1、Disclosures&Disclaimer:This report must be read with the disclosures and the analyst certifications inthe Disclosure appendix,and with the Disclaimer,which forms part of it.HSBC China ConferenceMay 2019Equities/Hong Kong/ChinaMay 2019By:The Hong Kong/China Research TeamHong Kong/ChinaEquitiesHSBC Ch
2、ina ConferenceRevitalising the domestic capital marketthrough reforms HSBCs China Conference on 15-17 May is our flagship event for clients investing in the China marketsThe three-day event will feature about 50 external speakers,including leading Chinese executives,entrepreneurs,distinguished acade
3、mics and policy specialistsAround 165 companies including 50 A-share companies are attending:this report profiles most participating companies 1 Equities Hong Kong/China May 2019 Introduction 3 Foreword 4 Stocks under coverage 5 Agile Group(3383 HK)6 Aluminum Corp of China(2600 HK)8 Bank of Communic
4、ations(3328 HK)10 Beijing Enterprises Water(371 HK)12 CGN Power(1816 HK)14 China Coal Energy Co(1898 HK)16 China Communications Construction (1800 HK)18 China Communication Services(552 HK)20 China Construction Bank(939 HK)22 China Eastern Airlines(670 HK)24 China Everbright Bank(6818 HK)26 China Ev
5、erbright Intl(257 HK)28 China Everbright Water(CEWL SP)30 China Hongqiao(1378 HK)32 China Jinmao Group(817 HK)34 China Life Insurance Co(2628 HK)36 China Medical System(867 HK)38 China Merchants Bank(3968 HK)40 China Mobile(941 HK)42 China Overseas Land&Inv(688 HK)44 China Pacific Insurance(2601 HK)
6、46 China Resources Cement(1313 HK)48 China Resources Land(1109 HK)50 China SCE Group(1966 HK)52 China Shenhua Energy Co(1088 HK)54 China State Construction(3311 HK)56 China Telecom Corporation(728 HK)58 China Unicom(762 HK)60 China Yongda Auto(3669 HK)62 CIFI Holdings(884 HK)64 CK Hutchison Holdings
7、(1 HK)66 CNOOC(883 HK)68 COSCO Shipping Holdings(1919 HK)70 Crystal International(2232 HK)72 ENN Energy(2688 HK)74 Galaxy Entertainment(27 HK)76 GCL-Poly Energy Holdings(3800 HK)78 Guangzhou R&F(2777 HK)80 Guotai Junan Intl(1788 HK)82 HKEX(388 HK)84 Huaneng Power Intl(902 HK)86 Jinmao Hotel(6139 HK)
8、88 Joy City Property(207 HK)90 Kunlun Energy(135 HK)92 KWG Group(1813 HK)94 Livzon Pharmaceutical(1513 HK)96 Logan Property Holdings(3380 HK)98 Longfor Group(960 HK)100 Melco Resorts&Entertainment (MLCO US)102 Minth Group Limited(425 HK)104 New China Life(1336 HK)106 Nexteer Automotive Group(1316 HK
9、)108 PA Good Doctor(1833 HK)110 PetroChina(857 HK)112 PICC Group(1339 HK)114 PICC Property&Casualty(2328 HK)116 Sany International(631 HK)118 SMIC(981 HK)120 Shimao Property(813 HK)122 Sino-Ocean Group(3377 HK)124 Sinopec(386 HK)126 Sinopec Engineering(2386 HK)128 Sinotrans(598 HK)130 SITC Internati
10、onal(1308 HK)132 SNP Shanghai Petrochem(338 HK)134 SOHO China Limited(410 HK)136 Stella(1836 HK)138 Sun Art Retail Group(6808 HK)140 Sunny Optical(2382 HK)142 Weichai Power(2338 HK)144 Zhongsheng Group Holdings(881 HK)146 Contents Equities Hong Kong/China May 2019 2 Stocks not under coverage 149 111
11、,Inc.150 Ausnutria Dairy(1717 HK)151 Changyou(CYOU US)152 China Everbright Greentech(1257 HK)153 China Everbright Limited 154 China Gas Holdings(384 HK)155 China Huarong AMC(2799 HK)156 China New Higher Education(2001 HK)157 China Renaissance 158 China Resources Medical(1515 HK)159 China Suntien Gre
12、en Energy(956 HK)160 China Tian Lun Gas(1600 HK)161 China Water Affairs(855 HK)162 Comba Telecom(2342 HK)163 Essex Biotechnology 164 Far East Global(830 HK)165 Fosun International(656 HK)166 GCL New Energy(451 HK)167 Genetron Health 168 Gogovan 169 Guangzhou Baiyunshan Pharma (874 HK)170 iClick(ICLK
