本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。1
closures
Strategy The Chinese View on China
April 9, 2013
未来三个月看好的投资组合
–申银万国研究香港中资股重点推荐表确定买入和卖出的公司
(2013 年 月 9 ) 4 日
Analyst
胡晓晖, CFA
A0230511040064
AXB617
huxh@
杨明, CFA
A0230511040029
ARG350
yangming@
Contact
倪昱婧
(8621) 2329 7212
niyj@
3 月 28 日至 4 月 8 日, 香港中资股重点推荐表平均跌幅为 %, 跑赢
HSCEI 指数 %。从第一期 2013 年 1 月 2 日至今, 香港中资股重点推荐
表的累计跌 为 %, 对 HSCEI 指数跑赢 %。 幅 相
确定买入表: 保持不变。
本期重点推荐表确定买入的公司总数 9 家, 分别为华翰生物制药 (587 HK),
农业银行 (1288 HK), 华能国际电力 (902 HK), 雨润食品 (1068 HK), 中石化
(386 HK), 招金矿业 (1818 HK) ,保利協鑫 (3800 HK), 东方航空 (670 HK)和
中国海外发 (688 HK)。 展
确定卖出表: 保持不变。
本期重点推荐表确定卖出的公司总数为 2 家, 为龙湖地产 (960 HK)和民生
银行 (1988 HK)。
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。2
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 1
Share Price Performance of HK‐listed China Stocks in SWS Conviction Buy
and Sell List from Mar 28 to Apr 8 ............................................................ 2
Updated SWS Conviction Buy and Sell List ............................................... 3
HK‐listed China Stocks in SWS Conviction Sell List – Stock profile ........... 14
Table of Contents
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。3
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 2
Share Price Performance of HK‐listed China
Stocks in SWS Conviction Buy and Sell List
from Mar 28 to Apr 8
Table 1: Share price performance of HK‐listed China Stocks in SWS Conviction Buy List from Mar 28 to Apr 8
Ranking
① Code Company Name GICS II
Recommendation
Date
Closing Price of
Recommendation
Date (HKD)
Closing
Price of
Mar 28
(HKD)
Closing
Price of
Apr 8
(HKD)
Return of
the Previous
Period ②
Cumulative
Return ③
Co uy List nviction B
1 1288 AGRICULTURAL BANK OF CHINA‐H Banks 2013‐1‐2 ‐% ‐%
2 386 C HINA PETROLEUM &CHEMICAL‐H Energy 2013‐3‐5 ‐% ‐%
3 1068 CH INA YURUN FOODGROUP LTD
Food Beverage &
Tobacco 2013‐1‐8 ‐ % ‐ %
4 1 818 Z G HAOJIN MINININDUSTRY ‐ H Materials 2013‐3‐19 1 ‐% ‐%
5 587 HUA HAN BIO‐PHARMACEUTICAL H
Pharmaceuticals,
B y iotechnolog 2013‐1‐2 ‐% %
6 688 CH D INA OVERSEAS LAN& INVEST Real Estate 2013‐4‐2 2 2 ‐% ‐%
7 3 800 G CL‐POLY ENERGYHOLDINGS LTD
Semiconductors
& Semiconductor 2013‐3‐26 ‐ % ‐ %
8 670 CHINA EASTERN AIRLINES CO‐H Transportation 2013‐4‐2 ‐% ‐%
9 902 HUANENG POWER INTL INC‐H Utilities 2013‐1‐2 % %
Conviction Sell List
1 1 988 CHINA MINSHENG BANKING‐H Banks 2013‐4‐2 % ‐%
2 960 LONGFOR PROPERTIES Real Estate 2013‐3‐5 % %
Portfolio Performance ‐% ‐%
HSCEI Performance ‐% ‐%
Excess Return over HSCEI % %
Sourc Bloomberg, SWS Research
Note:①
② Return of the Previous
e:
Ranked by cumulative return
Period
For Conviction Buy List, return = closing price of the ending period / closing price of the beginning period ‐1
For Conviction Sell List, return = ‐ (closing price of the ending period / closing price of the beginning period ‐1)
③ Cumulative return of individual stock refers to the share price return from the first day the stock was added into the List to the day of last
trading period. Cumulative return of the whole portfolio is computed by compounding the average portfolio return of each period, that is
(1+R1)(1+R2)…(1+Rn)‐1, wherein, Rn denotes average portfolio return in period n.
