文档介绍：China Strategy Earnings splitErwin SanftHead of China Research BNP Paribas Peregrine Securities Ltderwin.******@peregrine.(852) 2825 1183 servicesIT municationsTextilesInsuranceUnderweightOil & GasPowerNon-ferrous moditiesPharmaceuticalsOctober 2004■Earnings growth drives performance:Weexpect a marked divergence ofearnings growth within the China market over the next two tertiary sector development should enhance consumer andservices sector earnings, while rising costs and capacity additions modity plays and industrials. Earnings growth tends to dictate shareperformance among Hong-Kong-listed China equities and, so, we expectthe former group of stocks to outperform. ■ing consumption boom:Rising wealth levels are resulting in astructural shift in consumer spending patterns, and the services sector isjust beginning to grow. Sustained growth in consumer spending and retailsales, together with mild domestic inflation, is good news for consumer pany profits.■modities won't perform:Risks modity sector performanceare on the downside as rising costs erode margins and supply graduallycatches up with demand. Clear signs of overheating in the industrial sectorhave emerged, although these will take time to e malignant.■Top picks:Leading consumer and service sector franchises form the coreof our mended stock list. We also expect outsourcing plays to performwell. Among large-cap stocks, we see better earnings growth prospects s and insurance than oil. Our BUY list includes China Mobile, ChinaLife, Lenovo, Tencent, BYD, Weiqiao Textile,andChina Overseas Land.(Please refer to the important notice on the inside back cover)China Strategy – October 2004 Contents Executive summary 1 IT – Software 73 Earnings drives performance 2 Machinery 75 ing consumption boom 8 Media 76 modities won’t perform 12 Non-ferrous metals 77 Financial services 19 Petrochemicals 79 munications 36 Power 80 Oil & Gas 48 Property 82 Sector reviews 53