20151119-新鸿基金融集团-INVESTMENT_DAILY_NOTE_13页_2mb

Investment Daily Note Summary

Core Content Overview

This document provides a comprehensive overview of the current market conditions in Hong Kong and the broader global market, including equity indices, sector performance, valuations, and specific stock recommendations. It also covers external market factors such as interest rates, exchange rates, precious metals, and commodities, along with data on A-share premium to H-share, top traded ETFs, and short-selling activity.

Main Points

Market Trends

• HSI (Hang Seng Index): The index closed at 22,188, down 0.3% for the day and 6.0% year-to-date (YTD).
• HSCEI (Hang Seng China Enterprises Index): The index closed at 10,055, down 0.2% for the day and 16.1% YTD.
• Market Conditions: The Hong Kong stock market was generally weak, with limited direction and a narrow trading range.

External Market Conditions

• U.S. Federal Reserve Minutes: Indicated that most officials believed the conditions for a December rate hike are met, with a 72% market expectation for a rate hike.
• U.S. Stock Performance: The Dow, S&P 500, and Nasdaq Composite all rose following the minutes.
• Interest Rates: U.S. Treasury yields increased, while Hong Kong HIBOR rates decreased slightly.
• Exchange Rates: The USD/HKD pair remained stable, and other major currency pairs showed minor fluctuations.
• Commodities and Precious Metals: Prices saw modest declines, with gold and silver futures down slightly.

Sector Performance

• Best Performing Sectors:

  • Gas: +4.2% for the day
  • Chinese Property: +2.7% for the day
  • Sports Accessories: +2.3% for the day
  • Logistics: +1.3% for the day
  • Airline: +1.0% for the day
  • Toll Road: +0.7% for the day
  • Steel: +0.7% for the day
  • Brokerages: +0.6% for the day
  • REITs: +0.3% for the day
  • Technology: +0.2% for the day

• Major Stocks in Best Performing Sectors:

  • Gas: China Gas (384.HK), Beijing Enterprises (392.HK), ENN Energy (2688.HK), CIMC Enric (3899.HK), China Res Gas (1193.HK)
  • Chinese Property: COLI (688.HK), China Res Land (1109.HK), Sunac (1918.HK), Country Garden (2007.HK), Evergrande (3333.HK)
  • Sports Accessories: 361 Degrees (1361.HK), Xstep Int'l (1368.HK), Peak Sport (1968.HK), Anta Sports (2020.HK), Li Ning (2331.HK)
  • Logistics: Kerry Log Net (636.HK), SITC (1308.HK)
  • Airline: Cathay Pacific (293.HK), China East Air (670.HK), Air China (753.HK), China South Air (1055.HK)
  • Toll Road: Sichuan Express (107.HK), Jiangsu Express (177.HK), Shenzhen Express (548.HK), Zhejiang Express (576.HK), Anhui Expressway (995.HK)
  • Steel: Angang Steel (347.HK), Maanshan Iron (323.HK), Shougang Res (639.HK)
  • Brokerages: First Shanghai (227.HK), Central China Sec. (1375.HK), CITIC Sec. (6030.HK), Haitong Sec. (6837.HK), China Galaxy Sec. (6881.HK)
  • Infrastructure: China Railway (390.HK), China Railway Cons. (1186.HK), CSR Corp. (1766.HK), China Comm. Cons. (1800.HK), China Machinery Eng. (1829.HK)
  • REITs: Yuexiu REIT (405.HK), Fortune REIT (778.HK), Prosperity REIT (808.HK), LINK Reit (823.HK), Champion REIT (2778.HK)
  • Technology: Kingdee (268.HK), Chinasoft (354.HK), Tencent (700.HK), NetDragon (777.HK), Kingsoft (3888.HK)
  • Building Materials: Shanshui Cement (691.HK), Anhui Conch (914.HK), China Res Cement (1313.HK), BBMG (2009.HK), CNBM (3323.HK)
  • IPP (Independent Power Producer): China Res Power (836.HK), Huaneng Power Int'l (902.HK), Datang Int'l Power (991.HK), Huadian Power Int'l (1071.HK), China Power Int'l (2380.HK)
  • Chinese Banks: CCB (939.HK), ABC (1288.HK), ICBC (1398.HK), BankComm (3328.HK), BOC (3988.HK)
  • HK Telecoms: HutchTel HK (215.HK), Smartone (315.HK), HKT-SS (6823.HK)

Key Stock Picks

• Greentown China (3900.HK):

  • Last Close: HK$7.10
  • Target Price: HK$7.80
  • Stop-loss Price: HK$6.49
  • Reason: Expected supportive policies and outperformance in the real estate sector.

