2018 - csb · china’s exports/imports increased 11.1%/36.9% yoy, respectively in jan 2018....

China A-Share Market Weekly

2018

Market StrategyStick to fundamentals to pull through the panic

12 Feb 2018

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Stock RecommendationsZaisheng Tech Yunnan Germanium Chihong Zinc & Germanium Prolto

MacroeconomicsRobust domestic and external demand

csb.com.hk

CITIC Securities Brokerage (HK) LimitedInvestment Advisory ServicesTel：2237 9250E-mail：[email protected]

CompanyPrice

(Rmb)Target (Rmb)

Stop Loss (Rmb)

Upside (%)

Zaisheng Tech (603601 CH)

11.80 26.00 11.2 120

Yunnan Germanium (002428 CH)

10.60 16.50 10.1 56

Chihong Zinc & Germanium (600497 CH)

6.67 9.50 6.3 42

Prolto (002769 CH) 13.94 16.80 13.2 21

MacroeconomicsRobust domestic and external demand

China’s exports/imports increased

11.1%/36.9% YoY, respectively in Jan 2018.

Exports lagged imports but still surpassed

market forecast, suggesting that RMB

appreciation did not fend off robust external

demand. From a structural viewpoint,

exports reflect improvement in the quality of

growth, pointing to a healthy path ahead.

2 12 Feb 2018

Please refer to the attachment for detailed disclaimer and regulatory disclosures.

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icContents:

Source: Respective Company, CS

Stick to fundamentals to pull through the panic

The recent sharp correction may have

dragged A-share market to its trough for full-

year 2018E. We suggest keeping eyes peeled

for investment opportunities.

Market Strategy

Weekly Top Pick

Zaisheng Tech

3 12 Feb 2018


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icMarket strategy:

Source: CS

Stick to fundamentals to pull through the panic

A combination of domestic and overseas market negatives caused rapid risk release in A-share equities. While

sentiment takes time to recuperate, we warn against excessive pessimism as the recent drastic correction has

widened the safety margin of stocks and leverage is no longer too high. On a full-year 2018E horizon, the market

correction may have dragged A-share valuation to its intra-year trough, thus presenting allocation opportunities.

4 12 Feb 2018


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icMaCroeConoMiCs:

Source: CS

Robust domestic and external demand

Da t a f r o m t h e G e n e r a l

Adminis t rat ion of Customs

show that in Jan 2018, Chinese

exports and imports increased 11.1%

and 36.9% YoY, respect ively (vs .

10.9% and 4.5% YoY for the prior

month). This brought the t rade

surplus to US$20.34bn. We attribute

the signif icant beat in imports to

a late Chinese New Year holiday,

R M B a p p re c i a t i o n a n d ro b u s t

domestic demand. While exports

advanced at a slower pace, the rate

stil l outstripped market estimates,

suggesting that RMB appreciation

did not meaningfully fend off strong

external demand. From a structural

perspective, the export data clearly

reflect improvement in the quality of

growth, pointing to a healthy outlook.

Source: Bloomberg, CS

CITIC S&P 50

(Index)

(Index)

5 12 Feb 2018


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icMarket review & teChiniCal:

3,2503,3003,3503,4003,4503,5003,5503,6003,6503,7003,7503,8003,8503,900

22/9

/17

27/9

/17

9/10

/17

12/1

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2/11

/17

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/17

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/17

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/18

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2/18

Market Review: On Monday, the

benchmark indices for the Shanghai

and Shenzhen bourses went through

choppy waters, with the Shanghai

Composite Index (SCI) adding 0.7%

at i t s close. On Tuesday, A-share

equit ies were dragged as global

markets plunged in unison. The SCI

saw 3.4% evaporate by day-end. On

Wednesday, the Shanghai gauge

started high before moving south,

diving deep intraday and finishing off

1.8%. On Thursday, the SCI opened

low and retreated thereafter, shedding

1.4%. On Friday, the three major

A-share stock indices tumbled and

more than 200 companies listed on

the two bourses hit their daily down

limits. The SCI once gave up 6% and

closed with a 4.1% loss. In the week,

CITIC/S&P 50 and CITIC/S&P 300

dropped 10.8% and 9.9%, respectively.

Technical analysis: The technical

trends of CITIC/S&P 50 and CITIC/

S&P 300 slumped further, with both

indices now in the bear territory. We

expect to see support at the 200-day

moving averages of 3,139 points for

CITIC/S&P 50 and 3,344 points for

CITIC/S&P 300.

2,950

3,0503,150

3,2503,350

3,450

3,5503,650

3,7503,850

3,95022

/9/1

727

/9/1

79/

10/1

712

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1717

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1725

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172/

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77/

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710

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711

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18

Index 3,369.70

52-wk high/low 3,846.60/2,883.46

50/100/200D MA 3,630.6/3,549.4/3,344.2

RSI (14D) 30.2

MACD (12/26D)/Signal -10.64/26.12

Index 3,366.81

52-wk high/low 3,852.92/2,555.67

50/100/200D MA 3,567.3/3,410.2/3,138.9

RSI (14D) 35.5

MACD (12/26D)/Signal 17.91/55.90

CITIC S&P 300

6 12 Feb 2018


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icstoCk reCoMMendations:

Zaisheng Tech (603601 CH) has signed

a framework agreement to increase

its stake in Suzhou ES-VIP. The investment

aims to accelerate the Company’s growth

and strengthen its muscles by enlarging

sa les o f core mater ia l s for vacuum

insulation panel (VIP) and promoting

VIP derivative products. The deal will

ef fectively accrue prof it in the future.

We forecast 2018-20E earnings CAGR to

exceed 60%.

Zaisheng TechTarget Price: Rmb26 Upside: 120%

Higher investment

Share Price Performance

11.711.912.112.312.512.712.913.113.313.513.7

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(Share price/Rmb)

Price/Target/Stop Loss 11.8/26.0/11.2

52 Weeks High/Low 18.59/11.80

50/100/200D MA 13.23/14.13/15.08

RSI (14D) 29.7

MACD (12/26D)/Signal -0.30/-0.21

2017E PER (x) 33.7

Company: Zaisheng Technology is a technology company engaged in manufacturing and marketing glass microf iber f ilter media and glass f iber core materials.

Source: Bloomberg, Respective Company, CS * Closing prices as of 9 Feb 2018

Risk Rating: 1 to 5 in ascending order

7 12 Feb 2018


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Yunnan Germanium Industrial (002428

CH) is next to none in China in

terms of the size of germanium reserve.

It also boasts advantages in production

and process ing . An integrated fu l l

chain allows the Company to operate

the ent i re l ine and t rans form f rom

preliminary processing towards high-

end manufac tur ing. Thank s to the

economies of scale, the Company is

able to keep cost under control and

raise profitability continuously from 1Q

to 3Q in 2017. Explosive demand and a

favorable industry climate lend support to

performance. Management has

been persistently upgrading

product mix and aggressively

i n v e s t i n g i n h i g h - e n d

production facilities. We believe

the Company will cash in on

opportunities in downstream

sectors, such as the optical fiber

and infrared (IR) fiber segments.

Chihong Zinc & Germanium (600497

CH) is highly resource self-sufficient

thanks to its quality mineral mines, which

translates into a sharp edge in cost .

The self-suf f iciency rate of lead stands

at 100% and zinc 84%, ranking above

domestic peers in terms of resource self-

sufficiency. The Company recorded stellar

performance in the f irst three quarters

of 2017, with surging earnings and

enhanced profitability. As the industry

steps into an up-cycle, the Company is

slated to benefit from hiking prices and

accelerate earnings growth.

Yunnan Germanium Target Price: Rmb16.5 Upside: 56%

Explosive demand spells opportunity

Chihong Zinc & Germanium

Target Price: Rmb9.5 Upside: 42%Benefiting from price hike potentials

(A Shenzhen-HK Stock Connect Northbound Stock)

(A Shanghai-HK Stock Connect Northbound Stock)


6.16.36.56.76.97.17.37.57.77.98.18.3

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(Share price/Rmb)



50/100/200D MA 7.01/7.25/6.96

RSI (14D) 38.3

MACD (12/26D)/Signal 0.10/0.18

2017E PER (x) 24.7

Company: Chihong Zinc & Germanium mines and produces a variety of non-ferrous metals including zinc, lead, and germanium. The Company also produces silver and sulfuric acid.


10.410.711.011.311.611.912.212.512.813.113.4

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50/100/200D MA 11.93/11.69/11.50

RSI (14D) 32.9

MACD (12/26D)/Signal -0.10/0.11

2017E PER (x) NA

C o m p a n y : Yu n n a n G e r m a n i u m p r o d u ce s , ref ines and sells germanium products and other metallurgical products. The Company's products include high-purity germanium dioxide, germanium ingot, zone melting germanium, organic germanium products, and other metallurgical products.



8 12 Feb 2018


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Prolto (002769 CH) is a leading private

firm in China, providing supply chain

management services. Growth is mainly

driven by the dual businesses of ICT and

medical equipment supply chain services.

The Company has set foot deeply in the

Xiaomi value chain and is expected to

usher in faster turnover and net profit

growth as Xiaomi increases output and

market share. The momentum in medical

equipment supply chain segment is likely

to sustain. Despite recent termination of

a private placement plan, the Company

is still capable of exploring the medical

equipment financial leasing market. It has

also set aside sufficient provision for the

account receivable

f r o m L e s h i w h i l e

coopera t ing w i t h

indus t r y g iant s to

tap into the safet y

protection business.

We anticipate steady

e a r n i n g s r e l e a s e

going forward.

Prolto Target Price: Rmb16.8 Upside: 21%

Riding on two wheels

(A Shenzhen-HK Stock Connect Northbound Stock)


12.813.013.213.413.613.814.014.214.414.614.815.0

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50/100/200D MA 14.22/15.52/16.00

RSI (14D) 48.0

MACD (12/26D)/Signal -0.08/-0.15

2017E PER (x) 82.0

Company: Prolto delivers supply chain management services. The Company provides integrated supply chain so lut ions , logis t ic s cus toms clearance, procurement fulfillment, and distribution fulfillment. Prolto is predominately engaged in the IT service field side of supply chain management.



