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Weekly A-share Market Recommendations Summary

Core Content Overview

This document presents the weekly A-share market recommendations from the Industrial Securities Research Institute dated February 14, 2017. It includes stock recommendations for multiple companies across various sectors, with detailed EPS forecasts, investment highlights, and potential risks for each.

Top Stock Recommendations

Key Companies and Their Highlights

Yuan Longping High-tech Agriculture (Agriculture Sector)

• Investment Highlights:
  • New product launches are expected to boost earnings.
  • Current valuation is at a historical low, limiting downside risk.
• Potential Risks:
  • Weather uncertainty
  • Grain price fluctuations
• EPS Forecast: CNY 0.48 (2016), CNY 0.62 (2017), CNY 0.84 (2018)
• Rating: STRONG BUY (Maintained)

COSCO Shipping Holdings (Transportation Sector)

• Investment Highlights:
  • Container transportation industry recovery
  • Improved supply/demand dynamics
  • Inventory replenishment supports export growth
• Potential Risks:
  • Sluggish market demand
  • Fewer ships in operation
  • Vicious competition
  • Rising trade protectionism
  • Oil price increases
• EPS Forecast: CNY -0.97 (2016), CNY 0.36 (2017), CNY 0.47 (2018)
• Rating: BUY (Maintained)

Huadong Medicine (Pharmaceutical Sector)

• Investment Highlights:
  • Strong product mix and sales force
  • Fast growth expected
  • Funding constraints eased
• Potential Risks:
  • Lower-than-expected product sales
  • Slow progress in new product R&D
• EPS Forecast: CNY 2.86 (2016), CNY 3.53 (2017), CNY 4.28 (2018)
• Rating: STRONG BUY (Maintained)

Hangzhou Everfine Photo E Info (Computer Sector)

• Investment Highlights:
  • Strategic expansion into AR, IoT, and big data
  • Biometric recognition technology widely applied
  • Expected revenue growth from new business areas
• Potential Risks:
  • Intensifying competition
  • Failure in M&A
• EPS Forecast: CNY 0.31 (2016), CNY 0.87 (2017), CNY 0.99 (2018)
• Rating: BUY (Maintained)

Ningbo Huaxiang Electronic (Automobile Sector)

• Investment Highlights:
  • Improved earnings resilience
  • Strategic partnerships with major automakers
  • Expansion into new growth areas
• Potential Risks:
  • Loss from German subsidiary
  • Possible rejection of private placement
• EPS Forecast: CNY 1.23 (2016), CNY 1.83 (2017), CNY 2.22 (2018)
• Rating: BUY (Maintained)

Wanhua Chemical Group (Chemical Raw Materials Sector)

• Investment Highlights:
  • Fast growth in new business divisions
  • Focus on new chemical materials
  • Improved productivity and profit contributions
• Potential Risks:
  • Slow downstream demand recovery
  • Raw material price volatility
• EPS Forecast: CNY 1.49 (2016), CNY 1.88 (2017), CNY 2.35 (2018)
• Rating: BUY (Maintained)

Jiangsu Changjiang Electronics Technology (IC Sector)

• Investment Highlights:
  • Strong recovery in profitability
  • Strategic partnership with SMIC
  • Growth from SiP manufacturing
  • Expected 20% growth in the semiconductor industry
• Potential Risks:
  • Semiconductor industry downturn
  • Integration with STATs ChipPAC not meeting expectations
• EPS Forecast: CNY 0.11 (2016), CNY 0.78 (2017), CNY 1.29 (2018)
• Rating: STRONG BUY (Revised Up)

Sino Great Wall (Construction Sector)

• Investment Highlights:
  • Strong revenue from PPP hospital projects
  • Strategic partnership with local governments
• Potential Risks:
  • Lower-than-expected orders
  • Slow progress in overseas projects
  • Delay in fund collection
• EPS Forecast: CNY 0.32 (2016), CNY 0.46 (2017), CNY 0.64 (2018)
• Rating: STRONG BUY (Maintained)

Shandong Hualu Hengsheng Chemical (Fertilizer Sector)

• Investment Highlights:
  • Strong technological capabilities in gasification platforms
  • Profitable downstream products
  • Upcoming projects to ensure earnings growth
• Potential Risks:
  • Downstream demand slumps
  • Raw material price fluctuations
• EPS Forecast: CNY 0.7 (2016), CNY 0.88 (2017), CNY 1.22 (2018)
• Rating: STRONG BUY (Maintained)

Bank of Nanjing (Banking Sector)

• Investment Highlights:
  • Benefiting from interest rate declines
  • Strong creditworthiness of clients
• Potential Risks:
  • Systematic risks in the banking industry
• EPS Forecast: CNY 1.44 (2016), CNY 1.74 (2017), /
• Rating: BUY (Maintained)

Key Information

• Valuation: Several companies are at historical lows, reducing downside risk.
• Growth Drivers: Product innovation, strategic partnerships, and industry recovery are key growth factors.
• Sector Focus: The recommendations span across agriculture, transportation, pharmaceutical, computer, automobile, chemical, construction, and banking sectors.
• Ratings: Most companies are rated BUY or STRONG BUY, with a few having revised up their ratings.
• EPS Forecasts: Detailed EPS projections for 2016–2018 are provided for each company.
• Risk Factors: Each recommendation includes potential risks such as market demand, competition, regulatory changes, and operational challenges.

Disclaimer and Information Disclosure

• The Industrial Securities Research Institute ensures transparency by disclosing all relevant information.
• The quiet period and affiliates' shareholdings are available on their website: www.xyzq.com.cn.
• The report is intended for clients only and may not be shared with unauthorized parties.
• The views expressed are subject to change and not guaranteed.
• The report is based on public information, and the company reserves all rights to the content.