20160415-兴业证券-A-Share_Daily_Express_13页_852kb

Summary of Industrial Securities Co., Ltd. Report

Core Content

Industrial Securities Co., Ltd. provides a comprehensive market and company analysis, including stock indices, sector performance, daily headlines, and investment recommendations for specific companies.

Market Overview

• Market Indices:

  • SSE Composite: Closed at 3078.12, down 0.14%
  • SZSE Component: Closed at 10733.64, down 0.35%
  • CSI 300: Closed at 3272.21, down 0.11%
  • ChiNext: Closed at 2309.68, down 0.63%
  • HSI: Closed at 21316.47, down 0.10%
  • HSCEI: Closed at 9214.98, down 0.25%
  • Aggregate Market Volume: CNY 585 billion

• Market Trend:

  • China stocks slightly declined on Friday, with a lighter trading volume.
  • The market saw a downtrend, with losers outnumbering winners by a ratio of 1434-to-1032.
  • The Chinese GDP growth in Q1 2016 was 6.7%, within expectations.
  • March industrial added value increased by 6.8% YoY, reaching an 8-month high.

Sector Review

• Banks: Most were higher, with China Merchants Bank up 2.86% and Bank of China flat.
• Auto Makers: Chongqing Changan Automobile rose 1.61%, while Guangzhou Automobile Group declined 0.14%.
• Steel Makers: Weak performance, with Baoshan Iron & Steel down 2.18% and Inner Mongolia Baotou Steel Union down 1.26%.
• Media: Corrections were observed, with Jiangsu Phoenix Publishing & Media down 1.31% and Chinese Universe Publishing & Media down 1.52%.

Daily Headlines

• Economic Data: Chinese GDP growth for Q1 2016 is expected to be 6.7%, the weakest since 2009.
• Policy Updates:
  • Ministry of Land and Resources plans to reduce land supply in cities with large stockpiles.
  • Guangzhou Financial Bureau demands real estate firms to stop using crowdfunding for projects.
• Industry News:
  • Angang Steel expects a net loss in Q1 2016 due to weak steel prices.
  • China and Australia agree to enhance cooperation in new energy and e-commerce.
  • Shanghai city government fines real estate agents for fake information.
• Production: China's fuel oil production rose to 3.69 million metric tons in Jan.-Feb. 2016.

Company News

• Angang Steel (000898.SZ): Expected Q1 2016 net loss of about 615 million yuan.
• China Communications Construction (601800.SH): Crane collapse resulted in 18 deaths.
• Chongqing Changan (000625.SZ): Executives visited Google on driverless car technology.
• ICBC (601398.SH): May offer 2.85 trillion yuan in loans in 2016.
• Juneyao Airlines (603885.SH): FY net profit of 1.05 billion yuan, up from 427.7 million yuan in the previous year.
• Ping An (601318.SH): Life insurance premium income of 106.7 billion yuan for Jan.-March 2016.
• PetroChina (601857.SH): Plans to start a Canadian oil-sands plant.
• Poly Real Estate (600048.SH): FY net profit of 12.3 billion yuan, slightly up from 12.2 billion yuan.
• Zoomlion (000157.SZ): Expected Q1 2016 net loss of 600 million to 680 million yuan.

Investment Recommendations

• Wuhu Token Science (300088:SZ):

  • Rating: OUTPERFORM (Maintained)
  • Performance: Revenue increased by 142.61% YoY in 2015, net profit up 43.47%.
  • Earnings Forecast: EPS expected to be CNY 0.36 in 2016, CNY 1.01 in 2017, and CNY 1.49 in 2018.
  • PE Ratio: 36.12x, 12.85x, and 8.7x.
  • Potential Risks: Slower-than-expected M&A progress, worse-than-expected sales of display and touch modules.

• China Union Holdings (000036:SZ):

  • Rating: BUY (Maintained)
  • Performance: 2015 earnings met expectations, with a sharp increase in 16Q1.
  • Earnings Forecast: EPS forecasted at CNY 1.70 in 2016 and CNY 2.10 in 2017.
  • PE Ratio: 5x and 4x for 2016 and 2017.
  • Potential Risks: Weaker-than-expected sales recovery, slower-than-expected project progress.

Key Financial Insights

• Wuhu Token Science:

  • Revenue and net profit growth rates are strong, with net profit increasing by 43.5% in 2015.
  • Gross margin and net profit margin are improving, with ROE expected to rise to 26.2% by 2018.
  • Investment in BAK is expected to boost future performance.

• China Union Holdings:

  • Sharp increase in 16Q1 earnings due to sale of Sino Great Wall shares.
  • Project construction will benefit from the property market boom in Shenzhen.
  • Strong financial support for business transformation from investment returns and receivables.

Key Takeaways

• The Chinese stock market showed a slight decline in Q1 2016, with a reduced trading volume.
• The GDP growth of 6.7% was in line with expectations, but the market trend remained bearish.
• Certain sectors, such as banks and auto makers, outperformed, while steel and media sectors underperformed.
• The number of sows for reproduction stabilized in March 2016, signaling a potential recovery in the pig sector.
• Investment in the pig sector is expected to improve due to high pig prices and low corn prices.
• Wuhu Token Science and China Union Holdings are recommended as strong investment targets.
• Both companies are expected to benefit from the property market boom and improved financial performance.

Conclusion

The report highlights the mixed performance of China's stock market, with some sectors showing resilience and others struggling. It provides detailed financial data and forecasts for Wuhu Token Science and China Union Holdings, emphasizing their potential for growth and investment value.