9M19revenue +0.2% YoY. Net profit -2.5% YoY. Adjusted net profit +0.5% YoY.RPK +6.2% YoY. Passenger load factor was 81.4%, up 0.5ppt YoY. For 4Q19, asChina and US are marching towards a “phase one” deal, we reiterate our view thatwe expect domestic demand to release. However, in the context of China-US tradefrictions and unrests in Hong Kong, higher proportion of international and regionalroutes is a double-edged sword. For 4Q19, we remain cautiously optimistic. Wefactor in our house view of 2019E average Brent crude oil, and raise TP from RMB9.47to RMB 10.40, corresponding to 1.5x 2020E P/B. Maintain BUY.n 9M19revenue in line. For 9M19, operating revenue increased 0.2% YoY toRMB 103bn, representing 74%/72% of our/consensus original full-yearestimates. Net profit decreased 2.5% YoY to RMB 6,762mn, representing93%/84% of our/consensus original full-year estimates. Net profit in 3Q19increased 4.4% YoY, benefitting from increase in other income and investmentincome. Adjusted net profit increased 0.5% YoY to RMB 6,557mn.n Disappointing operating results. For 9M19, RPK increased 6.2% YoY, lowerthan major peers (CEA +10.4% YoY, CSA +9.2% YoY). Although third quarteris a traditional peak season for business, student and tourism travel, traffic in3Q19increased 5.6% YoY, down 3.8ppt YoY. RPK from international/regionalroutes in 3Q19increased 4.4%/0.7% YoY, as compared with 12.7%/7.8% in3Q18. ASK increased 5.6% YoY, lagging management guidance of 9-10% atthe beginning of the year. Passenger load factor was 81.4%, up 0.5ppt YoY.n Cautiously optimistic 4Q19outlook. For 4Q19, as China and US aremarching towards a “phase one” deal, we reiterate our view that we expectdomestic demand to release. However, in the context of China-US tradefrictions and unrests in Hong Kong, higher proportion of international andregional routes is a double-edged sword. For 4Q19, we remain cautiouslyoptimistic.n Valuation. We adjust 2019/20E revenue down 0.7%/1.5% to reflect lower-thanexpected traffic growth. After drone attack on two Saudi Aramco’s oil facilities,production resumed faster than expected, our house trimmed 2019E averageBrent crude oil to US$64/b. We adjust 2019/20E net profit up by 20.6%/30.7%,and roll over TP to RMB 10.40. Our TP corresponds to 1.5x 2020E P/B. Thestock is currently trading at 1.2x 2020E P/B, lower than historical average of1.7x. Maintain BUY.

Zoomlion’s net profit in 3Q19came in at RMB904mn, surging 106% YoY, withinthe range of RMB850-950mn disclosed in the positive profit alert in mid-Oct.Going forward, rising infrastructure spending, resilient growth of property areaunder construction, replacement of national emission standard (NES) III trucks,and market share gain on tower crane will all serve as a share price catalyst. Wemaintain our TP of RMB7.28(based on 1.4x 2019E P/B, on the back of 11.6%-13.4% ROE in 2019E-21E), similar to the level in 2013(11.8%). Reiterate BUY.n Key highlights of 3Q19results. The net profit growth of 106% in 3Q19wasmainly driven by: (1) a 50% YoY increase in revenue to RMB9.5bn; (2) 1.2pptYoY expansion in gross margin to 29.4%; and (3) reduction of selling expenseratio and administrative expense ratio of 1.2ppt and 0.6ppt, respectively,thanks to the operating leverage. In 9M19, net profit surged 167% YoY toRMB3.48bn, representing 76% of our full year estimates. Operating cashinflow increased 62% YoY to RMB4.96bn, much higher than the net profit,suggesting high earnings quality.n Further growth driven by a couple of positive factors. Demand for towercrane and concrete machinery are correlated with the growth of property areaunder construction (8% YoY growth in Aug, highest growth rate over the pastfour years). Besides, Zoomlion is set to benefit from the structural risingdemand for large-size tower cranes, as a result of the increasing application ofpre-cast concrete construction. Furthermore, the elimination of NES III truckswill continue to lend strong support to the demand for truck crane and concretetrucks over the coming two years.n Risk factors: (1) Unexpected weakness on property construction activities; (2) Slow recovery of infrastructure spending; (3) High earnings volatility.

