Focus Today

Selected viewpoints of research and newspaper

1. CICC: the market valuation once again has the midline value, so we should not be pessimistic about the medium-term market.

2. Citic Construction Investment: the LPR interest rate is expected to follow the MLF interest rate reduction, and the interest rate reduction window has not been closed yet.

3. Goldman Sachs expects the Federal Reserve to raise interest rates by 50 basis points in September, increasing the chances of a soft landing.

4. CITIC: the key to solving the problems in the real estate industry is still on the demand side, and mortgage rates are expected to continue to decline.

5. Haitong: the downward probability of coal prices has increased, and the pessimistic expectation of power has landed.

6. Galaxy Securities: social finance fell in July, focusing on "Baojiaolou" + infrastructure development.

7. Tianfeng Securities: optimistic about the structural market of semiconductors for the whole year

8. Goldman Sachs Group: maintain Li Auto Inc.-W "buy" rating, and lower the target price to HK $179,

9. Xiao Mo: reiterate Li Ning Co. Ltd. 's "overweight" rating, and the target price rises to HK $94.

10. BoCom International: maintains Semiconductor Manufacturing International Corporation's "buy" rating and reduces the target price to HK $20.63

11. Zheshang Securities: give Tencent a "buy" rating with a target price of HK $364

I. Macro-market

• CICC: the market valuation once again has the midline value, so we should not be pessimistic about the medium-term market.

China International Capital Corporation pointed out that factors such as repeated local epidemics in China, real estate risk management and sluggish sales, downward overseas economic cycles, and uncertainties in the regional situation will still restrict the effectiveness of the policy of "steady growth." the uncertainty of fundamentals may affect risk appetite, and the characteristics of short-term volatility and lack of mainline in the market may remain for some time, and attention should be paid to rhythm and flexibility. Combined with the greater strength of the current monetary and fiscal policies, especially the increase in real estate support policies in some areas, it is expected that although the transmission of policies to fundamentals is sometimes lagging, it is expected to gradually take effect in the future, and combined with the current market valuation once again has the midline value, it is not appropriate to be pessimistic about the medium-term market, "stable" and then "enter".

• Citic Construction Investment: the LPR interest rate is expected to follow the MLF interest rate reduction, and the interest rate reduction window has not been closed yet.

Citic CCIC pointed out that the LPR interest rate is expected to follow the MLF interest rate reduction. Under the MLF interest rate anchored by LPR, the decline in MLF interest rate will effectively lead to the reduction of LPR quotation. The one-year quotation rate of LPR is expected to be cut independently again in August, reflecting the efforts of the banking system to support the real economy, reduce financing costs and support real estate. The reduction of MLF and OMO interest rates provides an opportunity for LPR to continue to reduce. Follow-up interest rate cuts will continue to be observed, but the window for interest rate cuts has not yet been closed. This time MLF and OMO downgraded 10BP, significantly exceeding market expectations. Expectations of subsequent interest rate cuts may be reduced, but at present, there is still great pressure to stabilize growth, reduce costs, guard against risks, and support the real economy, and the weakening situation of supply, demand and expectations has not significantly changed, so if there is still downward pressure on the economy in the fourth quarter, it is still possible to cut interest rates.

• Goldman Sachs expects the Federal Reserve to raise interest rates by 50 basis points in September, increasing the chances of a soft landing.

Jan Hatzius, chief economist of Goldman Sachs Group, said the US Federal Reserve is expected to raise interest rates by 50 basis points in September, followed by 25 basis points in November and December respectively. Mr Hazis's latest forecast of increase is lower than the 75 basis points estimated in June and July. Goldman Sachs Group's team, led by Hazes, believes that some of the factors troubling the US economy are beginning to ease, slightly reducing the degree of uncertainty faced by the Fed and increasing the possibility of a soft landing for the economy. As long as the Fed can formulate an appropriate path to raise interest rates, effectively slow the economy and adjust the relationship between supply and demand in the labour market, it can eventually successfully depress inflation. According to Goldman Sachs Group's analysis, as long as the Fed raises interest rates properly, the US economy can maintain growth of less than 1 per cent in the next few quarters to avoid falling into recession. Goldman Sachs Group believes that the demand for labor begins to cool down and the market situation begins to improve. The fall in commodity prices is also good for the Fed to curb inflation.

II. Industry plate

• Citic: mortgage interest rates are expected to continue to decline, and financial and local administrative measures will work together to stabilize the property market.

CITIC research newspaper pointed out that the real estate market continues to decline, sales recovery is weak, and has not been transmitted to the areas of credit and investment, which is not only due to the traditional cycle adjustment, but also due to the superposition of many factors such as delivery. We believe that the key to solving the problem is still on the demand side, and we expect mortgage rates to continue to decline rapidly and financial and local administrative measures to work together to stabilize the real estate market.

