20171208-广发证券_香港_-Dim_Sum_Express_5页_511kb

Dim Sum Express Summary

Core Content Overview

This report provides an analysis of the Hong Kong market, focusing on key indices, ADRs (American Depositary Receipts), and specific sector and company updates. It includes insights into the regulatory environment, sales performance, and investment recommendations for various financial institutions and property developers.

Key Index Performance

Key Company Analysis

Hong Kong ADRs

Banking Sector

• Regulation Update: The CBRC issued new liquidity regulations for commercial banks, effective from Dec 6, 2017.
• Key Measures:
  • High-Quality Liquid Assets (HQLA) Adequacy Ratio: Must be at least 100% by the end of 2018, applicable to banks with assets under Rmb200bn (mainly rural commercial banks).
  • Liquidity Matching Ratio: Must be at least 100% by the end of 2019, applicable to all commercial banks.
  • NSFR (Net Stable Funding Ratio): Included in the regulation, effective from March 2018, applicable to banks with assets over Rmb200bn.
• Impact:
  • Short-term volatility: Expected for small to medium-sized banks due to increased borrowing and purchase of high-liquidity assets.
  • Capital needs: Increased reliance on tier-2 bonds, CBs, and medium-to-long-term deposits.
  • NIM (Net Interest Margin): Expected to improve steadily, with divergent sub-sector performance in 2018.
• Investment Recommendation: Maintain Positive rating on the Chinese banking sector, recommend banks with strong fundamentals such as China Merchants Bank (600036 CH/3968 HK), Bank of Ningbo (002142 CH), ICBC (601398 CH/1398 HK), and ABC (601288 CH/1288 HK).

Property Sector

• Country Garden (2007 HK):

  • 11M17 contract sales revenue rose 85% YoY to Rmb534bn.
  • GFA sold increased 66% YoY to 36m sqm.
  • Rating: Hold.
  • Target Price: HK$12.30.
  • Valuation: 2.7x 2017E NBV and 12.0x 2017E PE.
  • Concern: Focus on third and fourth-tier cities may be unsustainable.

• COLI (688 HK):

  • 11M17 contract sales revenue increased 6% YoY to HK$219bn.
  • GFA sold rose 33% YoY to 0.88m sqm.
  • Rating: Buy.
  • Target Price: HK$30.50.
  • Valuation: 1.0x 2017E NBV, considered relatively cheap compared to industry leaders.

• COGO (81 HK):

  • 11M17 contract sales revenue rose 57% YoY to HK$34bn.
  • GFA sold increased 27% YoY to 3.2m sqm.
  • Rating: Underperform.
  • Valuation: 14.4x 2018E P/E, 1.0x 2018E P/B.
  • Concern: Focus on third/fourth-tier cities and EPS dilution due to a proposed share issue.
  • Target Price: HK$3.80.

WuXi Biologics (2269 HK)

• New Facilities: 30,000L disposable bioreactor-based biologics commercial manufacturing facilities in Wuxi started operation, increasing capacity fivefold.
• Revenue Growth: Expected to support a revenue CAGR of 63% during 2017-19.
• Backlog: Reaches US$452m in 1H17, 37% of FY17-19 combined revenue.
• Valuation: High valuation burden of 66x FY18, compared to Samsung Biologics' 237x.
• Rating: Buy.
• Impact: The new capacity commencement should ease concerns about growth, though the stock is volatile.

Rating Definitions

Sector Ratings

Analyst Certification and Disclosure

• The analysts certify that their views accurately reflect their personal opinions and that no part of their remuneration is linked to specific recommendations.
• No proprietary trading or investment banking relationships with the companies mentioned in the past 12 months.
• No financial interests or ownership in the securities mentioned.

Disclaimer

• The report is for informational purposes only and does not constitute an offer to buy or sell securities.
• GF Securities (Hong Kong) accepts no liability for any loss arising from the use of the materials.
• Investment involves risks and past performance does not guarantee future results.
• The report may contain different views from other communications issued by GF Securities (Hong Kong).