公司2019年三季度净利润下跌3.9%至1.83亿元人民币,主要因缺乏联营公司贡献利润所致(相对2018年三季度的高基数)。虽然三季度整体业绩略低于我们预期,但公司三季度收入同比增长10%,较二季度下跌2%有所改善,我们认为这反映复苏迹象。国内劳动成本上升仍是推动高空作业平台应用的主因,我们对鼎力看法维持正面,重申买入评级,目标价定于72元人民币不变(2020年预测每股收益30倍)。 三季度业绩亮点。2019年三季度收入同比增长10.4%至5.97亿元人民币。虽然毛利率同比下降4个百分点及环比下降1.2个百分点至39.6%,但我们认为这仍然属于理想水平。销售开支同比下降29%,反映公司严格控制成本。联营公司在2019年三季度仅贡献利润(主要用于海外业务)20万元人民币,同比下跌99%。不过值得注意的是,2018年三季度来自联营公司的利润异常地高且只属一次性质。撇除联营公司的贡献,公司2019年三季度净利润同比增长18%。 2019年前九个月的净利润占我们全年预测的74%。2019年首九个月的净利润同比增长12%至4.44亿元人民币。经营现金流入同比下降26%至3.29亿元人民币,主要是由于库存增加以应付销售。我们预期四季度盈利将改善,故维持盈利预测不变。 减持股份影响有限。同时,公司宣布德清中鼎股权投资管理有限公司计划在六个月内出售250万股鼎力股份。我们认为这因素对市场的影响有限,因为计划出售的股票仅占总股本0.72%。德清中鼎是目前由许树根拥有39.69%股权的投资公司。2018年,德清中鼎在市场上配售了367万股,价格为每股46.0-50.7元,远低于当前股价。 主要风险因素:(1)空高作业平台市场出现更多新竞争对手;(2)中美贸易争端不确定性;(3)国内工程活动差于预期。

Dingli’s net profit in 3Q19dropped 3.9% to RMB183mn, largely due to the lack ofprofit contribution from associate companies (versus a high base in 3Q18). Whilethe 3Q19result is slightly below our expectation, we are encouraged to see a 10%YoY growth of revenue in 3Q19, an improvement from a decline of 2% in 2Q19,which we believe is an early sign of recovery. We maintain our positive stance onDingli, as rising labor cost remains the key driver for the application of the aerialworking platform (AWP) in China. We maintain our BUY rating and TP of RMB72(30x 2020E EPS).n Key highlights on 3Q19results. Revenue grew 10.4% YoY to RMB597mnin 3Q19. While gross margin narrowed 4ppt YoY and 1.2ppt QoQ to 39.6%,we believe it’s still a comfortable level. Selling expense decreased 29% YoY,suggesting a stringent cost control. Profit from associate companies (mainlyfor overseas business) was only RMB0.2mn in 3Q19, representing a 99% YoYdecline. However, it’s worth noting that profit from associates in 3Q18wasunusually high, which was one-off in nature. The net profit growth excludingthe associate profit would be 18% (YoY) in 3Q19.n 9M19net profit accounted for 74% of our full year estimate. Net profit in9M19grew 12% YoY RMB444mn. Operating cash inflow dropped 26% YoYto RMB329mn, largely due to an increase in inventory for upcoming sales. Wehave left our earnings forecast unchanged as we expect earningsimprovement in 4Q19E.n Share disposal plan to have limit impact. Meanwhile, Dingli announced thatDeqing Zhongding Equity Investment Management has planned to offload2.5mn shares within six months. That said, we believe the impact to the marketwill be limited as the potential share sales account for only 0.72% of the totalo/s shares. Deqing Zhongding is an investment company which XU Shugenowns 39.69% stake at present. In 2018, Deqing Zhongding disposed 3.67mnshares in the market with a price range of RMB46.0-50.7per share, muchlower than the current share price.n Major risk factors: (1) more new entrants in the AWP market; (2) uncertainty onChina-US trade disputes; (3) weaker-than-expected construction activities inChina.

