Sectors:

Mainland Telecom (Fanguohe), Air, Automobiles, Infrastructure (ZhangJing), New energy & Environmental Goods (Zhang Kun)

Mainland Telecom (Fan guohe)

In March I released 5 equity reports including, Kingsoft (3888.HK), Kingdee (0268.HK), Chinasoft International (0354.HK), Tencent(0700.HK) and Jumpcan Pharma (600566.CH). The top five customers of Chinasoft International include Huawei, Microsoft, Tencent, HSBC and Bank of Communications, contributing to around 40% of total revenues of the Company. We expect the Company will maintain a continued growth of about 20% by virtue of business expansion of major customers and Chinasoft's larger share among them. To be specific, the Company, thanks to its status of the largest outsourcing service provider, successfully issued 3.97% strategic shares to Huawei. Such a closer association is expected to help it obtain more outsourcing business share from Huawei, increasing from 40% in 2014 to 50% in 2015. Additionally, the Company's JointForce Commerce Platform adopts cloud + crowd-sourcing model to achieve interconnection between related industries and to help integrate resources and boost efficiency. In the future, the Company's revenues resulting from the platform will constantly increase with the gradual improvement in functions and efficient marketing of the platform in the future. Further, the platform's business is characterized by high gross profit margin, which is hoped to enhance the Company's earning capabilities. Moreover, the Company is constantly recognized by large institutional investors. We grant the Company a valuation corresponding to 22x EPS in e2015, with a target price of HKD3.65, and a rating of “Buy”.

Automobile & Air (ZhangJing)

This month I released 4 equity reports including CUCT (600358 CH), Geely (175 HK), and Poly Culture ((3636 HK). We prefer the CUCT. The future development strategic positioning of CUTC is reconstructed from the original single tourism business into multi-driven businesses including culture, sports, leisure and tourism. We believe that the Company's clear control and introduction of new management will help improve its governance structure and enhance operational efficiency, while the cultural and sports industry is constantly booming thanks to the national policy support and market focus. We are optimistic about the Company's new strategic focuses and its development prospects are worth looking forward to.

New energy & Environmental protection (ZhangKun)

We update five reports in this month, they are Concord NE (182.HK), China Everbright Int (257.HK), Longking ENV (600388.HK), Xinyi Solar (968.HK) and Dongjiang ENV (895.HK). We recommend Xinyi Solar, the Company takes a leading position in the industry of photovoltaic glass. In recent years, its production lines are constantly expanded. Additionally, benefiting from the installation rush, the Company's performance witnesses an immense growth. In the future, the Company will also develop new production lines in Southeast Asia and the PV installed capacity of the Company during the ൕth Five-Year Plan" will remain stable. Therefore, we maintain the Company's target price of HK$4.35 at the "Buy" rating.

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