> **来源：[研报客](https://pc.yanbaoke.cn)** # Weekly HK Market and Sector Views Summary ## Core Content Overview This report provides a detailed analysis of the Hong Kong market and key sectors, including macroeconomic trends, investment strategies, and specific industry insights. It highlights the potential for market adjustments due to US yield curve inversions, the impact of Sino-US trade tensions, and the performance of key sectors such as consumer, auto, financials, healthcare, and TMT. The report also includes analyst ratings and recommendations for specific stocks and sectors. --- ## Main Points and Key Information ### 1. **Macro Trends** - The US yield curve inversion (three-year and five-year bonds) has become a leading indicator of potential recessions and stock market adjustments. - The inversion is expected to shift from daily to monthly and eventually become a comprehensive inversion (including one-year and ten-year bonds) in Q1 2019, signaling the end of the Fed's rate hike cycle. - The US-China trade talks at the G20 summit have temporarily eased trade tensions, with a 90-day tariff suspension agreement, reducing market uncertainty. - The market is sensitive to the US yield curve inversion due to the economy being in a late cycle. ### 2. **Investment Strategy** - Global stock markets fell last week, with European markets leading the decline. - The Hong Kong stock market initially rose due to trade talks but later fell. - **Recommended Sectors in 2019:** - **Consumer and Services:** Focus on "weak cycle" stocks, including consumer services, insurance, and autos. - **Leading Consumer and Tech Companies:** Reduced US-dollar debt pressure on ROE. - **Infrastructure Opportunities:** In the construction industry. - **High Dividend Yield Stocks:** Such as Hang Seng Hong Kong 35 Index constituents. - **Stock Connect Flows:** Net northbound flow of Rmb12.58bn, southbound of Rmb700m. - Investors should remain cautious about follow-up trade negotiations and potential conflicts. ### 3. **Consumer Sector** - **Gaming:** Macau gaming sector GGR growth stabilized at a high single digit in November, with the sector trading at 10.5x EV/EBITDA. The HKZM is expected to attract more visitors. - **Property Management:** Country Garden Services (6098 HK) has a strong landbank and growth potential in property management and non-owner value-added services. - **Consumer Discretionary:** Trade war and renminbi depreciation have negatively impacted consumer sentiment, especially in Hong Kong and Macau. CTF (1929 HK) is expected to outperform peers due to its multi-brand and mainland-focused strategy. - **Auto Sector:** Sales in November rebounded, but 4Q18 may face headwinds. NEV production and policy support (tax exemptions, subsidies) are positive for the sector. ### 4. **Auto Sector Insights** - **Geely Auto (175 HK):** Top pick with strong sales growth and overseas expansion plans. Nov sales reached 141,661 units, with SUV models performing well. - **Zhongsheng Holding (881 HK):** Benefited from lower US import dependence, with 4.9% of luxury brand sales from US imports. Expected to rebound in 4Q18 with new car sales and aftersales margins. ### 5. **Financials** - HK financial stocks followed the HSI, rising and then declining due to Sino-US trade talk developments. - **Positive Factors:** - Possible slowdown or halt in US Fed rate hikes. - Chinese policies to mitigate credit risk at private enterprises. - Potential for improved sentiment from Shanghai-London Stock Connect and Sci-Tech Innovation Board. - **Negative Factors:** - Ongoing Sino-US trade dispute. - Uncertainty about policy effectiveness in the real economy. - Financial names with low valuations may benefit from improved sentiment. ### 6. **Healthcare Sector** - **Drug Procurement Tender:** 25 out of 31 drugs won tenders, with an average price cut of 52% and some up to 96%. This will negatively impact 2019 revenue and profits but may be offset by reduced selling expenses and increased sales volume. - **Generic Drugs:** Profitability is expected to shrink, pushing companies to focus on R&D for innovative drugs and accelerating generic approvals. ### 7. **New Energy & Utilities** - **Wind Power:** Curtailment rates are falling, profit margins rising, and wind power plants are undervalued. - **Natural Gas:** Sales volume exceeded expectations due to coal-to-gas substitution, with stable connection fees. - **Environmental Sector:** Strong demand for hazardous waste treatment. ### 8. **TMT Sector** - **Hardware:** In a down cycle with flat demand before 5G commercialization in 2020. Some suppliers are relocating manufacturing, which may pressure margins. - **Optical Components:** Expected to see increasing content value, with a preference for leading companies like Sunny Optical (2382 HK). --- ## Internet Sector Highlights - **Mobile Internet Usage:** Growth is slowing, and the industry is entering a stable phase. - **Online Advertising:** Expected to grow at more than 25% CAGR over the next two years, with increased focus on AI and information flow. - **Games:** New game numbers and revenue rebounded in 3Q18 but decreased in 4Q18. Game approval policies will affect 2019 growth, while overseas revenue for Tencent and NetEase is expected to improve. - **Video Applications:** User growth is slowing, but content and membership revenue are rising. - **Digital Literature:** WeChat Read is growing rapidly, while NetText remains a key domestic content source. - **Industrial Internet:** A growing focus for Tencent and Alibaba, with SaaS as a key feature. Microsoft and Amazon Cloud are leading growth engines. --- ## Key Stock Recommendations - **Consumer:** - Galaxy Entertainment (27 HK) - Sands China (1928 HK) - Country Garden Services (6098 HK) - Chow Tai Fook (1929 HK) - Luk Fook (590 HK) - **Auto:** - Geely Auto (175 HK) - Zhongsheng Holding (881 HK) - **Healthcare:** - Sino Biopharmaceutical (1177 HK) - 3SBio (1530 HK) - SSY Group (2005 HK) - Weigao Group (1066 HK) - **TMT:** - Sunny Optical (2382 HK) - **Internet:** - Tencent (700 HK) - China Literature (772 HK) - IGG (799 HK) --- ## Rating Definitions | Rating | Definition | |------------|------------| | **Buy** | Expected to outperform the benchmark by more than 15% | | **Accumulate** | Expected to outperform the benchmark by more than 5% but not more than 15% | | **Hold** | Expected relative performance ranges between -5% and 5% | | **Underperform** | Expected to underperform the benchmark by more than 5% | | Sector Rating | Definition | |---------------|------------| | **Positive** | Expected to outperform benchmark by more than 10% | | **Neutral** | Expected relative performance ranges between -10% and 10% | | **Cautious** | Expected to underperform benchmark by more than 10% | --- ## Analyst Certification and Disclosure - Analysts certify that all views reflect their personal opinions and that no remuneration is directly or indirectly tied to recommendations. - **Disclosure of Interests:** - GF Securities (Hong Kong) does not hold any shares in the mentioned securities. - GF Securities (Hong Kong) has an investment banking relationship with Weigao Group (1066 HK) in the past 12 months. - Analysts and their associates have no financial interests in the mentioned companies. --- ## Disclaimer - This report is for informational purposes only and does not constitute an offer to buy or sell securities. - It is intended solely for GF Securities (Hong Kong) clients. - The report may not be sold or distributed in certain jurisdictions. - GF Securities (Hong Kong) accepts no liability for losses arising from the use of this report. - Past performance does not guarantee future results. Investment involves risk.