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Weekly A-share Market Recommendations Summary

Core Content Overview

This document provides weekly stock recommendations from the Industrial Securities Research Institute for May 2, 2017, focusing on key companies across different sectors. It includes EPS forecasts, investment highlights, and potential risks for each listed company, alongside market data and analyst certifications.

Top Stock Recommendations

Main Sectors and Companies

1. Agriculture

• Yuan Longping High-tech Agriculture (000998:SZ)
  • Rating: STRONG BUY
  • EPS Forecast: 2016: 0.48, 2017: 0.62, 2018: 0.84
  • Investment Highlights:
    • New product launches boost earnings.
    • Current valuation is at a historical low.
  • Potential Risks:
    • Weather uncertainty.
    • Grain price fluctuations.

2. Transportation

• COSCO Shipping Holdings (601919:SH)
  • Rating: BUY
  • EPS Forecast: 2016: -0.97, 2017: 0.36, 2018: 0.47
  • Investment Highlights:
    • Container transportation industry is recovering.
    • Inventory replenishment supports export growth.
    • Fourth largest container transporter.
  • Potential Risks:
    • Sluggish market demand.
    • Fewer ships in operation.
    • Vicious competition.
    • Rising trade protectionism.
    • Oil price increases.

3. Pharmaceutical

• Huadong Medicine (000963:SZ)
  • Rating: STRONG BUY
  • EPS Forecast: 2016: 2.86, 2017: 3.53, 2018: 4.28
  • Investment Highlights:
    • Leading manufacturer of endocrine drugs and immunosuppressors.
    • Competitive product mix and strong sales force.
    • Fast-paced business growth.
  • Potential Risks:
    • Lower-than-expected product sales.
    • Slower-than-expected R&D progress for new products.

4. Electric Equipment

• Eve Energy (300014:SZ)

  • Rating: BUY
  • EPS Forecast: 2016: 0.86, 2017: 1.61, 2018: 2.62
  • Investment Highlights:
    • Strong demand for traditional clients.
    • Expansion of power battery and electronic cigarette businesses.
    • Fundraising for lightweight projects expected to boost growth.
  • Potential Risks:
    • Sales slowdown.
    • Higher-than-expected losses from German subsidiary.

• Wanhua Chemical Group (600309:SH)

  • Rating: BUY
  • EPS Forecast: 2016: 1.49, 2017: 1.88, 2018: 2.35
  • Investment Highlights:
    • Strong performance in overseas EPC projects.
    • Expansion into new business divisions.
    • Plans to become a top chemical materials company.
  • Potential Risks:
    • Overseas revenue recognition risks.

• TBEA (600089:SH)

  • Rating: BUY
  • EPS Forecast: 2016: 0.64, 2017: 0.76, 2018: 0.98
  • Investment Highlights:
    • Strong performance in overseas EPC projects.
    • Expansion into new business divisions.
    • Plans to become a top chemical materials company.
  • Potential Risks:
    • Overseas revenue recognition risks.

5. Chemical Raw Materials

• Wanhua Chemical Group (600309:SH)
  • Rating: BUY
  • EPS Forecast: 2016: 1.49, 2017: 1.88, 2018: 2.35
  • Investment Highlights:
    • Steady progress in overseas EPC projects.
    • Expansion into polyether, surface materials, ADI, and specialty amines.
    • Strong cash reserves.
  • Potential Risks:
    • Overseas business revenue recognition issues.

6. Construction

• China National Chemical Engineering (601117:SZ)
  • Rating: BUY
  • EPS Forecast: 2016: 0.44, 2017: 0.55, 2018: 0.68
  • Investment Highlights:
    • Recovery in main business.
    • Strong overseas order growth.
    • Improved fundamentals.
  • Potential Risks:
    • Sluggish macroeconomic growth.
    • Overseas market risks.
    • Slow project progress.

7. Fertilizer

• Shandong Hualu Hengsheng Chemical (600426:SH)
  • Rating: BUY
  • EPS Forecast: 2016: 0.70, 2017: 0.88, 2018: 1.22
  • Investment Highlights:
    • Steady organic growth.
    • Profitable downstream products.
    • Expansion of ethylene glycol project.
  • Potential Risks:
    • Downstream demand slowdown.
    • Raw material price fluctuations.

8. Non-ferrous Metal

• Yintai Resources (000975:SZ)
  • Rating: BUY
  • EPS Forecast: 2015: 0.30, 2016: 0.47, 2017: 0.56
  • Investment Highlights:
    • Acquired high-quality gold mines.
    • Expansion of big shaft project.
    • Expected production capacity increase.
  • Potential Risks:
    • Sharp volatility in lead and zinc prices.
    • Sharp fluctuations in silver prices.
    • Slower-than-expected M&A progress.

Key Information

• Market Data: Includes closing prices, total shares, shares outstanding, market cap, market float, net assets, total assets, and BVPS.
• EPS Forecasts: Provided for 2016, 2017, and 2018 for each company.
• Ratings: Companies are rated as either BUY or STRONG BUY.
• Inclusion Dates: Indicates when the recommendation was first included in the list.
• Potential Risks: Each recommendation includes identified risks for the respective company.

Analyst Certification

• The report is issued by Industrial Securities Research Institute.
• Analysts are certified as Securities Analysts and have fulfilled their duty of disclosure.
• The report is based on legitimate and public information.

Disclaimer

• The report is for internal clients only.
• The views in the report may change and are not guaranteed.
• The report is not an invitation to buy or sell securities.
• Investment decisions should be made independently and with due diligence.
• The Company reserves all rights to the report and prohibits unauthorized redistribution.