Quam Pulse
INSTITUTIONAL RESEARCH: TRADING PLACES
DATE
EQUITIES
MONDAY
HONG KONG STRATEGY
FEBRUARY 17, 2014
QUAM PULSE China’s Telecom Industry will Benefit from the Central Government’s Administrative Decentralization (China Securities Journal) – The current government has already completed more than half of its target of decentralizing one-third of its administrative power on approval of 1,700 projects as of today. Over the weekend, the State Council had published a statement to further cancel and decentralize administrative approval for 64 core projects and 18 sub-projects. This included the decentralization of administrative approval on basic telecommunications and regional value-added telecommunications business license registration, cancellation of the approval for domestic aviation enterprises, having oversea operations and the approval of general sea cargo license to be given to the provincial government. Our take: We believe the decentralization of administrative approval for the telecom industry will help to break the monopoly by China Mobile, China Telecom and China Unicom, thus enhancing competition, and to smoothen the industry development process more efficiently. This will invite greater opportunities in the telecom equipment industries, with greater demand on their products, as more players are allowed to enter the telecom industries. This is beneficial to Trigiant (1300 HK), we have a BUY rating with a TP of HK$4.0.
CHINA TAKEAWAYS Record Financing Underscores Risk of Loan Defaults – China’s new credit rose to a record in Jan, with aggregate financing at RMB2.58 tri. New lending hit RMB1.32tri, the highest since 2010. The data added to better-than-forecast trade numbers suggest that China can limit the scale of any slowdown from last year’s 7.7% GDP expansion. While credit growth may remain rapid in the first few months, the pace will slow over the rest of the year. Tencent To Acquire Dianping for USD400 Mn – Tencent (700 HK) is said to have splashed out USD400 mn to acquire a 20% stake in Dianping, the mainland’s largest restaurant review site. Tencent has the option to take another 5% within a year after Dianping has listed overseas, Bloomberg Business Week Chinese reported. Shanghaibased Dianping has more than 90 mn monthly active users. China Raises Photovoltaic Installation Volumes – According to the latest announcement by the National Energy Administration, the new photovoltaic(PV) installation volumes are set at 14 GW in 2014, instead of the 12GW in 2013. Among the new PV installations, ground-mounted power is targeted at 6GW, and distributed PV power at 8GW. Zhejiang, Jiangsu and Shandong are the top three distributed PV power installed areas. < http://www.yicai.com/news/2014/02/3470646.html>
HSI TOP M OVERS Leaders Ticker GA LA XY EN TER SIN O LA N D CO TIN GYI HLDG TEN CEN T HO LD CO SCO PA C LT
Laggers % 2.41 2.13 1.74 1.57 1.55
Ticker CITIC PA CIFI A IA GRO UP LT CHIN A RES EN LI & FUN G LT BELLE IN TERN
% -1.38 -1.35 -1.29 -1.13 -1.06
Close
1D Chg
1D %Chg
22298.41 9933.73 2295.58 8513.68 1940.28 3038.71 1819.37 20366.82 6048.35 1311.87 4508.04 6113.66 3579.04
132.88 61.02 16.02 45.98 13.32 -1.19 2.22 173.47 47.25 -2.19 16.38 11.94 3.81
0.60 0.62 0.70 0.54 0.69 -0.04 0.12 0.86 0.79 -0.17 0.36 0.20 0.11
Close
1D %Chg
YTD %Chg
99.85 108.33 5.30 276.54
-0.50 -0.18 1.51 -0.42
1.32 -1.76 26.45 -0.95
325.05 1308.36 20.88 1423.13
0.02 0.42 1.87 0.43
-4.30 8.88 7.22 3.80
Corn Wheat Soybeans Coffee Sugar Cotton
441.00 598.75 1338.00 140.45 15.89 88.05
0.11 0.80 0.56 -1.06 -0.94 -0.60
4.50 -2.17 4.78 24.35 -4.05 4.32
Baltic Dry
1097.00
1.11
-51.82
Asia HSI HSCEI SHSZ300 TWSE KO SPI FSSTI KLCI SEN SEX N IFTY SET JCI PCO M P A SX
COM M ODITIES Energy WTI Brent N atural Gas Gasoline
M etals Copper Gold (Spot) Silver (Spot) Platinum (Spot)
Agriculture
Wanxiang Acquires Fisker for USD149 Mn - After 19 rounds of bidding, the Wanxiang Group won at auction for Fisker Automotive Holdings Inc., the maker of luxury plug-in hybrid cars, for USD149.2 mn. This is nearly six times what Fisker asked for when it filed for bankruptcy in Nov 2013. Wanxiang is the largest auto-parts supplier in China.
1
QUAM INSTITUTIONAL BUSINESS UNIT RESEARCH
SALES
JENNIFER SO
+852 2971 5433
GUY STILLE
+852 2217 2853
ANDY CK WONG
+852 2971 5434
MARTIN CORNETT
+852 2217 2854
CHRISTOPHER HO
+852 2971 5436
STANLEY NG
+852 2217 2857
quam research@quam group.com 18/F Aon 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.