• China Lilang (1234.HK):

  • Last Close: HK$6.26
  • Target Price: HK$7.00
  • Stop-loss Price: HK$5.90
  • Reason: Sharp valuation drop, potential for a rebound.

Stock in Focus

• BOC Hong Kong (2388.HK):
  • Last Close: HK$24.50
  • Entry: HK$24.50
  • Target: HK$27.00
  • Stop-loss: HK$22.30
  • YTD/1M/3M/12M % Change: -5.6%/-5.0%/-13.6%/-8.8%
  • Market Cap: HK$259.03bn
  • 3M Average Daily Volume: 14.79mn shares
  • FY1 Forward P/E: 9.9x
  • Reason: Anticipated inclusion of RMB in SDR, which may increase demand for the currency and benefit the bank's offshore RMB business.

Valuation Analysis

• Forward P/E and Valuations:
  • HSI: FY15E P/E = 11.2, Long-term avg. = 11.3, Deviation from avg. = -0.8%, FY1 EPS growth = -12.6%, FY2 EPS growth = 5.7%
  • HSCEI: FY15E P/E = 7.5, Long-term avg. = 8.5, Deviation from avg. = -11.5%, FY1 EPS growth = -1.6%, FY2 EPS growth = 4.4%
  • Shanghai Composite: FY15E P/E = 15.3, Long-term avg. = 11.0, Deviation from avg. = +38.1%, FY1 EPS growth = 22.5%, FY2 EPS growth = 10.9%
  • S&P 500: FY15E P/E = 17.6, Long-term avg. = 14.7, Deviation from avg. = +19.6%, FY1 EPS growth = 5.9%, FY2 EPS growth = 9.0%

Market Data Highlights

• Best Performers:

  • ENN Energy (2688.HK): +10.1% for the day
  • TRINITY LTD (891.HK): +9.0% for the day
  • China Res Gas (1193.HK): +8.5% for the day
  • China Gas Holdings (384.HK): +8.0% for the day
  • Sino Ocean Land (3377.HK): +7.4% for the day

• Worst Performers:

  • CAR Inc (699.HK): -6.2% for the day
  • Zall Development (2098.HK): -5.4% for the day
  • Truly International Holdings (732.HK): -5.0% for the day
  • Galaxy Entertainment (27.HK): -4.6% for the day
  • Sinotruk HK Ltd (3808.HK): -4.6% for the day

• HSCI Volume Filter: Highlighted stocks with significant volume increases compared to the average, such as China Lilang (1234.HK) and China Huiyuan (1886.HK).

• Most Short Sold Stocks: Include China Lilang (1234.HK), CAR Inc (699.HK), and others with notable short-selling activity.

A-Share Premium to H-Share

• The table lists companies with their H-share and A-share prices, along with the A-share premium to H-share. For example:
  • China Vanke (2202.HK): A-share price = RMB14.67, H-share premium = -7.9%
  • BOC (3988.HK): A-share price = RMB4.07, H-share premium = 28.8%
  • China Life (2628.HK): A-share price = RMB27.91, H-share premium = 23.0%

Top 20 Most Traded ETFs

• Includes ETFs like HS H-Share ETF (2828.HK), CSOP FTSE China-HKD (2822.HK), and ISHARES FTSE A50 (2823.HK), with varying price movements and volume changes.

Key Information Summary

• The market outlook is influenced by the potential inclusion of the RMB in the SDR, which may boost demand and benefit Hong Kong's financial institutions.
• Gas and real estate sectors showed positive performance, driven by policy changes and market sentiment.
• The U.S. Federal Reserve's rate hike expectations are a positive factor for global equities, including Hong Kong.
• Short-selling activity and volume changes are important indicators for market sentiment and potential stock movements.
• Valuation metrics such as Forward P/E suggest some indices are undervalued, particularly the HSCEI.
• A-share premium to H-share indicates mixed market perceptions, with some companies showing significant premiums and others discounts.