13、 US)171 Kingboard Holdings(148 HK)172 Kingboard Laminates(1888 HK)173 Meitu(1357 HK)174 Nine Dragon Paper 175 O-Net Technologies(877 HK)176 Qutoutiao(QTT US)177 Sogou(SOGO US)178 Union Medical(2138 HK)179 Wuxi Biologics(2269 HK)180 Xiabuxiabu(520 HK)181 Disclosure appendix 184 Disclaimer 188 Aier Ey
14、e Hospital Group Co.Ltd.,Baoshan Iron&Steel Co.Ltd.,Beijing Kunlun Tech Co.Ltd.,Beijing SL Pharmaceutical Co.Ltd.,BlueFocus Communication Group Co.Ltd.,By-Health Co.Ltd.,China Merchants Shekou Industrial Zone Holdings Co.Ltd.,China South Publishing&Media Group Co.Ltd.,China State Construction Intern
15、ational Holdings Ltd.,China Yangtze Power Co.Ltd.,Chongqing Brewery Co.Ltd.,DHC Software Co.Ltd.,Estun Automation Co.Ltd.,Focus Media Information Technology Co.Ltd.,Glodon Co.Ltd.,Gree Electric Appliances,Inc.,Guangxi Liugong Machinery Co.Ltd.,Guangzhou Holike Creative Home Co.Ltd.,Hangzhou Hikvisio
16、n Digital Technology Co.Ltd.,Hengli Petrochemical Co.Ltd.,Hengyi Petrochemical Co.Ltd.,Huadong Medicine Co.Ltd.,Hundsun Technologies Inc.,Hybio Pharmaceutical Co.Ltd.,Hytera Communications Corporation Ltd.,Jiangsu Eastern Shenhong Co.Ltd.,Jiangsu Hengrui Medicine Co.Ltd.,Jonjee Hi-tech Industrial&Co
17、mmercial Holding Co.Ltd.,Joyoung Co.Ltd.,Lepu Medical Technology(Beijing)Co.Ltd.,Metallurgical Corporation of China Ltd.,Midea Group Co.Ltd.,Opple Lighting Co.Ltd.,Perfect World Co.Ltd.,Ping An Bank Co.Ltd.,Power Construction Corp of China Ltd.,Rongsheng Petrochemical Co.Ltd.,SF Holding Co.Ltd.,Shan
18、ghai Pudong Development Bank Co.Ltd.,Shanghai Yuyan Tourist Mart Co.Ltd.,Shanxi Xinghuacun Fen Wine Factory Co.Ltd.,Shenzhen Airport Co.Ltd.,Shenzhen Kangtai Biological Products Co.Ltd.,Shenzhen Salubris Pharmaceuticals Co.Ltd.,Shenzhen Sunway Communication Co.Ltd.,Spring Airlines Co.Ltd.,Wingtech T
19、echnology Co.Ltd.,Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co.Ltd.,Xiamen Meiya Pico Information Co.Ltd.,Zhejiang Huace Film&TV Co.Ltd.The Hongkong and Shanghai Banking Corporation Limited does not have a license to publish research on A-share securities in the Peoples Republ
20、ic of China(excluding Hong Kong and Macau).THIS CONTENT MAY ONLY BE DISTRIBUTED TO QUALIFIED DOMESTIC INSTITUTIONAL INVESTORS(QDII)IN THE PEOPLES REPUBLIC OF CHINA(EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG AND MACAU)3 Equities Hong Kong/China May 2019 Introduction We are very pleased to
21、welcome you to HSBCs 6th Annual China Conference in Shenzhen.Reflecting our commitment to provide the best corporate access in China and our continued investment in China research,this conference continues to grow in size;this years is the largest we have yet delivered with nearly 170 corporates att
22、ending with good representation across all sectors.This report provides an introduction to many of these companies but if you have any further questions or requests on any of the attending corporates,please do contact the respective coverage analyst.Together with the 17 investor tours we are hosting
23、 as part of the conference and the comprehensive range of keynote speakers,we hope that your time with us provides you with a better understanding of recent trends,developments,and important issues for individual companies and sectors,as well as for the broader macro economy.We always appreciate fee
