20181127-中国银河国际证券-China_Galaxy_A-Share_Morning_Comments晨会纪要13页_1mb

报告摘要

A-Share Market Summary (November 27, 2018)

Core Content

The A-share market experienced a mixed performance on November 26, 2018, with an initial flat opening followed by a rebound in the morning due to rallies in XiongAn New Area and Fujian-related stocks. However, the rebound did not last into the afternoon, and the major indices showed substantial declines. The SHCOMP fell by 0.14% to 2,575.8, the SZSE Component dropped by 0.27% to 7,615.9, and the ChiNext index lost 0.32% to 1,304.6. The overall market was quiet with low turnover, and we expect the market to gradually pick up in the coming days.

Key Sectors and Trends

Bonds: The US equity market has undergone a sharp correction since October, while the bond market has shown resilience. The correction is attributed to tighter liquidity and increased economic uncertainty. The Fed's rate hike cycle is not yet complete, so liquidity risk remains the largest for the global and US equity markets. The yield curve of US bonds is expected to remain flat, and long-term bond yields will stay above 3%. The narrowing of the spread between US and Chinese long-term bonds is limited.
Power Generation (IPP): Despite production capacity surplus and slower electricity demand, power generators are likely to see lower fuel costs in Q4 due to weak thermal coal prices. Recommended stocks include Huadian Power International Corp (600027.CH), Fujian Funeng (600483.CH), Guangdong Electric Power Development (000539.CH), and Anhui Wenergy (000543.CH). Continued recommendation for China Yangtze Power (600900.CH) and SDIC Power Holdings (600886.CH).
Textile & Apparel: As of end-Q3 2018, 42 of the 86 listed textile & apparel companies reported goodwill of RMB10.98bn, up 6.46% compared to the full-year 2017. The goodwill represented 4.17% of total assets and 7.52% of net assets, indicating a relatively small proportion. The sector is a traditional cash-cow industry, and with the exclusion of companies that had goodwill impairment in 2017, the remaining 29 companies mostly showed solid operations, suggesting low goodwill impairment risk for the sector in 2018.
Media: The latest policy direction in China is expected to benefit large players in the sector. With the resumption of game license approvals, the sector may see reasonable growth. Leading companies with strong IP reserves and R&D capabilities are expected to benefit first. Recommended stocks include Tencent (700.HK), NetEase (NTES.US), Sanqi Interactive Entertainment Network Technology (002555.CH), Shunwang Technology (300113.CH), and Perfect World (002624.CH).

Major Indices

Index	Close (pts)	Change (pts)	% Chg
SHCOMP	2,575.8	-3.7	-0.14%
SZSE Component	7,615.9	-20.8	-0.27%
CSI 300	3,141.2	-2.2	-0.07%
ChiNext	1,304.6	-4.2	-0.32%
HSI	26,376.2	+448.5	+1.73%
HSCEI	10,521.5	+133.0	+1.28%

Futures and Money Markets

Market	Close	% Chg
NYMEX Crude	51.60	+2.34%
COMEX Gold	1,222.30	-0.07%
LME Copper	6,172.50	-0.56%
LME Aluminum	1,949.00	+0.00%
BDI Index	1,018.00	+0.99%
USD/RMB	693.51	-0.10%

Top Gainers and Losers (CSI300)

Top 5 Gainers:

Zhongfu Straits Pingtan (000592)
Beihai Gofar Marine Biological (600538)
Changhong Meiling Co (000521)
Suzhou Yangtze New Materials (002652)
Eatern Communications (600776)

Top 5 Losers:

Tianjin Saixiang Technology (002337)
Shenzhen Prolto Supply Chain (002769)
Avcon Information Technology (300074)
Jiangsu Shagang Co (002075)
Great-Sun Foods (603336)

Investment Recommendations

Golden Stock Combination (November 2018):

新城控股 (601155.SH)
陕西煤业 (601225.SH)
大秦铁路 (601006.SH)
长江电力 (600900.SH)
沪电股份 (002463.SZ)
航天电器 (002025.SZ)
仁和药业 (000650.SZ)
杰瑞股份 (002353.SZ)
广汇能源 (600256.SH)
中国铁建 (601186.SH)

Cash Cow Combination:

潍柴动力 (000338.SZ)
苏宁环球 (000718.SZ)
露天煤业 (002128.SZ)
宝钢股份 (600019.SH)
宁沪高速 (600377.SH)
金地集团 (600383.SH)
方大特钢 (600507.SH)
上海石化 (600688.SH)
长江电力 (600900.SH)
旗滨集团 (601636.SH)

Key Reports

Xingyu Automotive Lighting Systems (601799.CH): Q3 results showed substantial growth in LED lighting sales.
ZTE Corp (000063.CH): Q3 earnings improved, with continued investment in R&D.
CITIC Securities (600030.CH): Q3 results outperformed peers.
Yili Industrial Group (600887.CH): Q3 profits increased due to lower distribution expenses.
Yonghui Superstores (601933.CH): Business expansion in 9M18 was in line with expectations.
Inner Mongolia First Machinery (600967.CH): Q3 earnings missed, but long-term profitability remains strong.
Huatai Securities (601688.CH): Investment income grew despite a weaker market.
Shunwang Technology (300113.CH): Q3 earnings were largely in line with expectations, with new business boosting revenue growth.
Sanqi Interactive Entertainment (002555.CH): Q3 earnings were in line with expectations, awaiting new policies and game launches.

Risk and Disclaimer

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