9 12 Feb 2018


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China/HK Stock(55%)

US Stock(5%)Euro Stock

(5%)Japan Stock

(5%)

Global ETF(15%)

Cash(15%)

Recommended global asset allocation (GAA)

Global Asset Allocation

Source: Bloomberg, Respective Company, CS

Hong Kong: Relatively undemanding stock valuation; potential benefit of “Shenzhen-Hong Kong Stock Connect” to small caps

Mainland China: Government preference for a “slow bull market”; relaxed fiscal policy in favor of equities

Japan: Real estates, exports and tourism enjoying monetary easing and weak yen

US: Macro stability and recovery; short-term pressure stemming from rate rise and strong USD

Europe: Stock valuation falling due to weak euro and further quantitative ease

The Philippines: Positive current account balance for over a decade; projected GDP growth of 6.8% in 2016E

India: Relatively strong growth versus other emerging markets; projected GDP growth of 8% in 2016E

Selected equity markets at a glance

10 12 Feb 2018


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China/Hong Kong StocksCompany Remarks

Realcan Pharm (002589 CH) Medical equipment distribution across the nation

Wellhope Agri-Tech (603609 CH) Wider margins in animal feed and upbeat growth in slaughter and trade

Dabeinong (002385 CH) Warming industry climate and growth-driving strategy

Huace Film & TV (300133 CH) Continued progress in SIP operations and promising VR content investment

Alpha Animation (002292 CH) Entering the baby/toddler market upon acquisition of BT and Jinwang

Kweichow Moutai (600519 CH) Steady and superb

CR Land (1109 HK) Benefiting from rate/RRR cuts + projects in top-tier cities

Fortune REIT (778 HK) High-quality assets + Potential Asset Injection + dividend yield of 5%-plus

Link REIT (823 HK) Asset enhancement initiative + buyback expectations

Haitong Sec. (6837 HK) Gaining from IPO re-launch and rebounding A-share market turnover

Eastern Airlines (670 HK) To ride on Shanghai Disney and Beijing Winter Olympics

Tencent (700 HK) 2016Q1: Games could surprise

CAR Inc. (699 HK) Potential regulation on taxi industry + low market penetration

Pax Global (327 HK) Strong overseas sales

Japan StocksCompany Remarks

Mizhuho (8411 JP) Expanding overseas portfolio remains the key driver

Nissan Motor (7201 JP) Robust sales, favorable currency, further cost cutting

Sony (6758 JP) Growth story continues...

US StocksCompany Remarks

Facebook (FB US) Strong products

Starbucks (SBUX US) Still brisk growth

Alphabet (GOOG US) Positive data on page view

Euro StocksCompany Remarks

Adidas (ADS GY) Upbeat industry climate

Zurich Insurance (ZURN VX) High dividend yield

LVMH (MC FP) Gain from weak €

Global ETF / ETNName Remarks

Tracker Fund of HK (2800 HK) To track the performance of the Hang Seng Index

CSOP Hang Seng Index Daily (2x) Leveraged Product (7200 HK) To track the daily performance of Hang Seng Index (2x leverage)

CSOP Hang Seng H-Shares Index Daily (2x) Leveraged Product (7288 HK) To track the daily performance of Hang Seng H-Shares Index (2x leverage)

CSOP Hang Seng Index Daily (-1x) Inverse Product (7300 HK) To track the daily performance of Hang Seng Index (inverse 1x leverage)

CSOP Hang Seng H-Shares Index Daily (-1x) Inverse Product (7388 HK) To track the daily performance of Hang Seng H-Shares Index (inverse 1x leverage)

ChinaAMC Hang Seng SmallCap Index (3157 HK) To track the performance of the Hang Seng SmallCap Index

ChinaAMC CSI 300 Index (3188 HK) To track the performance of the CSI 300 Index

Powershares QQQ Trust Series 1 (QQQ US) To track the performance of the Nasdap 100 Index (Excluded Financial Sector)

PowerShares DB Commodity Index Tracking ETF (DBC US) To track the performance of the DBIQ Optimum Yield Diversified Commodity Index

XIE Shares FTSE Chimerica (3161 HK) To track the performance of the FTSE China N Shares All Cap Capped Net Tax Index

Deutsche X-Trackers MSCI Eur (DBEU US) To track the performance of the MSCI Europe USD Hedged Index

Deutsche X-Trackers MSCI Jap (DBJP US) To track the performance of the MSCI Japan US Dollar Hedged Net Index

iShares MSCI Philippines (EPHE US) To track the performance of the MSCI Philippines Investable Market Index

iShares MSCI India (INDA US) To track the performance of the MSCI India Index

SPDR Gold ETF (2840 HK) To track the performance of the price of gold bullion in COMEX

Value Gold ETF (3081 HK) To track the performance of the London Gold Morning Fixing Price

CSOP WTI OIL ETF (3135 HK) To track the performance of the Merrill Lynch Commodity index eXtra CLA Index ER

Source: Bloomberg, Respective Company, CS

Top GAA picks

11 12 Feb 2018


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ica-share reCoMMended stoCks:

Defensive StockSMkt Cap PriceU Target Stop Loss Upside Risk

Company Business (Rmb bn) (Rmb) (Rmb) (Rmb) (%) rating Remarks

Bank of Beijing (601169 CH)^

Banks 152 7.21 11.50 6.8 60 3Aggressive and resil ient at the same time: Solid financials poised for growth, backed by safe assets and quality clients

China United Network (600050 CH)^

Telecom 182 6.01 9.08 5.7 51 3The approaching 5G era: transformation and profit rebound on SOE reform

Beijing Capital Development (600376 CH)^

Real Estate Owners & Developers

23 8.89 13.31 8.4 50 3Sales growth second to none: Far ahead of peers in housing sales.

SZ Expressway (600548 CH)^

Infrustructure Construction

12 8.32 11.80 7.9 42 3

Strengthening core while seeking transformation: Net cash of Rmb3bn upon repurchase of three toll roads will be used to consolidate main business and facilitate transformation

Zhejiang Dingli Machinery (603338 CH)^

Construction & Mining Machinery

11 61.97 86.62 58.9 40 3Another breakthrough in overseas expansion: Acquisition of a 25% CMEC stake in line with strategy to grow offshore markets

Daqin Railway (601006 CH)^

Rail Transportation

136 9.14 12.00 8.7 31 3Scarce and valuable assets: Operating a most precious railway of strategic importance

Shanghai Power (600021 CH)^

IPP 18 7.52 9.20 7.1 22 3Malta project to accelerate overseas expansion: Aim at making the best use of “two markets and two types of resources”.

Great Wall Motors (601633 CH)^

Automobiles 74 12.32 15.00 11.7 22 3Beating market expectations: launching of new models and new powertrain will optimize its product mix and help improve profitability outlook.

Baiyun International Airport (600004 CH)^

Transport Support Services

31 14.90 16.00 14.2 7 3

More duty free operation tipped to ease T2 impact: Contribution from arrival duty free business revenue plus more departure duty free sales to offset new capacity cost

Bank of Nanjing (601009 CH)^

Banking Services 74 8.72 9.29 8.3 7 3Active expansion: A better-than-expected first half thanks to scale expansion; capital replenishment a positive response to business model.

Aggressive StockSMkt Cap PriceU Target Stop Loss Upside Risk


Dongfang Energy (000958 CH)*

Utility Networks 4 4.03 21.20 3.8 426 3Projects gaining traction: Looking to faster progress in alternative-energy projects and asset injection from parent.

Realcan Pharmaceutical (002589 CH)*

Drug & Medical equipment

19 12.75 48.09 12.1 277 3

Becoming a national medical equipment distributor: Share placement to ease short-term financial pressure and ef forts to quickly extend business footprint nationwide.

Pinggao Electric (600312 CH)^

Power Equipment

11 8.22 24.25 7.8 195 3Explosive growth of UHV business: forecast-beating resul t s on recognized UHV income and more profitable product mix.

Dinghan Technology (300011 CH)*

Rail Transportation Systems

5 8.96 25.37 8.5 183 3

Increasing presence in the urban rail transportation m a r ke t : T h e d e ve lo p m ent o f n e w p ro d u c t s and branching into the urban rai l and subway maintenance and security market ensure growth.

Xinjiang Tianye (600075 CH)^

Basic & Diversified Chemicals

7 7.21 19.49 6.8 170 3Prices of chemicals tipped to remain elevated: Prices likely to hike further on re-stocking, providing drive to sector earnings growth

Yibai Pharmaceutical (600594 CH)^

Generic Pharma 7 8.52 22.40 8.1 163 3A new healthcare arm to integrate tumor treatment resources: Speeding up resource consolidation and looking to set up shops across the nation

Wellhope Agri-Tech (603609 CH)^

Animal Feed 7 8.41 21.60 8.0 157 3

Adding overseas resources: Poised to gain from agricultural development in association with the “One Road One Belt” scheme while advancing on “Internet+” strategy.

Tong Oil Tools (300164 CH)

Oil & Gas Services & Equip

3 5.71 14.23 5.4 149 3

Oil giants’ reports bode well for oilf ield service prov iders: Industr y opening up oppor tunit ies , shale oil and offshore oil segments standing out in particular

Zhongding Sealing Parts (000887 CH)*

Auto Parts 18 14.94 32.00 14.2 114 3Increase exposure to smart driving: Auto industry heading towards smart driving and electrical vehicles.

Source: Bloomberg, CS U Closing prices as of 9 Feb 2018 * Shenzhen-HK Stock Connect – Northbound Stocks (ChiNext Board for Professional Institutional Investors Only) ^ Shanghai-HK Stock Connect – Northbound Stocks # Sell Only Risk Rating: 1 to 5 in ascending order

12 12 Feb 2018


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Mkt Cap PriceU Target Stop Loss Upside Risk


Grand Auto (600297 CH)^

Agricultural Chemicals

55 6.75 14.00 6.4 107 3Driven by auto financing and second-hand car sales: China’s largest car dealer aiming at top-of-the-world rank

Keyvia Electric (300407 CH)

Transit Services 3 9.77 20.20 9.3 107 3Bellwether in railway electrif ication: Acquisition of German technology to create synergy and increase earnings upside

Bailian Group (600827 CH)^

Food & Drug Stores

18 10.93 22.00 10.4 101 3Alibaba to partner up with Lianhua Supermarket: Undervalued counter with remarkable upside.

Baolihua New Energy (000690 CH)*

IPP 16 7.50 14.90 7.1 99 3Rmb3bn new share i s suance mi r ro r s s t rong confidence: Core business has promising growth outlook; internet financing opens up upside.

HMT New Technical Materials (603306 CH)^

Textile & Textile Products

5 21.90 43.50 20.8 99 3Sustainable growth: A beneficiary of increasing use of airbags and the recall of Takata

FAWER Automotive Parts (000030 CH)*

Auto Parts 9 7.13 14.00 6.8 96 3B u s i n e s s c l i m a te to re m a i n u p b e a t : 4 Q16E performances may surprise the market on the upside.

