20180718-中国银河国际证券-China_Galaxy_A-Share_Morning_Comments_3页_304kb

报告摘要

China Galaxy A-Share Morning Comments Summary (July 18, 2018)

Core Content

The China A-share market experienced a mixed performance on July 18, 2018. The main board indices, particularly the SHCOMP, declined significantly, falling below the 2,800 level and losing over 1% in the afternoon. In contrast, the ChiNext index showed resilience, even turning positive, driven by the environmental protection and media sectors. The overall market sentiment remained cautious, as reflected by low trading volumes following the SHCOMP rebound.

Key Market Observations

Main Board Indices (SHCOMP):
- Closed at 2,798.1 points.
- Declined by 15.9 points or -0.57%.
ChiNext Index:
- Closed at 1,621.6 points.
- Rose by 4.7 points or +0.29%.
Sector Performance:
- Oil & Gas: Suffered a correction due to a drop in international oil prices. China Petroleum & Chemical (600028.CH) and PetroChina (601857.CH) dropped over 2%.
- Financials: Sluggish performance dragged the SHCOMP below its 5-day moving average.
- Technology, Environmental Protection, and Media: Gained momentum and climbed higher, indicating some optimism.
Market Momentum:
- Weak momentum observed in the main board, with only limited bargain hunting activity.
- The market is expected to consolidate further due to the lack of strong buying pressure.

Investment Recommendations

Transportation Sector

Policy Context: China is promoting ecological and cultural compliant construction and developing an environmental-friendly transportation system.
Recommendations:
- Daqin Railway (601006.CH): Recommended for capturing investment opportunities from the "road to rail" shift.
- Green Freight Logistics: Suggested focus on companies like Jiayou International Logistics (603871.CH), Beijing Changjiu Logistics (603569.CH), BYD Co (002594.CH), Transfar Zhilian Co (002010.CH), Guangdong Great River Smarter Logistics (002930.CH), and Shanghai International Port (600018.CH).

Auto Sector

Outlook: Auto sector is expected to underperform in 2018 due to slower growth in June.
Recommendation:
- SAIC Motor (600104.CH): Maintained a "Buy" recommendation due to its expanding market share, strong reserves, and growth potential.

Perfect World

Company Highlights:
- Announced share buyback plans, indicating management confidence.
- Launched several well-received games in 2018.
- Its TV programme "The Way We Were" ranked second in online video views.
Earnings Outlook:
- Estimated 2018-20E net profits at RMB1.9bn, RMB2.37bn, and RMB2.89bn, respectively.
- YoY growth projections: 26.6%, 24.4%, and 22.0%.
- PER: 20x, 16x, and 13x.
Rating: Maintain "RECOMMEND".

Recent Research Reports

Strategy H2 2018 Outlook: Focus on stocks with attractive value and growth potential amid market reshaping.
Healthcare: Recommend sub-segment leaders with low valuations and strong growth.
Media H2 2018 Outlook: Content is the key growth driver in the post-traffic era.
Quantitative Analysis: Exposure increased amid market declines.
Bonds: RRR cut to ease liquidity risks; tight global liquidity to limit rate downside.
TMT: Sino-US trade conflicts may have limited impact.
Property: Sales volume and value expected to rise as de-inventory efforts show effect.
Non-Bank Financials: CDR details announced; 10 brokers appointed for domestic listing of innovative companies.
Military & Defence: Caution advised due to sector correction risks.
Consumer Upgrade: Positive outlook for the consumer sector due to policy support and demand.

Disclaimer and Risk Statement

The document is issued by China Galaxy International Securities (Hong Kong) Co., Ltd. for institutional clients.
Information is based on reliable sources but not guaranteed for accuracy or completeness.
The analysis does not consider individual client investment objectives, financial situations, or risk tolerance.
Past performance is not indicative of future results.
No personal investment recommendations are made.

Disclosure of Interests

China Galaxy International may have financial interests in the companies mentioned, potentially equal to or exceeding 1% of their market capitalization.
Directors, officers, and employees may have roles in the companies or related entities.
The firm may engage in financing transactions, provide services, or hold positions in the securities of the mentioned companies.
Possible compensation from the companies for investment banking services in the preceding 12 months.