[Today's Guide]
○ Ports along Maritime Silk Road go into action
○ Attentions to critical risk points, seek advantages and avoid disadvantages
○ Annual and quarterly reports releasing to conclude, A shares valuation to adjust
○ New products manufacturing to boost profit growth
[Hotspot Investigation]
Ports along Maritime Silk Road go into action
------
Recently, the “One Belt and One Road” investigation group constituted by main news reporters of Shanghai Securities Newspaper visited the key cities including Beihai, Qinzhou, Nanning, Guangzhou, Shenzhen and Zhuhai along the 21st Century Maritime Silk Road. The investigation finds that cities along the Road attach unexpected great importance to the construction of “One Belt and One Road” and have clear functional localization. Currently, the whole investigation is still undergoing and part of the investigation status is provided below for investors’ reference.
◆ Beibu gulf ports: Great efforts spared to develop harbor industry
As an important gateway to connect the 21st Century Maritime Silk Road, the Beibu gulf port (including Fangcheng port, Qinzhou port and Beihai port) in Guangxi Province is an important coastal port area as well as an important hub of comprehensive transportation system. It will support the Beibu gulf port economic zone of Guangxi Province to further open up and build an upgraded version of China-ASEAN Free Trade Zone. Striving to develop harbor industry so as to attract more investment is a unique development path of Beibu gulf port. At present, the port area is actively developing strong-strong alliance with giants in metallurgy, iron & steel, papermaking, energy, food, chemicals, and etc. industries.
◆ Guangzhou port and Yantian port: Outstanding prosperity
Guangzhou port covers four port areas, namely, Neigang, Huangpu, Xinsha and Nansha. Nansha, as the pioneer area in Guangzhou to connect with the construction of Maritime Silk Road, gains preferential policy. Guangzhou will actively push forward key projects including the Phase III and Phase IV of Nansha Container, Nansha internationally-applied wharf, the Phase II engineering of Xinsha port area from 2015 to 2017. The expectation that “the Maritime Silk Road will contribute to great development of Yantian port” greatly boosts the morale of all staff, while Zhuhai port will benefit from the friendly cooperation relationship with Gwadar, a city on the southwestern Arabian Sea coastline of Pakistan.
◆ Alliance of port cities along Maritime Silk Road abuilding
It is learnt that Guangzhou port is trying to build an alliance of port cities along the Maritime Silk Road. Meanwhile, it will found a Maritime Silk Road port fund in Nansha area of Guangdong Free Trade Zone to support the cooperation between Guangzhou port and the key cities along the Road in projects like port facilities and sea transportation.
[XFA View]
Attentions to critical risk points, seek advantages and avoid disadvantages
-----
Fluctuation picks up after Shanghai Composite Index reaches 4,500 points. Combined with that the regulator warns risks repeatedly in recent period, it’ hard for investors to make decisions. It’s necessary for investors to sort out the critical risk points that might impact the market so as to seek advantages and avoid disadvantages as well as make better investment decisions.
It should be admitted that this round of bullish market started from last year begins under the context of sluggish economy, but “reform-oriented” and “capital-driven” bullish markets are not created by China. Looking back the historical experience at home and abroad, the risks of turning into a bearish market mainly come from three aspects: first of all, repeated policy pressure. If the regulator pressures the stock market in a high-profile and continuous way, then the market might be caught in medium level adjustment; secondly, the economic data is much worse than expected. Sluggish economic development has been expected by the market, but if single-quarter economic data drops unexpectedly, it will undoubtedly impact the stock market; thirdly, outflow of capital, mainly resulted by the underweight of industrial capital. The two underweight peaks of A-share market in 2009 fell on March and July. The maximum monthly underweight once even reached 0.5 percent of the monthly turnover.
Judged from current market, though the regulator has warned risks for multiple times, it still aims to maintain a stable and lasting market. The measures adopted are “gentle” and the regulator does not mean to pressure the market. Under the government’s all-out effort in stabilizing the economy, though the economy is still searching for the bottom to rebound, it shows no sign of uncontrollable decrease. What’s more, the underweight peak of industrial capital does not heat a historical height. Therefore, it’s better to focus on the changes of above risk points and study on decision-makings than to imagine or worry about risks.