On 17Oct, CITICB reported 9M19net profit of RMB 40.8bn, up 10.7% YoY andaccounting for 86.5%/87.4% of CMBIS/consensus full-year estimates. In 3Q19,revenue saw an impressive gain of 21.3% YoY (vs 14.5% YoY in 1H19), mainlydriven by strong net interest income (+11.2% YoY), net fee income (+37.5%YoY), and trading and investment gain (+55.6% YoY). Despite a 38.9% YoYsurge in provision charges, bottom-line earnings still picked up by 12.3% YoY(vs 10.1% YoY in 1H19). 3Q19annualized ROE expanded 0.11ppt YoY to11.7%. Results positives: 1) CITICB’s loan growth remained healthy at 3.1%QoQ, faster than system loan growth of 2.6% QoQ and total asset growth of1.0% QoQ. We believe it was primarily driven by retail loans, as the Banktargets to lift its retail loan proportion to near 60% by 2021(43% as of 2Q19);2) Asset quality was well managed. NPL formation declined 38bps QoQ to1.34%, and NPL ratio stayed flat at 1.72%. Provision coverage climbed9.7ppts QoQ to 174.8%; 3) NIM widened 2bps QoQ to 1.98%, given abetter mix of interest-earning assets and strict control in funding cost; 4) Netfee income rose 37.5% YoY, likely on strong bank card and agency servicefees; 5) Capital position improved, as CET1CAR was up 18bps QoQ to8.76%. The outstanding RMB 40bn A-share CB has entered into conversionperiod since 11Sep, and it could potentially boost CAR by 80bps with 10.2%EPS dilution. Results negatives: 1) Deposit growth slowed to 0.4% QoQ, pushing upLDR by 2.6ppts to 97.7%. This was likely due to less deposit absorptioneffort under CBIRC’s clampdown on irregular structured deposits; 2) 3Q19opex went up 14.9% YoY, possibly on rising expenses in technologydevelopment. Maintain BUY and RMB 6.7TP. CITICB-A currently trades at 0.68x FY19EP/B, 13% below its past 5-year mean of 0.78x and 22% lower than A-shareJSBs’ average of 0.87x. We anticipate a positive share price reaction to theoverall solid 3Q19results. Furthermore, we see rising incentives formanagement to accomplish a decent earnings track record in order tofacilitate CB conversion.

On 29 Aug, ICBC reported 1H19 net profit of RMB 167.9bn, up 4.7% YoY and accounting for 53.7%/54.4% of CMBIS/consensus full-year estimates. 2Q19 PPoP rose 7.1% YoY, driven by a solid net interest income (+7.5% YoY) and robust net fee income (+12.5%). Impairment charges was flat YoY, helping to offset a higher tax expense due to low-base effect in 2Q18. As a result, bottom-line earnings growth accelerated to 5.2% YoY in 2Q19 (vs 4.1% YoY in 1Q19). The Bank will hold result briefing and reverse road show on 3-4 Sep in Beijing. We initiate coverage on ICBC’s A-share with BUY rating. Results positives: 1) 1H19 net fee income was up 11.7% YoY, mainly driven by settlement & clearing and guarantee & commitment businesses. The Bank’s non-interest income as of total revenue increased to 24% from 21% in FY18; 2) Deposit growth was strong at 8.0% HoH, the fastest among large banks and outpacing loan growth of 5.5% HoH, therefore sending LDR down by 1.7ppt HoH to 70.4%. 3) Asset quality continued to improve, as NPL ratio fell 3bp QoQ to 1.48%, and provision coverage climbed 6.2ppt to 192%. Overdue loan and special mention loan ratio declined 7bp and 21bp to 1.68% and 2.71%, respectively. 4) Lower RWA density, as RWA grew at a slower pace (+0.7% QoQ) than that of total assets (+2.5% QoQ), likely due to faster growth in retail vs corporate loans. Results negatives: 1) 2Q19 NIM contracted 4bp QoQ to 2.27%, in line with other large bank peers. Liability cost was up 10bp HoH on deposit cost hike, more than offsetting the 5bp expansion in asset yield. That said, 1H19 NIM only retreated 1bp YoY, vs 7bp YoY slip for CCB (939 HK, BUY); 2) CIR rose 0.6ppt YoY in 2Q19, possibly due to higher expense on technology development. 3) Annualized ROE in 1H19 declined 0.8ppt to 14.7%, given the subdued earnings growth. Initiate ICBC-A with BUY rating and RMB 7.2 TP. ICBC-A currently trades at 0.78x FY19E P/B, 3% below its past 5-year mean of 0.8x. Our TP of RMB 7.2 is based on a GGM-derived target P/B of 1.04x and FY19E BPS of RMB 6.9.

