Quam Pulse
EQUITIES HONG KONG STRATEGY
INSTITUTIONAL RESEARCH: TRADING PLACES
DATE FRIDAY SEPT 4, 2015
QUAM PULSE China’s Military Contractors will Help Fuel Economic Growth by Turning Technology into Commercial Success (China Daily) – China is stepping up plans to turn military technology into commercial success, which will fuel economic growth in China. According to the chief of MIIT, Miao Wei, using military technologies in civil industries will significantly boost product values and lift domestic consumption. Major companies such as China Aerospace Science and Technology Corporation, Aviation Industry Corporation of China, China Aerospace Science and Industry Corp. or CASIC and China North Industries Group are branching out into commercial sectors. Key projects involve cutting-edge aviation sensor chip manufacturing, undersea cable construction and technologies normally associated with defense firms. However, China needs to develop its own engines and chips, as well as setting up a mechanism so that it can be easier for technologies to be transferred to civilian customers. As China replaces out-of-the-date manufacturing techniques with advanced technologies in the next five years, defence companies will increase their business in the commercial sector. Our Take: We believe the commercialization of military technology echoes with China’s ongoing military modernization and civil-military integration. Coupled with “Made in China 2025” opportunities, the key beneficiary is AviChina (2357 HK), with the aviation industry being one of the highly emphasized industries. Besides, the potential opening of low-altitude airspace in 2015 is favorable for AviChina. It currently trades at 26x P/E for FY15E, according to Bloomberg estimates.
CHINA TAKEAWAYS BYD to Export 10,000 Vehicles to Sudan– BYD has inked a deal to supply 10,000 vehicles, including new-energy cars and gasoline-powered vehicles to Sudan. Under the deal, BYD’s largest in Africa, it will first ship power systems and key components to Sudan and then assemble cars there at a later date. BYD has set up two assembly plants in Africa in Egypt and Sudan for gasoline-powered cars. It also provided solar modules to the Kalkbult project, one of South Africa’s largest PV plants in the Northern Cape region. China Mobile Games Revenue will Top The World – According to Asian market research firm, Niko Partners, it is estimated that the global revenue of mobile games from smartphones and tablets will be USD30bn in 2015. In particular, Chinese mobile games revenue will reach USD5.5bn, up 66% from a year earlier. China is likely to surpass that of the U.S. in terms of revenue and become the world’s largest mobile games market. China Imposes Further Curbs on Speculative Activities – On Tuesday, the China financial Futures Exchange(CFFEX) released a series of measures to regulate speculative activities on index futures, including raising the futures’ margins and transaction fees, and squeezing the maximum number of open positions. From Sept 7, daily open position of over 10 times for CSI300, Shanghai Composite 50 and CSI 500 will constitute abnormal trading behaviour. China to Continue Tax Incentives for Commodity Warehouses of Logistics Enterprises - The Ministry of Finance and the state Administration of Taxation jointly announced on Tuesday that the government will continue implementing the urban land tax incentives for commodity warehouses of logistics enterprises. From 1 Jan 2015 to 31 Dec 2016, the urban land tax is cut by 50% for commodity warehouses owned by logistics enterprises. Securities Firms Fined for Profiteering Amid Stock Market Chaos – China securities regulator on Wednesday fined three companies for illegal business activities amid the recent chaos in the country’s stock market. An investigation found that Shanghai-based
