Quam Pulse
INSTITUTIONAL RESEARCH: TRADING PLACES
DATE WEDNESDAY AUGUST 20, 2014
EQUITIES HONG KONG STRATEGY
QUAM PULSE Russia Agrees on Broadening Chinese IT Exports (Tencent Finance) – Russia agreed on broadening Chinese IT supplies to Russia, Minister of Telecommunications and Mass Communications Nikolai Nikiforov wrote on his Twitter account on Monday. The two countries have reached an agreement at working meetings between the Chinese Minister of Industry and Information Technology Miao Wei, chief of the Chinese media administration Cai Fuchao and Mr Nikiforoc in Beijing. Russia agreed to broaden delivery of Chinese servers, storage systems and other IT products to Russia. Meanwhile, the two countries have agreed on expansion of Russian software supplies to China. Our Take: After U.S. and E.U. imposed sanctions on Russia in July, the Russian government is expected to replace US IT product suppliers with other countries’ IT suppliers, especially those from China due to the close bond between the two countries. We believe the agreement will benefit Chinese leading IT hardware suppliers such as Lenovo(992 HK), which has acquired the x86-based server business from IBM. Lenovo, the largest global PC producers by shipment, posted revenue and net profit growth of 18% and 23% YoY for the 3 months ended 30 Jun, 2014. The counter is currently trading at 18.9x FY2014 P/E, according to Bloomberg consensus.
CHINA TAKEAWAYS NDRC Cutting Retail Oil Price – NDRC is cutting the retail oil price by RMB0.14/L for gasoline and RMB0.16/L for diesel. This has been the 6th retail oil price cut for the year. Retail prices of gasoline and diesel are now priced at RMB190/ton and RMB185/ton respectively. < http://www.chinadaily.com.cn/business/2014-08/19/content_18444309.htm> Casino Operators Fighting For Workers - Galaxy Entertainment Group is planning to increase its workforce by 50% or 8,000 workers by the end of the year for the second phase of its Galaxy Macau resort on the Cotai Strip. The Company now has 16,000 employees, and continues to face competition for workers from operators such as Melco Crown. Sands and Wynn are also planning to expand their territory in Macau.
HSI TOP MOVERS Leaders Ticker CHINA RES LA GALAXY ENTER LENOVO GROUP CHINA RES PO HONG KG CHIN
Laggers % 7.57 3.43 2.74 2.48 2.18
Ticker KUNLUN ENERG COSCO PAC LT HENGAN INTL CITIC PACIFI TINGYI
% -2.44 -1.19 -1.00 -0.96 -0.66
Close
1D Chg
1D % Chg
25122.95 11094.59 2374.77 9243.78 2071.14 3315.03 1872.16 26425.82 7896.20 1544.30 5165.17 7082.75 3618.95
167.49 29.38 0.21 102.47 18.01 2.25 10.41 34.86 21.95 1.94 8.42 55.17 18.27
0.67 0.27 0.01 1.12 0.88 0.07 0.56 0.13 0.28 0.13 0.16 0.79 0.51
Close
1D % Chg
YTD % Chg
96.72 101.82 3.82 267.29
0.32 0.22 0.66 0.64
2.07 -5.12 -7.91 -4.89
314.20 1300.69 19.68 1446.00
0.27 0.18 0.25 0.09
-6.42 8.24 1.05 5.47
Corn Wheat Soybeans Coffee Sugar Cotton
368.00 549.75 1050.50 192.25 15.65 64.07
-0.94 -0.81 -0.69 -0.44 -0.19 0.36
-18.27 -14.17 -7.44 60.07 -8.21 -18.31
Baltic Dry
1042.00
2.66
-54.24
Asia HSI HSCEI SHSZ300 TWSE KOSPI FSSTI KLCI SENSEX NIFTY SET JCI PCOMP ASX
COMMODITIES Energy WTI Brent Natural Gas Gasoline
Metals Copper Gold (Spot) Silver (Spot) Platinum (Spot)
Agriculture
China Unveils Policies to Revitalize Northeast – The Chinese central government announced an action plan to assist the northeast region’s economy with a list of new measures. The plan aims to free up private businesses, deepen reforms of state-owned enterprises, develop modern agriculture, renovate urban rundown and launch dozens of infrastructure projects in Liaoning, Jilin and Heilongjiang provinces. China will speed up the construction of eight rail lines and build or expand 10 regional airports in the region. Discounts on Mortgage Rates in Beijing – According to the National Business Daily, Citic Bank and China Merchant Bank are now offering 10% discount on mortgage rates for first home purchases in Beijing, and other banks are offering 2-5% discounts on mortgage rates. According to a Beijing-based property agency, the volume of secondhand home purchases rose 19.7% MoM for the second week of August, and rose 9.7% compared to the first week of August. Japanese Auto Suppliers Face Record Fines – Two Japanese auto suppliers, namely NTN Corp and NSK Ltd, disclosed on Tuesday the fines imposed on them by the National Development and Reform Commission(NDRC). NTN, a bearings producer, said it must pay RMB119.2mn for monopoly behavior in the Chinese market, while its rival NSK said it must pay RMB2.9bn in fines. NDRC said this month that it had completed an investigation into 12 Japanese companies and would punish violators. The AntiMonopoly Law allows the government to fine companies up to 10% of their annual revenue.
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QUAM INSTITUTIONAL BUSINESS UNIT RESEARCH
SALES
JENNIFER SO
+852 2971 5433
STANLEY NG
+852 2217 2857
ANDY CK WONG
+852 2971 5434
GUY STILLE
+852 2217 2853
CHRISTOPHER HO
+852 2971 5436
quam research@quam group.com 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 number 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 consequential 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.
