20140904-招商证券_香港_-Morning_Express_12页_512kb

Hong Kong Stock Market Strategy Bi-weekly Summary

Core Content

This document provides a bi-weekly stock market strategy for the Hong Kong market, focusing on the performance of the market and specific sector recommendations. It highlights the shift in market dynamics from August to September and outlines key economic indicators and stock recommendations for various sectors.

Main Views and Key Information

Market Outlook

• Market Peak: The market is expected to peak around September.
• Cautious Approach: The strategy now turns cautious due to waning upward momentum and the market reaching its peak.
• Risk Tilt: The risk is now more tilted towards the downside, prompting a shift to a more defensive approach.
• Recommendation: Investors are advised to take profits on rallies in September and adopt a defensive strategy.

Sector Analysis

Environmental Protection

• Performance: The sector underperformed the market in the latest week, with a decline of 2.24%.
• Key Companies:
  • Dongjiang Environmental (002672 CH): Announced an external investment in a micro finance company, potentially generating a net profit of RMB30-36mn if it achieves a return on net assets of 10-12%.
  • Recommended Companies:
    • Originwater Techno (300070 CH)
    • Qinling Cement (600217 CH)
    • Sound Environmental
    • Dongjiang Environmental
    • Waste water treatment and water-saving companies that can benefit from new policies.

Technology, Media & Telecom

• Key Companies:
  • Kingsoft (3888 HK): Rated BUY, with a 70% upside potential.
  • Wisdom (1661 HK): Rated BUY, with a 34% upside potential.
  • NetDragon (777 HK): Rated BUY, with a 34% upside potential.
  • Tencent (700 HK): Rated BUY, with an 18% upside potential.

Pharmaceutical & Healthcare

• Key Companies:
  • Phoenix Healthcare (1515 HK): Rated BUY, with a 34% upside potential.
  • CSPC Pharmaceutical (1093 HK): Rated BUY, with a 19% upside potential.
  • Sihuan Pharmaceutical (460 HK): Rated BUY, with a 1% upside potential.
  • Dawnrays Pharmaceutical (2348 HK): Rated BUY, with a 29% upside potential.
  • Essex Bio-Technology (1061 HK): Rated BUY, with an 18% upside potential.

Auto & Auto Parts

• Key Companies:
  • Brilliance China (1114 HK): Rated BUY, with a -14% upside potential.
  • BYD Company (1211 HK): Rated NEUTRAL, with a -42% upside potential.
  • China ZhengTong Auto (1728 HK): Rated BUY, with a 39% upside potential.
  • Geely Automobile (175 HK): Rated BUY, with a 69% upside potential.
  • CSR (1766 HK): Rated BUY, with a 13% upside potential.
  • Great Wall Motor (2333 HK): Rated BUY, with a 31% upside potential.
  • CSR Times Electric (3898 HK): Rated BUY, with a 15% upside potential.
  • Minth Group (425 HK): Rated BUY, with a -20% upside potential.
  • Dongfeng Motor (489 HK): Rated BUY, with a -3% upside potential.
  • Zhongsheng Group (881 HK): Rated NEUTRAL, with a 23% upside potential.

Oil and Gas

• Key Companies:
  • SPT Energy (1251 HK): Rated BUY, with a 59% upside potential.
  • Hilong Holding (1623 HK): Rated BUY, with a 26% upside potential.
  • Chu Kong Petroleum (1938 HK): Rated BUY, with a 22% upside potential.
  • China Oilfield Services (2883 HK): Rated NEUTRAL, with a -10% upside potential.
  • Jutal Offshore Oil Services (3303 HK): Rated NEUTRAL, with a -40% upside potential.
  • Anton Oilfield Services (3337 HK): Rated BUY, with a 62% upside potential.
  • NewOcean Energy (342 HK): Rated BUY, with a 130% upside potential.
  • Sinopec (386 HK): Rated NEUTRAL, with a 7% upside potential.
  • CIMC Enric (3899 HK): Rated NEUTRAL, with a 60% upside potential.

Property

• Key Companies:
  • China Resources Land (1109 HK): Rated NEUTRAL, with an -8% upside potential.
  • Colour Life Group (1778 HK): Rated BUY, with a -14% upside potential.
  • Sunac China (1918 HK): Rated BUY, with a 9% upside potential.
  • Evergrande Real Estate (3333 HK): Rated BUY, with a 34% upside potential.

Consumption

• Key Companies:
  • Mengniu Dairy (2319 HK): Rated BUY, with a 32% upside potential.
  • Yurun Food (1068 HK): Rated BUY, with a 32% upside potential.
  • China Dongxiang (3818 HK): Rated BUY, with a -5% upside potential.

Retail

• Key Companies:
  • Haier Electronics (1169 HK): Rated BUY, with a 9% upside potential.
  • Intime Retail Group (1833 HK): Rated BUY, with a 17% upside potential.
  • GOME ELECTRICAL (493 HK): Rated BUY, with a 29% upside potential.

Alternative Energy

• Key Companies:
  • China Wind Power (182 HK): Rated BUY, with a 49% upside potential.
  • Xinjiang Goldwind (2208 HK): Rated BUY, with an -8% upside potential.
  • GCL-Poly Energy (3800 HK): Rated BUY, with a 2% upside potential.
  • Singyes Solar (750 HK): Rated BUY, with an 11% upside potential.
  • Tianneng Power (819 HK): Rated BUY, with a 134% upside potential.
  • China Longyuan Power (916 HK): Rated BUY, with a 13% upside potential.
  • Huaneng Renewables (958 HK): Rated BUY, with an 8% upside potential.

Economic Data Highlights

• Germany:
  • Factory Orders MoM: Expected to be -1.76% on September 4.
• Eurozone:
  • ECB Interest Rate Decision: Forecast to be 0%.
• U.S.:
  • Challenger Job Cuts: Forecast to be 39.6K.
  • Balance of Trade: Forecast to be $-42.1B.
  • Continuing Jobless Claims: Forecast to be 2455K.
  • Average Hourly Earnings: Forecast to be 0.17% on September 5.
  • Unemployment Rate: Forecast to be 6.10% on September 5.

Summary

The Hong Kong stock market strategy is shifting to a more cautious and defensive stance as the market is expected to peak in September. The previous rally in August was driven by different factors compared to July, with a focus on results and M&A news. The weak August data and lack of economic recovery signals suggest a potential downturn. Investors are advised to take profits and shift towards growth and defensive sectors, such as pharmaceuticals, internet, and policy beneficiaries. The report also includes detailed recommendations for various sectors, highlighting specific stocks with their ratings, price targets, and upside potential. Economic data from Germany, Eurozone, and the U.S. is also provided for reference.