20180911-广发证券_香港_-Dim_Sum_Express_4页_466kb

Dim Sum Express Summary

Key Index Performance

Core Content:
The document presents a summary of equity research from September 11, 2018, focusing on key index performances and the impact of macroeconomic conditions on the Chinese market.

Main Points:

• Market Trends: Most indices showed negative performance over the short to medium term, with SHCOMP and SZCOMP experiencing significant declines. However, some indices like SPX and CCMP showed positive growth.
• Earnings and P/E: Earnings growth for the majority of indices was strong, but P/E ratios were mixed. For example, SHCOMP had a high 18E EPS growth but a relatively low P/E ratio.
• Sectoral Divergence: During quasi-stagflation, mid/upstream and cyclical industries may see a slowdown in earnings growth, while consumer staples like food and beverage may show stronger profit growth.
• Trade War Impact: The Sino-US trade war is expected to lead to supply-side shocks, increasing import prices and affecting output.

Hong Kong ADRs

Key Information:

• ADRs (American Depositary Receipts) for major Hong Kong-listed companies show mixed performance, with some experiencing significant declines.
• The performance of ADRs is often different from local stock prices, as seen in the case of TENCENT and ICBC, where ADRs declined more sharply than local shares.

Investment Strategy: Rebounds Weakening

• The Shanghai Composite has fallen below 2,700 multiple times since July, indicating market instability.
• Rebounds have been short-lived, with only the defense sector initially driving the recovery.
• The market is likely to continue dipping, with a potential drop below 2,638.
• Trade frictions remain a key factor affecting market performance.
• Historical data suggests the market tends to be weak in September, with small and mid-cap stocks performing better.
• A rebound is often seen after the National Holiday.

Media Sector Analysis

• The media sector is currently trading at a TTM P/E of 23.6x, with some subsectors at four-year lows.
• High-quality leaders in the media sector have maintained high growth despite the downturn.
• Policy changes are expected to have less impact on the media sector compared to labor-intensive industries.
• The sector is showing divergence, but no significant reason for a major decline is expected.
• Box office growth for summer films was strong, and there is optimism for September growth due to new film releases.
• The sector faces risks including systemic risks, stricter policies, and technological challenges.

Rating Definitions

• Company Ratings:

  • Buy: Expected to outperform the benchmark by more than 15%
  • Accumulate: Expected to outperform the benchmark by more than 5% but not more than 15%
  • Hold: Expected relative performance ranges between -5% and 5%
  • Underperform: Expected to underperform the benchmark by more than 5%

• Sector Ratings:

  • Positive: Expected to outperform the benchmark by more than 10%
  • Neutral: Expected relative performance ranges between -10% and 10%
  • Cautious: Expected to underperform the benchmark by more than 10%

Analyst Certification & Disclosure

• The analyst certifies that the views expressed accurately reflect their personal views.
• No part of the analyst's remuneration is directly or indirectly connected to specific recommendations.
• GF Securities (Hong Kong) and its affiliates do not hold any shares in the securities mentioned.
• No investment banking relationship exists with the companies mentioned in the past 12 months.
• The analyst and their associates do not serve as officers of the companies mentioned and have no financial interests in the securities.

Disclaimer

• This report is for informational purposes only and does not constitute an offer to buy or sell securities.
• The information may not be accurate or complete and is subject to change.
• The report does not take into account the specific investment objectives or financial situation of any individual.
• Investments involve risks, and past performance does not guarantee future results.
• GF Securities (Hong Kong) may issue other communications with different views or conclusions.