Guangzhou Baiyun Int'l Airport:Remain UW on near-term concerns of capacity saturation and capex

We maintain UW rating even though we factor in potentialbenefit of a modest tariff hike. We believe the company willface downward earnings pressure from capacity constraintscombined with heavy capex on the construction of a newterminal building and potential runway costs.
    What's new: Our Hong Kong/China Transportation & Infrastructure team haspublished a report titled "Hong Kong/China Transportation & Infrastructure: AtThe Crossroad of Industry Reforms". In this report, we explore how possibleindustry reforms could help to improve the current situation and what theimplications would be for public infrastructure firms (e.g., railways, airports,ports, toll roads, and so on). While the real magnitude of pricing changes maydepend on regulatory approvals, we think a 10% hike is a realistic assumption forairport services.
    Changes to earnings forecasts and price target: We raise our DCF-derived PT toRmb14.40 from Rmb13.70 to reflect a 10% tariff hike on domestic routes in 2019.
    However, we largely maintain earnings estimates for 2016-18 (Exhibit 3), afterfactoring in 2016 actual traffic data.
    Valuation: GBIA is trading at 1.5x 2017e P/B and 8.3x 2017e EV/EBITDA, on ourestimates, versus its historical average of 1.3x P/B and 5.4x EV/EBITDA since2009. Our price target implies 1.4x 2017e P/B and 8.2x 2017e EV/EBITDA.

万科A:当前股价已计入了加杠杆进行净资产价值扩张的潜力;卖出

最新事件
    我们认为万科A 的股价已经远远超出了通过合理的资本配置可实现的净资产价值扩张潜力。鉴于该股估值远高于正常水平(我们认为一定程度上是7月底以来恒大增持万科A 股份至14.07%所致),且我们的12个月目标价人民币16.5元所隐含的35%的下行空间,我们重申对万科A 的卖出评级。本报告中,我们分析了投资者对于我们观点的三个主要相反意见。
    潜在影响。
    相反观点 #1:买万科A 股股票比直接买地便宜。我们的看法:我们估算万科现有土地储备若按市值计价为人民币21元/股,较当前股价低18%。
    相反观点 #2:万科负债率较低,存在加杠杆扩张土地储备/净资产价值的空间。我们的看法:当前股价相当于净负债率升至60%(我们的基本假设为-14%)所实现的2016年年底净资产价值。即便是在较激进的净负债率为300%的情景假设下,我们估算潜在的净资产价值也仅约为人民币32元/股,风险回报不具吸引力。
    相反观点 #3:万科可以凭借雄厚的财务实力支付更高的股息。我们的看法:假设派息率上升到100%(我们的基本假设为45%),则当前股价隐含的2016年预期股息收益率为7.2%(我们的基本假设为3%,行业均值为4%)。虽然派息率可以超过100%,但由此带来的股东权益的下降可能意味着加杠杆的空间减小。
    估值。
    万科A 当前估值远高于2010年以来历史区间的1个标准差(相对于2016年年底预期净资产价值溢价8%,对应13.9倍的2016年预期市盈率和2.5倍的2016年预期市净率),且相对于A 股同业(相对净资产价值折让22%,市盈率11.6倍,市净率2.0倍)存在大幅溢价。维持对万科A 的卖出评级,基于2016年年底净资产价值的12个月目标价格为16.5元,维持对万科H 的中性评级,12个月目标价为19.0港元。
    主要风险。
    恒大和/或其它方持续购买股份;资本配置执行好于预期。

Dongjiang Environmental:New SOE leader benefiting from Shenzhen Connect;initiating with Buy

New SOE leader in hazardous waste treatment
    We initiate coverage of Dongjiang (895 HK) with Buy and an HKD15.5 targetprice. We like Dongjiang on the strong capacity growth outlook for China’shazardous waste treatment market, its leading market position and potential toconsolidate the fragmented market, and the company’s transformation into anSOE with an employee share incentive scheme. We expect the Shenzhen-HongKong Stock Connect to be a share price catalyst. We also initiate on Dongjiang-A (002672 CH) with an RMB14.8 target price and Sell, on valuation.
    Leader to benefit from market growth, consolidation, and its new SOE identity
    China’s hazardous waste treatment capacity should post a 17% CAGR, driven bythe Soil Pollution Control Plan. Dongjiang is well-positioned to capture thegrowth, as a leader in capacity, geographic presence, treatment qualificationsand its track record. The company should also benefit as the market, with~1,500 players, consolidates. Dongjiang’s announced share issue to a companyunder Guangdong SASAC will turn it into an SOE and we expect it to benefitfrom its new SOE status in new project wins, project ramp-ups and finance cost.
    Strong earnings growth; employee share incentive scheme should help
    We expect Dongjiang to deliver a recurring earnings CAGR of 26% in 2016-18e, driven by capacity growth and a rise in the utilization rate in industrialhazardous waste treatment. We believe the recently-issued employee shareincentive scheme should help drive Dongjiang’s earnings growth, as it requiresthe company to deliver a recurring earnings CAGR similar to our forecast.
    DCF-based target price of HKD15.5/RMB14.8; key downside risks
    Our DCF valuation is based on a 7.3% WACC, explicit cash flow to 2026E and2% terminal growth. Major risks: fluctuations in China’s industrial activities,slower/faster-than-expected capacity ramp-ups, lower/higher-than-expectedmetal prices, lower/higher-than-expected margins, and changes in China’spolicies.

CRRC:H/A,Hold/Reduce,News from abroad

Awarded a major metro train contract in Victoria, Australia
    Potential investment in European-based Skoda Transportation
    Maintain Hold (HKD8 TP)/Reduce (RMB7 TP) on H/A-shares;no changes to earnings
    Over the weekend CRRC made two announcements on its international businesses:1) the award of a major metro train contract as part of a consortium in Australia; and2) an update on its potential acquisition of Skoda Transportation.
    Major metro train award in Australia – Evolution Rail, a consortium consisting ofCRRC Changchun (45% equity interest), Australian Downer EDI and AustralianPlenary Group, was awarded a AUD2bn (about RMB10.1bn) High Capacity MetroTrain Project in Victoria, Australia. 65 seven-carriage trains will be manufactured anddelivered over the coming six years. Local content will be at least 60% and there is30-year maintenance work associated with the contract. Other competitors for thecontract included consortiums involving Bombardier and Alstom. The attributablevalue of the contract would be equivalent to about 2-3% of CRRC’s backlog ofRMB203bn as at September 2016. Near-term earnings impact is limited as deliverywill start from 2018.
    Potential acquisition may open up European market – CRRC Zhuzhou ElectricLocomotive, a 100% owned subsidiary, is contemplating the acquisition of 100% ofSkoda Transportation in Czechoslovakia. No binding agreement has been enteredinto. According to Handelsblatt news in Europe, Skoda generated about USD730m inrevenue and USD24m in profit in 2015. The potential acquisition price could be asmuch as EUR2bn or USD2.1bn (Railwaynews.net, 24 November). While Skoda is nota leading global rail equipment manufacturer, it has licenses and certifications for theEU countries which may be the key attraction for CRRC. The estimated global railequipment market according to UNIFE (European Rail Industry) is cEUR150bn perannum, of which the European continent makes up about 50% of the global demand,compared with China which makes up about 12-15% of global demand. Skoda has asmall involvement in the Chinese subway train and light rail market and one of its keylocal partners in China is Shenzhen Inovance (300124 CH, RMB21.2, Buy).
    Weak new order in China holding back the stock – We think the share price willremain weak until the new order outlook in China improves. The stock is trading at14.5x FY17e PE and our earnings forecasts are 5-10% below market consensus inFY16e and FY17e.

China Oilfield Services:H/A,Reduce,connected transaction limits signal 2017revenue risk

2017e looks even tougher than expected given shrinkingconnected party transaction limits with CNOOC Group
    In addition the company will be removed from HSCEI and seea possible credit downgrade by Moody’s
    Maintain Reduce on COSL-H/A with unchanged TPs ofHKD5.25/RMB4.6
    Event: COSL has experienced a wave of negative news over the last week.
    Firstly, last week, the new Service Framework Agreement (SFA) on 9 November2016 set significantly lower connected transaction limits with CNOOC Group (883HK, HKD9.51, Reduce). Two other negative inputs were received (11 Nov 2016,Reuters): Effective 5 December 2016, COSL will be removed from Hang SengChina Enterprises Index (HSCEI) due to lower liquidity and market capitalization,which may pressure the shares; and Moody’s announced that COSL’s credit rating ison review for a further downgrade after it was cut from A3 to Baa1 in December 2015in reflection of the impact of low oil prices on corporate liquidity and profitability.
    Implications: The outlook for COSL’s operations remains challenging, despiteshare price resilience in the face of a steady stream of negative news flow. Theloss in 9M16 reached a record RMB9bn as upstream clients lowered spending. Otherindicators including rig utilizations (-21% y-o-y in 3Q16) and Operating Margin (-18%in 3Q16) also reflect ongoing industry headwinds. Even with the 1H16 crude oil pricerebound, COSL’s operations remain under significant pressure as the industryspending outlook remains subdued. In 2015 COSL generated 65% of revenue fromCNOOC Group. Proposed transaction caps between COSL and CNOOC Group in2017e are only half the 2016 limit. Further, historically, COSL’s actual revenuegeneration has been well below the intra group transaction limits. In 1H16, COSL’sconnected party revenue was only 30% of proposed annual cap, while CNOOC 9M16outlays represented 56% of its FY16 capex budget (RMB60bn). The announcementof COSL’s removal from HSCEI and potential credit action from Moody’s may createadditional pressure on the share. Upstream investment outlays are highly sensitive tooil price volatility; upstream capex budgets are likely to remain tight. We believe it istoo early to call a recovery before finding evidence for fundamental improvements.
    Valuation and risks: maintain Reduce on both COSL-H/A with TPs ofHKD5.25/RMB4.6. We derive our H-share TP by applying a 5.7x 2yr Forward P/CF,the average trailing multiple at which the stock traded since 2011. To derive our Asharetarget price, we convert the H share target price using a HKD:RMB cross of1.13x. Upside risks for H/A shares: Higher oil prices, Chinese government equitymarket support, expanding valuation multiples, narrowing H-share discount, recoveryin E&P capex budgets, rising rig scrap rates, improvement in rig utilizations and dayrates, industry consolidation, etc.

Air China:H/A,Buy/Reduce,Strong 3Q;CX headwinds to hit

3Q16 EPS surged 62% y-o-y to RMB0.31
    Highly profitable domestic market to absorb forex losses andinternational softness; Slash 2017-18e profits by 29% and25% largely on Cathay Pacific headwinds
    Maintain Buy, cut TP to HKD6.7 from HKD7.8 for AC-H;Reduce with an lower TP at RMB5.9 from RMB6.9 for AC-A
    3Q16 results meet our expectation. 3Q16 net profit surged 62% y-o-y or EPS ofRMB0.31 per share. Net financial expenses fell 67% y-o-y to RMB1.3bn due to asmaller forex loss. For 9M16, reported profit up 15% y-o-y.9M16 profits fromassociates, largely Cathay Pacific (293 HK, HKD10.2, Reduce, TP HKD10.0) andShandong Airlines tumbled 59% y-o-y to RMB468m.
    Domestic more than offset a deteriorating international market. We believedomestic yield was largely flat in 9M16 despite a 23% y-o-y decline in average oilprices. In our view, the strength of top tier cities helped by supply constraints morethan offset the weakness in lower tier cities. However we think there were significantinternational yield erosion in 3Q because of Air China’s large exposure to long haulmarkets and aggressive capacity expansion. We estimate it’s EU and NorthAmerican capacity surged 14% and nearly 40% y-o-y in 9M16, Chinese airlinesstrategically expanded US capacity to occupy the quota in air service agreementswhich has been used up already.
    Expect US debt to be lowered again. We forecast its US debt of RMB52-57bn atend-2016 from RMB77bn at end-2015, accounts for 50-55% of total debt. Air China isa slow mover, however we expect some progress in reducing US debt in 2H16.
    Watch out for Cathay Pacific headwinds. Given the profit slump at Cathay Pacifichighlighted in our recent report “expect a loss making 2017” and forex exchange ratechanges, we slashed 2017-18e net profits by 29% and 25%, respectively.
    Maintain Buy on AC-H, TP cut to HKD6.7; Reduce on AC-A, TP lowered toRMB5.9. Our H-share TP at HKD6.70 is based on a 5-year average ROE/COEgimplied 2017e PB of 1.0x from 1.2x previously, reflecting a lower ROE of 10% in2017e. Our TP implies upside of c31% and we have a Buy rating on Air China-H. Wederive our TP of RMB5.90 for AC-A by converting our AC-H target price into RMB,us ing HSBC’s HKD/RMB FX rate of 1.13. Our TP implies c20% downside and werate the A shares Reduce. Downside risks for H-share: RMB depreciation versus theUSD; intense fare competition; and a surge in oil prices. Upside risks for A-shares:better-than expected traffic growth; and lower oil prices.

