20170524-兴业证券-A-Share_Daily_Express_15页_665kb

报告摘要

Summary of Industrial Securities Co., Ltd. Report

Core Content

This report provides a comprehensive overview of the Chinese financial and stock market situation as of May 23-24, 2017, including key market indices, sector performance, company news, and investment strategies. It also includes insights on the macroeconomic environment and fixed income market analysis.

Main Market Indices and Performance

SSE Composite Index: Closed at 3064.08, up 0.07%.
SZSE Component Index: Closed at 9812.46, up 0.50%.
ChiNext Index: Closed at 1776.28, up 1.03%.
HSI (Hang Seng Index): Closed at 25418.84, up 0.06%.
HSCEI (Hang Seng China Enterprises Index): Closed at 10390.63, down 0.04%.
Total Market Volume: CNY 342.34 billion (USD 60.98 billion), a 19% drop from the previous day.
Market Sentiment: Despite support around the 3000 level, trade volume contraction suggests weak sentiment. Small-cap tech stocks led the rebound, while large-cap stocks faced profit-taking pressure.

Sector Performance

Winners:

Xiong An concept names: Strong performance, with Tianjin Tianbao Infrastructure Co., Ltd. (000965) up 10.01% and Beijing Qianjing Landscape Co., Ltd. (603778) up 7.68%.
OLED manufacturers: Boosted by Apple’s deal with Samsung for OLED screens, with Irico Display Devices Co., Ltd. (600707) and Puyang Huicheng Electronic Material Co., Ltd. (300481) both up over 10%.
Guangdong-Hong Kong-Macao bay concept names: Rebounded after a few days of decline, with Zhuhai Port Co., Ltd. (000507) up 9.60% and Shenzhen Yan Tian Port Holdings Co., Ltd. (000088) up 5.47%.

Losers:

Insurers: Faced profit-taking pressure, with China Life Insurance Company Limited (601628) down 1.72% and New China Life Insurance Company Ltd. (601336) down 1.24%.
Liquor Makers: Weak performance, with Shanxi Xinghuacun Fen Wine Factory Co., Ltd. (600809) down 2.45% and Jiugui Liquor Co., Ltd. (000799) down 2.16%.

Daily Headlines

Moody’s Debt Rating Cut: China's debt rating was downgraded to A1 from Aa3, signaling concerns over financial strength.
International Cooperation: China, Canada, and the EU are advancing the Paris Agreement, while the U.S. under Trump is still deciding on its participation.
Regulatory Actions: Assistant Chairman of China Banking Regulatory Commission Yang Jiacai is under investigation. De-leveraging efforts and tighter supervision continue.
Foreign Investment Policy: China eased foreign investment thresholds, as reported by CCTV.
OTC Derivatives Market: PBOC emphasized the need to prevent systemic risks.
Company Mergers: Sinochem's chief Ning Gaoning may lead the company if a merger with ChemChina is approved.

Investment Recommendations

Fixed Income Insight

Investment Strategy: Investors with high tolerance for bond price volatility and stable liabilities should consider higher-yield, higher-rated assets.
Market Liquidity: Tightened in May due to deleveraging and financial regulation, but eased slightly with increased liquidity injections.
Bond Market Trends: Bond yields increased, with a flatter curve for CDB bonds and a steeper curve for treasuries. Bond Connect Scheme is expected to attract foreign investment.

Social Service - Life Plus Medical Cosmetology Model

New Business Model: Integrated 'Life Cosmetology (LC) plus Medical Cosmetology (MC)' model is expected to be a future trend.
Key Players: Guangdong CHJ Industry (002345.SZ) indirectly owns 26% of Declear, which operates 150 LC stores and 7 MC institutions.
Potential Benefits: Unified pricing, training, and profit center for LC and MC services. The model aims to improve customer loyalty and reduce acquisition costs.
Market Size: China's beauty market is CNY 709 billion, with the home beauty care market at CNY 74 billion.
Risks: Compliance issues and changing consumption trends in the MC and LC industry.

Inner Mongolia Yili (600887.SH) - Buy (Maintained)

EPS Forecast: CNY 1.02 for 2017, indicating 10% earnings growth.
P/E Ratio: 18x, lower than peers like Moutai (25x), Haitian Flavouring and Food (30x), and Mengniu Dairy (22x).
Revenue Growth: Steady recovery in the dairy industry, with Yili's Q117 revenue growth at nearly 7%.
Cost Management: Yili's COGS decreased by 4 points in Q117, showing improved efficiency.
Future Outlook: Strong fundamentals and potential for valuation upswing. Yili may acquire Stonyfield, an organic yogurt supplier in North America, for USD 850 million.

Market Strategy

Deleveraging Impact: Financial products' deleveraging has reduced liquidity and affected market dynamics.
Investor Caution: Investors should remain cautious due to economic slowdown and liquidity risks.
Asset Management: Companies with unstable liabilities are more vulnerable to deleveraging.
Institutional Investors: Need to stay patient and monitor regulatory and economic changes closely.

Key Companies and Events

Anhui Jianghuai Automobile Group (600418.SH): Approved a joint venture with Volkswagen China to produce electric vehicles.
Anhui Guangxin (603599 CH): Private share sale approved by CSRC.
Banbao (603398 CH): Shares to resume trading in Shanghai on May 24.
Cwen (002343 CH): A-shares private placement approved.
Dayu Water-Saving (300021 CH): Signed pact with Fuyang govt for 6b yuan projects.
Qingdao Doublestar (000599 CH): Private share sale approved by CSRC.
Wolong Real Estate (600173 CH): Shares to resume trading on May 24.

Conclusion

The Chinese stock market experienced a rebound following a decline triggered by Moody’s debt rating cut, with small-cap tech stocks leading the recovery. However, market sentiment remains weak due to declining trade volume. The fixed income market saw increased bond supply and liquidity challenges, with yields rising. The 'Life Plus Medical Cosmetology' model is gaining traction as a future trend in the social service sector, offering potential growth opportunities. Inner Mongolia Yili is recommended as a 'Buy' due to strong fundamentals and a favorable valuation. Investors are advised to focus on risk control and monitor the ongoing deleveraging and regulatory changes.

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