GS 高盛：中国每日报告 06.28

China Daily Insights 06.28 9页

Today’s focus
China: Portfolio Strategy: NBS profits: Uptrend reaffirmed
Simcere Pharmaceutical Group (SCR) Buy: Fundamentals remain solid; buy on weakness
Shanghai Industrial (0363.HK): First take: Officially entering the China real estate market
Headline news
Hot money inflows to be curbed (China Daily)
China Will Sell $200 Billion Bond for Reserve Fund (Bloomberg)
Bioindustry outlook bright in China (Xinhua)
Chinese auditors reveal billions of yuan in misappropriated social security funds (Xinhua)
Mainland and Hong Kong bourses track joint path for equities growth (Shanghai Daily)
China: Portfolio Strategy: NBS profits: Uptrend reaffirmed, Thomas Deng, CFA
• NBS profits grew 42.1% yoy: As per the latest National Bureau of Statistics (NBS) announcement, pre-tax profits for all industrial enterprises with annual sales exceeding Rmb5 mn surged 42.1% yoy in the first 5 months of 2007, reaffirming the impressive growth trend of 43.8% in the first 2 months of the year.
• Implications: further upward EPS revisions: This strong set of numbers is consistent with various growth indicators that we obtained thus far in 2007: 1Q2007 A-share EPS growth (82%); 1Q2007 profit growth for major SOEs (34.8%); GSCA (12.5% yoy growth in May). Given the strong directional correlation of the NBS data with listed companies’ earnings growth, we expect room for further upward EPS revisions, possibly during the interim results season, for selected industries amid the currently conservative consensus estimates (EPS growth for MSCI China: 16.8% 2007 and 21.2% for 2008). Investment-related sectors: upcycle continues
• Among all industrial sectors, profits growth for investment-related sectors: stood out due