1H19net profit up 17%, slight beat. Midea’s net profit rose 17% YoY to RMB 15.2bn, inline with CMBI and 2% above BBG’s est. Sales growth was 8%, inline. The beat was aided mainly by robust GP margin expansion, jumping by 2.3ppt to 29.5% in 1H19(vs 27.2% in 1H18), thanks to: 1) falling raw material costs (copper -6%, aluminum -5% and steel -8%, etc), Midea benefited more vs peers due to its high self-production rate, 2) favorable FX (CNY -5% YTD), and 3) Midea’s multi-brand strategy (launch of high-end positioned COLMO in Oct 2018and Midea PRO series in Mar 2019, internet brand BUGU/ 布谷in Mar 2019and brand targeting youth WAHIN/华凌 in 2019). However, due to greater A&P and R&D expenses, NP margin only increased by 0.8ppt to 9.9%. Exceptional achievement (esp. on A.C.) in 1H19. Despite a ~4% drop in A.C industry sales, Midea’s A.C sales surged by ~12% YoY in 1H19(market share climbed to 27%/30% on offline/inline in 1H19, vs 25%/23% in 2018). We attribute such impressive results to its innovations (e.g. more products equipped with the “windless” technology, winning the 2019AWE Epland Gold Award). Washing machines/ Refrigerator/ small appliances sales growth were ~6%/~10%/~low-single digit in 1H19, vs industry growth of ~3%/ ~-1%/ ~5%. Prudent sales and rosy margins for 2H19E. The Company targets a 5-10% sales growth in FY19E and expects a GP margin expansion plus a faster growth for net profit. A.C. sales growth slowed down to ~10% in Jul/Aug 2019, according to management. However, in our view, that should not be a worry as margin should continue to improve given softening raw material prices and highly healthy level of channel inventory, at ~5-6mn units (vs industry’s ~20- 30mn). Also, we see potential upsides from export business’s GP margin since CNY had already further depreciated vs USD in 2H19E. KUKA sales missed in 1H19but management suggested a better 2H19E, for both sales and EBITDA margin. Maintain BUY and raised TP to RMB 64.96(20% upside). Our new TP is based on 16x FY20E P/E (rolled over from 18x FY19E). We lifted FY19E/20E/21E’s net profit by 1.9%/1.1%/0.2%, to factor in: 1) better A.C. sales, 2) declining raw material costs and currency rate and 3) greater R&D expenses. The counter now trades at 15x/ 13x FY19E/ 20E P/E with 2.6% forward yield.

