Focus Today

Selected viewpoints of research and newspaper

1. Guoxin: Hong Kong stocks are under repair and should focus on growth and ROE

2. CICC: pay attention to the double main line of loose policy and epidemic situation repair in July

3. Societe Generale: Hong Kong stocks are expected to rise at the bottom in the second half of the year, but the conditions for a bull market in the market index are insufficient.

4. Haitong: digital economy is expected to become the second growth curve, and Internet leaders are actively seeking transformation and development.

5. Guojin: prospect of ICT Infrastructure Investment in Meta-Universe era

6. CICC: Kirin battery release, battery thermal management solution upgrade

7. Galaxy: at present, it is still a good time for the layout of the chemical industry.

8. Ping an: the decline in sales of the top 100 real estate enterprises narrowed in June, and it is recommended to pay attention to investment opportunities in the real estate industry chain.

9. Guotai Junan: wind power equipment, automation and construction machinery are expected to be greatly improved in the second half of the year.

10. CICC: for the first time, Luoyang Glass shares outperformed the "Industry rating" with a target price of HK $16.50.

11. First Shanghai: first give China Longyuan Power Group Corporation a "buy" rating, with a target price of HK $19.60

12. Goldman Sachs Group: Topsports International Holdings Limited's sales in the first quarter were in line with expectations and were rated as "buy".

I. Macro-market

• Guoxin: Hong Kong stocks are under repair and should focus on growth and ROE

Guoxin Securities Research newspaper pointed out that Hong Kong stocks fell 6% in the first half of this year, but compared with A shares and S & P 500, they all had excess returns. For most of last year, Hong Kong stocks outperformed the world's major indexes. after the emergence of the Internet policy in late April this year, the most difficult time for Hong Kong stocks has passed and is now under obvious repair. We believe that Hong Kong stocks have the characteristics of both offensive and defensive. In terms of attack, we find the optimal solution from the "growth-rise and fall" matrix, while on the defense side, we get correction from the "ROE- rise and fall" matrix. There are four reasons for Hong Kong stocks to look forward to in the second half of the year: 1, the falling time and space is sufficient; 2, the Internet policy is already at the bottom; 3, the valuation has obvious advantages compared with A-shares; 4, the buyback of listed companies increases confidence.

• CICC: pay attention to the double main line of loose policy and epidemic situation repair in July

China International Capital Corporation research newspaper believes that looking forward, the Chinese and foreign policy cycles continue to reverse, and the Chinese market is likely to maintain relative resilience relative to overseas in the second half of the year. However, considering that the market has rebounded for two months in a row, has accumulated a certain range of rebound, and individual stocks have risen even more, the sustainability of the subsequent rebound needs to see a more obvious improvement at the financial level, a more substantial improvement in epidemic prevention and control, a more substantial repair of growth expectations, and a gradual stabilization of overseas markets, otherwise the market situation may change from the previous unilateral rise to two-way fluctuations, and the configuration will pay attention to the dual main lines of policy easing and epidemic repair.

• Societe Generale: Hong Kong stocks are expected to rise at the bottom in the second half of the year, but the conditions for a bull market in the market index are insufficient.

Zhang Yidong, chief global strategist at Societe Generale Securities, expects Hong Kong stocks to rise at the bottom in the second half of the year, but the conditions for a bull market in the broader index are insufficient. The overall earnings of Hong Kong stocks and A-share listed companies will be better than in the first half of the year, helping the Chinese stock market to show a bottom rise in the first half of the year. It is not difficult to rebound from the technical bull market from the first half low, but it is more difficult to have a "trend bull market". Zhang Yidong suggested that Hong Kong stock "heavyweights" make profit forecasts and improve momentum in the second half of the year, which is expected to be stronger than A-share "heavyweights". The biggest difference lies in industries such as information technology and the Internet. He believes that the following industries have short-term recovery dividends and medium-term growth "gold rush" industries, including automobiles, sports shoes and clothing, the Internet, property management, food and beverage and medicine.

II. Industry plate

• Haitong: digital economy is expected to become the second growth curve, and Internet leaders are actively seeking transformation and development.

Haitong released a research report saying that with reference to the Internet giants in the United States, the reason why they have been able to develop to today's volume, their business structure is not immutable. On the contrary, positive transformation and continuous innovation are the genes of the Internet, and the digital economy has become a new business growth point for some companies. In addition, the digital economy has become the strategic development direction of our country, and the important business transformation direction of Internet companies. At present, the Internet leader in China is actively seeking transformation and development, and the digital economy is expected to become the second growth curve.

• Guojin: prospect of ICT Infrastructure Investment in Meta-Universe era

Guojin Securities Research News pointed out that although the business model of meta-universe is still being explored, a new generation of ICT business infrastructure investment opportunities based on computing and transmission have emerged. The massive demand for data computing and transmission will bring iterative upgrading of computing power and network, and bring a wide range of technical iterative opportunities in the fields of 5max 6G network, cloud computing, edge computing, computer vision, machine learning, sensor technology, block chain and so on.

