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                                                                                                                          HK/China Equities
                                                                                                                                                                                  31 Mar 2011



                                                                             HSI and HSCEI - 12M
Market Highlights                                                             26000                                                                                                                15000

4 China Southern Airlines: Earnings risk discounted                           25000
                                                                                                                                                                                                   14000
4 China Unicom: Substantial hike in handset subsidy                           24000
4 Evergrande Real Estate: Skyrocketing results                                                                                                                                                     13000

4 Ping An Insurance: Strong growth justifies premium valuation
                                                                              23000

                                                                                                                                                                                                   12000
                                                                              22000


Daily Spotlights                                                              21000                                                                                                                11000


4 Belle International (1880.HK, $14.20, HOLD)                                 20000
                                                                                                                                                                                                   10000

                                                                              19000
                                                                                                                                                                                                   9000
                                                                              18000


Market Highlights                                                             17000
                                                                                                                                                                                                   8000




China Southern Airlines (1055.HK,                               $3.40,
                                                                              16000                                                                                                                 7000
                                                                                3/30/2010 5/1/2010 6/2/2010 7/4/2010 8/5/2010 9/6/2010 10/8/2010 11/9/2010 12/11/2010 1/12/2011 2/13/2011 3/17/2011



BUY): Earnings risk discounted
                                                                                                                                HSI Index PX_LAST           HSCEI Index PX_LAST




                                                                             Market Statistics
What’s new: CSA reported a strong set of FY10 results, with its top and
                                                                              Indices                                             Day Hi                  Day Lo Close                  Change
bottom lines coming in at Rmb76.5b and Rmb5,795m, up 40% and 17x,
                                                                              HSI (Blue Chips)                                        23,505              23,181 23,451 +391(+1.7%)
respectively. Total passenger and cargo traffic income surged 37% and         HSCCI (Red Chips)                                        4,197               4,147 4,196 +54(+1.3%)
87% yoy to Rmb68.7b and Rmb5.4b during FY10. A major gauge of                 HSCEI (H-shares)                                        13,187              13,004 13,162 +242(+1.9%)
                                                                              GEMI (GEM)                                                 774                 767    771 +3(+0.4%)
operating efficiency, CSA’s passenger load factor edged up 3.9 ppts yoy
to 79.2%.                                                                     Total Mkt Turnover ($m):                                              89,481 YTD Daily Avg: 76,156
                                                                              Main Board                                                            89,078 100%          75,787
Our analysis and comments: Excluding the exceptional gain of                   HSI (Blue Chips)                                                     36,274   41%
                                                                               HSCCI (Red Chips)                                                     7,133    8%
Rmb1.10b from the disposal of its entire 50% stake in a jet engine             HSCEI (H-shares)                                                     22,566   25%
maintenance joint venture to its parent for Rmb1.6b, and the significantly    GEM Board                                                                402    0%            369
higher exchange gain of about Rmb1.75b, CSA’s recurring earnings of          HSI Futures                                        Hi      Lo    Close                                   Change
about Rmb3.7b for FY10 don’t merely represent continuing improvement         Mar                                              23,435 23,188 23,402                                     +332
                                                                                 Vol / Open int.                              14,655 / 30,313
from an instant shift to the black of Rmb330m in FY09 after a dismal loss    Apr                                              23,513 23,166 23,436                                       +395
of Rmb4,823m in FY08. They also represent an annual profit higher than           Vol / Open int.                              77,106 / 74,389
any since listing in 1997, mainly boosted by resilient traffic growth and    HSCEI Futures                                      Hi      Lo    Close                                   Change
improved operating efficiency.                                               Mar                                            13,154   13,000 13,130   +206
                                                                                 Vol / Open int.                            13,060 / 39,937
                                                                             Apr                                            13,152   12,945 13,114   +239
Despite the threat from a sustained rebound in fuel prices in recent             Vol / Open int.                            43,360 / 88,877
months, the impact on the airlines would be mitigated by the collection      Moving Average                                 10-day      50-day     250-day
of a fuel surcharge. The fuel surcharge mechanism for domestic routes        HSI                                             22,861                         23,286                   22,102
changed in November 2009, whereby the National Development                   HSCEI                                           12,785                         12,632                   12,356
and Reform Commission loosened control and granted mainland
airlines autonomy to impose surcharges, which allows for more timely         Other Key Asian Market Indexes
adjustments. The company guided that the fuel surcharge compensated           Indexes                                                                       Close     Change
                                                                              AOI (Australia)                                                               4,822 +66 (+1.4%)
for about 70% of the fuel price hike in FY10.                                 Composite Index (Kuala Lumpur)                                                1,532 +12 (+0.8%)
                                                                              CSI 300                                                                       3,256    -2 (-0.1%)
While we expect a yoy drop of about 20% in the company’s underlying           KOSPI (Korea)                                                                 2,091 +19 (+0.9%)
net profit in FY11 amid the impact of the fuel cost hike, we believe the      Nikkei 225 (Japan)                                                            9,709 +250 (+2.6%)
earnings risk is largely discounted after its underperformance in recent      SET Index (Thailand)                                                          1,050 +14 (+1.3%)
                                                                              Shanghai A-shares                                                             3,095    -2 (-0.1%)
months, as CSA is trading at an undemanding forward FY11 EV/EBITDA            Shenzhen A-shares                                                             1,323   -11 (-0.8%)
valuation of 5.2x and a P/B of 1.1x.                                          Straits Times Index (Singapore)                                               3,095 +38 (+1.3%)
Analyst: Cho Fook Tat (852-3723 2923, ft.cho@htisec.com)                      TAIEX (Taiwan)                                                                8,646 +50 (+0.6%)