Investors shall also realize that a large amount of OTC capital is waiting for opportunity to buy in. Incremental capital might flow into the stock market during fluctuation. Low-valuation blue-chip shares and traditional industries deeply involved in mobile Internet will be the first target. (Wen Dao)
[Data Reference]
Annual and quarterly reports releasing to conclude, A shares valuation to adjust
------
Listed companies will complete the releasing of annual reports and first quarterly reports in the end of April. It means that the dynamic P/E ratio and other valuation indexes based on the third quarterly reports of 2014 may see great changes after May 1. The exorbitant valuation trend may ease due to the improved profitability of certain hot sectors.
XFA’s statistics show that the overall dynamic P/E ratio of individual stocks on the ChiNext Board is 104 times based on the first quarterly reports released. It declined greatly compared with the previous dynamic P/E ratio of 123 times. The Internet sector with various supports recorded a dynamic P/E ratio of 164 times before the end of April, but it fell to 141 times after the releasing of the first quarterly reports. The valuation of the cultural media sector dropped from 56 times to 53 times.
The above situation is also reflected correspondingly in the blue-chip sector with the securities companies seeing significant decline. The net profit of securities companies surged nearly 100 percent for two consecutive quarters while the P/E ratio of in end-April has plumped from the nearly 60 times to 35 times. The P/E ratio of the real estate sector decreased from 44 times to 27 times. The valuation of such traditional sectors with low valuation as the food and beverage sectors surged from 29.9 times to 33.7 times due to the unsatisfactory profit growth in the past two quarters. In addition, the overall P/E ratio of the A shares on the main boards of the Shanghai and Shenzhen stock exchanges, which have released the first quarterly reports, improved to 25.3 times from 23.5 times after adopting the latest statistics.
[XFA Viewpoint]
New products manufacturing to boost profit growth
-----
Listed companies will complete the releasing of first quarterly reports soon. The companies with year-on-year and quarter-on-quarter growth in the first quarter will catch more attention after their profit reached a new high in the fourth quarter of last year. XFA made further researches and found that three companies will put new products into production and their capacities will unleash, which will support the continuous growth of their profits.
Changzhou NRB Corporation (002708.SZ) has increased investment in the development of new products since last year. Many new products will put into mass production. The trial of the Eaton transmission and bearing project and an SUV rear-wheel hub bearing has been completed on the whole and have put into mass production gradually. The third-generation wheel hub bearing units for new energy vehicles and other products are under trial and are likely to put into mass production in the year. With the increasing proportion of products with high value assed, the profitability of the company is expected to be further strengthened.
Ningbo Shuanglin Auto Parts Co., Ltd. (300100.SZ) is principally engaged in the sale of automobile parts. The company strives to improve its comprehensive strength in various products and industries and achieve an annual output of 10 billion yuan after three years. The manufacturing equipment for the demo control system has been installed. It has completed trial production and the production and delivery of small orders. With the increasing investments in recent years, it has established six subsidiaries. Institutes believe that with the production of new subsidiaries, its profitability is expected to be further released.
The single high speed blower, vapor compressor and other profits with high gross profit of Jiangsu Jin Tong Ling Fluid Machinery Technology Co., Ltd. (300091.SZ) enjoys huge market demand and they have become new highlights in the results of the company. Meanwhile, with the operation of the air compression station of Zhejiang GuXianDao industrial fiber Co., Ltd. in the second half of last year, the magnetic suspension blower of the company has developed four basic types and is under trial production. In addition, the unmanned aerial vehicles (UAVs) with turbojet engines have conducted series of experiments and progressed smoothly. As the UAVs of the company are positioned at the targets for military exercises, it will apply for relevant military qualification and is likely to be certified within the year.
[Industry Observation]
GMIC focuses big health data
-----
The Global Mobile Internet Conference (GMIC) 2015 will be held from April 28 to 29 in Beijing. The CEO of Misfit, a U.S. wearable devices tycoon, indicated that it will introduce three products in the Chinese market. Chinese wearable devices manufacturers are smart in developing the big health data industry with the wearable devices as accesses.
It is reported that Andon Health Co., Ltd. (002432.SZ) is speeding up in transforming from a hardware supplier to a data supplier. Its health data has been downloaded for 10 million times. It will also introduce wearable devices to monitor respiration and the electrocardio. Shenzhen Fenda Technology Co., Ltd. (002681.SZ) is also an outstanding wearable devices manufacturer. It provides solutions to integrated hardware, software and cloud computing and obtains the health data of customers during the process. The back data platform of the company is developing rapidly and will build a complete mobile big health medical treatment network in the future.
