港股周策略报告-经济复苏进程疲弱,负面事件使市场进一步承压：市场缺乏正面驱动力,维持谨慎策略建议

Strategy Research Weekly Strategy – Hong Kong April 8, 2013 For ratings definitions and other important disclosures, refer to the Information Disclosures at the end of this report. 1 Market is under stress amid sluggish recovery and negative events Maintain our cautious stance for the lack of positive driving forces Strategy Highlights  Market Review Last week, the Hong Kong stock indexes dropped significantly. The daily average turnover on Mainboard was $63.0 billion with a 5.89% decrease from previous week ($67.1 billion), tumbled further away from the 30D average turnover. The HSI closed at 21,727 points on Friday, with 573 points, or 2.57% down; the HSCEI closed at 10,429 points, with 463 points, or 4.29% down, and the volume weighted return of HSI and HSCEI were -0.70% and -1.92% respectively. According to our industry indexes, steel, healthcare, Hong Kong power and property developers performed relatively well, with weekly returns of 1.93%, 1.33%, -0.71% and -1.81%, respectively, while machinery, electrics, airlines, and infrastructures were the laggards, with weekly return of -14.29%, -10.72%, -10.47% and -8.98%, respectively  Fundamental Analysis and Prospects The economic recovery is sluggish: From the production side, as revealed by the series of industrial added value data released in early March, the net industrial output did not, as expected, continue to accelerate, but fell slightly to 9.9% in February from 10% at the end of last year. Correspondingly, the added value growth of upstream industries of energy and raw materials marked a further decline, which implies that the demand from mid-and-downstream industries was insufficient, and actually did not effectively transmitted to the upstream industries; Indicated by macro data, the potential investment opportunities are still limited to mid-and-downstream industries of medicine manufacturing, automobile manufacturing, and gas production and supply industries. Released in the end of March, the accumulated year-on-year growth of enterprise profits recorded a good improvement, but low base effect is obvious: If examining the year-on-year growth on a quarterly basis, it can be observed that the profit growth actually fell slightly, while in the breakdown by business types, we see some harder facts that the state-owned enterprises is the key driver that pulling up the growth rate of industrial profit, however the profit growth of joint-stock enterprises and private enterprises, on the contrary, marked a significant slowing-down. Because of these phenomena we are now very concerned about the strength of the economic recovery, and perhaps the recovery process can hardly continue spontaneously. In another angle, we see also the weakness on the demand side that can testify the above-mentioned phenomena on the production side: we found ANALYST Xu Bo (Albert) SFC CE No. AXG732 +852 2899 6758 xubo@guosen.com.hk Hong Kong Equity Indices Source: Guosen Securities (HK), Bloomberg Index Performance HSI Close Last Week 21,727 HSI Wk Return/Vib（%） -2.57/3.80 HSI 52w High/Low 23,945/ 18,056 HSI PE（TTM） 10.34 HSCEI PE（TTM） 8.58 Source: Guosen Securities (HK), Bloomberg -5%0%5%10%15%0.40.60.81.01.21.42012-04-052012-10-052013-04-05Dispersion AccHSIHSCEI 策略研究 港股周策略报告 2013年4月8日 国信证券（香港） 研究报告仅代表分析员个人观点，请务必阅读正文之后的免责声明。 that real estate investment is actually the core driver for the overall economic recovery from the second half of 2012, investment in rail transportation and urbanization initiated by government is limited, and traditional manufacturing industries has not been adequate stimulated; And furthermore, since the curbs on property sales is tightening, it would become a definite result that the consumption will be weakened in the upstream building-and-materials sectors and downstream household-product sectors; What’s more, under this condition, we found that the FAI-driving force from the central government weakened month by month, which means, as opposed to 2008, local governments have had to bear a greater responsibility by not only the investment scale but also the participation ratio; And there is another negative factor that is the No. 8 Document issued by China Banking Regulatory Commission, which will eventually, in essence, increase the financing cost to demand side. The outlook of industrial enterprises remains relatively healthy: National Bureau of Statistics announced in early April that PMI composite index was 50.9, with a slight improvement compared to 50.1 in February, which shows that the industrial outlook remains healthy, but after seasonality adjustment we find out that the adjusted composite index retreated 2.16 and other three major sub-indexes, i.e., production, new orde