20170117-兴业证券-A-Share_Daily_Express_12页_919kb

报告摘要

Company: Industrial Securities Co., Ltd.
Address: 17F, East Tower, No.36, Changliu Road, Pudong New District, Shanghai, China, 200135
Website: www.xyzq.com.cn
Date: January 17, 2017
Document Focus: Market indices, sector performance, daily headlines, company news, bond market analysis, and investment strategies.

Index	Close	Daily Change	% Change
SSE Composite	3108.77	↑ 5.34	↑ 0.17%
SZSE Component	9826.79	↑ 113.99	↑ 1.17%
CSI 300	3326.36	↑ 6.91	↑ 0.21%
ChiNext	1867.87	↑ 37.02	↑ 2.02%
HSI	22840.97	↑ 122.82	↑ 0.54%
HSCEI	9702.19	↑ 36.10	↑ 0.37%

Aggregate Market Volume: CNY 356 billion
Market Performance: Chinese stocks stabilized after a five-day losing streak, with small-cap shares rebounding strongly. The ChiNext index surged by 2.02% due to technology stocks. Winners outnumbered losers by 2180-to-614.

Media Sector: Leshi Internet Information & Technology Corp. (300104 SZ) rose 10.00%, Shenzhen Zqgame Co., Ltd. (300052 SZ) rose 5.82%.
Computer Sector: Surfilter Network Technology Co., Ltd. (300311 SZ) and Wisesoft Co., Ltd. (002253 SZ) hit the up limit.

Banking Sector: Bank of Beijing Co., Ltd. (601169 SH) -0.99%, Industrial Bank Co., Ltd. (601166 SH) -0.79%.
Securities Brokers: Soochow Securities Co., Ltd. (601555 SH) -1.66%, Guoyuan Securities Company Limited (000728 SZ) -1.14%.

Xi Jinping's Speech: Will address the World Economic Forum, presenting a "blueprint for the future progress of human society."
IMF Growth Forecast: Upgraded China's 2017 GDP growth target to 6.5%.
Central Bank Policy: Net capital injection of 270 billion yuan, with CNH/USD rising, supporting market sentiment.
China's Trade Policy: Lowered 2017 GDP growth target to 6.5% from the previous range of 6.5% to 6.7%.
Morgan Stanley: Approved to increase stake in China securities venture to 49%.
BOCOM International: Plans to spin off and list BOCOM International Holdings.
Baidu: Established an augmented reality lab to enhance its search engine and compete in the internet advertising market.
Outbound Investment: Fell 39.4% in dollar terms to $8.41 billion in December 2016.

Market Trend: Short-term bonds outperformed long-term bonds; credit bonds outperformed rates products.
Weak Trader Sentiment: High policy bank bond yields relative to government bonds indicate weak sentiment.
Market Dominance: Bond allocation, not trading, is the main activity.
Funding Sources: Mainly from WMP issuance and outsourced funds.
Liquidity Outlook: Market liquidity is expected to remain loose in the coming weeks, possibly leading to a consensus that PBOC will maintain accommodative policies.
Liquidity Impact: Fiscal deposit payments and cash withdrawal near Spring Festival may reduce monetary base.
Interest Spread: Shrinking due to inverted cost of outsourced funds and asset yields.
Recommendation: Investors should focus on short-term trading amid interest rate downturns.

Inter-bank Liquidity: Remained accommodative, with increased injection of 204 billion RMB through MLFs and 100 billion in open market operations.
Repo Rates: Fluctuated, with 21-day repo rates rising by 89 basis points.
FX Outflows: Reduced, easing liquidity pressure.
Yield Curve: Steepened due to loan expansion and stabilized economic data.
Credit Bonds: Yields declined, especially for short-end and high-rated bonds, with credit spreads narrowing.

Performance: Sales growth is expected to be two-digit in 2017 and 2018.
Key Products: Wang Lao Ji and Jia Duo Bao, with Wang Lao Ji surpassing Jia Duo Bao in market share.
Earnings Forecast: EPS of CNY 0.87 in 2016, CNY 1.07 in 2017, and CNY 1.26 in 2018, with PE ratios of 19.2x, 15.6x, and 13.3x respectively.
Chemical Drugs: Kingo is expected to reach CNY 500 million in sales, with a high net profit margin.
Patent Drugs: Suffered from healthcare expense control but show potential for growth.

IPO Details: Plans to issue 600 million new shares, raising CNY 3.95 billion.
Post-IPO Shares: Total shares outstanding will reach 10.14 billion.
Controlling Shareholder: China Galaxy Financial Holdings will remain the controlling shareholder, with Central Huijin Investment Ltd. as the de facto controller.
Performance: Ranked 6th in total assets, net assets, revenue, and profit in 2015; expected to grow in 2017 and 2018.
Valuation: Estimated reasonable price range is CNY 10.23–14.12 per share, with a potential price increase of 50.2%–107.3% from the initial offering price.

FY	2015A	2016E	2017E	2018E
Revenue (Mn/CNY)	262.60	139.49	151.51	174.93
YoY (%)	130.11%	-46.88%	8.61%	15.46%
Net Profit (Mn/CNY)	98.77	49.41	59.09	69.59
YoY (%)	160.60%	-49.97%	19.59%	17.77%

Bond Market: May face high downside risks due to deleveraging and weak fundamentals unless financial system strengthens or regulations tighten.
Brokerage Business: Risk of falling commission rates and capital market downturns.
Investment Strategy: Short-term trading is recommended due to potential market slumps and interest rate downturns.

Liquidity Expectations: Short-term rates have limited downside, and the yield curve remains flat.
Arbitrage Risk: If liquidity remains loose, financial arbitrage may rise, prompting PBOC to take measures.
Fundamental Factors: Manufacturing recovery may lead to more decisive impact on the bond market over time.

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