○ Ports along Maritime Silk Road go into action
○ Attentions to critical risk points, seek advantages and avoid disadvantages
○ Annual and quarterly reports releasing to conclude, A shares valuation to adjust
○ New products manufacturing to boost profit growth
[Hotspot Investigation]
Ports along Maritime Silk Road go into action
------
Recently, the “One Belt and One Road” investigation group constituted by main news reporters of Shanghai Securities Newspaper visited the key cities including Beihai, Qinzhou, Nanning, Guangzhou, Shenzhen and Zhuhai along the 21st Century Maritime Silk Road. The investigation finds that cities along the Road attach unexpected great importance to the construction of “One Belt and One Road” and have clear functional localization. Currently, the whole investigation is still undergoing and part of the investigation status is provided below for investors’ reference.
◆ Beibu gulf ports: Great efforts spared to develop harbor industry
As an important gateway to connect the 21st Century Maritime Silk Road, the Beibu gulf port (including Fangcheng port, Qinzhou port and Beihai port) in Guangxi Province is an important coastal port area as well as an important hub of comprehensive transportation system. It will support the Beibu gulf port economic zone of Guangxi Province to further open up and build an upgraded version of China-ASEAN Free Trade Zone. Striving to develop harbor industry so as to attract more investment is a unique development path of Beibu gulf port. At present, the port area is actively developing strong-strong alliance with giants in metallurgy, iron & steel, papermaking, energy, food, chemicals, and etc. industries.
◆ Guangzhou port and Yantian port: Outstanding prosperity
Guangzhou port covers four port areas, namely, Neigang, Huangpu, Xinsha and Nansha. Nansha, as the pioneer area in Guangzhou to connect with the construction of Maritime Silk Road, gains preferential policy. Guangzhou will actively push forward key projects including the Phase III and Phase IV of Nansha Container, Nansha internationally-applied wharf, the Phase II engineering of Xinsha port area from 2015 to 2017. The expectation that “the Maritime Silk Road will contribute to great development of Yantian port” greatly boosts the morale of all staff, while Zhuhai port will benefit from the friendly cooperation relationship with Gwadar, a city on the southwestern Arabian Sea coastline of Pakistan.
◆ Alliance of port cities along Maritime Silk Road abuilding
It is learnt that Guangzhou port is trying to build an alliance of port cities along the Maritime Silk Road. Meanwhile, it will found a Maritime Silk Road port fund in Nansha area of Guangdong Free Trade Zone to support the cooperation between Guangzhou port and the key cities along the Road in projects like port facilities and sea transportation.
[XFA View]
Attentions to critical risk points, seek advantages and avoid disadvantages
-----
Fluctuation picks up after Shanghai Composite Index reaches 4,500 points. Combined with that the regulator warns risks repeatedly in recent period, it’ hard for investors to make decisions. It’s necessary for investors to sort out the critical risk points that might impact the market so as to seek advantages and avoid disadvantages as well as make better investment decisions.
It should be admitted that this round of bullish market started from last year begins under the context of sluggish economy, but “reform-oriented” and “capital-driven” bullish markets are not created by China. Looking back the historical experience at home and abroad, the risks of turning into a bearish market mainly come from three aspects: first of all, repeated policy pressure. If the regulator pressures the stock market in a high-profile and continuous way, then the market might be caught in medium level adjustment; secondly, the economic data is much worse than expected. Sluggish economic development has been expected by the market, but if single-quarter economic data drops unexpectedly, it will undoubtedly impact the stock market; thirdly, outflow of capital, mainly resulted by the underweight of industrial capital. The two underweight peaks of A-share market in 2009 fell on March and July. The maximum monthly underweight once even reached 0.5 percent of the monthly turnover.
Judged from current market, though the regulator has warned risks for multiple times, it still aims to maintain a stable and lasting market. The measures adopted are “gentle” and the regulator does not mean to pressure the market. Under the government’s all-out effort in stabilizing the economy, though the economy is still searching for the bottom to rebound, it shows no sign of uncontrollable decrease. What’s more, the underweight peak of industrial capital does not heat a historical height. Therefore, it’s better to focus on the changes of above risk points and study on decision-makings than to imagine or worry about risks.
