Key recommendation
"Metalworking | Quantification Weekly View: the market pattern is changing again, deal with it cautiously"
For the first time this year, the market has changed from a concussion pattern to a downtrend pattern. Once it enters the downtrend pattern, the core variables are two points: whether the absolute value of the average distance of the first market has returned to less than 3%, which is currently 3.2%; whether the profit effect index of the second market has become positive or not, the current market profit effect index is-2.8%, which shows that it is necessary to deal with it cautiously. In terms of seasonal effect, the forecast of the first-quarter results of the two cities will end on April 15. judging from the market performance in recent years, it has declined to varying degrees from April 14 to April 30 every year from 2016 to 2019. From the seasonal effect, it is also suggested to deal with it cautiously. Absolute income products with wind all-An as the main body of stock allocation recommend that the equity position be reduced to 30%.
"Strategy | revisit Q2 configuration strategy: which is more important, valuation or profitability? "
1. Starting from the logic behind the Q2 industry allocation strategy and calendar effect, a similar situation began to appear in Q2 this year, with micro-liquidity and risk appetite starting to be inferior to Q1: (1) compared with the continued large net applications from February to March, the net application scale of technology ETF has continued to shrink in the past two weeks.
(2) the offering scale of public offering funds reached the highest level after 2015 in March, but the weekly offering scale has declined significantly since late March. (3) interbank interest rates such as SHIBOR overnight and DR007 have risen significantly in the past week. Therefore, following the Q2 calendar effect and the logic behind it-macro liquidity cannot continue to expand at the margin most of the time, trading at the micro level is sluggish, corresponding to a significant decline in market risk appetite, so the market gives higher weight to the current performance. 2. Which is more important, valuation or profit? (1) from the perspective of relative earnings, prosperity determines ranking, which has little to do with valuation most of the time. (2) from the perspective of absolute return, the position of valuation determines the room for stock prices to rise.
(3) from the perspective of long-term capital, it is the logic of mean regression, not only to buy good companies, but also to buy cheaper.
"Nonferrous | Weekly view: gold price is expected to hit a new high"
1. The Federal Reserve continues to increase its size, and the price of gold is expected to hit a new high. From a flexible point of view, we focus on Shandong Gold Mining, Huayu Mining, Hunan Gold, etc., and from the perspective of valuation and asset allocation, we pay attention to Yintai Gold, Zijin Mining Group, CICC Gold and so on. 2. Short-term supply and demand are blocked, and the long-term trend of new energy remains unchanged. The recent spread of the overseas epidemic has had an impact on the supply and demand side of new energy to a certain extent. the supply side cobalt supply chain in places such as Congo Gold and South Africa may be affected by the closed policy transportation, and some overseas car factories on the demand side have stopped work and their exports have been blocked due to the epidemic. Demand may lag. In the long run, low cobalt and high nickel ternary is still expected to be the trend, and Q3 new energy vehicles are expected to increase gradually. 3. Metal prices: precious metals prices have rebounded sharply. Last week, US CPI was lower than expected, Fed policy continued to increase, and liquidity crisis eased precious metal prices continued to rise sharply.
Base metal price repair. The price of rare earths fell. Tungsten and cobalt fall and molybdenum picks up.
"Pharmaceutical | Industry depth: vaccine industry: a new era of regulation and domestic development, opening a golden period of development"
The Vaccine Law promotes three major changes in the industry and opens a new stage in the development of China's vaccine industry. Vaccine Act
We will support the development and structural optimization of the vaccine industry and encourage large-scale and intensive vaccine production. We believe that with the continuous improvement of the quality of vaccine production and the further improvement of industry standards, enterprises that do not meet the requirements will gradually withdraw, the industry will accelerate the survival of the fittest, and the leading role of state-owned enterprises and large backbone enterprises will be more prominent. the advantages and scarcity of high-quality enterprises will be further reflected. China's vaccine industry will continue to expand in the future, and a new era of domestic vaccine varieties will be opened. From the perspective of our future vaccine development structure, class II vaccines will be the main category to promote the overall market expansion, and there is a lot of room for the development of high-value large varieties of vaccines in China's vaccine market in the future. COVID-19 vaccine development opportunities: the growth of CDC and technological upgrading. COVID-19 vaccine research and development has attracted much attention, listed companies Zhifei biology, Kangtai biology, CANSINOBIO and so on have laid out COVID-19 vaccine research and development. Risk tips: industry black swan incident; new variety research and development progress is lower than expected; policy change risk.
"Machinery | Weekly View: the price of construction machinery is rising, and the extension of subsidy policy is conducive to the improvement of the prosperity of electric vehicles."
