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27 Oct, 2016 (Thursday) |
 
BBI LIFE SCI(1035)
Analysis¡G
BBI Life Sciences Corporation (1035) announced that its wholly-owned subsidiary, BBI Asia, has completed the acquisition of the entire equity interests of BIONICS CO. LTD. The latter is a company incorporated in South Korea. Its major products and services are similar to those of the Group, mainly including DNA synthesis, gene sequencing and molecular biology related services. The Group intends to further expand the life sciences products for the research use and services to the South Korean market through BIONICS, enlarge the local market share and optimize the portfolio of products and services of BIONICS. (I do not hold the above stock)
Strategy¡G
Buy-in Price: $2.15, Target Price: $2.50, Cut Loss Price: $2.00
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BAIC MOTOR(1958)
Analysis¡G
BAIC saw an annual growth of net profit by 74% in the first 9 months of 2016 as the sales of Beijing Benz witnessed a substantial year-on-year increase of 29% to 226,795 units and the growth of proprietary brand was because it unveiled a number of new SUVs based on the booming domestic SUV market and the SUV sales soared by eight times to 156,160 units. It is worth mentioning that the performance of new energy vehicles, the market focus, was the highlight. The sales of new energy vehicles under BAIC Motor brands amounted to about 30,274 units in the first nine months of 2016, up by 169% over the previous year and remained number one in the sales of pure electric vehicles nationwide.
Strategy¡G
Buy-in Price: $8.59, Target Price: $9.80, Cut Loss Price: $7.985
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Shenzhen-Hong Kong Stock Connect Series - Shenzhen-Hong Kong Stock Connect Overview
Shenzhen-Hong Kong Stock Connect (SZ-HK Stock Connect) will be launched at the end of November. Although the actual launch date is not announced yet, Li Xiaojia, CEO of Hong Kong Exchanges and Clearing (HKEX), said it is preferred to launch SZ-HK Stock Connect on one of the Monday at the end of November. On October 13, 2016, HKEX and Shenzhen Stock Exchange (SZSE) held an investor roadshow in Hong Kong, signaling the start of the international investor roadshows for SZ-HK Stock Connect. Li Xiaojia,, CEO of HKEX, announced along with Wang Hong, Vice Executive President of SZSE, that HKEX and SZSE will conduct a three week system test for the trading link between October 17, 2016 and November 9, 2016, and is set to finish in mid-November. Brief Overview of SZ-HK Stock ConnectThe daily quotas of Hong Kong Stock Connect and Shenzhen Stock Connect are CNY10.5Bn and CNY13Bn respectively. SZ-HK Stock Connect has no aggregate quota in its initial launch. SZ-HK Connect covers about 880 stocks, which include the constituent stocks of SZSE Component Index and SZSE Small-Midcap Innovation Index with market capitalization of more than CNY6Bn, and stocks listed on SZSE which the companies have issued both A and H shares. Hong Kong Stock Connect covers constituent stocks of Hang Seng Composite LargeCap Index and Hang Seng Composite MidCap Index, constituent stocks with market capitalization of more than HKD5Bn of Hang Seng Composite SmallCap Index, and stocks listed on HKEX which the companies have issued both A and H shares. Impact to Hong Kong StocksHong Kong stocks is relatively undervalued in comparison with Shenzhen stocks, as evident by Shenzhen A shares have an average historical P/E ratio of 40x while Hong Kong stocks have an average historical P/E ratio of 11x. Chinese investors are expected to use the southbound channel to invest in Hong Kong stocks. However, we expect that only the MidCap and SmallCap stocks in Hong Kong will benefit from the SZ-HK Stock Connect, and the effect on major indices will be limited since they have been included in the Shanghai-Hong Kong Stock Connect already. For the first time, the stock connect expands to constituent stocks with HKD5Bn market capitalization of Hang Seng Composite SmallCap Index, whose valuation ratio implies the stocks are relatively undervalued in comparison with those listed on SZSE. Funds are expected to flow into the MidCap and SmallCap stocks in Hong Kong, and these stocks are expected to benefit from the stock connect programme. However, the primary participants of A Shares market are retail investors, who are highly sensitive to market rumours. Therefore, we expect the SmallCap and MidCap stocks in Hong Kong to be more volatile in the future. 
Click Here for PDF format...
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| Stock Code |
H share
Price |
A share
Price |
H share
discount |
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| Phillip Research - Hong Kong ½÷¥ß¬ã¨s³¡ ¡V »´ä¤Î¤¤°ê |
| Company |
Stock Code |
Last Update |
Suggestion |
Target Price |
Price on Recom |
| | O-Net Technologies | 877 | 27/09/2016 | No Rating | | 4.02 | | O-Net communications | 877 | 26/10/2010 | BUY | 7.15 | 6 | | | BAIC | 1958 | 20/10/2016 | BUY | 9.8 | 7.93 | | BAIC | 1958 | 19/10/2016 | BUY | 9.8 | 7.93 | | | Shenzhen-Hong Kong Stock Connect Series | | 27/10/2016 | | | 0.000 | | | Wisdom Sports Group | 1661 | 11/07/2016 | Buy | 3.3 | 2.18 | | NetDragon | 777 | 16/06/2016 | Buy | 28.4 | 22.9 | | | Kangmei Pharmaceutical | 600518 | 05/10/2016 | BUY | 20.1 | 16.22 | | China Traditional Chinese Medicine | 570 | 13/09/2016 | Accumulate | 4.4 | 3.98 | | | Guangzhou Baiyunshan Pharma | 874 | 18/10/2016 | Buy | 24.48 | 19.16 | | Guangzhou Baiyunshan Pharma | 874 | 17/10/2016 | Buy | 24.48 | 19.16 | | | CONCORD NE | 182 | 24/10/2016 | Buy | 0.6 | 0.39 | | SINGYES SOLA | 750 | 14/10/2016 | Buy | 5.1 | 4.12 | | | 361 Degrees | 1361 | 26/08/2016 | Buy | 3.2 | 2.48 | | Poly Culture | 3636 | 25/08/2016 | Accumulate | 23.5 | 19.84 | | | Chinasoft International | 354 | 26/10/2016 | Buy | 4.86 | 3.72 | | Chinasoft International | 354 | 25/10/2016 | Buy | 4.86 | 3.72 | | | ¤Ñ¼w¤Æ¤u | 609 | 06/09/2016 | ¼ÈµLµû¯Å | | 1.95 | | Fortune REIT | 778 | 23/08/2016 | No Rating | | 9.65 | | | HUADIAN FUXIN | 816 | 07/10/2016 | Buy | 2.51 | 1.84 | | Dynagreen | 1330 | 26/09/2016 | Buy | 5.52 | 4.14 | | | Goldpac Group | 3315 | 18/02/2015 | N/A | | 4.77 | | IGG | 8002 | 21/11/2014 | Accumulate | 3.95 | 3.44 | | | Jinjiang Hotels | 2006 | 08/07/2016 | Accumulate | 2.98 | 2.49 | | CUTC | 600358 | 08/03/2016 | N/A | | 10.41 |
Information contained herein is based on sources that Phillip Securities (Hong Kong) Limited and/or its affiliates ( the ¡§Group¡¨) believe to be accurate. The Group does not bear responsibility for any loss occasioned by reliance placed upon the contents hereof. The Group (or its employees) may have interests in relevant investment products. For details of different products¡¦ risks, please view the Risk Disclosures Statement on http://www.phillip.com.hk.
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