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DATE WEDNESDAY AUGUST 20, 2014
EQUITIES HONG KONG STRATEGY
QUAM PULSE Russia Agrees on Broadening Chinese IT Exports (Tencent Finance) – Russia agreed on broadening Chinese IT supplies to Russia, Minister of Telecommunications and Mass Communications Nikolai Nikiforov wrote on his Twitter account on Monday. The two countries have reached an agreement at working meetings between the Chinese Minister of Industry and Information Technology Miao Wei, chief of the Chinese media administration Cai Fuchao and Mr Nikiforoc in Beijing. Russia agreed to broaden delivery of Chinese servers, storage systems and other IT products to Russia. Meanwhile, the two countries have agreed on expansion of Russian software supplies to China. Our Take: After U.S. and E.U. imposed sanctions on Russia in July, the Russian government is expected to replace US IT product suppliers with other countries’ IT suppliers, especially those from China due to the close bond between the two countries. We believe the agreement will benefit Chinese leading IT hardware suppliers such as Lenovo(992 HK), which has acquired the x86-based server business from IBM. Lenovo, the largest global PC producers by shipment, posted revenue and net profit growth of 18% and 23% YoY for the 3 months ended 30 Jun, 2014. The counter is currently trading at 18.9x FY2014 P/E, according to Bloomberg consensus.
CHINA TAKEAWAYS NDRC Cutting Retail Oil Price – NDRC is cutting the retail oil price by RMB0.14/L for gasoline and RMB0.16/L for diesel. This has been the 6th retail oil price cut for the year. Retail prices of gasoline and diesel are now priced at RMB190/ton and RMB185/ton respectively. < http://www.chinadaily.com.cn/business/2014-08/19/content_18444309.htm> Casino Operators Fighting For Workers - Galaxy Entertainment Group is planning to increase its workforce by 50% or 8,000 workers by the end of the year for the second phase of its Galaxy Macau resort on the Cotai Strip. The Company now has 16,000 employees, and continues to face competition for workers from operators such as Melco Crown. Sands and Wynn are also planning to expand their territory in Macau.
HSI TOP MOVERS Leaders Ticker CHINA RES LA GALAXY ENTER LENOVO GROUP CHINA RES PO HONG KG CHIN
Laggers % 7.57 3.43 2.74 2.48 2.18
Ticker KUNLUN ENERG COSCO PAC LT HENGAN INTL CITIC PACIFI TINGYI
% -2.44 -1.19 -1.00 -0.96 -0.66
Close
1D Chg
1D % Chg
25122.95 11094.59 2374.77 9243.78 2071.14 3315.03 1872.16 26425.82 7896.20 1544.30 5165.17 7082.75 3618.95
167.49 29.38 0.21 102.47 18.01 2.25 10.41 34.86 21.95 1.94 8.42 55.17 18.27
0.67 0.27 0.01 1.12 0.88 0.07 0.56 0.13 0.28 0.13 0.16 0.79 0.51
Close
1D % Chg
YTD % Chg
96.72 101.82 3.82 267.29
0.32 0.22 0.66 0.64
2.07 -5.12 -7.91 -4.89
314.20 1300.69 19.68 1446.00
0.27 0.18 0.25 0.09
-6.42 8.24 1.05 5.47
Corn Wheat Soybeans Coffee Sugar Cotton
368.00 549.75 1050.50 192.25 15.65 64.07
-0.94 -0.81 -0.69 -0.44 -0.19 0.36
-18.27 -14.17 -7.44 60.07 -8.21 -18.31
Baltic Dry
1042.00
2.66
-54.24
Asia HSI HSCEI SHSZ300 TWSE KOSPI FSSTI KLCI SENSEX NIFTY SET JCI PCOMP ASX
COMMODITIES Energy WTI Brent Natural Gas Gasoline
Metals Copper Gold (Spot) Silver (Spot) Platinum (Spot)
Agriculture
China Unveils Policies to Revitalize Northeast – The Chinese central government announced an action plan to assist the northeast region’s economy with a list of new measures. The plan aims to free up private businesses, deepen reforms of state-owned enterprises, develop modern agriculture, renovate urban rundown and launch dozens of infrastructure projects in Liaoning, Jilin and Heilongjiang provinces. China will speed up the construction of eight rail lines and build or expand 10 regional airports in the region. Discounts on Mortgage Rates in Beijing – According to the National Business Daily, Citic Bank and China Merchant Bank are now offering 10% discount on mortgage rates for first home purchases in Beijing, and other banks are offering 2-5% discounts on mortgage rates. According to a Beijing-based property agency, the volume of secondhand home purchases rose 19.7% MoM for the second week of August, and rose 9.7% compared to the first week of August. Japanese Auto Suppliers Face Record Fines – Two Japanese auto suppliers, namely NTN Corp and NSK Ltd, disclosed on Tuesday the fines imposed on them by the National Development and Reform Commission(NDRC). NTN, a bearings producer, said it must pay RMB119.2mn for monopoly behavior in the Chinese market, while its rival NSK said it must pay RMB2.9bn in fines. NDRC said this month that it had completed an investigation into 12 Japanese companies and would punish violators. The AntiMonopoly Law allows the government to fine companies up to 10% of their annual revenue.
1
2
QUAM INSTITUTIONAL BUSINESS UNIT RESEARCH
SALES
JENNIFER SO
+852 2971 5433
STANLEY NG
+852 2217 2857
ANDY CK WONG
+852 2971 5434
GUY STILLE
+852 2217 2853
CHRISTOPHER HO
+852 2971 5436
quam research@quam group.com 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 number 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 consequential 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.
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