The core idea of this week: the shortage of construction machinery leads to a rise in prices. (1) key area 1: construction machinery, infrastructure or all kinds of construction sites will be fully resumed in late March. Construction machinery has continued to sell well since early March, with overall sales exceeding 40,000 units. (2) key area 2: the reverse cycle of rail transit ushered in the peak of completion and opening to traffic, benefiting equipment and operation and maintenance. (3) priority area 3: emerging industries (photovoltaic equipment / lithium equipment / semiconductor equipment). Lithium equipment: we believe that the extension of subsidy policy is conducive to the improvement of the prosperity of electric vehicles, and the large-scale financing of battery factories is conducive to production expansion. Photovoltaic equipment: with the arrival of large silicon wafers, the full popularization of HJT technology is close at hand, and the improvement of power generation efficiency / economy is the driving force for the continuous improvement of the photovoltaic industry. Semiconductor equipment: 5G and other new infrastructure investment demand is hot, Central shares launched 5 billion refinancing.
Buyer's view
The rebound of the market may have twists and turns, and a comprehensive rebound may be more difficult to see, plate rotation repair is still a feature of the recent market. Customers are currently in a balanced style, focusing on new infrastructure and essential consumer sectors in the domestic demand economy, well-adjusted technology growth stocks and companies that report better-than-expected quarterly growth.
Focus of the morning meeting
"non-bank | Zhou's point of view: insurance has welcomed the improvement of premiums, and securities firms will welcome deregulation."
We expect that insurance stocks, driven by an improvement in the debt side, will usher in a valuation repair after an overfall; liquidity easing plus policy catalysis is expected to continue to boost brokerage valuations in the short term. Specifically: 1) in terms of insurance, the short-term driving force of insurance stock valuation repair lies in the year-on-year improvement in insurance premiums, which is expected to be improved in April, thanks to the recovery of offline development industry, the improvement of security demand and the more active business promotion strategies. The long-term allocation value of insurance stocks lies in the expected difference in the investment return of insurance companies, and the market is too pessimistic about the investment return of insurance companies. We expect the net investment return of listed insurance companies to be no less than 4.5% in the next five years. Six months to one year dimensions recommend New China Life Insurance and China Life Insurance Company Limited, long-term recommend Ping An Insurance, China Pacific Insurance, suggest to pay attention to AIA, Taibao H. 2) in terms of securities firms, the Financial Committee first mentioned "relaxing and abolishing controls that do not meet the needs of development" and made clear the role of the capital market as a hub. It is expected that good policies for follow-up capital market reform will continue to land, superimposed by MLF and LPR interest rates in the second quarter, and liquidity easing + policy catalysis is expected to continue to boost the valuation of securities stocks in the short term, recommend Huatai, CITIC, and suggest paying attention to CITIC Construction Investment H.
"non-bank | March brokerage performance: the performance of major stock indexes is weak and superimposed with a high base in February, with a month-on-month performance of-20% and a cumulative year-on-year of-5% from January to March"
Investment points: the performance of 31 listed securities firms is-20% month-on-month in March and-34% in January-March compared with the same period last year. The month-on-month decline in performance was attributed to the adjustment of major stock indexes in the market, and the overall performance of listed securities firms in March was in line with expectations. Risk-free interest rate down + policy positive plus + valuation is still below the center, focusing on recommending Huatai and CITIC, it is recommended to pay attention to CITIC Construction H shares. The overall performance of listed securities firms in March was in line with expectations, with CITIC + 6 per cent month-on-month. Market trading volume fell slightly, and the scale of refinancing and bond underwriting rose sharply. The Financial Stability and Development Commission of the State Council pointed out the follow-up policy direction. Investment suggestion: the Financial Stability and Development Committee of the State Council points out the follow-up policy direction, opening up room for the improvement of securities firms' valuations. At present, the average valuation of the securities industry is 2.0xPB, the valuation of large brokerages is between 1.0 and 1.7xPB, and the median historical valuation of the industry is 2.4xPB (from 2012 to the present). Huatai and CITIC are recommended, and it is recommended to pay attention to CITIC Construction Investment H shares.
"Bank | Review of 19 Annual reports of 6 Major Banks: good performance, or Catalytic valuation repair"
The growth rate of revenue is stable, while the growth rate of profit is slightly higher. The overall revenue YoY+7.9%, of 6 major banks in 19 years is the same as that in 18 years. The overall net profit of six major banks increased by 5.2% in 19 years, an increase of 0.3 percentage points over 18 years. Excluding the new addition of Postal Savings Bank of China, the profit growth rate of the five major banks was the best in the past five years. Future earnings growth may be slightly under pressure. Taking into account the downward pressure on the economy, asset quality is expected to be stable but difficult to significantly improve, net interest margin downward pressure, earnings growth is expected to decline slightly in the coming year. The asset expansion is steady and the net interest margin is under great downward pressure. The impact of the sharp drop in the downward market interest rate on the rate of return on assets has been reflected. The countercyclical adjustment policy has made the market interest rate continue to decline. It is expected that the rate of return on assets will continue to decline slightly, and the net interest margin of large banks will still narrow slightly. The quality of assets is stable and good, and the provision is adequate.
"Media | Weekly View: quarterly reports are coming out one after another, focusing on high growth and sustainability."