HSI TOP MOVERS Leaders Ticker BELLE INTL CKH HOLDINGS WANT WANT CH CHINA LIFE-H CHINA OVERSE
Laggers % 1.45 1.38 1.28 0.78 0.68
Ticker BANKCOMM-H KUNLUN ENERG GALAXY ENTER CNOOC CITIC
INDEX
% -5.66 -4.28 -4.18 -4.12 -3.73
1D Chg
1D % Chg
20934.94 9301.32 3365.83 8035.29 1915.22 2878.13 1590.19 25453.56 7717.00
-250.49 -152.79 3.75 17.73 0.99 -4.64 -19.02 -242.88 -68.85
-1.18 -1.62 0.11 0.22 0.05 -0.16 -1.18 -0.95 -0.88
1372.45 4401.29 7072.46 5101.46
10.06 -11.17 -14.40 5.05
0.74 -0.25 -0.20 0.10
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
44.42 48.91 2.67 138.99
-2.18 -1.31 -1.18 -0.41
-23.59 -23.77 -12.11 -13.47
230.60 1138.96 14.57 1009.53
0.20 -0.11 -0.34 0.70
-18.50 -3.83 -7.28 -16.43
Corn Wheat Soybeans Coffee Sugar Cotton
369.25 485.50 875.75 121.30 10.66 62.65
0.07 -0.15 0.20 0.41 -0.47 -0.08
-12.29 -21.02 -12.90 -31.57 -31.97 -2.75
Baltic Dry
911.00
0.89
16.50
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
1
Mecrt Corporation, Hangzhou-based Hundsun Technolgoies Inc(600570 CH) and Hithink Flush Information Network Co Ltd(300033 CH) developed an operating system that allowed securities investors to trade without opening accounts via real-name registration, violating the Securities Act, said the CSRC. Shanghai Pudong Airport and Hongqiao Airport to Expand – Han Zheng, the Communist Party Secretary of Shanghai, met Richard Anderson, the CEO of Delta Air Lines, Inc. on Monday and said that the city will further expand Shanghai Pudong International Airport and Hongqiao Airport in order to satisfy growing international and domestic passenger and cargo demands. On Sept 1, Delta Air Lines agreed to invest USD450mn in China Eastern Airlines for 3.55% equity interest.
QUAM INSTITUTIONAL SALES
STANLEY NG
Sales Director
+852 2217 2857
GUY STILLE
Sales
+852 2217 2853
SUSANNA CHU
Associate
+852 2217 2854
[email protected] [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 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
INSTITUTIONAL RESEARCH: TRADING PLACES
DATE FRIDAY SEPT 4, 2015
QUAM PULSE China’s Military Contractors will Help Fuel Economic Growth by Turning Technology into Commercial Success (China Daily) – China is stepping up plans to turn military technology into commercial success, which will fuel economic growth in China. According to the chief of MIIT, Miao Wei, using military technologies in civil industries will significantly boost product values and lift domestic consumption. Major companies such as China Aerospace Science and Technology Corporation, Aviation Industry Corporation of China, China Aerospace Science and Industry Corp. or CASIC and China North Industries Group are branching out into commercial sectors. Key projects involve cutting-edge aviation sensor chip manufacturing, undersea cable construction and technologies normally associated with defense firms. However, China needs to develop its own engines and chips, as well as setting up a mechanism so that it can be easier for technologies to be transferred to civilian customers. As China replaces out-of-the-date manufacturing techniques with advanced technologies in the next five years, defence companies will increase their business in the commercial sector. Our Take: We believe the commercialization of military technology echoes with China’s ongoing military modernization and civil-military integration. Coupled with “Made in China 2025” opportunities, the key beneficiary is AviChina (2357 HK), with the aviation industry being one of the highly emphasized industries. Besides, the potential opening of low-altitude airspace in 2015 is favorable for AviChina. It currently trades at 26x P/E for FY15E, according to Bloomberg estimates.
