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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 as of July 4, 2016, highlighting key investment highlights, EPS forecasts, and potential risks for several listed companies in China. The report emphasizes companies with strong growth potential, strategic expansions, and industry-specific opportunities, while also noting the risks associated with each investment.

Top Stock Recommendations

Key Investment Highlights

Beijing Mainstreets Investment Group Corp (000609:SZ)

• Sector: Real Estate
• Key Points:
  • No interest-bearing liabilities, with over CNY 1.1 billion in cash and short-term WMPs.
  • Expanding into real estate development, special glasses for rail transportation, and medical services.
  • Strong optimism about future growth prospects.
• Risk: Lower-than-expected property sales, slower-than-expected business transformation.

Liaoning Wellhope Agri-Tech JSC (603609:SZ)

• Sector: Fodder
• Key Points:
  • Leading fodder producer in northeastern China, with strong business control.
  • Expected sharp rebound in sow inventory, and growth in chicken slaughtering.
  • Industry concentration and land/grains as potential assets in transformation.
• Risk: Epidemic risk, policy risk.

Shenzhen Comix Group (002301:SZ)

• Sector: Stationery
• Key Points:
  • Acquired FastMeeting, entering the video conference industry.
  • Vision to expand into SaaS, education, and remote medical services.
  • Launch of ESOP shows management confidence.
• Risk: Management risk.

Shenzhen Zhongjin Lingnan Nonfemet (000060:SZ)

• Sector: Non-ferrous Metal
• Key Points:
  • Optimized tailings recycling, improving profitability.
  • Increased investment in new materials and supply chain finance.
  • Plans to develop an integrated non-ferrous metal service platform.
• Risk: Sharp volatility in lead and zinc prices, slower product development.

Shandong Longquan Pipeline Engineering (002671:SZ)

• Sector: Pipe
• Key Points:
  • Leading in PCCP, petrochemical, and nuclear energy pipe markets.
  • Strong upside potential with expected earnings growth.
  • High margin of safety with private placement price at CNY 12.1 per share.
• Risk: Persistently low orders, slow order implementation.

Wanhua Chemical Group (600309:SH)

• Sector: Chemical Raw Materials
• Key Points:
  • Improved productivity and steady MDI supply.
  • Established new business divisions in polyether, surface materials, and specialty amines.
  • Aimed to become a top-tier new chemical materials company.
• Risk: Slow downstream demand recovery, raw material price volatility.

Jiangsu Changjiang Electronics Technology (600584:SH)

• Sector: IC
• Key Points:
  • Profitability recovery faster than expected, with earnings forecast over CNY 500 million.
  • Strategic partnership with SMIC, leading to revenue from SiP products.
  • Expected 20% growth in China's semiconductor industry for the next five years.
• Risk: Semiconductor industry downturn, integration with ChipPAC failing expectations.

Guangzhou Devotion Thermal Technology (300335:SZ)

• Sector: Environmental Engineering and Services
• Key Points:
  • Transitioned from biomass heating operator to clean energy integrated service provider.
  • Aiming to build a smart furniture and energy management platform.
  • Strong incentive mechanisms for executives.
• Risk: Slower progress in core business, slow business integration.

Beijing Homyear Capital Holdings (600240:SH)

• Sector: Diversified Finance
• Key Points:
  • Engaged in medical supply chain finance, with strong future prospects.
  • Real estate business has high value and profit margin.
  • Expected CAGR growth of 30%.
• Risk: Property sales, hospital operations, medical sales, and operational risks in finance.

Qingdao Haili Metal One (002537:SZ)

• Sector: Mechanical Component
• Key Points:
  • Engaged in household appliance parts, auto parts, and motors.
  • Business transition is at an inflection point.
  • Expected significant growth in NEV sales.
  • Merging with Union Mobile Pay to expand into Internet finance.
• Risk: Regulation, management, policy, and market risks.

Summary of EPS Forecasts (CNY)

Disclaimer and Information Disclosure

• Industrial Securities is a qualified securities investment consulting institute.
• The report is for internal clients only and may not be shared with unauthorized individuals.
• The report is based on public information and is not guaranteed for accuracy or completeness.
• The views expressed are subject to change and not binding.
• The company may trade stocks of the companies mentioned, and potential conflicts of interest may exist. Investors are advised to make independent decisions.