Bewinner Communications (002148 CH) *

Telecom Carriers 4 7.07 13.60 6.7 92 3Further growth in mobile games: Industry apps and games expected to push forward in 2017E

DHC Software (002065 CH)*

Computer Hardware & Storage

24 7.54 14.00 7.2 86 3Focusing on long-term development: Initial step into Henan Province for long-term expansion in central China

Changan Automobile (000625 CH)*

Automobiles 46 11.89 22.00 11.3 85 3Partnering Baidu to push ahead with smart vehicle: Strategic alliance with search engine to venture into H2M connection and smart driving.

Sunway Communication (300136 CH)*

Electronics Components

35 35.15 64.40 33.4 83 3Swif t growth in RF separator and structural part: Fueled by acoustic/RF integration and front-end RF device in the mid/long term

Sinomach Automobile (600335 CH)^

Automotive Wholesalers

9 8.82 16.00 8.4 81 3NEV investment to help lift valuation: Venturing into the NEV realm

NBTM New Materials (600114 CH)

Auto Parts 6 13.73 24.80 13.0 81 3Riding on new powder metallurgical technology: High value-added products securing profitability

Yueyang Forest & Paper (600963 CH)^#

Paper 8 5.45 9.70 5.2 78 3Raise the cur tain for business shi f t : Tradit ional business regaining speed, new business scaling up

Yuto Packaging Tech (002831 CH)*

Containers & Packaging

21 51.86 90.90 49.3 75 3Splendid result s underscore excellence: Upbeat indust r y cl imate, fas ter market expansion and potential re-rating on the upside

Xiamen Tungsten (600549 CH)^

Base Metals 24 22.00 38.00 20.9 73 3Cathode materials to play key role after tungsten: Relatively weak 3Q17 results caused by business expansion; future still bright

Truchum Advanced Materials (002171 CH)*

Base Metals 6 5.86 10.10 5.6 72 3Skewing towards new materials: Developing new materials a part of national strategy

Tuopu Group (601689 CH)^

Auto Parts 14 19.17 33.00 18.2 72 3S u s t a i n a b l e g ro w t h : Fo re c a s t - b e a t i n g p re -announcement , precise posit ioning and faster expansion upon additional financing

Weifu High-Tech (000581 CH)*

Fuel Injection Pumps

19 22.34 38.00 21.2 70 3B u s i n e s s c l i m a te to re m a i n u p b e a t : 4 Q16E performances may surprise the market on the upside.

Xinhua Pharmaceutical (000756 CH)*

Specialty Pharma 4 12.67 21.46 12.0 69 3Multi-dimensional re-rating: Accelerating growth in preparation and hiking price for preparation

Xilinmen (603008 CH)^Home & Office Furnishings

6 15.88 26.70 15.1 68 3A warming market for home furnishing: Continuous improvement and emerging demand for tailor-made furniture.

Financial Street (000402 CH)*

Real Estates 30 10.10 16.77 9.6 66 3Bei j ing Real Es tate Sector : Buy ing inves tment properties in core districts while staying away from so-called “king plots”.

Jufei Optoelectronics (300303 CH)*#

Semiconductor Devices

4 3.04 5.04 2.9 66 3Core business beat ing est imates: Back l ight ing products to re-accelerate and a promising land of optic communication ahead

Jianghuai Automobile (600418 CH)^

Automobile 14 7.30 12.00 6.9 64 3Volkswagen JV approved: A win-win deal for both parties

Sunlord Electronics (002138 CH)*

Electrical Components

11 13.88 22.50 13.2 62 3L ikely breakthrough in appl icat ion of ceramic components: Use of ceramic parts to dif ferentiate mobile phones.

China South Publishing & Media (601098 CH)^

Media 23 12.58 20.00 12.0 59 3Deserving richer valuation: A much undervalued stock seeing catalysts emerging on the upside

Grandland (002482 CH)*

Non-Residential Bldg Const

12 7.56 12.00 7.2 59 3Launching employee stock ownership plan: ESOP to fuel endogenous growth


13 12 Feb 2018


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Qingdao Kingking (002094 CH)*


7 19.09 30.00 18.1 57 3New chapter in growth: Poised to lead the pack in market cap and profit

Yinlun Machinery (002126 CH)*

Auto Parts 7 8.44 13.20 8.0 56 3We d g i n g i n t o Vo l k s w a g e n ’s s u p p l y c h a i n : Qualif ication as a potential supplier to VW a step forward in internationalization

Overseas Chinese Town (000069 CH)*


68 8.30 12.92 7.9 56 3

No fundamental difference between project disposal and housing sales: with Beijing tightening up housing control, the Fengtai project seems better sold than held.

Yunnan Germanium (002428 CH)*

Base Metals 7 10.60 16.50 10.1 56 3Explosive demand spells opportunity: Upgrading products and investing in high-end manufacturing

Fosun Pharma (600196 CH)^

Pharmaceutical 70 34.87 54.25 33.1 56 3Pocketing a rare gem: Adding a Shenzhen hospital to form a strong healthcare network in the Pearl River Delta

Xingrong Environment (000598 CH)*

Utility Networks 14 4.75 7.30 4.5 54 3Anticipating faster growth on mixed-ownership reform: Progress in reform to exert impact far and wide

Jiangshan Agrochemical & Chemicals (600389 CH)^#


5 16.27 25.00 15.5 54 3Upbeat supply-demand prof ile on environmental pressure: Glyphosate price returning to and expected to stay on the upward trajectory

Weichai Power (000338 CH)*

Commercial Vehicles

47 7.75 11.90 7.4 54 3Market cap tipped to exceed Rmb100bn: Favorable industry climate lifting results and guidance beyond expectations.

Greenland (600606 CH)^

Real Estate Services

90 7.43 11.40 7.1 53 3Gross margin upturn as expected: Moderate increase in real estate income, coupled with significantly wider margins

Redsun (000525 CH)*Agricultural Chemicals

11 19.60 30.00 18.6 53 3Enjoying bonus for leading pesticide producers: Environmental pressure to slash industry capacity, to the benefit of key players

Irtouch Systems (300282 CH)

Electronics Components

4 17.52 26.80 16.6 53 3Income and earnings soaring in tandem: Revenue mix upgrading further under strong business execution

Dongjiang Environmental (002672 CH)*

Waste Management

10 13.86 21.20 13.2 53 3Stronger capital on share placement: Clearly positive climate for waste treatment and detoxification likely to speed up earnings

Tus-Sound (000826 CH)*

Solid Waste Treatment

28 27.14 40.90 25.8 51 3

O2O integration of renewable resources unleashing a trillion RMB market: A crucial year for the “Internet+” solid waste treatment strategy to take root, with new strategic partnership to realize the potential of mixed ownership.

Sunvim Group (002083 CH)*


5 5.67 8.50 5.4 50 3Riding the online business: domestic sales business is on good track to drive a fast earnings growth.

China National Accord Medicines (000028 CH)*

Health Care Supply Chain

20 53.44 79.80 50.8 49 3A sharp rise in profitability: Impressive headroom for share price

Xixia Automobile Water Pump (002536 CH)

Auto Parts 4 12.73 19.00 12.1 49 3Rewarding new products: R&D, NEV electronics and engine heat management to drive growth

Ningbo Huaxiang Electronic (002048 CH)*

Auto Parts 13 20.21 30.00 19.2 48 3More concentrated shareholding: De facto controller raising stake, further streamlining the interest of all parties

Joyson Electronic (600699 CH)^

Auto Parts 26 27.13 40.00 25.8 47 3Increase exposure to smart driving: Auto industry heading towards smart driving and electrical vehicles.

Robam Appliances (002508 CH)*

Home Improvement

45 47.50 70.00 45.1 47 3Another forecast-beating quarter: Visible outlook and potential to perform better than expected in 2017E

Shenzhen Gas (601139 CH)^

Utility Networks 16 7.08 10.40 6.7 47 3Selling low-eff icient assets to improve earnings of projects outside of Shenzhen

Sanan Optoelectronics (600703 CH)^

Semiconductor Devices

92 22.51 33.00 21.4 47 3On track to lead global compound semi-conductor manufacturing: Erecting a series of facilities in seven years

Huayou Cobalt (603799 CH)^

Base Metals 52 87.01 127.00 82.7 46 3Earnings elasticity from cobalt price hike: Leading cobalt supplier, rising output and sales, optimizing product mix

Southern Media (601900 CH)

Publishing & Broadcasting

9 9.69 13.92 9.2 44 3Stepping in the education sector: acquisition of a minority stake in Xinhua Group is earnings accretive.

Xianju Pharma (002332 CH)*

Specialty Pharma 6 6.90 9.90 6.6 43 3Starting a new chapter: an acquisition of Newchem will open its overseas export business.


14 12 Feb 2018


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O-film (002456 CH)*Electronics Components

53 19.70 28.12 18.7 43 3Sensing the future: To be driven by market expansion on dual camera and OLED technology advancement and increasing number of major clients

Chihong Zinc & Germanium (600497 CH) ^

Base Metals 34 6.67 9.50 6.3 42 3Benefiting from price hike potentials: Entering an up-cycle for explosive earnings growth

Changyuan Group (600525 CH)^


18 13.35 19.00 12.7 42 3Venturing into smart apparel manufacturing: Merger target boasting high value given the huge potential in smart garment manufacturing.

Chint Electronics (601877 CH)^

Electrical Power Equipment

49 22.98 32.60 21.8 42 3Explor ing the household photovol ta ic power generation market: Favorable policy to boost growth

Chongqing Department Store (600729 CH)^

Department Stores

10 24.41 34.50 23.2 41 3Embracing reform and innovation: Alibaba and local government collaboration to of fer growth opportunities

CMB (600036 CH)^ Banking Services 634 30.71 43.00 29.2 40 3Rare assets: A precious find in the market with reliable growth going forward

Jiangxi Copper (600362 CH)^

Base Metals 36 17.50 24.50 16.6 40 3Higher copper prices a boost to profit: Core business growing steadily, with 2H17E copper price to propel earnings

CYTS Tours (600138 CH)^

Tourism Services 15 20.94 29.30 19.9 40 3Earnings poised to pick up next year: Price hike for Wuzhen and strong income from Gubei

Kingenta (002470 CH)*Agricultural Chemicals

26 8.24 11.36 7.8 38 3Get t ing in to agr i cu l t u ra l se r v i ces : A se r v i ce subsidiary to drive transformation from conventional manufacturer into producer and solution provider

Angel Yeast (600298 CH)^

Packaged Food 24 29.08 40.00 27.6 38 3Higher output and price, lower cost: Projecting a 20% revenue jump for 2018E

China Meheco (600056 CH)^

Healthcare Supply Chain

21 20.12 27.65 19.1 37 4

An emerging integrated platform: One of the few Chinese companies that have already established diversified operations including manufacturing, sales and international trade.