美的上半年市场份额大幅增加,主要受惠于其空调产品的技术突破及多品牌策略。 在原材料价格有所改善以及人民币汇率下跌的情况下,我们对下半年净利润增长感乐观。我们维持「买入」评级,并上调目标价至 64.96元人民币,基于 20财年市盈率 16倍(此前为 19财年 18倍),对应 1.1倍 PEG。 上半年净利润增长 17%,略超预期。 美的净利润同比增长 17%至 152亿元人民币,符合招银国际预测,但较彭博预期高 2%。公司销售增长 8%,与预期相符。净利润主要受强劲毛利率增长支撑,在 2019上半年上升 2.3个百分点至 29.5%( 2018上半年为 27.2%),原因包括: 1)原材料成本下降(铜、铝、钢分别下跌 6%、 5%和 8%),而美的因自营生产率高,因此较同业更受惠于此项因素; 2)汇率利好出口(年初至今人民币下跌 5%),以及 3)美的多品牌战略( 2018年 10月推出高端定位品牌 COLMO、 2019年 3月推出 Midea PRO 系列、互联网品牌 BUGU /布谷、以及 2019年推出针对年轻群组的 WAHIN/华凌品牌。然而,由于更高的广告促销和研发费用,净利率比率仅增加 0.8个百分点至 9.9%。 2019上半年取得佳绩(尤其是空调)。 尽管空调整体行业销售下跌约 4%,但美的空调销售在上半年同比增长约 12%(线下/在线市场份额上升至 27%/30%,而 2018年为 25%/ 23%)。我们认为这成果归因于其创新产品(例如推出更多配备“无风感”技术的产品,和产品获得了 2019年 AWE 艾普兰金奖)。洗衣机/冰箱/小家电上半年录得约 6%/10%/低个位数销售增长,相对行业约 3%/1%/5%的增长率。 虽然下半年销售增长保守,但利润率提升可期。 公司在 2019年目标销售增长为 5-10%,并预期录得毛利率会有改善,以及更快的净利润增长。管理层表示, 2019年 7月/ 8月的空调销售增长放缓至 10%左右。不过,由于原材料价格持续走软,加上目前管道库存约为 500-600万件货(行业整体 2,000-3,000万件),属于健康水平,故我们认为空调的利润率应该会继续提高,并毋须担心销售放缓。此外,我们看到出口业务的毛利率还有潜在上升空间,因人民币兑美元汇率已在 2019下半年进一步贬值。 KUKA 上半年销售未达预期,但管理层相信销售及税前利润率均会在下半年有所改善。 维持买入评级,并上调目标价至 64.96元人民币( 20%上升空间)。 我们的新目标价是基于 20财年市盈率 16倍(此前为 19财年 18倍)。我们将19/20/21财年的净利润上调 1.9%/ 1.1%/ 0.2%,以反映: 1)空调销售增加,2)原材料成本及汇率下降,以及 3)研发费用增加。公司目前 19/20财年预测市盈率为 15倍/ 13倍, 19财年预测股息率为 2.6%。

Results positive: 1) 2Q19NIM edged up 2bp QoQ to 1.84%, vs a downward margin trend for other large banks. This was attributed to optimized asset mix and strict control in liability cost, according to management’s explanation during results briefing; 2) Demand deposit rose 7.2% HoH, faster than total deposit growth of 5.5% HoH. In particular, retail demand deposits expanded 11.5% HoH. The proportion of total demand deposit climbed 0.8ppt HoH to 49.5%; 3) Asset quality improved notably, as NPL slid 2bp QoQ to 1.40%, lowest among the Big-5banks. Both special mention and overdue loans saw double-decline in 2Q19. NPL recognition was more stringent, as NPLs covered 135.9% of >90-day overdue loans and 98.5% of total overdue loans (vs 123.5% and 75.9% in 4Q18); 4) CAR was supported by multi-channel capital replenishment. BOC issued RMB 40bn perpetual bonds and RMB 73b preference share in 1H19, boosting total CAR by 36bp HoH to 15.3%. Results negative: 1) Provision coverage dropped 7.1ppt to 177.5%, lower than Big-5average of 208%, indicating less buffer to hold up earnings should topline growth weakens. 2) Net fee income growth slowed to 3.6% YoY in 2Q19, dragged by falling fees on credit commitment and foreign exchange businesses. 3) 1H19annualized ROE declined 0.7ppt to 14.6%, as net profit growth remained subdued at 4.5% YoY. Initiate BOC-A with BUY rating and RMB 4.7TP. BOC-A currently trades at 0.63x FY19E P/B, 11% below its past 5-year mean of 0.71x. Our TP of RMB 4.7is based on GGM-derived target P/B of 0.84x and FY19E BPS of RMB 5.6.