                                                                             Source: Bloomberg




                                                                                                                                                                                    Page 1
                                                                                                   Navigator Report


China Unicom (0762.HK, $12.64, HOLD): Substantial hike in handset
subsidy
What’s new: CU reported in-line FY10 revenue of           Our analysis and comments: The
Rmb171b, up 12% yoy, while its net profit of Rmb3.9b,     lower-than-expected FY10 earnings were mainly a
which implies a 60% yoy drop, was behind market           result of a substantial hike in handset subsidy expense.
expectations and 17% lower than our forecast. Its 2G,     The company reported a net subsidy expense of
3G and blended mobile ARPU of Rmb39.5, Rmb124             Rmb3.2b in FY10. Management indicated that about
and Rmb43.7 were largely in-line with our projections     46% of its handset subsidies was recognized as
of Rmb39, Rmb122 and Rmb43.4.                             handset revenues in FY10 using the new accounting
                                                          approach, implying that the company spent
From 4Q10 the company started adopting the relative
                                                          approximately Rmb6.9b on gross handset subsidies in
fair value method accounting policy retrospectively
                                                          FY10, significantly higher than its earlier guidance of
from 1 January 2010 to account for preferential
                                                          Rmb3-5b.
promotional packages that bundle the sale of handsets
and provision of services. Under this method, the total   The company is targeting to add 35m mobile
contract consideration of such preferential packages      subscribers in FY11, of which 25m will be 3G users.
is allocated to service revenue, recognized based         This is an aggressive target in our view, given that it
upon the actual usage of mobile services, and sales       only added 2.6m 3G users in the first two months of
of handsets are recognized immediately when sold to       FY11, meaning that CU would need more than 2.2m
customers, based on their relative fair values.           3G net adds per month for the rest of the year.
The adoption of such fair value method resulted in an     CU will continue to stay aggressive on 3G handset
increase in revenue, net profit and earnings per share    subsidies in order to drive up its subscriber base and
of Rmb3.2b, Rmb2.4b and Rmb0.11, respectively, for        market share: it intends to spend 30% of revenue from
FY10.                                                     its 3G business on its net handset subsidy. We believe
                                                          this could have a negative impact on the company’s
CU spent Rmb70b on capex in FY10, slightly lower
                                                          profitability outlook in the near future and thus continue
than its previous target of Rmb73.5b and guided FY11
                                                          our Hold call on the counter.
capex of Rmb73.8b. It has also cut its DPS by half for
                                                          Analyst: Alex Lee
the year to Rmb0.08.
                                                          (852-3926 8947, alex.lh.lee@htisec.com)


