20161108-兴业证券-Weekly_A-share_Market_Recommendations_13页_390kb

Weekly A-share Market Recommendations Summary

Core Content Overview

This document presents weekly stock recommendations from the Industrial Securities Research Institute, dated November 8, 2016. It highlights key investment opportunities across multiple sectors, including Construction, Automobile, Hardware, Telecom Device, IC, Auto Parts, Fertilizer, and Banking. Each recommendation includes EPS forecasts, rating, inclusion time, and potential risks.

Top Stock Recommendations

Main Points and Key Information

1. ARTS Group (Construction)

• Rating: BUY
• EPS Forecast: CNY 0.45 (2016), CNY 0.68 (2017), CNY 0.86 (2018)
• Inclusion Time: Sept. 5, 2016
• Investment Highlights:
  • Expanding business to more regions, including acquisitions in China's southwestern region.
  • Exploring new businesses integrating VR technology with architectural construction.
  • Strong optimism about future growth due to M&A and technological advancements.
• Potential Risk: Government investment slump, slower-than-expected contract signing.

2. SAIC Motor (Automobile)

• Rating: STRONG BUY
• EPS Forecast: CNY 2.85 (2016), CNY 3.00 (2017), CNY 3.17 (2018)
• Inclusion Time: Oct. 17, 2016
• Investment Highlights:
  • Industry recovery is expected to boost sales of JV-brand vehicles.
  • The Roewe RX 5 model is contributing to earnings.
  • Strong growth potential in 2017 and 2018.
• Potential Risk: Passenger vehicle industry downturn, weak new product sales.

3. Shenzhen Laibao Hi-tech (Hardware)

• Rating: STRONG BUY
• EPS Forecast: CNY 0.28 (2016), CNY 0.43 (2017), CNY 0.56 (2018)
• Inclusion Time: Oct. 10, 2016
• Investment Highlights:
  • Leading manufacturer of OGS touch panels.
  • Expected sales increase for larger-size OGS full lamination touch panels.
  • Added touch panels for AIO PCs to its product mix.
• Potential Risk: Demand for two-in-one laptops not meeting expectations, revised touch technology roadmap.

4. Guangshen Railway (Rail Transport)

• Rating: BUY
• EPS Forecast: CNY 0.22 (2016), CNY 0.25 (2017)
• Inclusion Time: Nov. 7, 2016
• Investment Highlights:
  • High likelihood of rail freight price hikes.
  • Potential rail asset securitization and asset injection.
  • Strong fundamentals and financial management.
• Potential Risk: Slower-than-expected rail reform progress.

5. Hengtong Optic Electric (Telecom Device)

• Rating: STRONG BUY
• EPS Forecast: CNY 1.12 (2016), CNY 2.31 (2017), CNY 3.16 (2018)
• Inclusion Time: Nov. 7, 2016
• Investment Highlights:
  • Optical fibre and cable industry expected to grow at 20% CAGR.
  • Submarine cables, special wires, and EV power cables will grow faster.
  • Strategic shift to big data and service platforms.
• Potential Risk: Intensifying competition, slower production of optical wands, delayed new business progress.

6. Rastar Group (Mobile Internet)

• Rating: BUY
• EPS Forecast: CNY 0.39 (2016), CNY 0.49 (2017), CNY 0.58 (2018)
• Inclusion Time: Nov. 7, 2016
• Investment Highlights:
  • Engaged in M&A in mobile game, sports, and culture industries.
  • Acquired 56% stake in Spanish soccer club Espanyol.
• Potential Risk: Slower-than-expected business progress.

7. Jiangsu Changjiang Electronics Technology (IC)

• Rating: STRONG BUY (Revised Up)
• EPS Forecast: CNY 0.11 (2016), CNY 0.78 (2017), CNY 1.29 (2018)
• Inclusion Time: May 17, 2016
• Investment Highlights:
  • Profitability recovery faster than expected.
  • Strategic alliance with SMIC and collaboration with STATs ChipPAC.
  • Strong growth prospects in China's semiconductor industry.
• Potential Risk: Semiconductor industry downturn, integration with STATs ChipPAC not meeting expectations.

8. Shandong Meichen Science & Technology (Auto Parts)

• Rating: STRONG BUY
• EPS Forecast: CNY 0.5 (2016), CNY 0.66 (2017), CNY 0.8 (2018)
• Inclusion Time: May 17, 2016
• Investment Highlights:
  • Fast development of PPP projects supports steady revenue growth.
  • Expansion into auto after-sale market.
• Potential Risk: Business consolidation may fail to meet expectations, lower-than-expected new orders.

9. Shandong Hualu Hengsheng Chemical (Fertilizer)

• Rating: BUY
• EPS Forecast: CNY 0.7 (2016), CNY 0.88 (2017), CNY 1.22 (2018)
• Inclusion Time: Nov. 7, 2016
• Investment Highlights:
  • Strong technological capabilities in gasification platforms.
  • Profitable downstream products.
  • Upcoming projects like the 500,000-metric-ton ethylene glycol project.
• Potential Risk: Chemical product price downturn, raw material price fluctuations.

10. Bank of Nanjing (Banking)

• Rating: BUY
• EPS Forecast: CNY 1.44 (2015), CNY 1.74 (2016)
• Inclusion Time: August 29, 2016
• Investment Highlights:
  • Fixed-income products form a major part of its assets.
  • Strong creditworthiness of local government and SOE clients.
• Potential Risk: Systematic risk in the banking sector.

Conclusion

The report outlines a range of investment opportunities across various sectors, emphasizing growth potential, strategic initiatives, and EPS forecasts. The key areas of focus include expansion through M&A, technological innovation, and industry-specific growth drivers. However, potential risks such as market downturns, slower-than-expected reforms, and competition are also highlighted. The recommendations are based on thorough analysis and are subject to change.