20151104-新鸿基金融集团-INVESTMENT_DAILY_NOTE_13页_2mb

Investment Daily Note Summary

Core Content

This document provides an overview of the Hong Kong and global financial markets, focusing on stock performance, sector trends, valuation metrics, and key economic indicators. It includes detailed information on the Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI), highlights specific stocks with investment focus, and outlines the top-performing and underperforming stocks from the previous day. It also includes insights on interest rates, exchange rates, and commodities, as well as the A-share premium to H-share for major listed companies.

Main Points

1. Market Highlights

• Xinhua News Agency released guidelines from the Chinese President for the 13th Five-Year Plan, including a minimum annual economic growth rate of 6.5% and emphasis on environmental protection and other reforms.
• Standard Chartered (2888.HK) announced a 2-for-7 rights issue and a global layoff, leading to a sharp drop in its share price. The target price was revised to HK$97, with a stop-loss at HK$67.
• HSI and HSCEI showed weak performance, with HSI closing at 22,568 and HSCEI at 10,283. The market turnover for HSI was HK$21.3bn, and for HSCEI HK$12.2bn.

2. Stock in Focus: DYNAGREE NENVI-H (1330.HK)

• Last Close: HK$4.41
• Entry Price: HK$4.30
• Target Price: HK$4.70
• Stop-loss Price: HK$4.00
• YTD/1M/3M/12M % Change: -4.5% / 8.1% / -9.6% / -17.6%
• Market Cap: HK$4.61bn
• 3M Average Daily Volume: 1.45mn shares
• FY1 Forward P/E: 16.6x
• Reason for Investment: Favorable valuation and potential growth from environmental protection initiatives in the 13th Five-Year Plan.

3. Today's Top Picks

• NetDragon (777.HK): Target price HK$24.30, stop-loss at HK$21.00. Expected to rise above 100-day MA due to the acquisition of Prometheus.
• China OVS PPT (2669.HK): Target price HK$1.61, stop-loss at HK$1.38. A leading property management company with strong fundamentals.
• The selections are based on daily market updates, price movement, technical analysis, and corporate news.

4. Sector Performance

• Top Performing Sectors: Gaming (3.4%), Heavy Machinery (1.9%), Sports Accessories (1.9%), Chinese Property (1.8%), Durable Consumables (1.8%), Technology (1.7%), Telecoms Equipment (1.7%), and Agriculture (1.7%).
• Key Stocks: Galaxy Ent. (27), SJM Hldg (880), Wynn Macau (1128), Sands China (1928), and others in each sector.

5. Forward P/E and Valuations of Major Indices

• HSI: FY15E P/E 11.3x, long-term average 11.3x, deviation from average 0.5%, FY1 EPS growth -13.6%, FY2 EPS growth 6.3%.
• HSCEI: FY15E P/E 7.6x, long-term average 8.5x, deviation from average -10.4%, FY1 EPS growth -0.6%, FY2 EPS growth 4.8%.
• Shanghai Composite: FY15E P/E 14.1x, long-term average 11.0x, deviation from average 28.1%, FY1 EPS growth 22.8%, FY2 EPS growth 10.8%.
• S&P 500: FY15E P/E 17.8x, long-term average 14.7x, deviation from average 20.6%, FY1 EPS growth 6.0%, FY2 EPS growth 9.1%.

6. Market Data

• Best Performers: China Harmony AU (3836.HK), OZNER Water (2014.HK), Sinotrans Ltd-H (598.HK), TVB (511.HK), BOYAA Interactive (434.HK).
• Worst Performers: Livzon Pharma-H (1513.HK), Wuzhou International (1369.HK), Consun Pharmaceutical (1681.HK), Huaneng Renewable-H (958.HK), China Precious M (1194.HK).
• HSCI Volume Filter: Stocks like Livzon Pharma-H (1513.HK) and others showed significant volume increases, indicating potential interest.
• Most Short Sold Stocks: TSINGTAO BREW-H (168.HK), ASM PACIFIC (522.HK), and others with high short-sell turnover.

7. Interest Rates and Exchange Rates

• Interest Rates: U.S. 2-year Treasury yield at 0.7616%, 10-year at 2.2015%, and 30-year at 2.9839%.
• Exchange Rates: USD/HKD at 7.7505, USD/CNY at 6.3359, and others showed varied movements.
• Precious Metals and Commodities: Comex Gold at US$1,121.0, Comex Silver at US$15.280, and others had mixed performance.

8. A-share Premium to H-share

• Key Companies: CMOC-H, PETROCHINA-H, CRRC CORP LTD -H, etc., with significant premiums ranging from 30% to over 400%.
• Examples: CMOC-H has a 950.3% premium, while China Southern-H (1055.HK) has a 46.5% premium.

9. Top 20 Most Traded ETFs

• Includes ETFs like iShares FTSE A50 (2823), HS H-Share ETF-H (2828), CSOP FTSE CH-HKD (2822), and BMO Asia USS ETF (3141).
• These ETFs show varied performance with changes in price and volume.

Key Information

• The 13th Five-Year Plan emphasizes environmental protection and reforms, influencing investment in related sectors.
• Standard Chartered faces challenges due to a rights issue and revised strategy, leading to a lower target price.
• Dynagreen Environmental Protection (1330.HK) is highlighted for its favorable valuation and potential growth.
• NetDragon (777.HK) and China OVS PPT (2669.HK) are recommended for their expected price increases.
• The HSI and HSCEI showed mixed performance, with the Hang Seng Index slightly up and the Hang Seng China Enterprises Index down.
• Sector performance varied, with Gaming and Agriculture leading the gains.
• Market data indicates a range of price movements, with some stocks experiencing sharp declines.
• Interest rates and exchange rates show different trends, affecting investment decisions.
• Precious metals and commodities had mixed results, with gold prices down due to Fed rate hike speculation.
• A-share premiums highlight the difference in valuation between A-shares and H-shares, indicating potential investment opportunities.

Conclusion

This daily note provides a comprehensive overview of the current market conditions, key investment opportunities, and insights into the performance of major indices and sectors. Investors are advised to consider stocks in sectors aligned with government initiatives and those with favorable valuations, while being cautious of those with high short-selling activity and declining trends.