We hosted SF (002352CH) interim results conference call yesterday. Mgmtexpressed upbeat outlook on volume recovery and progress of new business inview of 1) eye-catching volume contribution from preferential products sincerollout in May and 2) strong growth of new business in 1H19. Investors weremainly concerned about 1) volume recovery persistence, 2) financial conditiongiven heavy Capex this year, and 3) new business outlook. We maintain BUYrating with TP unchanged, based on 33% adj. EPS CAGR in FY18-20E.n Volume recovery to carry on into 2H19E. As express products bottomedout since May, combined with robust incremental volume from preferentialproducts, mgmt were confident that the Company would go ahead withaccelerated volume growth. We expect volume to increase 21%/ 20% inFY19/ 20E. Meanwhile, preferential products would remain as part of LTstrategies to enrich product portfolio and benefit SF from e-commerceprosperity, mgmt. added, with margins intact backed by 1) high-capacitytruck adoption, 2) capacity sharing between heavy cargo and preferentialproducts, and 3) technology empowerment.n Controllable financial pressure despite heavy Capex. Mgmt expectedCapex to accelerate in 2H19E, while total Capex in FY19E would be below10% of total revenue. Considering continued ABS shelf offering (industrialparks as underlying asset) and CB issuance in 2H19E, mgmt believed thefinancial pressure would be under control.n Mixed prospects on new business. Mgmt guided that revenue growth ofheavy cargo would fall behind its volume growth due to self-operatedbusiness slowdown in FY20E, caused by fierce competition and limited sizeof high-end market, while under more aggressive strategy, cold chain wasexpected to accelerate with widening loss. We forecast that heavy cargo/cold chain will grow 29%/ 41% YoY in FY20E, respectively.n Maintain BUY with TP unchanged. We maintain our forecasts unchangedand reiterate BUY with TP of RMB46.53based on 33x FY20E P/E, due to 1)SF’s ongoing volume growth momentum and 2) easing financial pressure onheavy Capex. Key risks include deteriorating macro environment andslower-than-expected e-commerce growth.

LONGi’s robust earnings performance was well expected by the market, but westill discover several highlights, including 1) non-silicon wafer costs reductionreached 31.75%, 2) module GPM reached 28.4%, and 3) accelerating capacityexpansion pace. We are impressed by LONGi’s cost control capability, and webelieve the Company now has enhanced product pricing power. We roll overvaluation to FY20E with multiple of 21.5x. Raise TP to RMB32.37, maintain BUY.n 1H19earnings surged 53.8%. Revenue increased 41.1% YoY toRMB14,111mn, driven by wafer/module external shipment growth of183.4%/21.0% YoY. Major operating expense remained in good control, andon track with our full year estimates. Net profit read RMB2,010mn, up 53.8%YoY. Based on 1H19results, we estimate 2Q19net profit was RMB1,398mn,up 128.7% QoQ, indicating significant increase in product profitability.n 1H19wafer non-silicon cost reduction reached 31.75%. The cost reductionpace was significantly faster than our expectation. At current poly-Si and waferprices, we estimate LONGi’s wafer sales GPM is likely to reach above 30%,which would be significantly higher than 1H19wafer sales GPM of 23.2%.Other than margin expansion, mgmt. also disclosed that the Company hasbeen running tight in wafer supply. Therefore, LONGi intenses to accelerateits wafer expansion pace by 1year earlier, setting new target to have 65GWwafer capacity by end-2020.n Module shipment reached 3.19GW with a GPM of 28.4%. Module GPMfurther expanded 4.6ppt YoY, despite the fact that 1H18module productpricing was substantially better, reflecting LONGi’s capability in cost control.For FY19, LONGi maintains 9.5GW module output target, of which 1-1.5GWfor internal use, leaving 8-8.5GW for external sales. Given LONGi’s excellentcost reduction, we expect module sales to maintain stable GPM in 2H19.n Enhanced pricing power. Given LONGi’s superior profitability comparingwith peers, we believe LONGi now has enhanced pricing power over peers,especially to those multi-Si wafer producers.n Raise TP to RMB32.37, maintain BUY. Based on revised costs and productprice outlook and CB conversion impact, we trim FY19-21E EPS forecast by3.3/1.6/3.2% to RMB1.25/1.51/1.93. LONGi had approached our previous TPof RMB28.00. We roll over our PE valuation to FY20E earnings based on amultiple of 21.5x. Given FY19-21E earnings CAGR of 29.0%, we believe ourmultiple selection is justified. Lift TP by 15.6% to RMB32.37per share.Maintain BUY.

