20140311-新鸿基金融集团-Investment_Daily_Note_12页_1mb

Investment Daily Note Summary - 11 March 2014

Core Content

On 11 March 2014, the Hong Kong and global markets experienced a decline, influenced by negative external news and weak Chinese economic data. The Hang Seng Index (HSI) fell by 1.7%, closing at 22,264, while the HSCEI dropped by 1.8% to 9,536. The Dow Jones Industrial Average (DJIA) declined by 34 points, and the S&P 500 and NASDAQ saw minimal declines. The Chinese economic data, including a significant trade deficit and falling CPI and PPI, led to concerns about growth and affected Hong Kong stocks, with the HSI falling as much as 400 points.

Main Points

• Market Performance:

  • HSI closed at 22,264, down 1.7%.
  • HSCEI closed at 9,536, down 1.8%.
  • Dow fell 34 points.
  • Commodity prices were mixed, with gold prices rising slightly and crude oil prices falling.

• Key Influences:

  • Weak Chinese exports data and a fall in CPI and PPI.
  • The Ukrainian crisis and concerns over the Chinese economy.
  • The disappearance of Malaysia Airlines' plane impacted Chinese insurers and airline stocks.

• Stocks with Positive Factors:

  • Conch Venture (586.HK):

    • Last price: HK$18.12
    • Target price: HK$20.80
    • Stop loss: 10% below the buy price
    • Positive factors: Policy support for residue heat power generation solutions.
    • The company is an investment holding company of Anhui Conch, a major cement producer. It benefits from policy-driven elimination of obsolete capacity and urbanization-driven demand. The company's residual heat power generation segment contributes 70% of revenue and is expanding into waste incineration.

  • First Tractor (38.HK):

    • Last price: HK$4.91
    • Target price: HK$5.65
    • Stop loss: below HK$4.50
    • Positive factors: Supportive government policies for the Three Rural Issues (agriculture, rural areas, and farmers).
    • The company is engaged in agricultural machinery and may benefit from increased subsidies and rural development.

Key Information

• Market Turnover: Hong Kong market turnover was HK$68bn.
• ETF Performance:
  • CSOP A50 (2822.HK) closed at HK$8.15, down 3.0%.
  • ChinaAMC CSI 300 (3188.HK) closed at HK$26.7, down 3.6%.
• Upcoming Earnings:
  • MTR Corporation (66.HK): Net profit down 35% to HK$8.86bn.
  • Want Want China (151.HK): Net profit up 19% to US$660mil.
  • Cathay Pac Air (293.HK): Net profit up 212% to HK$2.86bn.
  • Swire Pacific A (19.HK): Net profit down 28% to HK$12.5bn.
  • China Overseas (688.HK): Net profit up 18% to HK$22bn.
  • Swireproperties (1972.HK): Net profit down 46% to HK$10.2bn.
  • Ping An (2318.HK): Net profit up 44% to RMB28.9bn.
  • GCL-Poly Energy (3800.HK): Net loss of HK$1.04bn.
• Economic Data and Events:
  • Industrial Production (U.S.) for January: 0.3%.
  • MBA Mortgage Applications (U.S.) for March 7: 9.4%.
  • Unemployment Rate (Australia) for February: 6.0%.
  • Machine Orders (Japan) for January: 8.0%.
• Market Data:
  • Best Performers: Franshion Properties, Shangdong Weigao, China Longyuan, Li & Fung, Guangzhou Automobile.
  • Worst Performers: CR Cement, Weichai Power, China Merchants, Anhui Conch, China Unicom.
  • Most Short Sold Stocks: Tencent, Sinopec, Hutchison, China Mobile, Anhui Conch.

Major Index Valuations and Estimated Earnings Growth

A-share and H-share Comparison

Analysts and Disclosure

• Analyst: Hannah Li, CAIA
• Disclosure:
  • The views expressed in this report reflect the personal views of the research analyst.
  • Analysts have no financial interests in the listed corporations covered.
  • SHKF may have financial interests in the issuers mentioned and may engage in investment banking activities related to them.

Disclaimer

This report is for informational purposes only and does not constitute a solicitation or offer to buy or sell securities, futures, options, or other financial instruments.