Evergrande Real Estate (3333.HK, $4.17, BUY): Skyrocketing results
What’s new: Evergrande reported an eightfold jump         Evergrande’s presale ASP steadily improved over
in its FY10 revenue to Rmb45.8b and nearly18x leap        the last two years, suggesting further margin growth
in underlying profit attributable to shareholders to      in FY11. In FY10, a total of nearly 9m m2 of GFA was
Rmb5.1b. Management has proposed a dividend of            completed, an impressive surge from FY09’s 1.1m m2.
Rmb0.1268/share that implies a dividend yield of 3.7%     The company’s land bank now includes a total GFA of
for the stock.                                            over 100m m2, of which 23m m2 is under construction
                                                          this year. Both numbers are the largest in the sector.
Our analysis and comments: As the most transparent
developer, Evergrande holds monthly analyst               Thanks to proactive financing in Hong Kong and
meetings to disclose its sales performance and issue      outstanding presale proceeds, Evergrande’s
business updates. Consequently, investors have high       financial position remained healthy despite generous
expectations of what is to be announced and the           acquisitions and heavy capex. At end-FY10, cash
company’s share price has been rising in recent days in   on hand amounted to Rmb20b and net gearing was
anticipation of a strong set of results.                  53%. In FY10, management demonstrated it ability to
                                                          generate amazing growth amid the market volatility.
Revenue recognized in 2H10 was Rmb25.4b, a hoh
                                                          With a market cap of $60b, Evergrande is trading at
increase of around 25%, while core net profit surged
                                                          an attractive FY11 P/E of 6x. We maintain our Buy
84% hoh due to much better margins. Most revenue
                                                          recommendation.
recognized in 1H10 was presold in 2008 at low prices
                                                          Analyst: Hugo Hou
and margins. Gross margin rose nearly 9 ppts to 33.%
                                                          (852-3723 2921, hugo.lz.hou@htisec.com)
in 2H10 and net margin also jumped from 1H10’s
9.5% to 2H10’s 14%. With relatively stable costs,




www.htisec.com                                                                                             Page 2
                                                                                                 Navigator Report

Ping An Insurance (2318.HK, $77.15, BUY): Strong growth justifies
premium valuation
What’s new: PAI reported that its FY10 net profit           rising by 20% and 38%, respectively. The surge in
rose 25% to Rmb17,311m, with EPS rising 22% to              general insurance profit was driven by strong growth
Rmb2.30. The company has declared a final divided           in underwriting profit, as the combined ratio for this
of Rmb0.40, bringing FY10 DPS to Rmb0.55. Among             segment fell 5.4 ppts to 93.2%. Ping An Bank reported
major business segments, net profit for life insurance      a 61% surge in its bottom line with the group’s 29.9%
fell 19%, but profit for property and casualty insurance,   stake in Shenzhen Development Bank contributing
banking, and securities business soared 473%, 167%          the rest. PAI is fast achieving its goal of becoming a
and 49%, respectively. The embedded value for the           major financial conglomerate with strong synergies
group’s life business rose 20% yoy.                         among its major business segments, as the company
                                                            indicated that cross-selling has contributed some 42%
Our analysis and comments: The results were
                                                            of auto premium income, 55% of newly issued credit
slightly ahead of market expectations. Although the
                                                            cards and 35% of newly added retail deposits. We have
life insurance business reported a decline in profit,
                                                            fine-tuned our target price to $100.70 based on 2.5x
this was mainly due to investment write-downs as
                                                            our projected end-FY11 embedded value for the group.
the total investment yield fell to 4.9% from 6.4%.
                                                            Analyst: Paul Lee
The operating figures remained robust with overall
                                                            (852-3723 2916, paul.kh.lee@htisec.com)
premium and first-year premium for individual life


