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1、Deutsche BankMarkets Research,AsiaChinaStrategy,PeriodicalMade in China,Date24 August 2012Jun Ma,Ph.D,Hui Miao,Ph.D,China August flash PMI disappoints,D/G Baidu to HoldKEY POINTSBOC Hong Kong Holdings-Strong results;Better RMB funds utilization,Chief Economist(+852)2203 Michael Tong,CFAResearch Anal
2、yst(+852)2203,Strategist(+852)2203,boosts NIM(2388.HK,Buy,Target Price:HKD 24.60,Closing Price:HKD24.90,Sophia Lee)Franshion-1H12 declines expected;2H12 should be stronger(0817.HK,Buy,Target Price:HKD 3.55,Closing Price:HKD 2.39,Tony Tsang)The United Laboratories-1H12 first read:Robust recovery(3933
3、.HK,Buy,Target Price:HKD 3.90,Closing Price:HKD 4.01,Jack Hu)THEME OF THE DAYAsia Data Flash-China:August flash PMI disappoints(Jun Ma)HSBCs flash manufacturing PMI dropped to 47.85 in August from 49.3 in July,indicating that the momentum of the economy remains sluggish and a lowerprobability of IP
4、growth recovery in August.In the HSBC flash PMI report,thedecrease of the headline index is mainly due to the worse output(-3ppts)andnew orders sub-indices(-2.1 ppts).The subindices of input prices,new exportorders,stocks of purchases and backlogs of work also dropped by about2ppts.(Jun Ma 852 2203
5、8308)http:/pull.db-Landscape shift;D/G to Hold(BIDU.OQ,Hold,Target Price:USD137.00,Closing Price:USD 122.80,Alan Hellawell III)Our channel checks suggest Baidu lost 4-8 percentage points search trafficmarket share to Qihoo,which launched its search engine solution on Aug 16,2012.We expect Baidu to c
6、ontinue to lose traffic share to Qihoo in the next 2quarters before Qihoos traffic share likely stablizes at 15-18%.We estimaterevenue and EPS impact to be 6%and 9%in 2013.We cut our 2013 and 2014EPS by 9%and 10%.Our 2013 EPS is 10%below consensus.(Alan HellawellIII 852 2203 6240)http:/pull.db-Pharm
7、aceuticals-1H12 better than expected;limited earningvisibility(2607.HK,Hold,Target Price:HKD 15.00,Closing Price:HKD 12.82,Jack Hu)Shanghai Pharmaceuticals(SPH)reported a solid 1H12,with revenue/non-GAAP net profit of RMB33.6bn/RMB1.06bn,beating Street consensus ofRMB33.1bn/RMB1.0bn,representing 30%
8、and 32%YOY growth,respectively.We expect top-line growth to decelerate,as M&A activity moderates in 2013.We reiterate our Hold rating and increase our target price to HKD15.(Jack Hu 852 2203 6208)http:/pull.db-Bank AG/Hong KongAll prices are those current at the end of the previous trading session u
9、nless otherwise indicated.Prices are sourcedfrom local exchanges via Reuters,Bloomberg and other vendors.Data is sourced from Deutsche Bank and subjectcompanies.Deutsche Bank does and seeks to do business with companies covered in its research reports.Thus,investors should be aware that the firm may
10、 have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.DISCLOSURES ANDANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.MICA(P)072/04/2012.,24 August 2012Made in ChinaDB EQUITY RES
11、EARCHFocus Media-2Q12 review-respectable results;Buy(FMCN.OQ,Buy,Target Price:USD 36.68,Closing Price:USD 25.19,Anne Ling)FMCNs 2Q12 non-GAAP net profit beat our estimate and company guidance by 5%and 9%,respectively.For 3Q12,FMCN guides sales to increase 23%yoy to US$241-243m and non-GAAP net profi
12、t to increase 12%yoy to US$92-94m.We adjust our EPSforecasts by-1.4%,-1.6%and+1.5%for FY12-14,respectively,to reflect the change insales mix,especially in branding adex and promotion adex,and share repurchase.Buy.(Anne Ling 852 2203 6177)http:/pull.db-1H12 declines expected;2H12 should be stronger(0
13、817.HK,Buy,TargetPrice:HKD 3.55,Closing Price:HKD 2.39,Tony Tsang)With quality exposure in prime-location commercial properties and star-rated hotels inChina,Franshion is well positioned to capture further growth from both the segments.Moreover,as contribution from its active acquisitions in the pas