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。4
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 3
Updated SWS Conviction Buy and Sell List
Table 2: HK‐listed China Stocks Conviction Buy List
Code Company Name GICS II
Market
Cap (HKD
mn)
12PE 13PE 14PE PB
EPS
12‐14
CAGR
Closing
Price
(HKD)
Target
Price
(HKD)
Potential
1288 AGRICULTURAL BANK OF CHINA‐H Banks 108,201 ‐3% %
386 CHINA PETROLEUM & CHEMICAL‐H Energy 172,118 ‐8% %
1068 CHINA YURUN FOOD GROUP LTD
Food Beverage &
Tobacco 8,184 NA NA %
1818 ZHAOJIN MINING INDUSTRY ‐ H Materials 8,402 ‐4% %
587 HUA HAN BIO‐P HARMACEUTICAL H
Pharmaceuticals,
Biotechnology 6,707 3% %
3 800 GCL‐POLY ENERGY HOLDINGS LTD
Semiconductors &
Semiconductor 21,670 NA NA ‐%
670 CHINA EASTERN AIRLINES CO‐H Tr n ansportatio 11,147 ‐14% %
688 CHINA OVERSEAS LAND & INVEST Real Estate 168,763 ‐11% %
902 HUANENG POWER INTL INC‐H Utilities 29,474 ‐16% %
Source: Bloomberg, SWS Research
Table 3: HK‐listed China Stocks Conviction Sell List
Code Company Name GICS II Market Cap
(HKD mn) 12PE 13PE 14PE PB
EPS
12‐14
CAGR
Closing
Price
( HKD)
Target
Price
(HKD)
Potential
1 988 CHINA MINSHENG BANKING‐H Banks 79,863 ‐14% ‐%
960 LONGFOR PROPERTIES Real Estate 111,534 ‐3% ‐%
Source: Bloomberg, SWS Research
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。5
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 4
Table 4: Revisions made to the HK‐listed China Stocks Conviction Buy List
Item Code Company Name Before Revision
After
Revision
Direction
for
Revision
Reason
Source: SWS Research
Table 5: Revisions made to the HK‐listed China Stocks Conviction Sell List
Item Code Company Name Before Revision
After
Revision
Direction
for
Revision
Reason
Source: SWS Research
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。6
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 5
HK‐listed China Stocks in SWS Conviction Buy
List – Stock profile
ABC ( 1288 HK ) Analyst：Vivian Xue
Investment Rating Neutral Closing price
(Apr 8 , 2013):
HKD TP： HKD
Financial summary and valuation Price performance chart
2011
30
2012A 2013E
34 6
2014E
37 9 Revenue(RMB M) 7,199 644,636 9,74 8,73
YoY(%)
12
%
14 8
15 2 Net income(RMB M) 1,956 145,094
1
8,11 7,16
YoY(%) %
EPS(RMB)
BPS (RMB)
%
%
%
%
%
%
%
%
06
-1
8-
10
07
-1
8-
10
08
-1
8-
10
09
-1
8-
10
10
-1
8-
10
11
-1
8-
10
12
-1
8-
10
01
-1
8-
11
02
-1
8-
11
03
-1
8-
11
04
-1
8-
11
05
-1
8-
11
06
-1
8-
11
07
-1
8-
11
08
-1
8-
11
09
-1
8-
11
10
-1
8-
11
11
-1
8-
11
12
-1
8-
11
01
-1
8-
12
02
-1
8-
12
03
-1
8-
12
04
-1
8-
12
05
-1
8-
12
06
-1
8-
12
07
-1
8-
12
08
-1
8-
12
09
-1
8-
12
10
-1
8-
12
AGRICULTURAL BANK OF CHINA-H Bank peers HSCEI Index
ROE (%) % 2 % % % Price performance and valuation
PE
1. 6
1. 7
0. 1 PB 3
1
9
Valuation comparison
ABC Banks
2012PE
2012PB
0
1
2
3
4
5
6
7
8
9
10
Ju
l-1
0
Se
p-
10
N
ov
-1
0
Ja
n-
11
M
ar
-1
1
M
ay
-1
1
Ju
l-1
1
Se
p-
11
N
ov
-1
1
Ja
n-
12
M
ar
-1
2
M
ay
-1
2
Ju
l-1
2
Se
p-
12
Stock price in
HKD AGRICULT
URAL
BANK OF
CHINA-H
5X
10X
15X
20X
Rationale: Currently ABC is traded at 2012P/B which is a bit lower than ICBC and CCB. Compared to other big
banks, we believe ABC has some advantage in its deposits franchise and will better survive in the rate
liberalization environment. Its larger proportion of demand deposit and retail deposit make it a money
is promising to benefit from the liquidity tightening. supplier in the inter‐bank market, which
Key assumptions： No hard landing in the Chinese economy
We believe Chinese banks are in the process of interest rate liberalization. In the mid‐term, NIM will
contract as a result of intense competition in loans and deposits. We believe ABC is one of the banks who
can best survive in a liberalization environment. In the loans side, ABC is likely to benefit from the
stronger demand in agriculture business. In the deposits side, ABC will enjoy its advantage in strong
How we differ from
consensus:
deposits franchise.
