Focus Today

1. CICC: it is still possible for the market to maintain consolidation in the short term, and we need to wait for the policy to be further clarified.

2. CITIC: the introduction of the personal pension system will have a profound impact in the coming decades.

3. Fu Rui: industrial Internet telecom companies have become the highlight of their performance in the first quarter, maintaining China Telecom Corporation's "first choice".

4. Galaxy Securities: fundamental improvement expectations, superimposed low valuation, home head enterprise investment opportunities highlight

5. Guojin Securities: scale effect + cost transfer will be an important measure for the machinery industry to cope with rising costs.

6. Goldman Sachs Group: downgrade NONGFU SPRING CO., LTD. (09633) to "neutral" and adjust the price of consumer necessities stocks

7. Anxin International: maintain Li Ning Co. Ltd. 's (02331) buy rating with a target price of HK $85

8. CICC: raise Aluminum Corporation Of China Ltd's (02600) target price to HK $5.40 to maintain neutral rating

9. Daiwa: reiterate Great Wall Motor's (02333) "buy" rating, with a target price of HK $35

10. Credit Suisse: give Jinxin Reproduction (01951) "outperform market" rating, target price lowered to HK $9.40

11. Morgan Stanley: Shenghe Platinum Pharmaceutical-B (02142) target price to HK $5.55, rating "overweight"

Selected viewpoints of research and newspaper

I. Macro-market

• CICC: it is still possible for the market to maintain consolidation in the short term, and we need to wait for the policy to be further clarified.

The absence of the LPR downgrade last week raised concerns that steady growth policies were not fast and strong enough to meet the growing growth challenges, which accelerated the marked weakening of the renminbi against the dollar, according to the CICC Research report. In view of the current policy and economic growth situation, we believe that the RMB will still face some pressure before the epidemic is effectively controlled, especially before more stable growth policies are introduced. It is expected that the short-term market is still likely to maintain the consolidation situation and need to wait for the policy to be more clear. On the whole, considering that the valuation of the Hong Kong stock market is lower and the dividend yield is relatively high compared with A shares, the opportunities faced by the Hong Kong stock market still outweigh the risks in the medium term.

• CITIC: the introduction of the personal pension system will have a profound impact in the coming decades.

CITIC pointed out that the introduction of the individual pension system will have a profound impact in the coming decades. Its payment ceiling is low, the lock-in period is long, the actual number of participants is expected to be small, the short-term effect may be limited, the need to continue to strengthen the policy. Banks have the advantages of accounts and customers and are the main beneficiaries; other financial institutions compete for products, investments and services. Pay attention to the public offering funds with the ability of asset allocation or fixed investment, and the insurance companies with leading advantages on the supply side.

II. Industry plate

• Fu Rui: industrial Internet telecom companies have become the highlight of their performance in the first quarter, maintaining China Telecom Corporation's "first choice".

Fu Rui believes that the three major telecommunications operators in the mainland have announced their results in the first quarter one after another. in addition to the traditional mobile business, the industrial Internet has become a bright spot for the growth of telecommunications companies in the first quarter.$China Mobile Limited (00941.HK) $The performance in the first quarter exceeded expectations, compared with$China Telecom Corporation (00728.HK) $And$China Unicom (00762.HK) $Similarly, the growth rate in the first quarter was the highest since the first quarter of 2019, mainly due to revenue growth on the industrial Internet. The bank believes that the current valuations of the three telecommunications companies are all attractive and still maintain China Telecom Corporation as the first choice, followed by China Mobile Limited and finally Unicom. According to the results of the first quarter of this year, the Internet business revenue of the telecommunications industry accounts for 29% of the service revenue, China Unicom 24%, and China Mobile only 13%.

• Galaxy Securities: fundamental improvement expectations, superimposed low valuation, home head enterprise investment opportunities highlight

Galaxy Securities pointed out that cities due to urban policies, continue to issue loosening policies, the real estate industry is expected to recover, will lead to a pick-up of household industry fundamentals and higher valuations. The epidemic repeatedly disturbs the short-term operation of the home, and the demand for home decoration has the attribute of rigid demand. The inflection point of the current epidemic situation has already appeared. It is expected that with the improvement of the epidemic, the decoration demand will be released centrally. Head household enterprises lead the industry change, continue to promote category integration, strengthen flow competitiveness, superimposed epidemic, raw material prices, etc. lead to the withdrawal of small and medium-sized enterprises, concentration is expected to accelerate.

• Guojin Securities: scale effect + cost transfer will be an important measure for the machinery industry to cope with rising costs.

Guojin Securities believes that in 2021, the machinery industry shows an obvious "profit growth rate is lower than income growth" phenomenon. During each round of revenue expansion in the machinery industry, the proportion of companies with "net profit growth rate lower than income growth rate" has increased significantly. Among the machinery companies that have published annual reports for 2021, companies whose net profit growth is lower than revenue growth account for 74 per cent of positive revenue growth, significantly higher than in 2017. This is contrary to the scale effect of the machinery industry, mainly due to the pressure on the cost side, which may not be enough to hedge against the sharp rise in the cost of raw materials. Scale effect + cost transfer is an important measure to deal with the rising cost. In the later stage, it is suggested to pay attention to the companies with relatively high raw material costs and strong economies of scale, as well as companies with significant increases in product prices this year.