24、dback,however,so do feel free to contact us with any ideas or comments you may have.In addition,should you or your colleagues have any specific company or corporate access requests,please raise them directly with us,the respective coverage analyst or with your sales representative;we would be very h
25、appy to help.We hope you enjoy your stay with us and we look forward to seeing you again next year.Yours sincerely,William Bratton Head of Equity Research,Asia Pacific Steven Sun Head of Research,HSBC Qianhai Securities Limited Equities Hong Kong/China May 2019 4 Foreword Investing in China revitali
26、sing the A-share market Welcome to the Silicon Delta!HSBCs sixth annual China Conference in Shenzhen,one of Asias most dynamic and innovative cities,will draw on the expertise of leading thinkers and business minds to help investors navigate the latest trends that are moving Chinas economy and equit
27、y markets,and help to identify actionable investment strategies.HSBC Qianhai Securities Limited,Chinas first foreign majority-owned securities joint venture,opened for business in December 2017.Over the past six quarters,we have built an A-share research team with coverage of 125 stocks,ten sectors
28、and equity strategy.With MSCIs further inclusion of A-shares this year,we aim to help you uncover opportunities in consumer,healthcare,IT hardware,IT software,media&internet,environmental protection,infrastructure,machinery and high-end manufacturing,petrochemical and transportation companies.In our
29、 2Q 2019 outlook report(A-share Investment Atlas:The bull is slowing,but theres still some upside left,4 April 2019),we cautioned that a near-term correction was likely but we expected more upside for the rest of the year due to:i)unprecedented policy stimulus to boost the private sector,ii)increasi
30、ng participation by foreign investors following MSCIs decision to quadruple the A-share weighting in its global benchmarks,iii)the renewed enthusiasm of domestic retail investors;and iv)further equity allocation by domestic institutional investors.That being said,the renewed Sino-US trade tensions c
31、ertainly create more uncertainty;however,equity market matters for both countries,and we do think its in the interest of both countries to avoid the worst case scenario that we have gone through in 2018.Notably,the progress of the Science and Technology Innovation Board(STIB)of Shanghai Stock Exchan
32、ge(SSE)has been an upside surprise.Since March 2019,106 companies have submitted their STIB IPO application,of which 85 have completed the first round of hearings with the SSE.In 2018,these companies generated,on average,net profits of RMB123m,grew revenues by 42%y-o-y,spent 11%of revenue on R&D and
33、 had 33%of employees in R&D.The first batch of seven STIB mutual fund products launched in late April 2019 aims to raise RMB7bn but has met with over RMB100bn subscriptions,indicating the demand of retail investors for innovative companies.The SSE expects to complete all technical and regulatory pre
34、parations for secondary market trading of the STIB by the end of May.While the STIB is a potential catalyst for the broader A-share market,secondary market trading(likely starting in July 2019 or August 2019)could introduce short-term volatility to the broader market,especially if the IPO valuations
35、 are set high.This year we are honoured by the participation of around 165 listed Chinese corporates,including over 50 pure A-share companies.Our conference features senior policymakers and advisors,the top management teams of Chinas leading companies,plus industry experts from a variety of sectors.