rs Catalysts: Stronger NIM in 1Q compared to pee
Credit cost is higher than expected Major risks:
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。7
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 6
Hua Han Biopharmaceutical ( 587 HK ) Analyst: Ming Shi
Investment Rating BUY Closing price
(Apr 8, 2013):
HKD TP: HKD
Finan n cial summary and valuatio Price performance chart
FY12 F Y13E F Y14E F Y15E
Revenue(HKD M) 1312
2050
2597
3216
YoY(%)
Net income(HKD M) 695
4
472
()
661
4
864
YoY(%)
EPS(RMB)
GPM (%)
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
12
-0
3
12
-0
4
12
-0
4
12
-0
4
12
-0
5
12
-0
5
12
-0
6
Hua Han Pharm Sector Index
HSCEI Index
ROE (%) 1 Price performance and valuation
PE
PB
Valuation comparison
Hu n a Ha Pharm ctor a Se
1
2013PE
2013PB
0
1
1
2
2
3
3
4
4
5
Ju
n-
09
Se
p-
09
D
ec
-0
9
M
ar
-1
0
Ju
n-
10
Se
p-
10
D
ec
-1
0
M
ar
-1
1
Ju
n-
11
Se
p-
11
Stock price
in HKD
3x
6x
9x
12x
15x
18x
Investment Rating
& Valuation:
Current price represents just FY13 PE which we consider undervalued compared with forecasted
FY12‐14 earnings CAGR of % (excluding one‐time items) and sector average of . Maintain Buy.
1. hNGF is launched in 1Q13; 2. Sales volume for hNGF during FY13‐15 is 54,000/135,000/243,000 Key assumptions:
vials..
1. Exclusive NMIC products act as a strong growth driver. We believe that the future strong growth will
mainly come from 4 major products: Qijiao Shengbai Capsules, Zhisou Huatan Pills, Yi Fu and Yi Bei. The
exclusivity and inclusion into NMIC are critical factors that will drive the strong growth of those
How we differ from
consensus:
products. They will account for % of principal business sales by FY14.
2. OTC product to become another growth driver. Fuke Zaizao Pills is estimated to have a theoretical
market of HK$900M and it has just entered 1036 pharmacy stores by FY11, we believe there is a huge
growth potential for this product. Cooperation with Ogilvy will help release the growth potential. We
expect the product to account for % of TCM sales by FY14.
3. hNGF closer to launch with huge market potential, free options for investors. We estimate that hNGF
has a market of at least in China and has no direct competitor. We expect it to be launched as
early as 1Q13. hNGF will contribute HK$14M/35M/63M in net profit (~%/%/% of total NP)
for FY13/14/15 respectively. The potential contribution is not priced in, it’s a free options for investors.
4. Stable management and excellent investment track record ensure future success. Hua Han has a stable
management team consisting of three core members who have been with the company for 20 years. The
huge successes of 3 major investments/acquisitions have proved that the management has excellent
investment insight, integration and management capability.
1. New product Golden Peptides is launched in Oct; 2. hNGF qualification report is received by the end of Catalysts & time of
occurrence:
Major risks:
2012 .
1. Launch of hNGF delayed.
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。8
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 7
Huaneng Power ( 902 HK ) Analyst: Daniel Huang
Investment Rating Outperform Closing price
(Apr 8 , 2013):
HKD TP: HKD
Financial summary and valuation Price performance chart
2012
133,967
2013E
138,212
2014E
149,215
2015E
160,054Revenue(RMB M)
YoY(%)
8,663
10,869
12,190 Net income(RMB M) 6,366
4YoY(%)
EPS(RMB)
BPS (RMB)
-15%
-5%
5%
15%
25%
35%
45%
12
/1
1/
29
12
/1
2/
13
12
/1
2/
27
13
/0
1/
10
13
/0
1/
24
13
/0
2/
07
13
/0
2/
21
13
/0
3/
07
13
/0
3/
21
HUANENG POWER-H IPP Index HSCEI Index
ROE (%) 1 Price performance and valuation
PE
PB
Valuation comparison
HPI
1
IPP
1
2013PE
2013PB
Ma
r/1
0
Ma
y/1
0
Ju
l/1
0
Se
p/
10
No
v/1
0
Ja
n/1
1
Ma
r/1
1
Ma
y/1
1
Ju
l/1
1
Se
p/
11
No
v/1
1
Ja
n/1
2
Ma
r/1
2
Ma
y/1
2
Ju
l/1
2
Se
p/
12
No
v/1
2
Ja
n/1
3
Ma
r/1
3
Stock price in
RMB HPI
3X
6X
9X
12X
15X
18X
Investment Rating
& Valuation:
Earnings estimates for 2013/14/15 are respectively, TP is HK$. Our TP implies
a 13E PE which is below the historical average PE.
1) QHD Datong Premium Blend spot price (w/c heat content of 5800kcal/kg) to be RMB688/674 per Key assumptions:
tonne in 2013/14;
2) BJ coal price to be US$93/93 in 2013/14;
3) Utilization hours to be 5,141/5256hrs in 2013/14.
1) We expect installed capacity to grow by % YoY and utilization hour to increase 3% to 5,141hrs in
13E. We estimated there will be new capacity in 13E/14E (up % and % YoY). With
slightly improved utilization hour (5,141/5,256hrs for 13E/14E, up %/% YoY) and increased
How we differ from
consensus:
install capacity, the total power output is expected to reach 313Twh/341Twh, up %/%YoY.