• Haitong: the downward probability of coal prices has increased, and the pessimistic expectation of power has landed.

Haitong released a research report saying that the bad situation in the power industry has gradually fallen to the ground since July. After the Beginning of Autumn, coal stocks rise in the peak season, continue to recommend power companies, the logic is still coal prices downside probability increased, power pessimistic expectations have been landed, industry ROE is expected to improve for a long time, the third quarter profit improvement probability is greater. Power leader valuation long-term low range, Q3 profits are expected to rise. The bank believes that the bottom of thermal power Q4 profits in 21 years has been confirmed, most companies 22Q3 benefit from electricity and coal prices, improvement is the trend. Overseas power leader PB is generally 1.5-2 times, domestic less than 1.5 times or underestimated.

• Galaxy Securities: social finance fell in July, focusing on "Baojiaolou" + infrastructure development.

Galaxy Securities Research News pointed out that with the introduction of measures to resolve the risk of loan suspension and the continued development of infrastructure investment, we believe that there is limited room for social finance to continue to decline. The central bank cut MLF and the seven-day reverse repo winning interest rate 10BP, which will help guide the decline of LPR and stimulate credit demand. We continue to be optimistic about the low valuation allocation opportunities of the banking sector at the current stage, and recommend small and medium-sized banks in Jiangsu, Zhejiang, Chengdu and Chongqing, which have advantages in regional economic development, infrastructure, manufacturing and small and micro businesses, and are expected to benefit from improved credit margins.

• Tianfeng Securities: optimistic about the structural market of semiconductors for the whole year

Tianfeng Securities Research report said that it is firmly optimistic about the structural market of semiconductors throughout the year, and is optimistic about the dominant opportunities of H2 equipment + materials + parts plate. Recently, Changshu and Changxin actively promote production expansion, and the demand for silicon wafers, precursors and targets will increase exponentially, providing strong growth opportunities for all kinds of domestic material manufacturers. In July, domestic equipment in the scalar month-on-month increase, Huahong 18 billion listing of domestic equipment manufacturers are expected to fully benefit. Expansion cycle + localization, upstream materials + equipment parts plate growth logic is always clear.

III. Individual stocks

• Goldman Sachs Group: maintain$Li Auto Inc.-W (02015.HK) $"Buy" rating, target price reduced to HK $179

Goldman Sachs Group released a research report that maintained the Li Auto Inc.-W "buy" rating, continued to be included in the "convinced buy" list, and lowered its sales forecast for 2022-25 by 6%, 12%, to reflect the life of the ideal ONE model and the sales wear and tear between the L9 and the L9, with the target price reduced from HK $199 to HK $179. In addition, the adjusted net profit forecast for 2022 will be reduced from 1.9 billion yuan to 1.5 billion yuan, and the adjusted net profit forecast for 2023-25 will be reduced by 8%.

• Xiao Mo: to reiterate$Li Ning Co. Ltd. (02331.HK) $"overweight" rating, target price raised to HK $94

Xiaomo released a research report, reiterating Li Ning Co. Ltd. 's "overweight" rating, raising its net profit forecast for the 2022-24 fiscal year by 1% to 2%, and raising its target price from HK $88 to HK $94. The company's net profit rose 12% year-on-year in the first half of the year, driven by a 22% year-on-year increase in sales, but sales growth was partially offset by a contraction in gross profit margin due to strong discounts, cost inflation and channel mix. Maintain the sales growth guidance of 23% for this year, and guide that the net profit margin may reach a high double-digit rate (about 16%, 19%).

• BoCom International: maintenance$Semiconductor Manufacturing International Corporation (00981.HK) $"Buy" rating, target price reduced to HK $20.63

BoCom International released a research report saying that it maintained Semiconductor Manufacturing International Corporation's "buy" rating, but based on further determining the downward trend of the semiconductor industry, lowered its earnings per share forecast for 2023-24 by 7% Murray 8% and the target price by 26.6% from HK $28.1 to HK $20.63. The current valuation is not high. The company's second-quarter results beat the bank's expectations and guided third-quarter revenue to be flat to 2%, with a gross profit margin of 38% and 40%. Management expects this round of destocking adjustment to last at least until the first half of 2023, but believes that the long-term logic of local semiconductor manufacturing remains unchanged.

• Zheshang Securities: to$Tencent (00700.HK) $"Buy" rating, target price of HK $364

According to a research report released by Zheshang Securities, Tencent's "buy" rating estimates that the annual profit of 1063max in 2022-23-24 is 1315 / 155.7 billion yuan (an increase of 21.3%, 23.7% and 18.4% over the same period last year), with a target price of HK $364, which is 19.5% more than the current share price. The bank said that in the future, it can look forward to the imaginative space of the company's Mini Program and video account business and overseas game business.