Come join us in this presentation as we share our views on these companies and why they have the potential to outperform the market in the longer term. Our HK analyst will also be answering your questions in Mandarin via webcast.

1. Bank of China (Hong Kong) (2388 HK)
BOCHK announced that it has entered into an acquisition agreement with Bank of China (3988 HK), the parent company, to purchase the entire issued share capital of BOC Thailand and BOC Malaysia for HK$6.9b. Though the valuation of the transaction is not cheap, the acquisition would further facilitate development of its business and anchor its foothold as a regional bank. We maintain a BUY rating on BOCHK given its attractive valuation of 1.2x 2016F P/B and dividend yield of 5.4%. Target price is HK$29.50.

2. China Communications Construction (1800 HK)
CCCC is engaged in the construction and design of transportation infrastructure dredging and port machinery manufacturing business. The company benefits from the “One Belt One Road” initiative as it has the highest exposure to overseas markets among peers. Its overseas revenue accounted for 19% of total revenue and 24% of total new orders in 2015. The company’s target of at least 20% earnings growth from overseas projects in 2016 is a key growth driver. We maintain a BUY rating on CCCC with a target price of HK$12.70.

3. China Coal (1898 HK)
Amid low coal prices to facilitate industry consolidation, and China’s supply-side reform policy to reduce output, we expect China’s coal prices to hit rock bottom and rebound next year. China Coal, given its highest earnings sensitivity, and great exposure to the seaborne market, would benefit the most. We maintain a BUY rating on China Coal with a target price of HK$5.00.