20150604-新鸿基金融集团-INVESTMENT_DAILY_NOTE_13页_2mb

Investment Daily Note Summary

Core Content

• Market Trends: The Hang Seng Index (HSI) closed slightly above its 20-day moving average (MA), while the HSCEI hovered around its 20-day MA. The Shanghai Composite Index showed strong performance with a significant increase in year-to-date (YTD) returns.
• Stock in Focus: CKH Holdings (1.HK) is highlighted as a stock with potential for growth due to the restructuring of Cheung Kong and Hutchison, which may reduce the holding company discount. The target price is set at HK$146, with a stop-loss at HK$104.
• Today's Top Picks: Stocks are selected based on market trends, technical analysis, and corporate news. Examples include CRTG (269.HK) and South Sea Petro (76.HK), which have shown positive price movements and increased trading volume.
• Sector Performance: The best performing sectors include Coal, Toll Road, and Infrastructure, while sectors like Brokerages and Airlines have underperformed. Major stocks in these sectors are listed with their respective price changes.
• Valuations and Earnings Growth: The Forward P/E and valuations of major indices are compared against long-term averages. The HSI and HSCEI show significant deviations, indicating potential undervaluation or overvaluation.
• Market Data: Highlights include the best and worst performers from the previous day, HSCI volume filter, and most short sold stocks. The HSI and HSCEI saw notable changes in performance and volume.
• External Market Conditions: US stocks rose due to strong payroll data and positive developments in Greece's debt talks. However, oil prices and gold prices fell. ADRs showed a positive impact on the HSI.
• Interest Rates and Exchange Rates: US interest rates and exchange rates show mixed movements, while HK and SH HIBOR rates have seen slight changes. The USD/HKD rate remained stable.
• Precious Metals and Commodities: Commodity prices such as oil and gold show mixed performance, with some showing gains and others declines. The CRB Index and various metals have seen small percentage changes.
• A-share Premium to H-share: A significant premium exists for many companies listed on both A and H-shares, with some showing a large difference in valuation.
• Top 20 Most Traded ETFs: A list of ETFs with their prices and daily/weekly performance changes is provided, showing mixed trends.

Main Points and Key Information

Market Trends

• HSI: Closed slightly above 20-day MA, showing a positive daily change of 0.7% and a YTD increase of 17.2%.
• HSCEI: Closed near 20-day MA, with a negative daily change of 0.6% and a YTD increase of 17.8%.
• Shanghai Comp: Showed a YTD increase of 51.8%.
• Shenzhen Comp: Demonstrated a YTD increase of 114.9%, indicating strong performance.

Stock in Focus

• CKH Holdings (1.HK):
  • Entry: HK$121
  • Target: HK$146
  • Stop-loss: HK$104
  • Reason: Expected to benefit from the restructuring of Cheung Kong and Hutchison, which may reduce the holding company discount.
  • Core Businesses: Includes ports, telecommunications, retail, infrastructure, energy, and aircraft leasing.

Today's Top Picks

• CRTG (269.HK):
  • Purchase Price: Current price
  • Target Price: HK$0.223
  • Stop-loss Price: HK$0.184
  • Reason: Sharp price increase due to increased turnover.
• South Sea Petro (76.HK):
  • Purchase Price: Current price
  • Target Price: HK$0.72
  • Stop-loss Price: HK$0.53
  • Reason: Made four consecutive days of positive returns after a correction, with rising turnover.

Sector Performance

• Best Performing Sectors: Coal, Toll Road, and Infrastructure showed positive daily changes.
• Worst Performing Sectors: Brokerages, Airlines, and Gas sectors had negative daily changes.

Valuations and Earnings Growth

• HSI: FY1 P/E of 12.8, long-term average of 11.4, deviation of 12.3%, with a FY1 EPS growth of -11.8% and FY2 EPS growth of 10.6%.
• HSCEI: FY1 P/E of 9.9, long-term average of 8.9, deviation of 11.1%, with a FY1 EPS growth of 3.2% and FY2 EPS growth of 11.1%.
• Shanghai Comp: FY1 P/E of 19.6, long-term average of 11.1, deviation of 77.0%, with a FY1 EPS growth of 25.0% and FY2 EPS growth of 13.8%.
• S&P 500: FY1 P/E of 17.8, long-term average of 14.4, deviation of 24.2%, with a FY1 EPS growth of 4.7% and FY2 EPS growth of 11.9%.

Market Data

• Best Performers: FANTASIA HOLDING, CRTG, CP NEW ENERGY, CC LAND HOLDING, ZHEJIANGEXPRE-H.
• Worst Performers: HI SUN TECHNOLOG, GOLDIN FINANCIAL, GOLDIN PROPERTY, CMOC-H, SHOUGANG INTL EN.
• HSCI Volume Filter: Includes stocks with significant volume increases, such as C C LAND HOLDING and ZHEJIANGEXPRE-H.
• Most Short Sold Stocks: Highlighted include GOLDIN FINANCIAL, HI SUN TECHNOLOG, and others with high short-selling turnover.

External Market Conditions

• US Stocks: Rose due to strong payroll data and Greece's positive debt talks.
• Oil Prices: Fell as US crude inventory fell less than expected.
• Gold Prices: Declined despite positive economic data.
• ADR Impact: ADRs in the US market contributed to a 36-point increase in the HSI.

Interest Rates and Exchange Rates

• Interest Rates: US 2-year and 10-year Treasury yields showed increases, while HK and SH HIBOR rates had small changes.
• Exchange Rates: USD/HKD remained stable, while other rates showed mixed movements.

Precious Metals and Commodities

• Commodity Prices: Mixed performance, with oil and gold showing declines, and others showing small gains.
• CRB Index: Slight increase, indicating a mixed market sentiment.

A-share Premium to H-share

• ZHEJIANG SHIBA-H: A-share premium of 319.8%.
• BYD CO LTD-H: A-share premium of 74.5%.
• CHINA SHENHUA-H: A-share premium of 36.0%.

Top 20 Most Traded ETFs

• Includes ETFs like CSOP FTSE CH-HKD, ISHARES FTSE A50, and others with varying price changes and performance.

Summary

This daily note provides an overview of the Hong Kong and broader Asian stock markets, highlighting key trends, stock picks, sector performance, and valuation metrics. The restructuring of Cheung Kong and Hutchison is expected to positively impact CKH Holdings, while the market shows mixed performance across various sectors. External market conditions, including US stocks and commodity prices, also influence the Hong Kong market. The note includes detailed data on interest rates, exchange rates, and short-selling activity, offering insights into market dynamics and investment opportunities.