Bank of Ningbo is engaged in taking in public savings; granting loans; handling domestic settlements; handling discount of negotiable instruments; issuance of financial bonds; acting as an agent for the issue and underwriting of government bonds; buying and selling government bonds; inter-bank funding; providing guarantees; acting as an agent for accounts receivable and payable, and insurance; provision of safety-deposit box service; commission loan operations; foreign exchange deposit, loan and remittance; undertaking foreign currency exchange; international settlement, foreign exchange dealings and borrwings and providing foreign exchange guarantees.
Ping An Bank is providing commercial banking services approved by Bank of China. Co is engaged in the offering of company loans, deposits, trade finance, company wealth management, and company intermediary services; providing personal loans, deposits, bank cards, personal wealth management services, and other personal intermediary services; local and foreign currency tradings; bond investments and other money market operations; and providing central management on non-performing assets, equity investments and nonclassifiable assets, liabilities, revenues and expenditures. As of Dec 31 2013, Co. had total assets of RMB1,891,741,000,000 and total deposits of RMB1,667,791,000,000.
Despite the market rally in the first 20 days of the month, May 20 still saw a sharp decline amid rising Sino-US tensions. We expect equity markets to remain volatile in June; hence, we prefer low-beta and stick to the beneficiaries of policy support, durable themes and names with strong balance sheets. Our key picks are Ausnutria Dairy, CEG, CIFI, Kingsoft and ZTE.
Larger banks (SOEs and JSBs) outperformed smaller ones (city banks and rural commercial banks) in asset quality and profit growth in 1Q20. Amid the current economic downturn, larger banks showed better NPL management ability while higher provisions offered protection from asset deterioration. Besides, larger banks showed a better ability to moderate NIM compression in the low interest environment. Upgrade the sector to MARKET WEIGHT; top pick is CCB (939 HK).
While we are optimistic for infrastructure REITs to gain traction in the long term as it aligns with China’s structural reform goals, projections of near-term impact would be premature for now as key details remain sparse. We expect a scale of Rmb300b- 500b to set the ball rolling. This reinforces our positive view on infrastructure FAI. Within our coverage, Sany Heavy, Zoomlion and Anhui Conch could be upstream beneficiaries. Unfavourable tax regime may be a potential stumbling block.
Meituan is well positioned in China’s large consumer services market with a dominant position. It has been solidifying its leading position in online local services in China’s mostly duopolistic market, spanning food delivery, in-store dining and online services, with a market share of 65% as of 2019 in China’s online on-demand delivery market in terms of GTV, and 35% of online hotel bookings by number of domestic room nights. Initiate coverage with BUY and target price of HK$175.00.
KEY HIGHLIGHTS Initiate Coverage Meituan Dianping (3690 HK/BUY/HK$150.00/Target: HK$175.00) Leader of duopolistic market riding on resilient local services. TRADERS’ CORNER Budweiser Brewing (1876 HK): Trading Buy Range: HK$24.95-25.00 Minth Group (425 HK): Trading Buy Range: HK$23.15-23.20
KEY STORY GREATER CHINA Initiate Coverage Meituan Dianping (3690 HK/BUY/HK$147.10/Target: HK$175.00): Leader of duopolistic market riding on resilient local services. GREATER CHINA Initiate Coverage Meituan Dianping (3690 HK/BUY/HK$147.10/Target: HK$175.00): Leader of duopolistic market riding on resilient local services. INDONESIA Sector Plantation: The government is determined to carry out the B30 mandate as planned, with additional funding support to top up CPO fund. MALAYSIA Sector Banking: Sentiment on the sector has turned more positive on the economic re-opening theme. Upgrade RHBBa...
China’s official manufacturing PMI retreated to 50.6% but non-manufacturing PMI rose to 53.6% in May 20, likely boosted by the sustained recovery in construction activities as well as a pick-up in demand mom during the May Golden Week. We would like to highlight the declines in both employment sub-indices as a key concern, considering the NPC has repeatedly emphasised “stabilising employment” as the main priority in the absence of a GDP growth target in 2020.
KEY HIGHLIGHTS Economics Two Sessions Beyond The Government Work Report The 2020 draft Budgets largely complement key policy goals put forth in the GWR. The NDRC’s Development Plan for 2020 mainly aims to achieve China’s 13th FYP goals. Strategy Impact Of Holding Foreign Companies Accountable Act Chinese ADRs could be forced to delist from the US, accelerating the trend of their secondary listings in Hong Kong. Sector Steel Weekly: Raw material cost hikes and higher inventory weigh on margins. Results Trip.com Group (TCOM US/HOLD/US$25.34/Target: US$23.00) 1Q20: Revenue beat, botto...
Upon conclusion of the Two Sessions, we note that the 2020 draft Budgets largely complement key policy goals put forth in the GWR. Meanwhile, the NDRC’s Development Plan for 2020 is primarily angled towards the attainment of China’s 13th FYP goals. Premier Li re-iterated the importance of keeping to the bottom line of targeted easing and ensuring “Six Security” for positive economic growth in 2020. Further policy support could also be promptly introduced if necessary.
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