20160902-兴业证券-A-Share_Daily_Express_11页_881kb

Summary of Industrial Securities Co., Ltd. Report

Core Content

This report provides an overview of the Chinese A-share and HK stock market performance as of August 30, 2016, along with company-specific analyses for Xiamen C & D Inc (600153:SH) and Jiangsu Yoke Technology (002409.SZ). It highlights market trends, sector performance, and investment recommendations for both the broader market and individual companies.

Market Overview

A-Share Market

• Market Indices:
  • SSE Composite: Closed at 3067.35, up 0.13% on the day and down 0.10% for the week.
  • SZSE Component: Closed at 10640.42, down 0.27% on the day and 0.50% for the week.
  • CSI 300: Closed at 3314.11, up 0.38% on the day.
  • ChiNext: Closed at 2170.86, down 0.48% on the day and 0.86% for the week.
  • HSI: Closed at 23266.70, up 0.45% on the day.
  • HSCEI: Closed at 9686.88, up 0.84% on the day.
• Market Volume: Total market volume reached CNY 431 billion, a 5% decrease from the previous day.
• Market Sentiment: Mixed, with more losers than winners (1635:1026). Investors are cautious due to the upcoming G20 summit in Hangzhou.

HK Stock Market

• Market Strategy: Despite market fluctuations, the HK stock market is considered a strong investment opportunity due to ultra-low global interest rates, favorable currency (HKD USD peg), and undervalued assets.
• Investment Recommendations:
  • High Yield and Dividend: HSI and HSCEI offer dividend yields of 3.5% and 4.4% respectively, which are attractive to investors.
  • Consumption Industry Stocks: These stocks have underperformed HSI but show better-than-expected performance in semi-annual reports.
  • GARP Stocks: Selected stocks in internet, medical service, education, and sports and tourism sectors are recommended for their growth potential at reasonable prices.

Sector Performance

Winners

• Home Appliances: Rose after Gree Electric Appliance announced the acquisition of an electric auto manufacturer.
  • Gree Electric Appliance (000651): +9.99%
  • Qingdao Haier Co. (600690): +3.57%
• Insurers: Extended recent strength.
  • China Pacific Insurance (601601): +0.89%
  • Ping An Insurance (601318): +1.43%
• Brokerage: Strong performance.
  • Pacific Securities (601099): +4.24%
  • Haitong Securities (600837): +1.43%
• Coal Miners: Outperformed the market.
  • Shanxi Coking Co. (600740): +2.95%
  • Shanghai Datun Energy Resources (600508): +2.28%

Losers

• Aviation Equipment Manufacturers: Extended the correction trend.
  • Avic Aero-Engine Controls (000703): -2.28%
  • Sichuan Chengfa Aero Science & Technology (600391): -2.30%
• Liquor Makers: Weak performance.
  • Anhui Gujing Distillery (000596): -2.42%
  • Citic Guoan Wine (600084): -2.56%
• Household Names: Profit taking after a previous rise.
  • Qumei Home Furnishings (603818): -3.61%

Company News

Xiamen C & D Inc (600153:SH)

• Interim Report (2016):
  • Operating revenue: CNY 55.2 billion, up 5.7% YoY.
  • Net profit: CNY 862 million, up 18.1% YoY.
  • Net profit after non-recurring items: CNY 890 million, up 68.2% YoY.
• EPS: CNY 0.3 for the first half of 2016.
• Earnings Forecast:
  • 2016: CNY 1.03 EPS
  • 2017: CNY 1.13 EPS
  • 2018: CNY 1.21 EPS
• Valuation:
  • 11.61x 16E PE
  • 10.6x 17E PE
  • 9.93x 18E PE
• Recommendation: STRONG BUY
• Key Drivers: Housing market recovery, strong performance in real estate and supply chain operations.
• Potential Risks: Commodity price drop, real estate downturn.

Jiangsu Yoke Technology (002409.SZ)

• Interim Report (2016):
  • Revenue: CNY 424 million, down 18.25% YoY.
  • Net profit: CNY 30.29 million, down 21.76% YoY.
  • Net profit after non-recurring items: CNY 19.02 million, down 29.37% YoY.
  • EPS: CNY 0.09
  • OCFPS: CNY -0.02
• Earnings Forecast:
  • 2016: CNY 0.20 EPS
  • 2017: CNY 0.27 EPS
  • 2018: CNY 0.32 EPS
• Valuation:
  • 12.84x 15E PE
  • 11.61x 16E PE
  • 10.60x 17E PE
  • 9.93x 18E PE
• Recommendation: BUY
• Key Highlights:
  • Acquisition of Korea's UP Chemical through its subsidiary to expand into electronic chemical field.
  • Active expansion into semiconductor materials and LNG insulation board field.
  • Expected to become a key player in the electronic chemical industry.

