Investment Daily
16 March 2017
The Hang Seng Index is expected to trade at 23,700 – 24,000
today
The market is waiting for the Federal Reserve rate decision and the Netherlands
election. Hang Seng Index declined 35 points to close at 23,792 points on
Wednesday. HSCEI closed at 10,272 points, falling 42 points. Turnover was $73.2
billion. Several cement stocks gained 1% to 5%. The local property sector stocks
slightly declined in general.
The Fed rate hike by 25 basis point, in line with market expectation.However, the
Fed maintain its forecast to hike rate three times this year, help to ease investors
concern of further tightening.US stock market rebound.Besides, US oil
inventory dropped, oil price rebounded, also help to boost oil stocks.US stock
rose on Wednesday, the Dow and the Nasdaq rose 113 points (to 20,950) and 43
points (to 5,900) respectively.
The Fed rate hike by 25 basis point, in line with market expectation.However, the
Fed maintain its forecast to hike rate three times this year, US dollar exchange rate
and US treasury yield both decline, it will favor HK stock market. Of which,
interest rate sensitive utility stock and real estate stock might rebound today.
Technical Analysis
HSI MACD bearish gap keeps narrowing, yet it’s still restrained by the middle line
of Bollinger Band（23,842 points）. Hence, we only treat it as technical rebound
once the index is still located below the middle line of Bollinger Band. The first
resistance is 24,000 points. The second resistance is 24,364 points. The first
support is the 50-DMA 23,372 points, and the next support is 23,000 points.
HSI Chart
Sources：etnet
Major Market Indicators
15 Mar 14 Mar 13 Mar
Mkt. Turn.(mn) 73,20072,000 86,500
Stock Advances 743695 1,028
Stock Declines 821859 600
HSI 23,79223,827 23,829
Change -35-1 +261
HSI Turn.($bn) 22.3025.34 30.72
HSCEI 10,27210,315 10,258
Change -42+56 +189
HSCEI Turn.($bn) 10.8913.81 15.33
Market Overview
HSI Technical Indicators
10-days MA 23,686
50-days MA 23,372
250-days MA 22,168
14-days RSI 54.8
Primary resistance 24,200
Primary support 23,372
CEI Technical Indicators
10-days MA 10,208
50-days MA 10,005
250-days MA 9,359
14-days RSI 54.8
Primary resistance 10,500
Primary support 10,000
HSI Futures
15 Mar 14 Mar 13 Mar
Mar 23,778 23,784 23,802
Volume 79,460 68,347 94,469
Open interests 135,607 137,587 139,890
Apr 23,784 23,792 23,811
Volume 1,713 532 2,595
Open interests 8,979 7,722 7,584
HSCEI Futures
15 Mar 14 Mar 13 Mar
Mar 10,273 10,303 10,256
Volume 57,024 57,942 79,732
Open interests 262,619 262,915 260,707
Apr 10,277 10,309 10,259
Volume 300 1,909 1,978
Open interests 11,252 11,054 9,429
Investment Daily
kgieworld16 March 2017 2
Ping An（2318）premium income grew 35% for the first two months
in February, rising 36.6% yoy. For the first two months, the figure accounted for
$160.87 billion, increasing 34.9% yoy.
two months, increasing 40% yoy. Renewal business ratio was 52.83%, which was
quite stable.
billion during the first two months, increasing 21.1% yoy. The growth pace was
faster than the same period in 2015（~2.9%）The automobile insurance possessed
76.4% of the total premium income.
property and casualty insurance segment growth seems accelerating because it has recorded double digit growth for the fifth
consecutive month, which is better than expected. Recently there’s news report that Lufax is restructuring business. The listing of
Lufax may be conducted early next year instead. We’ll keep an eye on its latest development.
Ping An at the moment.
Cathay Pacific(293): Recognized Loss
aviation revenue, Cathay Pacific(293) revenue fell 9.4% to HK$92.8bn and
suffered loss of HK$570mn, worse than expectation.It does not declare final
dividend.
yield dropped 9.2%.Cargo revenue dropped 13.2% to HK$20.1bn.It is
mainly due to other airlines increase number of flights while budget airlines
also brought more competition to market.Besides, Cathay corporate client
also first time recorded drop since 2009.Cathay has to sell First Class and
Business Class at discount price.
Since hedging ratio and price both declined in 2017 and 2018, although there is very likely for Cathay to suffer hedging
loss in 2017 and 2018, but the loss will be much smaller.
profitability.
Cathay business class demand. Competition from other airlines (especially budget airlines) also hit economic class revenue.
Cathay is facing a structural problem.Although the Group plans to cut cost, but its profit is likely to remain sluggish in the
coming 2 years. We expect its share price to maintain recent range trade at 10-12 HK dollar (book value is 12 HK dollar per
share).
