Focus Today

Selected viewpoints of research and newspaper

1. CITIC: the optimization of the HKEx system provides a new "soil" for the general situation, and the market may be excessively worried about the liquidity problem.

2. Guosheng Securities: should take a positive view of the current volatile stock market

3. CITIC: LPR downgrade and policy guidance have an "immediate" effect on the credit market.

4. Galaxy Securities: overseas interest rate hikes are expected to cool down, and the domestic economy as a whole is weak

5. Citic Construction Investment: optimistic about the recovery trend of real estate sales

6. Tianfeng Securities: MLF downgrade 10bp, banks may continue to benefit from stable growth environment

7. Xiaomo: it is expected that the scale and duration of power cuts in the mainland are relatively moderate, which is good for thermal power generation and smart grid operators.

8. Galaxy Securities: the equipment link of photovoltaic industry will usher in a high boom.

9. HSBC research: if the size of guaranteed bond issuance is not enough to cover maturing debt, inner housing stocks may lose momentum.

10. Fu Rui: raise Sunny Optical Technology's target price to HK $142.63, rating "buy"

11. Xiao Mo: Orient Overseas and COSCO Shipping Holdings have attractive levels of risk and return.

12. Morgan Stanley: maintain China Literature's rating in line with the market, with a target price of HK $34

13. Bank of America Securities: first rated neutral by China Molybdenum, with a target price of HK $4.50

I. Macro-market

• CITIC: the optimization of the HKEx system provides a new "soil" for the general situation, and the market may be excessively worried about the liquidity problem.

CITIC research newspaper believes that recently, BABA announced that he would apply for secondary listing in Hong Kong into a dual major listing; five state-owned enterprises announced the delisting of US stocks ADR and other events once again aroused investors' attention to the cross-border audit process. At present, China and the United States are committed to reaching cooperation in this regard, but still do not rule out the risk of the passage of the accelerated Foreign Company Accountability Act. In this context, the HKEx optimizes the listing system, lowering the qualification requirements and providing time "exemption" for involuntary delisting issuers, so as to facilitate the return of US stocks to Hong Kong. At the trading level, the gradual return of US stocks has led to a gradual transfer of trading volume to the Hong Kong Stock Exchange, and the opening of southward investment channels for Hong Kong stocks is also expected to provide incremental liquidity support to the Hong Kong stock market. At present, the market is overly worried about the liquidity problem.

• Guosheng Securities: should take a positive view of the current volatile stock market

Guosheng Securities believes that the market sentiment is not weak, superimposed plate benign rotation, waiting for the market to appear a new main line, the market is expected to come out of a new wave of strong rebound. In terms of funds, the central bank carried out a seven-day reverse repurchase operation of 2 billion yuan through the open market on Tuesday, with a net repurchase of 600 billion yuan due to 2 billion reverse repurchase and 600 billion yuan of MLF due on the same day. Strategy to control the low suction adjustment of the strong plate, careful to chase high, can focus on new energy vehicles, photovoltaic and other trend track plate core stocks of low suction opportunities.

• CITIC: LPR downgrade and policy guidance have an "immediate" effect on the credit market.

CITIC pointed out that the overall performance of the financial data in July was weak, and the intention of the central bank to formally cut interest rates on August 15 to stimulate steady credit growth was very obvious. If the current weak credit is seen as a problem in need of "treatment", then the LPR cut that is expected to be brought about by higher-than-expected interest rate cuts will be a "quick cure" for credit problems. Historically, LPR downgrades and policy guidance tend to have an "immediate" effect on credit markets, so perhaps we can be more optimistic about the pace and effect of credit repair in August.

• Galaxy Securities: overseas interest rate hikes are expected to cool down, and the domestic economy as a whole is weak

Galaxy Securities released a research report that the Fed's aggressive interest rate hike expectations have been cooled by the downward CPI. On the same day, 6m and 1Y implied interest rates fell by more than 2%. Fed observations show that the possibility of raising interest rates 75BP in September has dropped sharply, and the possibility of raising interest rates 50BP has soared to more than 60%. At present, from the perspective of the global market, especially the United States, inflationary pressure has eased, but it still needs to be observed, the interest rate hike cycle is not over, the economy is certain to decline, and the overall stock and debt commodity coefficient is in the stage of decline. In contrast, the Chinese market: from the financial and economic data, the overall economy weakened in July, the demand for investment and financing shrank, and the subsequent downside risks of external demand also dragged down the Chinese economy.

II. Industry plate

• Citic Construction Investment: optimistic about the recovery trend of real estate sales

CSC FINANCIAL CO.,LTD believes that he is optimistic about the recovery trend of real estate sales and continues to recommend high-credit housing enterprises. In July, the statistics bureau data on sales, funds in place, and investment data expanded; social finance data showed a significant decline in medium-and long-term loans for residents. The current downturn in the property market will promote the further relaxation of local policies. Continue to be optimistic about the recovery trend of real estate sales and the follow-up performance of the real estate sector, high-credit housing enterprises will rely on high-quality brand reputation, sufficient stock reserves, take the lead to benefit from the follow-up market rebound.