2) We expect fuel prices to remain at current levels on oversupply in the coal sector. We estimate that
growth in coal supply will outpace demand growth by in 2013. IPP margins will not contract
during the economic recovery on flat coal price. HPI could be the main beneficiary of the coal price
decline given its exposure to thermal power generation.
3) Coastal regions will see a more rapid recovery in power demand than inland regions, as we expect the
export growth to pick up in 2013/14, driven by recovery of foreign economy. With most capacity
llocated to coastal regions, HPI could therefore be the major beneficiary of a demand recovery. a
1) Contribution from hydropower declines faster than expected; rising thermal utilization. 2) More
thermal projects commence generation ahead of schedule, leading to a faster‐than‐expected expansion
Catalysts & time of
occurrence:
in market share. 3) QHD coal prices decline as overcapacity appears more severe than expected.
1) Coal prices spike as energy‐intensive industry output rises faster than expected. 2) Contribution
from hydropower increases on excessive rainfall.
Major risks:
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。9
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 8
Yurun Foods (1068 HK) Analyst: Sean Zhang
Investment Rating OUTPERFORM Closing price
(Apr 8, 2013):
HKD TP： HKD
Financial summary and valuation Price performance chart
2012A
2013E
32,554
2014E
38,284
2015E
45,022 Revenue(HKD M) 26,782
(YoY(%) )
1Net income(HKD M) ‐605
(
302
788
,368
YoY(%) )
‐
‐
0
0 EPS(HKD) .17 0 .43 .75
ROE (%) ‐
‐30%
‐20%
‐10%
0%
10%
20%
30%
40%
Ju
l‐1
2
Ju
l‐1
2
Au
g‐1
2
Au
g‐1
2
Se
p‐1
2
Se
p‐1
2
Oc
t‐1
2
Oc
t‐1
2
Oc
t‐1
2
No
v‐1
2
No
v‐1
2
De
c‐1
2
De
c‐1
2
Ja
n‐1
3
Ja
n‐1
3
Fe
b‐1
3
Fe
b‐1
3
M
ar
‐13
M
ar
‐13
Yurun China F&B stocks HSCEI Index
Debt/Asset (%) 4 Price performance and valuation
Dividend yield (%) ‐
3
PE ‐
0. PB 5
Valuation comparison
Yurun Peers
2
2013PE
2013PB
‐20
‐10
0
10
20
30
40
50
2009‐1‐2 2010‐1‐2 2011‐1‐2 2012‐1‐2 2013‐1‐2
Stock price
1068 HK
Equity
30x
25x
20x
15x
10x
5x
Investment Rating
& Valuation:
We expect Yurun Foods to turn to positive earnings in FY12 and it is trading at FY13 P/B. The
valuation has priced in risks of FY12 operating results decline and concern on management transition.
We give Outperform rating with TP of HKD .
1) ave hog price remains stable in FY13; 2) slaughtering volume grows 12% and GPM recovers to
% in FY13 (% in FY11); 3) other income reduced by 63% yoy as capacity expansion
Key assumptions:
significantly slows down
Focus now turns to margin improvement through slowing down expansion, increasing investment in
marketing, emphasizing new products catering to different new distribution channels, increase
purchasing and production efficiency. We expect hog/pork demand to rebound in 2H13 on improved
macro. Maturing of markets surrounding new factories and parent company’s over 10M planned hog‐
breeding capacity by 2015, we expect utilization rate of Yurun Foods will improve. In the long term,
How we differ from
consensus:
agricultural industrialization drives sector consolidation and leaders such as Yurun Foods will benefit.
Continuous slaughtering volume growth and margins recovery; pork‐related food safety incident; Catalysts & time of
occurrence:
Major risks:
further increase of shareholding of principal shareholders.
Slower pace of recovery of sales volume and margins, weak macro.
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。10
BuildinApril 9, 2013 Strategy Research
Please refer to the last page for important disclosures Page 9
Zhaojin Mining () Analyst: Rong Ye/ Dimi Du
Investment
Rating
Outperform C e losing pric
(Apr 8, 2013):
HKD
TP： HKD
Financial summary and valuation Price performance chart
2012A 2013E 2014E 2015E
Revenue(RMB M) 7,603 7,576 8,057 8,735
YoY(%) ()
Net income(RMB M) 1,924
.76
2,072
9
2,151
6
8
YoY(%) 15
EPS(RMB)
ROE (%)
Investment Rating
& Valuation:
We maintained our outperform rating on Zhaojin mining and our target price is based on 15x 13 PER.
Key assumptions: We assume gold price will average at 1650/1600 USD per oz for year 2013/2014.
The gold price corrected significantly over past months on selling from large institutions. Short term
bearishness towards gold is currently strong. Many investors are turning bearish towards gold price
and believe super bull market has ended. We believe downside potential for gold is limited and in
How we differ from
consensus:
medium term we still be gold will rebound.
