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Weekly A-share Market Recommendations Summary

Core Content Overview

This document presents weekly stock recommendations from the Industrial Securities Research Institute dated August 29, 2016, covering a range of sectors including Diversified Finance, Automobile, Medical Equipment, Construction, Fodder, IC, Online Information Service, and Banking. Each recommendation includes EPS forecasts, rating, investment highlights, and potential risks.

Top Stock Recommendations

Key Investment Highlights

Beijing Homyear Capital Holdings (600240: SH)

• Sector: Diversified Finance
• Growth Potential: Engaged in medical supply chain finance and real estate.
• EPS Forecast: CNY 0.84 (2016), CNY 1.05 (2017), CNY 1.16 (2018)
• Potential Risks: Property sales may not meet expectations, hospital operations may underperform, medical sales may slump, and operational risks in medical finance.

Jiangling Motors Corp (000550: SZ)

• Sector: Automobile
• Growth Potential: Entered niche markets of light trucks and buses; strong optimism in non-stressed SUV and MPV markets.
• EPS Forecast: CNY 2.23 (2016), CNY 3.06 (2017), CNY 3.37 (2018)
• Potential Risks: Sales of Everest may not meet expectations.

Shandong Pharmaceutical Glass (600529: SH)

• Sector: Medical Equipment
• Growth Potential: Leading manufacturer of pharmaceutical glass; strong profitability from high-margin products.
• EPS Forecast: CNY 0.68 (2016), CNY 0.86 (2017), CNY 1.07 (2018)
• Potential Risks: Uncertainty in the market, potential for slower growth.

Shenzhen Expressway (600548: SH)

• Sector: Expressway
• Growth Potential: Government subsidies and repurchase of road assets; FCFE model valuation suggests undervaluation.
• EPS Forecast: CNY 0.92 (2016), CNY 1.06 (2017), CNY 1.13 (2018)
• Potential Risks: Systematic risk from traffic flow reduction, lower-than-expected returns from new expressways.

Beijing Oriental Yuhong Waterproof Technology (002271: SZ)

• Sector: Construction
• Growth Potential: Strong growth in waterproof materials, improved revenue and profit.
• EPS Forecast: CNY 1.07 (2016), CNY 1.36 (2017), CNY 1.70 (2018)
• Potential Risks: Property market demand slump, price rebound of asphalt.

Guangdong Haid Group Company (002311: SZ)

• Sector: Fodder
• Growth Potential: Fast revenue and earnings growth despite industry slowdown; strategic M&A and overseas expansion.
• EPS Forecast: CNY 0.77 (2016), CNY 1.01 (2017), CNY 1.12 (2018)
• Potential Risks: Natural disasters, overseas political risks.

Jiangsu Changjiang Electronics Technology (600584: SH)

• Sector: IC
• Growth Potential: Strong recovery in profitability; collaboration with SMIC and growth in SiP manufacturing.
• EPS Forecast: CNY 0.05 (2016), CNY 0.23 (2017), CNY 0.73 (2018)
• Potential Risks: Semiconductor industry downturn, integration with STATs ChipPAC may not meet expectations.

People.cn (603000: SH)

• Sector: Online Information Service
• Growth Potential: Key player in SOE reform; new lottery business expected to drive growth.
• EPS Forecast: CNY 0.24 (2016), CNY 0.25 (2017), CNY 0.27 (2018)
• Potential Risks: Slower-than-expected growth in online lottery industry, potential obstacles in lottery business.

Zhejiang Reclaim Construction Group (002586: SZ)

• Sector: Water Conservancy
• Growth Potential: Expansion into culture and entertainment through M&A and PPP model.
• EPS Forecast: CNY 0.14 (2016), CNY 0.18 (2017), CNY 0.19 (2018)
• Potential Risks: Fewer new orders, slower project development.

Bank of Nanjing (601009: SH)

• Sector: Banking
• Growth Potential: Benefits from interest rate decline; clients with strong creditworthiness.
• EPS Forecast: CNY 2.58 (2016), CNY 3.04 (2017), / (2018)
• Potential Risks: Systematic risks in the banking sector.

Key Information Summary

• Rating Status: Most recommendations are BUY or STRONG BUY, with one OUTPERFORM.
• Growth Projections: Most companies are expected to grow at CAGR of 20-30% over the next few years.
• Valuation: Some companies are considered undervalued, with stock prices below fair value.
• Sector Focus: The recommendations span multiple sectors including finance, automobile, construction, medical equipment, and IC.
• Risks: Each recommendation includes potential risks such as market demand, operational challenges, and systematic risks.

Conclusion

The report highlights several companies with strong growth potential and positive earnings outlooks, emphasizing their roles in key industries and strategic moves. Investors are advised to consider these stocks with a focus on their EPS forecasts, sector performance, and management strategies. However, it also acknowledges the risks associated with each investment, including market conditions, regulatory changes, and operational challenges.