• Tianfeng Securities: MLF downgrade 10bp, banks may continue to benefit from stable growth environment

Tianfeng Securities believes that the higher-than-expected reduction in MLF interest rates highlights the regulatory determination to stabilize growth, and the signal significance is more important. Banks as the main body of wide credit, the MLF interest rate is reduced first, which is helpful to reduce the pressure on banks unilaterally by LPR. During the critical window of steady growth in the third quarter, policy backing is expected to be further strengthened. Banks with advantages to public business may continue to benefit from a stable growth environment; at the same time, the gradual resolution of real estate credit risks will also help banks to repair their fundamentals.

• Xiaomo: it is expected that the scale and duration of power cuts in the mainland this year will be relatively mild, which will benefit thermal power generation and smart grid operators.

JPMorgan Chase & Co issued a report saying that the recent power cuts in Sichuan have aroused investors' concerns about large-scale power cuts in the mainland. The bank believes that as the power cuts are caused by a surge in residential electricity consumption in hot weather, the scale and duration of the power cuts are expected to be moderate this year. At present, the basic assumption will only last for a few weeks and will be limited to some provinces rather than the whole country. In terms of industry impact, Moto refers to the benefit of thermal power operators. As electricity prices continue to rise, the government has increased its support for thermal power generation, which is also good for smart grid operators because of the increased demand for investment in the digital grid.

• Galaxy Securities: the equipment link of photovoltaic industry will usher in a high boom.

Galaxy Securities pointed out that the photovoltaic industry parity and technology co-drive, efficient battery production expansion accelerated, equipment links ushered in a high boom. Photovoltaic start parity, the future is expected to gradually achieve the transformation to the main form of energy, global photovoltaic installation is expected to continue to improve. The continuous cost reduction of the industrial chain and the technical iterations of large-size, HJT and multi-grid are expected to accelerate the clearance of backward production capacity and the expansion of advantageous production capacity, and the growth momentum of core equipment manufacturers in all links is sufficient.

• HSBC research: if the size of guaranteed bond issuance is not enough to cover maturing debt, inner housing stocks may lose momentum.

It has been reported that mainland regulators plan to provide liquidity support to a small number of private real estate enterprises, including Longfor Group and Xuhui Holdings, by appointing state-owned enterprises to guarantee the issuance of RMB bonds by real estate enterprises. HSBC Research released a report saying that if the guaranteed bond issuance is not large enough to cover maturing debt, it will disappoint the market and inner housing stocks may lose momentum. The bank maintains a defensive position on the inner housing plate and is bullish.$China Overseas Land & Investment (00688.HK) $和$China Resources Land (01109.HK) $The property management stock is optimistic.$China property (02669.HK) $和$Greentown Service (02869.HK) $The ratings are all "buy".

III. Individual stocks

• Fu Rui: up-regulation$Sunny Optical Technology (02382.HK) $Target price to HK $142.63, rating "buy"

Fu Rui issued a report that Shunyu's sales and operating profit in the first half of the year were slightly higher than the bank's expectations, but inferior to market expectations. Demand for smartphones remains weak in the second half of the year, but growth in cars and auto AR/VR should pick up. The bank believes that the current conservative guidance from management could represent a bottom in profits and that performance is expected to recover next year, coupled with the company's leading position in emerging applications.

• Xiao Mo:$Orient Overseas (00316.HK) $及$COSCO Shipping Holdings (01919.HK) $The level of risk return is attractive.

JPMorgan Chase & Co published a report that container shipping spot rates, including the Shanghai Export Container Freight Index (SCFI), have fallen by 15 per cent for nine consecutive weeks. Due to weak demand across the Pacific, the weak price trend has attracted the attention of investors and rekindled the interest of the sector.

• Big Motors: maintain$China Literature (00772.HK) $Rated at the same time as the market, with a target price of HK $34

Morgan Stanley released a research report that maintained China Literature's "keep pace with the market" rating, cut its 2022-24 revenue forecast by 2% to 3%, net profit forecast by 5% to 8%, and the target price from HK $37 to HK $34, in view of recent profit pressures and limited visibility into the long-term development of IP business. Dragged down by online and copyright operations, the company's revenue fell 6% in the first half of this year from a year earlier, 14% lower than the bank's forecast. Management attributed the decline in online business to reduced marketing during the period, while shifting the focus of development to improving efficiency.

• Bank of America Securities: first$China Molybdenum (03993.HK) $Neutral rating, target price HK $4.50

According to a research report released by BofA Securities, with a "neutral" rating for China Molybdenum, net profit after tax in 2022-24 is expected to be + 38% compared with the same period last year, with a target price of HK $4.50, with a target price of HK $4.50 to reflect its position as a leading polymetallic mining company. The bank said it was optimistic about the company's long-term development, but was cautious about the short-term outlook because it was bearish on copper and cobalt prices and project implementation risks from the second half of this year to next year.