A-share Research Highlights Summary (June 29, 2015)
Core Content
The document provides an overview of the performance of the A-share market and highlights key investment opportunities across various sectors. It includes market performance data, company-specific updates, and recommendations for potential investments.
Market Performance
- The environmental sector experienced a significant drop of 7.65% for the week, with an average PE of 47.3x.
- The CSI 300 index fell 6.49%, and the GEM Index dropped 11.89%.
- The environmental sector underperformed the CSI 300 by 1.16 ppt.
- Only Kalco (300422 CH) and Shenwu (300156 CH) recorded gains in the environmental sector, while Shengyun (300090 CH), Beijing Water (300055 CH), and Sound (000826 CH) were among the top losers.
Regulatory Developments
- The Ministry of Finance, National Development and Reform Commission, and Ministry of Environmental Protection jointly formulated the Trial Measures on Charges on Emission of Volatile Organic Substance (VOCs).
- These measures may provide positive momentum for environmental monitoring companies.
Investment Recommendations
The report recommends adding positions in strong companies, especially in the secondary market and GEM (Growth Enterprise Market), amidst potential market corrections.
Key Recommendations:
- Beijing Originwater (300070 CH): A leader in water treatment and a pioneer in government collaboration. Its direct share issue could act as a short-term catalyst if approved.
- Kalco (300422 CH): A small-cap company with a margin of safety at current prices. It has a combination of technical strength, platform advantages, 15 years of rapid growth, PPP (Public-Private Partnership) potential, bonus issue expectations, and refinancing prospects.
- Zhongyuan (000544 CH): Peer competition with the parent company resolved, and refinancing capacity restored through restructuring. M&A and asset injections are expected, and it may participate in PPP projects in Zhengzhou.
Company Events
- Beijing Originwater (300070 CH): Approved for a non-public share issue.
What to Watch
Economic Data
| Country |
Date |
Event |
Prior |
Forecast |
| China |
2015/07/03 |
HSBC Services PMI |
53.5 |
-- |
| Germany |
|
Markit Services PMI |
53 |
54.2 |
Company Events
| Date |
Ticker |
Company |
Event |
| 2015/07/03 |
1169 HK |
HAIER ELEC |
FIN RES/DIV (Y.E.31/03/15) |
| 2015/07/03 |
1300 HK |
TRIGIANT |
FIN RES/DIV (Y.E.31/03/15) |
Research Coverage List
Auto & Auto Parts
| Company |
Ticker |
Rating |
Share px Jul. 2 |
12-month TP % Upside |
Mkt cap (US$mn) |
EPS 2014 |
EPS 2015E |
EPS 2016E |
P/E 2014 |
P/E 2015E |
P/E 2016E |
| BAIC Motor |
1958 HK |
BUY |
HK$8.88 |
HK$13.25 |
8,601 |
0.70 |
0.85 |
1.07 |
10.1 |
8.4 |
6.7 |
| Fuyao Glass |
3606 HK |
BUY |
HK$18.14 |
HK$22.7 |
5,870 |
1.11 |
1.10 |
1.22 |
13.0 |
13.2 |
12.0 |
Property
| Company |
Ticker |
Rating |
Share px Jul. 2 |
12-month TP % Upside |
Mkt cap (US$mn) |
EPS 2014 |
EPS 2015E |
EPS 2016E |
P/E 2014 |
P/E 2015E |
P/E 2016E |
| China Resources Land |
1109 HK |
BUY |
HK$24.85 |
HK$27.7 |
18,692 |
2.16 |
2.80 |
3.05 |
11.5 |
8.9 |
8.2 |
| KWG Property |
1813 HK |
BUY |
HK$6.35 |
HK$7.8 |
2,389 |
1.10 |
1.27 |
1.47 |
5.8 |
5.0 |
4.3 |
| Country Garden |
2007 HK |
NEUTRAL |
HK$3.39 |
HK$3.4 |
8,900 |
0.67 |
0.57 |
0.71 |
5.1 |
6.0 |
4.8 |
| Agile Property |
3383 HK |
BUY |
HK$5.15 |
HK$7.1 |
2,602 |
1.42 |
1.35 |
1.38 |
3.6 |
3.8 |
3.7 |
| Greentown China |
3900 HK |
BUY |
HK$9.62 |
HK$12.0 |
2,679 |
1.21 |
1.74 |
1.83 |
8.0 |
5.5 |
5.3 |
| China Overseas Land |
688 HK |
BUY |
HK$27.65 |
HK$33.5 |
29,155 |
2.92 |
3.54 |
4.19 |
9.5 |
7.8 |
6.6 |
Metals & Mining
| Company |
Ticker |
Rating |
Share px Jul. 2 |
12-month TP % Upside |
Mkt cap (US$mn) |
EPS 2014 |
EPS 2015E |
EPS 2016E |
P/E 2014 |
P/E 2015E |
P/E 2016E |
| China Hongqiao |
1378 HK |
BUY |
HK$7.05 |
HK$8.0 |
5,352 |
0.98 |
