20181205-中国银河国际证券-China_Galaxy_A-Share_Morning_Comments晨会纪要3页_413kb

报告摘要

China Galaxy A-Share Morning Comments Summary (December 5, 2018)

Market Overview

The A-share market experienced a mixed performance on December 5, 2018. It opened slightly lower but gradually recovered, driven by a rally in auto parts stocks and a rebound in venture-capital related stocks and shell companies in the afternoon. The financial sector saw a significant boost following news about the launch of the Shanghai-London Stock Connect.

Major Indices

SHCOMP: Closed at 2,666.0, up 11.2 points (+0.42%)
SZSE Component: Closed at 7,953.7, up 15.3 points (+0.19%)
CSI 300: Closed at 3,267.7, up 6.8 points (+0.21%)
ChiNext: Closed at 1,378.8, up 6.0 points (+0.43%)
HSI: Closed at 27,260.4, up 78.4 points (+0.29%)
HSCEI: Closed at 10,907.5, up 25.4 points (+0.23%)

Liquidity Flow

Net capital outflows: RMB2.6bn in Shanghai, RMB3.0bn in Shenzhen.
Top inflows: Special equipment, precious metals, and medical sectors.
Top outflows: Property, electronic component, and software services sectors.
Northbound trades: Net inflows of RMB3.46bn and RMB1.10bn for Shanghai and Shenzhen Stock Connects, respectively.

Sector Performance

Outperforming sectors: Titanium dioxide, utilities, oilfield services, iron & steel, and shell stocks.
Underperforming sectors: Communication services, baijiu, and military & defence sectors.

Key Investment Recommendations

Construction

Sentiment: Improved due to positive developments in Sino-US trade disputes and easing concerns over risky assets.
Recommendation: Infrastructure blue chips with low valuation and road & bridge design names.
Stock Picks: CCC (601800.CH), CRCC (601186.CH), CRG (601390.CH), China State Construction Engineering (601668.CH), Sichuan Road and Bridge (600039.CH).

Power Generation (IPP)

Sentiment: Positive due to weak thermal coal prices and improved fuel costs.
Recommendation: Power generators, especially hydropower leaders.
Stock Picks: Huadian Power International Corp (600027.CH), Fujian Funeng (600483.CH), Anhui Wenergy (000543.CH), and China Yangtze Power (600900.CH).

Machinery

Sentiment: Expected to benefit from continued investments in shale gas exploration and development.
Recommendation: Oilfield services and railway equipment industry.
Stock Picks: Jereh Oilfield Services (002353.CH), China Oilfield Services (601808.CH), Offshore Oil Engineering (600583.CH), and Sinopec Oilfield Equipment (000852.CH).

Textile & Apparel

Sentiment: Improved with positive news from the G20 Summit and RMB depreciation.
Recommendation: Consider the sector as it benefits from reduced trade tensions and improved external demand.

Recent 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 new business boosting revenue growth.
Sanqi Interactive Entertainment (002555.CH): Q3 earnings were in line, awaiting new policies and game launches.
Wuliangye Yibin (000858.CH): Stable Q3 earnings growth.
Siasun Robot & Automation (300024.CH): Share buyback boosted investor confidence.
CRRC Corp (601776.CH): Stable MOU business and higher rail freight volume expected to boost growth.
Strategy Reports: Personal income tax reduction is expected to boost sentiment, and consumption upgrade is seen as a thematic opportunity with supportive policies.
Non-ferrous Metals: Funds are reducing exposure, with preference for NAV upstream players.

Disclaimer

This document is issued by China Galaxy International Securities (Hong Kong) Co., Ltd..
It is intended for institutional clients only.
No warranty or guarantee is made regarding the accuracy or completeness of the information.
The analysis does not consider individual investment objectives, financial situations, or risk tolerance.
Past performance is not indicative of future results.
The recipient should consult their own financial advisers before making any investment decisions.

Disclosure of Interests

China Galaxy International may have financial interests in the companies mentioned, potentially equal to or exceeding 1% of their market capitalization.
Some directors, officers, or employees may hold positions in the companies referenced.
The firm may participate in financing transactions, provide services, or hold investments in the securities of the mentioned companies.
It may have received or be seeking investment banking mandates from the subject companies.