China Citic Bank:H/A,Hold/Reduce,Preference share issuance plan to alleviate capital pressure

3Q16 profit growth was 6% y-o-y, the same as in 1H16. 9M16 profit grew by 5%,largely in line with our estimates.
    What we liked: (1) Fee income increased to 13% y-o-y in 3Q16, faster than the 10%reported in 2Q16. (2) The cost to income ratio improved 1ppt y-o-y in 3Q16 to 31%on Value Added Tax reform effect.
    What we disliked: (1) Loan loss reserve was 2.3% (+13bp q-o-q) but NPL coveragefell 2ppt to 155% in 3Q16. (2) ROE fell by 1.9ppt y-o-y for 9M16.
    Other points of interest: (1) NIM was 1.93% in 3Q16, down 4bp q-o-q and fallingslower than the 16bp decline in 2Q. The continued fall in margin was a result of ValueAdded Tax reform. (2) NPL formation adjusted for write-offs was 1.28%, slower thanthe 1.69% seen in 2Q. (3) Tier-1 ratio rose 21bp q-o-q to 9.2% in 3Q compared to a2bp decline in 2Q. Tier-1 ratio at 9.2% offers a 65bp buffer to requirements. The bankproposed to issue RMB35bn preference shares and RMB40bn convertible bonds,which could boost tier-1 ratio by 198bp according to our calculation. The preferenceshares issuance plan has been approved by the China Securities RegulatoryCommission (CSRC).
    We retain our Hold/Reduce ratings on CITIC H and A shares: We make nochanges to our earnings estimates or target prices of HKD5.60 for the H shares andRMB5.00 for the A shares. See page 2 for valuation and risks. Investment thesis:This is one of the cheapest China bank stocks in terms of PB but it faces lowprofitability, even though its loan book is less risky than some of its peers. The bankhas support from its largest shareholder CITIC Ltd and SOE groups such as ChinaTobacco in capital raising.
    With this note Chen Wang assumes primary coverage of China Citic Bank.

China Minsheng Banking:Aggressive credit growth in a down cycle,Underperform

Risky growth strategy, maintain UnderperformMSB's 9M16 net profit rose 2.0% YoY to RMB39.2bn, while core earnings rose 6.9%YoY. MSB-H’s share price rose 16% YTD, by far the best performer in the sector, duepossibly to stock purchase by its large shareholders. Fundamentally, we are concernedwith the credit risks and capital pressure in its aggressive volume growth. Underperform.
    Very aggressive growth and high balance sheet leverageGrowth of assets/loans remained high at 7.4%/7.7% QoQ in 3Q16, or 28.8%/23.8% YoY,much higher than rest of the sector. Receivables investment surged by another 35%QoQ or 181% YoY, when most peers scaled back post CBRC's tightening. Receivablesaccounted for 19% of total assets by 3Q16, up from 10% in 4Q15. With the aggressivevolume growth, CET1 fell by 27bp QoQ to 9.07%, when most peers reported 10-30bpQoQ rise. The rapid deterioration in CET1 will put pressure on equity re-financing. Asset/equity leverage rose 0.8x QoQ to 17.3x by 3Q16, the highest level since 3Q13.
    Revenue growth offset by sharp rebound in operating costsNet interest margin (NIM) fell by ~10bp QoQ to 1.87% in 3Q16. Net interest incomerose by only 0.5% QoQ, despite the very high volume growth. Fee income declined by12% QoQ, and the YoY growth slowed to 5% for 9M16. Other non-interest income wasalso strong in 3Q, and total revenue rose 4.7% QoQ. However, operating cost, havingdropped 26% QoQ in 2Q16, rebounded by 47% in 3Q16. Cost-income ratio rebounded10ppt QoQ, but continued to improve by 4.4ppt YoY to 30.0% in 9M16.
    Credit costs reached normalized levelsNPL size rose 1.1% QoQ or 17% YTD. With the rapid loan growth, NPL ratio declined by10bp QoQ to 1.57%. Credit cost at 167bp in 3Q16 was broadly in line with 171bp inFY15, but lower than 193bp in 1H16, and we do expect mid-cap banks’ credit cost tostabilize at around 150-200bp levels. NPL coverage edged up QoQ to 154%, while loanreserve ratio declined 13bp QoQ to 2.43% by 3Q16.

Great Wall Motor (H/A):Time to lock in some profit Downgrade to UW

We are downgrading Great Wall Motor to UW from Neutralfollowing a weak 3Q16 result today that was in line with our estimate, but10-15% shy of consensus as a result of a margin shortfall, a key long-termstructural concern and challenge facing the company and the main shareprice driver, in our view. Our Neutral rating (here) was tactical, to captureour summer rally theme (here). With the stock’s 40-50% appreciation inthe past four to five months vs. MXCN’s ~20%, we recommend investorstake profits in GWM and focus on companies with higher earningsvisibility or benefits from NEV policy as we enter 2017: Brilliance, Geelyand BYD-H, our top OEM picks.
    Recap of our long-term reservations on GWM: (1) Margin willcontinue to be under pressure due to mounting competition. GWM willneed to respond by offering incentives, cutting MSRPs or undertakingmore marketing expense. All these happened in 3Q16 and were the mainreasons for the disappointing margin. (2) While GWM might outperformthe broader PV market on volume growth due to its high concentration inthe SUV business, it could still underperform the SUV segment. (3)China’s carbon emission and fuel consumption trading schemes, bothstarting from 2017, add further uncertainty to GWM’s profitability.
    3Q16 result; our revisions: GPM slipped in 3Q16 despite rising volumeand a better mix. Management blamed price cuts and the marketingcampaign. We leave 2016E largely unchanged, but lift 2017E 14% as weincorporate new models, though our concerns about margin remain.
    UW, risks: Our new Jun-17 (H/A) PT is HK$7.70/Rmb10 on a 6x/9xfwd P/E. Upside risks include better-than-expected sales and margins.

Dongfang Electric :Hold/Reduce on H/A,Loss continues in 3Q16

Dongfang Electric reported 3Q16 net loss of RMB723m on lowrevenue and assets impairment
    Management expects flat overall GPM for FY16e; looking forrecovery from hydro/wind
    Maintain Hold/Reduce for H/A shares, with unchanged TPs ofHKD5.6/RMB5.0
    Investment thesis: As a major Chinese traditional power equipment player,Dongfang Electric is facing significant growth challenges amid the over-suppliedpower market. We did not expect power equipment stocks to rally so strongly, asearnings are no longer falling, but they are not rising either. We think earnings havenow bottomed but see no sign of a cyclical rerating. Our H-share TP price impliesFY17e PB of 0.5x, which we believe fairly reflects a RoE contraction to 1% in2017-18e. We keep the H shares rated Hold and maintain our Reduce rating on theA share due to their expensive valuation.
    3Q16 result: Dongfang reported 3Q16 net loss of RMB723m due to 1) low revenueof RMB5,420m, down 30% yoy; and 2) assets impairment of RMB452m related toprovision on aging receivables and inventory reduction in 3Q16, compared toRMB325m in 3Q15; GP margin maintained at 11.5% in 3Q16 vs 11% for 1H16. Neworder inflow experienced a sharp decline to RMB5,570m in 3Q16 by 43.7% yoy, vsRMB1,480m in 2Q16. The company has cash on hand of RMB25bn by end of 3Q16vs market cap of HKD24bn.
    Key highlights from conference call: Management sees the uncertainty of FY16assets impairment and expects no more impairment related to inventory reduction;Production output is largely scheduled for 2017, including thermal and cleanenergy; Expects overall GP margin to bottom out at this level and expects FY16e GPmargin of 11-12%; Expects 8-10 nuclear projects for public tender over 2016-2020e(accounts for 10%-15% of company’s annual revenue); Looking for GP marginrecovery from hydro (to the normal level at 15% helped by large scale projects, i.e.
    Baihetan).and wind. DEC signed a USD2bn Egypt projects contract in 1H16 (notincluded in 9M16 new orders as not received prepayment), which still in the progress.
    Valuation: We use the PB valuation approach, as the company has flagged potentialloss for FY16. We apply a PB multiple of 0.5x to reflect RoE of 1% in 2016-18e.
    Upside risks for H and A shares: Better order inflows for the thermal power, fasterdevelopment in nuclear power projects, and higher GPM from a recovery in ASP.
    Downside risks for H shares: Cancellation or suspension of thermal backlogorders; lower-than expected GPM recovery.

New China Life Insurance-H,Hold/A,Reduce:Results moderately disappointing

What we disliked: (1) Net profit was 1% below consensus having fallen 51% YoY,which was marginally below the “50%” profit fall guidance. (2) New China Life is theonly insurer to post a decline in number of life agents, which fell 6%. While we see>20% agent growth as promoting future mis-selling risk, a decline is a new concernaltogether. It would suggest New China Life may have suffered poaching by peers.
    (3) Non-standard Asset exposure ballooned to a worrying 30.1% of total assets (vspeers’ avg. 14%), which marks a concerning increase from 21.8% of assets atbeginning of year. (4) Life NBV was 6% below consensus, rising just 18% YoY, whichwas the lowest growth among peers. The 18% rise in NBV was driven by a 28% risein APE offset by 2%pts of margin contraction. (5) NBV margin of 26% remainsrelatively low versus 35% peer group average. The margin was pulled down by anoticeable 6%pts margin decline in Agency channel. (6) Persistency ratio on a 25thmonth basis deteriorated by 2%pts to 78.4%. We note that 13mth improved by 3% to87.9%, which remains below the 92% peer average. (7) New China Life paid nointerim dividend as usual.
    What we liked: (1) Shareholders funds was 1% above consensus. (2) EmbeddedValue was 3% above expectations. (3) NBV per agent rose 12%, although this wasflattered by a concerning decline in number of agents. (4) Total investment yield of5.3% (1H15: 10.5%) was relatively high compared to peers (4.6% average), althoughthis was due to relatively high exposure to Non-Standard Assets (see “What wedisliked” section). (5) Comprehensive/Core solvency ratios of 282%/252% werecomfortably above 100%/50% regulatory requirements. (6) Surrender ratio improvedto 4.5%, although this remains higher versus peers.
    Reiterate Hold/Reduce ratings on H/A shares with unchanged TPs ofHKD29/RMB25. On the back of the lower-than-expected 1H16 NBV, we cut ourFY16-18e NBV estimates by 5-12%. Lower NBV estimates and higher ‘asset risk’(updated per the latest release) have offset the valuation impact of positive markedto-market asset values and higher-than-expected reported embedded value. Wemaintain our Hold rating on New China Life-H as it has so far been unwilling toacquire Chinese bank stakes unlike peers, which allows less exposure to bank risks.
    See pg.3 for valuation and risks.

