Company profile
EQUITIES HONG KONG STRATEGY
INSTITUTIONAL RESEARCH: TRADING PLACES
DATE FRIDAY MAY 15, 2015
QUAM PULSE China will Launch “Earth Ten” Policy Soon (Sina) – Following the “Water Ten” policy rolled out earlier this year for tackling water pollution in China, the Ministry of Environmental Protection has submitted an action plan, namely “Earth Ten” policy, which aims at soil protection and pollution control. The Earth Ten policy will include identification of areas polluted by heavy metal and the respective investment amounts required to rectify the polluted area. The action plan also consists of a series of supportive policies to alleviate and regulate soil pollution, as well as encourage publicprivate-partnership in these investments. The market expects that the total investments resulting from this Earth Ten policy will be more than RMB5.7trillion. Our Take: Earth or soil protection in China had drawn little attention because of its low investment return compared to investment in water protection, i.e. waste water treatment processing due to the widespread impact of soil pollution which affects a large area geographically. However, the negative effect of soil pollution has been escalating, nearly one-fifth of arable land was contaminated by 2013 due to the overuse of chemical fertilizers or dumping of untreated heavy metals. We expect the government to tighten the solid waste collection policy with stringent controls on illegal dumping of waste. Hence, we expect the demand for solid waste treatment will increase. At such, China Everbright International (257 HK) and Capital Environment (3989 HK) will benefit.
CHINA TAKEAWAYS Huijin Investment Sold Shanghai ETFs Worth RMB20bn – Central Huijin Investment Ltd., the state-owned investment enterprise, had kept selling its stakes in blue chip ETFs of Shanghai Composite since the second half of last year, and the selling pace had accelerated in April. Central Huijin sold ETFs worth ~RMB20bn on Apr 17 and Apr 22. The market share of Huaan Shanghai Composite 180 ETF (510180 CH) has sharply contracted since April, exceeding the contraction of other ETFs. Four Out of Five Privately-owned Banks Received Approval – The China Banking Regulatory Commission released its FY2014 annual report yesterday, stating that the country has started a privately-owned bank pilot program. Four out of five privatelyowned banks have received operation approval, the exception being MYbank which is owned by Alibaba. MYbank had submitted the opening inspection report in March, and is now waiting for regulatory approval. Lenovo TV to Set Up New Company with Alibaba – Lenovo smart TV business is going to spin-off from the Lenovo entity, and will adopt a venture capital model to build a new brand and operate as a separate company, Chinese media Jiemian quoted from an internal source of Lenovo. The new company will be registered by Lenovo and Alibaba, and will source other venture capital investments. The company will launch a new TV brand called “17”. Alibaba will provide the TV brand with Yun OS system and the channel resources of Tmall. China Telecom To Invest RMB80bn On Broadband – The parent company of China Telecom (728 HK) will invest no less than RMB80bn this year to expand development of broadband access and will co-cooperate with Weichai Group, ZTE, Huawei, and IBM to development an ecosystem of “Internet Plus”. China’s April Power Consumption Up 1.3% – According to the National Energy Administration, China's electricity consumption rose 1.3% YoY to 441.5bn kilowatt hours
HSI TOP MOVERS Leaders Ticker TENCENT CATHAY PAC A LENOVO GROUP SINO LAND BOC HONG KON
Laggers % 2.87 2.16 2.08 1.63 1.35
Ticker TINGYI CNOOC SANDS CHINA CHINA RES LA CHINA MER HO
INDEX
% -2.52 -2.35 -2.29 -1.77 -1.53
1D Chg
1D % Chg
27286.55 13775.95 4700.78 9610.83 2120.33 3455.78 1807.55 27206.06 8224.20
37.27 -83.60 -17.66 -113.28 6.17 2.61 4.53 -45.04 -11.25
0.14 -0.60 -0.37 -1.16 0.29 0.08 0.25 -0.17 -0.14
1497.40 5246.13 7831.44 5696.57
1.45 40.52 23.09 -18.58
0.10 0.78 0.30 -0.33
Asia HSI HSCEI SHSZ300 TWSE KOSPI FSSTI KLCI SENSEX NIFTY SET JCI PCOMP AS51
COMMODITIES
Close
1D % Chg YTD % Chg
Energy WTI Brent Natural Gas Gasoline
60.66 67.26 2.93 205.82
0.26 0.67 -0.03 0.87
9.00 9.88 -0.64 18.04
292.20 1218.61 17.36 1153.49
-0.24 0.24 1.37 0.44
3.42 2.89 10.49 -4.51
Corn Wheat Soybeans Coffee Sugar Cotton
362.75 483.75 957.25 134.75 13.06 65.84
0.14 0.47 0.00 -0.48 0.77 0.11
-12.06 -19.04 -7.69 -21.61 -14.36 6.19
Baltic Dry
634.00
7.64
-18.93
Metals Copper Gold (Spot) Silver (Spot) Platinum (Spot)
Agriculture
HSI Daily
Institutional Research Team [email protected] Jennifer So, Head of Research
+852 2971-5433
Christopher Ho, Analyst
+852 2971-5436
Wilfred Yuen, Analyst
+852 2971-5434
1
(kwh) in April. Total power consumption in the first 4 months was 1.73tr kwh, up 0.9% YoY. China Approves Merger Plans Of Six Rare Earth Companies – According to the Ministry of Land and Resources, merger plans of China Aluminum Corporation, Xiamen Tungsten Co., Inner Mongolia BaoTou Steel Union Co., China Minmetals Corporation, Ganzhou Rare Earth Group, and Guangdong Rare Earth Industrial Group Co. have been approved. China’s mining control limit for rare earth exploitation is 105,000ton while that of tungsten is 91,300ton this year.