Daily Spotlights
Belle International (1880.HK, $14.20, HOLD)                 Analyst : Winnie Fong
                                                            (852-3723 2911, winnie.ym.fong@htisec.com)
4 After fine-tuning our earnings model on the heels of        and improved gross margins for acquired
  our review of its FY10 results, we have set our new         businesses. Company-owned labels will remain the
  target price on the stock at $15.60, representing a         key revenue driver in the near future.
  forward FY11 P/E of 27x or a PEG of 1.4x based            4 Attributable to the completion of internal process
  on our projected EPS CAGR of 19% for FY10-12.               reengineering, acquired brands’ SSS growth
4 Excluding the gain on disposal of Rmb31m, the               and revenue growth were above average, while
  FY10 results were in line with our expectations.            the Senda and Basto brands have more than
  Revenue in FY10 surged 20% yoy to Rmb23.7b                  doubled sales value within the three years since
  driven by the stable footwear growth and                    acquisition. Labels such as Senda and Basto will
  recovering sportswear demand. Net profit                    continue to increase contribution and improve
  increased 35% yoy to Rmb3,424m.                             performance, a result of the integration of sales
4 Belle’s FY10 footwear performance continued                 efforts and improved R&D. The operating leverage
  to improve and remained the company’s                       resulting from stringent cost control improved the
  core business. Belle achieved double-digit                  footwear operating margin by 2.3-ppt to 23.7%
  same-store-sales growth of 17%, posting 18%                 in FY10, leading to a 38% yoy leap in operating
  in 1H10 compared to 16.5% in 2H10. During the               profit to Rmb3,472m. As the sportswear market
  period, Belle aggressively expanded the footwear            is undergoing structural adjustment, footwear is
  store network for a 23% yoy rise to 8,312 locations.        expected to continue to outperform sportswear.
  As most of the new outlets were opened in the third       4 Separately, sportswear profitability improved
  and fourth quarters, higher contribution is expected        notably with operating profit up 31% yoy to
  for FY11. About 81% of Belle’s footwear outlets are         Rmb577m in FY10. Revenue recorded a modest
  located in second and third-tier markets. The store         rise of 13% yoy to Rmb9,057m with SSS growth
  expansion will continue to focus on cities with lower       rebounding to 5%. First-tier sportswear brands
  penetration rates, especially for the more mature           also posted a recovery, up 16% yoy to Rmb7,800m
  brands such as Belle. The strategy will speed up            and contributing 86% of sportswear revenue. After
  footwear sales growth, benefiting from the country’s        cutting underperforming locations, Belle continued
  increasing urbanization and the lower-tier markets’         to expand its sportswear segment, for a total of
  faster growth potential.                                    3,655 locations at end-FY10 and of them first-tier
4 Owing to the store expansion and strong SSS                 brands accounted for 77% of sportswear stores.
  growth, footwear revenue climbed 25% yoy to                 The more aggressive expansion of the first-tier
  Rmb14.6b. The major contributor continued to                brands will further enhance overall gross margin.
  be company-owned brands which accounted for               4 As footwear and sportswear are labour intensive,
  91% of segment turnover, growing 25% yoy to                 the ongoing increase in wage cost will have a
  Rmb13.4b. Gross margin increased 2.6-ppt yoy to             negative impact on Belle. We believe gross margin
  68% in FY10 attributable to reduced discounting             will continue to be underpinned by the ASP hike

www.htisec.com                                                                                           Page 3
                                                                                                             Navigator Report

  and reduced price discounting, offsetting the effects                network and multi-brand strategy should assure its
  of rising raw material and labour costs.                             competitiveness and allow it to retain the top slot
4 Belle maintained a sound financial position with net                 in the mainland market. The further integration of
  cash of Rmb5,212m at end-FY10. Looking forward,                      Mirabell, acquired in FY08, is expected to increase
  the company will expand the number of outlets                        synergy and economies of scale, and improve
  of its existing core footwear brands such as Belle                   overall operating efficiency. Given its liquid financial
  with an increased focus on second and third-tier                     position, we believe the company can finance its
  markets. The company’s strong brand recognition,                     expansion through internal resources.
  leading position in the industry, national retail

This is a summary of the detailed report to be published separately.



Price Information                                 Share Price - 12M
Issued shares: 8,434.2m
Current market cap: $119,766m
Target price: $15.60   Next 12M: +10%
Past 1M: +5%; 3M: +9%; 12M: +38%

P/L Information
Y/E: 31/12        FY10     FY11F     FY12F
Net profit   Rmb3,306m Rmb4,138m Rmb4,926m
EPS            Rmb0.30   Rmb0.49   Rmb0.58
                  +26%      +33%      +22%
DPS            Rmb0.08   Rmb0.13   Rmb0.16
P/E                 40.0      30.0      24.5
Yield              0.7%      1.9%      1.3%




www.htisec.com                                                                                                       Page 4
                                                                                                                                                                      Navigator Report