Huadian Power International:1H profit down 30%YoY;UHV,nuclear &DPS competition rising in Shandong

1H profit down 30% YoY, 19% below consensus
    Huadian (HDI) reported 1H16 net income of Rmb2,469mn, down 30.6% YoY, in line withour estimate of Rmb2,500mn, but 19% below consensus. Net of one-off items, HDI’s1H16 recurring profit dropped 29% YoY to Rmb2,560mn and 1H recurring RoIC droppedto 6.4% from 8.8% in 1H15 and 9.6% in FY15, lower than Huaneng’s (HNP) 8.1%, ChinaResources Power (CRP)’s 8.7% and China Power International (CPID)’s 9.3%. we projectHDI’s RoIC to drop to 6.4%/5.8% in FY16/17E. HDI’s 1H16 debt to capital ratio was67.2% vs 67.0% in FY15. HDI’s avg cost of debt dropped from 5.6% in 1H15 to 4.4% in1H16. This compares to HNP’s cost of debt 4.3%, CRP’s 4.6% in 1H16 and CPID’s 4.7%.
    UHV, nuclear power, DPS competition rising in Shandong
    The commissioning of Ultra High Voltage (UHV) power lines importing power intoShandong (SD) and the new Haiyang nuclear power units in SD will lower utilization ofHuadian’s thermal units in SD. We estimate HDI to have sold around 20% of its 1H totalpower output via DPS at 12-13% tariff discount in 1H16. In comparison, CPID soldaround 15% in DPS at around 10% tariff discount; HNP sold 18% of 1H output via DPSat 23% tariff discount; CRP sold around 18.2% at 11.6% discount in 1H16. HDI’s 1H16unit fuel cost dropped by 18.7% YoY, more than CR Power’s 18.1% YoY drop, but lessthan HNP’s and CPID’s 22.1% and 21.0% YoY drop in 1H16. We have assumed in ourmodel, a 7.0% YoY unit fuel cost drop in 2016. For every 1% change in unit fuel cost, weestimate Huadian’s 2016E net income would change by 2.1%.
    EPS estimates & PO unchanged; maintain Underperform
    We maintain our 2016-17 EPS estimates and our H share PO of HK$3.1 and A share POof Rmb3.3 and Underperform rating. We await more information from HDI’s briefing callto be held at 4:15pm on Aug 31. Our 2016-17 EPS estimates are 16.2-10.7% belowconsensus. We assume HDI’s tariff to drop 7.6% YoY in 2016E and FY16E thermal unitutilization hours to drop 9.5% YoY. HDI is trading at 6.96-7.1x 2016-17E EV/EBITDA, vsour H share based PO implied 2016-17E EV/EBITDA of 6.79-6.92x.

Jinke Property:Property sales growth below national level;diversified businesses yet to show results

Earnings in line with expectations
    H116 revenue was Rmb13.1bn (+100% YoY), net profit attributable to the parent wasRmb580m (+43% YoY), and EPS came to Rmb0.14, in line with our and consensusexpectations. Booked gross margin was 23%, down 2.8ppts from H115.
    Property sales growth below national level
    In H116, property sales value came to Rmb12.5bn (+29% YoY) and sales GFA totalled2.06m sqm (+41% YoY). ASP was Rmb6,068/sqm, down 13.6% from 2015. The dropin ASP was unusual among peers. Further, the 29% YoY sales growth trailed the 42%YoY sales growth of nationwide commodity housing in H116. The main reasons are:1) the company's low ASP for projects in Chongqing's suburbs and some tier-4 cities;and 2) the residential ASP in Chongqing city rose only 1.7% YoY in H116, resulting inoverall higher volume and lower price for the company's property project sales.
    Wind power revenue below expectations
    In H116, the wind power business delivered revenue of Rmb64m, up merely 3% YoY.
    We believe it is unlikely to meet our earlier full-year estimate of Rmb250m, with thecompany's diversification strategy facing obstacles. Apart from the wind powerbusiness, in H116, the company invested Rmb1bn each to set up two subsidiaries: onein education services and the other in community services. The company has yet tomake specific announcements on the businesses. In our view, the company does nothave sufficient technical experience and know-how in the diversified businesses, whichare unlikely to deliver stable earnings in the near term, as the investments are scattered.
    Valuation: Maintain Sell rating and Rmb3.33 PT
    We maintain our 2016-18E EPS at Rmb0.36/0.39/0.42. The stock is trading at 12x2016E PE. We derive our Rmb3.33 PT by applying 9x 2016E PE (5-year average less 1SD). We maintain our Sell rating, given: 1) the poor progress of the property business inthe cities; and 2) the diversified businesses are unlikely to deliver stable earnings in thenear term due to the scattered nature of the investments.

China United Network Communications-A:Fundamentals improving but weak position in industry unchanged

Fundamentals are improving but the stock is still overvalued
    We believe the worst is over for China Unicom (CU), although a near-term earningsreversal is unlikely. We are raising our PT to Rmb4.2 from Rmb3.5 while maintainingour Sell rating. We believe the stock remains overvalued: 1) The market expects CU tohave a profit of Rm2.36bn in 2016 vs. a reported H116 profit of Rmb450m, meaningthe market estimates CU's H2 profit at Rmb1.91bn, up 64% YoY and 324% HoH. Weview market expectations as too optimistic. 2) Using UBS's "What's Priced In?" tool toanalyse CU's share price, we find market expectations to be too high to allow a reversalin CU's earnings.
    H1 results released, with profit down 80.6% YoY
    On 17 Aug, CU released its interim results. H116 revenue was Rmb140.3bn (-3.1%YoY), EBITDA was Rmb41.43bn (-18.1% YoY) and net profit attributable to the parentwas Rmb450m (-80.6% YoY). We attribute the falling earnings to the following: 1)CU's relatively low 4G penetration made it hard for ARPU to grow. 2) China Mobile's(CM) rapid expansion in fixed-line broadband hit CU's fixed-line broadband business. 3)To defend its market share, CU increased marketing expenses 17.1% YoY, leading toprofit dilution. 4) Network support cost went up on recognition of tower lease fees.
    We are raising our financial forecasts
    We are raising our 2016/17/18E service revenue 2.0%/3.8%/4.2% to Rmb242.9/254.7/263.9bn, as we assume higher mobile ARPU and faster growth in new businesses suchas IDC. We are lifting our 2016/17/18E EBITDA 1.1%/5.1%/5.4% to Rmb83.7/90.4/95.7bn and our 2016/17/18E net profit 13.5%/53.3%/43.4% to Rmb2/3.2/4.1bn.
    Valuation: Lifting PT to Rmb4.2; maintain Sell
    CU's share price has declined 25% YTD, underperforming the broader market(Shanghai Composite index -12%). We believe the market has begun to recognize thedownward trend in CU's 2016 earnings because the consensus earnings estimate for2016 has dropped 39% YTD. However, 2016-18 consensus earnings estimates are still10-17% higher than ours, so we think the stock remains overvalued. Our PT is DCFbased,with 7.3% WACC and zero terminal growth. We are raising our PT to Rmb4.2from Rmb3.5 while maintaining our Sell rating.

金地集团:业绩低于预期,少数股东权益上升将拖累盈利增长

与预测不一致的方面
    金地集团2016年上半年净利润同比增长49%至人民币7.78亿元,在我们此前/万得全年预测中占比24%/19%(去年同期则占全年净利润的28%),受到结算面积增长66%的推动。要点:1. 毛利率(剔除土地增值税)同比/环比下降2个/3个百分点至20%,较我们的2016年全年预测低4个百分点,归因于总销量中销售均价较低的慈溪/宁波/大连项目的占比上升;由此导致人民币1.07万元/平方米的结算均价较高华2016年全年预测低16%。净利润率保持在6%,归因于销售及管理费用率从去年同期的12%降至7%(因为未并表项目销售收入上升)以及利息资本化率从2015年全年的59%升至66%,但净利润率仍较我们的2016年全年预测低2个百分点,原因在于少数股东权益上升(在净利润总额中占比40%,而去年同期占比18%,我们此前预测为36%)。由于未结算销售均价为人民币1.4万元(较上半年高30%),我们预计下半年毛利率将环比上升3个百分点,令全年毛利率达到20%。2. 鉴于今年前7个月销售进度相当于我们此前全年预测的74%,我们将2016年全年预售收入预测上调至人民币800亿元,同比增长30%,隐含的下半年销售去化率为45%,而今年上半年为49%。不过,鉴于截至今年上半年末公司在土地储备中的权益从2013-15年的75%降至65%,我们预计权益预售收入同比增长乏力,约为15%。3. 今年上半年新开工面积增长22%,管理层将全年新开工面积目标上调8%至540万平方米(同比下降2%)并维持完工面积目标480万平方米不变(同比增长2%)。4. 鉴于上半年审慎的土地储备扩张(新购置土地在销售额中占比22%,而同业约为40%)以及在新购置土地中的权益从2015年全年的39%降至33%,净负债率从2015年底的58%降至32%。
    投资影响
    我们将2016-18年每股盈利预测下调不多于5%以反映销售收入预测的上调和净利润率预测1个百分点的下调(以反映2016-18年预期少数股东权益在净利润中的占比升至45%),并维持基于净资产价值的12个月目标价格人民币9.2元(较2016年末预期净资产价值的折让幅度仍为35%)。鉴于金地集团当前股价较2016年末预期净资产价值折让11%、2016年预期市盈率为18.4倍,而内地上市开发商均值为折让21%和11.0倍,我们认为该股估值较高并维持卖出评级。风险:销售/利润率好于预期。

奥瑞金:拟收购欧塞尔59.95%股权,体育第二主业稳步推进

投资要点
    事件:公司第二届董事会2016年第六次会议审议通过了《关于收购法国欧塞尔足球俱乐部(AJA FootballS.A.O.S.)59.95%股权的议案》,同意公司与AJAXXL CAPITAL S.A.签订《股权购买协议》,并同意公司或由公司控制下的主体以自筹资金700万欧元收购AJAXXL 持有的法国欧塞尔足球俱乐部(AJA FootballS.A.O.S.)59.95%股权。
    收购法国传统豪门,历史底蕴丰厚。公司此次收购的法国欧塞尔足球俱乐部成立于1905年,为拥有百年历史的法国传统豪门之一,历史上享有盛誉。在2011-2012赛季前一直处于法国足球甲级联赛,并在1995-1996赛季夺得法国足球甲级联赛冠军,目前处于法国足球乙级联赛。法国欧塞尔足球俱乐部是欧洲少数几支拥有主场固定资产的足球俱乐部之一。同时法国欧塞尔足球俱乐部是欧洲最为著名的职业球员培育的摇篮之一,培育出了多名优秀的职业足球运动员,其中最为著名的职业球员包括埃里克·坎通纳、吉布里尔·西塞等。
    体育主业逐步落地,双主业协同发展可期。在国家政策扶持及自身下游体育相关度较高背景下,公司明确了体育产业为第二主业的发展方向。而本次投资标的法国欧塞尔足球俱乐部集合了大量的优质国际体育资源,且拥有成熟的足球俱乐部运作经验以及青少年培训体系。收购完成后不仅能够为公司带来一定的投资收益,还能使公司接触并掌握成熟的俱乐部管理及青少年培训体系运作经验,与公司现有的冰球发展计划相辅相成;此外是能够为公司包装产品赋予新的内容,提升公司为下游食品饮料客户的综合服务能力。
    主业稳健增长,纵横双向加速整合大包装行业。主业金属包装业务增长稳健。大包装行业整合方面,公司横向通过战略入股国内二片罐龙头中粮包装(27%),助力公司二片罐业务跨越式发展,强强联合加速金属罐行业整合,入股国内塑料软包装龙头永新股份(25.13%)拓展塑料包装领域。纵向投资沃田农业(20%),进入下游蓝莓种植加工领域,拓展业务面。同时收购卡乐互动(21.8%),成立奥瑞金财传媒,有望实现手游业务和智能包装(借助二维码)联动,为公司从制造商向包装一体化服务商转型打下坚实基础。
    维持“买入”评级,未来 3-6个月目标价 11-14元。考虑到公司主业仍能保持稳健增长,并且积极外延扩张,纵横双向进行大包装行业整合,加速从传统制造商向服务商转变。同时公司积极拓展大体育产业,此次收购法国欧塞尔球队将加速公司大体育战略成型,进一步拓展公司业绩增长点并与主业形成联动。我们预计公司16-18年 EPS 分别为 0.54、0.63及 0.73元,对应当前股价 PE 为17、14、12倍,我们给予公司 2016年 20-25倍估值,未来 3-6个月目标价 11-14元 。

鼎泰新材:当下可小憩,静待王者归

首次覆盖,给予“减持”评级,目标价22.86元。顺丰控股借壳鼎泰新材上市,将为资本市场提供一个绝佳的长期标的。预计鼎泰新材原有业务2016-18年EPS为0.12/0.14/0.16元,若重组顺利实施,我们预计2016-18年公司EPS分别为0.54/0.69/0.83元(考虑增发和配套融资后)。我们敬仰顺丰控股管理层的战略专注度和执行力,然而,投资一家企业所需的估值安全边际,与分析师的预测能力成反比。国君交运团队虽具十年交运研究经验,但却是快递研究新手。我们选择了保守但与我们当下研究能力相符合的估值溢价,首次覆盖给予目标价22.86元,“减持”评级。
    对商务快递的投资,时点选择难于标的选择。我们认为商务快递和电商快递在商业模式上有本质的不同,因此投资难点迥异。商务快递天然更容易形成寡头垄断格局,在位企业拥有先发优势,但行业重资产的特点决定了较长的培育期,以及潜在的持续再融资需求。基于这些特征,我们认为,不同于电商快递,商务快递的投资,时点选择难于标的选择。
    超级大国才能出世界级的快递企业。顺丰控股作为一家体制灵活的民营企业,深谙服务行业的商业诀窍,已成为商务快递领域的佼佼者。目前顺丰速运面前是一个极具潜力的市场,身后是规模效益搭建起的竞争壁垒,手握的是品牌和效率两把利斧。顺丰创始人王卫有着异于常人的冒险精神与勇毅,借助资本市场,有望完成未来20年艰苦跋涉的里程。
    风险提示:借壳上市风险难以评估,资本开支和电商快递业务可能拖累短期盈利能力,经济波动导致商务快递需求变化。

