20160811-新鸿基金融集团-INVESTMENT_DAILY_NOTE_15页_2mb

Investment Daily Note Summary

Core Content Overview

This daily investment note provides a comprehensive summary of market trends, performance ratios, result calendars, stock highlights, and valuation metrics for major indices and sectors in Hong Kong and global markets. It also includes insights on interest rates, exchange rates, precious metals, commodities, and A-share premiums to H-share.

Main Market Trends

• HSI (Hang Seng Index) closed at 22,492, up 0.1% with a 2.6% YTD increase.
• HSCEI (Hang Seng China Enterprises Index) closed at 9,315, up 0.2% with a -3.6% YTD decline.
• Shanghai Composite closed at 3,019, down 0.2% with a -14.7% YTD drop.
• Shenzhen Composite closed at 1,976, down 0.3% with a -14.4% YTD decline.
• US markets saw declines, with energy stocks dragged down by falling oil prices. The Dow Jones fell 37 points, S&P 500 fell 6 points, and NASDAQ Composite fell 21 points.
• Oil prices fell 2.5% to US$41.71/bbl, and gold prices rose US$5.20 to US$1,351.90/oz.

Market Performance and Ratios

• The market up/down ratio indicates a mixed performance over the past seven trading days.
• Hong Kong Market Turnover was HK$61.2bn, with the HSI showing a 15.03% increase.
• HSCEI had a 10.90% increase, while HSCCI had a -7.87% decrease.

Result Calendar

• The result calendar lists upcoming earnings reports, primarily from companies in the HSCEI and HSI.
• These include reports from C.P. POKPHAND, CHINA METAL, CHINA MOBILE, and others, all with 6-month ended periods.

Stock in Focus: China Overseas Grand (81.HK)

• Last Close: HK$2.45

• Entry Price: HK$2.40

• Target Price: HK$2.65

• Stop-loss Price: HK$2.24

• YTD/1M/3M/12M % Change: -25.3%/6.1%/2.9%/-24.6%

• Market Cap: HK$5.59bn

• 3M Average Daily Volume: 1.35mn shares

• FY1 Forward P/E: 4.0

• Performance: The company has stable finances and a lower debt level, which may provide catch-up potential in the current market environment.

• Key Highlights: Contract sales increased by 14.2% in H1, and the company's cash reserves rose by 14.2% to HK$13.03bn.

Today's Top Picks

• Jin Bao Bao H (1239.HK): Target price HK$0.20, stop-loss HK$0.168. Expected to test 100-day moving average.
• Rongzhong Fin (3963.HK): Target price HK$1.59, stop-loss HK$1.42. Share price has been rising with increasing turnover, suggesting a small bet opportunity.

Sector Performance Overview

• Top Performing Sectors (1D):

  • Gaming: +1.7%
  • Logistics: +1.4%
  • Other Metals: +1.2%
  • Gas: +0.9%
  • Agriculture: +0.8%
  • Chinese Banks: +0.6%
  • IPP: +0.2%
  • Local Banks: +0.1%

• Bottom Performing Sectors (1D):

  • Environmental and New Energy: +0.1%
  • REITs: -0.2%
  • Chinese Insurers: -0.2%
  • Department Store: -0.2%
  • HK Telecoms: -0.2%
  • Infrastructure: -0.3%
  • Coal: -0.3%

• Key Stocks in top performing sectors:

  • Gaming: Galaxy Ent. (27), SJM Hldg (880), Wynn Macau (1128), Sands China (1928), MGM China (2282)
  • Logistics: Kerry Log Net (636), SITC (1308)
  • Other Metals: Jiangxi Copper (358), CMOC (3993), Zhaojin Mining (1818), Zijin Mining (2899)
  • Gas: China Gas (384), Beijing Enterprises (392), ENN Energy (2688), CIMC Enric (3899), China Res Gas (1193)
  • Agriculture: First Tractor (38), Sinofert (297), Ko Yo Group (827), National Agri (1236), China Bluechem (3983)
  • Chinese Banks: CCB (939), ABC (1288), ICBC (1398), BankComm (3328), BOC (3988)
  • IPP: China Res Power (836), Huaneng Power Int'l (902), Datang Int'l Power (991), Huadian Power Int'l (1071), China Power Int'l (2380)
  • Local Banks: Hang Seng Bank (11), BEA (23), Chong Hing Bank (1111), BOCHK (2388), Dah Sing Banking (2356)
  • Environmental and New Energy: China EB Int'l (257), BJ Ent Water (371), China Longyuan (916), Xinyi Solar (968), CGN Power (1816)
  • REITs: Yuexiu REIT (405), Fortune REIT (778), Prosperity REIT (808), LINK Reit (823), Champion REIT (2778)
  • Chinese Insurers: China Taiping Ins. (966), NCI (1336), CPIC (2601), Ping An (2318), China Life (2628)
  • Department Store: NWDS China (825), Springland (1700), Intime (1833), Golden Eagle (3308), Parkinson Group (3368)
  • HK Telecoms: HutchTel HK (215), Smartone (315), HKT-SS (6823)
  • Infrastructure: China Railway (390), China Railway Cons. (1186), CSR Corp. (1766), China Comm. Cons. (1800), China Machinery Eng. (1829)
  • Coal: China Shenhua (1088), Yanzhou Coal (1171), China Coal (1898)

