Local Broker Insight:
CICC: Investment Strategy
Its 2014 investment strategy report forecasts an annual yield of 20% for the Shanghai Composite Index, the first double digit returns in 4 years. The reason for the optimism was due to CICC seeing improvement in fundamentals, as well as better short-term and long-term earnings prospects, and the earnings improvement was not due to sharp deleveraging, but was brought about falling cost and higher efficiency. In addition, CICC believes there will be higher production efficiency in the future generated by the reform measures. www.cicc.com
SWS: Real Estate
After the Third Plenum, there is a very strong wait-and-see attitude in the market. The market is still interpreting the rules about the property tax, homes with limited property rights, residential land transfer, and rural construction land market operations. Transaction enthusiasm is not high and transaction volume continues to shrink. Still stick to our recommendation of growth stocks backed by strong earnings and thematic stocks which we believe will benefit from the implementation of the Third Plenum. www.swsresearch.com
SWS: Telecom
We think that after China’s telecom carriers obtain 4G licenses, the iPhone 5S will become a crucial weapon for China Mobile to develop the 4G business, as well becoming the core engine driving Apple’s whole industrial chain’s rapid growth during the first half of 2014. New devices that will be rolled out to market in 2014 also include the iWatch, iTV, Google Glass, Galaxy Gear2, that we believe will drive market expectations about future market room, becoming the core driver for related companies to have relative valuation advantages. www.swsresearch.com
SWS: Environmental Protection
The public is mainly concerned about environmental safety and we are optimistic about sub-sectors in this field, which include air quality management, industrial water treatment, drinking water safety and soil protection. We believe the peak for the air quality management market will continue and leading players in the industry will see rapid growth momentum in 2014 and 2015. www.swsresearch.com
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