CHINA TAKEAWAYS BYD to Export 10,000 Vehicles to Sudan– BYD has inked a deal to supply 10,000 vehicles, including new-energy cars and gasoline-powered vehicles to Sudan. Under the deal, BYD’s largest in Africa, it will first ship power systems and key components to Sudan and then assemble cars there at a later date. BYD has set up two assembly plants in Africa in Egypt and Sudan for gasoline-powered cars. It also provided solar modules to the Kalkbult project, one of South Africa’s largest PV plants in the Northern Cape region. China Mobile Games Revenue will Top The World – According to Asian market research firm, Niko Partners, it is estimated that the global revenue of mobile games from smartphones and tablets will be USD30bn in 2015. In particular, Chinese mobile games revenue will reach USD5.5bn, up 66% from a year earlier. China is likely to surpass that of the U.S. in terms of revenue and become the world’s largest mobile games market. China Imposes Further Curbs on Speculative Activities – On Tuesday, the China financial Futures Exchange(CFFEX) released a series of measures to regulate speculative activities on index futures, including raising the futures’ margins and transaction fees, and squeezing the maximum number of open positions. From Sept 7, daily open position of over 10 times for CSI300, Shanghai Composite 50 and CSI 500 will constitute abnormal trading behaviour. China to Continue Tax Incentives for Commodity Warehouses of Logistics Enterprises - The Ministry of Finance and the state Administration of Taxation jointly announced on Tuesday that the government will continue implementing the urban land tax incentives for commodity warehouses of logistics enterprises. From 1 Jan 2015 to 31 Dec 2016, the urban land tax is cut by 50% for commodity warehouses owned by logistics enterprises. Securities Firms Fined for Profiteering Amid Stock Market Chaos – China securities regulator on Wednesday fined three companies for illegal business activities amid the recent chaos in the country’s stock market. An investigation found that Shanghai-based
HSI TOP MOVERS Leaders Ticker BELLE INTL CKH HOLDINGS WANT WANT CH CHINA LIFE-H CHINA OVERSE
Laggers % 1.45 1.38 1.28 0.78 0.68
Ticker BANKCOMM-H KUNLUN ENERG GALAXY ENTER CNOOC CITIC
INDEX
% -5.66 -4.28 -4.18 -4.12 -3.73
1D Chg
1D % Chg
20934.94 9301.32 3365.83 8035.29 1915.22 2878.13 1590.19 25453.56 7717.00
-250.49 -152.79 3.75 17.73 0.99 -4.64 -19.02 -242.88 -68.85
-1.18 -1.62 0.11 0.22 0.05 -0.16 -1.18 -0.95 -0.88
1372.45 4401.29 7072.46 5101.46
10.06 -11.17 -14.40 5.05
0.74 -0.25 -0.20 0.10
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
44.42 48.91 2.67 138.99
-2.18 -1.31 -1.18 -0.41
-23.59 -23.77 -12.11 -13.47
230.60 1138.96 14.57 1009.53
0.20 -0.11 -0.34 0.70
-18.50 -3.83 -7.28 -16.43
Corn Wheat Soybeans Coffee Sugar Cotton
369.25 485.50 875.75 121.30 10.66 62.65
0.07 -0.15 0.20 0.41 -0.47 -0.08
-12.29 -21.02 -12.90 -31.57 -31.97 -2.75
Baltic Dry
911.00
0.89
16.50
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
1
Mecrt Corporation, Hangzhou-based Hundsun Technolgoies Inc(600570 CH) and Hithink Flush Information Network Co Ltd(300033 CH) developed an operating system that allowed securities investors to trade without opening accounts via real-name registration, violating the Securities Act, said the CSRC. Shanghai Pudong Airport and Hongqiao Airport to Expand – Han Zheng, the Communist Party Secretary of Shanghai, met Richard Anderson, the CEO of Delta Air Lines, Inc. on Monday and said that the city will further expand Shanghai Pudong International Airport and Hongqiao Airport in order to satisfy growing international and domestic passenger and cargo demands. On Sept 1, Delta Air Lines agreed to invest USD450mn in China Eastern Airlines for 3.55% equity interest.
QUAM INSTITUTIONAL SALES
STANLEY NG
Sales Director
+852 2217 2857
GUY STILLE
Sales
+852 2217 2853
SUSANNA CHU
Associate
+852 2217 2854
[email protected] [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 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
