《高盛最新中国策略研究报告》

1、october 29, 2009 china: portfolio strategy themes for 2010: follow the big trends thematic investing makes sense the risk/reward of engaging in theme-based investing seems favorable in 2010 as the government is remolding chinas growth orientation and sound investment opportunities usually emerge dur

2、ing a paradigm shift. big trends: reforms and integration we see the most compelling themes centering on what we believe are two secular trends in china: (1) deepening reforms and (2) integration. deepening reforms (structural, financial, and fiscal support): - health care reform: the government wil

3、l spend rmb850bn in the next 3 years and deregulation could create long-term investment opportunities. - inland vs. coastal: a more targeted way to trade chinas robust domestic demand against an anemic g3 growth recovery. - chinese autos: affordability has increased significantly, yet auto penetrati

4、on in china remains very low in a global context. - a-share issuance us$40bn of new equity could hit the market in 2010 (1.5% of market cap). brokers are likely to be the first to benefit. - a-share listing: offshore-listed stocks could list domestically in 1q10 and they tend to perform well ahead o

5、f their a-share listing dates. integration: - shanghai world expo: may attract 70mn visitors to the city and the infrastructure work should bode well for future growth. - cross-strait development: closer ties across the strait may benefit all concerned. buy chinese it and fujian-based firms. our rec

6、ommended themes for 2010 china: portfolio strategy thomas deng, cfa +852-2978-1062 | goldman sachs (asia) l.l.c. kinger lau, cfa +852-2978-1224 | goldman sachs (asia) l.l.c. kenneth kok, cfa +852-2978-0960 | goldman sachs (asia) l.l.c. sunil koul (212) 934-6971 | goldman sachs india spl policy objec

7、tives rebalance + sustain growth deepening reforms further integration financial gem structural healthcare + education fiscal inland vs. coastal wto brics bonds rates intl board unleashing domestic consumption 2008 beijing olympics a-share brokers red-chip listings healthcare reform go west chinese

8、autos world expo cross strait source: gs global ecs research. the goldman sachs group, inc. does and seeks to do business with companies covered in its research reports. as a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this rep

9、ort. investors should consider this report as only a single factor in making their investment decision. for reg ac certification, see the end of the text. other important disclosures follow the reg ac certification, or go to analysts employed by non-us affiliates are not registered/qualified as rese

10、arch analysts with finra in the u.s. this report is intended for distribution to gs institutional clients only. the goldman sachs group, inc. goldman sachs global economics, commodities and strategy research goldman sachs global economics, commodities and strategy research 1 jun-00 jul-06 jun-07jan-

11、00 aug-05 jan-07oct-02jun-08 feb-05dec-00sep-03 sep-04feb-06 may-01 may-02 dec-07mar-04 199519961997199819992000200120022003200420052006200720082009 may-09nov-01nov-08oct-09 apr-03 30 25 2 october 29, 2009china: portfolio strategy themes for 2010: follow the big trends market setup: favorable for th

12、ematic investing we believe investment strategies revolving around thematic investing and proactive sector strategies, as opposed to an outright market beta, could reward investors well in 2010. our arguments are backed up by the following shift in policy setup and market dynamics: china needs to bo

13、ost domestic consumption to sustain growth, as the growth momentum from trade and investment is likely to moderate on an anemic g3 recovery and a high-base effect, respectively. we expect government policies to be increasingly skewed towards the promotion of domestic consumption and attractive long-

14、term investment opportunities usually arise during a paradigm shift, just like they did in chinas 11th five-year plan period (2006-2010). a significant portion of market returns in 2009 have so far been propelled by valuation normalization off a low base (exhibit 1). although we argue that current m

15、arket valuations are largely fair (14.8x versus our target multiple of 15x for h shares), we believe that fundamentals (eps growth) will, once again, become the primary returns driver in 2010. rolling returns dispersion has normalized but is not at stretched levels, especially in the a-share market.

