18 Mar 2019

Market Outlook

The HSI is expected to consolidate at around 29,000 points.

Eye on the Sino-US trade war: South China Morning Post quoted sources as saying that US President Trump held talks with Chinese President Xi Jinping to end the trade war, and that may be postponed until June this year because they could not reach an agreement before May.

Focus on results announcement: The market focuses on the results of the big blue chip, and it is expected that the market has a high chance of short-term consolidation.

Eye on the Fed rate meeting: Fed will hold a meeting on Tuesday and Wednesday local time. Investors are concerned about Chairman Powell's statement of economic prospects, interest rate forecasts and any issues related the end of balance sheet trimming.

Daily Pick

HK Stocks

SHK PPT (00016.HK)

(Rating: Buy; Target Price: HKD154; Current Price: HKD129.3)

The Company’s sales volume recorded a decent growth.

Its revenue from rent remained strong.

It has a sufficient land reserve.

A-share

Contemporary (300750.SZ)

(Rating: Buy; Target Price: RMB102; Current Price: RMB89.83)

Net profit after deducting non-recurring gains and losses might increase 30.95% YoY in 2018.

Lithium battery industry leader, market share continues to improve.

Layout of overseas business to enhance overseas competitiveness.

Sector and Company News

The following stocks will announce earning results: CSPC Pharma(01093)(18th Mar), Wuxi Bio (02269)(18th Mar), China Telecom(00728)(19th Mar), Xiaomi-W(01810)(19th Mar), Sunny Optical(02382)(19th Mar), Sun Hung Kai(00086)(20th Mar), Power Assets(00006)(20th Mar), China Oversea(00688)(20th Mar), CKI Holdings(01038)(20th Mar).

WH Group (00288) announced annual results ended December 2018. The turnover rose 1% YoY to USD22.605 bn. Net profit before biological fair value adjustments amounted to USD1.046 bn, down 4% YoY. Final DPS was HK15 cents.

Fuyao Glass (03606) announced annual results ended December 2018. The revenue rose 8.1% yoy to RMB20.225 bn. Net profit grew 30.9% yoy to RMB4.12 bn.

China Coal (01898) announced annual results ended December 2018. Revenue amounted to RMB104.14 bn, up 27.8% YoY. Net profit amounted to RMB4.488 bn, up 33.3% YoY. Final DPS was RMB0.078.

Prada (01913) announced annual results ended December 2018. Net profit amounted to EUR205 mn, down 17.5% YoY. Final DPS was EUR0.06.

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15 Mar 2019

Market Outlook

US China trade talks uncertainties remain, HSI likely to range bound trade

The S&P 500 and Nasdaq snapped three-day winning streak and closed lower on Thursday while the market is digesting the release of weak U.S. home sales data.

Brexit: The UK Parliament has voted to postpone the Brexit deadline meaning Prime Minister Theresa May may get Parliament to back her Brexit deal at a third attempt.

HK ADR: Held back by US market, HSI ADR fell 64.02pts or 0.22% to 28,767 level.

Daily Pick

HK Stocks

Lenovo Group (00992.HK)

(Rating: Buy; Target Price: HKD8; Current Price: HKD6.73)

Risk greatly lowered by successful transformation in the smartphone segment.

2018 Q3 outperformed market forecast by 15%-20%.

Strong PC segment, with market share of 24.6%.

A-share

Midea Group (000333.SZ)

(Rating: Buy; Target Price: RMB63; Current Price: RMB46.41)

The product structure has improved continually.

Its international business developed well.

Its net profit in FY2018 recorded a decent growth.

Sector and Company News

The following stocks will announce earning results: Sands China(01928)(15th Mar), WH Group(00288)(15th Mar), CSPC Pharma(01093)(18th Mar), Wuxi Bio (02269)(18th Mar), China Telecom(00728)(19th Mar), Xiaomi-W(01810)(19th Mar), Sunny Optical(02382)(19th Mar).

AIA (01299) announced in FY2018 results that operating profit after tax grew 13% YoY to USD5.298 bn; its net profit dropped 60% YoY to USD2.597 bn.

China Res Land (01109) announced that for February 2019, the Company achieved contracted sales of approximately RMB9.01 bn. The contracted sold area amounted to approximately 500,603 sq.m..

Skyworth Digital (00751) released a positive profit alert that the Company expects to record a profit after taxation for the nine months ended 31 December 2018 that represents an increase of at least 20% compared to that for the twelve months ended 31 March 2018. In case of comparison with the unaudited profit after taxation for the corresponding nine months period from 1 April 2017 to 31 December 2017, the Company expects to record an increase in profit after taxation of not less than 100%.

ZA Online (06060) announced that its aggregate gross written premiums for the first two months of 2019 were approximately RMB1.653 bn according to the PRC Accounting Standards for Business Enterprises, up 23.3% YoY.

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