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Weekly A-share Market Recommendations Summary

Core Content Overview

This document presents weekly stock recommendations from the Industrial Securities Research Institute, dated August 3, 2015. It highlights key companies across different sectors, providing EPS forecasts, investment ratings, and potential risks for each.

Top Stock Recommendations

Main Points and Key Information

China Southern Airlines (600029: SH)

• Sector: Aviation
• Rating: OUTPERFORM
• EPS Forecast: CNY 0.80 (2015), CNY 0.95 (2016)
• Key Factors: High demand for air transport due to tourism and relaxed fiscal policies. Strong earnings growth expected, with a lower base compared to peers.
• Potential Risks: Macroeconomic downturn, oil price increases, exchange rate depreciation, competition from high-speed trains.

Kingfa Sci & Tech (600143: SH)

• Sector: Chemical Engineering
• Rating: BUY
• EPS Forecast: CNY 0.36 (2015), CNY 0.46 (2016), CNY 0.60 (2017)
• Key Factors: Strong growth in modified plastics and new chemical materials. Expansion into biodegradable plastics and carbon fiber composites.
• Potential Risks: Slower-than-expected project progress, poor performance of new materials marketing.

Guoxing Rongda Real Estate (000838: SZ)

• Sector: Real Estate
• Rating: BUY
• EPS Forecast: CNY 0.60 (2015), CNY 0.75 (2016), CNY 0.86 (2017)
• Key Factors: Strong support from major shareholder, Chongqing Casin Group. High margin of safety with RNAV of CNY 10 per share.
• Potential Risks: Private placement implementation may not meet expectations.

Shandong Meichen Science & Technology (300237: SZ)

• Sector: Construction
• Rating: BUY
• EPS Forecast: CNY 0.72 (2015), CNY 1.18 (2016), CNY 1.57 (2017)
• Key Factors: Growth from auto parts and garden businesses. Strategic transformation into environmental protection.
• Potential Risks: M&A results may not meet expectations, new orders may be lower than expected.

Shenzhen Victor Onward Textile Industrial (000018: SZ)

• Sector: Conglomerates
• Rating: BUY
• EPS Forecast: CNY 0.88 (2015), CNY 1.40 (2016), CNY 1.84 (2017)
• Key Factors: Asset injection from Sino Great Wall International, expansion into overseas markets, and development of online sports platforms.
• Potential Risks: Overseas order fulfillment may not meet expectations, currency exchange losses.

Lander Real Estate (000558: SZ)

• Sector: Real Estate
• Rating: OUTPERFORM
• EPS Forecast: CNY 0.09 (2015), CNY 0.21 (2016), CNY 0.17 (2017)
• Key Factors: Expansion into sports industry, active transformation, and strong market cap.
• Potential Risks: Projects may progress slower than expected.

Macrolink Real Estate (000620: SZ)

• Sector: Real Estate
• Rating: BUY
• EPS Forecast: CNY 0.35 (2015), CNY 0.40 (2016), CNY 0.47 (2017)
• Key Factors: Strong land resources and cultural tourism transformation. Acquired stake in Hong Kong's JLF Investment.
• Potential Risks: Systematic risks in real estate industry.

Shanghai Ganglian E-Commerce Holdings (300226: SZ)

• Sector: Steel
• Rating: OUTPERFORM
• EPS Forecast: CNY 0.17 (2015), CNY 0.66 (2016), CNY 1.03 (2017)
• Key Factors: Undervalued in the steel e-commerce sector. Plans to expand e-commerce and supply chain finance.
• Potential Risks: Sharp steel price volatility, potential challenges in hydrogen energy industrialization.

Zhejiang Kaier New Materials (300234: SZ)

• Sector: Construction Material
• Rating: OUTPERFORM
• EPS Forecast: CNY 0.53 (2015), CNY 0.70 (2016), CNY 0.92 (2017)
• Key Factors: Key player in vitreous enamel cladding panel market. Expansion into energy-saving and environmental protection sectors.
• Potential Risks: Urban rail construction delays, poor marketing of new products.

Xiamen Tungsten (600549: SH)

• Sector: Non-ferrous Metal
• Rating: OUTPERFORM
• EPS Forecast: CNY 0.25 (2015), CNY 0.57 (2016), CNY 0.85 (2017)
• Key Factors: Expected to benefit from Tungsten price surge. Active in hydrogen energy and LNG sectors.
• Potential Risks: Tungsten and rare earth price volatility.

Zhangjiagang Furui Special Equipment (300228: SZ)

• Sector: SME Board
• Rating: BUY
• EPS Forecast: CNY 1.92 (2015), CNY 2.47 (2016), CNY 3.32 (2017)
• Key Factors: Growth in LNG marine fuel tanks and hydrogen storage. Development of industrial IOT and online transactions.
• Potential Risks: LNG may not be as economical as expected, higher AR and inventory levels, potential challenges in hydrogen material industrialization.

Guangdong Sky Dragon Printing Ink Group (300063: SZ)

• Sector: Media
• Rating: OUTPERFORM
• EPS Forecast: CNY 0.55 (2015), CNY 0.72 (2016), CNY 0.93 (2017)
• Key Factors: Transformation into digital marketing platform, strong growth potential through M&As.
• Potential Risks: Synergy issues from acquisitions, economic downturn affecting digital marketing.

Guangdong Dahuanong Animal Health Products (300186: SZ)

• Sector: Agriculture
• Rating: BUY
• EPS Forecast: CNY 1.93 (2015), CNY 3.31 (2016)
• Key Factors: Strong growth in poultry farming, low valuation, high margin of safety.
• Potential Risks: Pork price volatility.

China Union Holdings (000036: SZ)

• Sector: Real Estate
• Rating: BUY
• EPS Forecast: CNY 0.07 (2015), CNY 0.90 (2016), CNY 1.26 (2017)
• Key Factors: Strong stock price discount to RNAV, recent executive stock awards, and business transformation plans.
• Potential Risks: Slower sales rebound, project delays.

Tibet Tourism (600749: SH)

• Sector: Real Estate
• Rating: OUTPERFORM
• EPS Forecast: CNY 0.02 (2015), CNY 0.08 (2016), CNY 0.15 (2017)
• Key Factors: Growth in tourism, low valuation.
• Potential Risks: Uncertainty in macroeconomic conditions.