III. Individual stocks

• Goldman Sachs Group: health$NONGFU SPRING CO., LTD. (09633.HK) $Rating to "neutral" and adjusting the price of consumer necessities

Goldman Sachs Group released a report that NONGFU SPRING CO., LTD. is expected to face the adverse factors of rising costs in the near future as the COVID-19 epidemic rebounds, and believes that as a pure beverage company, NONGFU SPRING CO., LTD. may face greater pressure than other catering shares. The bank downgraded NONGFU SPRING CO., LTD. from "buy" to "neutral" and its target price from HK $48 to HK $46. Goldman Sachs Group believes that the current epidemic and sharp inflationary pressures have been generally reflected in the valuation of the food and beverage sector, and it is too early to expect a rebound in valuations or profits, but it is believed that the recent correction has provided attractive buying opportunities for some stocks, such as$China Mengniu Dairy (02319.HK) $Benefit from the structural growth of dairy products.

• Anxin International: maintain$Li Ning Co. Ltd. (02331.HK) $Buy rating, target price of HK $85

According to a research report released by Anxin International, it maintains Li Ning Co. Ltd. 's "buy" rating and predicts that EPS in 2022-24 will be 1.84pm 2.28pm 2.72 yuan, giving it 30 times PE in 2023, with a target price of HK $85. As a leader in the industry, it will give priority to enjoying the growth dividend of the industry. The epidemic is only a short-term disturbing factor, and with the strong support of the rise of domestic goods and relevant national policies, the long-term growth logic of the domestic sporting goods track remains unchanged.

• CICC: upward adjustment$Aluminum Corporation Of China Ltd (02600.HK) $Target price to HK $5.4 to maintain neutral rating

CICC issued a report that Chinalco's annual performance was lower than the bank's expectations, mainly due to the decline in non-operating performance. On the one hand, the company has benefited from the rise in aluminum prices, resulting in a substantial increase in profits per ton of aluminum; at the same time, the volume and price of alumina has risen, increasing profits. On the other hand, it benefits from the optimization of asset structure, and impairment is a drag on performance. CICC raised its revenue forecast for Chinalco due to rising aluminum prices, but kept its earnings forecasts for 2022 and 2023 unchanged, taking into account rising costs, and maintained its neutral rating of H shares, raising its target price by 35% to HK $5.4, corresponding to 12.9 times forecast earnings this year and 12.7 times forecast earnings this year and next.

• Daiwa: reiterate$Great Wall Motor (02333.HK) $"Buy" rating, target price HK $35

Daiwa released a research report that reaffirmed Great Wall Motor's "buy" rating, with a target price of HK $35, first-quarter gross margin and recurrent net profit exceeded the bank and market expectations, and the product plan strengthened the bank's confidence in its future profitability. The bank maintained its forecast of 1.67 million car sales this year, a year-on-year increase of 30 per cent, compared with the company's target of 1.9 million. The bank said it was more confident about the group's profitability because of the continuous improvement in its product portfolio. In addition, sales are expected to pick up this quarter, which will be a catalyst for share prices to rise in the coming quarters.

• Credit Suisse: to$Jinxin Reproduction (01951.HK) $"outperform market" rating, target price lowered to HK $9.4

Credit Suisse released a research report that gave Jinxin Reproduction an "outperform" rating, lowering its net profit forecast for the 2022-24 fiscal year to-3 per cent, 0.1 per cent, and 1.4 per cent, respectively, and lowered the target price to HK $9.4. Credit Suisse pointed out that the company plans to spend 954 million yuan (the same below) to acquire shares in "Jiuzhou Hospital" and "Wo Wan Hospital". The valuation of the two hospitals is about 1.236 billion yuan, which is about 500 million yuan higher than the valuation 10 months ago, but it is still at a reasonable level. The bank predicts that revenue and profit margins at the two hospitals will increase from fiscal year 2024.

• Big motorcycle: l$and Platinum Medicine-B (02142.HK) $Target price to HK $5.55, rating "overweight"

According to the Morgan Stanley Research report, Heplatinum Pharmaceutical-B recently announced the conclusion of a HBM7022 global licensing agreement with AstraZeneca PLC, which predicts that the loss for this year will be reduced by 14.2% according to the company's performance last year, the adjustment of R & D and management costs, as well as the latest development of tanfanercept, Batoclimab and other product pipelines. At the same time, taking into account milestone fees, advances and cost of sales, the target price was raised from HK $5.35 to HK $5.55. Daimo said that Hutchison Platinum Pharmaceutical is developing a rich product line, and the new products are mainly aimed at a large number of disease areas in China that do not meet medical needs, and its three proprietary platforms continue to produce antibody candidates with novel molecular design and treatment potential. It is believed that the company has a unique business model, which helps to reduce the overall business risk and gives it an "overweight" rating.