SF posted revenue/ adj. net profit increase of 20%/ 25% YoY in 2Q19, driven by1) accelerated volume growth backed by new preferential services and 2)rigorous cost control. We believe most of negatives have been reflected in currentprice, and expect 1) solid business presence in various new initiatives and 2)steady volume growth to boost further growth afterwards. We raised FY19/ 20Eadj. EPS by 8%/ 7%, and upgraded it to BUY with TP of RMB46.53, representing39x/ 33x FY19/ 20E P/E.n Bottom-line beat in 2Q19. Since new business progressed robustly andvolume growth recovered moderately in Jun, revenue increased 19% YoY,in line with our est. Adj. net profit reached RMB1,494mn (+25% YoY), 16%higher than our est, due to 1) improved loading rate and 2) continued costcuts. Looking into 2H19E, we expect volume growth recovery to continuebacked by 1) share gain in mid/low-end market and 2) further penetrationinto fresh products and upmarket categories.n Bullish on new initiatives. As pioneer in new business initiatives, SFprogressed significantly through consistent heavy investment and closecooperation with global logistics giants (e.g. DHL). Revenue contributionfrom new business (cold chain, heavy cargo, supply chain and etc.) shot upfrom 16% in 1H18to 24% in 1H19. Going forward, we believe SF’s firstmover advantages will be better recognized in view of 1) brand recognitionamong enterprise customers, 2) economies of scale and 3) increasing entrybarriers, against the backdrop of other major peers rushing to expandpresence in those fields under LT growth pressure.n Ample cash reserve to fuel Capex. We expect Capex to be RMB11bn/RMB13bn in FY19/ 20E mainly for warehouses and civil airport. RecentlyCSRC approved SF to issue CB as much as RMB5.8bn, and we believe itwould help mitigate the Company’s financial pressure in NT. After financing,we forecast the cash on hand will be amounted to RMB19bn by End -FY19.If fully converted, the bond would dilute common shares by less than 3%, inour estimate.n Upgraded to BUY with TP of RMB46.53. We lifted our FY19-21E adj. EPSby 6-8% to reflect our upbeat outlook on volume recovery and new business.Therefore, we upgraded it to BUY and raised TP to RMB46.53, based on33x FY20E P/E (roll-over from previous 33x FY19E P/E).

On 28Aug, CCB reported 1H19net profit of RMB 154.2bn, up 4.9% YoY andaccounting for 57.0%/58.4% of CMBIS/consensus full-year estimates. 1H19PPoP had a decent growth of 6.7% YoY. Net interest income rose moderatelyby 4.6% YoY as margin narrowed, yet non-interest income (incl. fees, tradinggains, and investment return) picked up 12.8% YoY. Thanks to slowerexpansion in opex and impairment charges, bottom-line earnings grew faster at5.5%% YoY in 2Q19(vs 4.2% YoY in 1Q19). 1H19annualized ROE declined1ppt YoY to 15.9%, still the highest of the Big-4banks. We initiate coverageon CCB A-share with BUY rating.n Results positive: 1) 1H19net fee income was up 11.1% YoY, driven bybank card, wealth management, and electronic banking services. As a result,CCB’s non-interest income as of total revenue increased 1.5ppt YoY to27.2%; 2) Asset quality continued to improve, as NPL ratio fell 3bp QoQto 1.43% and provision coverage climbed 3.8ppt to 218%. However, we notethat overdue loans rebounded 18.2% HoH, and we would seek formanagement’s explanation during results briefing. 3) Credit growth wasprudent. The Bank maintained a stable growth in mortgage (+5.3% HoH)while reduced personal consumption loan (-17.1% HoH). Lending to utilityand construction segments, and discounted bills accounted for near 50% ofnew corporate loans. 4) Capital position remained strongest in thesector, as CET 1/total CAR only slid 13bp/8bp QoQ to 13.7%/17.1% due toappropriation of cash dividend in 2Q19.n Results negative: 1) 2Q19NIM contracted 4bp QoQ to 2.25%, as liabilitycost went up faster than asset yield. Given higher proportion of depositfunding, CCB may not benefit as much as most joint-stock peers duringmonetary loosening, but we believe the weaker margin trend was withinexpectation. 2) Proportion of demand deposit fell 0.5% HoH to 53.1%,leading to rising deposit cost thereby smaller net interest spread. 3) Assetgrowth slowed to 0.8% in 2Q19from 4.2% in 1Q19, as interbank assetspulled back 17% QoQ.n Initiate CCB-A with BUY rating and RMB 8.8TP. We expect a positiveshare price reaction to 1H19results. CCB-A currently trades at 0.83x FY19EP/B, in line with its past 5-year mean. Our TP of RMB 8.8is based on GGMderived target P/B of 1.05x and FY19E BPS of RMB 8.3.