Industrial Bank Alert:Start of a new round of capital raising on shadow credit tightening

INDB plans Rmb26bn private placement to boost capital
    Industrial Bank (INDB) announced last Friday that its board has approved aprivate placement plan to issue 1.72bn new shares (9% of outstanding shares)at Rmb15.1 apiece (2.3% discount to last close, or 1.0x 2015 book value) for aconsideration of Rmb26bn. On our estimate, the private placement wouldboost INDB’s CET-1 and total CAR by 74bps to 9.4% and 12.1%, respectively.We believe this placement marks the beginning of new round of capital raisingamong smaller banks, which may face capital risks on regulators’ collaborativetightening on shadow credit. Having one of the highest exposure to shadowcredit (39% of total assets), INDB is vulnerable to the regulatory scrutiny sothat we view this placement as a preemptive move to offset the capital impact.
    Smaller banks need to build up buffer against regulatory tightening
    Over the past three months, all the financial regulators, including PBOC, CBRC,CSRC and CIRC, have intensified the tightening on shadow credit on acoordinated basis (see Tightening regulatory noose on shadow credit and NewWMP draft rules). As the key motivation for banks to grow shadow credit wasto bypass capital rules, the regulatory curb may weigh on banks’ capitalpositions. Smaller banks have higher exposure to shadow credit at 22% of totalassets, vs. 3% for big-four banks. Under a worst case, our stress test showssmaller listed banks might need to raise capital worth Rmb355bn, majority ofwhich would be in A-share, assuming an 8.5% CET-1 (7.5% regulator floor plus1% buffer). We think BONJ, BONB and SPDB are more likely to be next banksto issue new shares, given higher-than-peers shadow credit exposure.
    INDB – among the most vulnerable to shadow credit tightening
    INDB’s on- and off-B/S shadow credit exposure made up 39% of total assets,the second highest among listed banks. We believe it is vulnerable to theregulatory crackdown. Our stress test shows that INDB’s CET-1 ratio would behit by 298bps if all shadow credit assets are sufficiently charged forprovisioning and capital (see No more hiding behind shadow). We maintain sellrating on the share, with TP of Rmb12.15 (21% of downside).
    Details of INDB’s placement plan
    According the placement plan, INDB will sell 1.72bn common shares atRmb15.1 to six investors, including Fujian Finance Bureau, China Tobacco andits Fujian and Guangdong subsidiaries, Yango Holdings and Fujian InvestmentGroup. Yango Holdings is the only private investor in the proposed deal. Afterthe subscription, Fujian Finance Bureau will remain the largest shareholder,with stakes boosted to 18.78% from current 18.22%. Fujian Finance Bureauand China Tobacco are subject to a lock-up period of 60 months, while ashorter 36-month lock-up period applies to Yango Holdings and FujianInvestment Group. On our estimates, the placement would dilute the bank’sEPS by 7.2% in 2017E and lower 2017E ROE by 98bps to 15.7%.

中海油服:预计中期业绩将出现较大幅度亏损

中海油服预计16年上半年亏损约84亿人民币,主要是因为拨备和减值费用达到71亿人民币。虽然2季度公司的主营业务净亏损环比收窄,但是盈利的改善幅度却低于我们的预期。我们预计下半年业绩难有明显复苏,因此我们下调了该股的盈利预测,预计16-18年公司主营业务将保持净亏损。我们对H股和A股重申卖出评级。
    支撑评级的要点
    过去两年中由于油价大跌,油企都大幅缩减了资本性开支。中海油服受到设备利用率低和服务费下跌的重创,部分钻井平台现金流折现评估价值低于其账面价值,公司将不得不对固定资产做出36.88亿人民币的拨备。此外,公司还将会做34.55亿人民币的商誉减值。该商誉基本上来自08年收购AwilcoOffshore时产生的溢价。考虑到当前海上钻探市场经营环境艰难,该项目溢价就显得不合理。
    细看之下,公司2季度核心净亏损约为3.7亿人民币。虽然相比1季度亏损9.27亿人民币有好转,但是我们认为业绩的环比改善主要还是来自于季节性影响。业绩的改善程度也没有达到我们的预期,因为我们先前预计16年旺季(每年的2、3季度)公司有望扭亏为盈。
    虽然油价相比1季度的低点已有明显的反弹,但是这仍不足以推动离岸油气项目投资的大幅增长。在较长的一段时间内,需求仍将低迷。
    影响评级的主要风险
    油价大涨;
    新市场开拓进程快于预期。
    估值
    我们将H股估值倍数从0.4倍2016年预期市净率调整为0.6倍,是15年8月以来的交易区间的中间值。因此,我们将目标价从4.64港币上调至5.38港币。
    A股方面,我们将目标价从9.96人民币上调至10.10人民币,仍基于公司3个月平均A-H股溢价(自我们上4月底的最新一份报告出版以来,溢价已从157%缩窄至118%)。

Chalco Alert:Fine tuning earnings after commodity price adjustments

Deutsche Bank Global commodity price forecast adjustments
    Deutsche Bank’s global commodity team released the newest commodityprice forecasts for the third quarter on July 6. Out of all the industrial metals,2017/2018 aluminum prices received the second largest cut after lead, mainlydue to the industry being in oversupply. The 2016/2017/2018 average annualprice of aluminum is predicted to be 1541/1535/1570 USD/t respectively,indicating a change of +0.2%/-3.8%/-7.7% from the previous forecast.
    Chalco earnings adjustments
    Based on the latest commodity quarterly released by Deutsche Bank’s globalcommodity team, we changed our earnings forecast for Chalco for the nextthree years. We expect the company’s 2016 bottom line to turn positive,reflecting the lower unit cost of alumina and aluminum that the companyachieved during the first quarter and the recovery of aluminum price fromNovember 2015. We cut our 2017 and 2018 net profit forecasts by 10% and20%, respectively, following 4% and 8% cuts in the aluminum price,respectively.
    Valuation and risks
    Our target price remains at RMB2.3 for Chalco. We use 0.9x our 2016E PB –historical average since 2013 (unchanged) – as our target 12-month forwardPB multiple. We maintain our Sell rating on overvaluation. The main risks toour outlook are larger-than-expected price increases in aluminum and alumina.
    As Chalco is highly geared, lower-than-expected financing costs is another keyrisk to our forecasts.

Jiangxi Copper Alert:Fine tuning earnings after commodity price adjustments

Deutsche Bank Global commodity price forecast adjustments
    Deutsche Bank’s global commodity team released the newest commodity price forecasts for the third quarter on July 6. Copper price received a cut for both the near-term and long-term as a result of lackluster downstream demand. The 2016/2017/2018 average annual price of copper is predicted to be 4595/4475/5023 USD/t respectively, indicating a change of -0.5%/-5.3%/-3.8% from the previous forecast. As for precious metals, gold received the second largest price increase for 2016 after silver; forecasts were changed by +7.1%/7.8%/2.7% for 2016/2017/2018, respectively.
    Jiangxi Copper earnings adjustments
    Based on the latest commodity quarterly released by Deutsche Bank’s global commodity team, we changed our earnings forecast for Jiangxi Copper for the next three years. We change our forecasts for Jiangxi Copper’s bottom line by +20.3%/-3.8%/-3.9% for 2016/17/18 respectively. The higher estimate for 2016 is mainly because we factored in Jiangxi Copper’s better-than-expected 1Q16 results as a result of cash management. The lower forecast for 2017/2018 is due to our global commodity team’s copper price forecast changes of -5.3%/-3.8%.
    Valuation and risks
    Our target price for Jiangxi Copper is RMB7.5, an increase of 0.1RMB from our previous forecast. We base our valuation for JXC on DCF life-of-mine methodology where we assume 9.6% WACC. We adopt 11.7% as cost of equity, implying a risk-free rate of 3.9%, market risk premium of 5.6%, and beta of 1.4. We maintain our Sell rating on JXC on overvaluation. Major risks include higher -than-expected realized copper price, and lower-than-expected production costs.

Chalco Alert:Well-supplied alumina and bauxite slightly affects profits

DB Australasia MM team downgrades seaborne alumina and bauxite prices
    The seaborne bauxite market is rapidly increasing in size due to the reliance ofChina’s domestic alumina refineries to imported bauxite. Starting with alumina,the recovery in the Chinese domestic alumina price to RMB1,950/t (US$250/tseaborne equivalent) has resulted in 4.5Mt of restarts. With China adding newlow alumina capacity and with imports flat lining we expect the seabornealumina price to closely track the equilibrium price in China over the near tomedium term. As such, DB’s Australasia metals and mining team hasdowngraded seaborne alumina price forecasts by 6% in 2016 to US$236/t andby 13% in 2017 to US$245/t.
    Lower cost bauxite has limited effect on Chalco
    Chalco produced 17.9mt of bauxite from its self-owned mines in 2015,accounting for 55% of total annual bauxite production. The company procuresthe rest 45% of bauxite supplies mainly from domestic suppliers and, to alesser extent, international suppliers. Average cost per tonne was 251.6 RMB/tfor self-produced bauxite and 383 RMB/t for bauxite supplied by third party in2015. A decrease in seaborne bauxite price will lower the unit cost of bauxitein alumina production, but the effect is limited because Chalco will beprocuring a larger percentage of its bauxite used for alumina productionthrough self-owned mines currently under development in Laos and Indonesia.
    Alumina segment slightly impacted by lower alumina prices
    In 2015, Chalco supplied approximately 5.3mt of alumina produced from theirown refineries to their own aluminum smelters, accounting for roughly 40% ofannual alumina production. The other 60% of alumina produced are sold toChalco’s customers through Chalco Trading. The company’s alumina segmentwill be affected by the decrease in alumina price, but at the same time, Chalcohas managed to lower its alumina unit cost substantially last quarter (DBe,12%YoY decline in 2016E), we thus revise up its 2016 bottom line fromRMB1.5bn losses to RMB1.3bn losses. Given the limited room to further costreduction in 2017 and 2018, we cut its NPAT by 10% and 7%, respectively.
    Maintain Sell rating with lower TP
    Using a PB valuation method, we lower our target price of Chalco A fromRMB2.5 to RMB2.3, maintaining Sell on overvaluation. Risks: better-thanexpectedmetal prices and cost control.

