20180620-广发证券_香港_-Dim_Sum_Express_4页_446kb_446kb

Dim Sum Express Summary

Core Content

This document provides an analysis of market performance and sector-specific insights, particularly focusing on the Power Sector and Media Sector in the Chinese and global markets. It includes data on market indices, ADRs (American Depositary Receipts), and company-specific forecasts.

Market Performance Overview

The following table summarizes the performance of key indices and their respective changes:

Key Market Insights

• HSI and HSCEI showed negative performance over the short and medium-term, indicating a bearish trend in the Hong Kong and mainland Chinese markets.
• MXCN and SHCOMP also faced declines, but SZCOMP showed a more significant YTD drop.
• SPX and CCMP had a more positive outlook, especially in the short-term.
• UKX and NKY experienced moderate declines, with UKX showing the highest EPS growth in 2018E.

ADRs Performance

• ADRs for most major Chinese companies showed negative daily changes, indicating market pessimism.
• PING AN (2318 HK) had a positive ADR daily change, suggesting a potential upside in the US market.

Power Sector Analysis

Key Points

• Coal prices are the main driver of profit for thermal power companies.
• Long-term contracts between coal and thermal power companies are expected to grow, reducing fuel cost fluctuations.
• ROE (Return on Equity) for thermal power companies is projected to improve in the medium to long-term due to stable coal prices and policy support.
• Huaneng Power International (902 HK) and Huadian Power International (1071 HK) are highlighted for potential valuation re-rating, with current P/B ratios of 0.89x / 0.67x (H-share) and 1.3x / 0.9x (A-share).

Risks

• Worsening demand and supply structure in the electricity market
• Downward adjustment in electricity prices
• Substantial increase in coal prices

Media Sector Analysis

Key Points

• Imported films have become more diverse in subject matter, reducing reliance on Hollywood blockbusters.
• Revenue-sharing films have a limited quota, usually reserved for high-quality blockbusters.
• Buyout films are increasing in number and are typically low-budget, offering flexibility in the market.
• In 2017, non-Hollywood films such as Dangal and Bad Genius achieved strong box office success.

Investment Highlights

• China Film (600977 CH) has advantages in distributing both revenue-sharing and buyout imported films.
• The company has a long history in the film industry and operates across the entire value chain: production, distribution, showing, and services.

Risks

• Insufficient supply of high-quality content
• Changes in imported film policies
• Overall box office falling short of expectations

Rating Definitions

• Buy: Stock expected to outperform benchmark by more than 15%
• Accumulate: Stock expected to outperform benchmark by more than 5% but not more than 15%
• Hold: Expected stock relative performance ranges between -5% and 5%
• Underperform: Stock expected to underperform benchmark by more than 5%

Sector Ratings

• Positive: Sector expected to outperform benchmark by more than 10%
• Neutral: Sector relative performance ranges between -10% and 10%
• Cautious: Sector expected to underperform benchmark by more than 10%

Analyst Certification & Disclosure

• The analyst certifies that the views expressed accurately reflect their personal opinions.
• No part of their remuneration is tied to specific recommendations in the report.
• GF Securities (Hong Kong) and its affiliates do not hold any shares in the mentioned securities.
• No investment banking relationships with the companies mentioned in the past 12 months.
• The report is for informational purposes only and does not constitute an offer to buy or sell securities.

Disclaimer

• The report is prepared by GF Securities (Hong Kong) and is not a recommendation for investment.
• Recipients should exercise their own judgment and consult professional advice before making investment decisions.
• The information may be subject to change and is not guaranteed to be accurate or complete.
• GF Securities (Hong Kong) accepts no liability for any loss arising from the use of the report.