20140306-新鸿基金融集团-Investment_Daily_Note_12页_1mb

Investment Daily Note Summary - 6 March 2014

Core Content

This document is an investment note dated 6 March 2014, covering market updates, stock analysis, economic data, and other financial indicators relevant to the Hong Kong and global markets. It provides insights into stock performance, market trends, and key financial metrics for investors.

Main Points

Market Performance

• U.S. Market: The Dow fell 35 points due to weak ADP private sector job growth and concerns over the Ukraine crisis. The S&P 500 remained unchanged, while the NASDAQ rose by 6 points.
• Hong Kong Market: The Hang Seng Index (HSI) closed at 22,579, down 77 points but still above its 10-day and 50-day moving averages. The HSCEI closed at 9,661, down 114 points. Market turnover was HK$64.9bn.
• Commodity Prices: Crude oil and distilled gasoline inventory rallied, with New York crude oil futures closing at US $101.45/bbl. Gold prices rose due to weak U.S. job data, with New York gold futures closing at US$1,340.30/oz.

Economic Data and Events

• China's GDP Growth Target: Set at 7.5% for 2014, the same as 2013, indicating steady growth expectations.
• Inflation and Money Supply: CPI growth is expected to remain within the target of 3.5%, and M2 growth is targeted at 13%, suggesting a stable monetary policy.
• Key Economic Data Releases: Include U.S. Nonfarm Payrolls, Trade Balance, and China's Exports and CPI data.

Stock Analysis

Truly (732.HK)

• Price: HK$4.51
• Target: HK$5.00
• Stop Loss: HK$4.00
• Positive Factors: Encouraging operating data for the first two months of 2014, diverse client base, and growth potential in the smartphone industry.
• Valuation: Trades at 9.1X FY13E and 7.8X FY14E P/E, well below its peers.
• Technical Analysis: Share price broke above the downtrend from October 2013 with heavy volume.

Pax Global (327.HK)

• Price: HK$4.16
• Target: HK$4.50
• Stop Loss: HK$3.58
• Positive Factors: Actively expanding overseas business, electronic payment concept, and growing market for financial cards.
• Valuation: Trades at 19.7X FY13E and 15.9X FY14E P/E.
• Technical Analysis: Share price broke through a pennant pattern with increased turnover.

Upcoming Results

• Wing Hang Bank (302.HK): Expected to report a 14% increase in net profit to HK$2.06bn.
• Hysan Dev (14.HK): Expected to report a 25% increase in adjusted net profit to HK$2.03bn.
• OOIL (316.HK): Net profit is expected to drop by 87% to US$38.69mil.
• MTR Corporation (66.HK): Net profit is expected to decrease by 35% to HK$8.86bn.
• Want Want China (151.HK): Net profit is expected to increase by 19% to US$660mil.
• Cathay Pac Air (293.HK): Net profit is expected to increase by 212% to HK$2.86bn.
• China Overseas (688.HK): Net profit is expected to increase by 18% to HK$22bn.
• Swireproperties (1972.HK): Net profit is expected to decrease by 46% to HK$10.2bn.
• GCL-Poly Energy (3800.HK): Expected to report a net loss of HK$1.04bn.

Key Information

Market Outlook

• The HSI is expected to swing between its 50-day and 100-day moving averages in the short term.
• The HSCEI was capped by its 10-day and 20-day moving averages, indicating possible resistance.

Investment Recommendations

• Truly (732.HK): Buy, targeting HK$5.00, with a stop loss at HK$4.00.
• Pax Global (327.HK): Buy, targeting the previous high of HK$4.50, with a stop loss if it drops below the uptrend at ~HK$3.58.

Economic and Market Trends

• Smartphone Growth: China's smartphone penetration rate is expected to rise, creating growth opportunities for related stocks.
• AMOLED Displays: Truly has formed a joint venture to develop AMOLED displays, which are projected to grow significantly in production by 2020.
• Consumer Spending: Rapid economic growth in China is changing consumer spending habits, favoring financial card usage with a 30% CAGR forecast.

Major Index Valuations

• HSI: Forward P/E at 10.2X, below the long-term average of 14.1X.
• HSCEI: Forward P/E at 6.5X, significantly below the long-term average of 13.5X.
• Shanghai Composite: Forward P/E at 8.0X, below the long-term average of 18.0X.
• S&P 500: Forward P/E at 15.9X, slightly above the long-term average of 14.5X.

Market Data Highlights

• Best Performers: Franshion Properties, China Agri, ZTE, Sands China, and Cathay Pacific.
• Worst Performers: Guangzhou Automobile, China Longyuan, Shangdong Weigao, China Railway, and Brilliance China.
• Short Selling: Tencent, CCB, ICBC, and others are under significant short selling pressure.

Exchange Rates and Commodity Prices

• USD/HKD: 7.7603, no change in the last 5 days.
• Gold (USD/oz.): Closed at 1,337.0, up 0.4% in the last 5 days.
• Silver (USD/oz.): Closed at 21.2, down 0.3% in the last 5 days.
• Brent (USD/barrel): Closed at 109.6, down 0.5% in the last 5 days.
• WTI (USD/barrel): Closed at 101.5, down 1.1% in the last 5 days.

Conclusion

The document highlights the mixed performance of U.S. stocks due to weak job growth and geopolitical tensions. In the Hong Kong market, the HSI closed above its 50-day moving average but below its opening high, while the HSCEI was capped by its moving averages. It recommends buying Truly and Pax Global due to their positive operating data and growth potential. Economic indicators in China suggest a stable growth environment, with a focus on the financial card market and AMOLED display technology. The report also provides key market data, including top performers, short sellers, and exchange rates, offering a comprehensive view for investors.