TCL集团:5月份经营数据点评

事件:
    公布5月经营数据及私有化TCL通讯
    投资要点:
    摘要一
    5月销量有所好转,但剧烈的价格战影响营收。
    摘要二
    服务业务大有进展,长远前景可期。
    风险提示
    价格战剧烈

一汽轿车:因重组计划延迟而重申卖出评级;下行空间为44%

建议理由。
    1) 一汽轿车于6月6日宣布,其控股股东一汽集团拟将其解决母公司和上市公司之间内部竞争问题的重组计划延迟三年(此前期限为2016年6月28日);2) 我们认为,最近领导层的变化以及重组计划与合资企业相关的某些部分获批可能会令一汽集团的重组进一步复杂化;3) 我们认为,一汽轿车最近销量疲弱(2016年1-4月批发销量同比下滑32.7%)以及估值倍数偏高意味着公司风险回报不利;我们预计当前股价面临44%的下行空间。
    推动因素。
    1) 据一汽集团的提案,重组计划可能延迟三年,这有待于2016年6月26日年度股东大会批准;2) 一汽的外资合资公司之一大众汽车在其2015年年报中披露了总额为162亿欧元的拨备,我们认为这可能令大众汽车推迟其已公布的增持一汽大众计划。而这可能延迟一汽集团重组所需的大众汽车的批准(因为合资公司的内资股权需要从母公司转移至上市公司);3) 我们预计一汽轿车2016年月度销量增长疲弱。
    估值。
    我们维持2016-2018年每股盈利预测和人民币6.63元的12个月目标价格(仍基于2016年预期市净率-2018年预期净资产回报率)。一汽轿车当前股价对应72.1倍的2017年预期市盈率和2.2倍2017年预期市净率,在所覆盖A 股中最高。
    主要风险。
    销量/价格/利润率高于预期;集团重组活动快于预期。

用友网络:围绕新业务的大幅销售管理费用导致业绩低于预期;卖出

与预测不一致的方面
    用友网络公布2016年一季度收入为人民币5.90亿元(同比增长19%,符合高华预期),净亏损人民币2.17亿元,而高华预测此前预计净利润500万元。销售管理费用为人民币6.23亿元,同比增长33%,销售管理费用率从2015年一季度的94%升至105%。财务成本为人民币5,100万元,因为欧元升值导致汇兑亏损上升。
    投资影响
    要点:1)企业互联网服务(云ERP、CRM、人力资源等)收入为人民币1,800万元,同比增长248%,互联网金融业务(P2P、支付)收入为人民币3,200万元,同比增长309%。虽然增势良好,但较小的规模使其中期增速难以推断,尤其在销售管理费用高企的情况下。2)企业互联网服务业务客户规模从2015年末的80万升至100万。我们认为客户增速放缓的主要原因是中小企业软件即服务业务(SaaS)竞争加剧。3)公司依然注重发展企业互联网服务和互联网金融服务业务。短期内,我们担忧公司的大举支出策略会对盈利能力产生负面影响。
    估值:我们将2016年盈利预测下调10%并将2017-2020年盈利预测下调1%-6%,以反映销售管理费用的上升。我们将基于长期贴现市盈率计算的12个月目标价格下调了6%至人民币11.6元,仍基于全球同业21倍的2016年预期市盈率中值乘以2020年每股盈利预测0.76元(原为0.81元),并贴现回2016年。我们维持卖出评级,因为我们预计盈利能力将因新业务扩张而走软。
    主要风险:货币化快于预期;成本控制好于预期。

一汽轿车:销量走低导致业绩低于预期;产品周期推迟;卖出

与预测不一致的方面
    一汽轿车4月30日公布2016年一季度收入/净利润同比下降41%/407%至人民币42.7亿元/亏损4.23亿元,较我们的预测低33%/1224%。盈利差于预期主要缘于汽车销售收入因以下两个因素而不及预期:1)激烈竞争和产品更新换代推迟(例如新一代B50的发售从原定于2015年年底推迟至2016年)导致整体销量疲软(同比下降31%);2)产品结构趋向低端(新推出的入门级紧凑型B30轿车在销量中占比超过30%)。在2016年4月份的北京车展上,一汽展示了包括奔腾X4/X6SUV概念车、新一代奔腾B50轿车、新马自达CX-4SUV以及新红旗概念车在内的若干新车。我们预计公司将逐渐步入相对强劲的新产品周期,但我们认为近期内公司竞争力仍将因为产品老化而表现不佳。
    投资影响
    我们将2016-18年盈利预测从人民币0.10/0.11/0.19元调整了-232%/+50%/+53%至-0.13/+0.17/+0.29元,以计入新产品周期晚于预期的影响。相应地,我们将基于2016年预期市净率-净资产回报率的12个月目标价格从人民币5.27元调整为5.16元(仍应用34%的估值溢价以计入2016年潜在的集团重组;净资产回报率为2016-18年预期均值)。鉴于销量疲弱和产品周期延迟,我们维持对该股的卖出评级。主要风险:销量/价格/利润率高于预期;控股公司潜在的集团重组(换股)推动估值高于预期。

Zijin Alert:1Q results missed on hedging;Maintain sell

1Q missed on hedging and higher financing cost; maintaining Sell.
    Zijin released its 1Q results, with NPAT of RMB64m (85%YoY decline) onlyaccounting for c.3% of both 2016 DB and consensus estimates, mainly due toRMB700m+ losses in its hedging and gold leasing business and, to a lesserextent, higher financing costs (+60% YoY). However, the gross margin wasc.10% in the first quarter, slightly ahead of DB and consensus estimates of 9%in 2016, due to its well-controlled unit cost. Although we have a positive viewon gold and the company has kept unit cost under control, we maintain oursell rating for Zijin-A at the current price level.
    Operation data on track; A-share placement made up by corporate bonds.
    Zijin’s mined gold and copper unit cost was RMB140/g and RMB15,427/t in thefirst quarter, representing 4% and 14% yoy declines, respectively. As a result,the gross margin reached c.10%, which was 1ppt higher than 2016 DBestimates and those of consensus. With the recent metal prices recovery(especially the gold price, which almost reached USD1,300/oz), we expectZijin’s GM to continue to improve in coming quarters. However, Zijin decidedto cancel its A-share placement with a proposed size of RMB8-9bn, issuingRMB5bn in corporate bonds in March 2016 instead, with a three-year rate of2.99% and a five-year rate of 3.37%.
    Maintaining Sell on high valuation; risks.
    Our Global Commodity team forecasts average copper prices of USD4,619/tand USD4,725/t and average gold prices of USD1,188/oz and USD1,231/oz in2016 and 2017, respectively. Our sensitivity analysis indicates that a 9%change in the gold price (i.e., gold price at USD1,300/oz) will translate into a22% change in earnings in 2016. Our target price of RMB2.3 is based on a lifeof-mine DCF, with 9.2% WACC. Zijin is currently trading at 30x/21x 2016/17EEPS and 2.4/2.2x 2016/17E BVPS. Risks: Higher than expected gold andcopper prices and output.

Maanshan Iron &Steel:Reduce (H/A),‘Unexpected’1Q16results

Maanshan reported 1Q16 loss of RMB331m, yet with‘surprisingly good’ gross margin
    The company expects a gain in 1H16, but we don’t seethis as sustainable
    Reiterate Reduce on H/A; with unchanged target price ofHKD0.88/RMB0.78 based on 0.4x 2016e PB
    Weak 1Q16 results, in an unexpected way: Maanshan reported 1Q16 net loss ofRMB331m, up from a loss of RMB595m in 1Q15 and a loss of RMB1,668m in 4Q15.
    Although the bottom line remained in loss, in line with our expectation and consistentwith its industry peers – CISA’s member mills reported a total loss of RMB8.7bn in1Q16 (1Q15: -RMB987m), Maanshan’s gross margin unexpectedly reached 8.2% in1Q16, up from -8.0% in 4Q15 and even up from 2.1% in 1Q15.
    This is surprising to us given Maanshan’s uncompetitive product portfolio, meaningits performance generally follows overall market movement. We calculate that thecompany’s average selling price in 1Q16 was cRMB2,218/t, down 18% y-o-y, in linewith 1Q16 average spot market steel price decline of 19% y-o-y. This meansMaanshan beats its peers on cost control – management attributes the significantdecrease in cost of sales to lower raw materials costs, which we assume results frombetter raw materials procurement timing compared to peers. We assume significantcost savings from improving production process is unlikely to be achieved in onequarter given the company’s continuous effort in cost control over the past few years.
    In addition, Maanshan incurred a loss of RMB471m from inventory impairment loss,which we deem too conservative given continuous price increase of both steel andiron ore in 1Q16. We think this could be reversed in 2Q16. Impairment losses in1Q15 and 4Q15 were RMB98m and RMB942m respectively.
    2Q16 earnings might improve, but do not look sustainable: Maanshan expects toturn profitable in 1H16 following continuous steel price rises since the beginning ofthis year. However, we think the good result is not sustainable as mills are rampingup their output quickly whilst demand might peak out in the following seasonallystrong March-April. We believe oversupply will soon weigh on mills’ margins andreturns again. We don’t think Maanshan’s cost control, presumably due to betterprocurement timing, is sustainable when prices start to fall.
    Remain Reduce on both H and A shares with 48.5%/71.6% implied downside to ourrespective target prices. Our H-share TP of HKD0.88 is based on 0.4x 2016e PB, inline with Maanshan’s previous trough points. Our A-share TP of RMB0.78 is basedon the H-share TP and our FX research team’s 2016 RMB/HKD forecast of 1.13. Ourearnings estimates for 2016-17 are unchanged.

绿地控股:开始努力降低负债率,但任重道远

业绩低于预期
    公司15年实现营收2073亿,同比负增长21%,实现归母净利润69亿,同比增长24%,收入和净利润均低于我们和市场一致预期,主要原因是退出能源业务和房地产结算量不足导致收入低于预期,以及计提18.6亿的资产减值准备拖累净利润。15年末净资产负债率为272%,相比15Q3微降23个百分点,仍远高于行业平均水平,公司降低负债率的任务仍很重。
    积极拿地,但降低开工
    公司15年实现销售额2301亿,与14年持平,其中住宅占比51%,商业办公楼占比49%,16Q1实现销售额496亿,同比增长80%,占比我们全年预测额2488亿的20%。16Q1拿地总金额173亿(其中70亿位于北京大兴区),拿地金额已达15年全年的63%,显示绿地在土地市场仍然十分积极,尤其看好北京房地产市场。但16Q1新开工仅380万平米,同比负增长47%,我们预计紧张的资金状况使公司在开工和拿地间只能二选一。
    出售酒店资产是降低负债率的重要一步
    根据公司公告,绿地拟与Amare公司合资成立资产管理公司,各占25%/75%股权,并发起酒店业投资信托,计划总募资210亿收购绿地下属19家酒店资产,绿地将认购该信托不低于30%的份额,首期募资62亿收购6家酒店,绿地承诺在信托首次发行后的五年内向信托相关方每年提供不少于6%的额外收入支持。鉴于酒店资产盈利能力低于房地产开发,周转率慢,我们认为这是公司盘活资产回收现金从而达到降低负债率的重要一步。
    估值:维持卖出评级,维持10.09元目标价
    我们维持公司16/17年EPS0.77/0.89元,目前股价对应16年PE16倍,远高于瑞银覆盖A股加权16年PE11.5倍的水平。我们的目标价基于16年13倍PE得出。我们认为公司净负债率过高,估值偏高,维持卖出评级。

埃斯顿:政府补贴支撑现金流;上调每股盈利预测/目标价但维持卖出评级

最新事件。
    我们将2016-18年每股盈利预测由较低基数上调了63%-72%,以主要计入受“中国制造2025”行动计划推动而高于预期的政府补贴支持。我们认为埃斯顿是政府努力打造机器人和工厂自动化领域全国性龙头企业过程中的主要受益者。我们目前假设政府补贴可覆盖2016-18年研发支出的80%,与2015年实际比例相一致但远高于2011-14年25%的均值。不过,埃斯顿的估值相对于同业仍然过高,我们的12个月目标价格隐含21%的下跌空间,而研究范围内企业的上涨空间中值为2%),我们因此维持对该股的卖出评级。
    潜在影响。
    总体而言,我们目前预计2016-18年每股盈利年均复合增速为17%,而2011-15年的净利润增速平缓。(1) 我们仍然预计机器人业务将由较低基数快速增长(2016-18年收入年均复合增速预计为50%),主要归因于向家电和汽车零部件领域的渗透(埃斯顿在汽车零部件领域可通过与上汽已宣布的合作关系,利用其供应链)。我们预计,到2018年机器人业务对总收入的贡献将达到50%。不过,我们预计未来一两年此项业务仍将仅处于盈亏平衡附近,从而拖累公司2018年综合毛利率较2016年下降2个百分点至32.6%。(2) 在去年下半年金属成型机床销售低迷之后,我们预计数控机床系统业务将温和增长,受到其在中国市场渗透率上升同时机床行业产能持续过剩的推动。
    估值。
    我们将12个月目标价格上调48%至人民币41.5元,基于2017年预期EV/GCIvs. CROCI/WACC 以及中国自动化行业3.1倍的现金回报倍数并应用70%的溢价(原为60%)计算得出。该股当前股价对应93倍/81倍的2016/17年预期市盈率,而内地上市自动化同业为57倍/48倍)。
    主要风险。
    上行:来自通用行业的资本开支需求好于预期。