16、 we believe active sector management approaches make sense (exhibit 2). aggregating our top-down analysis, sector dynamics, and our sector analysts fundamental views, we see two secular trends deepening reforms and integration to which several compelling investment themes are linked. we summarize th

17、e themes, their thematic appeal, and the investment implications in exhibit 3. for our recommended sector and pair-trade strategies, please see china strategy: 2010 outlook: fostering the roots of growth, october 29. exhibit 1: returns in 2009 have been largely driven by valuation normalization msci

18、 china forward p/e, eps index, and price index exhibit 2: sector returns dispersion is still at historically low levels for a shares standard deviation of 12-month rolling returns, gics level 2 sector, msci china offshore, and a shares forward p/e (x)indexed price and eps level index level mxcn 12m

19、forward eps (right) mxcn 12m forward p/e msci china (right) msci china index level fwd pe (x) change (%) since oct 31, 2008 67 73 24.2x 250 200 160% 140% 120% disperson of gics-ii 12-mo rolling returns (rhs) - mxcn disperson of gics-ii 12-mo rolling returns (rhs) - msci china a 20 fwd eps(4) 150 100

20、% 80% 15 13.6x 100 60% 40% 10 5 50 0 20% 0% source: factset, i/b/e/s, msci, gs global ecs research. goldman sachs global economics, commodities and strategy research deepeningreforms further integration 3 october 29, 2009 exhibit 3: we think these investment themes could generate alpha for investors

21、 in 2010 our recommended themes for 2010 at a glance china: portfolio strategy themes healthcare reform thematic appeal a secular theme. healthcare spending: china is low on a global basis and the government is committed to broadening and deepening healthcare coverage. the sector only accounts for 0

22、.2% and 2.7% of market cap in the h- and a-share market, respectively. similar to that of the property sector 10 years ago. separating strong domestic demand growth factors from anemic stock/sector implications a-share healthcare liquid sector: gsghheal inland vs. coastal external demand. stocks wit

23、h higher business exposure in the refreshed go west cat: inland regions have performed well over the past four years and we gsszcng2 expect this trend to continue. chinese autos a-share equity issuance a-share listing autos penetration rate in china is very low in a global context and affordability

24、is rising on the back of increased income per capita and low auto prices. a heavy equity issuance pipeline (new ipos, the return of h shares/red chips, gem, and the international board) and the proliferation of financial products are positive to a-share brokers earnings growth. an increasing number

25、of hong kong-listed chinese firms have shown interest in listing on the a-share market for financial, liquidity, and strategic reasons. empirical evidence indicates that h shares tend to generate positive returns before their a-share listing dates. sehk-listed china autos cat: gsszcnau a-share broke

26、rs liquid sector - gsghsecu potential a-share listing cat: gsszcnal closer economic ties across the straits could create a win-win cross-strait development situation for both parties. chinese it firms and fujian-based companies could benefit the most, in our view. selected chinese it firms and fujia

27、n basket: gsehfuji shanghai world expo the government estimates that the shanghai world expo may attract 70mn visitors to the city. infrastructure investment should bode well for the citys long-term growth prospects and lay a solid foundation for the city to become a global financial center. shangha

28、i-based property companies: gsszcnwe and gsszcwea note: the ability to trade this basket will depend upon market conditions, including liquidity and borrow constraints at the time of trade. source: gs global ecs research. goldman sachs global economics, commodities and strategy research hk) 4 octobe

29、r 29, 2009 exhibit 4: these stocks could generate thematic alpha for investors, in our view stocks that belong to each of our highlighted thematic cats china: portfolio strategy deepening reforms a-share equity further integration cross-strait healthcare reforminland vs. coastalchinese autosissuance

30、a-share listingdevelopmentshanghai world expo cats/baskets a-share healthcare liquid sector refreshed go west cat sehk-listed china autos cat a-share brokers liquid sector gs potential a-share listing cat a-share fujian basket shanghai world expo cats bloomberg ticker gsghhealgsszcng2gsszcnaugsghsec

31、ugsszcnalgsehfujigsszcnwe constituents jilin aodong medicinechina life insurancehaitong sec (600837yanlord land (yllg ind (000623 cs)(h) (2628 hk)byd (1211 hk)cg)china mobile (941 hk)ind bank (601166 cg)sp) shanghai fosundongfeng motor (489citichamp dartong pharma (600196 cg) zhejiang medicine tence

32、nt (700 hk) geely automobile (175 citic sec (600030 cg) hong yuan sec cnooc (883 hk)(600067 cg) fuyao glass ind shimao prop (813 hk) (600216 cg) shandong dong-e e- jiao (000423 cs) coli (688 hk) c intl (adr) (ctrp uw) hk) denway motors (203 hk) (000562 cs) northeast sec (000686 cs) coli (688 hk) chi

