Focus Today

Selected viewpoints of research and newspaper

1. CICC: the Hong Kong stock market may continue to consolidate in the short term, and growth prospects and policy positions may still be decisive factors

2. Ping an Securities: Hong Kong stocks are intertwined, and the focus is still on the structure

3. Everbright Securities: the market of innovative pharmaceutical industry chain warms up, and seize the good opportunity of high-quality asset layout.

4. CITIC: the policy is expected to speed up the development of digital consumption new business type, helping consumption to expand and upgrade.

5. Guosheng Securities: the market may still be dominated by the structural market of plate rotation, paying attention to the technology sector.

6. Citic Construction Investment: the supply pattern of rare earth market has not changed, and the price is expected to rebound.

7. Galaxy Securities: insurance sector valuation is historically low, with a high margin of safety

8. Guotai Junan: pay attention to the growth stocks of the new economy of science and technology and the race track dragon stocks whose share prices have been fully adjusted

9. CITIC: the certainty of the rise in lithium prices in the second half of the year is high

10. Macquarie: reiterate BABA-SW's "outperform" rating, with the target price rising to HK $148,

11. Bank of America Securities: slightly raise INNOVENT BIO's target price to HK $46.2, rating "buy"

12. Goldman Sachs Group: maintain HKEx's "buy" rating and lower the target price to HK $451

13. Tianfeng Securities: maintain Xinyi Solar's "buy" rating with a target price of HK $17.20

14. CITIC: maintain Nai Xue's tea "buy" rating, with a target price of HK $8
    

I. Macro-market

• CICC: the Hong Kong stock market may continue to consolidate in the short term, and growth prospects and policy positions may still be decisive factors

China International Capital Corporation pointed out that the Hong Kong stock market may continue to consolidate in the short term, and as the interim reporting period approaches, corporate earnings performance is also expected to become the focus of market attention. The search for certainty and high-quality targets, such as high-dividend stocks and high-quality growth stocks, may be a better option to help provide downside protection. In the medium term, we believe that still attractive market valuations, ample domestic liquidity and continued southbound capital inflows may still support the Hong Kong stock market. Future growth prospects and policy positions may still be the key decisive factors affecting the pace of the market, which deserve the close attention of investors.

• Ping an Securities: Hong Kong stocks are intertwined, and the focus is still on the structure

The Ping an Securities Research report said that the recent changes in the international financial market have had a mixed impact on the Hong Kong stock market, and the more one side is that the boom in the US job market has weakened the impact of the US consumption downturn to a certain extent, and the stagflation of US stocks may also bring about the return of some international funds; the empty side lies in the liquidity tension brought about by the tightening expectations of the Federal Reserve. Coupled with the recent complexity of the international geopolitical situation, the Hong Kong stock market may usher in a short-term market that gradually rebounds slowly in the shock. In the context of the overall performance will not be particularly strong, Hong Kong stocks still focus on the structure.

II. Industry plate

• Everbright Securities: the market of innovative pharmaceutical industry chain warms up, and seize the good opportunity of high-quality asset layout.

Everbright Securities Research News pointed out that the market of the new drug industry chain has warmed up and seized a good opportunity for the layout of high-quality assets. Innovative medicine sector after a long period of pullback, many high-quality assets into the cost-effective valuation of the bottom range, the recent market pick-up, ushered in a good opportunity for layout. We believe that there are the following logic: 1) the market risk preference and valuation have reached a low level in 10 years, which may usher in a big market for innovative drugs; 2) the impact of the epidemic has weakened, sales and clinical work have gradually returned to normal, some Biotech companies have made more progress in commercialization than expected, and the certainty of Q3 performance in the industry has been enhanced; 3) the technical level of China's ADC has been internationally recognized, and head pharmaceutical companies have bought shares in Biotech at a premium. 4) the policy orientation entered the stage of quality improvement, and the innovative drugs changed from homogenization to clinical value.

