20160515-兴业证券-A-Share_Daily_Express_11页_842kb

Summary of Document Content

Core Content

The document provides an overview of the Chinese A-share market performance on a specific day, along with detailed analysis of two companies: Nanjing Kangni Mechanical & Electrical (603111 SH) and Shenzhen Hongtao Decoration Co Ltd (002325 SZ). It includes market indices, sector performance, daily headlines, company news, financial forecasts, and investment recommendations.

Market Overview

• Market Indices:
  • SSE Composite Index: Closed at 2827.11, down 0.31% or 8.75 points.
  • SZSE Component Index: Closed at 9759.27, down 0.38% or 37.31 points.
  • CSI 300 Index: Closed at 3074.94, down 0.49% or 15.20 points.
  • ChiNext Index: Closed at 2025.22, down 0.46% or 9.35 points.
  • HSI: Closed at 19719.29, down 0.99% or 196.17 points.
  • HSCEI: Closed at 8301.39, down 1.34% or 112.33 points.
  • Total Market Volume: CNY 347 billion, down 9% from the previous day.
  • Market Sentiment: Weak, with more losers than winners (1652-to-895).

Sector Performance

• Positive Performers:

  • Nonferrous Metals: Extended the rally trend.
  • Gold: Strong performance, with Hunan Gold Corporation (002155) up 7.47% and Shandong Humon Smelting Co. (002237) up 4.31%.
  • Steel Makers: Outperformed the market, led by Jiangsu Shagang Co. (002075) up 10.05% and Fangda Special Steel Technology Co. (600507) up 4.78%.

• Negative Performers:

  • Consumer Names: Continued to retreat.
    • Wuxi Little Swan Co. (000418) down 4.20%.
    • Hefei Meiling Co. (000521) down 3.55%.
  • Dairy Companies: Slid with Xinjiang Tianrun Dairy Co. (600419) down 3.83% and Bright Dairy & Food Co. (600597) down 3.80%.
  • Liquor Makers: Under pressure, with Kuajishan Shaoxing Rice Wine Co. (601579) and Kweichow Moutai Co. (600519) both down 2.44%.
  • Small-cap Tech Names: Suffered heavy selloffs, with Beijing Interact Technology Co. (300419) down 5.44% and Digiwin Software Co. (300378) down 4.91%.

Daily Headlines

• April New Yuan Loans: May have fallen to 800 billion yuan, down from 1.37 trillion yuan in March.
• Aggregate Financing: May have dropped to 1.3 trillion yuan, down from 2.336 trillion yuan in March.
• Nonperforming Loans: Rose 9% to 1.39 trillion yuan in March.
• April New Loans by Big 4 Banks: More than halved from March.
• Rail Cargo Volume: Dropped 9.6% year-on-year in the first four months of 2016.

Latest Company News

• Gezhouba (600068.SH): To cooperate on ~60 billion yuan projects with Guizhou Govt.
• Guangxi Guiguan (600236.SH): Scaps preferred share sale due to falling market rates.
• Minsheng Bank (600016.SH): Unit to suspend Quam purchase.
• Shanghai Pharma (601607.SH), Baiyunshan (874 HK): Plan to launch a medical platform venture.
• Shenyang Machine (000410.SZ): Says regulator to probe some board members.
• Wanda Cinema (002739.SZ): To acquire Wanda Media for 37.2 billion yuan.

Investment Highlights

Nanjing Kangni Mechanical & Electrical (603111 SH)

• Key Financial Indicators:
  • 2016E EPS: CNY 0.84
  • 2017E EPS: CNY 1.19
  • 2018E EPS: CNY 1.68
  • 2016E PE: 33.99x
  • 2017E PE: 23.88x
  • 2018E PE: 16.91x
  • Market Share: Over 50% in urban rail door market for ten years.
  • High-speed Rail Doors: 70% of interior doors on China's high-speed trains are from the company.
  • Growth Prospects: Expected to benefit from increased demand for urban rail door maintenance.
  • Potential Risks: Less-than-expected urban rail projects, intensified market competition.

Shenzhen Hongtao Decoration Co Ltd (002325 SZ)

• Key Financial Indicators:
  • 2016E EPS: CNY 0.41
  • 2017E EPS: CNY 0.45
  • 2018E EPS: CNY 0.46
  • 2016E PE: 26x
  • 2017E PE: 24x
  • 2018E PE: 23x
  • Revenue Breakdown:
    • 2015: CNY 3.006 billion
    • 2016E: CNY 3.205 billion
    • 2017E: CNY 3.368 billion
    • 2018E: CNY 3.373 billion
  • Growth Drivers: Vocational education business, acquisitions of kuakao.com and shsunedu.
  • Potential Risks: Macroeconomic downturn, AR collection risks, underperformance of new businesses.

Analysts and Translators

• Nanjing Kangni Mechanical & Electrical (603111 SH):
  • Analyst: SHI Mingxuan
  • Email: shimingxuan@xyzq.com.cn
  • ID: S1440514090001
• Shenzhen Hongtao Decoration Co Ltd (002325 SZ):
  • Analyst: MENG Jie
  • Email: mengjie@xyzq.com.cn
  • ID: S0190515070001
• Translator: LI Xing
  • Email: lixingyj@xyzq.com.cn

Financial Highlights

Nanjing Kangni Mechanical & Electrical (603111 SH)

• Balance Sheet:
  • 2016E Total Assets: CNY 2836 million
  • 2016E Net Assets: CNY 1501 million
  • 2016E BVPS: CNY 4.85
• Cash Flow:
  • 2016E Net Change in Cash: CNY 29 million
  • 2016E Ending Cash Balance: CNY 436 million
• Income Statement:
  • 2016E Operating Revenue: CNY 2165 million
  • 2016E Net Profit: CNY 247 million
  • 2016E EPS: CNY 0.84

Shenzhen Hongtao Decoration Co Ltd (002325 SZ)

• Balance Sheet:
  • 2016E Total Assets: CNY 5694 million
  • 2016E Net Assets: CNY 3709 million
  • 2016E BVPS: CNY 3.25
• Cash Flow:
  • 2016E Net Change in Cash: CNY -53 million
  • 2016E Ending Cash Balance: CNY 417 million
• Income Statement:
  • 2016E Operating Revenue: CNY 3205 million
  • 2016E Net Profit: CNY 408 million
  • 2016E EPS: CNY 0.41

Investment Recommendations

• Nanjing Kangni Mechanical & Electrical: Reiterate OUTPERFORM
• Shenzhen Hongtao Decoration Co Ltd: Reiterate OUTPERFORM

Conclusion

The document highlights a weak and volatile A-share market, with most sectors showing declines. However, certain companies like Nanjing Kangni Mechanical & Electrical and Shenzhen Hongtao Decoration Co Ltd are identified as potential outperformers due to their strong market positions and growth strategies. Both companies are expected to benefit from increased demand in their respective industries, with financial forecasts indicating positive earnings growth. Risks include market competition and macroeconomic factors.