20160411-兴业证券-Weekly_A-share_Market_Recommendations_13页_386kb

Weekly A-share Market Recommendations Summary

Core Content Overview

This report provides weekly stock recommendations from the Industrial Securities Research Institute dated April 11, 2016, covering several companies across different sectors. The recommendations include OUTPERFORM and BUY ratings, with detailed EPS forecasts and investment highlights.

Key Companies and Recommendations

Main Investment Highlights

Shanghai M&G Stationery (603899: SH)

• Rating: OUTPERFORM
• EPS Forecast: CNY 1.01 (2015), CNY 1.22 (2016), CNY 1.47 (2017)
• Sector: Light Manufacturing
• Key Points:
  • Market recognizes its long-term investment value with strong institutional positions.
  • Earnings growth is expected to maintain above 20%.
  • The company is developing online sales channels and plans to launch a higher-end brand.
  • Potential risks include management and office supplies market slowdown.

Jiangsu Linyang Energy (601222.SH)

• Rating: OUTPERFORM
• EPS Forecast: CNY 1.32 (2015), CNY 1.48 (2016), CNY 1.93 (2017)
• Sector: Meters
• Key Points:
  • Strong CAGR in earnings due to efficient power plant operations.
  • Implements an Internet of Energy strategy with distributed PV systems.
  • Potential risk: earnings may fall short of expectations; new business development may face challenges.

Luzhou Laojiao (000568: SZ)

• Rating: OUTPERFORM
• EPS Forecast: CNY 0.95 (2015), CNY 1.38 (2016), CNY 1.63 (2017)
• Sector: Baijiu
• Key Points:
  • Diversified business operations including spirits, glass, hotels, and real estate.
  • High-end product lines show strong growth.
  • Potential risk: policy changes in pharmaceuticals, slower M&A progress.

Shenzhen Expressway (600548: SH)

• Rating: BUY
• EPS Forecast: CNY 0.75 (2015), CNY 0.92 (2016), CNY 1.05 (2017)
• Sector: Expressway
• Key Points:
  • Favorable conditions in the expressway sector with stable earnings.
  • Valuation at 40% discount to fair value based on FCFE model.
  • Government subsidies and strong cash reserves.
  • Potential risks: traffic decline and lower-than-expected returns from new expressways.

Zhejiang Jingxin Pharmaceutical (002020.SZ)

• Rating: OUTPERFORM
• EPS Forecast: CNY 0.54 (2015), CNY 0.9 (2016), CNY 1.26 (2017)
• Sector: Pharmaceuticals
• Key Points:
  • Fastest organic growth in the sector despite industry slowdown.
  • Strong M&A strategy with private placement at a premium.
  • Potential risks: policy changes and delayed M&A progress.

Tianjin Songjiang (600225: SH)

• Rating: OUTPERFORM
• EPS Forecast: CNY 0.54 (2015), CNY 0.81 (2016), CNY 1.32 (2017)
• Sector: Property Development
• Key Points:
  • Asset injection expected to boost earnings significantly.
  • Second-largest auto rearview mirror producer with strong auto electronics capabilities.
  • Potential risks: slump in panel prices and delayed AMOLED transition.

Tianma Microelectronics (000050: SZ)

• Rating: OUTPERFORM
• EPS Forecast: CNY 0.54 (2015), CNY 0.81 (2016), CNY 1.32 (2017)
• Sector: Display
• Key Points:
  • Strong LTPS technology and AMOLED production capabilities.
  • Expectation of growth in consumer-use display segment.
  • Potential risks: panel price slump and slower AMOLED production transition.

Ningbo Huaxiang Electronic (002048: SZ)

• Rating: OUTPERFORM
• EPS Forecast: CNY 0.42 (2015), CNY 0.98 (2016), CNY 1.25 (2017)
• Sector: Auto Components
• Key Points:
  • Completed asset injection, increasing shareholder stakes.
  • Strong auto electronics position with growth in leasing and preferred stock schemes.
  • Potential risks: continued losses from German subsidiary and asset injection delays.

Shandong Chenming Paper (000488: SZ)

• Rating: OUTPERFORM
• EPS Forecast: CNY 0.52 (2015), CNY 0.68 (2016), CNY 0.87 (2017)
• Sector: Paper Making
• Key Points:
  • Leasing business is growing and becoming a key earnings driver.
  • SOE reform improving paper-making business performance.
  • Potential risks: slower SOE reform and economic downturn affecting leasing.

Bank of Nanjing (601009: SH)

• Rating: OUTPERFORM
• EPS Forecast: CNY 2.1 (2015), CNY 2.5 (2016), CNY 2.8 (2017)
• Sector: Banking
• Key Points:
  • Benefiting from interest rate declines.
  • Strong creditworthiness of local government and SOE clients.
  • Potential risk: systematic banking industry risks.

Summary of Key Information

• Overall Rating Trends: Most companies are rated OUTPERFORM, while Shenzhen Expressway is rated BUY.
• EPS Forecasts: All companies have positive EPS growth projections for 2016 and 2017.
• Sector Focus: The report covers sectors such as Light Manufacturing, Meters, Baijiu, Pharmaceuticals, Property Development, Display, Auto Components, Paper Making, and Banking.
• Growth Drivers:
  • Strong earnings growth and organic expansion.
  • Strategic M&A and diversification into new sectors.
  • Government support and subsidies.
  • Technological advancements and product line upgrades.
• Risks:
  • Management and operational risks.
  • Market competition and economic slowdown.
  • Policy changes and regulatory challenges.
  • Delayed business development and asset injection.

Disclaimer and Information Disclosure

• The report is issued by Industrial Securities Co., Ltd., a qualified securities investment consulting institute.
• It is intended for use by the company's clients only.
• The views expressed are subject to change and not guaranteed.
• The report uses public information and does not guarantee its accuracy or completeness.
• Unauthorized redistribution or use is prohibited without prior written consent.