Daily Focus
Ping An (2318) Info
Closed price 42.00
Expected P/E (X) 11.6
Dividend yield (%) 1.4
52 week high 44.15
52 week low 31.85
14RSI 65.8
Cathay Pac (293) Info
Closed price 11.44
Expected P/E (X) -
Dividend yield (%) 0.5
52 week high 13.62
52 week low 10.00
14RSI 46.5
Investment Daily
kgieworld16 March 2017 3
Agile (3383) released annual result
佀 Agile reported net profit increased 64.3%yoy to RMB2.284bn, declared final
dividend of HK$0.2, after special dividend, the total dividend would be
HK$0.45.
佀 The group has currency hedging, recorded derivatives gain of RMB562bn, if
excluding this one off items, the core net profit increased 13%yoy.
佀 The group gross margin improved from 20% in 1H to 32.5% in 2H, while the
full year gross margin was 26.5%. Fair. The company is expecting the average
selling price would increase to RMB11000 to RMB12000 per square meter
this year, while gross margin would higher than 30%.
佀 The group had cash on hand of RMB22.3bn, while net debt ratio dropped
from FY2015 64% to 49.1%, the financial position is healthy.
佀 The group expecting the year sales target would be RMB60bn, while the first three months accumulate sales would be
13bn. In terms of valuation, the P/B would be 0.56x, its current price of HK$6.47 is trading at 56% discount to its NAV of
HK$14.7, valuation is fair. In addition, the group will split off its property management business and to be listed in Hong
Kong. However, still have no time table. We believe the share price would be sustained.
Agile(3383) Info
Closed price 6.47
Expected P/E (X) 8.4
Dividend yield (%) 3.6
52 week high 6.69
52 week low 3.61
14RSI 85.0
Investment Daily
kgieworld16 March 2017 4
Top 10 Most Actively Traded Stocks(SH-HK Connect Southbound)
Stock NameStock code Buy Trades (RMB) Sell Trades (RMB) Turnover (RMB)
CRRC 1766 174,648,260 34,310,474 208,958,734
TENCENT 700 157,764,540 33,356,940 191,121,480
HUISHAN DAIRY 6863 77,308,400 105,622,470 182,930,870
GREATWALL MOTOR 2333 115,656,640 21,957,930 137,614,570
CHINA MOBILE 941 93,297,675 39,698,575 132,996,250
CITIC BANK 998 117,537,650 13,607,710 131,145,360
HUANENG POWER 902 116,138,040 6,826,400 122,964,440
NEXTEER 1316 42,255,240 62,636,520 104,891,760
AIR CHINA 753 60,165,360 39,998,960 100,164,320
MEITU 1357 79,870,270 18,893,490 98,763,760
Sources: HKEx
Top 10 Most Actively Traded Stocks(SZ-HK Connect Southbound)
Stock Name Stock code Buy Trades (HKD) Sell Trades (HKD) Turnover (HKD)
YINGDE GASES 2168 124,638,425 1,596,050 126,234,475
IGG 799 113,618,010 8,374,800 121,992,810
MEITU 1357 66,375,250 21,095,660 87,470,910
ZTE 763 27,792,944 45,458,320 73,251,264
FULLSHARE607 6,004,725 48,939,325 54,944,050
TENCENT 700 47,462,520 644,160 48,106,680
RS MACALLINE 1528 35,010,166 8,297,606 43,307,772
HUISHAN DAIRY 6863 42,949,170 28,900 42,978,070
AGILE GROUP 3383 25,635,080 12,685,940 38,321,020
GREATWALL MOTOR 2333 22,478,170 8,301,165 30,779,335
Other Statistics
Ten Most Actively Traded Stocks
Shanghai/Shenzhen-Hong Kong Stock Connect Statistics
SH Connect SZ Connect CombinedSouthbound
Balance (RMB bn) 13.29 12.24 18.22
Balance as % of Quota
Amount
- 94.2 86.7
Stock Name Code Change Closed Price Turnover(Million)
AIA 1299 0.00% 48.45 2305.5
TENCENT 700 0.00% 214.60 2304.1
CCB 939 -0.79% 6.30 1516.5
CHINA MOBILE 941 -0.65% 83.55 1393.0
HKEX 388 1.41% 194.70 1241.0
HSBC HOLDINGS 5 0.32% 63.70 1101.9
BANK OF CHINA 3988 -1.02% 3.89 875.6
MEITU 1357 11.09% 14.22 839.2
CNOOC 883 -1.12% 8.81 811.8
PING AN 2318 0.12% 42.00 673.7
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