14、t two years acceleratesfurther,we believe it should ease investors concern over Franshions strategies andexecution capability.Indeed,Franshion is now entering the harvesting stage from theseinvestments,which will be a key driver for stronger earnings growth ahead,in our view.(Tony Tsang 852 2203 625
15、6)http:/pull.db-On Land Ltd-1H12 a non-event;2H12 should show stronger sales and earnings(0272.HK,Buy,Target Price:HKD 5.01,Closing Price:HKD 3.08,Tony Tsang)Shui On Lands reported declines in 1H12 net profit should not cause too muchconcern,in our view,because the decline was due to an uneven distr
16、ibution of saleableresources and property completions in 1H vs 2H.As more saleable resources inShanghai and in non-core commercial properties should become available in 2H,weexpect to see an acceleration in property sales in 2H12,which should present positivecatalysts.In addition,with more planned p
17、roperty delivery in 2H,we expect to seestrong earnings momentum in 2H.(Tony Tsang 852 2203 6256)http:/pull.db-China Cement-NDR takeaways looks cheap after our prudent revisions(2233.HK,Buy,Target Price:HKD 1.67,Closing Price:HKD 1.19,Johnson Wan)We hosted an NDR for WCCs top management.The key takea
18、way is that WCC hasnow shifted gears,focusing on profitability rather than growth.After two rounds ofconsolidation in Shaanxi over the last 12 months by Conch and WCC,Shaanxi hasmatured with the top-4 players commanding over 80%market share.The outlook forShaanxi is strong,and management believes it
19、 can maximize profitability through betterintegration of its assets.Based on this new strategy,we lower our sales forecast butstill believe WCC is attractively priced.We maintain Buy and raise target price toHKD1.67.(Johnson Wan 852 2203 6163)http:/pull.db-:Hang in there(3800.HK,Hold,Target Price:HK
20、D 1.30,Closing Price:HKD1.23,Eric Cheng)GCL reported a net loss of HK$330m,in line with its profit warning announcement twoweeks ago.We believe the near-term outlook for the sector will remain difficult,as wesee another c.10%drop in the spot polysilicon price since end-2Q12.Though GCL is themarket l
21、eader in the industry,its profitability is unlikely to return until we see furtherindustry consolidation and elimination of excess supply.We maintain our Hold rating.(Eric Cheng 852 2203 6202)http:/pull.db-Broadcasts-2H12 no slowdown in HK ad spending in HK ytd;maintainingHold(0511.HK,Hold,Target Pr
22、ice:HKD 55.88,Closing Price:HKD 56.85,Anne Ling)Television Broadcasts(TVB)1H12 net profit growth of 28%is better than we expected.Thus,we raise our forecast by 18%,11%and 10%for FY12-14,respectively.TVB seesno signs of slowdown,but we are more cautious as we saw a slowdown in HK retailsales.The long
23、-awaited China JV has concluded;the next step is to monitor itscapability to monetize TVBs China operations.We maintain our Hold rating as totalreturn offers limited upside potential.(Anne Ling 852 2203 6177)http:/pull.db-,Page2,Deutsche Bank AG/Hong Kong,24 August 2012Made in ChinaLi Ning Co Ltd-Fu
24、ture order process becoming more spot order-driven(2331.HK,Hold,Target Price:HKD 4.70,Closing Price:HKD 4.26,Chen Feng)Li Ning(LN)is still in a restructuring phase,with a focus on clearing inventory and onmore cooperation with distributors to achieve higher store productivity.LN will offer anextra c
25、.1%wholesale discount to distributors at the 2013 trade fair and implement aspot order system,rather than the future order process used previously.As LN is stillin a transition phase and with an uncertain industry outlook,we continue to maintain aHold rating and target price of HKD4.7.(Chen Feng 852
