20171103-广发证券_香港_-Dim_Sum_Express_4页_501kb

报告摘要

Market	1D Chg (%)	1M Chg (%)	YTD Chg (%)	17E EPS (%)	18E EPS (%)	17E P/E	18E P/E
HSI	-0.3	1.2	29.6	22.8	8.6	12.9	11.9
HSCEI	-0.3	2.6	23.5	9.6	9.4	8.8	8.1
MXCN	-0.3	1.6	48.1	26.3	14.9	15.2	13.2
SHSZ300	0.0	4.2	20.8	18.9	14.2	15.2	13.3
SHCOMP	-0.4	1.0	9.0	27.6	12.6	14.6	13.0
SZCOMP	-0.7	0.1	1.1	52.1	25.0	25.9	20.7
INDU	0.4	3.9	19.0	15.6	9.2	18.8	17.2
SPX	0.0	1.8	15.2	22.5	10.3	19.4	17.6
CCMP	0.0	2.8	24.7	54.2	13.3	24.0	21.2
UKX	0.9	1.2	5.8	164.1	6.3	15.2	14.3
NKY	0.5	9.3	17.9	37.8	11.4	19.3	17.3

Primary sales area dropped: According to Soufun data, primary residential GFA sold decreased by 4% MoM and 32% YoY in October, confirming a bearish outlook for the 4Q17 property market.
New down-cycle: The property market is believed to have entered a new down-cycle since September due to tightening policies and reduced property-related loans.
2018 outlook: Primary GFA sold is expected to drop by 10% YoY, which could challenge developers.
Investor action: Most China property stocks may decline by 20-40% once the down-cycle is confirmed.
Positive outlook on Bay Area landowners: Land prices in the Guangdong-Hong Kong-Macau Bay Area are expected to double over the next five years due to limited supply and increased demand.

3Q17 results expected: Results are likely to align with the full-year guidance of >30% YoY net profit growth.
Pipeline products: Albumin-bound paclitaxel and clopidogrel are under regulatory review and expected to gain approval by end-2017.
Generic drug growth: Generic drugs accounted for 44% of revenue in 1H17 and are expected to support growth.
API upcycle: Continued growth in API (Active Pharmaceutical Ingredients) since 4Q16 is expected to provide further revenue and margin upside.
Rating: Accumulate (expected to outperform benchmark by more than 5% but not more than 15%).

Net profit growth misses: Shareholders' net profit grew 9% YoY, missing expectations.
Wind power generation growth: Wind power generation increased by over 50% YoY in Xinjiang, Jilin, and Inner Mongolia due to reduced curtailment issues.
Earnings forecasts: EPS is forecasted at Rmb0.274, 0.315, and 0.371 for 2017-2019, with P/E valuations at 8.5x, 7.4x, and 6.3x, which are relatively low.
Key risks: Delays in subsidy payments, price cuts for subsidized wind power, and slower curtailment improvements.

Wind power generation beat expectations: Wind power generation in 3Q17 increased by 147.28% YoY to 1.11bn kWh.
Natural gas sales: Natural gas sales volume increased by 108.29% YoY to 3,372m m3, with retail sales up 271.3% YoY.
Earnings forecasts: EPS is estimated at Rmb0.237, 0.292, and 0.370 for 2017-2019, with P/E valuations at 7.9x, 6.4x, and 5.1x.
Key risks: Rising natural gas prices, declining electricity prices, usage restrictions, interest rate risk, and exchange rate fluctuations.

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

The analysts certifying the report express personal views on the companies and securities mentioned.
No part of their remuneration is directly tied to the recommendations in the report.
GF Securities (Hong Kong) and its affiliates do not hold shares in the mentioned securities or have investment banking relationships with the companies in the past 12 months.
Analysts and their associates do not serve as officers of the mentioned companies and have no financial interests in the securities.

This report is for informational purposes only and does not constitute an offer to buy or sell securities.
The report is intended solely for GF Securities (Hong Kong) clients.
The information may be subject to change without notice.
GF Securities (Hong Kong) accepts no liability for losses arising from the use of the report.
Recipients should consult professional advice before making investment decisions.

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