Investors shall also realize that a large amount of OTC capital is waiting for opportunity to buy in. Incremental capital might flow into the stock market during fluctuation. Low-valuation blue-chip shares and traditional industries deeply involved in mobile Internet will be the first target. (Wen Dao)
[Data Reference]
Annual and quarterly reports releasing to conclude, A shares valuation to adjust
------
Listed companies will complete the releasing of annual reports and first quarterly reports in the end of April. It means that the dynamic P/E ratio and other valuation indexes based on the third quarterly reports of 2014 may see great changes after May 1. The exorbitant valuation trend may ease due to the improved profitability of certain hot sectors.
XFA’s statistics show that the overall dynamic P/E ratio of individual stocks on the ChiNext Board is 104 times based on the first quarterly reports released. It declined greatly compared with the previous dynamic P/E ratio of 123 times. The Internet sector with various supports recorded a dynamic P/E ratio of 164 times before the end of April, but it fell to 141 times after the releasing of the first quarterly reports. The valuation of the cultural media sector dropped from 56 times to 53 times.
The above situation is also reflected correspondingly in the blue-chip sector with the securities companies seeing significant decline. The net profit of securities companies surged nearly 100 percent for two consecutive quarters while the P/E ratio of in end-April has plumped from the nearly 60 times to 35 times. The P/E ratio of the real estate sector decreased from 44 times to 27 times. The valuation of such traditional sectors with low valuation as the food and beverage sectors surged from 29.9 times to 33.7 times due to the unsatisfactory profit growth in the past two quarters. In addition, the overall P/E ratio of the A shares on the main boards of the Shanghai and Shenzhen stock exchanges, which have released the first quarterly reports, improved to 25.3 times from 23.5 times after adopting the latest statistics.
[XFA Viewpoint]
New products manufacturing to boost profit growth
-----
Listed companies will complete the releasing of first quarterly reports soon. The companies with year-on-year and quarter-on-quarter growth in the first quarter will catch more attention after their profit reached a new high in the fourth quarter of last year. XFA made further researches and found that three companies will put new products into production and their capacities will unleash, which will support the continuous growth of their profits.
Changzhou NRB Corporation (002708.SZ) has increased investment in the development of new products since last year. Many new products will put into mass production. The trial of the Eaton transmission and bearing project and an SUV rear-wheel hub bearing has been completed on the whole and have put into mass production gradually. The third-generation wheel hub bearing units for new energy vehicles and other products are under trial and are likely to put into mass production in the year. With the increasing proportion of products with high value assed, the profitability of the company is expected to be further strengthened.
Ningbo Shuanglin Auto Parts Co., Ltd. (300100.SZ) is principally engaged in the sale of automobile parts. The company strives to improve its comprehensive strength in various products and industries and achieve an annual output of 10 billion yuan after three years. The manufacturing equipment for the demo control system has been installed. It has completed trial production and the production and delivery of small orders. With the increasing investments in recent years, it has established six subsidiaries. Institutes believe that with the production of new subsidiaries, its profitability is expected to be further released.
The single high speed blower, vapor compressor and other profits with high gross profit of Jiangsu Jin Tong Ling Fluid Machinery Technology Co., Ltd. (300091.SZ) enjoys huge market demand and they have become new highlights in the results of the company. Meanwhile, with the operation of the air compression station of Zhejiang GuXianDao industrial fiber Co., Ltd. in the second half of last year, the magnetic suspension blower of the company has developed four basic types and is under trial production. In addition, the unmanned aerial vehicles (UAVs) with turbojet engines have conducted series of experiments and progressed smoothly. As the UAVs of the company are positioned at the targets for military exercises, it will apply for relevant military qualification and is likely to be certified within the year.
[Industry Observation]
GMIC focuses big health data
-----
The Global Mobile Internet Conference (GMIC) 2015 will be held from April 28 to 29 in Beijing. The CEO of Misfit, a U.S. wearable devices tycoon, indicated that it will introduce three products in the Chinese market. Chinese wearable devices manufacturers are smart in developing the big health data industry with the wearable devices as accesses.
It is reported that Andon Health Co., Ltd. (002432.SZ) is speeding up in transforming from a hardware supplier to a data supplier. Its health data has been downloaded for 10 million times. It will also introduce wearable devices to monitor respiration and the electrocardio. Shenzhen Fenda Technology Co., Ltd. (002681.SZ) is also an outstanding wearable devices manufacturer. It provides solutions to integrated hardware, software and cloud computing and obtains the health data of customers during the process. The back data platform of the company is developing rapidly and will build a complete mobile big health medical treatment network in the future.
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