Latest Events
IPO Subscription
Deadline for subscription:2019/2/18 14:00
Deadline for subscription:2019/2/18 14:00
1025    ¹ÅÃÀ±±ªÑ
Deadline for subscription:2019/2/19 14:00
Hong Kong Indices
HS Red-chip
-531.21   -1.87%
-75.08   -1.66%
-233.02   -2.09%
-815.11   -2.08%
At least 15-min delayed quote is provided by AASTOCKS
Disclaimer Last updated: 2019-02-15 16:09
Stock Quote
 High -  Volume -
 Low -  Turnover -
 Open -  EPS -
Previous Close -  P/E Ratio -
Real-time quote is provided by AASTOCKS
Disclaimer Last updated:
Daily Commentary

15 Feb 2019

Market Outlook

ADR implies HSI to open lower today

U.S. stocks closed mostly lower on Thursday: As disappointment over weak retail sales overshadowed optimism over U.S.-China trade talks, dow fell 104pts, or 0.4%, to 25,439.

Trade talks update: China seeks to reach agreement with U.S by the promise of increasing U.S. semiconductor sales to China to a total over six years of $200bn, or a level five times that of current exports. Chinese negotiators are also offering to eliminate a national vehicle-procurement policy that has given consumers subsidies to buy domestically made new-energy, small-engine and other types of cars, the people with knowledge of the talks said. Meanwhile, Trump reportedly considering pushing back trade deadline by 60 days.

HK ADR: HSI ADR fell by 219pts to 28,212 level.

Today’s A-share Snapshot

Wuxi Apptec (603259.SH)

Company’s Profile:

The Company is mainly engaged in CRO and CMO/CDMO.

Brief Comments: (Rating: Buy; Target Price: RMB100)

The Company released a positive profit alert that its net profit might grow 70% to 86% YoY to RMB2.086 billion to RMB2.282 billion in 2018 thanks to the continuous growth of revenue and profit from its core business.

As of 1H2018, the Company has assisted customers to complete the clinical trial declaration of 8 research new drugs, and obtained the clinical approval documents of 8 projects, representing 16% of the similar new drugs declaration in China.

The fierce competition in Medical research service industry might increase uncertainties to the Company’s core businesses.

Stock Pick

CRP(00836) benefited by weak coal price and asset disposal

Rating: Buy; Target Price: HKD19.48

China Resources Power is engaged in the development, construction and operation of power plants, including large-scale efficient coal-fired generation units, wind farms, hydro-electric plants, gas-fired power plants and photovoltaic power projects as well as construction and operation of coal mines.

We expect the coal price in 2019 will remain weak. This is due to (1) the release of new coal capacity; (2) coal companies’ interest in acquiring coal mine permits to build new mines; (3) reviving import coal from beginning 2019; (4) peak demand season coming to an end. We expect lackluster coal price can help reduce the cost of CRP.

Also, the Company announced on 23 Nov 2018 that the price of the proposed sales of its 51% stake in a coal mine to parentco would be HKD3,926.6 mn, which helps to realise a disposal gain of HKD881mn. The transaction can build a more robust balance sheet with sufficient cash reserves to sustain its current dividend policy. Disposal of coal mines would help to accelerate its transformation from a coal-fired IPP to a renewable company.

In addition, CRP has recorded rising account receivables due to subsidy delays over past 20 months. But the MoF has started paying operators since Sept and we expect significant improvement in cash flow before the year-end. Implementation of the Green Certificates scheme in 2019 should also help. We expect CRP's dividend visibility to be high with its dividend yield over 5%.