Tracking of HSI Constituents                                                                      Tracking of HSCEI Constituents
SEHK      Stock              Close    Change    Turnover    P/E    Yield    Index Weighting       SEHK       Stock              Close    Change    Turnover    P/E     Yield    Index Weighting
Code                          ($)      (%)        ($m)      (x)     (%)    Change    (%)          Code                           ($)      (%)        ($m)       (x)     (%)    Change    (%)
       Finance                                                                        45.4        168    Tsingtao Brew          38.25     (0.5)      93.2      35.3     0.5      (0.3)    0.4
5      HSBC Hldgs           82.00       0.6    2758.7      14.4     3.4      20.5     14.3        347    Angang Steel           10.58       4.3     280.7      31.3     1.7        2.4    0.4
11     Hang Seng Bank      126.00       0.6     226.7      16.2     4.1       2.3      1.6        358    Jiangxi Copper         26.00       5.5    1549.8      13.8     0.9        9.3    1.4
23     Bank of E Asia       33.10       2.0     130.4      17.2     2.8       4.1      0.9
388    HKEx                167.00       0.9     862.5      35.7     2.5       5.5      2.8        386    Sinopec Corp            7.81       1.4     991.1       7.9     3.2        9.1    4.9
939    CCB                   7.25       1.5    2374.1      10.9     3.5      25.2      7.1        390    China Railway           5.18       0.4      51.2      14.1     1.4        0.4    0.8
1398   ICBC                  6.38       1.3    1736.7      14.7     3.0      18.6      6.3        489    Dongfeng Group         12.52       3.8     453.8      15.2     0.8        6.2    1.3
2318   Ping An              77.15       2.8    1204.5      28.2     0.8      13.8      2.2        728    China Telecom           4.70       1.3     300.7      20.8     1.8        4.1    2.5
2388   BOC Hong Kong        25.05       0.4     623.0      16.4     3.9       1.4      1.5
2628   China Life           28.65       2.3    1804.7      20.2     1.7      18.5      3.5        753    Air China               7.36       2.8     148.3       6.0     1.9        2.3    0.6
3328   Bankcomm              8.32       1.1     347.4      12.6     2.6       2.3      0.9        763    ZTE                    35.05       1.2      93.4      25.2     1.0        1.0    0.7
3988   Bank of China         4.29       0.9    1669.5       9.3     4.0       9.6      4.4        857    PetroChina             11.68       3.2    1611.4      13.0     3.4      37.5     9.2
       Utilities                                                                       4.8        902    Huaneng Power           4.50     (0.2)      99.6      13.5     5.3      (0.2)    0.5
2      CLP Hldgs            62.75       0.6      224.8     14.6     4.0       2.4      1.8        914    Anhui Conch            47.20       3.5     418.7      22.8     0.8        6.5    1.5
3      HK & China Gas       18.84       1.7      159.2     24.2     1.9       5.3      1.3
6      Power Assets         52.15       1.4      226.2     15.5     4.1       3.7      1.2        916    China Longyuan          8.26       0.1     208.8      25.8     0.8        0.1    0.6
836    China Res Power      14.98       2.6      153.5     14.3     2.2       2.7      0.5        939    CCB                     7.25       1.5    2374.1      10.9     3.5      20.2    10.1
       Properties                                                                     10.3        998    CITIC Bank              5.55       0.7     307.6      13.2     1.8        1.4    1.4
1      Cheung Kong         127.40       4.0    1352.6      11.2     2.3      26.0      2.9        1088   China Shenhua          36.15       1.4     776.5      15.9     2.5        8.4    4.6
12     Henderson Land       52.85       2.1     290.7       7.2     1.9       4.6      0.9        1099   Sinopharm              27.70       0.0      35.9      44.0     0.7        0.0    0.7
16     SHK Prop            122.80       1.7     700.7      11.2     2.2      12.4      3.1
83     Sino Land            13.80       2.2     110.6      11.0     2.9       3.0      0.6        1138   China Ship Dev          8.78       0.6      30.8      14.7     2.3        0.3    0.4
101    Hang Lung Prop       33.55       2.6     232.2       6.3     2.1       8.0      1.3        1171   Yanzhou Coal           28.15       5.8     806.5      12.5     2.5      15.0     2.1
688    China Overseas       15.74       3.3     484.3      10.4     1.7       7.8      1.1        1186   China Rail Cons         8.36       2.0      70.3      13.7     2.2        1.6    0.6
1109   China Res Land       14.12       5.1     414.3      11.8     2.2       4.9      0.4        1211   BYD Company            29.55     (0.2)      97.2      22.5     0.0      (0.1)    0.6