金科股份:地产销售额增长缓慢,新能源发电业务需要积累经验

预计16年公司销售额260亿,低于280亿元的目标值。
    金科股份15年销售额238亿,其中房地产销售额221亿,分别增长3%/5%,低于15年全国商品房销售额增长14%的水平。鉴于15年公司新开工面积降低33%,公司在16年的可售项目面积预计为416万平米。假设85%的去化率和6600元/平米的销售均价,我们预计16年金科地产销售额为235亿,园林绿化等其他业务销售额25亿,公司总销售额预计为260亿,难以达到280亿的年度目标。
    2016-2018年毛利率或将低于2015年水平。
    14年后重庆市场销售均价下行,拖累金科项目销售均价下降,14-16年销售的项目将在16-18年结算,我们预计销售价格的下降将缩窄最终的结算毛利率,未来三年的毛利率水平将低于15年的毛利率。
    预计新能源发电业务2018年前难以贡献总利润的10%。
    15年公司新能源发电业务贡献收入1.2亿,占比总收入0.6%,我们预计该业务未实现盈利。我们预计16年限电损失率将下降至2%,与14年的水平相当。新能源发电收入预计为2.5亿,预计可贡献净利润0.38亿,约为16年公司整体净利润的2.5%。我们预计公司在16年将以学习掌握新能源发电技术和积累经验为主,目前项目仅能贡献利润的2.5%,公司是否进一步加大发电业务投资仍不确定,2018年底前新能源业务很难贡献净利润的10%。
    估值:维持“卖出”评级与3.33元目标价。
    我们将金科16-18年EPS下调为0.36/0.39/0.42元,分别下调5%/8%/8%,目前股价对应16-18年PE10.9/10/9.4倍,瑞银覆盖A股地产股16年加权PE12倍。我们基于16EEPS0.36元和16EPE9.2倍(近5年均值减一个标准差)维持公司目标价3.33元。鉴于公司地产业务毛利率将缩窄,进入风险较大的风电业务,而该业务盈利不确定性大,维持“卖出”评级。

凤凰传媒:因增长暗淡以及业务转型面临挑战而下调至卖出评级

建议理由
    凤凰传媒公布2015年收入/净利润分别为人民币101亿元/11亿元,同比增长4.5%/下降6.8%。2015年四季度收入/净利润同比下降10%/29%,2015年净利润较高华预测低13%。我们将该股评级从中性下调至卖出,并将12个月目标价格下调至人民币8.09元,隐含27%的下行空间——在我们所覆盖股票中下行空间最大。我们的2016/17年每股盈利预测较市场预测低22%/26%。我们对公司传统出版发行业务的增长前景愈发审慎。我们认为,公司向新业务转型虽然面临挑战,但中短期内对盈利的影响将比较有限;如果这些新业务的增长快于我们的预期,那么我们对该股的看法可能会变得更积极。
    推动因素
    (1)出版业务收入同比增长9.54%,普通图书增长29%而教材及参考书下降3%。发行业务收入同比下降9%,因为教材、参考书及普通图书出现了个位数降幅,体现出需求疲弱以及来自电商的结构性挑战。
    (2)在线游戏业务收入下降38%,主要因为来自慕和网络的线上游戏产品已过时,并面临激烈的竞争。该公司净亏损人民币7100万元,低于公司指引(净利润6300万元),导致2015年商誉核销6200万元。我们认为这表明凤凰传媒在向新领域转型的过程中面临挑战。
    (3)业绩亮点在于其他新业务,包括电影(因并表而同比增长207%)、软件(同比增长25%)、数据服务(同比增长42%)。我们认为凤凰传媒在这些领域取得了一定进展,但不足以抵消传统业务的下降。同时,销售管理费用上升了10%,超过收入增速,我们视其为转型成本。
    估值
    我们将2016-20年每股盈利预测下调17%-43%,以体现收入下降和费用上升的因素。并相应将12个月目标价格下调43%至人民币8.09元,仍基于18倍的2020年预期市盈率,并以8%的股权成本贴现回2016年。主要风险:新业务扩张快于预期。

欧菲光业绩符合预期:营业费用高企抵消了毛利率的改善;维持卖出评级

与预测不一致的方面
    欧菲光公布2016年一季度收入和净利润为人民币42亿元/1.25亿元,分别占到我们此前2016年全年预测的16%/14%,符合2012年以来15%/15%的历史季节性走势。公司还公布了2015年年报。
    要点:(1)2015年毛利率为12.8%,高于11.7%的高华预测,得益于低利润率的全贴合触屏业务占比下降。然而,营业费用占到销售的7.8%,高于我们预测的7.3%,原因在于研发费用上升。2016年一季度营业费用在销售中的占比为8.3%。(2)因人民币升值,2015年欧菲光录入了1.85亿元的汇兑损失,而高华预测为1.4亿元。(3)2015年欧菲光的自由现金流为负的5.8亿元。(4)2015年,公司摄像头模组的发货量为1.86亿,高于2015年的1.02亿,并正在追赶舜宇光学的2.28亿。(5)汽车电子方面,欧菲光正在努力成为主要汽车生产企业的合格供应商,但由于行业进入壁垒较高,这可能需要一定时间。
    投资影响
    尽管由于摄像头和指纹模组业务迅速增长从而短期盈利势头强劲,但我们对竞争带来的利润率的低迷和自由现金流的前景感到担忧;此外其汽车相关业务的可预见性仍然较低。维持该股卖出评级。我们将2016-18年每股盈利预测微调了不到1%以计入一季度业绩。我们的12个月目标价格仍为人民币18.4元,是以2016年同业估值倍数均值(16倍)乘以2020年预期盈利,再以8.4%的股权成本贴现回2016年得出。主要上行风险:汽车电子业务进展快于预期。

Bright Dairy Alert:4Q15recurring profit in line

2015 sales decline 6.2% yoy and net profit decline 27% yoy.
    Bright reported 2015 results with 6.2% yoy sales decline to Rmb19,373mn and27% yoy net profit decline to Rmb418mn. The sales decline was mainly due to6% yoy volume decline in liquid milk. Gross margin expanded 1.5ppts yoy to36.1%, but this was offset by 1.7ppts yoy increase in SG&A/sales, contributingto a squeezing EBIT margin. Sales in 4Q15 declined 11.8% yoy but net profitincrease 6.3% yoy due mainly to lower SG&A. Recurring net profit beforeminority interest and non-operating income was in line with our forecast forBright (excluding Tnuva) in 4Q15.
    Key products sales on a decline trend.
    UHT yoghurt “Mosilian”, “You Bei” pasteurized milk and “Chang You” chilledyoghurt, which were major sales driver in 2013-14, reported sales decline at1.4%, 2.3% and 19.9% respectively. According to the report, the sales declineis mainly due to industry sales slowing down and increasing competitions.
    Tnuva’s financials was excluding from the consolidated financials.
    Bright had begun to consolidate Tnuva’s financial statements from 3Q15because it had planned to acquire the business from its controlling shareholderBright Food group. However, as the plan has now been suspended in February,Tnuva’s financials was not consolidated in the annual results. Our currentforecast has included Tnuva’s financials.
    2016 guidance: 11% sales growth and 8.8% net profit growth.
    The company guides 11% yoy sales growth and 8.8% yoy net profit growth for2016. The major sales driver will be its key products, i.e. UHT yoghurt, highendmilk and chilled yoghurt. It guides Rmb879mn Capex for 2016 and willconsider to driver growth through M&A.
    Key focus in the analyst meeting.
    Bright will hold an analyst meeting this Thursday. We think the key focus willbe on: 1) growth strategy of its key products, and 2) gross margin trend andmarketing expense in 2016.

Chalco Alert:Rising risk of restarts;maintaining Sell

Aluminium – rising risk of restarts and capacity ramp-ups on price recovery
    The aluminium price has held up due to 4mt+ curtailments since late 2015.
    However, we see a rising risk of restarts when the aluminium price approachesRMB12,000/t, not to mention another 4mt of new capacity this year and 2.8mtnext year in the pipeline. We therefore expect aluminium output to grow by+4% yoy in the coming years. On the demand side, we believe that aluminiumcan do better than other metals due to the growing adoption of aluminiummadevehicles and aluminium conductors (aerial lines) in ultra-high voltageprojects and the rural distribution network. Overall, we expect aluminum priceto stall at the current level and we maintain Sell for Chalco-A.
    Aggressive cost-cutting plan – how low can it be?
    Chalco’s aluminum and alumina cash cost was c.RMB10,200/t andRMB1,600/t last year, representing 8% YoY and 12% YoY declines respectively,which means breakeven for aluminum and a c.RMB400/t+ cash gain foralumina. Chalco’s CFO, Mr. Zhang, mentioned that the company would try toachieve a 12-15% YoY unit cost cut in alumina and a 15-20% YoY cut inaluminum this year, through raw material cost savings, energy/operationefficiency, labor-cost savings and, of course, lower power tariffs. For example,it has settled directly-purchased electricity with Guizhou power plants atRMB0.17/kwh, almost half the previous level, meaning a total input cost ofc.RMB0.27/kwh (power cost + transmission fee + other misc. charges).
    However, we are not sure whether Chalco can achieve this discount in otherregions as well. Our utility analyst, Michael Tong, has noted that the powersupply in Guizhou and Yunnan is in serious oversupply, but the averagediscount in China is not that much.
    Maintaining Sell on rich valuation; risks
    With the rising risk of restarts and capacity ramp-ups, we expect aluminumprice to stall at the current level. Besides, we remain cautious on company’scost cut plan. We apply the identical valuation method of Chalco-H’s forChalco-A. Our target price of RMB2.5 is based on a three-year historical PB of1.0x and 2016E BVPS. We lift our TP after we factor in 2015 actual numberswhich results to higher equity balance. Chalco-A is now trading at 1.9x 2016EDBe BVPS. We therefore maintain our Sell rating on rich valuation. Risks:better supply discipline and higher metal prices.

Bright Dairy Alert:To sign up a new trusteeship contract for Tnuva’s operations

EGM approved a new trusteeship contract with Bright Food for Tnuva’s operation.
    Last Friday, Bright held an EGM which approved a new trusteeship contractbetween Bright and Bright Food Group (BFG, Bright’s controlling shareholder).
    According to the new contract, Bright will be the trustee and BFG will be thetrustor. Bright will be responsible for the daily operations of BFG’s subsidiary -Bright Food Singapore (BFS, the major asset of which is Israel’s largest dairycompany Tnuva). Bright will receive an annual management fee amounting toRmb100mn from BFG.
    Bright might no longer consolidate BFS’s financial statements.
    Bright had begun to consolidate BFS’s financial statements from 2Q15because it had planned to acquire the business from its controlling shareholderBFG. However, as the plan has now been suspended, we think Bright might nolonger be eligible for consolidating BFS’s financial statements under ChinaAccounting Standards.
    We like this contract.
    First, we estimate that the business will increase Bright’s China business byc.16.5%, assuming 75% of the net profit margin for the management feeaccording to EGM reports. Second, Bright will be able to create synergiesbetween Bright and Tnuva (i.e. R&D, dairy farming), because Bright stillcontrols Tnuva’s daily operations. Third, Bright has less re-financing pressureunder trustee contract than when under an acquisition plan.

