20160510-兴业证券-A-Share_Daily_Express_13页_834kb

报告摘要

Summary of Industrial Securities Co., Ltd. Report

Core Content

This report provides an overview of the performance of China's A-share market and highlights key financial data and investment recommendations for specific companies, particularly Xiamen Tungsten Co., Ltd. and Anhui Conch Cement Co., Ltd. It also includes market analysis, sector performance, and macroeconomic indicators for the period ending April 28, 2016.

Market Performance

SSE Composite Index: Closed at 2832.11, down 2.79%.
SZSE Component Index: Closed at 9790.48, down 3.07%.
ChiNext Index: Closed at 2053.60, down 3.55%.
HSI (Hang Seng Index): Closed at 20156.81, up 0.23%.
HSCEI (Hang Seng China Enterprises Index): Closed at 8450.72, down 0.25%.
Aggregate Market Volume: CNY 500 billion, down 24% from the previous day.
Market Sentiment: Investors are cautious, with more selling activity and concerns over liquidity and economic growth.

Sector Review

Commodities: Coal, steel, and nonferrous metal prices retreated after a surge in April.
Construction Materials: Underperformed the market, with companies like Xinjiang Guotong Pipeline Co. and Jiangsu Xiuqiang Glasswork Co. falling by 10%.
Small-cap Tech: Faced pressure, with Beijing Hanbang Technology Corp. and Netac Technology Co. declining by 10%.
Banks: Relatively stronger, with Bank Of Nanjing Co. and Bank Of Beijing Co. showing slight gains.

Daily Headlines

China's Exports: Stabilized in April, with a trade surplus of $45.6 billion.
Foreign Exchange Reserves: Increased by $7.089 billion to $3.22 trillion in April.
MSCI Review: Expected to influence investor expectations in June.
A-share Inclusion in MSCI: The CSRC indicated that A-share indexes are on the way to be included in MSCI.
Government Policy: Considered measures to limit drug prices and implement prudent monetary policy.
Corporate News: Highlights include Xiamen Tungsten's financial results, Citic Securities' profit, and HNA-Caissa's private sale.

Investment Strategy

Focus: Sound fundamentals, strong growth potential, and new thematic investment opportunities.
Recommended Industries:
- Booming industries: Chemical industry, construction materials, light manufacture, optical communication, and private communication network.
- Growth stocks: Companies with core competence in intelligent manufacturing and modern service industry.
- Low PE, high turnover rate, and strong fundamentals: Food & beverage, home appliances, and home furnishing companies.
Thematic Opportunities:
- Sports: Event operation and marketing, lottery.
- New energy and smart vehicles: ADAS, ASP lithium battery.
- Smart logistic: Automatic logistics equipment, logistic information system, information integration system.
- Education: Preschool education, vocational education, overseas study.

Company Analysis: Xiamen Tungsten Co., Ltd.

Financial Performance:
- Revenue for 2015: CNY 775.48 billion, down 23.5% YoY.
- Net profit for 2015: CNY -662 million, down 250.2% YoY.
- In 16Q1: Revenue of CNY 1.48 billion, up 3.2% YoY; net profit of CNY 20.68 million, down 17.5%.
Key Financial Indicators:
- Revenue: Expected to increase to CNY 10.28 billion in 2016, CNY 12.45 billion in 2017, and CNY 14.15 billion in 2018.
- Net Profit: Expected to reach CNY 271 million in 2016, CNY 424 million in 2017, and CNY 632 million in 2018.
- Gross Margin: Increased to 18.99% in 16Q1, up 6.97 percentage points from 15Q4.
Business Development:
- Tungsten and rare earth product prices rebounded, leading to improved gross profit margins.
- The company has obtained rare earth mining permits in Fujian and is focusing on resource integration.
- Sales of rare earth oxides and magnet materials increased significantly.
- The company is expected to benefit from the recovery of tungsten, molybdenum, and rare earth prices.
Investment Rating: OUTPERFORM.
Potential Risks:
- Sharp volatility in tungsten, molybdenum, and rare earth prices.
- Slower-than-expected development of hard alloy business.

Company Analysis: Anhui Conch Cement Co., Ltd.

Financial Performance:
- Revenue for 2016: CNY 10.6 billion, down 5.54% YoY.
- Net profit attributable to the parent company: CNY 1.16 billion, down 32.6% YoY.
- Earnings per share: CNY 0.22.
Investment Recommendations:
- The cement business climate is improving, with valuations still at low levels.
- The property market in second- and third-tier cities is recovering.
- The company is expected to benefit from the demand increase in the cement industry.
EPS Forecast:
- 2016E: CNY 1.55
- 2017E: CNY 1.68
- 2018E: CNY 1.77
Investment Rating: BUY.
Industry Outlook:
- Supply-side reforms are expected to accelerate M&A in the cement industry.
- Companies with strong cash flows and low indebtedness will be the first beneficiaries.

Analysts and Translators

Analysts:
- WANG Delun, ZHANG Yidong, WU Feng, LI Yanlin, WENG Tian, ZHOU Lin, ZHANG Qiyao, HAN Yijia
Translators:
- LI Xing

Key Data

Closing Price: CNY 22.24
Total Shares (Mn): 1081.57
Shares Outstanding (Mn): 886.57
Market Cap (CNY/Mn): 24054.21
Market Float (CNY/Mn): 19717.41
Net Assets (CNY/Mn): 6635.62
Total Assets (CNY/Mn): 15987.14
BVPS: CNY 6.14

Balance Sheet

Current Assets:
- 2015: CNY 7648 Mn
- 2016E: CNY 9481 Mn
- 2017E: CNY 10871 Mn
- 2018E: CNY 11953 Mn
Non-current Assets:
- 2015: CNY 8339 Mn
- 2016E: CNY 8637 Mn
- 2017E: CNY 8560 Mn
- 2018E: CNY 8050 Mn
Total Assets:
- 2015: CNY 15987 Mn
- 2016E: CNY 18117 Mn
- 2017E: CNY 19431 Mn
- 2018E: CNY 20003 Mn
Share Capital:
- 2015: CNY 1082 Mn
- 2016E: CNY 1082 Mn
- 2017E: CNY 1082 Mn
- 2018E: CNY 1082 Mn
Total Shareholders' Equity:
- 2015: CNY 8235 Mn
- 2016E: CNY 8681 Mn
- 2017E: CNY 9326 Mn
- 2018E: CNY 10280 Mn

Cash Flow Statement

Net Profit:
- 2015: CNY -662 Mn
- 2016E: CNY 271 Mn
- 2017E: CNY 424 Mn
- 2018E: CNY 632 Mn
Net Change in Cash:
- 2015: CNY -610 Mn
- 2016E: CNY 218 Mn
- 2017E: CNY -73 Mn
- 2018E: CNY 24 Mn

Income Statement

Operating Income:
- 2015: CNY 7755 Mn
- 2016E: CNY 10278 Mn
- 2017E: CNY 12454 Mn
- 2018E: CNY 14145 Mn
Operating Expense:
- 2015: CNY 6459 Mn
- 2016E: CNY 8138 Mn
- 2017E: CNY 9633 Mn
- 2018E: CNY 10734 Mn