       Com & Ind                                                                      39.5
4      Wharf (Hldgs)        53.45       2.6     476.8   4.1         1.9       7.8      1.3        1288   ABC                     4.24       2.7    1615.4      10.8     1.5      12.5     3.7
13     Hutchison            93.35       5.1    4431.5 19.9          2.1     37.0       3.2        1398   ICBC                    6.38       1.3    1736.7      14.7     3.0      16.6    10.1
17     New World Dev        13.84       1.0     103.1   4.6         2.8       1.4      0.6        1800   China Comm Cons         7.21     (1.2)     322.8       9.1     2.6      (2.0)    1.2
19     Swire Pacific ‘A’   113.60       2.2     280.4   4.5         3.1       6.6      1.3        1898   China Coal             10.62       1.9     545.0      16.0     1.8        4.1    1.6
66     MTR Corporation      28.80       1.4     144.1 13.7          2.1       2.2      0.7        1919   China COSCO             8.00     (1.1)     201.6      10.0     1.3      (1.2)    0.8
144    China Mer Hldgs      33.00       2.3     274.8 29.2          1.7       3.2      0.6
267    CITIC Pacific        21.70       1.9     154.6   8.9         2.1       2.0      0.5        1988   Minsheng Banking        7.26       1.8     289.3       9.3     1.6        2.7    1.1
291    China Resources      30.75       0.8     145.8 27.5          1.7       1.1      0.6        2238   GAC GROUP               9.30       2.1      80.1       8.5     2.5        2.1    0.8
293    Cathay Pac Air       18.64       1.6     192.6   5.2         6.0       1.4      0.4        2318   Ping An                77.15       2.8    1204.5      28.2     0.8      17.8     5.0
330    Esprit Hldgs         35.60       3.8     297.7 10.6          4.0       6.1      0.7        2328   PICC P & C              9.12       2.5     129.8      16.4     0.0        2.6    0.8
386    Sinopec Corp          7.81       1.4     991.1   7.9         3.2       7.1      2.1
494    Li & Fung            39.95       5.0    1033.1 35.7          2.3     20.4       1.8        2600   CHALCO                  7.50       0.4     281.7     105.5     0.2        0.6    1.1
700    Tencent             195.20       2.6    1804.2 37.1          0.3     19.3       3.2        2601   CPIC                   32.90       1.4     330.4      27.7     1.3        2.8    1.6
762    China Unicom         12.64     (3.5)    1006.4 65.2          0.8     (8.3)      1.0        2628   China Life             28.65       2.3    1804.7      20.2     1.7      23.9     8.0
857    PetroChina           11.68       3.2    1611.4 13.0          3.4     29.0       4.0        2777   R&F Properties         11.56       4.0     217.5       7.2     5.1        2.2    0.4
883    CNOOC                19.46       2.3    1554.8 13.4          2.4     30.0       5.7
941    China Mobile         71.85       0.4    1652.7 10.2          4.2       5.7      7.0        2883   China Oilfield         17.26       1.3     137.4      15.8     1.2        1.7    1.0
1088   China Shenhua        36.15       1.4     776.5 15.9          2.5       6.5      2.0        2899   Zijin Mining            6.19       1.8      79.9      22.7     1.8        2.2    0.9
1199   COSCO Pacific        14.26       0.6     113.9 16.9          3.1       0.5      0.4        3323   CNBM                   27.50       5.4     467.1      25.2     0.3      10.0     1.5
1880   Belle Int’l          14.20       2.3     265.9 29.4          2.6       5.7      1.1        3328   Bankcomm                8.32       1.1     347.4      12.6     2.6        3.0    2.1
1898   China Coal           10.62       1.9     545.0 16.0          1.8       3.1      0.7
2038   FIH                   4.89       1.5      48.7 114.6         0.0       0.6      0.2        3968   CM Bank                21.30       0.7     305.9      19.7     1.1        2.9    3.1
2600   CHALCO                7.50       0.4     281.7 105.5         0.2       0.5      0.5        3988   Bank of China           4.29       0.9    1669.5       9.3     4.0      12.3    10.0
Source: Bloomberg, HSI Services Ltd.                                 Source: Bloomberg, HSI Services Ltd.
Note: Announced historical figures are used in computing yield and P/E ratio.
Ten Largest Gainers                                               Ten Largest Losers                                               Ten Most Active
SEHK                                  Price Change                SEHK                                   Price Change              SEHK                   PriceTurnover
Code Stock                               ($)    (%)               Code Stock                                ($)    (%)             Code Stock                ($)   ($m)