中海油服:预计16年盈利继续大幅下滑

继2015年盈利同比下滑86%之后,中海油服预计16年盈利仍将大幅下滑。随着油价走低、油企不断削减经营开支,经营环境变得越来越有挑战性。公司的钻井船利用率成为一个严重的问题,服务价格持续承压。我们将16-17年盈利预测下调30-35%。对该股重申卖出评级。
    支撑评级的要点
    由于油价持续低迷,IHS 预测16年全球近海勘探与开采支出将同比下滑8.4%。中海油服的主要客户中国海洋石油(0883.HK/港币9.07, 持有)在15年同比减少38%之后,也将16年资本性开支计划同比削减了至少10%。
    根据 Rigzone 统计,截至3月中旬全球自升式和半潜式钻井船使用率分别跌至53%和42%。当前这样低迷的环境对中海油服来说实属挑战。截至15年末,中海油服的43艘钻井船中15艘被闲置或待命,4艘一直在船厂维修。
    而且,服务价格持续面临压力。15年中海油服将中海油的日费和其他服务费用同比下调了15-20%。16年签署的合同中有60%也下调了类似的幅度。由于双方都不愿有任何损失,因此尚未就剩余40%的合同达成协议。
    影响评级的主要风险
    油价大涨;
    新市场开拓快于预期。
    估值
    由于人民币贬值,我们将H 股目标价从4.67港币小幅上调至4.72港币。我们以0.4倍市净率对H 股估值。
    我们将A股目标价从10.85人民币下调至10.61人民币。虽然我们依然以3个月A-H 股平均溢价对A 股估值,但是自我们3月初上一期报告以来,溢价已从177%缩窄至169%。

用友网络:业绩不及预期;销售管理费用率仍将居高不下;维持卖出评级

与预测不一致的方面
    用友网络公布2015年实现收入/净利润人民币44.51亿/3.24亿元(同比上升2%/下降41%),较我们的预测分别低2%/7%。业绩与预期之间的差距主要缘于:1)销售管理费用率上升,主要因为公司持续扩张软件即服务(SaaS)和互联网金融业务,导致研发支出同比增长26%至高于预期的7.62亿元;2)用友网络售出致远26.5%股权,获得投资收益1.65亿元,部分抵消了销售管理费用上升的影响。
    投资影响
    要点:1)大中型市场的激烈竞争导致传统软件业务继续收缩,致使整体软件销售同比下降6%;2)SaaS和互联网金融等创新业务的收入增长强劲,分别从人民币100万/600万元跃升至8,700/8,100万元。我们认为这一增长是用友此前对SaaS和互联网金融投资变现的早期信号;这部分抵消了来自传统软件和服务业务的压力;3)2015年销售管理费用率从2014年的57%上升了10个百分点,而且我们认为短期内销售管理费用率将不会显著降低,因为公司仍需努力扩展创新业务,以扩大市场份额。
    估值:我们将2016/17/18年盈利预测分别下调了9%/8%/3%,以计入销售管理费用率上升的影响。我们基于长期贴现市盈率计算的12个月目标价格下降了5%至人民币12.3元,仍基于全球同业21倍的2016年预期市盈率中值乘以2020年每股盈利预测0.81元(原为0.85元),并以8.4%的股权成本贴现回2016年。
    我们维持对于该股的卖出评级,因其估值偏高且新业务增长可预见性较低。主要风险:增速提高,销售管理费用率加速下滑。

光大证券:四季度自营交易/资管/投行业务收入回升推动业绩好于预期

与预测不一致的方面。
    光大证券公布2015年实现税后净利润人民币76亿元,与业绩快报相符,并较我们/彭博市场预测高出12%/14%。四季度税后净利润季环比增长47%(同比增长41%),净资产回报率季环比上升3.5个百分点至16.9%,得益于自营交易、资管和投行业务收入回升的推动。客户存款和短期借款下降导致总资产季环比温和收缩3%(三季度降幅为15%)。主要积极因素:(a)回报走高推动四季度自营交易收入季环比上升307%,在当季总收入中的贡献占比升至27%;投资余额季环比基本持平(在总资产中占比22%)。权益和衍生品在光大母公司本金投资中占比62%。我们估算,截至2015年底,光大证券于7/9月通过证金公司投资的A股资产(总计人民币59亿)公允价值下降了5-6%,这一表现可能好于投资者预期。(b)2015年下半年自营资管规模稳健增长且结构改善,主动管理的集合资管产品达到人民币420亿元,占2015年年末总资管规模的20%(2015年上半年末时占比17%)。(c)得益于IPO重启、债权资本市场交易量强劲以及承销市场份额增长,投行业务收入季环比增长102%,在总收入中占比10%。主要不利因素:四季度经纪佣金费率加速下滑,我们估算,佣金费率季环比平均下降了19%至3.6个基点。2015年全年综合费率为4.6个基点,同比下降了25%。
    投资影响。
    维持卖出评级,因为在A股市场呈周期性放缓之际(我们预计2016年税后净利润同比下降38%,光大证券2016年1月16日公布母公司盈利同比下降74%)光大证券的收入结构不理想,而且估值偏高(2016年预期市净率较同业高出13%)。我们维持盈利预测以及基于市净率-净资产回报率计算的12个月目标价格人民币14.9元(隐含1.4倍的2016年预期市净率)不变。主要风险:A股大幅反弹,经纪业务市场份额及定价好于预期。

青岛海尔:高价收购GE家电点评

摘要一
    实物与员工资产分析;市场份额意义上的资产分析;财务意义上的资产分析
    摘要二
    海尔国际化的进程从未停止,但从青岛海尔的财报看,去年中报其来自于海外的销售收入仅占总收入的13%,此次收购则可能会大幅提高海尔海外收入的规模与比重,提升海尔的国际化形象。
    风险提示
    收购出价高;海外业务整合

中海油服:公司预计16年经营利润将下滑

中海油服预计2016年资本性开支为35-45亿人民币,相比2015年65-75亿人民币的预算明显下降。更值得关注的是,由于经营环境艰难,公司预计2016年的营收和经营利润将同比减少。因此,我们采用了更为保守的假设,将2016-17年盈利预测分别下调24%和4%。我们对中海油服维持卖出评级,公司的盈利在本周期尚未见底。
    支撑评级的要点
    由于油价低迷和2016年初可能取消对伊朗的制裁将导致伊朗扩大石油产量令油价进一步下跌,未来石油公司可能会进一步下调资本性开支预算。同时油服市场也会进一步收缩,尤其是专门提供海上项目的油服企业,因为这些项目的盈亏平衡油价相对更高。
    由于需求低迷,油服企业的业务量可能会进一步减少,服务价格的压力也会更大。中海油服预计这些因素导致2016年营收和经营利润下滑。
    公司需要对资产做进一步减值。公司的全部44个钻机中还有14个未签订16年的全年合同。考虑到市场环境进一步恶化,我们将这些钻机在2016年没有合同时段的利用率预测从50%下调至30%。
    风险提示
    油价大涨;
    成本控制措施的实际效果超过预期。
    估值
    我们依然将H股目标价定为13倍2015年预期盈利,是2015年8月以来交易区间的上限。由于近期人民币贬值,我们将目标价从5.83港币下调为5.74港币;
    A股方面,我们将目标价从11.71人民币下调至11.61人民币,依然以3个月A-H股平均溢价为基准(自10月底最近一期报告出版以来,溢价已从146%缩窄至144%)。

GAC Group (2238HK/601238CH):H,Hold/A,Reduce,PV sales +9%YoY in October

Strong GS4 sales driving domestic brand volumes
    Mixed growth for Guangqi Honda and GAC Toyota
    H: Hold with TP HKD6.00; A: Reduce with TP RMB5.00
    Strong GS4 sales driving domestic brand volumes: Sales volumes of compact SUV GS4launched in June 2015 reached 21k units in October 2015 and have been a key driver fordomestic brand volumes YTD. We believe the operating leverage from increased volumescould help narrow the loss from the domestic brand in 2015 and 2016. We forecast the lossbefore interest and tax (LBIT) of the consolidated business to narrow from RMB822m in2014 to RMB298m in 2015.
    Mixed sales in Japanese JVs: Wholesale volume of Guangqi Honda rose 5%YoY/-5%MoMto 47,423 units in October 2015. Growth has slowed from 22%YoY in September 2015 andwe believe this was because retail inventory built up slightly in September. Jan-Oct wholesalevolume rose 31%YoY to 427,164 units, accounting for 76% and largely on track to meet ourFY15 forecast of 560k units. On the other hand, wholesales of GAC Toyota rose 12%YoY/+15%MoM to 38,012 units in October, picking up from a 6%YoY decline in Septembermainly driven by better volumes of Levin (Oct 2015: 13,068 units, Oct 2014:11,016 units andSept 2015: 10,357 units). This could be related to the purchase tax cut from October 2015. InJan-Oct, GAC Toyota’s sales rose 9%YoY to 329,549 units, representing 77% and largely ontrack to meet our FY15 forecast of 426k units.
    Don’t expect a substantial margin improvement for the Japanese JVs in 4Q15: Datashowed that the discount level of the two JVs key sedan models including Honda Accord andToyota Camry remained at high levels in October 2015. We do not expect a substantialmargin improvement for the two Japanese JVs in 4Q15.
    Reception of Jeep would be a key catalyst: The first locally produced Jeep model, compactSUV Chervokee, was launched in November 2015. The first batch would be 2.4L variants withMSRP of RMB229.8-315.8. Given that the local model is c.30-40% cheaper than importedmodels we believe that the JV could make this a volume model for GAC Fiat. As consensus hasalready factored in a narrowing loss for GAC Fiat in 2016 as a result of Jeep production, wethink the initial reception of the Chervokee would be a key catalyst for the company.
    H: Hold with TP HKD6.00; A: Reduce with TP RMB5.00: Our target valuation of 8.9x2015e PE is derived from ROE-based PE method. While the improvement in the domesticbrand could continue, we see limited upside on valuation given that the H-shares are alreadytrading at 10.8x 2015e PE higher than ex-BYD industry average of 8.5x. Upside risks includefaster-than-expected profitability improvement of GAC Toyota and an improvement in thecompetitive outlook amid faster-than-expected industry growth. Downside risks includefurther slowdown in the passenger vehicle market and deterioration of JV entities profitability.

用友网络:变现慢于预期、销售管理费用较高导致业绩低于预期,卖出

与预测不一致的方面
    用友网络公布2015年三季度收入为人民币7.55亿元(下滑11%,较我们的预测低20%),净亏损人民币2.26亿元(2014年三季度为净亏损人民币6,700万元,而我们预期为人民币6,800万元)。业绩与预期之间的差距主要归因于收入较预期低20%,毛利率较预期低4个百分点,销售管理费用较预期高5%。
    截至2015年三季度末,随着销售管理费用的大力投入,公司创新业务继续推进:1) 企业互联网服务业务客户数量从2014年末的15万升至42万;2) 互联网融资P2P 业务也出现增长,交易量从2014年的1亿元升至18亿元;3) 支付业务当前有2.6万企业客户,交易量从2015年一季度的20亿元升至130亿元。
    投资影响
    要点:1) 虽然公司创新业务进展积极,但收入增长不及预期,下滑11%。我们认为新业务变现的可预见性依然疲弱,竞争也依然激烈。2) 由于继续投资于畅捷通的企业互联网业务,公司销售管理费用同比上升23%。
    估值:我们将2015-2017年盈利预测分别下调32%/24%/14%以反映变现进度的缓慢以及销售管理费用率上升。我们将基于长期贴现市盈率的12个月目标价格下调9%至人民币12.9元,仍基于全球同业21倍的2016年预期市盈率中值,乘以2020年每股盈利预测0.85元(原为0.93元),并以8.4%的股权成本贴现回2016年。因该股估值偏高(2016年预期市盈率为88倍,2016-2020年每股盈利年均复合增长率为20%,高于中国软件行业60倍和27%中值)而维持卖出评级。主要风险:长期内销售增长强于预期,变现快于预期。

一汽轿车:业绩低于预期;重组前销售和营销乏力;卖出

与预测不一致的方面
    10月30日一汽轿车公布2015年三季度收入/盈利为人民币54亿/-1.42亿元,同比下降36%/104%,较高华预测低14%/246%。盈利低于预期的原因包括:1)三季度销量下滑(同比下降33%);2)人民币10亿元的销售及管理费用高于我们人民币9.4亿元的预测;3)主营业务成本在收入中占比84.9%,高于我们84.2%的预测,归因于销量较低和制造业务固定成本的下降有限。公司公布的2015年三季度数据疲弱,在2016年集团潜在重组之前销售和营销活动乏力(根据公司指引)。
    投资影响
    我们将2015-18年每股盈利预测下调了30.8%/4.8%/5.0%/4.2%以计入疲弱的销售和产品周期。我们相应将基于2016年预期市净率和2016-18年预期净资产回报率均值的12个月目标价格从人民币8.64元下调至8.24元,采用的估值溢价仍为34%以体现2016年潜在的集团重组。鉴于销量疲弱和产品周期不振,我们维持卖出评级。主要风险:销量/价格利润率高于预期;重组计划完成后母公司整体上市(换股)带动估值高于预期。

CRRC Corporation(1766HK/601766CH):H/A,Hold/Reduce,Slow moving train

3Q15 NPAT fell 8% YoY to RMB3,262m; Sep 2015 YTD NPATof Rmb7,961m which comprises 62% of our FY15 forecast
    SG&A cost increase moderated in 3Q15 but product deliverytiming could be skewed towards 4Q15; plan to issue Hshareconvertible bond could create uncertainty
    Maintain Hold for H-shares and Reduce for A-shares; nochanges to earnings and valuations
    Quarterly earnings can be volatile, but progress is slower than expected – We thinkthe September 2015 YTD financial results are progressing slower than expected. The YoYdecline in 3Q15 NPAT was due to the strong 3Q14 financial performance, however, theproduct delivery timing is likely to be the reason for the September 2015 YTD resultstracking slower than expected. SG&A expense increase in 3Q15 has moderatedconsiderably compared to 1H15. Gross profit margin improvement should continue to bedriven by increased delivery of high-margin MU (multiple units, high speed passengertrains) and overseas locomotive products.
    In addition to the 3Q15 results, the company received shareholders’ approval on 30October for the potential issue of up to USD1bn H-share convertible bond. We note thatthe approval was strongly supported by A-shareholders but H-shareholders generallyvoted against. The potential use of the funds is unclear; the company has a net cashbalance sheet. This could be a near-term overhang on the share price for H-shares.
    Lack of catalyst for share price – We think there is no clear catalyst for the share priceto perform in the near term and over the medium term, we think the risk for a potentialnew entrant in the Chinese rail equipment industry may not be ruled out especially for thesubway train segment. The H-shares trade at 17x FY15e PE which we believe isreasonable with 14% three year EPS CAGR, while A-shares trade at 29.7x FY15e PE,which looks rich.

