Latest Events
Hong Kong Indices
HS Red-chip
-138.44   -0.54%
-16.02   -0.38%
-73.55   -0.70%
-148.53   -0.41%
At least 15-min delayed quote is provided by AASTOCKS
Disclaimer Last updated: 2018-11-14 16:11
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

14 Nov 2018

Market Outlook

HSI may fluctuate at around 25,400 to 25,800 points today.

The Hang Seng Index gapped down by 540 points to touch its intra-day low of 25,092 points yesterday, being its new low in this month. Afterwards, thanks to the strong performance of A-share, the market narrowed its losses and narrowed its loss to 26 points in the morning. During the afternoon session, HK stocks posted a fluctuating performance. The HSI finally closed at its intra-day high of 25,792.87 points, up 159.69 points or 0.62%. Market turnover amounted to HKD90.872 billion. The ADR proportional HSI index closed overnight at 25,704 points with 87 points or 0.34% than closing price last Friday. Energy companies lead US stocks lower after oil price plunge. Dow was down by 100.69 points or 0.40% to 25,286 points. The quarter result of Tencent (00700) will be the market focus today. HSI may fluctuate at around 25,400 to 25,800 points today.

Today’s A-share Snapshot

Company’s Profile:Haitian (603288.SH) is mainly engaged in the manufacture and distribution of seasonings. .

Brief Comments:According to the Company’s report for 9M2018, the Company’s turnover increased 17.20% YoY to RMB 12.712 billion and its net profit rose 23.33%YoY to RMB 3.131 billion. For 3Q2018, its turnover increased 17.12% YoY to RMB 3.992 billion and its net profit rose 23.40%YoY to RMB 883 million. It is expected that the Company’s results might continue to maintain its growth rate. For 3Q2018, its operating cost grew 20.13% YoY to RMB2.192 billion. The growth of cost is higher than revenue, mainly due to the price increasing of the raw material.The price changes of raw material might put a drag on the product’s gross profit margin of the Company.

Stock Pick

HKT (06823) telecom business remains stable with attractive dividend payout

HKT focuses on local fixed network, broadband (netvigator), mobile communication services (CSL Mobile under csl and 1O1O brands) and voice and data (PCCW Global). HKT business remains stable. The adjusted compound annual growth rate (CAGR) of EBITDA in 2011-2017 is about 10%, with strong cash flow. The compound annual growth rate of free cash flow in 2011-2017 is about 15%.

HKT can benefit from 5G networks, which will help increase long-term revenue. Fiber-optic networks and fiber-optic backbone networks are important infrastructure for 5G and IoT applications, supporting a wide range of services, including ultra-high-speed wireless broadband (10Gbps data transmission), high-reliability and low-latency communications (such as networking and automated vehicles). And large-scale machine (IoT) communication, which can be used in AR/VR/intelligent industry/car network/unmanned aircraft, is beneficial to increase the revenue per household (ARPU). On 18 Sep 2018, HKT announced new price plans for its high-end brands with reintroduction of the fee (HKD50/month) for availing the unlimited data option, which was cut to zero in Sep 2017. We expect it to be a positive catalyst to its earnings.

The stock is one of the highest dividends among many telecom stocks, with a forecast dividend yield of 6%, which is higher than its peer. Investors are advised to buy below HKD10.6 with a target price of HKD12.5 and a stop-loss price of HKD9.2.