20160520-兴业证券-A-Share_Daily_Express_12页_832kb

Summary of Industrial Securities Co., Ltd. Report

Core Content

This report provides an overview of the Chinese stock market performance and highlights key company updates and investment recommendations. It includes data on major market indices, sector performance, and specific company news and financial details.

Market Indices and Performance

• The market showed a rally on Friday, with mid and small-cap stocks outperforming blue chips.
• The total trading volume decreased by 2.6% compared to the previous session.
• Winners outnumbered losers by 2138 to 355.

Sector Review

• IT Sector: Led the market with strong gains, driven by companies like Hundsun Technologies Inc. (600570) and Shenzhen Kingdom Sci-Tech Co., Ltd. (600446).
• Military Sector: Strong performance with China Spacesat Co. (600118) and China Avionics Systems Co. (600372).
• Electronic Components: Shenzhen O-Film Tech Co. (002456) and Tongfang Guoxin Electronics Co. (002049) outperformed.
• Heavy Machinery: China First Heavy Industries (601106) and China CSSC Holdings Limited (600150) saw gains.
• Thematic Investments: Sub-new shares showed significant performance, with Changsha Jingjia Microelectronics Co. (300474) and Tongyu Communication Inc. (002792) leading the way.

Daily Headlines

• Yuan Market Access: Six banks, including ICBC Asia and China Merchants Bank's Hong Kong branch, are allowed to enter the onshore yuan market.
• Tourism Growth: China's tourism revenue and trips per capita are expected to double by 2020 compared to 2015.
• Walt Disney Resort: Over a million Chinese visitors have visited the Shanghai resort's public areas in the past 23 days.
• Apple Cooperation: China aims to deepen R&D and industrial chain cooperation with Apple.
• Bond Issuance: Bank of China Ltd. plans to issue bonds backed by non-performing assets, marking the first such issue since 2008.
• Trust Companies: Combined profits of Chinese trust companies fell to CNY 14 billion in Q1 2016.

Latest Company News

• BOC (601988.SH): Plans its first bad loan securitization sale since 2008.
• Ping An (601318.SH): Its medical service platform received a $500 million investment.

Investment Recommendations

• General Aviation Industry: Expected to sustain growth with favorable policies, including simplified airport construction procedures and expanded low-altitude airspace.
  • Investment Recommendations: CITIC Offshore Helicopter, Weihai Guangtai Airport Equipment, Wisesoft, DEA General Aviation Holding.
• Shenzhen Grandland Decoration Group Co., Ltd. (002482: SZ): Maintained OUTPERFORM rating.
  • Earnings Forecast: EPS forecasted at CNY 0.52 (2016), CNY 0.55 (2017), and CNY 0.57 (2018).
  • Valuation Ratios: 39x 16E PE, 37x 17E PE, 35x 18E PE.
  • Potential Risks: Macro economic slowdown, delayed construction, slower-than-expected new business expansion.

Financial Highlights for Shenzhen Grandland Decoration Group

• Revenue Breakdown:
  • 2015: CNY 8010 million
  • 2016E: CNY 8315 million
  • 2017E: CNY 8578 million
  • 2018E: CNY 8707 million
• Gross Margin: 16.9% in 2015, increasing to 17.4% in 2018.
• Net Profit Margin: 3.5% in 2015, increasing to 4.1% in 2018.
• ROE: 4.8% in 2015, increasing to 5.1% in 2018.
• Key Financial Ratios:
  • Growth: Business revenue growth rate increased from -18.2% (2015) to 1.5% (2018).
  • Profitability: Net profit margin improved from 3.5% to 4.1%.
  • Solvency: Asset-liability ratio dropped from 56.5% to 40.7%.
  • Operation Capacity: Asset turnover ratio increased from 64.1% to 74.2%.

Yintai Resources (000975:SZ)

• Event: Purchased gold mines from Eldorado Gold Corp.
  • Jin Feng Gold Mine: Sold to China National Gold Group Corporation for USD 300 million.
  • Bai Shan, Tan Jian Shan, Long Dong Projects: Sold to Yintai Resources for USD 600 million.
• Earnings Forecast:
  • 2016: CNY 0.27
  • 2017: CNY 0.34
  • 2018: CNY 0.47
• Valuation Ratios:
  • PE: 56x / 44x / 32x
• Potential Risks: Integration issues, low gold prices, management risk.

Key Data for Yintai Resources

Revenue Breakdown for Yintai Resources

OUTPERFORM - Non-ferrous Metal

• Key Financial Indicators:
  • Revenue: CNY 730880266.17
  • Operating Revenue: CNY 730880266.17
  • Revenue by Product:
    • Lead Concentrate (Silver included): CNY 553286256.80 (75.96%)
    • Zinc Concentrate: CNY 174353853.49 (23.90%)

Analysts and Translators

• ZHANG Xiaoyun (zhangxiaoyun@xyzq.com.cn, S0190514070002)
• MENG Jie (mengjie@xyzq.com.cn, S0190513080002)
• FANG Dalei (fangdalei@xyzq.com.cn)
• REN Zhiqiang (renzhiqiang@xyzq.com.cn, S0190514030002)
• QIU Zuxue (qiuzuxue@xyzq.com.cn, S0190515030003)
• YAN Peng (yanpeng@xyzq.com.cn)
• LI Xing (lixingyj@xyzq.com.cn)

Summary of Key Financial Indicators

• Shenzhen Grandland Decoration Group:

  • EPS Forecast: CNY 0.52 (2016), CNY 0.55 (2017), CNY 0.57 (2018)
  • PE Ratios: 39x (2016E), 37x (2017E), 35x (2018E)
  • Potential Risks: Macro economic slowdown, delayed construction, slower-than-expected new business expansion

• Yintai Resources:

  • EPS Forecast: CNY 0.27 (2016), CNY 0.34 (2017), CNY 0.47 (2018)
  • PE Ratios: 56x / 44x / 32x
  • Potential Risks: Integration issues, low gold prices, management risk

Conclusion

The report indicates a positive market sentiment with a rally in Chinese stocks, driven by policy support and thematic investments. Key sectors such as IT, military, and general aviation are performing well, with specific investment recommendations and potential risks highlighted. Yintai Resources and Shenzhen Grandland Decoration Group are both recommended as OUTPERFORM with detailed financial forecasts and strategic moves aimed at growth and expansion.