36、Our objectives are two-fold:first,to explore the key elements that drive Chinas growth and,second,to see whats happening in the economy at the ground level.Investors come to the HSBC China Conference for a variety of reasons.Whatever your reason for joining us,we look forward to helping you find ans
37、wers and gain new insights.Yours sincerely,Steven Sun Head of Research,HSBC Qianhai Securities Limited 5 Equities Hong Kong/China May 2019 Stocks under coverage Equities Hong Kong/China May 2019 6 Agile Group(3383 HK)Business description Agile is a Guangdong-based property developer and a key Greate
38、r Bay Area(GBA)player.It has around 27%(c9.8m sqm)of its land bank located in the GBA as of end-2018.Agile is also expanding its operation into diversified businesses,including property management,environment protection and real estate construction management.Key points Agile has a high exposure to
39、the GBA with nearly 30%of its land bank located in this area,which we believe enjoys long-term policy support by the government.The company estimated that the land bank in the GBA is sufficient for 3-5 years of development.The company highlighted that restrictive policy measures in Hainan continued
40、to impact the mode of operation the 2019 sales contribution from Hainan is expected to be similar to RMB10bn in 2018,representing c10%of the sales target.This is meaningfully below RMB17bn of sales generated in 2017.Agile has continued to invest in other non-property businesses.Specifically,the envi
41、ronmental protection business recorded strong revenue growth of 200%y-o-y to RM614m,although its contribution to total revenue remains insignificant.The outlook for these businesses is difficult to gauge at the current stage,in our view.Valuation and risks We have a Hold rating for Agile with a targ
42、et price of HKD10.40,based on a target NAV discount of 70%(1.0 SD below the mean)applied to our NAV estimate of HKD34.80/share.Our TP implies 12.8%downside from the current share price and we have a Hold rating,given the decent 2019e dividend yield of 10%.Key upside risks:constructive policies in re
43、lation to the development of the GBA,in particular Zhongshan where Agile has a relatively higher exposure;and faster-than-expected returns on non-property development businesses.Key downside risks:lower-than-expected sales;and uncertainties related to macroeconomic and property-specific policies,esp
44、ecially in Hainan where Agile has a significant exposure.HOLD TARGET PRICE(HKD)10.40 MARKET DATA HARE PRICE(HKD)DOWNSIDE Market cap(HKDm)46,691 Free float 34%11.92-12.8%Market cap(USDm)5,951 BBG 3383 HK 3m ADTV(USDm)14 RIC 3383.HK (as of 3 May 2019)FINANCIALS AND RATIOS(RMB)52-WEEK PRICE Year to 12/
45、2018a 12/2019e 12/2020e 12/2021e HSBC EPS 1.72 2.07 2.38 2.67 HSBC EPS(prev)-Change(%)-Consensus EPS 1.91 2.08 2.39 2.67 PE(x)5.9 5.0 4.3 3.8 Dividend yield(%)8.8 10.1 11.6 13.0 Source:Refinitiv Datastream,Bloomberg,HSBC estimates Source:HSBC estimates,Refinitiv IBES Michelle Kwok*Head of Real Estat
46、e Research,Asia Pacific The Hongkong and Shanghai Banking Corporation Limited .hk+852 2996 6918 Albert Tam*Analyst The Hongkong and Shanghai Banking Corporation Limited .hk+852 2822 4395 Simon Sin*Associate The Hongkong and Shanghai Banking Corporation Limited .hk+852 2996 6514 *Employed by a non-US
47、 affiliate of HSBC Securities(USA)Inc,and is not registered/qualified pursuant to FINRA regulations 7.3012.6518.0005/1811/1805/19Target price:10.40High:16.60 Low:8.41 Current:11.92 7 Equities Hong Kong/China May 2019 Financial statements Year to 12/2018a 12/2019e 12/2020e 12/2021e Profit&loss summar
48、y(RMBm)Property sales revenue 52,488 65,147 81,073 92,154 Property investment&other revenue 3,657 6,220 8,457 10,707 Total revenue 56,145 71,367 89,530 102,862 Cost of sales(31,471)(45,498)(59,409)(68,134)Gross profit 24,674 25,869 30,121 34,727 Selling&Admin expenses(5,228)(5,521)(6,687)(7,055)Othe
49、r gains&misc 2,672 788 780 554 Operating profit/EBIT 22,118 21,135 24,214 28,227 Net interest (2,744)(1,951)(2,351)(2,558)Share of profit from asso.27 120 126 132 PBT 19,401 19,304 21,989 25,801 Taxation(11,043)(9,958)(11,227)(11,658)Minority interests(556)(622)(822)(3,062)Net profit 7,802 8,725 9,9
50、40 11,081 Net profit(after perpetual)7,125 8,092 9,307 10,449 Core profit(after perpetual)6,689 8,092 9,307 10,449 Cash flow summary(RMBm)Cash flow from operations(7,698)(7,391)(7,460)(8,074)Capex(588)(617)(465)(268)Other investing activities(4,099)(3,002)(2,943)(345)Net cash in financing activities