QUAM INSTITUTIONAL SALES
STANLEY NG
Sales Director
+852 2217 2857
GUY STILLE
Executive Director
+852 2217 2853
[email protected] [email protected]
If you w ant to trade w ith us, please feel free to contact our institutional sales team above 18/F China Building, 29 Queen's Road Central, Hong Kong
Disclaimer and Risk Statement This document is published by Quam Securities Company Limited (“Quam Securities”), a licensed corporation (central entity num ber AAC557) regulated by the Securities and Futures Commission in Hong Kong. This document is for distribution in Hong Kong only to persons who are “Professional Investors” as defined in Part 1 of Schedule 1 of Securities and Futures Ordinance (Cap 571) of Hong Kong and any rules made thereunder. This document is not intended for distribution to or use by, any person or entity who is a citizen or resident of any jurisdiction where such distribution or use would be contrary to applicable law or regulation within such jurisdiction. This document does not constitute an offer or a solicitation of an offer to buy or sell any securities. This document is circulated to addresses solely and may not be reproduced or redistributed to any other person or published, in whole or in part, for any purpose. The research is based on information obtained from sources believed to be reliable, but Quam Securities does not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without prior notice. Any recommendation does not have regard to specific investment objectives, financial situation and particular needs of any specific addressee. Quam Securities accepts no liability whatsoever for any direct or consequenti al loss arising from any use of this document. Quam Securities and its affiliates as well as persons associated with any of them from time to time may or may not have interests in the securities mentioned in this document. The prices of securities may move up or down, and past performance is not an indication of future performance. Investors shall consider seeking separate legal or financial advice before making investment decisions
2
INSTITUTIONAL RESEARCH: TRADING PLACES
DATE FRIDAY MAY 15, 2015
QUAM PULSE China will Launch “Earth Ten” Policy Soon (Sina) – Following the “Water Ten” policy rolled out earlier this year for tackling water pollution in China, the Ministry of Environmental Protection has submitted an action plan, namely “Earth Ten” policy, which aims at soil protection and pollution control. The Earth Ten policy will include identification of areas polluted by heavy metal and the respective investment amounts required to rectify the polluted area. The action plan also consists of a series of supportive policies to alleviate and regulate soil pollution, as well as encourage publicprivate-partnership in these investments. The market expects that the total investments resulting from this Earth Ten policy will be more than RMB5.7trillion. Our Take: Earth or soil protection in China had drawn little attention because of its low investment return compared to investment in water protection, i.e. waste water treatment processing due to the widespread impact of soil pollution which affects a large area geographically. However, the negative effect of soil pollution has been escalating, nearly one-fifth of arable land was contaminated by 2013 due to the overuse of chemical fertilizers or dumping of untreated heavy metals. We expect the government to tighten the solid waste collection policy with stringent controls on illegal dumping of waste. Hence, we expect the demand for solid waste treatment will increase. At such, China Everbright International (257 HK) and Capital Environment (3989 HK) will benefit.
