20180816-中国银河国际证券-China_Galaxy_A-Share_Morning_Comments晨会纪要3页_347kb

报告摘要

China Galaxy A-Share Morning Comments Summary (August 16, 2018)

Core Content

The A-share market experienced a significant decline on August 16, 2018, with the SHCOMP falling below the 2,750 level and the ChiNext slipping below the 1,500 level and its 10-day moving average. The market was influenced by poor economic data and weak investor sentiment, leading to a slump in consumer and cyclical stocks. The overall market turnover remained low, indicating a lack of investor confidence and potential for prolonged consolidation.

Main Market Trends

SHCOMP closed 2.08% lower at 2,723.3 points.
SZSE Comp closed 2.32% lower at 8,581.2 points.
CSI 300 closed 2.40% lower at 3,292.0 points.
ChiNext closed 2.63% lower at 1,478.5 points.
HSI closed 1.55% lower at 27,323.6 points.
HSCEI closed 1.95% lower at 10,535.1 points.

The decline was exacerbated by sharp sell-offs in the banking sector and continued weakness in consumer stocks, particularly in the home appliance and baijiu industries. Major companies like GREE, Midea, Anhui Gujing Distillery, and Kweichow Moutai saw significant drops, indicating a loss of investor confidence.

Sector Analysis

Electrical Equipment

The sector showed decent interim earnings growth, but performance was more divergent.
Recommended stocks: Goldwind Science & Technology (002202.CH), Titan Wind Energy (002531.CH), Sinoma Science & Technology (002080.CH), Hopewind Electric (603063.CH), and Hangzhou Advance Gearbox Group (601177.CH).

Textile & Apparel

The RMB depreciated by 6.74% since June 2018, benefiting companies with significant cotton textile exports.
Expected improvements in corporate earnings due to favorable exchange rates.
Long-term growth is anticipated for companies with strong R&D and capacity expansion.

Property

Recommended tier 1 and 2 players benefiting from industry concentration.
Key investment themes:
1. Low valuation companies: China Merchants Shekou Industrial Zone Holdings Co Ltd (001979.CH), China Vanke (000002.CH), Poly Real Estate (600048.CH), China Fortune Land (600340.CH), and RiseSun Real Estate (002146.CH).
2. High growth potential companies: Future Land Holdings (601155.CH), Yango Group (000671.CH), and Sichuan Languang Development (600466.CH).
3. Companies with rich resources: Shenzhen Overseas Chinese Town (000069.CH).

Key Investment Themes

Consumer sector: Expected to benefit from solid policy support and strong demand.
Semiconductor: Increased support from China is anticipated to boost investments in foundry machinery.
Innovative drug R&D: Begins to show growth potential.
CDR (China Depositary Receipts): Details were announced, with 10 brokers appointed as sponsors for domestic listings.
Military & Defence: Risks of military-focused funds should be monitored during sector correction.
TMT (Technology, Media, Telecommunications): Sino-US trade conflicts may have limited impact.

Risk and Disclaimer

The document is issued by China Galaxy International Securities (Hong Kong) Co., Ltd. to institutional clients.
No guarantees are made regarding the accuracy or completeness of the information.
The analysis does not consider individual investment objectives or risk tolerance.
The recipient is advised to consult independent financial advisers before making investment decisions.

Disclosure of Interests

China Galaxy International may have financial interests in the companies mentioned, potentially equal to or exceeding 1% of their market capitalization.
Some directors, officers, or employees may be associated with the mentioned companies.
The firm may participate in financing transactions, provide investment services, or hold positions in the securities of the companies discussed.