Gujing Distillery (000596 CH)*

Beverages 23 61.10 83.40 58.0 36 3Resilient profit growth: Gradual decline in expense ratios helping to prop up earnings.

Huadong Medicine (000963 CH)*

Medicines Retailing

50 51.47 70.16 48.9 36 3Innovative diabetes drug approved for clinical trial: New diabetes medicine approved and coming to the market circa 2021E

Spring Airlines (601021 CH)^

Airlines 25 31.69 43.00 30.1 36 3Returning to positive growth: Greater earnings upside in high-end markets

Aisino (600271 CH)^Computer Hardware & Storage

34 18.45 25.00 17.5 36 3Smart manufacturing scheme out: Looking to the start of a pilot phase, with leaders benefiting from friendly environment

Bright Dairy (600597 CH)^

Dairy 15 12.58 17.00 12.0 35 3Fresh 3-year plan: Development scheme to step up old and new businesses and enhance brand power.

CMSK (001979 CH)*Investment Companies

167 21.10 28.35 20.0 34 3Expanding and optimizing land bank: To pocket more high-quality resources in major cities

Huangshan Tourism (600054 CH)^


7 13.40 18.00 12.7 34 3Better-than-expected 1Q16 results: Strong tourist flow sustainable, cost reduction effective and profitability enhanced.

Han's Laser Technology (002008 CH) *

Industrial Distribution & Rental

49 45.97 60.90 43.7 32 3Large orders materialized: High growth on doubling orders from major client

Shanghai Mech & Elect (600835 CH)^

Elevator 16 19.81 26.16 18.8 32 3Smart equipment platform established: The Company may serve as platform for parent to float more quality assets going forward.

Wuliangye (000858 CH)*

Beverages 270 71.20 93.80 67.6 32 3

Mixed-ownership reform to boost OP efficiency: The private placement will likely align the interests of the management and distributors with the Company, and thus improve the operational efficiency.

Three-Circle (300408 CH)*

Advanced Ceramics

35 19.92 26.10 18.9 31 3Expert electro ceramics maker upgrading business structure and looking to promising future with new products

Yonghui Superstores (601933 CH)^

Food & Drug Stores

92 9.66 12.60 9.2 30 3Acce le ra t ing fo rmat ion o f bus ines s a l l i ance: Establishing all -around partnership with another supermarket operator.

Yang Quan Coal (600348 CH)^

Coal Operations 19 7.78 10.05 7.4 29 3Hit t ing the sweet spot : Warmer- than-expected industry climate and increasingly clear earnings visibility


15 12 Feb 2018


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Shanghai Jahwa (600315 CH)^#

Household Products

22 33.38 43.00 31.7 29 3Curtain rises for product category expansion: Joint venture to launch product category expansion at low cost and low risk.

Wangfujing (600859 CH)^

Department Stores

15 19.09 24.50 18.1 28 3Riding on high-end consumption recovery: Exploring supermarket and premium store formats via joint ventures

Guiguan Electric (600236 CH)^

Power Generation

33 5.46 7.00 5.2 28 3Optimizing asset mix: Selling an aluminum firm to improve resource allocation

MIHF (600337 CH)^Home & Office Furnishings

10 5.41 6.90 5.1 28 3Gearing up for high growth: Accelerating growth and sustainable earnings on upgrading consumption

Hualan Biological Engineering (002007 CH)*

Specialty Pharma 23 24.93 31.68 23.7 27 3 Stella growth: A powerful trio to accelerate earnings.

Gemdale (600383 CH)^Real Estate Owners & Developers

57 12.60 15.99 12.0 27 3Embracing peak season for project launch: Rolling out more projects than previously planned

Yifeng Pharmacy (603939 CH)^

Food & Drug Stores

15 41.42 52.20 39.3 26 3Breaking into cit y ’s medical insurance system: Inclusion of 93 outlets in local health insurance system set to pad up earnings

Thinkingdom Media Group (603096 CH)

Publishing & Broadcasting

8 60.79 75.95 57.8 25 3Continuing dominance in literature: Top supplier of literature titles in 2017; promising market for children’s books in 2018E

Yangtze Power (600900 CH)^

Power Generation

351 15.97 19.80 15.2 24 3Cash dividend trumping est imates: Bet ter- than-expected payout and positive impact from industrial investment

Huayu Automotive (600741 CH)^

Auto Parts 79 25.20 31.00 23.9 23 3Delving deeper into the NEV sector by partnering Magna: Upgrading capability to become a global NEV parts supplier

Jiuzhou Pharma (603456 CH)

Specialty Pharma 7 16.30 20.00 15.5 23 3One-stop service provider for new drug R&D: Joining Frontage and making steady progress in CDMO strategy.

Jiajiayue (603708 CH)Food & Drug Stores

9 18.82 23.00 17.9 22 3Accelerating expansion: Buying a controlling share in a supermarket chain and stepping onto a track of rapid expansion

Zijin Mining (601899 CH)^

Precious Metal Mining

76 4.37 5.30 4.2 21 3A mining giant: Riding on non-ferrous metal up-cycle and own capacity expansion

Yutong Bus (600066 CH)^

Commercial Vehicles

51 22.88 27.70 21.7 21 3Accelerating sales to help valuation recover: Sales expansion to prop up valuation amid low market expectations

Dashenlin Pharmaceutical (603233 CH)

Food & Drug Stores

17 41.77 50.54 39.7 21 3A premium drug material retailor: Strong profitability and market expansion translating into impressive market cap potential

Neway (603699 CH)^#Fabricated Metal & Hardware

13 16.88 20.37 16.0 21 3A real gem: Ready to rebound in 2017E on growing demand from petrochemical and nuclear power sectors

Flyco Electrical Appliance (603868 CH)^

Consumer Elec & Applc Stores

25 58.04 70.00 55.1 21 3A promising leader in the personal care sector: 2017E revenue and profit likely to rise 20% and 30% YoY, respectively

SAIC Motor (600104 CH)^

Automobiles 374 32.01 38.00 30.4 19 3Accelerating by the quarter: New model launches for both local and JV brands, wide margin of safety on high dividend payout and yield

Bank of China (601988 CH)^

Banking Services 904 4.29 5.08 4.1 18 3

An elephant dancing to the national strategy tune: Well positioned in global f inancial operation and ready to gain from RMB internationalization and “One Belt One Road”.

Satellite Petrochemical (002648 CH)*

Chemicals 15 14.30 16.90 13.6 18 3Rebounding climate: Recovering demand for acrylic acid and ester, sanguine prospects in SAP.

Industrial Bank (601166 CH)^

Banking Services 370 17.79 20.85 16.9 17 3Freeing up excess reserve to smooth volat i l i t y : Moderate improvement in f inancia l data and accommodating new rules for reserves .

Chenming Paper (000488 CH)*

Paper 18 16.12 18.80 15.3 17 3Earnings tipped to rise further: Friendly industry policy to propel growth beyond expectations


16 12 Feb 2018


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very Agressive StockSMkt Cap PriceU Target Stop Loss Upside Risk


Beijing Tongtech (300379 CH)*#

Information Services

3 10.42 100.00 9.9 860 3New model for dat a in tegrat ion: Look ing to breakthroughs in project construction fee payment system to monetize sustainable payment flow.

Chuying Agro-Pastoral (002477 CH)*

Pork and Poultry Products

12 3.77 27.60 3.6 632 3

Benefit from this round of up-cycle for hog price: Due to strained and broken capital chain for the livestock breeding industry, sow population may thus hit record lows repeatedly going forward and thus potentially pushing hog prices to new highs.

Janus Precision (300083 CH)*

Electronic Components

10 6.96 46.00 6.6 561 3

Moving early for Industry 4.0: A national smart manufacturing demonstration pilot boasting scarce resources, poised to gain f rom accommodative policies.

Kailong (002783 CH) Chemicals 3 16.50 75.38 15.7 357 3Explosive growth ahead: Expect the regional leader to log net profit growth of 10%-plus CAGR in 2015-17E.

Haoxiangni (002582 CH)

Packaged Food 5 10.12 45.00 9.6 345 3

Nuts are core in online food sales: Nuts outrunning all other snacks in online food sales during the Chinese New Year holidays; online venders with nuts as core products ready for a bumper harvest ahead

Hailun Piano (300329 CH)*#

Music Instruments

2 7.23 29.00 6.9 301 3An O2O platform for music education: Linking smart piano with music education to generate new growth drivers.

Chant Group (002616 CH)*

Household Cooking Appliances

5 7.29 27.70 6.9 280 3Chant Group: An operationally stable counter in a high-growth sub-sector, with visible and sustainable growth ahead

Navtech (300456 CH)Consumer Eletronics

53 27.95 96.10 26.6 244 3Expecting explosive growth on MEMS: Leveraging on Silex edge and favorable industry climate

EVE Energy (300014 CH)*

Renewable Energy Equipment

13 15.70 50.00 14.9 218 3Policy guidance to beef up industry leaders: Large-scale manufacturers of car bat teries to r ide on favorable policy and first-mover advantages

China Hi-tech (600730 CH)^#

Comml & Res Bldg Equip & Sys

3 5.42 17.00 5.1 214 3Forming a large-scale vocational education group: Transforming into an education provider with massive on/offline courses.

TV & Broadcast Intermediary (000917 CH)*

Advertising & Marketing

10 6.85 19.34 6.5 182 3Active transformation into an internet-based new media play: Building up a not-notch entertainment ecosystem.

GoerTek (002241 CH)*Consumer Electronics

42 13.02 35.84 12.4 175 3A g lobal leader in VR lens : Super ior pos i t ion underscored by gap between HTC and Oculus in VR lens

Shida Shenghua Chemical (603026 CH)


3 16.18 44.20 15.4 173 3A green leader in electrolyte production: Upcoming full line of electrolyte products to tap into the swelling lithium battery market

Meiya Optoelectronic (002690 CH)*

Measurement Instruments

11 16.78 45.50 15.9 171 3Building up presence in mobile healthcare: Adding presence in the oral/mobile healthcare sector.

