Focus Today

Selected viewpoints of research and newspaper

1. Credit Suisse: it is expected that the valuation of the Chinese stock market is still very attractive, and the Hang Seng Index can look up to 24700 points.

2. CITIC: the macro-control policy in the second half of the year is expected to enter the revaluation stage.

3. GF Securities Co., LTD.: after the reverse repurchase of 3 billion yuan, the state of abundant liquidity is still continuing.

4. Bank of America Securities: Macau's gambling revenue is expected to be 2.8 billion patacas in July, continuing to be bullish on gambling stocks.

5. Tianfeng Securities: from the "old three high" to the "new three high" switch, the head of real estate enterprises are expected to take the lead in recovery

6. CITIC: the medium-term scale of sodium battery may reach 10 billion.

7. Goldman Sachs Group: adjust the list price of Hong Kong bank stocks and be sure to buy BOC Hong Kong (Holdings) Limited

8. Credit Suisse: raising the price of aviation stocks, China Southern Airlines is the first choice in the industry.

9. Morgan Stanley: reiterate that Meituan is the preferred stock for the Internet, with a target price of HK $240,000,000

10. Credit Suisse: XPeng Inc. 's June delivery volume is in line with market expectations, maintaining a "better than the market" rating

11. Macquarie: first give NetEase, Inc a rating of "outperform the market", with a target price of HK $202,

12. UBS: maintain Kang's biological buy rating, raising the target price to HK $29.1

I. Macro-market

• Credit Suisse: it is expected that the valuation of the Chinese stock market is still very attractive, and the Hang Seng Index is expected to rise to 24700 points.

Credit Suisse released its China Market Outlook report for the second half of the year, saying that it is believed that the mainland needs to adopt more strong fiscal and monetary policies, policies to support the consumer and internal housing industries, and the optimization of dynamic zero clearance strategies in order to stabilize the economy and the market. Looking forward to the individual development of the industry performance in the second half of the year, it is considered that investors should focus on China's reopening (reopening), policy stimulus and deregulation. It is expected that China's stock market will continue to rebound due to sustained economic recovery, deregulation, optimized epidemic control, and potential policy stimulus, but based on the bank's profit forecast, it has decided to lower its Hang Seng Index target from 26200 to 24700, the MSCI China Index target from 91 to 85, and the CSI 300 Index from 5760 to 5050.

• CITIC: the macro-control policy in the second half of the year is expected to enter the revaluation stage.

CITIC clearly believes that monetary policy has changed from the crisis model to the conventional model. Although the operation of the central bank is relatively balanced since April, and the main reason for the loosening of funds is the lack of demand for fiscal expenditure Xiaobai Maimai Inc, the central bank's tolerance for the operation of low capital interest rates reflects that its mode of operation is a crisis model in the environment of local epidemic. At present, the domestic local epidemic situation has entered the final stage, and the national economy will enter the national post-epidemic repair stage, which also means that monetary policy may enter a new stage-- returning to the broad credit target before this round of local epidemic. Recently, we have continuously carried out 3 billion yuan reverse repurchase operations, or indicated that the subsequent monetary policy has switched from the crisis mode to the conventional mode. Further, in addition to the change in the monetary policy model, the macro-control policy in the second half of the year is expected to enter the revaluation stage.

• GF Securities Co., LTD.: after the reverse repurchase of 3 billion yuan, the state of abundant liquidity is still continuing.

On July 4th, the central bank launched a reverse repurchase of 3 billion yuan. In response, GF Securities Co., LTD. pointed out that the current capital side and January 2021 are the state of liquidity abundance triggered by special events; the bond market will not end the state of liquidity abundance for the time being; it is a big month for tax payment. However, it is worth noting that after 3 billion yuan of reverse repurchase, the state of abundant liquidity is still continuing. We tend to think that this 3 billion reverse repurchase may send more signals to the market that the capital interest rate will gradually return to normal in the future. Moreover, the volatility of the capital side in January 2021 may be more caused by fiscal factors, when the change in fiscal deposits was a special case in recent years. Therefore, standing at the current point, while we pay attention to the signal of reverse repurchase, we also need to pay attention to the impact of financial factors on liquidity. In the case of high leverage in the bond market, it is relatively certain that expectations for the volatility of capital interest rates need to be raised.

II. Industry plate

• Bank of America Securities: Macau's gambling revenue is expected to be 2.8 billion patacas in July, continuing to be bullish on gambling stocks.

BofA Securities released a research report, pointing out that Macau's gaming revenue in June fell 62% year-on-year and 26% month-on-month, the lowest since September 2020, but in line with the bank's expectations of 2.3 billion to 2.7 billion patacas and slightly higher than market expectations. The bank believes that based on Macao's strict travel restrictions and epidemic prevention measures, gambling revenue and passenger flow in the next few weeks will be relatively weak. It forecasts that gambling revenue in July will be 2.8 billion patacas, up 13% month-on-month, and 67% year-on-year. That means an average daily income of about 90 million patacas. BofA Securities pointed out that although the recent epidemic in Macau has affected the recovery of gaming revenue, it is still optimistic about Macau gambling stocks and believes that valuations are attractive. According to past experience, once the situation improves, it is believed that the industry will rebound quickly. At the same time, it is expected that the re-tendering process for betting licences will end in the third quarter, and it is estimated that all six gaming operators will be able to obtain new betting licences.

