.099
  • Target: HK$0.101
  • Stop-loss: HK$0.087
  • Reason: Price rose with increasing turnover, suggesting a potential small bet.

• Creative Energy (8109.HK):

  • Last Close: HK$0.213
  • Target: HK$0.227
  • Stop-loss: HK$0.198
  • Reason: Price got supported on the 10-day MA, indicating a potential rebound.

Market Data

Best and Worst Performers (Previous Day)

• Best:

  • Intime Retail Group (1833.HK): 6.3% increase
  • Zhaojin Mining (1818.HK): 6.0% increase
  • China Oil & Gas (603.HK): 5.6% increase
  • Hydroo International (1396.HK): 5.4% increase
  • Yuan Da China Holdings (2789.HK): 4.9% increase

• Worst:

  • China Harmony Auto (3836.HK): -7.9% decrease
  • Rexlot Holdings (555.HK): -6.5% decrease
  • Air China Ltd-H (753.HK): -6.4% decrease
  • Sinotrans Ltd-H (568.HK): -6.4% decrease
  • PICC P&C-H (2328.HK): -5.9% decrease

HSCI Volume Filter

• Top Companies with significant volume changes:
  • PICC P&C-H (2328.HK): 1,673.7% increase
  • Jiangxi Copper-H (358.HK): 378.5% increase
  • China National Building Material-H (3323.HK): 51.7% increase
  • Bank East Asia (23.HK): 48.4% increase
  • Sino-Ocean Land (3377.HK): 27.8% increase

Most Short Sold Stocks

• Top Companies with high short-selling turnover:
  • ASM Pacific (522.HK): 71.7% of total shortsell turnover
  • Jiangxi Copper-H (358.HK): 52.6% of own turnover
  • China National Building Material-H (3323.HK): 51.7% of own turnover
  • Bank East Asia (23.HK): 48.4% of own turnover
  • MGM China (2282.HK): 46.1% of own turnover

Valuations and Forward P/E

• Hang Seng Index (HSI):

  • FY16E P/E: 11.1
  • Long-term average forward P/E: 11.0
  • Deviation from average: 1.6%
  • FY1 EPS growth: -7.1%
  • FY2 EPS growth: 10.5%

• HSCEI:

  • FY16E P/E: 7.2
  • Long-term average forward P/E: 7.9
  • Deviation from average: -9.6%
  • FY1 EPS growth: -4.4%
  • FY2 EPS growth: 9.3%

• Shanghai Composite:

  • FY16E P/E: 13.5
  • Long-term average forward P/E: 10.7
  • Deviation from average: 25.3%
  • FY1 EPS growth: 22.0%
  • FY2 EPS growth: 13.6%

• S&P 500:

  • FY16E P/E: 17.6
  • Long-term average forward P/E: 15.3
  • Deviation from average: 15.0%
  • FY1 EPS growth: 8.9%
  • FY2 EPS growth: 13.7%

A-Share Premium to H-Share

• Companies with significant premiums:
  • LuoYang Glass-H (1108.HK): 578.4% premium
  • Shandong Molon-H (568.HK): 283.8% premium
  • PetroChina-H (857.HK): 59.4% premium
  • Zijin Mining-H (2899.HK): 51.2% premium
  • China Life-H (2628.HK): 49.4% premium
  • Bank of China-H (3988.HK): 29.1% premium
  • China Shipping-H (2866.HK): 44.1% premium
  • China Cosco HO-H (1919.HK): 131.0% premium
  • Sinopec SHANG-H (338.HK): 114.9% premium
  • ICBC-H (1398.HK): 24.8% premium

Summary of Key Information

• Market Outlook: HK market may continue its weakness due to global market conditions and potential rate hikes.
• Stock Picks: Sino-Ocean Land (3377.HK) and Creative Energy (8109.HK) are highlighted for potential investment.
• Sector Performance: Other Metals and Department Store sectors showed positive performance, while Gaming and Agriculture sectors were underperforming.
• Valuation Analysis: HSI and HSCEI are undervalued relative to their long-term average forward P/E.
• Short Selling: Companies like Jiangxi Copper-H and Bank East Asia have high short-selling turnover.
• A-Share Premium: Significant premiums exist for A-shares compared to H-shares, indicating potential investment opportunities.