Valuation Metrics

• Forward P/E and Valuations:

  • Hang Seng Index: FY16E P/E = 12.4, Long-term average = 11.0, Deviation = +13.7%
  • HSCEI: FY16E P/E = 8.0, Long-term average = 7.9, Deviation = +1.0%
  • Shanghai Composite: FY16E P/E = 14.0, Long-term average = 10.7, Deviation = +30.3%
  • S&P 500: FY16E P/E = 18.5, Long-term average = 15.3, Deviation = +21.0%

• Estimated Earnings Growth:

  • Hang Seng Index: FY1 = -7.8%, FY2 = +10.4%
  • HSCEI: FY1 = -8.4%, FY2 = +10.0%
  • Shanghai Composite: FY1 = +19.0%, FY2 = +12.8%
  • S&P 500: FY1 = +10.4%, FY2 = +13.1%

Market Data Highlights

• Best Performers (1D):

  • XINCHEN CHINA PO (1148.HK): +10.6%
  • YINGDE GASES GRP (2168.HK): +8.8%
  • GOLDIN PROPERTY (283.HK): +7.8%
  • SANDS CHINA LTD (1928.HK): +5.2%
  • ASIA CEMENT CH (743.HK): +5.0%

• Worst Performers (1D):

  • UNI-PRESIDENT CH (220.HK): -6.0%
  • SKYWORTH DIGITAL (751.HK): -5.1%
  • HI SUN TECHNOLOG (818.HK): -5.0%
  • TRINITY LTD (891.HK): -4.8%
  • HI LONG HOLDING (1623.HK): -4.6%

External Market Conditions

• Interest Rates:

  • U.S. 2-year Treasury yield: 0.6820%, up 1.52 bps in 5D
  • U.S. 10-year Treasury yield: 1.5074%, down 3.46 bps in 5D
  • HK 1-month HIBOR: 0.2422%, down 0.19 bps in 5D
  • SH 1-month HIBOR: 2.7090%, down 2.00 bps in 5D

• Exchange Rates:

  • USD/HKD: 7.7565, no change in 5D
  • USD/JPY: 101.07, up 0.1% in 5D
  • USD/CNY: 6.6379, up 0.1% in 5D
  • USD/CNH: 6.6377, up 0.1% in 5D

• Precious Metals and Commodities:

  • CRB Index: 179.5, down 0.1% in 5D
  • Comex Gold: 1,348.7, down 1.0% in 5D
  • Comex Silver: 20.235, down 1.0% in 5D
  • Nymex WTI Crude: 41.44, down 1.2% in 5D
  • ICE Brent Crude: 43.8, down 1.1% in 5D
  • LME Copper: 4,821.00, down 1.1% in 5D
  • LME Aluminum: 1,647.00, up 0.3% in 5D

A-share Premium to H-share

• Key Companies with notable premiums:
  • LUOYANG GLASS-H (1108.HK): A-share premium to H-share = 573.3%
  • ZTE-H (763.HK): A-share premium to H-share = 56.1%
  • JINGCHENG MAC-H (187.HK): A-share premium to H-share = 289.4%
  • YANZHOU COAL-H (1171.HK): A-share premium to H-share = 213.1%
  • CHINA LIFE-H (2628.HK): A-share premium to H-share = 34.0%
  • CHINA VANKE-H (2202.HK): A-share premium to H-share = 26.0%

Key Takeaways

• China Overseas Grand Oceans (81.HK) has a strong financial position and may present a buying opportunity due to its lower debt and potential for price recovery.
• HSCEI and HSI showed mixed performance with slight gains and declines.
• Energy and banking sectors in the U.S. were negatively impacted by falling oil prices and weak earnings.
• Gaming and logistics sectors in Hong Kong outperformed, indicating strong investor sentiment.
• A-share premiums to H-shares were generally high, suggesting potential for value in the A-share market.