• Tianfeng Securities: from the "old three high" to the "new three high" switch, the head of real estate enterprises are expected to take the lead in recovery

Tianfeng Securities said in a research report that it is optimistic that the investment logic of the real estate industry has shifted from "old three high" to "new three high", that is, from "high debt, high leverage, high turnover" to "high energy level, high credit, high quality". State-owned central enterprises and head real estate enterprises with better credit qualifications and resource reserves are expected to be the first to benefit from the industry recovery in the second half of the year. Continuous recommendation: China Overseas Land & Investment (00688.HK), Xuhui holding Group (00884.HK), Country Garden Services Holdings (06098.HK), etc.

• CITIC: the medium-term scale of sodium battery may reach 10 billion.

CITIC believes that sodium batteries have their own advantages and disadvantages compared with lithium batteries, and the progress of commercialization is slower than lithium batteries due to limited energy density and slow technological breakthroughs. Since 2020, with the accelerated demand for energy storage, the rising cost of lithium batteries and the increasingly serious security problems in the supply chain, sodium batteries have been given priority in policy, industry and capital, and it is expected that commercialization is coming gradually, and the medium-term scale may reach tens of billions. Focus on each link of the industrial chain leader.

• Goldman Sachs Group: adjust the list price of Hong Kong bank stocks and be sure to buy$BOC Hong Kong (Holdings) Limited (02388.HK) $

Goldman Sachs Group said in a rating report that Hong Kong interbank offered rates (HIBOR) have begun to rise and are expected to rise sharply in the next 12 to 18 months, while the bank upgraded and raised its net interest yield (NIM) forecast for three Hong Kong banks by about 50 basis points. The bank said it revised its earnings per share forecast for 2022-24 to a decline of 7 per cent to an increase of 9 per cent as a result of lower balance sheet growth and higher credit costs, and gave BOC Hong Kong (Holdings) Limited a "buy" rating (confidence list).

• Credit Suisse: raise the price of aviation stocks, the first choice for the industry$China Southern Airlines (01055.HK) $

Credit Suisse published a research report pointing out that the recent relaxation of travel restrictions in the mainland should help restore traffic normalization, but under the policy of "dynamic zero clearance", it is believed that there may be a gradual recovery in the short term. The bank estimates that domestic air passenger volume is expected to reach 65% of the pre-epidemic level after hitting the bottom in some mainland cities in the second quarter. Industry losses are also expected to expand this year, but profits will rise by 5% to 10% in 2023. Credit Suisse is bullish on airline stock valuations and a more obvious domestic recovery, preferring China Southern (rated "outperform"), raising its target price from HK $4.90 to HK $5.50, raising China Eastern's target price from HK $3.10 to HK $3.70, maintaining its "neutral" rating on Air China Limited, and raising its target price from HK $5 to HK $6.40. The bank also raised its target price for Cathay Pacific from HK $7.3 to HK $8, maintaining a "neutral" rating.

III. Individual stocks

• Dama: to reiterate$Meituan-W (03690.HK) $The preferred stock for the Internet, with a target price of HK $240

Morgan Stanley said in a report that JD.com 's entry into the takeout business poses a limited threat to Meituan because Meituan has a strong competitive advantage in local services. The bank continues to be bullish on Meituan as a beneficiary of the reopening of social distance in the mainland, saying that its cost optimization is under way and its long-term investment prospects are consolidated. The bank reiterated Meituan as its preferred Internet stock in China, reiterated its "overweight" investment rating and target price of HK $240. due to the short-term catalyst for reopening and the underestimated long-term potential of in-store and innovative business, the bank continues to be bullish on Meituan's long-term outlook, forecasting a market capitalization of US $350 billion (HK $450 per share) over the next three years.

• Credit Suisse:$XPeng Inc.-W (09868.HK) $June delivery volume is in line with market expectations, maintaining the "better than the market" rating

Credit Suisse reported that XPeng Inc. 's delivery volume in June was roughly in line with market expectations, rising 1.33 times year-on-year and 51 per cent month-on-month to 15300 vehicles, the highest monthly sales figure this year. The bank believes that the significant monthly increase is mainly due to the lifting of the city closure in Shanghai. The bank maintains its "better than market" rating for U. S. stocks, with a target price of $50. According to the bank, XPeng Inc. 's second-quarter delivery volume rose 98 per cent year-on-year to 34400, slightly higher than the company's guidance of 3.1-34000. The bank expects delivery to rise 83 per cent year-on-year to 180000 vehicles in 2022. The stock is now trading at HK $121.6, with a total market capitalization of HK $209.2 billion.

• Macquarie: the first$NetEase, Inc-S (09999.HK) $"outperform the market" rating, with a target price of HK $202

Macquarie released a research report saying that, first given NetEase, Inc's "outperform" rating, profits are expected to grow by double digits each year in the next few years, and the domestic market share will continue to expand, with a target price of HK $202. The company's overseas expansion, high-quality gaming IP and service business growth, coupled with strong R & D capabilities, are supporting earnings growth.

• UBS: maintain$Kangfang Bio-B (09926.HK) $Buy rating, target price rises to HK $29.1

Kangfang Bio announced that the application for marketing of the independently developed PD-1/CTLA-4 bispecific antibody tumor immunotherapy drug katanyl (cadonil monoclonal antibody injection) has been approved by the mainland. UBS issued a report that details of the drug's pricing and patient assistance plan will be disclosed on July 9, and it is believed that the approval will be timely to enable the drug to participate in the upcoming negotiations on the national health insurance catalogue, which will begin this year. Based on its good efficacy and safety, the bank expects the indication of the drug to be extended to other tumor types, with risk-adjusted sales estimated at 3.4 billion yuan in the mainland. Raise the target price of Hong Fang Bio shares from HK $26.68 to HK $29.1, with a rating of "buy".