33、na telecom (728 hk) (600660 cg) xiamen tungsten (600549 cg) shui on land (272 hk) franshion prop china (817 hk) north china pharmchina mengniu dairychangjiang secchina comm constrxiamen c (2) large-scale infrastructure investment, which is a major growth contributor by itself, is mostly concentrated

34、 in the less-developed inland regions; and (3) low-base effect and increased government subsidies, particularly to the agricultural sector. all in all, we are in sync with our economists view, as we believe china remains a bright spot globally in terms of its growth potential and diverging growth tr

35、ajectory between it and the g3. as a consequence, we believe the ripple effect to both inland and coastal regions, is likely to continue. for investors who are interested in this top-down view, we have created a new “go west” cat (gsszcng2) (exhibit 12) to replace the old cat (gsszngw), which was cr

36、eated on september 12, 2005 (exhibit 11). exhibit 9: growth momentum appears to shift inland 2009 fai, retail sales, and power production yoy growth, ytd exhibit 10: coastal vs. inland traffic divergence is visible traffic growth, ytd western (ytd growth) power central (ytd growth) power eastern (yt

37、d growth) power 60% zhejiangjiangsushenzhensichuanjiangxishandong retailproduct-retailproduct-retailproduct- salesfaiionsalesfaiionsalesfaiion 50% inner mongolia 19.6%35.0%6.0%shanxi18.5%41.0%-1.1%beijing14.3%39.0%-2.7% guangxi18.9%54.9%2.3%jilin18.8%39.3%-7.0%tianjin20.9%45.2%-2.2% 40% chongqing18.

38、2%30.7%6.8%heilongjiang 19.0%43.6%-3.8%hebei17.7%49.9%1.8% sichuan guizhou yunnan tibet shaanxi 20.4% 19.0% 19.0% 26.2% 18.9% 44.3% 36.6% 39.8% 29.1% 42.6% 13.3% 14.7% 13.4% 4.8% 3.5% anhui jiangxi henan hubei hunan 18.7% 18.5% 18.6% 19.3% 19.0% 31.9% 42.1% 33.1% 36.6% 39.8% 19.9% -5.6% -4.6% 0.9% 8

39、.3% liaoning shanghai jiangsu zhejiang fujian 17.7% 13.9% 17.4% 14.2% 15.3% 42.9% 9.0% 24.9% 13.8% 17.5% -8.8% -6.3% -3.1% -3.4% 2.4% 30% 20% 10% gansu18.5%36.2%-7.1%shandong18.1%22.7%-3.1% qinghai ningxia 18.5% 19.5% 31.6% 37.9% 5.3% -13.9% guangdong 15.7% hainan 18.9% 15.4% 39.2% -9.0% 3.2% 0% xin

40、jiang15.2%24.2%8.0% -10% aggregate19.1% 39.2%6.2%aggregate18.8% 37.0%1.0%aggregate15.7% 27.2%-3.8% -20% -30% going west exhibit 11: performance of old “go west” cat (gsszngw) vs. the msci china since inception gsszcngw and msci china exhibit 12: we have created a new “go west” cat gsszcng2 constitue

41、nts gsszcng2 constituents 6m gsle eps grow th cy10e tickerstock name(us$mn) p/e (x )(% )p/b (x) d /y (% ) roe (% ) 2628 h k 700 hk 688 hk china life insurance (h) tencent china overseas land a better life the government estimates that the 2010 world expo, which will be held in shanghai between may a

42、nd october, could attract up to 70mn visitors to the city. while many shanghai-based companies believe the event will have little incremental impact on their business, a favorable ripple effect to the equity space is visible, in our view. exhibit 25 aggregates the equity market performance of 13 pre

43、vious hosts around the event and shows that equity markets tend to deliver reasonably strong performance post the event although the relative performance against the global market is less conclusive. apart from equities, the long-term value of local real estate may also rise post the event. the shan

44、ghai city government previously stated that it will spend more than us$30bn to improve its transportation systems, recreational facilities, and utilities in the city (exhibit 26). these investments, in our view, should have a long-lasting positive effect on the city and help buoy property market pri

45、ces even further, as illustrated by the robust performance of the property market in beijing post the olympics era (exhibit 27), all else being equal. to trade this theme, we think selecting a portfolio of companies with a high concentration of land bank in shanghai would be a sensible choice (exhib