8292 HC Int'l                         1.600 +42.9                 2999 Hanny Hldgs Rts                   0.081   -27.7             13   Hutchison Whampoa 93.35 4432.0
768 UBA Inv                           0.140 +15.7                 307 UP Energy Dev                      0.136   -20.9             5    HSBC              82.00 2759.0
723 Sustain Forest                    0.480 +15.7                 1328 Int'l Elite                       1.130   -13.1             939 CCB                 7.25 2374.0
1110 Kingworld                        2.220 +12.7                 8235 CCID Consulting                   0.630   -11.3             2628 China Life        28.65 1805.0
948 Z-Obee                            1.620 +12.5                 141 Great China                        0.960   -11.1             700 Tencent           195.20 1804.0
458 Tristate Hldgs                    4.400 +11.4                 732 Truly Int'l                        1.770   -10.6             1398 ICBC               6.38 1737.0
2011 Kee                              1.380 +10.4                 8047 Palmpay China                     0.260   -10.3             3988 Bank of China      4.29 1669.0
317 Guangzhou Ship                   15.900 +10.1                 8106 Zheda Lande                       0.305   -10.3             941 China Mobile       71.85 1653.0
642 Paladin Pref                      0.220 +10.0                 8078 China3D Digit                     0.081   -10.0             1288 ABC                4.24 1615.0
3355 ASMC                             0.590    +9.3               176 United Pacific                     0.270   -10.0             857 PetroChina         11.68 1611.0
Source: Etnet                                                     Source: Etnet                                                    Source: Etnet
Notes: (1) "$" refers to HK dollars throughout this report unless otherwise stated.               (2) Share prices and indices are as of 30 Mar 2011 (HSI: 23,451)
Recommendation Policy
BUY if current price is more than 10% below AFV.                                                  AFV (Assessed Fair Value) is arrived at based on various appropriate valuations,
HOLD if current price within +/-10% from AFV.                                                     including P/E, Yield, NAV, DCF, EV/EBITDA, and management quality, etc, with
SELL if current price is more than 10% above AFV.                                                 regard to prevailing interest rates and comparative valuations.
Disclaimer
Issued by Haitong International Research Limited (“HTIRL”) licensed corporation to carry on Type 4 (advising on securities) regulated activity for the purpose of the Securities and Futures
Ordinance (Cap. 571), approved for distribution by: Haitong International Securities Company Limited (“HTISCL”) and/or Haitong International Investment Services Limited (“HTIIS”) (both
are licensed corporations to carry on Type 1 (dealing in securities) regulated activity) in Hong Kong. The information and opinions contained in this document have been compiled or arrived
at from sources believed to be reliable and in good faith but no representation or warranty, express or implied, is made by HTIRL, HTISCL, HTIIS or any other members of the Haitong
International Securities Group (“HTISG”) from which this document may be received, as to their accuracy, completeness or correctness. All opinions expressed herein are subject to change
without notice. This document is for information purpose only. Descriptions of any companies or their securities mentioned herein are not intended to be complete and this document is
not, and should not be construed expressly or impliedly as, an offer to buy or sell securities. Neither HTIRL, HTISCL, HTIIS nor HTISG accepts any liability whatsoever for any direct or
consequential loss arising from any use of the materials contained in this document. This document is for the use of intended recipients only and may not be reproduced, distributed or
published for any purpose without prior consent of HTIRL. Each analyst who is primarily responsible for the content of this research is licensed under the Securities and Futures Ordinance
and certifies that all of the views represent accurately his or her personal views about the securities and issuers covered in the research. An affiliated company(ies) of Haitong International
Research Limited make(s) a market in the securities herein covered and/or any warrants or options on these securities herein covered. An affiliated company(ies) of Haitong International
Research Limited has, presently or within the last 12 months, an investment banking relationship with the listed corporation herein covered.

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