2
DATE
EQUITIES
MONDAY
HONG KONG STRATEGY
FEBRUARY 17, 2014
QUAM PULSE China’s Telecom Industry will Benefit from the Central Government’s Administrative Decentralization (China Securities Journal) – The current government has already completed more than half of its target of decentralizing one-third of its administrative power on approval of 1,700 projects as of today. Over the weekend, the State Council had published a statement to further cancel and decentralize administrative approval for 64 core projects and 18 sub-projects. This included the decentralization of administrative approval on basic telecommunications and regional value-added telecommunications business license registration, cancellation of the approval for domestic aviation enterprises, having oversea operations and the approval of general sea cargo license to be given to the provincial government. Our take: We believe the decentralization of administrative approval for the telecom industry will help to break the monopoly by China Mobile, China Telecom and China Unicom, thus enhancing competition, and to smoothen the industry development process more efficiently. This will invite greater opportunities in the telecom equipment industries, with greater demand on their products, as more players are allowed to enter the telecom industries. This is beneficial to Trigiant (1300 HK), we have a BUY rating with a TP of HK$4.0.
CHINA TAKEAWAYS Record Financing Underscores Risk of Loan Defaults – China’s new credit rose to a record in Jan, with aggregate financing at RMB2.58 tri. New lending hit RMB1.32tri, the highest since 2010. The data added to better-than-forecast trade numbers suggest that China can limit the scale of any slowdown from last year’s 7.7% GDP expansion. While credit growth may remain rapid in the first few months, the pace will slow over the rest of the year. Tencent To Acquire Dianping for USD400 Mn – Tencent (700 HK) is said to have splashed out USD400 mn to acquire a 20% stake in Dianping, the mainland’s largest restaurant review site. Tencent has the option to take another 5% within a year after Dianping has listed overseas, Bloomberg Business Week Chinese reported. Shanghaibased Dianping has more than 90 mn monthly active users. China Raises Photovoltaic Installation Volumes – According to the latest announcement by the National Energy Administration, the new photovoltaic(PV) installation volumes are set at 14 GW in 2014, instead of the 12GW in 2013. Among the new PV installations, ground-mounted power is targeted at 6GW, and distributed PV power at 8GW. Zhejiang, Jiangsu and Shandong are the top three distributed PV power installed areas. < http://www.yicai.com/news/2014/02/3470646.html>
HSI TOP M OVERS Leaders Ticker GA LA XY EN TER SIN O LA N D CO TIN GYI HLDG TEN CEN T HO LD CO SCO PA C LT
Laggers % 2.41 2.13 1.74 1.57 1.55
Ticker CITIC PA CIFI A IA GRO UP LT CHIN A RES EN LI & FUN G LT BELLE IN TERN
% -1.38 -1.35 -1.29 -1.13 -1.06
Close
1D Chg
1D %Chg
22298.41 9933.73 2295.58 8513.68 1940.28 3038.71 1819.37 20366.82 6048.35 1311.87 4508.04 6113.66 3579.04
132.88 61.02 16.02 45.98 13.32 -1.19 2.22 173.47 47.25 -2.19 16.38 11.94 3.81
0.60 0.62 0.70 0.54 0.69 -0.04 0.12 0.86 0.79 -0.17 0.36 0.20 0.11
Close
1D %Chg
YTD %Chg
99.85 108.33 5.30 276.54
-0.50 -0.18 1.51 -0.42
1.32 -1.76 26.45 -0.95
325.05 1308.36 20.88 1423.13
0.02 0.42 1.87 0.43
-4.30 8.88 7.22 3.80
Corn Wheat Soybeans Coffee Sugar Cotton
441.00 598.75 1338.00 140.45 15.89 88.05
0.11 0.80 0.56 -1.06 -0.94 -0.60
4.50 -2.17 4.78 24.35 -4.05 4.32
Baltic Dry
1097.00
1.11
-51.82
Asia HSI HSCEI SHSZ300 TWSE KO SPI FSSTI KLCI SEN SEX N IFTY SET JCI PCO M P A SX
COM M ODITIES Energy WTI Brent N atural Gas Gasoline
M etals Copper Gold (Spot) Silver (Spot) Platinum (Spot)
Agriculture
Wanxiang Acquires Fisker for USD149 Mn - After 19 rounds of bidding, the Wanxiang Group won at auction for Fisker Automotive Holdings Inc., the maker of luxury plug-in hybrid cars, for USD149.2 mn. This is nearly six times what Fisker asked for when it filed for bankruptcy in Nov 2013. Wanxiang is the largest auto-parts supplier in China.
1
QUAM INSTITUTIONAL BUSINESS UNIT RESEARCH
SALES
JENNIFER SO
+852 2971 5433
GUY STILLE
+852 2217 2853
ANDY CK WONG
+852 2971 5434
MARTIN CORNETT
+852 2217 2854
CHRISTOPHER HO
+852 2971 5436
STANLEY NG
+852 2217 2857
quam research@quam group.com 18/F Aon 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.
2
