Research Reports and Commentaries

Daily Commentary

22 May 2019

Market Outlook

HSI is expected to consolidate at around 27,700 today.

Sino-US tension continues: The United States postponed the ban on Huawei by 90 days. Tension in trade war has eased slightly, and US stocks have risen. However, considering that President Xi Jinping went to Jiangxi for investigation on Monday, he investigated Jinli permanent magnets in Ganzhou, learned about the development of the rare earth industry. The market is worried about China restricting the export of rare earths, investors should not be overly optimistic about the trade negotiation.

The United States targets Chinese high-tech companies: In addition to Huawei, the United States also exerts pressure on other Chinese companies. The drone company DJI faces sanctions risks. CNN reported that nearly 80% of UAVs in Canada and the United States are from DJI, and the United States is worried about drones stealing national data.

Today’s Focus Stock

HK Stocks

Tencent (00700.HK)

(Rating: Buy; Target Price: HKD440; Current Price: HKD341.20)

Reported mixed 1Q results.

Expected capitalization of “Peacekeeper Elite” as catalyst.

Sticky WeChat users and huge social platform client base.

Xiaomi Group (01810.HK)

(Rating: Buy; Target Price: HKD12; Current Price: HKD9.87)

1Q better than expectations, revenue turned from losses to profit.

Overseas expansion such as India to enhance market position.

Self-owned operating system, not affected by the US ban.


Hualu-Hengsheng (600426.SH)

(Rating: Buy; Target Price: RMB18.50; Current Price: RMB15.30)

Decent sales growth.

Increasing revenue for fertilizer and polyalcohol’s sector.

Continuously improving industry chain.

Sector and Company News

Sino Biopharm (01177) announced its results for 1Q2019. Its revenue grew 33.4% YoY to RMB6.208 bn; its net profit grew 11.1% YoY to RMB857 mn.

Truly INT'L (00732) released the results announcement for the three months ended 31 March 2019. Its revenue grew 12.5% YoY to HKD4.58 bn while its net profit grew 715.6% YoY to HKD102 mn.

Towngas China (01083)'s 1Q2019 total gas sales volume burgeoned 17% YoY to 3.05 bn cubic metres. Meanwhile, total number of customers reached 12.81 mn, with 210,000 new customers and an ideal growth.

Man Wah Hldgs (01999) announced annual results ended March 2019. Its revenue increased 12.3% YoY to HKD11.258 bn; its net profit amounted to HKD1.364 bn, down 11.2% YoY. Final DPS was HK6 cents. Full-year DPS totaled HK12 cents.

Canvest Env (01381) gained the PPP project of waste-to-energy plant in Ruili, Yunnan. Based on the contact, the daily garbage disposal ability of the plant will be 1,000 tons. The right of franchise will last for 30 years.

Read More

Research Report

Stock Report
28/02/2019 Focus List
Sector Report