Key Financial Data (Xiamen C & D Inc)

• Closing Price: CNY 11.96
• Total Shares: 2835.20 Mn
• Shares Outstanding: 2835.20 Mn
• Market Cap: CNY 33909.00 Mn
• Net Assets: CNY 19575.26 Mn
• BVPS: CNY 6.90

Revenue Breakdown (Xiamen C & D Inc)

• Total Revenue (CNY, Mn): 55,179.65
• Operating Revenue: 55,179.65
• Revenue by Product:
  • Supply Chain Operation: 49,541.58 (90.3%)
  • Real Estate Development: 5,271.40 (9.6%)

Key Financial Ratios (Xiamen C & D Inc)

• Growth:
  • Increase Rate of Business Revenue: 5.9% (2015), 9.9% (2016), 6.7% (2017), 6.2% (2018)
  • Net Profit Growth Rate: 5.4% (2015), 10.6% (2016), 9.4% (2017), 6.8% (2018)
• Profitability:
  • Gross Margin Rate: 9.6% (2015), 10.0% (2016), 10.1% (2017), 9.8% (2018)
  • Net Profit Margin: 2.1%
  • ROE: 13.8% (2015), 13.4% (2016), 12.8% (2017), 12.0% (2018)
• Solvency:
  • Asset-liability Ratio: 73.2% (2015), 71.2% (2016), 68.9% (2017), 66.8% (2018)
  • Current Ratio: 1.59 (2015), 1.62 (2016), 1.68 (2017), 1.72 (2018)
  • Quick Ratio: 0.49
• Operation Capacity:
  • Asset Turnover Ratio: 1.33 (2015), 1.37 (2016), 1.39 (2017), 1.39 (2018)
  • AR Turnover Ratio: 41.01 (2015), 43.85 (2016), 43.23 (2017), 43.13 (2018)

Key Financial Data (Jiangsu Yoke Technology)

• Closing Price: CNY 26.27
• Total Shares: 332.64 Mn
• Shares Outstanding: 165.06 Mn
• Market Cap: CNY 8738.45 Mn
• Net Assets: CNY 1355.86 Mn
• BVPS: CNY 4.08

Revenue Breakdown (Jiangsu Yoke Technology)

• Total Revenue (CNY, Mn): 424.37
• Operating Revenue: 424.37
• Revenue by Product:
  • Flame Retardant: CNY 379.37 (89.4%)
  • Tin Salts: CNY 26.46 (6.2%)
  • Silicon Oil and Amine Products: CNY 14.36 (3.4%)
  • Others: CNY 4.19 (1.0%)

Key Financial Indicators (Jiangsu Yoke Technology)

• Revenue (Mn/CNY): 1006 (2015), 906 (2016), 1051 (2017), 1126 (2018)
• YoY (%): -24.0% (2015), -9.9% (2016), 16.0% (2017), 7.1% (2018)
• Net Profit (Mn/CNY): 90 (2015), 67 (2016), 89 (2017), 107 (2018)
• YoY (%): 49.8% (2015), -25.8% (2016), 32.3% (2017), 20.9% (2018)
• Gross Margin (%): 23.7% (2015), 22.4% (2016), 25.9% (2017), 26.4% (2018)
• Net Profit Margin (%): 9.0% (2015), 7.4% (2016), 8.4% (2017), 9.5% (2018)
• ROE (%): 6.7% (2015), 4.8% (2016), 6.0% (2017), 6.7% (2018)
• EPS (CNY): 0.27 (2015), 0.20 (2016), 0.27 (2017), 0.32 (2018)
• OCFPS (CNY): 0.36 (2015), 0.23 (2016), 0.29 (2017), 0.53 (2018)

Investment Highlights

• Jiangsu Yoke Technology: Despite a decline in 16H1, the company's strategic acquisitions and expansion into the semiconductor industry are expected to drive long-term growth.
• Recommendation: BUY
• Potential Risks: Decline in flame retardant prices, external market downturn.

Conclusion

The report emphasizes the potential of the HK stock market as an attractive destination for both domestic and international investors due to its undervalued assets and high dividend yields. It also highlights the strong performance of certain sectors and companies, including home appliances, insurers, and real estate, while noting the challenges faced by others. Investment recommendations are tailored to different market segments and growth opportunities.