中国人寿发布2019 上半年业绩。保费收入同比增长4.9%至3,779.8 亿元人民币。净利润同比增长128.9%至376 亿元, 与此前发布的盈喜( 净利润增长115%~135%)一致。令人欣喜的是,寿险新业务价值同比大幅增长22.7%,超预期的同时亦超越同业;内含价值较年初增长11.5%至8,868 亿元,主要由于超预期的新业务价值增长及期内优异的投资表现带来正向的投资回报偏差。 净利润激增,主要由于令人满意的投资表现和新的税收优惠政策。净利润大幅增长的主要原因是:1)采用新的税前扣除佣金和手续费政策后,上半年所得税节省51.5 亿元,此部分为非经常性损益2)投资收益改善,特别是股权投资。进入利润表的已实现收益及公允价值变动损益合计169 亿元(去年同期为亏损119 亿元)。上半年年化总投资收益率为5.78%,同比提升2 个百分点。 新业务价值强劲增长22.7%。根据我们的预测,公司新业务价值增长高于主要同业(此前公布业绩的平安寿险上半年新业务价值增速为+4.7%)。代理人渠道和银保渠道的新业务价值率分别提升4.2 个百分点和7.9 个百分点,这要归功于业务结构的优化,长期险产品和保障型产品占比提升。10 年期以上产品首年期交保费收入同比增长68%至381 亿元,占首年期交保费的比例达到45.8%。趸交保费收入同比下降近90%至不到10 亿元。期间,特定保障类产品占首年期交业务的比例同比提升5 个百分点。 代理人队伍迅速发展,姿态良好。个人代理人数较年初增长9.3%至157.3 万人。代理人渠道的首年期交保费收入同比增长5.0%。银行保险销售人员达到24.1 万人,保险规划师月均长险举绩人力同比增长43.4%。公司大力推进个险和银保渠道代理人队伍的整合,将为未来的业务增长打下坚实基础。 风险因素。1)代理人增速低于预期;2)资本市场波动影响股权投资业绩。 目标价提升至37.52 人民币;估值吸引。由于强劲的新业务价值增长和投资表现,我们将2019 年预测新业务价值和内含价值分别提升2.0%/1.3%。目标价提升至37.52 人民币,相当于较H 股目标价溢价50%。公司A 股股价相当于0.92 倍2019 年预测每股内含价值,近似同业平均。估值吸引。

概要。公司二季度业绩令人失望,我们将2019-21年盈利预测下调4-6%。,昨天股价于业绩公布后跌停,但相信市场已消化相关消息。我们对行业维持正面看法,主要由于国内劳动成本上升将继续拉动高空作业平台需求。我们把目标价下调至72元人民币,基于不变的30倍(2020年)目标估值。 上半年业绩回顾。2019上半年净利润同比增长27%至2.6亿元人民币。尽管中国市场收入同比增长35%,但北美市场下跌54%,导至公司2019上半年收入同比仅增长8%。在2019年二季度,公司收入同比下跌2%但净利润增长18%,主要由于:(1)高毛利的融资租赁收益增加,以及(2)净财务收入增加。但该增长并非由主营业务上升所拉动。 结构增长维持正面。我们从公司了解到尽管客户(如融资租赁公司)采取更保守的采购策略,但北美市场的终端用户需求仍具韧性。我们相信尽管北美市场对高空作业平台的需求短期内仍会受到贸易战不确定性所影响,未来数年中国市场将继续提供增长机会。 盈利变动。我们将2019E-21年的销量预测下调8-9%,基于我们现在对北美市场的取态趋向保守。我们上调融资租赁收入假设,因公司将继续通过其融资租赁公司拉动销售量。我们因此将2019-21E的盈利预测下调4-6%。 主要风险因素:(1)空高作业平台市场出现更多新竞争对手;(2)中美贸易争端不确定性;(3)国内工程活动差于预期。