Angang Steel (347HK/000898CH):H,Hold/A,Reduce,Poor 3Q15results well-flagged

3Q15 loss of RMB1,043m in line with the earlier profitwarning
    Earnings outlook remains poor
    We maintain Hold/Reduce on H/A shares with TPs ofHKD3.86/ RMB3.22 based on 0.5x 2016e PB
    Big loss in 3Q well flagged: Angang reported a loss of RMB1,043m in 3Q15 and anaccumulated loss of RMB888m in 9M15, down from a gain of RMB346m and RMB923min 3Q14 and 9M14 respectively, and in line with the profit warning issued on 14 October.
    Gross margin deteriorated from 12.8% in 3Q14 and 11.9% in 2Q14 to just 5.5% in 3Q15due to tumbling steel prices in the quarter. Finance charges surged by 37% y-o-y mainlydue to an FX loss of RMB98m on RMB depreciation. Inventory impairment loss wasRMB398m in 3Q15, versus RMB535m in 3Q14 and RMB371m in 2Q15.
    Outlook remains difficult: Although prices might have now bottomed on upcomingseasonal demand recovery and improving property sales data, we don’t expect anymeaningful price recovery in 4Q15 given overall sluggish demand and the glut of steelsupplies. We forecast an FY15 loss of RMB1.3bn which implies 4Q15 loss of RMB395m.
    Management appears cautious on the earnings outlook having announced on 16 October achange in depreciation policy which is expected to boost bottom line by RMB412mannually from 2016 onwards. This was the fourth time Angang has changed itsdepreciation policy since 2008. The earlier three times, November 2012, September 2011and July 2008, all came in a time when the company expected poor earnings. Howevereven after accounting for lower depreciation policy, we are forecasting just RMB409m in2016 and RMB661m in 2017. Our estimates are 28% and 47% below consensus estimatesfor 2016 and 2017 respectively.
    Maintain Hold on H-shares and Reduce on A-shares: Our H-share target price ofHKD3.86 is based on 0.5x 2016e PB, in line with Angang H-share’s previous troughvaluation given the poor returns outlook – we are forecasting ROEs of -2.7%-1.4% over2015-17. Our A-share TP of RMB3.22 is based on the H-share TP and our FX team’s2015e RMB/HKD forecast of 1.2.

Aluminum Corp of China(2600HK/601600CH):Downgrade H-share to Hold from Buy;maintain Reduce on A-share:Swimming against the tide

Back to losses in 3Q despite good progress on cost cuts
    We see increased challenges for Chalco with 18% and 22%cuts in aluminium prices over 2016e and 2017e
    Downgrade H-share to Hold from Buy with a TP of HKD2.88(from HKD3.65); reiterate Reduce on A-share with a TP ofRMB2.40 (from RMB3.04)
    Again a loss in 3Q under weaker market conditions. Chalco reported a 9M15 net lossof RMB0.9bn after breakeven in 1H15. The underlying loss was RMB2.0bn excludingone-off items, such as a gain of RMB0.7bn on the disposal of Jiaozuo Wanfang shares.
    The company maintained its 2015 target of breakeven, but admittedly with nonoperationalmeasures.
    Driving down costs. The company has lowered cost of power by 25% to RMB0.34/kwhsince 2013 by negotiating direct purchase and lower tariffs. Recently, the company hasdriven down power cost to RMB0.25/kwh from RMB0.38/kwh at its 0.52mt Lianchengsmelter and announced the closure of the 0.32mt Fushun aluminium smelter.
    But faced with increased challenges in aluminium market. Since the end of Q3, theLME and SHFE price has seen another correction of 8% and 10%, respectively, with theSHFE aluminium price trading around RMB10,300/t. We cut our 2015e/16e/17e SHFEaluminium price forecast by 5%/18%/22% and see a 7.5% y-o-y decline in 2016e.
    See losses continuing over 2015-17e. Based on the y-t-d success in cost reduction, weassume 9% lower cost of production of aluminium and alumina in 2016 on the back oflower power cost, and an increase in integration of bauxite. However, these self-helpmeasures are more than offset by our sharp cut in aluminium prices. We cut our estimatesto a net loss of RMB2.2bn (from RMB1.4bn) in 2015e, RMB2.0bn (from a net profit ofRMB1.4bn) in 2016e and RMB0.9bn (from a net profit of RMB3.4bn) in 2017e.
    Downgrade H-share to Hold from Buy, reiterate Reduce on A-share: While 9M15results demonstrate the company’s commitment to reforms, we see increased challenges forChalco in a weaker aluminium market ahead. We now consider risk-reward relationshipless favourable. We lower our H-share fair value TP to HKD2.88 from HKD3.65 bycutting the target PB multiple to 1.05x (from 1.3x) as we move away from the recoverymultiple. We lower our A-share fair value TP to RMB2.40 (from RMB3.04) based on ourH-share TP, currency adjusted at a HKD:RMB rate of 1.2 (unchanged).

China Railway Construction(1186HK/601186CH):H/A,Buy/downgrade to Reduce –Paddling hard in 3Q15

3Q15 new project flow improved but not as strong asexpected and the government appears reluctant to increaseinfrastructure investment to drive economic growth
    Operating cash flow remains positive in 3Q15
    Maintain Buy for H-share and downgrade A-share to Reducefrom Hold; FY16 and FY17 EPS -3% pa; TP for H/A share isunchanged
    3Q15 results in line with expectation – The company 3Q15 NPAT increased 4.3% YoYto RMB2,784m. For the September 2015 YTD, NPAT increased 3.7% YoYRMB8,114m, which makes up about 72% of our FY15 NPAT forecast. Overall, thefinancial results are in line with our expectations. The company continued to generatepositive operating cash flow in 3Q15, which is a standout among the listed Chineseconstruction sector. Total operating cash flow for September 2015 YTD is nowRMB9.98bn. We think this is the key differentiation with other Chinese constructioncompanies and could enable the company to more easily finance new contract growth incoming years than its competitors.
    Decelerating growth for infrastructure investment is a challenge – While the companysaw a good pick up in new contract flows in 3Q15, we think the momentum is somewhatslower than its expectations. Total new contract for September 205 YTD declined 1.5%YoY to RMB556bn and the company maintains its FY15 new contract guidance ofRMB819.7bn. We think it would be unlikely for the government to consider an increasein infrastructure investment in 4Q15 to help economic growth. The structural decelerationgrowth for infrastructure investment is likely to persist and is the biggest challenge for theChinese construction sector. We note that CRCC Corp’s new contract mix in 2015 couldpose a risk to profitability as the low-margin highway projects make up about 20% of thetotal. Therefore, we reduce our profitability assumption in 2016 and 2017 marginally andresulted in the 3% reduction in FY16 and FY17 EPS forecast.
    The company management will host a post result conference call at 10am on Monday2 November.

China Railway Group (390HK/601390CH):H/A,Hold/Reduce –Slow new contract improvement

Company 3Q15 NPAT increased 3%YoY to RMB3,104m,broadly in-line with expectations
    New contract recovery progress is slower than expected; inour view, it would be difficult for the company to see positivenew contract growth in 2015
    Maintain Hold/Reduce for H/A-share; lower earnings by 4.1%and 4.8% for FY15 and FY16; TP for H/A is reduced toHKD7.0 (vs HKD7.3 prior)/RMB5.8 (vs RMB6.1 prior)
    New contract flow struggles to see positive growth in 2015 – While the company’s 3Q15earnings were generally satisfactory, we were disappointed with the slower than expected2H15 pick up in new contract. For September YTD, the company’s new contracts achievedRMB552bn or an 8.9%YoY decline. We think the company would struggle to see positivenew contract growth for FY15 and thus lower our new contract forecast from flat to a7.7%YoY decline. The company has a total order backlog of RMB1,858bn at the end ofSeptember 2015, which covers FY16 revenue by about 2.8 times.
    Structural deceleration in transport infrastructure investment growth – Note that thecompany has achieved new contract amount RMB543bn (-13%YoY) at the end ofAugust, according to management in 1H15 result conference call. Only RMB9bn of newcontracts were added for the company in September reflecting the slower-than-expectedinfrastructure project tender recovery. We saw a similar new contract trend for the othermajor construction companies in China. The tender progress slowed for new projectmodel PPP (Private-Public-Partnership) could be a reason. Management indicated thatrailway investment could be maintained at RMB800bn for FY15 but no details of the 13thfive year plan that was released at this moment.
    We maintain Hold/Reduce for H/A-share but reduced earnings by 4.1% and 4.8% forFY15 and FY16 due to our lower new contract forecast and revenue estimate for thecompany. Our revised earnings would be about 9% below consensus in FY15 accordingto Thomson Reuters. We think the disappointing new contract growth could put pressureon the stock price. The stock is trading at 12.2x FY15 PE with three years CAGR 3.2%.

GAC Group (2238HK/601238CH):Hold,3Q15,Strong rebound in earnings

3Q15 NPAT +73.9%YoY to Rmb952m
    We revised up our earnings forecasts by 4%/7% in 2015e-16e, mainly driven by higher volume of GAC Trumpchi
    H: maintain Hold with TP HKD6.00 revised from HKD5.70;
    A: maintain Reduce with TP RMB5.0 revised from RMB4.70
    Strong earnings rebound amid a weak market in 3Q15. We believe the36%YoY/8%YoY sales volume growth of Guangqi Honda/GAC Toyota were the keydrivers for the 40%YoY earnings growth of share of income from equity-accountedinvestment of RMB1,140m in 3Q15 (3Q14: RMB814m, 2Q15: RMB1,352m). The strongvolume growth was a result of 1) new SUV model launches; 2) rising discount of sedanmodels; and 3) low base in 3Q14 as the two Japanese brands were de-stocking in 3Q14.
    Sales volume of Trumpchi GS4 above our expectations. Loss before interest and tax(LBIT) of the consolidated business narrowed to RMB97m in 3Q15 (3Q14: loss ofRMB213m, 2Q15: profit of RMB74m) mainly driven by the 54% revenue growth broughtby new compact SUV Trumpchi GS4. The operating leverage has offset the weaker GPmargin resulting from product mix. While we have been aware of the decent reception ofthis model from Jun, we are surprised that the sales volume of Trumpchi GS4 could rise to18,900 units in Sep 2015 (Aug: 14,317 units). We think the strong sales momentum wouldlikely continue in 4Q15 amid peak season and positive impact from purchase tax cut. Weraised our sales volume forecast of GAC Trumpchi by 4%/9%% in 2015e/16eEarnings revisions. We revised up our earnings forecasts by 4%/7% in 2015e-16e,mainly driven by lower loss assumption for the consolidated business as a result of strongreception of Trumpchi GS4. Our earnings forecasts are 1% above consensus in 2015e.
    H: Maintain Hold with TP HKD6.00 (up from HKD5.70); A: Maintain Reduce with TPRMB5.00 (up from RMB4.70). We raise our ROE-based target PE from 8.8x to 8.9x 2015ePE. We think the market would consider this as a solid set of results and we expect somepositive earnings revisions. The timing of expense accruals such as the launching costs ofJeep production and promotion expenses of Japanese brands could introduce volatility to thequarterly earnings. Given that the stock is trading at 10.2x 2015e PE versus ex-BYD industryaverage of 8.0x we see limited upside at this level. Upside risks include the operatingleverage from volume growth and downside risks would be the rising selling expenses.