46、it 28). exhibit 25: world expo seems to have a positive impact on the stock market of the host nation index performance around world expo, 13 nations exhibit 26: infrastructure investment is likely to improve the efficiency and living quality of shanghai investment projects in shanghai ahead of the

47、expo 90 80 70 average index performance (absolute) average index performance (relative to msci world) projects 1) transformation of riverbank areas 2) shanghais metro rail system 3) high-speed railway 4) expansion of pudong international airport 5) expansion of hongqiao domestic airport 5) elevated

48、pedestrian walkways in pudong description a 735-million-dollar project to build an eight-lane road, 3.3 km of which is underground expand to 11 lines from the current 7, of which 5 links to the expo site and 1 link to the airport linking shanghai to the eastern lakeside city of hangzhou a 2.8 millio

49、n project to build a new terminal and 3 new runways to increase passenger capacity fourfold a new terminal and runway to increase its passenger capacity fivefold to 40 million passengers linking the financial districts main metro station to the oriental pearl tv tower, major office towers and malls.

50、 -18 -16 -14 -12 -10 -8 -6 -4 -2 0246810 12 14 1618 months from the world expo year exhibit 27: local property prices may benefit from the large-scale infrastructure investment post world expo change of average selling price (asp), by city exhibit 28: we believe developers with high exposure to the

51、shanghai market could benefit from this theme world expo offshore shanghai cat constituents 25% 20% asp - 2009 ytd average / 2008 average gsszcnwe constituents ticker stock name 6m gsle (us$mn) p/e (x) eps growth (%) cy10e p/b (x) d/y (%) roe (%) 15% 10% 5% 813 hk 272 hk yllg sp 817 hk 2337 hk shima

52、o prop shui on land yanlord land franshion prop china shanghai forte land 42.1 25.1 19.1 9.8 3.9 30.3 12.4 13.2 3.9 1.6 13.6 12.9 14.9 14.8 10.7 18.8 0.6 13.4 24.1 48.8 1.9 0.9 1.8 1.3 0.9 2.0 1.2 0.7 1.3 2.3 14.9 7.3 13.1 8.8 8.7 0% -5% -10% olympics effect? note: these are the top-5 stocks with hi

53、ghest shanghai exposure in their land bank, based on our analysts estimates. world expo a-share shanghai cat constituents -20% gsszcnea constituents 6meps cy10e -25% tickerstock name gsle (us$mn p/e growth (x) (%) p/b (x) d/y (%) roe (%) -30% 600643 600895 600663 600748 600639 cg cg cg cg cg shangha

54、i aj shanghai zhangjiang hi-tech park shanghai lujiazui finance buy, on our conviction buy list) and zte (763 hk, hk$ 46.45; buy) and (2) geographically, companies based in fujian, which is chinas closest point to taiwan (within 2 hours flight time), could enjoy increased growth if investment regula

55、tions for taiwanese investors are relaxed further given the language and cultural similarities that exist and the general proximity between fujian and taiwan. exhibit 29: china and taiwan are increasingly linked the timeline of cross-strait development exhibit 30: both sides could get what they want

56、 country and sector weighting in msci asia pacific 1st round sef-arats meeting (june 13, 2008) direct weekend chartered flights initiating 18 direct chartered flights from each side of the strait each weekend. 45% japan average daily quota of mainland tourists visiting taiwan raised from 1,000 to 3,

57、000. taiwan 2nd round sef-arats meeting (november 4, 2008) new, shorter flight routes established between the strait to reduce travel time; increased frequency. direct cross-strait sea transportation to increase logistics efficiency and boost taiwans agricultural exports. 40% 35% taiwan technology-

58、focused 3rd round sef-arats meeting (april 25-26, 2009) a) set up a joint regulatory framework to supervise the operation of banks, brokers, and cooperative agreement on cross-strait financialinsurers on both sides. services direct flights april 29, 2009 financial investments (qdii) strategic cooper

59、ation between 2 telecom companies from china and taiwan may 4, 2009 accelerate development of economic zone near the taiwan strait may 16-17, 2009 (xiamen cross-straits forum ) economic cooperation framework agreement (ecfa) june 5, 2009 executive yuan finalized list of 100 sectors to be opened to chinese investment b) sign memorandums of understanding (mou), on banking, brokerage, insurance, and other financial services. increase the number of direct flights from 108 per week currently to 270 per week in the future. fsc provided application guidelines for mainland qdii to invest directly