20150826-新鸿基金融集团-INVESTMENT_DAILY_NOTE_14页_2mb

Investment Daily Note Summary

Core Content

• Market Highlights: The People's Bank of China cut benchmark interest rates and required reserve ratios, boosting Hang Seng Index (HSI) futures and expected to result in higher openings for both Hong Kong and mainland China equities. The Chinese government emphasized the stability of the renminbi and the ability to meet economic targets, which is expected to support the equities market.

• Equity Indices:

  • Hang Seng Index: Closed at 21,405, up 0.7%, with a YTD decline of 9.3%.
  • HSCEI: Closed at 9,514, down 0.9%, with a YTD decline of 20.6%.
  • Shanghai Composite: Closed at 2,965, down 7.6%, with a YTD decline of 8.3%.
  • Shenzhen Composite: Closed at 1,749, down 7.1%, with a YTD increase of 23.6%.
  • DJIA, S&P 500, Nasdaq Composite, FTSE 100, DAX, CAC 40, Nikkei 225, and Taiwan Weighted also showed varying levels of performance, with some indices seeing gains and others declines.

• External Market Conditions:

  • U.S. stocks initially rose but eventually slid, ending with losses.
  • ADRs dropped, effectively putting HSI down 85 points.
  • Oil prices increased due to China's economic stimulus measures, with New York crude oil futures closing at $39.31/bbl.
  • Gold prices fell slightly, with New York gold futures settling at $1,138.3/oz.

Main Points

• Yesterday's Hong Kong Equities:

  • The Shanghai Composite broke below 3,000, closing at 2,964, down 7.6%.
  • HSI gained only 0.72%, while HSCEI fell 0.92%.
  • Strong performers like AIA and Tencent initially rose but ended with smaller gains.
  • Want Want China and Tingyi saw declines due to poor results.

• Stock in Focus: New China Life-H (1336.HK)

  • Entry: HK$30.00
  • Target: HK$40.00
  • Stop-loss: HK$23.00
  • YTD/1M/3M/12M % Change: -27.3%/-24.8%/-46.5%/0.9%
  • Market Cap: HK$105.86bn
  • 3M Average Daily Volume: 6.86mn shares
  • FY1 Forward P/E: 8.0x
  • Valuation: Trading at 0.86x of its year-end 2014 embedded value per share, considered highly attractive.
  • Reason: Strong health insurance business growth, with premiums rising 46% in 2015, outperforming competitors like Ping An Insurance.
  • Investment Strategy: Buy at HK$30 or lower, with a target of HK$40 and a stop loss at HK$23.

• Today's Top Picks:

  • Nexteer (1316.HK):

    • Last Trading Day Closing Price: HK$6.00
    • Purchase Price: Current
    • Target Price: HK$6.90
    • Stop-loss Price: HK$5.40
    • Reason: Main income from North America, avoiding China's economic slowdown while benefiting from the US dollar's strength.

  • Goldwind (2208.HK):

    • Last Trading Day Closing Price: HK$11.72
    • Purchase Price: 11.12
    • Target Price: HK$15.00
    • Stop-loss Price: HK$10.00
    • Reason: Expected strong interim results, with a weak stock price possibly triggering a share buyback.

Sector Performance Overview

• Top Performing Sectors (1D):

  • Technology: +3.3%
  • Sports accessories: +2.8%
  • Local Banks: +1.7%
  • Dairy: +1.5%
  • HK Telecoms: +1.4%
  • Medical: +1.1%
  • Brokerages: +0.9%
  • Chinese Insurers: +0.7%
  • Agriculture: +0.7%
  • Local Property: +0.7%
  • Telecoms Equipment: +0.6%

• Major Stocks in Top Performing Sectors:

