China Strategy Spotlight:3Q first read;performance,valuation,earnings and liquidity reviews

类别:投资策略 机构:德意志银行 研究员:Michael Tong,Luka Zhu 日期:2017-11-14

19th CCP Party Congress, revised GDP growth and 3Q earnings quick take

    At the 19th CCP Party Congress, President Xi gave a speech outlining a planfor China in the long term, without mentioning the 2020growth target as hispredecessor did in the past. 3Q GDP came in at 6.8% yoy in real terms, in linewith expectations. Our Chief China Economist Zhiwei Zhang now expects 6.6%growth in 4Q and 6.8% for the full year. 3Q earnings season has just gottenunderway; 300+ A-shares have announced results, for which earnings grew59% yoy in 3Q, vs. 45% yoy in 2Q on a comparable basis, with cyclical(steel/chemical/paper) being the most robust sectors. We include some of ouranalysts’ 3Q results commentary on page 4and also key earnings upgradesestimate over the past month on page 7.

    Performance and valuations: HSCEI/MXCI/CSI300gained 3.8%/2.5%/2.6%

    In the past four weeks, HSCEI gained 3.8%, outperforming MSCI China(+2.5%), A-shares (+2.6%) and EM (+1.3%). Environmental, insurance, banksand select defensives led, while real estate, transportation and telecom postedlosses. The MSCI China (ex. ADRs) 12m forward P/E stands on par withhistorical average at 11.5x while P/B is at 1.5x, or a 12% discount to thehistorical average. A-share CSI300rose 2.6% in RMB terms in the past fourweeks, led by defensives, insurance and large-caps. The index trades at 13.6xand 1.7x 12m forward earnings and book value, respectively. Despite strongYTD performance, we believe MSCI China remains very attractive in terms ofdiscount to its historical average as compared to other global indices.

    Macro and earnings: 3Q macro in line; material/property led earnings upgrade

    Macro data was largely in line for 3Q/Sept: 1) PMI stayed strong as NBS PMIrose to a multi-year high. IP slightly beat at 6.6% yoy and is notably above lastmonth’s 6.0%; 2) New loans and TSF beat expectations again. Adjusted TSFbalance growth was stable at 14.8% yoy while corp. M/LT loan balance wasgrowing at an elevated 17.4% yoy; 3) Investment diverged as FAI growthslowed across the board, but property investment improved by 0.2ppt to 8.1%YTD yoy. MSCI China 2018E consensus EPS remain largely unchanged in thepast four weeks, though materials and real estate saw notable upgrades.Liquidity and sentiment: H-shr and A-shr liquidity and sentiment largely stableHK equities’ ADT averaged HKD93bn in Oct’ MTD, a touch lower than lastmonth but still strong compared with the YTD average. Connect inflowscontinued both ways while volatilities subsided. A-share sentiment was stable.Onshore rates and credit spreads both moderated.

    End-FY17index targets, sector preference and weightings

    We reiterate our end-17MSCI China/HSCEI targets at 83/11,900. Werecommend overweight internet, financials, consumer services (education),metals and mining (steel, non-ferrous) and water/IPPs, and we wouldunderweight telecom, coal, airlines, traditional retailing and staples. We expect2017/18growth of 18.5%/15.1% for MSCI China. Our recommended subsectorpreference and weightings for MSCI China are shown in Figure 2.


    Key downside risks: 1) tighter-than-expected monetary policy; 2) harsher-thanexpectedproperty tightening; 3) any disorderly deleveraging as China tightensshadow credit; and 4) sharper-than-expected RMB depreciation.



上海医药 买入 -- 研报
新华保险 中性 -- 研报
新和成 持有 -- 研报
片仔癀 买入 -- 研报
上海银行 买入 12.30 研报
万里扬 买入 -- 研报
南方航空 持有 10.03 研报
联美控股 买入 12.54 研报
首旅酒店 持有 -- 研报
中青旅 持有 -- 研报
广州酒家 持有 -- 研报


上海医药 0.83 0.78 研报
新华保险 0.83 0.97 研报
新和成 1.80 1.59 研报
片仔癀 1.70 2.43 研报
顺网科技 0.60 0.66 研报
上海银行 0 0 研报
万里扬 0.89 0.29 研报
南方航空 0.66 0.36 研报
腾邦国际 0.79 0.59 研报
众信旅游 0 0 研报
中青旅 0.72 0.79 研报


五粮液 42 持有 买入
伊利股份 39 持有 买入
完美世界 35 持有 持有
保利地产 33 买入 买入
隆基股份 32 持有 买入
贵州茅台 30 买入 买入
泸州老窖 30 持有 持有
中国国旅 29 持有 持有
三一重工 28 持有 买入
广联达 28 持有 买入
比亚迪 28 持有 持有
上汽集团 27 买入 买入
瀚蓝环境 26 持有 买入
长城汽车 26 持有 中性
海天味业 26 持有 持有
亿纬锂能 26 持有 买入
中信证券 25 持有 持有


电子信息 513 86 252
汽车制造 411 42 225
电子器件 299 55 189
机械行业 278 57 128
生物制药 272 53 150
建筑建材 242 47 133
化工行业 235 56 109
金融行业 232 30 99
有色金属 206 41 53
酿酒行业 196 16 111
钢铁行业 190 32 89
家电行业 181 13 106
商业百货 178 36 92
酒店旅游 176 20 83
交通运输 168 32 69
房地产 162 26 104
电力行业 137 29 65