CHINA TAKEAWAYS Huijin Investment Sold Shanghai ETFs Worth RMB20bn – Central Huijin Investment Ltd., the state-owned investment enterprise, had kept selling its stakes in blue chip ETFs of Shanghai Composite since the second half of last year, and the selling pace had accelerated in April. Central Huijin sold ETFs worth ~RMB20bn on Apr 17 and Apr 22. The market share of Huaan Shanghai Composite 180 ETF (510180 CH) has sharply contracted since April, exceeding the contraction of other ETFs. Four Out of Five Privately-owned Banks Received Approval – The China Banking Regulatory Commission released its FY2014 annual report yesterday, stating that the country has started a privately-owned bank pilot program. Four out of five privatelyowned banks have received operation approval, the exception being MYbank which is owned by Alibaba. MYbank had submitted the opening inspection report in March, and is now waiting for regulatory approval. Lenovo TV to Set Up New Company with Alibaba – Lenovo smart TV business is going to spin-off from the Lenovo entity, and will adopt a venture capital model to build a new brand and operate as a separate company, Chinese media Jiemian quoted from an internal source of Lenovo. The new company will be registered by Lenovo and Alibaba, and will source other venture capital investments. The company will launch a new TV brand called “17”. Alibaba will provide the TV brand with Yun OS system and the channel resources of Tmall. China Telecom To Invest RMB80bn On Broadband – The parent company of China Telecom (728 HK) will invest no less than RMB80bn this year to expand development of broadband access and will co-cooperate with Weichai Group, ZTE, Huawei, and IBM to development an ecosystem of “Internet Plus”. China’s April Power Consumption Up 1.3% – According to the National Energy Administration, China's electricity consumption rose 1.3% YoY to 441.5bn kilowatt hours
HSI TOP MOVERS Leaders Ticker TENCENT CATHAY PAC A LENOVO GROUP SINO LAND BOC HONG KON
Laggers % 2.87 2.16 2.08 1.63 1.35
Ticker TINGYI CNOOC SANDS CHINA CHINA RES LA CHINA MER HO
INDEX
% -2.52 -2.35 -2.29 -1.77 -1.53
1D Chg
1D % Chg
27286.55 13775.95 4700.78 9610.83 2120.33 3455.78 1807.55 27206.06 8224.20
37.27 -83.60 -17.66 -113.28 6.17 2.61 4.53 -45.04 -11.25
0.14 -0.60 -0.37 -1.16 0.29 0.08 0.25 -0.17 -0.14
1497.40 5246.13 7831.44 5696.57
1.45 40.52 23.09 -18.58
0.10 0.78 0.30 -0.33
Asia HSI HSCEI SHSZ300 TWSE KOSPI FSSTI KLCI SENSEX NIFTY SET JCI PCOMP AS51
COMMODITIES
Close
1D % Chg YTD % Chg
Energy WTI Brent Natural Gas Gasoline
60.66 67.26 2.93 205.82
0.26 0.67 -0.03 0.87
9.00 9.88 -0.64 18.04
292.20 1218.61 17.36 1153.49
-0.24 0.24 1.37 0.44
3.42 2.89 10.49 -4.51
Corn Wheat Soybeans Coffee Sugar Cotton
362.75 483.75 957.25 134.75 13.06 65.84
0.14 0.47 0.00 -0.48 0.77 0.11
-12.06 -19.04 -7.69 -21.61 -14.36 6.19
Baltic Dry
634.00
7.64
-18.93
Metals Copper Gold (Spot) Silver (Spot) Platinum (Spot)
Agriculture
HSI Daily
Institutional Research Team [email protected] Jennifer So, Head of Research
+852 2971-5433
Christopher Ho, Analyst
+852 2971-5436
Wilfred Yuen, Analyst
+852 2971-5434
1
(kwh) in April. Total power consumption in the first 4 months was 1.73tr kwh, up 0.9% YoY. China Approves Merger Plans Of Six Rare Earth Companies – According to the Ministry of Land and Resources, merger plans of China Aluminum Corporation, Xiamen Tungsten Co., Inner Mongolia BaoTou Steel Union Co., China Minmetals Corporation, Ganzhou Rare Earth Group, and Guangdong Rare Earth Industrial Group Co. have been approved. China’s mining control limit for rare earth exploitation is 105,000ton while that of tungsten is 91,300ton this year.
QUAM INSTITUTIONAL SALES
STANLEY NG
Sales Director
+852 2217 2857
GUY STILLE
Executive Director
+852 2217 2853
[email protected] [email protected]
If you w ant to trade w ith us, please feel free to contact our institutional sales team above 18/F China Building, 29 Queen's Road Central, Hong Kong
Disclaimer and Risk Statement This document is published by Quam Securities Company Limited (“Quam Securities”), a licensed corporation (central entity num ber AAC557) regulated by the Securities and Futures Commission in Hong Kong. This document is for distribution in Hong Kong only to persons who are “Professional Investors” as defined in Part 1 of Schedule 1 of Securities and Futures Ordinance (Cap 571) of Hong Kong and any rules made thereunder. This document is not intended for distribution to or use by, any person or entity who is a citizen or resident of any jurisdiction where such distribution or use would be contrary to applicable law or regulation within such jurisdiction. This document does not constitute an offer or a solicitation of an offer to buy or sell any securities. This document is circulated to addresses solely and may not be reproduced or redistributed to any other person or published, in whole or in part, for any purpose. The research is based on information obtained from sources believed to be reliable, but Quam Securities does not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without prior notice. Any recommendation does not have regard to specific investment objectives, financial situation and particular needs of any specific addressee. Quam Securities accepts no liability whatsoever for any direct or consequenti al loss arising from any use of this document. Quam Securities and its affiliates as well as persons associated with any of them from time to time may or may not have interests in the securities mentioned in this document. The prices of securities may move up or down, and past performance is not an indication of future performance. Investors shall consider seeking separate legal or financial advice before making investment decisions
2
