Research Reports and Commentaries

Daily Commentary




25 Mar 2019

Market Outlook


HSI expected to test lower to around 28,500 today.

Weakness on Eurozone economy: The Eurozone flash Manufacturing PMI in March was at 47.6, a 69-month low. Germany’s manufacturing PMI in March was 44.7, a 79-month low, below the 50 line for 3 consecutive months.

Concerns on global economic outlook: The 10-year US Treasury yield fell to 2.43%, lower than 3-year yield of 2.45%, which is the first time since 2007, indicating that the economy will fall into recession in the next 1-2 year. We see sell off in emerging market currencies, the Argentine Peso, the Brazilian Real, and the Turkish lira fell more than 2% against the US dollar, we expect weak economic outlook will have strong negative impact on the stock market.


Daily Pick


HK Stocks

CSPC Pharm (01093.HK)

(Rating: Buy; Target Price: HKD16; Current Price: HKD15.04)

Strong sales of existing drugs.

Higher earnings visibility than peers with attractive valuation.

Oncology drugs are another growth engine.


A-share

CMSK (001979.SZ)

(Rating: Buy; Target Price: RMB24; Current Price: RMB22.62)

Its net profit increased 20.42% YoY to RMB15.24 bn in 2018.

The Company has abundant land reserves and strong profitability.

It might benefit from the development of Guangdong-Hong Kong-Macao Greater Bay Area continually.


Sector and Company News


The following stocks will announce earning results: Shenzhou INTL(02313)(25th Mar), China RES Land(01109)(26th Mar), Shimao Property(00813)(26th Mar), ZTE(00763)(27th Mar), BYD Company(01211)(27th Mar), Mengniu Dairy(02319)(27th Mar), China Life(02628)(27th Mar), CCB(00939)(27th Mar).

Sinopec Corp (00386) announced its annual results ended 31 December 2018. Its revenue grew 22.5% YoY to RMB2,891 bn while its net profit increased 20.2% YoY to RMB61.6 bn.

YOFC (06869) announced its annual results ended 31 December 2018. Its revenue grew 9.6% YoY to RMB11.36 bn while its net profit increased 17.4% YoY to RMB1.489 bn.

Wuxi APPTEC (02359) announced annual results ended December 2018. Net profit went up 84.2% YoY to RMB2.261 bn. Dividend was RMB5.80 for every 10 shares, together with 4 new bonus shares for every 10 existing shares.

China Shenhua (01088) announced annual results ended December 2018. The turnover went up 6.2% YoY to RMB264.101 bn. The net profit amounted to RMB44.137 bn, down 7.7% YoY. Final DPS was 88 fen.


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