1.23 |
1.57 |
5.7 |
4.6 |
3.6 |
| Jiangxi Copper |
358 HK |
SELL |
HK$12.62 |
HK$10.2 |
2,259 |
0.81 |
0.66 |
0.66 |
12.4 |
15.3 |
15.4 |
| China Molybdenum |
3993 HK |
NEUTRAL |
HK$5.33 |
HK$3.1 |
902 |
0.20 |
0.21 |
0.22 |
21.1 |
20.3 |
19.6 |
| RUSAL |
486 HK |
NEUTRAL |
HK$3.67 |
HK$3.1 |
7,133 |
0.04 |
0.05 |
0.07 |
11.8 |
9.5 |
6.8 |
Technology, Media & Telecom
| Company |
Ticker |
Rating |
Share px Jul. 2 |
12-month TP % Upside |
Mkt cap (US$mn) |
EPS 2014 |
EPS 2015E |
EPS 2016E |
P/E 2014 |
P/E 2015E |
P/E 2016E |
| China Telecom |
728 HK |
BUY |
HK$4.51 |
HK$5.4 |
8,074 |
0.22 |
0.25 |
0.29 |
16.3 |
14.4 |
12.6 |
| China Mobile |
941 HK |
BUY |
HK$100.3 |
HK$105.0 |
263,684 |
5.34 |
5.89 |
6.35 |
14.9 |
13.6 |
12.8 |
| Wisdom |
1661 HK |
BUY |
HK$5.83 |
HK$9.7 |
1,210 |
0.17 |
0.20 |
0.23 |
27.2 |
23.3 |
20.5 |
Environmental Protection
| Company |
Ticker |
Rating |
Share px Jul. 2 |
12-month TP % Upside |
Mkt cap (US$mn) |
EPS 2014 |
EPS 2015E |
EPS 2016E |
P/E 2014 |
P/E 2015E |
P/E 2016E |
| Technovator |
1206 HK |
BUY |
HK$6.37 |
HK$8.2 |
530 |
0.04 |
0.14 |
0.06 |
20.5 |
5.9 |
13.7 |
| CT Environmental |
1363 HK |
BUY |
HK$10.3 |
HK$8.4 |
1,916 |
0.26 |
0.30 |
0.39 |
39.6 |
34.3 |
26.4 |
| Canvest |
1381 HK |
BUY |
HK$4.14 |
HK$3.85 |
1,068 |
0.10 |
0.16 |
0.21 |
41.4 |
25.9 |
19.7 |
Recently Published Reports
| Date published |
Name of report |
Analyst |
| 2015-07-02 |
Yunnan Water (6839 HK) |
Li Xiang |
| 2015-07-02 |
China South City (1668 HK) |
John So, Hayden Zhang |
| 2015-07-02 |
Macau Gaming-June review: weak data but positive policy |
Angela HAN LEE |
| 2015-07-02 |
Macau Gaming-Transit visa policy easing - positive |
Angela HAN LEE |
| 2015-07-02 |
Xtep International (1368 HK) |
Eugene MAK |
| 2015-06-30 |
Cowell (1415 HK) |
Alex Ng, Marley Ngan |
| 2015-06-30 |
PBOC cut both interest rates and RRR on the same day |
Lynn SONG, Cliff ZHAO, David XIE |
| 2015-06-30 |
Coolpad (2369 HK) |
Alex Ng |
| 2015-06-29 |
BAIC Motor (1958 HK) |
Yonghuo Liang |
| 2015-06-29 |
Risks of Greek Tragedy rise with referendum decision |
Lynn SONG, Cliff ZHAO, David XIE |
| 2015-06-29 |
Global Macro Weekly Digest (Issue 17) |
Lynn SONG, Cliff ZHAO, David XIE |
| 2015-06-29 |
HK Market Strategy Quick Comment |
Cliff ZHAO, Ivy ZHAO |
| 2015-06-26 |
Luk Fook Holdings (590 HK) |
Eugene MAK, Lewis WONG |
| 2015-06-25 |
China Banks - Resume of reserve repo |
Donger WANG, Sean CHENG |
| 2015-06-25 |
China Banks - Removal of LDR restriction |
Donger WANG, Sean CHENG |
| 2015-06-25 |
HK Market Strategy Bi-weekly (Vol. 10, 2015) |
Cliff ZHAO, Ivy ZHAO |
| 2015-06-25 |
Country Garden (2007 HK) |
John So |
| 2015-06-24 |
GOME (493 HK) |
Gloria WANG |
| 2015-06-23 |
Dynam Japan (6889 HK) |
Angela HAN LEE |
| 2015-06-23 |
Cowell (1415 HK) |
Alex Ng, Marley Ngan |
| 2015-06-23 |
Greentown China (3900 HK) |
John So |
| 2015-06-23 |
China Biologic Products (CBPO US) |
Milo Liu, Hayden Zhang |
| 2015-06-22 |
Global Macro Weekly Digest (Issue 16) |
Lynn SONG, Cliff ZHAO, David XIE |
| 2015-06-19 |
NetDragon (777 HK) |
Jeff HAO |
| 2015-06-19 |
China Lilang (1234 HK) |
Eugene MAK |
| 2015-06-18 |
FOMC meeting keeps rate hike on track for 2015, hints at gradual pace of hikes |
Lynn SONG, Cliff ZHAO, David XIE |
| 2015-06-17 |
Xstep International (1368 HK) |
Eugene MAK |
| 2015-06-17 |
Sunny Optical (2382 HK) |
Alex Ng |
| 2015-06-17 |
KWG Property (1813 HK) |
John So |
| 2015-06-16 |
2H15 HK Stock Market Investment Outlook |
Cliff ZHAO, Zhizhong CHEN, Ivy ZHAO, Lynn SONG |
| 2015-06-16 |
Haier Electronics (1169 HK) |
Gloria WANG |
| 2015-06-15 |
China Banks |
Donger WANG, Sean CHENG |
| 2015-06-15 |
Global Macro Weekly Digest (Issue 15) |
Lynn SONG, Cliff ZHAO, David XIE |
| 2015-06-12 |
Wason Group (3393 HK) |
Vivien CHAN, Lewis WONG |
Contact
- CMS (HK) Equity Research
- Date: June 29, 2015
- Source: Bloomberg, CMS (HK)