  • Technology: Kingdee (268), Chinasoft (354), Tencent (700), NetDragon (777), Kingsoft (3888)
  • Sports accessories: 361 Degrees (1361), Xtep Int'l (1368), Peak Sport (1968), Anta Sports (2020), Li Ning (2331)
  • Local Banks: Hang Seng Bank (11), BEA (23), Chong Hing Bank (1111), BOCHK (2388), Dah Sing Banking (2356)
  • Dairy: Biostime (1112), CH Modern (1117), YST Dairy (1431), Mengniu (2319), Huishan Dairy (6863)
  • HK Telecoms: HutchTel HK (215), Smartone (315), HKT-SS (6823)
  • Medical: Trad Chi Med (570), Sinopharm (1099), Sino Biopharm (1177), Fosun Pharma (2196), SH Pharma (2607)
  • Brokerages: First Shanghai (227), Central China Sec. (1375), CITIC Sec. (6030), Haitong Sec. (6837), China Galaxy Sec. (6881)
  • Chinese Insurers: China Taiping Ins. (966), NCI (1336), CPIC (2601), Ping An (2318), China Life (2628)
  • Agriculture: First Tractor (38), Sinofert (297), Ko Yo Group (827), National Agri (1236), China Bluechem (3983)
  • Local Property: CK Hutchison (1), Henderson Land (12), SHK Prop (16), New World Dev (17), Sino Land (83)
  • Telecoms Equipment: China Com Service (552), ZTE (763), Trigiant (1300), Comba (2342)
  • Automobile: Geely Auto (175), Dongfeng Motor (489), BRILLIANCE CHI (1114), BYD Co. (1211), Great Wall Motor (2333)
  • Environmental and New Energy: China EB Int'l (257), BJ Ent Water (371), China Longyuan (916), Xinyi Solar (968), CGN Power (1816)
  • Infrastructure: China Railway (390), China Railway Cons. (1186), CSR Corp. (1766), China Comm. Cons. (1800), China Machinery Eng. (1829)
  • Handset and related accessories: Tongda Group (698), AAC Tech (2018), Sunny Optical (2382), Coolpad Group (2369), TCL Comm (2618)

Valuation and Forward P/E

• Hang Seng Index: FY15E P/E of 10.6, long-term average of 11.3, deviation of -5.6%, FY1 EPS growth of -13.4%, FY2 EPS growth of 9.2%.
• HSCEI: FY15E P/E of 7.1, long-term average of 8.5, deviation of -16.9%, FY1 EPS growth of -1.8%, FY2 EPS growth of 8.9%.
• Shanghai Composite: FY15E P/E of 12.2, long-term average of 11.0, deviation of +10.6%, FY1 EPS growth of 22.2%, FY2 EPS growth of 12.9%.
• S&P 500: FY15E P/E of 15.8, long-term average of 14.7, deviation of +7.2%, FY1 EPS growth of 4.6%, FY2 EPS growth of 10.8%.

Market Data

• Best Performers (1D):

  • Greenland Hong K (337.HK): +9.1%
  • Fosun Intl (656.HK): +8.3%
  • Kingdee Intl Sft (268.HK): +8.3%
  • Polytec Asset Ho (208.HK): +8.1%
  • Daphne Internat (210.HK): +6.7%

• Worst Performers (1D):

  • China Natl Bdg-H (3323.HK): -14.8%
  • International En (1009.HK): -14.3%
  • Huabao Intl (336.HK): -12.5%
  • Sunac (1918.HK): -11.8%
  • China Precious M (1194.HK): -10.5%

• HSCI Volume Filter:

  • Tong Ren Tang-H (1666.HK): -4.6%, 452.9% increase in volume
  • Tingyi (322.HK): -5.1%, 381.3% increase in volume
  • AAC Technologies (2018.HK): +4.2%, 370.3% increase in volume
  • China Lilang Ltd (1234.HK): +4.1%, 365.0% increase in volume
  • China National Bdg-H (3323.HK): -14.8%, 352.1% increase in volume

• Most Short Sold Stocks:

  • Sun Art Retail (6808.HK): -14.8%, 381.3% increase in short sell turnover
  • Huabao Intl (336.HK): -12.5%, 381.3% increase in short sell turnover
  • China Vanke-H (2202.HK): -6.4%, 313.3% increase in short sell turnover
  • Other notable short sold stocks include:
    • Want Want China (151.HK): -2.4%
    • China Lilang Ltd (1234.HK): +4.1%
    • China National Bdg-H (3323.HK): -14.8%
    • Shandong Xinhu-H (719.HK): +5.0%
    • Others:
      • Sunac (1918.HK): -11.8%
      • China Shipping D (1138.HK): +5.49%
      • China Life-H (2628.HK): +4.65%
      • CCB-H (939.HK): +5.46%
      • ICBC-H (1398.HK): +4.63%
      • Ping An-H (2318.HK): +36.50%

• Interest Rates:

  • U.S. 2-year Treasury yield: 0.6289%, down 2.85 bps
  • U.S. 10-year Treasury yield: 2.0627%, down 6.29 bps
  • U.S. 30-year Treasury yield: 2.7961%, down 1.92 bps
  • HK 1-month HIBOR: 0.2526%, up 1.15 bps
  • HK 3-month HIBOR: 0.4074%, up 1.78 bps
  • SH 1-month HIBOR: 2.8580%, up 9.90 bps
  • SH 3-month HIBOR: 3.0910%, down 0.20 bps

• Exchange Rates:

  • USD Dollar Index: 93.9420, down 2.5%
  • USD/HKD: 7.7509, unchanged
  • EUR/USD: 1.1531, up 3.7%
  • USD/JPY: 119.02, up 4.0%
  • GBP/USD: 1.5694, up 0.1%
  • USD/CHF: 0.9406, up 2.7%
  • AUD/USD: 0.7119, down 3.1%
  • NZD/USD: 0.6473, down 1.9%
  • USD/CAD: 1.3340, down 1.6%
  • USD/CNY: 6.4088, down 0.2%
  • USD/CNH: 6.5023, down 0.6%

• Precious Metals and Commodities:

  • CRB Index: 187.7, down 4.6%
  • Comex Gold: $1,143.0, up 1.4%
  • Comex Silver: $14.695, down 3.2%
  • Nymex WTI Crude: $39.29, down 3.7%
  • ICE Brent Crude: $43.3, down 8.2%
  • LME Copper: $5,065, up 0.6%
  • LME Aluminum: $1,557, up 0.2%
  • CBT Wheat: $496.00, down 0.1%
  • CBT Corn: $366.50, down 0.2%
  • CBT Soybean: $891.00, down 1.4%

• A-share Premium to H-share:

  • LUOYANG GLASS-H: H-share price HK$4.62, A-share price RMB 28.26, A-share premium to H-share: 639.8%
  • BYD CO LTD-H: H-share price HK$28.80, A-share price RMB 40.34, A-share premium to H-share: 69.4%
  • NEW CHINA LIFE-H: H-share price HK$28.45, A-share price RMB 30.31, A-share premium to H-share: 28.8%
  • PING AN-H: H-share price HK$36.50, A-share price RMB 25.11, A-share premium to H-share: -16.8%

• Top 20 Most Traded ETFs:

  • 2823: iShares FTSE A50, Price: HK$9.13, 1D change: -3.49%, 5D change: -19.91%
  • 2822: CSOP FTSE CH-HKD, Price: HK$10.34, 1D change: -4.44%, 5D change: -20.58%
  • 2800: Tracker Fund HK, Price: HK$22.10, 1D change: +0.91%, 5D change: -8.30%
  • 2828: HS H-share ETF-H, Price: HK$97.25, 1D change: -0.92%, 5D change: -11.59%
  • 3188: Not provided in the table.

Conclusion

The market showed mixed performance with the Chinese government's rate cuts providing a short-term boost to equities, but overall sentiment remains cautious. New China Life Insurance is highlighted as a potential buy due to its attractive valuation and strong health insurance growth. Nexteer and Goldwind are recommended as today's top picks based on their exposure to North America and expected results. Sector-wise, technology and sports accessories performed well, while others showed mixed results. A-share premiums over H-shares are generally high, indicating potential value in H-shares. The data also shows that several stocks are experiencing increased short selling, suggesting market uncertainty.