26、 2203 8309)http:/pull.db-Inc-Mixed business momentum(RENN.N,Sell,Target Price:USD 3.15,ClosingPrice:USD 3.95,Alan Hellawell III)We expect Renrens online ads to face increasing pressure in 2H12 and to decline on aYoY basis.We expect the online gaming and group-buy businesses to continue theirstrong m
27、omentum,driven by favorable market trends.This mixed business momentumis likely to lead to a broadly in-line top-line growth but margins could surprise on thedownside on inv activities.Sell.(Alan Hellawell III 852 2203 6240)http:/pull.db-of China-1H12 Results In Line;Profit growth converges to ICBC
28、and CCB(3988.HK,Buy,Target Price:HKD 3.67,Closing Price:HKD 2.99,Tracy Yu)BOCs reported net profit rose by 7.6%yoy to Rmb71.6bn(Consensus;Rmb71bn)in1H12 and accounted for 54.7%of our full year estimates.Adjusting for the one-offcontribution of Rmb2.38bn from the underlying collateral of Lehman Broth
29、ers Mini-bonds booked in June 2011,the companys net profit should rise by 12.2%,which iscomparable to our forecast growth for ICBC(Buy;HK$4.48)and CCB(Hold;HK$5.36).On our estimates,BOC is trading at 0.9x 2012E P/B,with a P/E of 5.2x and we maintaina Buy rating on the stock.(Tracy Yu 852 2203 6191)h
30、ttp:/pull.db-Unicom-2Q12 results first take(0762.HK,Buy,Target Price:HKD 19.40,ClosingPrice:HKD 13.02,Alan Hellawell III)Unicom reported 2Q operating revenue of RMB60.5b,in line with DBe and shy ofconsensus by 1%.Mobile service revenue increased 21.5%YoY to RMB31.2b,lowerthan DBe by 4.7%.Mobile as a
31、 percentage of service revenue rose 4.9pp to 59.1%in1H12 Fixed line service revenue increased 2%YoY to RMB20.9b,beating our numberby 1%.Lastly,non-service revenues(mostly handset sales)increased to RMB8.1b,RMB1b higher than DBe.(Alan Hellawell III 852 2203 6240)http:/pull.db-Hong Kong Holdings-Stron
32、g results;Better RMB funds utilization boosts NIM(2388.HK,Buy,Target Price:HKD 24.60,Closing Price:HKD 24.90,Sophia Lee)BOC(HK)reported strong results with 1H12 net profit of HKD11,243m beating streetestimates by 11%.Adjusting for Lehman Minibond write back which was included in1H11,net profit incre
33、ased by 16.2%YoY.NIM improvement was notable,which wasdriven by better utilization of offshore RMB funds,improved loan yields and beingprudent in responding to rising deposits competition.NIM improved by 20bps HoH butwhen excluding the effects of excess RMB deposits related to its clearing function,
34、NIMimproved by 14bps HoH.While specific figures were not provided,management citedsatisfactory growth in its offshore RMB business,with encouraging growth in lendingand investment;fee income benefited from RMB syndicate loans arrangement,RMBQFII funds servicing,and Dim Sum bond underwriting.(Sophia
35、Lee 852 2203 6226)http:/pull.db-1H12 results-earnings inline but balance sheet deteriorated(3323.HK,Buy,Target Price:HKD 10.81,Closing Price:HKD 8.22,Johnson Wan)CNBM reported its 1H12 results after market close on Aug 23,with bottom line ofRMB1.9b(EPS of RMB0.35/sh),down 47%YoY and top line of RMB3
36、.8b,up 10%YoY.The earnings were in line with DBe and consensus estimates(achieving 33%and 31%of DB and consensus estimates)but balance sheet had worsened with net debt risingby RMB25b,up 34%from end 2011.If we stripped out non-core income fromgovernment grants,up 51%YoY,earnings would decline by 53%
37、YoY.No interimdividend was announced.(Johnson Wan 852 2203 6163)http:/pull.db-Electric-Key takeaways from 1H12 results conference call(1072.HK,Buy,Target Price:HKD 21.70,Closing Price:HKD 12.70,Michael Tong),Deutsche Bank AG/Hong Kong,Page3,24 August 2012Made in ChinaWe host a conference call this m
38、orning and summarized key takeaways from the call aswell as yesterdays online briefing.Overall,management stated that they will strive toreach FY12 operational targets set earlier this year in terms of sales output(35.5GW)and new order intakes(Rmb48bn),vs 16.5GW.and Rmb22bn achieved respectively in1