The Jan FOMC meeting minutes raised concerns that the Fed may exit QE in 2013. However, we don't
believe Fed will exit QE as early as what market is expecting. There has been a disconnection between
gold price and Fed’s balance sheet size. We believe this will provide large upward potential for a
possible rebound.
Many investors believed that global tail risks have gone. But the event of Cyprus made the Eurozone
tail risk rose again. We believe for the next period, it will continue to put pressure on the market. Gold
as a traditional way of hedging assets, will become more attractive. Operational fundamentals remain
solid for Zhaojin and high growth may continue with low costs. We believe the FY12 result will clarify
nd increasing gold cost. the market previous concern on Zhaojin’s slowing down volume growth a
1) More Eurozone problems exposed 2) US debt ceiling deadline in May Catalysts & time of
occurrence:
Major risks: 1) Earlier than expected exit of QE3 2) better than expected future US economy data
%
%
%
%
%
%
%
04
/D
ec
/1
2
04
/J
an
/1
3
04
/F
eb
/1
3
04
/M
ar
/1
3
Zhaojin Mining Gold Peers HSCEI Index
Debt/Asset (%) Price performance and valuation
Dividend yield (%)
PE
PB
Valuation co arison mp
1
Zhaojin Peers
2013PE
2
2
2013PB
-10
0
10
20
30
40
50
M
ar
/0
8
M
a y
/0
8
Ju
l/0
8
Se
p/
08
N
ov
/0
8
Ja
n/
09
M
ar
/0
9
M
ay
/0
9
Ju
l/0
9
Se
p/
09
N
ov
/0
9
Ja
n/
10
M
ar
/1
0
M
ay
/1
0
Ju
l/1
0
Se
p/
10
N
ov
/1
0
Ja
n/
11
M
ar
/1
1
M
ay
/1
1
Ju
l/1
1
Se
p/
11
N
ov
/1
1
Ja
n/
12
M
ar
/1
2
M
ay
/1
2
Ju
l/1
2
Se
p/
12
N
ov
/1
2
Ja
n/
13
Stock price in
HKD Zhaojin
Mining
5X
10X
15X
20X
25X
30X
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。11
Please refer to the last page for important disclosures Page 10
BuildinApril 9, 2013 Strategy Research
Sinopec ( 386 HK ) Analyst: Albert Miao
Investment Rating Buy Closing price
(Apr 8 , 2013):
HKD TP: HKD
Financial summary and valuation Price performance chart
2012
2,786
2013E
2,700,3
2014E
2,809
2015E
2,973Revenue(RMB Mn) ,045 09 ,577 ,245
YoY(%)
6
(3)
77
83
84Net income(RMB B) 3,496
()
,802
,748
,140
YoY(%)
(RMB)
BPS (RMB)
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
12
-0
7-
31
12
-0
8-
07
12
-0
8-
14
12
-0
8-
21
12
-0
8-
28
12
-0
9-
04
12
-0
9-
11
12
-0
9-
18
12
-0
9-
25
12
-1
0-
02
12
-1
0-
09
12
-1
0-
16
12
-1
0-
23
12
-1
0-
30
12
-1
1-
06
12
-1
1-
13
12
-1
1-
20
12
-1
1-
27
12
-1
2-
04
12
-1
2-
11
12
-1
2-
18
12
-1
2-
25
13
-0
1-
01
13
-0
1-
08
13
-0
1-
15
13
-0
1-
22
13
-0
1-
29
13
-0
2-
05
13
-0
2-
12
13
-0
2-
19
13
-0
2-
26
13
-0
3-
05
13
-0
3-
12
13
-0
3-
19
13
-0
3-
26
HUANENG POWER-H IPP Index HSCEI Index
ROE (%) Price performance and valuation
PE
PB
Valuation com son pari
Sinopec Oil industry
2013PE
2013PB
N
…
Ja
…
M
…
M
…
Ju
…
S
…
N
…
Ja
…
M
…
M
…
Ju
…
S
…
N
…
Ja
…
M
…
M
…
Ju
…
S
…
N
…
Ja
…
Stock price in
RMB HPI
3X
6X
9X
12X
15X
18X
Investment Rating
& Valuation:
Given Sinopec’s management premium and potential business structure swifts that copies PetroChina,
we therefore use PetroChina’s historical average PB of to derive Sinopec TP of HK$, which
to buy in dips. offsets 15% upside potentials, and suggest investors
Key assumptions: Oil price will remain fluctuate around current levels
We expect Sinopec to report 2012 EPS of RMB , 7% higher than consensus. Current consensus is
RMB , but as most houses have not updated their forecasts following the placement, we believe
RMB is more reasonable. We believe see the key difference as higher refining profit and higher
How we differ from
consensus:
production in our 4Q12 forecast.