Victory Precision (002426 CH)*

Structural Components for TV and laptop

18 5.19 14.00 4.9 170 3Potential growth in Industry 4.0: Scale expansion to cut into Industry 4.0 for high growth ahead.

Sanquan Food (002216 CH)*#

Packaged Food 6 7.42 20.00 7.0 170 3

The post-1990 cohort : Eat , drink and have fun: Following the spending trend of the post-1990 cohort and selecting sub-sectors with potential upsides in both output and price.

Sierte (002538 CH)*Agricultural Chemicals

5 7.54 20.00 7.2 165 3Creat ing an overal l health and wel lness fund: Healthcare fund expected to boost revenue going forward

Kaier New Materials (300234 CH)

Enamel 2 7.65 20.00 7.3 161 3

Leaping into a new stage of development: The Company w i l l pos s ib l y ente r a h igh - g row th period and upgrade to a new stage in business development.

Tungkong (002117 CH)*

Printing Services 5 14.13 36.40 13.4 158 3Rapidly growing new businesses: Expecting the sports lottery market to expand and favorable policy to drive up stock price.

Jereh Oilfield Services (002353 CH)*

Oil & Gas Services & Equip

12 12.70 32.00 12.1 152 3

Oil giants’ reports bode well for oilf ield service prov iders: Industr y opening up oppor tunit ies , shale oil and offshore oil segments standing out in particular

Guoxuan High-Tech (002074 CH)*


21 18.48 46.40 17.6 151 3Policy guidance to beef up industry leaders: Large-scale manufacturers of car bat teries to r ide on favorable policy and first-mover advantages

17 12 Feb 2018


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Bairun (002568 CH)* Flavorings 8 10.60 26.50 10.1 150 3To new spirits: Premixed package spirits are rapidly growing in popularity, creating tantalizing upside for the monopolistic ingredients maker.

Wiscom (002090 CH)*#Application Software

4 16.85 42.00 16.0 149 3 to propel growth in 2018E

ORG Packaging (002701 CH)*

Containers & Packaging

13 5.47 13.00 5.2 138 3Acquiring a football club: Fair price for good value, leading the way into the sports arena.

Zhejiang Zhenyuan (000705 CH)

Specialty Pharma

2 6.78 16.00 6.4 136 4Cooperating with a local hospital: Systematic training for TCM staff and faster drug adoption for certain diseases.

Sunner Develop (002299 CH)*

Meat Type Chicken Products

15 11.95 27.60 11.4 131 3

Seize the opportunity from oversold poultry plays: Another round of broiler price hikes drawing near and upbeat industry climate tipped to last into 2018E on tight supply

Zhiyun Automation (300097 CH)*

Automation Equipment

6 19.90 45.00 18.9 126 3O n w a y t o l e a d h o m e - g r o w n e q u i p m e n t makers: Acquisition to pave way into a new market segment.

Apex (002180 CH)*Power Generation

26 24.91 55.50 23.7 123 3

From chip maker to printing system leader: Solid base in printing consumables and chips manufacturing, future business growth in providing printing system solutions.

Zaisheng Tech (603601 CH)

Specialty Chemicals

5 11.80 26.00 11.2 120 3H i g h e r i n v e s t m e n t : A b i g g e r s t a k e i n V I P manufacturer to buoy up future earnings

Lianchuang Electronic (002036 CH)*

Consumer Electronics

8 14.04 30.78 13.3 119 3Investment prospects in science and technology: 2017E to see equipment market expansion and explosive content growth.

Changgao (002452 CH)

Infrustructure Machinery

3 5.26 11.47 5.0 118 3

Acquisition of a giant sets a milestone: High-voltage electric power distribution box for electric cars a rising star in the market; investment in Hangzhou Fute highly promising

Hongda Xingye (002002 CH)*

Packaging Materials

17 6.46 14.00 6.1 117 3Reaping fruits from soil remediation projects: Guiding strong earnings growth for 1-3Q17E

Hytera Communications (002583 CH)*

Communication Equipment

20 11.20 24.00 10.6 114 3Seeking global dominance in private communication net works: Core technology and r ich product s pointing way to industry leader worldwide

Hailide (002206 CH)* Textile 6 4.74 9.90 4.5 109 3

Meaningful upturn in demand: Improving demand on the back o f bet ter technology, changing downstream competitive landscape and increasing localization.

Yongli Belting (300230 CH)

Light Duty Conveyor Belts

5 11.11 22.60 10.6 103 3Private placement to finance premium asset purchase: Full acquisition backed by private placement ready to catapult earnings growth going forward.

Kehua Hengsheng (002335 CH)*


7 24.44 47.40 23.2 94 3Emerging in top-t ier markets: Cloud computing project in Shanghai received go-ahead

Dongbai Group (600693 CH)^

Department Stores

6 6.80 13.00 6.5 91 3Unlock ing long - term valuat ion upside: R is ing demand for logistic property in the midst of sector consolidation and industry upgrading

StarNeto (002829 CH)Measurement Instruments

4 21.90 41.65 20.8 90 3Embracing oppor tunit ies f rom mil i tar y - civ i l ian convergence in marine technology: Main products in high demand, driving organic and inorganic growth

Vtron Tech (002308 CH)*


9 9.58 18.00 9.1 88 3Acquiring a controlling share in Keer Education: Leveraging on top-quality education resources and offline development in core cities.

Xinyangfeng Fertilizer (000902 CH)*


12 9.11 17.08 8.7 87 3Alliance with Alibaba: Tying up with e-commerce giant to enter the rural on/off-line business world.

Fiyta (000026 CH)Jewelry & Watch Stores

3 9.61 18.00 9.1 87 3Strong brand, substantial upside: A warming luxury watch market and upbeat outlook for watch repair and maintenance

Cha Cha Food (002557 CH)*

Packaged Food 7 13.40 25.00 12.7 87 3

Nuts are core in online food sales: Nuts outrunning all other snacks in online food sales during the Chinese New Year holidays; online venders with nuts as core products ready for a bumper harvest ahead

Zhengzhou Coal Mining Machinery (601717 CH)^

Flow Control Equipment

9 5.88 10.90 5.6 85 3To leapfrog via Bosch SG acquisition: Premium target expected to boost profitability in the long run.

Shouhang Resources Saving (002665 CH)*

Comml & Res Bldg Equip & Sys

16 6.32 11.70 6.0 85 3Killing two birds with one mixed-ownership stone: Faster advance on reform and business upturn

Jetsen Technology (300182 CH)*

Infrastructure Software

23 8.80 16.00 8.4 82 3Rosy out look : income structure opt imized and mechanism in place for long-term growth.

18 12 Feb 2018


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Ningbo Shanshan (600884 CH)^

Apparel, Footwear & Acc Design

17 14.93 27.00 14.2 81 3Leading supplier of lithium battery material: Favorable climate thanks to the NEV market boom

Taihai Manoir Nuclear (002366 CH)*

Flow Control Equipment

23 26.45 47.70 25.1 80 3Embarking on a new journey: Private placement to beef up production capability

Xiangyu (600057 CH)Logistics Services

11 7.38 13.20 7.0 79 3Looking up: Faster growth via increasing presence along industry chain and southbound grain shipment

Zhongbai Group (000759 CH)

Department Stores

5 7.51 13.40 7.1 78 3Among the first to benefit from SOE reform: Potential breakthroughs in management incentive programs

AVIC Helicopter (600038 CH)^

Aircraft & Parts 20 33.65 60.00 32.0 78 3Promising target: The sole listed helicopter asset in parent group

Offshore Oil Engineering (600583 CH)^

Oil & Gas Services & Equip.

27 6.15 10.80 5.8 76 3Upside for re-rating: 2016E earnings likely to ease moderately, with overseas orders on the rise.

Gehua CATV (600037 CH)^#

Cable TV Network

16 11.77 20.52 11.2 74 3Clearly an asset consolidation platform: More high-quality asset injections likely and potential upside in value on shift toward new media.

Digiwin Software (300378 CH)*#

Application Software

3 11.21 19.35 10.6 73 3Smart manufacturing scheme out: Looking to the start of a pilot phase, with leaders benefiting from friendly environment

SPC Environment Protection Tech (002573 CH)*

Pollution Control Equipment

15 14.14 24.30 13.4 72 3ESOP reflects strong confidence: Tipped to solidify its lead in air pollution treatment

Sanyou Chemical (600409 CH)^


20 9.51 16.30 9.0 71 3Stellar performance of all core businesses: Expecting high growth to continue in 2H on friendly climate

Xinye Textile (002087 CH)


4 5.26 8.91 5.0 69 3Riding on capacity release and favorable policies: Enhancing operating results on greater capacity, upgrading products and effective cost control

Hejia (600093 CH)^ Auto Parts 15 13.07 22.00 12.4 68 3Building up a financing chain for the coal industry: Significant potential in business growth and earnings/dividend commitments

AVIC Electromechanical (002013 CH)*

Aircraft Parts 20 8.33 14.00 7.9 68 3Asset injection on the door steps: Private placement of shares approved by regulator.

Newland (000997 CH)*


16 15.77 26.50 15.0 68 3

Full speed ahead to payment business: Buying a national merchant acquir ing l icense to boost prof i tabi l i t y and t rans form into an integrated electronic payment operator.

Huayi Brothers (300027 CH)*

Movie/TV drama

25 9.07 14.97 8.6 65 3

Set sail for an exciting long journey with powerful partners onboard: Cooperate with Alibaba and Tencent in e -commerce, new media and movie production development.

Global Top E-Commerce (002640 CH)*

Apparel, Footwear & Acc Design

24 16.21 26.50 15.4 63 3Consolidating to stoke quality growth: Persistently strong electronics and recovering apparel trade

Denghai Seeds (002041 CH)*

Crop Seeds 9 10.33 16.80 9.8 63 3Anticipating new concept in management and upgrading products: Buying quality seed companies and bringing in strategic investors to raise valuation.

Tianyuan DIC (300047 CH)*#


5 11.53 18.70 11.0 62 3Expect big data to be re-rated: A rare big-data play in the A-share market looking to faster business growth

Goldwind (002202 CH)*

Wind Power 43 14.90 24.00 14.2 61 3

Share placement to executives underscores full conf idence: Management clearly shows staunch confidence for the Company to ride even higher going forward.