39、H12.With regard to gross margin,management is confident to maintain at 1H12 levelfor coal/gas/hydro/nuclear equipment in 2H11 and 2013,while expecting furtherdownside for construction and wind businesses(i.e.another 2-3ppt decline for wind).(Michael Tong 852 2203 6167)http:/pull.db-1H12 results in l
40、ine;profit down due to uneven delivery schedule for 1H:2H(0817.HK,Buy,Target Price:HKD 3.55,Closing Price:HKD 2.39,Tony Tsang)Franshion reported that its 1H12 revenue+96%YoY to HKD3,618mn,gross profit+81%YoY to HKD2,014mn,and net profit attributable to shareholders-2%YoY toHKD1,603mn.However excludi
41、ng fair value gains on investment properties(net ofdeferred tax),core net profit attributable to shareholders fell 44%YoY to HKD593mn.The decrease is in line with our expectation,as most of Franshions property completion beware ofdeterioration risks(1988.HK,Hold,Target Price:HKD 8.25,Closing Price:H
42、KD 7.17,Tracy Yu)Minsheng Bank reported 1H12 NPAT growth of 36.9%yoy to Rmb19bn,which wasRmb1bn ahead of consensus estimates(Bloomberg).Adjusting for the stronger thanexpected gains of Rmb2.73bn from the trading of discounted bills(1H11:Rmb1.11bn),we believe the headline profit growth is at best in
43、line with consensus forecast,with avisible deterioration in the quality of the 2Q results.Excluding the more volatile tradingand FX income,Minsheng Banks underlying pre-tax profit in 2Q12 fell by 4.8%qoq,with yearly growth rate falling to 12.4%yoy,down from 53.4%yoy in 1Q12.Morespecifically,net inte
44、rest income fell by 0.4%qoq,bringing down NIM by 25bps qoq to3.1%.Net fee income was also down by 4.8%qoq and 1.5%yoy.(Tracy Yu 852 22036191)http:/pull.db-,Page4,Deutsche Bank AG/Hong Kong,24 August 2012Made in ChinaBeijing Cap Intl Airport-1H12 results inline with increased interim dividend payout;
45、Hold(0694.HK,Hold,Target Price:HKD 5.40,Closing Price:HKD 5.27,Vincent Ha)Beijing Capital Intl Airports(BCIA)1H12 net revenue YoY grew by 8%to RMB3.2bndespite a flattish 4%YoY aircraft movement increase.This was driven by a solid 10%YoY increase in the non-aero revenue and improvement in traffic mix
46、 with moreinternational flight contributions.As BCIA also managed to contain YoY operatingexpense growth to a mere 8%,its net profit rose 13%YoY to RMB580m,in line with ourexpectations.Moreover,BCIA raised its 1H12 interim dividend payout ratio to about30%(1H11:about 15%).(Vincent Ha 852 2203 6247)h
47、ttp:/pull.db-Iron and Steel-1H12 results-Expand the losses(0323.HK,Hold,TargetPrice:HKD 1.96,Closing Price:HKD 1.73,James Kan)Maanshan announced its 1H2012 results on 23 August 2012.The company makesRMB1,893mn net losses in 1H12,bigger than DBs 1H12 estimate of RMB859mn,andits about 8 and 7 times of
48、 FY2012 DBe net loss forecast and Bloomberg consensus,respectively.We believe the results might imply both DB and consensus estimates toohigh.Results details are shown in Figure 1.(James Kan 852 2203 6146)http:/pull.db-Ning Co Ltd-1H12 results update(2331.HK,Hold,Target Price:HKD 4.70,ClosingPrice:H
49、KD 4.43,Chen Feng)Li Ning(LN)announced 1H12 results.Sales were down by 9.5%yoy to RMB3880m,and net profit was down by 85%to RMB44m.Net profit is slightly below our forecast ofRMB60m.The company did not declare interim dividends.As LN already announced aprofit warning in June,this announcement should
50、 be a non-event.However,this time inits outlook,LN said that FY12 may post a loss due to short-term adjustments.(ChenFeng 852 2203 8309)http:/pull.db-TMT Daily Weibo Desktop 2012;also,SINA,0728.HKUtility/Alternative Energy 1H12 results comment for CEI;update on coal price andsolarAsia Financial Dail