We expect oil and gas asset injections from Sinopec Grp and cooperation with China Gas to accelerate
during 1H13, indicating that Sinopec is copying PetroChina’s business model to improve its overall ROA
o p levels. We believe the valuation gap between the tw com anies may shrink during the period.
Recent feedback from investors suggests there have been concerns about corporate governance
following the recent share placement, but we expect this to be alleviated as confidence recovers as
upcoming catalysts boost its share price.
Higher than expected 2012 earnings, higher than expected 1Q13 earnings, the announcement of
cooperation of China Gas and Sinopec in 1H13, the announcement of asset injection from Sinopec group
Catalysts & time of
occurrence:
in 1H13
Oil price drops too fast to erode refining margins, oil price drops too fast to erode upstream profitability,
the price of M&A is too expensive, the delays of M&As
Major risks:
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。12
Please refer to the last page for important disclosures Page 11
BuildinApril 9, 2013 Strategy Research
GCL‐Poly Energy ( 3800 HK ) Analyst: Vincent Yu
Investment Rating Underperform Closing price
(Apr 8, 2013):
HKD TP: HKD
Financial summary and valuation Price performance chart
FY12 FY13E
21,672
FY14E
23,524
FY15E
24,541 Revenue(HKD M) 22,348
YoY(%) () .
1
4 Net income(HKD M) (3,385)
(
,032 3,201
2
,653
YoY(%) )
()
.
EPS(RMB)
GPM (%)
ROE (%) () Price performance and valuation
PE .
1. PB 1. 7
2
Valuation comparison
GC y L‐Pol
2
Sola tor r Sec
4
2013PE
2013PB
Investment Rating
& Valuation:
We maintain TP at HK$ but downgrade our rating to Underperform. We have also focused our
2013‐14 EPS forecasts at and our TP reflects 13/14/15E PBR. Now the
company is trading at 13/14/15E PBR.
GCL‐Poly announced its 2012 annual results of net loss HK$ B, even worse than our estimation of
HK$ 2B (+100% vs. BB consensus of ~HK$). The operating loss was ~HK$ and impairment for
PP&E and goodwill was ~. Looking forward, we think there is still uncertainty ahead which may
h
Key assumptions:
negative impact t e solar industry.
Firstly, the most concerned issue is from pending judgment from EU for the AD/CVD claims. Though
Chinese government has sent several batches of the officials or lawyers to negotiate with the Europeans,
the results are not promising. We believe the poly‐si price may crack again if the final judgment is
How we differ from
consensus:
negative. (Though Poly‐Si has rallied from US$ 15 per kilo in end 2012 till US$ 20 per kilo now).
Secondly, China solar market may not boom as fast as expected. Though we hear voices from several
unofficial sources stating that China will installed at least 10GW in 2013, we doubt the actual results as
the proposed RDEG (renewable distributed energy generation) FiT is only RMB lower than
expected range of RMB ‐. ( It caused Singyes (750,HK) dropped over 30% within three
trading days).
Thirdly, the long expected AD/CVD claims against overseas poly‐si manufacturers are still pending. The
original plan, from some unofficial channel checks, was that the DoC of PRC would file the preliminary
judgment on 20th Feb but it missed. It is still unsure when and by what extent DoC will file the actual
judgment.
GCL‐Poly is facing a strong domestic competitor, the TBEA (), who is planning to accomplish
the construction work of approx. 12,000MT poly‐si capacity by July. The cash cost is estimated to be
below approx. US$ 13 per kilo, lower than GCL‐Poly’s current level of approx. US$ 15. Though we believe
GCL can achieve an even lower cost in 2014, by some new technology promised by the Chairman, it still
Catalysts & time of
occurrence:
has a long road to go.
New technology progress delayed. Major risks:
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。13
Please refer to the last page for important disclosures Page 12
BuildinApril 9, 2013 Strategy Research
COLI ( 688 HK ) Analyst：Kris Li
Investment Rating Neutral Closing price
(Apr 8 , 2013):
HKD TP： HKD
Financial summary and valuation Price performance chart
2012
6
2013E
7
2014E
9
2015E
11 Revenue(RMB M) 4,581 8,127 4,386 4,034
YoY(%)
1
2
2
2 Net income(RMB M) 8,723 1,298 5,007 9,900
YoY(%)
EPS(RMB)
BPS (RMB)
ROE (%) % 1 % 1 % 20 .2% Price performance and valuation
PE 10. 9
1. PB 2
Valuation comparison
COLI Property Sector
2013EPE
2013EPB
Rationale: We favor the company’s demonstrated sales record in the decade‐long history and well diversified
geographical footprints. We believe developers with high dependency on single market especially the
high tier cities would be relatively risky this year given the on‐going policy tightening, in this respect
COLI would be the most defensive player among the sector.
We expect COLI may at least achieve HKD 120B contracted sales this year (+15% YoY) on back of the
pipelines HKD16B and flat sell‐through rate 75%, and we’re also confident it could continue to deliver
Key assumptions：
20% annual earnings growth on a sustainable basis and keep ROE at the robust level of 20%.