Xuelang Environment (300385 CH)

Pollution Control Equipment

3 21.13 34.00 20.1 61 3Share placement to raise HWT presence: Towards a model powered by manufacturing and waste treatment.

Kangni Mechanical (603111 CH)^


10 11.10 17.60 10.5 59 3Acquisi t ion target may surprise on the upside: Proposing merger to tap into the growing mobile casing market

Songcheng Performance (300144 CH)*

Theme Park & Cultural Arts

26 17.98 28.40 17.1 58 3Hatching the first offshore project: Making headways on/off-line and on/offshore.

AECC Aviation Power (600893 CH)^

Aircraft & Parts 52 22.96 36.00 21.8 57 3Promising target: A whole-engine plat form with sustainable strong growth

19 12 Feb 2018


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Kingfa Tech (600143 CH)^

Specialty Chemicals

16 5.99 9.30 5.7 55 3New materials forming multiple drivers for earnings turnaround in 2018E

Kinlita Chemical (300225 CH)

Industrial Coatings

5 10.95 17.00 10.4 55 3

New oppor tunit y for environmental ly f r iendly coating supplier: Leadings domestic players in terms of technology for water-based coating and market build-up.

Sanqi Interactive Entertainment (002555 CH)*


43 19.85 30.60 18.9 54 3A traffic giant in the age of web-to-mobile conversion: Blockbuster games expected to lift 2018E earnings

Kaiyuan Instruments (300338 CH)

Education 6 17.28 26.60 16.4 54 3Renewed expectations for law to promote privately-run schools: Al locat ing in educat ion ahead of legislation in support of privately-run schools.

Star-net Communication (002396 CH)*

Communication Equipment

11 18.10 27.60 17.2 52 3The approaching 5G era: differentiation in corporate-level equipment, with M&As to pad up earnings

Venustech (002439 CH)*


18 19.93 30.00 18.9 51 3Strategic partnership with Tencent: New growth potential and faster scale expansion ahead

Dabeinong (002385 CH)*

Animal Feeds 25 6.00 9.00 5.7 50 3Setting sails again: Concentrating on high-end feed to maintain strong margins

Yinhe Electronics (002519 CH)*

Cable TV Equipment

7 6.02 9.00 5.7 50 3Upbeat all around: Steady and smooth growth of STB, military electromechanical and new-energy auto parts businesses.

Nhwa Pharmaceutical (002262 CH)*

Food & Drug Stores

13 12.59 18.81 12.0 49 3Exclusive agent for a premium anesthetic from the US: Signing a pact with LSI for marketing ProSQ in China

Originwater (300070 CH)*

Waste Water Treatment

47 15.14 22.50 14.4 49 3“River chiefs” assuming duty: Shanghai rolling out new system to clean polluted waters .

Sinnet (300383 CH)*Network Integration Services

19 13.19 19.60 12.5 49 3

Acquiring a tech f irm and land to build a cloud computation base: The new project, when completed and running at full steam, could add Rmb360mn net profit a year.

Titan Wind Energy (002531 CH)*


11 6.07 9.00 5.8 48 3

Acquisition of South Kerry Windpower: Shelling out Rmb100mn for 58% of a wind-power company to further enlarge the share of the wind-power tower market.

Fenghua Advanced Technology (000636 CH)*


9 9.91 14.59 9.4 47 3New opportunities: Scale and business expansion to be fueled by SOE reform.

Tongwei (600438 CH)^Agricultural Producers

34 8.85 13.00 8.4 47 3Creating a new growth driver: Investing Rmb12bn on high efficiency cells to catapult earnings

Global Safety Tech (300523 CH)


5 37.80 55.45 35.9 47 3A promising new star: Strong orders to translate into healthy growth

Hoshine Silicon (603260 CH)

Specialty Chemicals

34 51.24 74.92 48.7 46 3A silicon leader with full presence along the industry chain: Visible prospects thanks to industry recovery and presence in new materials

Youpon Ceiling (002718 CH)

Integrated Ceiling

4 44.60 65.00 42.4 46 3Growth to pick up in 2H15E: Living-room products and “internet+” to propel growth.

Changjiang Electronics (600584 CH)^

Semi Conductor 23 17.16 25.00 16.3 46 3Leading the race: Intensifying M&As as the Moore’s Law coming towards a bottleneck

NavInfo (002405 CH)*Application Software

25 19.34 27.99 18.4 45 3A launch pad to international track: Buying a stake into global mapping service provider to form strong alliance

*ST Shanxi Coal (600546 CH)^#

Coal Operations 9 4.52 6.45 4.3 43 4Even happier times ahead: Higher earnings in coal and loss-stopping in trade

CIMC (000039 CH)*Fabricated Metal & Hardware

22 17.28 24.30 16.4 41 3Framework pact signed for Qianhai plot : Land conversion to commercial use t ipped to boost valuation and balance sheet

Emei Shan Tourism (000888 CH)*

Tourism Services 5 9.67 13.50 9.2 40 3Strong 1H14E results boost conf idence in tourist operators: Upbeat 1H14E results could lift confidence in scenic zone operators in general.

Xin Zhi Motor (002664 CH)*

Starters and Rotors

9 23.50 32.50 22.3 38 3A rising star in AEV: Investing on AEV and building a comprehensive engine platform.

Haid Group (002311 CH)*

Agricultural Producers

32 20.21 27.90 19.2 38 3Pushing ahead with supply-side structural reform in agriculture: Service positives to benefit comprehensive platform operators.

Perfect World (002624 CH)*

Entertainment Content

39 29.80 41.10 28.3 38 3Asset sales to consolidate core business: Sell ing cinema line assets in a bid to concentrate on core

20 12 Feb 2018


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Wanfeng Wheel (002085 CH)*

Auto Wheels 30 13.79 19.00 13.1 38 3

Structural shif t and upgrading amid steady core growth: Huge potential to expand its chromium-free metal surface treatment operation after acquiring Shanghai Dacromet.

China Animal Husbandry (600195 CH)^#

Animal Feeds & Vaccine

8 17.83 24.32 16.9 36 3Enhanced produc t qua l i t y : Bet ter qua l i t y on upgraded technology to support sales and profit.

Nanji E-Commerce (002127 CH)*

Internet Retailing

22 13.64 18.60 13.0 36 3Huge room to expand: Strong head products and potential to expand long-tail goods

Jinyu Bio-technology (600201 CH)^

Animal Biophar-maceuticals

24 26.53 36.00 25.2 36 3New product approval cements leadership: Another vaccine approved, expanding room for further market penetration.

Unifull Industrial Fibre (002427 CH)*#


11 27.99 37.20 26.6 33 3Venturing into the EV sector: Power battery to ride on the high-growth EV market.

Weixing New Materials (002372 CH)*

Plastic Pipe 19 18.86 25.00 17.9 33 3

Visible outlook of infrastructure: Construction of infrastructure projects will play a bigger role than real estates in stabilizing growth, offering opportunities with relatively certainty.

Tatwah Smartech (002512 CH)*


20 18.07 23.76 17.2 31 3Well -def ined direct ion for business upgrading: Acquiring control of Card-U, leveraging on payment licensing and extending into financial services.

Hikvision Digital (002415 CH)*


345 37.36 48.10 35.5 29 3Vision technology to drive growth: Innovative vision technology and promising future in f luorite and machine vision areas

Lao Feng Xiang (600612 CH)^

Jewelry & Watch Stores

13 40.58 52.00 38.6 28 3Set to benefit from industry recovery: Top-brand retailer a step ahead of peers amid warming sales

Suning Commerce (002024 CH)*

Consumer Elec & Applc Stores

110 11.82 15.00 11.2 27 3

Kicking of f a new era of digital retailing: Alibaba Group’s acquisition of a Sunning stake at a significant premium expected to impact internet-based retailing in China

Zhejiang Transfar (002010 CH)*

Specialty Chemicals

50 15.49 19.50 14.7 26 3U p p e d e a r n i n g s co m m i t m e n t u n d e r s co r e s confidence in long-term growth: Still optimistic about strategic presence in highway/port logistics.

Shanxi Coking (600740 CH)


10 12.42 15.60 11.8 26 3A crucial point for earnings growth: A deal to contribute investment gains by Rmb1.6bn

New Beiyang (002376 CH)*

Office Electronics

8 12.60 15.75 12.0 25 3Benef it ing from the popularization of intelligent terminals: Increasing popularization of intelligent terminals pointing to long-term growth potential

Laobaixing (603883 CH)^

Food & Drug Stores

15 54.30 67.64 51.6 25 3New deal for a new market: 2016E performance to ride on acquisition of quality local chain

Heilan Home (600398 CH)^

Specialty Apparel Stores

51 11.44 14.04 10.9 23 3Advancing the multi-brand strategy: Expanding scale and widening presence via UR acquisition

Toly Bread (603866 CH)^

Packaged Food 18 39.19 48.00 37.2 22 3Baking up a promising market across the Mainland: Great expectations as the bread consumption moves into high gear.

Guirenniao (603555 CH)^#

Apparel & Footwear

14 21.81 26.55 20.7 22 3Running into the sports arena: Operating sports resources/content s , media and monet izat ion structure, and looking to a bright future.

Shanghai Ganglian (300226 CH)*

Internet Based Services

82 51.66 62.80 49.1 22 3Reaching the internet for more upside: Pocketing IT portal operator to gain from its promising profits ahead

Better Life (002251 CH)*

Food & Drug Stores

16 19.01 23.00 18.1 21 3Global trade of growing scale: Upbeat about players with strong overseas supply chains and commodity flow.

