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雷达卡
Most Chinese companies have reported their 2016 results; we review 2016 earnings and comment on 2017 sector guidance in this report:
■ Rebound of non-financials, but earnings upgrades not significant yet. The earnings picture reversed in 2016, with non-financials recording 9% YoY growth in 2016 (vs overall growth of 1%), while in 2015 growth was mainly contributed by the financial sector (financial sector growth of 12% vs overall growth of 1%). We see YTD MSCI China net earnings upgrades of 1.83%, which though higher than 2016 (-2.3%) is not significant yet. 2017 consensus EPS growth is now revised to 17.5%, from around 15% in the beginning of 2017, but still below our forecast of 20%.
■ Mixed 2017 sector guidance. Despite the strong nominal GDP growth from 4Q16 onwards, the guidance by Chinese sectors for 2017 is relatively mixed. Sectors geared more towards investment and interest rate cycle are generally more upbeat, but with other sectors it is not necessarily the case. Consumption is a rather mixed sector, with the high-end discretionary segment doing well, but not the mass consumption segment.
■ Positive overall trend and continue to Overweight old economy sectors. We believe the overall trend will still be positive. Thus we maintain our index targets unchanged, and we continue to overweight old economy sectors rather than new economy sectors. After the strong rally in many old economy sectors in the last few months, our top picks are the more laggard sectors like insurance (Ping An) and large cap property (CRL) with low gearing.
20170412-Credit Suisse-China-HK Market Strategy.pdf
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