COLI’s valuation is still higher than most of the peers, however we believe the possibly non‐stopping
property control this year make it deserve a larger premium. We’re rather confident the company could
wth at no less than 20% in the next three years and keep ROE stable at 20%.
How we differ from
consensus:
maintain annual gro
Catalysts: Sales continue beat.
Credit to be tightened more severe than expected. Major risks:
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。14
Please refer to the last page for important disclosures Page 13
BuildinApril 9, 2013 Strategy Research
CEA ( 670 HK ) Analyst：Leo Fan
Investment Rating Outperform Closing price
(Apr 8 , 2013):
HKD TP： HKD
Financial summary and valuation Price performance chart
2012 2013E 2014E
114,
2015E
Revenue(RMB M) 85,25 3
101,62 5
126
12 3
128, 558
YoY(%)
2,808
.
5,1Net income(RMB M) 4,2 51
.2
33
8
5,550
YoY(%) ( .6 36 )
26
45
33
21.
40
EPS(RMB) 0.
2.
0.
2 4
0.
7
.BPS (RMB) 18 . 4 2. 6 3 05
ROE (%) 11. %8 13 6. % 14 7%. 14 4%. Price performance and valuation
PE
1. 3
1. 0
8 6 63.
0. 7
6.
0. 8
13
PB 2
1
9
8
Valuation comparison
CEA Airlines
2013EPE
2013EPB
Rationale: We are optimistic about earning growth of domestic airlines in 2013. With the economy recovery, air
traffic growth will catch up and beat market expectation. We reiterate “Outperform” on CEA with TP
of HK$
Key assumptions： Economy recovers as expected; oil prices do not rise sharply next year.
Earnings growth may turnaround in 2013 Domestic airlines’ profit has been declining since reaching a
historical high in 3Q10. FY13 NP may rise sharply on a traffic recovery, conservative capacity growth,
stable oil prices, and renewed RMB appreciation. The profit turnaround may lift domestic airlines’
How we differ from
consensus:
valuations.
Catalysts: March air traffic YoY growth beat market expectation
Sharp rise in oil price; Unexpected bird flu H7N9 expansion. Major risks:
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。15
Please refer to the last page for important disclosures Page 14
BuildinApril 9, 2013 Strategy Research
HK‐listed China Stocks in SWS Conviction Sell
List – Stock profile
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。16
Please refer to the last page for important disclosures Page 15
BuildinApril 9, 2013 Strategy Research
Longfor Property (960 HK ) Analyst: Kris Li
Investment Rating OUTPERFORM Closing price
(Apr 8 , 2013):
HKD TP: HKD
Financial summary and valuation Price performance chart
2012
27,893
2013E
45,328
2014E
52,405
2015E
60,589 Revenue(RMB M)
YoY(%) 16% 63% 16% 16%
Underlying Net
income(RMB M) 5 ,402 6 ,092 7 ,191 8 ,377
YoY(%) 20%
13%
18%
16%
Underlying EPS (RMB)
Net Gearing (%) 48% 58% 61% 61% %
%
%
%
%
%
%
%
%
%
%
06
-1
8-
10
07
-1
8-
10
08
-1
8-
10
09
-1
8-
10
10
-1
8-
10
11
-1
8-
10
12
-1
8-
10
01
-1
8-
11
02
-1
8-
11
03
-1
8-
11
04
-1
8-
11
05
-1
8-
11
06
-1
8-
11
07
-1
8-
11
08
-1
8-
11
09
-1
8-
11
10
-1
8-
11
11
-1
8-
11
12
-1
8-
11
01
-1
8-
12
02
-1
8-
12
03
-1
8-
12
04
-1
8-
12
05
-1
8-
12
06
-1
8-
12
07
-1
8-
12
08
-1
8-
12
09
-1
8-
12
10
-1
8-
12
11
-1
8-
12
12
-1
8-
12
01
-1
8-
13
02
-1
8-
13
Longfor Property peers HSCEI Index
ROE (%) 21% 19% 18% 18% Price performance and valuation
PE
1.
1. PB
6
1
Valuation comparison
Po K ly H Property sector
2013PE
2013PB
0
5
10
15
20
25
30
35
40
N
ov
-0
9
Ja
n-
10
M
ar
-1
0
M
ay
-1
0
Ju
l-1
0
Se
p-
10
N
ov
-1
0
Ja
n-
11
M
ar
-1
1
M
ay
-1
1
Ju
l-1
1
Se
p-
11
N
ov
-1
1
Ja
n-
12
M
ar
-1
2
M
ay
-1
2
Ju
l-1
2
Se
p-
12
N
ov
-1
2
Ja
n-
13
Stock price in
HKD
Longfor
5X
10X
15X
20X
25X
30X
Rationale: We forecast a further slower earnings growth and declining ROE during the ongoing transition of 2013‐
2014 when sales stagnate and acquisitions accelerate, and we’re concerned the company’s current
geographical locations is till not good enough to withstand the additional property tightening.