Prolto (002769 CH)*Logistics Services

5 13.94 16.80 13.2 21 3Riding on two wheels: Production and market share expansion in Xiaomi set to boost earnings

21 12 Feb 2018


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ictop twenties:

Top 20 GainersCompany

Price (Rmb)

WoW Chg (%)

Huaxi Securities (002926 CH) 15.76 67

Nonghua Intelligent (000816 CH) 3.80 62

Tricolor Technology (603516 CH) 45.54 61

Nacity Property Service (603506 CH) 34.26 33

Zhongnongfa Seed (600313 CH) 3.46 27

Sun Pharmaceutical (300216 CH) 9.94 26

Malion New Materials (300586 CH) 30.61 22

B-Soft (300451 CH) 26.90 22

Huatong Meat Products (002840 CH) 33.62 19

Sunshine Circuits (300739 CH) 40.70 15

Chunxing Precision (002547 CH) 9.06 15

Renrenle Commercial (002336 CH) 11.78 15

HC SemiTek (300323 CH) 16.32 14

Seagull Cooling Tower (603269 CH) 28.85 14

Anjubao (300155 CH) 5.51 14

Three Stars New Material (603578 CH) 31.98 13

Xiamen Intretech (002925 CH) 76.10 12

Yuanlong Yato (002878 CH) 38.00 12

Highlander Digital (300065 CH) 14.86 11

Talimu Agriculture (600359 CH) 6.17 11

Top 20 LosersCompany

Price (Rmb)

WoW Chg (%)

Zhangzidao (002069 CH) 4.56 (41)

Yanhua Smartech (002178 CH) 8.89 (41)

Magic Design (002856 CH) 28.08 (41)

Dymatic Chemicals (002054 CH) 6.89 (41)

Global Printing (002799 CH) 11.95 (36)

Zhenjing Corp (603477 CH) 11.57 (35)

Chang Lan Technology (002879 CH) 28.38 (35)

Riying Electronics (603286 CH) 24.34 (34)

Langbo Seal (603655 CH) 18.84 (33)

Chanhen Chemical (002895 CH) 20.03 (33)

GenSho Logistics (603813 CH) 24.03 (33)

Routon Electronic (600355 CH) 5.10 (32)

CCCG Real Estate (000736 CH) 15.94 (32)

Genuine New Materials (603429 CH) 28.55 (32)

La Chapelle Fashion (603157 CH) 14.59 (31)

Runhe High-Tech (300727 CH) 26.91 (31)

Yongji Printing (603058 CH) 15.93 (31)

Leshi Internet (300104 CH) 4.57 (31)

Ace Investment (603329 CH) 25.15 (31)

Electrical Alloy (300697 CH) 18.96 (31)

Source: Bloomberg, CS * Closing prices as of 9 Feb 2018

22 12 Feb 2018


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ica/h preMiuM table

A-share H-share CompanyPrice

(Rmb)

A/H premium

(%)

600876 CH 1108 HK Luoyang Glass 15.17 427

002490 CH 568 HK Shangdong Molong 4.03 285

002703 CH 1057 HK Zhejiang Shibao 6.02 272

600860 CH 187 HK Beijing Jingcheng 5.05 223

600806 CH^ 300 HK^ Kunming Machine 6.44 221

600685 CH^ 317 HK COMEC 26.66 219

600874 CH 1065 HK Tianjin Capital Environmental 10.36 208

000585 CH 42 HK Northeast Electric Development 3.15 203

601326 CH 3369 HK Qinhuangdao Port Co Ltd 5.06 187

601038 CH 38 HK First Tractor 6.24 167

601375 CH 1375 HK Central China Securities Co Ltd 6.16 154

601866 CH 2866 HK CSCL 3.06 152

601727 CH 2727 HK Shanghai Electric 5.50 143

601811 CH 811 HK Xinhua Winshare 11.28 141

601881 CH 6881 HK China Galaxy Securities Co Ltd 9.85 133

600871 CH 1033 HK Sinopec SSC 2.21 132

600958 CH 3958 HK DFZQ 13.67 131

601880 CH 2880 HK Dalian Port 2.46 128

601618 CH 1618 HK Metallurgical Corporation 4.11 126

002910 CH 1533 HK Lanzhou Zhuangyuan Pasture Co Ltd 16.02 124

603157 CH 6116 HK Shanghai La Chapelle Fashion Co Ltd 14.59 122

601600 CH^ 2600 HK Aluminum of China 8.09 121

600012 CH 995 HK Anhui Express 10.39 112

000756 CH^ 719 HK Xinhua Pharmaceutical 12.67 107

601588 CH 588 HK Beijing North Star 4.24 101

600875 CH 1072 HK Dongfang Electrical 9.81 99

600775 CH 553 HK Nanjing Panda 6.26 98

601991 CH 991 HK Datang Int'l Power 3.74 97

601800 CH 1800 HK China Comm. Construction 12.83 93

601919 CH 1919 HK COSCO 6.00 89

601898 CH 1898 HK China Coal 5.35 89

601107 CH 107 HK Sichuan Expressway 3.95 87

601857 CH 857 HK PetroChina 7.95 84

600362 CH 358 HK Jiangxi Copper 17.50 82

601766 CH 1766 HK China South Locomotive 10.34 81

600999 CH 6099 HK CMSC 16.99 80

601717 CH 564 HK ZMJ 5.88 79

601633 CH 2333 HK Great Wall Motor 12.32 78

601788 CH 6178 HK EB Securities 12.72 76

000921 CH 921 HK Kelon Electric 12.43 75

600688 CH 338 HK Shanghai Petrochemical 6.09 75

600188 CH 1171 HK Yanzhou Coal 15.15 74

601992 CH 2009 HK BBMG 4.63 72

601390 CH 390 HK China Railway Group 7.69 72

000157 CH 1157 HK Zoomlion 4.15 70

002672 CH 895 HK Dongjiang Environmenta 13.86 70

002202 CH 2208 HK Goldwind 14.90 69

601005 CH 1053 HK Chongqing Iron & Steel 2.06 68

600026 CH 1138 HK China Shipping Dev. 5.52 66

A-share H-share CompanyPrice

(Rmb)

A/H premium

(%)

600027 CH 1071 HK Huadian Power 3.47 64

601899 CH 2899 HK Zijin Mining Group 4.37 63

000488 CH 1812 HK Chenming Paper 16.12 62

601238 CH 2238 HK Guangzhou Automobile 20.96 61

601808 CH 2883 HK China Oilfield Services 10.51 59

600115 CH 670 HK China Eastern Airlines 7.41 58

000039 CH 2039 HK CIMC 17.28 58

603993 CH 3993 HK China Molybdenum 6.20 57

600029 CH 1055 HK China Southern Airlines 10.82 56

600635 CH 1635 HK DZUG 3.87 55

601998 CH 998 HK CITIC Bank 6.90 54

601186 CH 1186 HK China Railway Construction 10.18 54

600011 CH 902 HK Huaneng Power 5.82 52

600332 CH 874 HK Baiyunshan 24.13 49

601111 CH 753 HK Air China 12.08 46

601628 CH 2628 HK China Life 26.97 45

601336 CH 1336 HK New China Life Insurance 51.63 42

601688 CH 6886 HK HTSC 16.88 42

601607 CH 2607 HK Shanghai Pharmaceuticals 21.15 42

601818 CH 6818 HK China Everbright Bank 4.40 41

601088 CH 1088 HK Shenhua Energy 24.29 40

000513 CH 1513 HK Livzon Pharmaceutical 63.37 37

000063 CH 763 HK ZTE 28.45 37

000776 CH 1776 HK GF Securities 16.16 37

601328 CH 3328 HK BoComm 6.70 36

600837 CH 6837 HK Haitong Securities 11.89 35

601939 CH 939 HK CCB 8.36 34

600548 CH 548 HK Shenzhen Express 8.32 34

600808 CH 323 HK Maanshan Iron & Steel 4.02 31

600028 CH 386 HK Sinopec 6.38 30

600016 CH 1988 HK Minsheng Bank 8.29 30

601988 CH 3988 HK BOC 4.29 28

601601 CH 2601 HK Pacific Insurance 37.33 28

601398 CH 1398 HK ICBC 6.68 27

600030 CH 6030 HK CITIC Securities 17.35 27

601288 CH 1288 HK ABC 4.16 25

601211 CH 2611 HK Guotai Junan Securities Co Ltd 17.41 25

600036 CH 3968 HK China Merchants Bank 30.71 17

601333 CH 525 HK Guangshen Railway 4.37 15

000002 CH 2202 HK Vanke 31.27 14

600600 CH 168 HK Tsingtao Brewery 35.74 12

000338 CH 2338 HK Weichai Power 7.75 11

600196 CH 2196 HK Fosun Pharmaceutical 34.87 7

002594 CH 1211 HK Byd Co Ltd 56.65 6

000898 CH 347 HK Angang Steel 6.66 5

600660 CH 3606 HK Fuyao Glass 25.35 4

600377 CH 177 HK Jiangsu Express 9.37 3

601318 CH 2318 HK Ping An 64.43 1

600585 CH 914 HK Anhui Conch Cement 30.75 (1)

Source: Bloomberg, CS * Closing prices as of 9 Feb 2018 ^ Suspended

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CITIC S&P 50 IndexPER (x) 16-18E Chg (%) 6M Avg Daily T/O Mkt Cap

Sector 16 17E 18E PEG (x) 1-wk 1-mth YTD 1-yr (Rmb mn) (Rmb bn)

Market cap weighted average 23 18 15 1.0 (10.5) (3.5) 0.3 40.7 73,093 14,563

Energy 18 13 12 0.8 (15.3) (6.1) 4.4 30.7 1,967 1,010

Materials 25 16 13 0.7 (11.4) (0.6) 6.1 37.9 4,405 491

Capital Goods 30 24 19 1.2 (11.5) (10.9) (8.5) (8.1) 4,925 881

Transportation 19 10 10 0.5 (6.2) (7.3) 0.8 29.1 526 136

Automobiles & Components 11 11 10 1.7 (7.8) (1.3) (0.1) 27.6 860 374

Consumer Durables & Apparel 21 17 14 1.0 (12.0) (6.7) 2.4 83.2 5,778 754

Media 13 15 12 3.9 (10.2) (15.3) (12.7) (38.0) 114 38

Retailing 148 78 77 3.9 (5.1) (5.1) (3.8) 7.7 840 110

Food, Beverage & Tobacco 45 32 24 1.2 (8.6) (12.3) (2.6) 89.4 7,625 1,504

Pharmaceuticals, Biotechnology & Life Sciences 59 48 39 2.6 (6.4) (8.5) (4.2) 50.2 1,162 293

Banks 8 8 7 1.3 (9.3) 5.8 5.8 32.6 12,703 5,310

Diversified Financials 18 17 15 1.7 (16.1) (10.4) (4.8) (6.3) 3,908 363

Insurance 28 20 16 0.9 (14.0) (9.6) (9.6) 42.5 8,134 1,494

Software & Services 128 131 88 6.1 (10.1) (22.9) (19.8) 58.3 3,503 66

Technology Hardware & Equipment 58 30 24 1.0 (6.6) (12.1) (8.7) 93.9 9,957 618

Telecommunication Services NA 87 45 NA (12.1) (11.5) (5.1) (11.5) 2,227 182

Utilities 16 16 16 11.4 (1.7) (1.7) 1.4 17.8 609 410

Real Estate 15 12 10 0.6 (18.9) (12.6) 0.5 44.7 3,852 529

CITIC S&P 300 IndexPER (x) 16-18E Chg (%) 6M Avg Daily T/O Mkt Cap

Sector 16 17E 18E PEG (x) 1-wk 1-mth YTD 1-yr (Rmb mn) (Rmb bn)

