摩根大通JP 中国宏观经济十二五计划深度研究报告

AsiaPacificEquityResearch13October2010ChinaStrategyThePowerofTrends:TheNextFive-YearPlanChinaFrankLiAC(852)[e-mail](852)[e-mail](AsiaPacific)LimitedSeepage49foranalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Relativeindexperformance50150250350450550Oct/05Oct/06Oct/07Oct/08Oct/09Oct/10HSCEIIndexSHCOMPIndexMSCIChinaSource:Bloomberg.•ReviewingourcallsinAugust:(1)Werecommendedbuyingondipsbasedonourviewthat:(a)China’srealGDPgrowth,onasequentialbasis,mayhavebottomedoutat7.2%Q/Qin2Q10;(b)liquidityconditionsareimproving.Lookingback,MSCIChinarose8.3%inSep10,outperformingMSCIEMby0.8%.•WeexpectMSCIChinatoriseby38%to94byend-FY11:WemaintaintheviewthatChina’sequitymarkethasbottomedout.Basedon17.38xtrailingP/E,a10%premiumtoitslong-termaveragetrailingP/Eof15.8x(since2000),andourMSCIChinaFY10andFY11EPSgrowthforecastsof27.4%and15.2%,respectively,weexpectMSCIChinatoriseby19%and38%fromthecurrentleveltoreach81and94byend-FY10andend-FY11,respectively.•Wehaveidentified8stickytrendsfacingChinaontheeveofthereleaseofChina’s12thFive-YearPlan:(1)theconsumptionboomonthebackofthegovernment’spoliciestoraisepeople’sincome,andtoincreasespendingonsocialsafetynetwork;(2)theurbanizationdrive;(3)thedevelopmentofwesternandcentralChina;(4)theaccelerationintheserviceindustry’sgrowth;(5)theagingpopulation;(6)thewater&energyconservationandemissionreduction;(7)theupgradeofChina’smanufacturingindustries,andthebuildingofsevenstrategicnewindustries;and(8)Rmbliberalizationreform.•Werecommendbuyingsectorsthatshouldbenefitfromtheabove8stickytrends,whichwethinkinclude:(1)consumer;(2)commodities,suchascement,whosedemandismainlydrivenbyChina’slocaldemandratherthanbyglobaldemand;(3)serviceindustries,suchaseducation,IToutsourcing,andhealthcare;(4)economichousingbeneficiaries,suchasBBMG;(5)heavymachinery,suchascoalminingmachinery;(6)nuclearpowerequipment,naturalgas,andwatertreatment;(7)telecomequipment;(8)HongKongStockExchangeandselectbrokers,whichcouldbenefitfromRmbliberalizationreform,andqualityB-sharestradingatasharpdiscounttoA-sharestobenefitfromthepotentialmergerbetweentheA-andB-sharemarketswiththedeepeningofRmbliberalizationreform;(11)banks;and(12)insurance.Wearenegativeonexporters,ports,tollroads,telcos,andutilities.Lastly,weupgradeproperty,andglobalbulkcommodities,suchasaluminum,fromunderweighttoneutral,andupgradeenergyfromunderweighttooverweightinourmodelportfolio.ChinatoppicksJPMRICMktcapEPSY/Ygrowth(%)P/E(x)P/BV(x)ROE(%)Div.yld(%)Recticker(US$MM)2010E2011E2010E2011E2010E2010E2010EBankofChina-HOW3988.HK4164429.013.09.18.11.619.64.3MindrayMedicalOWMRUS25699.625.522.518.03.421.70.9GeelyAutomobileHoldingsLtdOW0175.HK349735.321.714.011.52.823.30.9BBMGCorpOW2009.HK16102.851.514.99.82.014.10.7GloriousPropertyOW0845.HK2300-4.443.98.25.71.215.93.1Source:Bloomberg,J.P.Morganestimates.Sharepricesandvaluationsasof11October2010.2AsiaPacificEquityResearch13October2010FrankLi(852)[e-mail]stickytrendsinChina.................................................3ReviewingourkeycallsmadeinthepreviousissueofChinaStrategy.......................3WeexpectMSCIChinatoriseby38%to94byendFY11........................................5Identifyingstickytrendsaheadofthereleaseofthe12thFive-YearPlan(FYP)..............................................................10KeyobstaclestoChina’seconomicdevelopment......................................................11Policyinitiativestocomeoutofthe12thFive-YearPlan.........................................15SectorViews...........................................................................34ChinaModelPortfolio(CMP)adjustments...........................403AsiaPacificEquityResearch13October2010FrankLi(852)[e-mail]hinaReviewingourkeycallsmadeinthepreviousissueofChinaStrategyWemadethefollowingcallsinourAugustissueoftheChinaStrategyreportentitled,“AVolatileBottomingProcessAhead”,publishedonAugust24,2010:(1)WeshiftedfromarelativelycautiousstanceheldfromJanuarytoJuly,toamorepositivestanceonChina,andrecommendedinvestorsbuyChinaequitiesondips.FromJanuarytoJuly,FY10,wehaveheldarelativelycautiousstanceonChinabecause:(A)China’sexcessiveliquiditygrowth,i.e.,M2growthminusnominalGDPgrowth,isexpectedtogodownfrom21%inFY09to5%inFY10;(B)wewarnedaboutaneconomicslowdownastriggeredby:(a)thecrackdownonthepropertysectorbythegovernment;and(b)theinvestigationintothelocalgovernmentdebtproblembyCBRCbroughtaboutaslowdowninbanks’lendingtothelocalgovernment’sfundingvehicles,which,inturn,mighthurtthelocalgovernments’infrastructuralinvestmentprojects.InourAugustChinastrategyreport,werecommendedbuyingondips,aswebelieve