We revise ASP rise this year from 5% to 0% and assume sell‐through rate may at most beat ~50% (vs
48% of 2012 and 54% guided by company for 2013). In such case FY13 sales may arrive at ~RMB44B
Key assumptions：
(+9% YOY), ~5% below the company’s target or 9% below our old estimates.
The company’s sales have been staying at RMB 40B for two years after fast growing in 2009 and 2010,
and the momentum was significantly weaker in contrast to the comparable peers over the same period.
We saw its effort in moving from developing large‐scale residential projects in suburban areas to
medium‐scale city urban projects, however until today the geographical footprints is still not good
enough to withstand the property tightening. For the total above 50 projects held by Longfor, there’re
more than 45 in 1st and 2nd tier cities but 35 projects are located in suburban instead of central of the
cities. We believe the additional tightening may primarily target at 1st and 2nd tier cities while city
here.
How we differ from
consensus:
urban should be more defensive than suburban areas given the limited supply t
Sales momentum ease; Big cities move more aggressively on policy tightening Downside
Catalysts:
Upside risks: S
ales beat; Property control is not as serious as anticipated.
本研究报告仅通过邮件提供给 申银万国 经纪总部王国强(yaosong@) 使用。17
Please refer to the last page for important disclosures Page 16
BuildinApril 9, 2013 Strategy Research
CMBC ( 1988 HK ) Analyst：Vivian Xue
Investment Rating BUY Closing price
(Apr 8, 2013):
HKD TP： HKD
Financial summary and valuation Price performance chart
2011 2012A 2013E 2014E
Revenue(RMB M) 81,110
%
173,978 105,914 125,349
YoY(%) % % %
Net income(RMB M) 27,920
%
37,563
34
37,315
5
46,029
% YoY(%) .54% .71%
EPS(RMB)
BPS (RMB) %
%
%
%
%
%
%
%
%
%
06
-1
8-
10
07
-0
8-
10
07
-2
8-
10
08
-1
7-
10
09
-0
6-
10
09
-2
6-
10
10
-1
6-
10
11
-0
5-
10
11
-2
5-
10
12
-1
5-
10
01
-0
4-
11
01
-2
4-
11
02
-1
3-
11
03
-0
5-
11
03
-2
5-
11
04
-1
4-
11
05
-0
4-
11
05
-2
4-
11
06
-1
3-
11
07
-0
3-
11
07
-2
3-
11
08
-1
2-
11
09
-0
1-
11
09
-2
1-
11
10
-1
1-
11
10
-3
1-
11
11
-2
0-
11
12
-1
0-
11
12
-3
0-
11
01
-1
9-
12
02
-0
8-
12
02
-2
8-
12
03
-1
9-
12
04
-0
8-
12
04
-2
8-
12
05
-1
8-
12
06
-0
7-
12
06
-2
7-
12
CMBC Bank peers index HSCEI Index
ROE (%) % 2 % % % Price performance and valuation
PE
PB
Valuation comparison
CMBC Banks
2012PE
2012PB
0
5
10
15
20
25
30
N
ov
-0
9
D
ec
-0
9
Ja
n-
10
Fe
b-
10
M
ar
-1
0
Ap
r-
10
M
ay
-1
0
Ju
n-
10
Ju
l-1
0
Au
g-
10
Se
p-
10
O
ct
-1
0
N
ov
-1
0
D
ec
-1
0
Ja
n-
11
Fe
b-
11
M
ar
-1
1
Ap
r-
11
M
ay
-1
1
Ju
n-
11
Ju
l-1
1
Au
g-
11
Se
p-
11
O
ct
-1
1
N
ov
-1
1
D
ec
-1
1
Ja
n-
12
Fe
b-
12
M
ar
-1
2
Ap
r-
12
M
ay
-1
2
Ju
n-
12
Stock price in
RMB
CMBC
5X
10X
15X
20X
25X
30X
Rationale: Given CMBC’s larger proportion of WMP invested on non‐standardized credit assets, CBRC’s new rules
on WMP will lead to a significant decrease of CMBC’s incremental WMP invested on such kind of assets.
And the concern about economy recovery outlook and potential asset quality risk may continue to weigh
on its valuation.
Key assumptions： CBRC will continue to regulate the off‐balance sheet assets of banks
Investors believe there are two ways to meet the new rules on WMP: (1) sell these WMP to third party or
transfer these off‐balance assets back to the balance sheet. (2) Sell more WMP invested on standardized
assets to enlarge the denominator. But we believe it is not that easy, because:1) big banks are not willing
to take these assets due to one‐on‐one management requirement; 2) CMBC’s loan to deposit ratio is
already high; 3) WMP invested on standardized credit assets is less attractive due to low investment
How we differ from
consensus:
yield.
Credit cost is higher than expected Catalysts & time of
occurrence:
Major risks: Strong NIM performance compared to its peers in 1Q