• CITIC: the policy is expected to speed up the development of digital consumption new business type, helping consumption to expand and upgrade.

CITIC research newspaper pointed out that the period of the greatest impact on consumption is expected to be over, but the negative impact of residents' expectations of future economic uncertainty still exists, and consumption may recover in a U-shaped shape. Although promoting consumption is not the main means of short-term counter-cyclical adjustment in China, it is the key to medium-term economic development, so it is necessary to strengthen consumption promotion. From the perspective of stimulus measures, or gradually shift from the expenditure side to the income side, consider adopting more effective policy types such as consumption coupons and cash subsidies, which are fully deducted by cash. From the perspective of subsidy industry, it is expected that industries with more complex industrial chain structures such as automobiles, home appliances and communications may become key areas favored by subsidies; at the same time, the policy is expected to speed up the development of digital consumption new business type to help consumption expand.

• Guosheng Securities: the market may still be dominated by the structural market of plate rotation, paying attention to the technology sector.

Guosheng Securities pointed out that the current small-level adjustment of the index is expected to come to an end in the near future, but still need to pay attention to the market trend and volume in the next few days. On the whole, it may still be dominated by the structural market of plate rotation, focusing on the supplementary growth opportunities of technology sectors such as chips and digital currency in the near future. in addition, the photovoltaic plate, which is in the high demeanour of the industry, has recently reached an all-time high. New energy vehicles, lithium batteries and other related plates are also close to previous highs. Recently, the relevant plates have shown a fixed degree of correction, after a short period of rest is still expected to continue to rise, seize the opportunity of several high-prosperity plate pullback. Currently in the disclosure window of the semi-annual report of listed companies, actively tap the investment opportunities of listed companies whose performance exceeds expectations, the uncertainty of the external situation, the superposition industry's own profitability has been significantly improved and the valuation is low in the past three years, the national defense and military industry sector can pay attention to bargain.

• Citic Construction Investment: the supply pattern of rare earth market has not changed, and the price is expected to rebound.

Citic Construction Investment pointed out that July-August is the traditional off-season of NdFeB demand, and rare earth prices have adjusted back since June 2022 due to the depressed demand in the rare earth market. In the long run, the tight supply pattern of the rare earth market remains unchanged, and the rare earth mining and smelting control index is expected to rise only 20% in 2022, and rare earth prices are expected to rebound with the advent of the peak demand season in the fourth quarter. It is suggested that attention should be paid to rare earth mining and rare earth recycling enterprises.

• Galaxy Securities: insurance sector valuation is historically low, with a high margin of safety

Galaxy Securities pointed out that due to the decline in the base, the adjustment of product sales strategy and the gradual stabilization of the team of agents, the decline in core business indicators of life insurance of insurance companies narrowed quarter by quarter, and the margin of debt improved. Affected by the relief of the epidemic and the increase in the stimulus policy of automobile consumption, the production dangerous scene is on the rise. At present, the valuation of the insurance sector is historically low and has a high margin of safety, so it is recommended to pay attention to the value of allocation.

• Guotai Junan: pay attention to the growth stocks of the new economy of science and technology and the race track dragon stocks whose share prices have been fully adjusted

Guotai Junan research newspaper believes that under the interpretation of the market with ample macro liquidity and risk preference, growth will spread from the track leading stocks to plates with more trading structure advantages, boom advantages and valuation advantages. The next stage focuses on two major themes, one is the new economic growth stocks of science and technology, such as new energy, digital economy and self-controllable under the background of transformation, and the other is the racing track dragon stocks whose competitive advantage is expanded and the stock price has been fully adjusted under the stock economy.

• CITIC: the certainty of the rise in lithium prices in the second half of the year is high

CITIC research newspaper pointed out that Australian lithium concentrate production increased significantly in the second quarter of 2022, but disturbing factors such as declining ore grade and labor shortage still exist. The price of Australian lithium concentrate has risen to US $7000 per ton since July, driving up the cost of domestic lithium salt production. Under the cost support, the certainty of the rise in lithium prices in the second half of the year is higher. The sharp rise in the price of lithium concentrate makes the protection of lithium raw materials more and more important. it is suggested to pay attention to the enterprises with high self-sufficiency rate of lithium resources.

