H-Shares

H-Shares: Barclays examines widening A-H Share premium for dual-listed stocks and filtered four stocks to focus on: 1. China Oilfield Services (2883.HK, OW TP HK$19.00) Defensiveness in revenue streams and competitiveness in cost structure is underestimated. Domestically, demand at CNOOC, COSL’s largest client, is expected to remain robust. Overseas, COSL’s rigs managed to secure longer-term contracts that insulates it from weakening international dayrates. 2. China Life Insurance (2628.HK, OW TP HK$30.30) Value of new business growth to resume double-digit 12%/14% growth for 2015/16E and company has attractive risk-reward profile. 3. China Citic Bank (998.HK, OW TP HK$6.80) Recently upgraded as the house believes CITIC Bank will likely be one of the first batch among peers to push forward with hybrid ownership reform as well as employee stock incentive programme. Largest A-H share premium of 45%. 4. PetroChina (857.HK, OW TP HK$11.00) Lower crude prices a material near-term headwind but impact on cash earnings may be less accentuated than feared. Capex controls should help shore up balance sheet, and delay in gas price cuts may cushion crude price slide in China. Long-term play.