• CICC: Kirin battery release, battery thermal management solution upgrade

China International Capital Corporation believes that the Kirin battery was released in Ningde era on June 23, which integrates the water-cooled plate into an elastic interlayer to achieve the four major functions of support, buffer, water cooling and thermal insulation. Because the vertical water-cooled plate structure is adopted in this scheme, the heat exchanger is established at the cell level, and the thermal management area is 4 times larger than that of the traditional bottom water-cooled plate, so as to support the functions of fast hot start, 4C rate fast charging and so on. Looking forward, we believe that high-rate fast charging is an important layout direction of automobile and battery enterprises, and fast charging has higher requirements for fine thermal management, which will promote the continuous upgrading of battery thermal management system.

• Galaxy: at present, it is still a good time for the layout of the chemical industry.

Galaxy Securities pointed out that the boom in the chemical industry continued in the first quarter, and the profits of each sub-industry were clearly divided. Among the 33 sub-industries, the proportion of year-on-year increase and decline in net profit accounted for 50% respectively. The rising cost of 22Q2 raw materials superimposed by the epidemic suppresses demand, and Q2 profits are expected to be greatly affected. With the continuous development of the steady growth policy, the profit of H2 industry is expected to improve gradually, which is still a good time for the layout of the industry. It is suggested to focus on the performance flexibility brought about by the improvement of profit expectations of the relevant leading enterprises and the growth attributes brought about by the continuous expansion of high-quality production capacity.

• Ping an: the decline in sales of the top 100 real estate enterprises narrowed in June, and it is recommended to pay attention to investment opportunities in the real estate industry chain.

Ping an Securities report pointed out that the decline in sales of the top 100 housing enterprises narrowed in June, reflecting the control of the epidemic and the gradual emergence of policy effects. With the continued efforts of the policy in the second half of the year, real estate is expected to recover slowly under stability, especially in high-energy cities with good fundamentals, the real estate sector is also expected to meet the fundamentals of the market. The development plate suggests that high-credit enterprises with superior sales and investment should be the first to benefit from the recovery of the industry, such as Poly Development, China Overseas Land & Investment, China Merchants Shekou, Vanke A, Jindi Group, Binjiang Group, Tianjian Group and so on. In terms of diversification, with the moderate recovery of real estate, concerns about the growth and independence of property management are expected to be alleviated, and the valuation of leading property enterprises is expected to be repaired. It is recommended to pay attention to Country Garden Services Holdings, Poly property, investment surplus, Metro service, Xingsheng business and so on. At the same time, it is suggested that we should pay attention to the investment opportunities of the real estate industry chain.

• Guotai Junan: wind power equipment, automation and construction machinery are expected to be greatly improved in the second half of the year.

Guotai Junan research newspaper pointed out that the impact of the epidemic on the machinery industry is mainly in production and logistics, and Q2 performance may be the lowest point this year. With the improvement of the epidemic, the high price of raw materials and the depreciation of the RMB, the machinery industry is expected to usher in marginal improvement. From the second quarter results, photovoltaic equipment, lithium equipment, tools, oscilloscopes and other sub-industry performance is good; wind power equipment, automation, construction machinery is expected to usher in a greater improvement in the second half of the year.

III. Individual stocks

• CICC: the first$Luoyang Glass Co. (01108.HK) $Outperform industry rating with a target price of HK $16.50

In its report, CICC first rated Luoyang Glass as an "outperform industry" with a target price of HK $16.50, equivalent to 20 times the forecast price-to-earnings ratio this year, and expected earnings per share of 0.66 yuan and 1.05 yuan respectively this year and next, with an expected compound annual growth rate of 60 percent. The bank expects photovoltaic glass demand to reach 16 million tons this year, with a compound annual growth rate of more than 35 per cent. At present, the daily melting capacity of Luoyang glass ultra-white calender glass is 3230 tons, and the daily melting capacity is expected to reach 5200 to 5300 tons by the end of this year. After this round of production expansion, the company is expected to increase its market share to the third place in the industry.

• First Shanghai: the first$China Longyuan Power Group Corporation (00916.HK) $"Buy" rating, target price of HK $19.6

First Shanghai released a research report saying that with the first "buy" rating of China Longyuan Power Group Corporation, the net profit of returning to its mother in 2022-24 is expected to be 93 mobiles 113 / 12.9 billion yuan, with a target price of HK $19.60. The company will have a controlling installed wind power capacity of 26.7 gigawatts by the end of 2021, and is expected to continue to lead the industry in resource reserves and project acquisition capacity with the advantage of the National Energy Group (hereinafter referred to as "the Group"). The dual listing of Aspirh has broadened and improved financing channels to support future project development funding requirements and maintain a healthy level of debt. Long-term accumulation of wind power development, operation and management experience is expected to expand to offshore wind power and photovoltaic and other diversified project areas, to achieve a stable improvement of project returns and profitability.

• Goldman Sachs Group:$Topsports International Holdings Limited (06110.HK) $The sales volume in the first quarter is in line with expectations and is rated as a buy.

Goldman Sachs Group published a research report that the sales of Topsports International Holdings Limited (6110.HK) 2022 Greater China recorded a high drop of 20% in the first quarter of fiscal year 23, which was in line with the bank's expectations. Passenger volume dropped 30-40% year-on-year, and retail business performed better in the middle of 20%. It was in line with the annual decline of Nike Inc Greater China in the same period, and Topsports International Holdings Limited's direct online sales achieved 20-30% annual growth without large-scale discounts. The target price is HK $8.7 and a "buy" rating.