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Weekly A-share Market Recommendations Summary

Core Content Overview

This document outlines weekly investment recommendations for several A-share companies across different sectors, focusing on their earnings forecasts, market performance, and potential risks. The recommendations are provided by the Industrial Securities Research Institute, dated March 7, 2016.

Top Stock Recommendations

Key Investment Highlights

Tangshan Sanyou Chemical Industries (600409: SH)

• Sector: Chemical Product
• Earnings Forecast: CNY 0.22 (2015), CNY 0.54 (2016), CNY 0.67 (2017)
• Rating: BUY
• Key Points:
  • China's rayon stable fiber industry is improving, and the company is a leading manufacturer.
  • Full utilization of 500,000 metric ton production capacity could boost EPS by CNY 0.2.
  • Potential risk: weaker-than-expected demand for rayon stable fiber and continued slowdown in the chemical market.

Fujian Sunner Development (002299.SZ)

• Sector: Agriculture
• Earnings Forecast: -CNY 0.29 (2015), CNY 1.29 (2016), CNY 2.2 (2017)
• Rating: BUY
• Key Points:
  • The company processes and markets poultry, with strong growth expected.
  • Shares trade at a premium to peers, and the company has strong institutional support.
  • Potential risk: management risk and slowdown in office supplies market expansion.

Shanghai M&G Stationery (603899: SH)

• Sector: Light Manufacturing
• Earnings Forecast: CNY 1.01 (2015), CNY 1.22 (2016), CNY 1.47 (2017)
• Rating: OUTPERFORM
• Key Points:
  • Strong long-term investment value, with a focus on expanding stationery brands.
  • The company is developing 'Morning Glory Colipu' and 'Morning Glory Superior' brands.
  • Potential risk: management risk and slowdown in business expansion.

Jiangsu Linyang Energy (601222.SH)

• Sector: Meters
• Earnings Forecast: CNY 1.32 (2015), CNY 1.48 (2016), CNY 1.93 (2017)
• Rating: OUTPERFORM
• Key Points:
  • Strong earnings growth due to efficient power plant operations and the Internet of Energy strategy.
  • Potential risk: earnings may fall short of expectations and new business development challenges.

Zhejiang Jingxin Pharmaceutical (002020.SZ)

• Sector: Pharmaceuticals
• Earnings Forecast: CNY 0.54 (2015), CNY 0.9 (2016), CNY 1.26 (2017)
• Rating: OUTPERFORM
• Key Points:
  • Fastest organic growth among peers and strong M&A momentum.
  • High margin of safety from private stock offering.
  • Potential risk: policy changes and slower-than-expected M&A progress.

China Union Holdings (000036.SZ)

• Sector: Real Estate
• Earnings Forecast: CNY 0.07 (2015), CNY 0.90 (2016), CNY 1.26 (2017)
• Rating: BUY
• Key Points:
  • Strong margin of safety and potential for earnings rebound.
  • Benefited from property price surge and equity incentive plan.
  • Potential risk: slower industry recovery and delayed project progress.

Hengtong Optic-electric (600487: SH)

• Sector: Telecommunication
• Earnings Forecast: CNY 0.66 (2015), CNY 0.87 (2016), CNY 1.04 (2017)
• Rating: BUY
• Key Points:
  • Expected to grow by 50% in 2016 and 20% in 2017-2018.
  • Strong M&A strategy and big data implementation.
  • Potential risk: intensified competition and slower overseas development.

Shenzhen Expressway (600548: SH)

• Sector: Expressway
• Earnings Forecast: CNY 0.75 (2015), CNY 0.92 (2016), CNY 1.05 (2017)
• Rating: BUY
• Key Points:
  • Strong government support and substantial cash reserves.
  • Leasing business is growing and contributing to earnings.
  • Potential risk: reduced traffic flow and lower returns on new expressways.

Shandong Chenming Paper (000488: SZ)

• Sector: Paper Making
• Earnings Forecast: CNY 0.52 (2015), CNY 0.68 (2016), CNY 0.87 (2017)
• Rating: OUTPERFORM
• Key Points:
  • Strong leasing business and SOE reform benefits.
  • Production cost reduction and increased gross margin.
  • Potential risk: slow SOE reform and economic downturn affecting leasing earnings.

Bank of Nanjing (601009: SH)

• Sector: Banking
• Earnings Forecast: CNY 2.1 (2015), CNY 2.5 (2016), CNY 2.8 (2017)
• Rating: OUTPERFORM
• Key Points:
  • Benefiting from the interest rate decline cycle.
  • Strong creditworthiness of clients reduces bad loan risk.
  • Potential risk: systematic banking industry risk.

General Information

• Disclosure: The report is based on public information, and the authenticity, accuracy, and completeness are not guaranteed.
• Disclaimer: The report is intended for the company's clients only. Unauthorized recipients are not considered clients.
• Analyst Certification: The analysts are certified by the Securities Association of China and have conducted due diligence and used legitimate information to produce the report.

Summary of Key Factors

• Earnings Growth: Most companies show positive EPS growth forecasts, with some experiencing significant increases.
• Sector Trends: Sectors such as chemical products, agriculture, and telecommunications are highlighted for their growth potential.
• Risks: Each company has identified specific risks, including market demand, policy changes, and economic conditions.
• Strategic Moves: M&A, product diversification, and government support are key strategies for growth and stability.