III. Individual stocks

• Macquarie: reiterate$BABA-SW (09988.HK) $"outperform the market" rating, with the target price rising to HK $148

Macquarie released a research report that reaffirmed BABA-SW's "outperform" rating and raised its adjusted diluted earnings per share forecast for fiscal year 2023 from HK $145 to HK $148. The company's adjusted net profit exceeded market expectations by 12% in the first quarter to the end of June. Although the technology platform stock has fallen back since the end of last year, it is still committed to cost improvement and profit recovery in the coming quarters. The bank expects BABA's adjusted EBITA to grow 26 per cent year-on-year in the second half of 2022, while commercial customer management income (CMR) rose 2 per cent year-on-year, down 6 per cent from the first half.

• Bank of America Securities: a slight rise$INNOVENT BIO (01801.HK) $Target price to 46.2 Hong Kong dollars, rating "buy"

According to a report issued by Bank of America Securities, INNOVENT BIO announced strategic cooperation with Sanofi in different projects, including the development and commercialization of two tumor assets in the mainland, and Sanofi agreed to invest in INNOVENT BIO. At the same time, the bank pointed out that, taking into account INNOVENT BIO's income of 1 billion yuan in the second quarter of this year, the group's revenue forecast for this year and next year will be lowered by 11.1% and 4.7% respectively. And slightly raised its target price from HK $46 to HK $46.2, maintaining its rating as "buy".

• Goldman Sachs Group: maintain$Hong Kong Exchanges and Clearing (00388.HK) $"Buy" rating, target price reduced to HK $451

Goldman Sachs Group released a research report that maintained HKEx's "buy" rating, reducing its 2022-25 earnings per share forecast by 3 per cent by 5 per cent and the target price by 5 per cent from HK $475 to HK $451. The company will report second-quarter earnings on August 17, with total trading volume shrinking. Earnings per share are expected to fall 18% to 1.79 yuan. Spot daily turnover is down 10% on a quarter, down 15% from a year earlier. The estimate for second-quarter earnings per share is lower than market expectations.

• Tianfeng Securities: maintain$Xinyi Solar (00968.HK) $"Buy" rating, target price of HK $17.2

According to a research report released by Tianfeng Securities, to maintain Xinyi Solar's "buy" rating, based on the more cautious profit forecast of photovoltaic glass unit and the pace of production of new capacity, the revenue forecast for 2022-24 is lowered to 209x315 / 42.9 billion Hong Kong dollars (the same below), and the net profit of returning mother is forecast to be 53x86 / 12.6 billion, of which the net profit of photovoltaic glass and photovoltaic power station is estimated to be 43ppm 75 / 11.4 billion and 1011 / 1.2 billion respectively. The target price is HK $17.2. Photovoltaic glass stage under pressure, the company firmly expand production in the counter-cycle, leading competitive advantage or continuous strengthening, and in the photovoltaic industry multi-link layout coordination, consolidate the medium-and long-term growth foundation, continue to be optimistic about its growth prospects and advantages.

• CITIC: maintain$Nai Xue's tea (02150.HK) $"Buy" rating, target price HK $8

CITIC released a research report saying that to maintain Nai Xue's tea "buy" rating, the adjusted EPS for 2023 / 24 is predicted to be 0.19pm 0.33 yuan, considering that it is in a rapid growth cycle, 35 times PE in 2023, with a target price of HK $8. The company manual optimization gradually landed, with the Q3 tea season, revenue, performance is expected to be further repaired, open the configuration window, it is recommended to continue to pay attention to the continuous verification of the pro store model. At present, the competition in the tea industry tends to be flat, while the high growth of the track and the characteristics of wide space remain unchanged, and the company's mid-term 3000 + store space is supported.