Market cap weighted average 34 23 17 0.8 (9.9) (5.6) (2.2) 27.3 168,940 26,365

Energy 116 41 19 0.8 (14.9) (6.6) 0.7 10.3 4,226 2,410

Materials 43 25 18 0.8 (11.8) (10.5) (5.1) 23.4 24,556 1,383

Capital Goods 28 22 18 1.1 (9.4) (12.0) (9.1) 1.1 23,793 2,451

Commercial & Professional Services 26 20 15 0.8 (6.3) (17.9) (17.7) (12.4) 972 108

Transportation 23 18 17 1.3 (7.3) (5.0) (2.1) 28.7 5,071 842

Automobiles & Components 18 17 14 1.3 (5.6) (7.5) (6.6) 10.9 5,292 1,055

Consumer Durables & Apparel 25 20 16 1.0 (10.4) (7.1) 0.4 62.0 9,407 1,027

Consumer Services 33 25 21 1.3 (15.2) (5.2) 3.2 62.6 1,063 175

Media 37 23 19 0.9 (5.9) (10.3) (10.4) (24.6) 2,383 247

Retailing 83 49 48 2.6 (7.0) (9.7) (8.0) (1.5) 1,438 228

Food & Staples Retailing 67 46 36 1.8 (11.6) (10.2) (7.6) 63.7 920 121

Food, Beverage & Tobacco 43 31 24 1.3 (9.2) (12.3) (4.0) 76.5 10,636 2,006

Household & Personal Products 104 57 41 1.7 1.8 (4.2) (9.5) 18.7 151 22

Health Care Equipment & Services 57 40 42 3.4 (8.6) (13.2) (9.8) 19.9 1,124 192

Pharmaceuticals, Biotechnology & Life Sciences 45 43 36 3.5 (6.4) (10.6) (8.1) 23.9 7,405 1,136

Banks 8 8 7 1.3 (8.6) 6.1 6.3 28.1 15,005 6,776

Diversified Financials 19 18 16 1.9 (12.9) (9.6) (5.9) (14.3) 5,097 595

Insurance 28 20 16 0.9 (14.0) (9.6) (9.6) 42.5 8,134 1,494

Software & Services 72 69 49 3.5 (6.4) (11.2) (10.0) 9.7 6,469 238

Technology Hardware & Equipment 49 31 24 1.1 (6.9) (11.7) (10.3) 51.7 19,914 1,330

Semiconductors & Semiconductor Equipment 57 30 21 0.9 (9.0) (14.2) (13.6) 69.2 2,560 177

Telecommunication Services 2 81 43 NA (12.6) (13.1) (7.0) (14.4) 2,468 200

Utilities 17 21 15 3.7 (4.3) (5.1) (2.8) 2.2 2,521 980

Real Estate 15 12 10 0.6 (18.0) (10.5) 0.9 31.4 8,331 1,170

Source: Bloomberg, CS * Closing prices as of 9 Feb 2018 GICS (Global Industry Classification Standard)

Major index perforManCe:

24 12 Feb 2018


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Results Announcement Code Company Estimated Date Financial Year / Quarter^

- - - - -

*Companies included in CITIC S&P 300 Index only ^ MM/YY QQSource: Bloomberg, CS

Publication of Economic DataDate/Time* Event Period Figures Actual Previous Revision

02/08 - 02/18/2018 Foreign Direct Investment YoY CNY Jan -- -- -9.2% --

02/10 - 02/15/2018 Money Supply M1 YoY Jan 13.5% -- 11.8% --

02/10 - 02/15/2018 Aggregate Financing CNY Jan 3,200b -- 1,140b --


02/10 - 02/15/2018 New Yuan Loans CNY Jan 2,000b -- 584.4b --


Source: Bloomberg, CS * MM/DD/YYYY

Major corporate results and economic data


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(5)05

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2018

E

China Export Trade USD YoY

China Import Trade USD YoY

(%)

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6.56.6

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6.97.0

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/201

5

30/9

/201

5

31/1

2/20

15

31/3

/201

6

30/6

/201

6

30/9

/201

6

31/1

2/20

16

31/3

/201

7

30/6

/201

7

30/9

/201

7

31/1

2/20

17

2018

E

China GDP Constant Price YoY

China GDP Constant Price CumulativeYoY

(%)

012345678

31/1

/201

7

28/2

/201

7

31/3

/201

7

30/4

/201

7

31/5

/201

7

30/6

/201

7

31/7

/201

7

31/8

/201

7

30/9

/201

7

31/1

0/20

17

30/1

1/20

17

31/1

2/20

17

31/1

/201

8

2018

E

China CPI YoY

China PPI YoY

(%)

51.051.251.451.651.852.052.252.452.6

31/1

/201

7

28/2

/201

7

31/3

/201

7

30/4

/201

7

31/5

/201

7

30/6

/201

7

31/7

/201

7

31/8

/201

7

30/9

/201

7

31/1

0/20

17

30/1

1/20

17

31/1

2/20

17

31/1

/201

8

(Index)

GDP ►China posted GDP growth of 6.8% YoY

in 4Q17, flat QoQ, taking the reading

for ful l -year 2017 to 6.9% YoY. The

pace was 0.2ppt faster than in 2016,

powered by cyclical inventory growth

and export recovery. On the back of

rebounding capital spending and

global trade, the Chinese economy is

slated to continue expanding steadily

in 2018E. The market forecasts full-year

2018E GDP growth of 6.5% YoY.

Import and Export ►In Jan 2018, China posted export and import growth rates of 11.1% and 36.9% YoY, respectively (vs. 10.9% and 4.5% YoY for the prior month). Trade surplus came to US$20.34bn. The st ronger-than-expected imports were mainly a result of a late Chinese New Year holiday, RMB appreciation and robust domestic demand. While exports growth was relatively weak, it nevertheless outstripped consensus estimates, indicating that RMB appreciation did not meaningfully fend off strong external demand. The market forecasts full -year 2018E exports and imports to expand by 6.0% and 6.7% YoY, respectively.

◄ Manufacturing PMI

In Jan 2018, China’s manufacturing PMI

came to 51.3, above the expansion -

contraction divide for the 18th month

in a row despite a retreat. The factory

sector has maintained steady momentum.

Industrial production will rebound to

an extent after the heating season. The

service industry continued to enjoy an

upbeat climate. The PMI dip should thus

be temporary and we see no substantial

downward pressure going forward.

◄ CPI and PPI

China’s CPI and PPI ticked up 1.5% and 4.3%

YoY, respectively, in the first month of 2018

(vs. 1.8% and 4.9% YoY in Dec 2017). The

market projects that 2018E CPI and PPI will

advance 2.3% and 3.3% YoY, respectively.

Major economic indicators


26 12 Feb 2018


Ch

ina

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har

e M

arke

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y:St

ick

to f

un

dam

enta

ls to

pull

th

rough

th

e pan


8

1012

1416

1820

22

31/1

2/20

16

31/1

/201

7

28/2

/201

7

31/3

/201

7

30/4

/201

7

31/5

/201

7

30/6

/201

7

31/7

/201

7

31/8

/201

7

30/9

/201

7

31/1

0/20

17

30/1

1/20

17

31/1

2/20

17

2018

E

China Monthly Money Supply M1 YoY

China Monthly Money Supply M2 YoY

(%)

5.75.96.16.36.56.76.97.17.37.57.7

31/1

2/20

16

Jan-

Feb

2017

31/3

/201

7

30/4

/201

7

31/5

/201

7

30/6

/201

7

31/7

/201

7

31/8

/201

7

30/9

/201

7

31/1

0/20

17

30/1

1/20

17

31/1

2/20

17

2018

E

China Value Added of Industry YoYCumulative

China Value Added of Industry YoY

(%)

0

300600

9001,200

1,5001,800

2,100

31/1

2/20

16

31/1

/201

7

28/2

/201

7

31/3

/201

7

30/4

/201

7

31/5

/201

7

30/6

/201

7

31/7

/201

7

31/8

/201

7

30/9

/201

7

31/1

0/20

17

30/1

1/20

17

31/1

2/20

17

(Rmb bn)

9.49.69.8

10.010.210.410.610.811.0

31/1

2/20

16

Jan-

Feb

2017

31/3

/201

7

30/4

/201

7

31/5

/201

7

30/6

/201

7

31/7

/201

7

31/8

/201

7

30/9

/201

7

31/1

0/20

17

30/1

1/20

17

31/1

2/20

17

2018

E

(YoY %)

Value Added of Industry ►In Dec 2017, the actual industrial value-

added from scale enterprises in China

picked up 6.2% YoY, slightly faster than

consensus and the growth in Nov, both

being 6.1% YoY. The gauge advanced

6.6% YoY in for full-year 2017. Growth

accelerated throughout the year and

price remained the core driver. The

market projects industrial value-added

to rise 6.0% YoY in 2018E

Monthly Supply M1 & M2 ►China’s M2 registered a 8.2% YoY growth

in Dec 2017, after a 9.1% advance in the

previous month. The reading, an all-time

low breaking the 8.8% record just set

in Oct 2017, was mainly the result of a

sharp decline in deposits by non-banking

f inancial institutions – approximately

Rmb1trn less than the year-ago period.

M1 growth in Dec 217 came to 11.8%

YoY. The market expects full-year 2018E

M2 growth to be 9.2% YoY.

◄ Retail Sales Value

To t a l re t a i l s a l e s v a lu e i n Ch i n a

expanded 9.4% YoY in Dec 2017, lagging

the 10.2% forecast and Nov print. In

the whole of 2017, total retail value

increased 10.2% YoY, which was 0.1ppt

slower than in the previous year. The

remarkable monthly slowdown was

chiefly attributable to seasonal factors.

Market consensus for 2018E retai l

growth stands around 10.2% YoY.

◄ CNY Monthly New Loan

N e w l o a n s i n D e c 2 017 t a l l i e d

Rmb584bn , the sma l le s t month l y

i n c re a s e i n t h e y e a r a n d b e l o w

consensus estimates. We believe policy

res t r ic t ion on lending caused the

weakness. As such, we warn against

excessive worries over the miss.

Major economic indicators

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2018 - csb · china’s exports/imports increased 11.1%/36.9% yoy, respectively in jan 2018....

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