Benefiting from the joint promotion of 5G news by the three major operators, RCS gained more attention in the market last week, with related [Blue cursor, Palm Technology (+ 9.3%), Century Huatong, etc.] rising at the top. [Shengguang Group (+ 37.2%)]
Won the core agency of TikTokAds, Q1 performance pre-increase [one net one creation (+ 24.8%)] also has a good performance. Overseas epidemic and domestic policies are the core factors that determine the market at present, and the media point of view continues online consumption & the relevant main line of 5G remains unchanged. On April 9, Beijing announced the construction plan of the National Cultural Center, which will build an online game capital in the future. in addition, the quarterly report is coming to an end, focusing on Q1's forecast of high-growth stocks, including Dongcai (April gold shares), Yaoji, travelers, Panax notoginseng, new media, Huatze, etc., combined with the overall judgment of 19Q4 and 20Q2.
"Media | Huatze Film and Television: 20Q1 Preview comments: the performance inflection point is emerging, and high-quality dramas are frequent."
Huatze Film and Television disclosed the 20Q1 performance forecast, which is expected to achieve a net profit of 1-110 million yuan, an increase of 177.40% to 205.14% over the same period last year, which is in line with our earlier judgment on the high growth expected of the company's Q1. 20Q1 Huatze series got off to a good start, and the continuous verification of product power also helps to enhance the bargaining power of follow-up projects. Under the influence of the epidemic, the delay in the supply of new dramas is conducive to the reserve-rich companies, while the film and television supply side is expected to continue to accelerate clearance, and the leading advantage will be more prominent. Investment advice: in the face of changes in the film and television industry, Huatze Film and Television has adjusted its market strategy over the past 19 years, cleaned up risk projects, guaranteed cash rebates, and made some provision for impairment. With the rematch of the revenue and cost of the new show in 2020, the production rhythm and profit margin of the company's project are expected to return to the normal level, the company's performance inflection point is expected to be seen in 20 years, and the company's new drama, such as "long Song Line", starts at the end of March. As more projects are expected to start one after another, and shooting will be completed in the second half of the year, we think we can expect to see a more obvious performance trend. We expect the company's 19-21 net profit to reach-1.295 billion (disclosed by KuaiBao) / 612 million / 704 million, corresponding to the 20-21 PE of 20.8x/18.1x, maintaining the buy rating.
"Electronic | brainstorming technology: 20 years of new product release, Q1 starts a high growth cycle."
The company issued a forecast for the first quarter of 2020, with an estimated net profit of 15.9483 million yuan to 180.747 billion yuan in the first quarter of 2020, an increase of 50% and 70% over the same period last year. The impact of non-recurrent profit and loss on net profit is estimated to be 2.5 million yuan. The company grew at a high speed in the first quarter, and has maintained good performance for three consecutive quarters since 19Q3. We think it is mainly due to the improvement of industry supply and demand and competitive structure, as well as the improvement of the company's high-end products, such as QLED film, small-size high-end optical film, photovoltaic backplane film and other high-end products. 1.20 years of new products have contributed to profits and have performed well for three consecutive quarters. two。 Huawei QLED smart screen release, the company is expected to continue to profit. 3. Precision coating + formulation technology + micro-nano processing core technology to create a functional film, new material platform. 4. Investment advice: taking into account the impact of the 20-year global epidemic on downstream demand and new product development, we adjust the company's revenue forecast for 20x21 to 2 billion yuan (original value: 2.54 billion), adjust profit forecast to 1.35 trillion (original value: 257 million), and maintain buy rating.
"computer | Jiadu Science and Technology: in the year of bumper harvest orders, the core builders of the smart city set sail again."
According to the annual report released by the company in 2019, the company achieved operating income of 5.012 billion yuan in 2019, an increase of 7.09% over the same period last year; net profit of 680 million yuan, an increase of 159.58% over the same period last year; and net profit of 85 million yuan, down 59.91% from the same period last year. The short-term adjustment of the business structure led to a decline in gross profit margin and the high growth of intelligent products in the industry. Rail traffic business orders have a bumper harvest, continue to expand the market outside the province. With the improvement of the degree of production of public safety, the core builders of smart cities will set sail again. Investment suggestion: it is optimistic that the company's industry AI will continue to land, and the rail transit business will continue to expand. Due to the impact of the epidemic, the company will adjust its 2020max 2021 and the new 2022 profit forecast from 640x813 million to 319x114,000,000, through the segment valuation method to get a reasonable valuation of 22.85 billion yuan, corresponding to a reasonable stock price of 13.04yuan, maintaining the "buy" rating.
"Environmental Protection and Public use | Weekly Viewpoint: first quarter results Forecast Overview: whether it will be extremely successful or not"
Forecast results generally fell in the first quarter, with an average decline of 30.9% compared with the same period last year. Among the public environmental protection industry targets that announced the Q1 performance forecast, more than 60% of the performance declined compared with the same period last year. The forecast performance generally fell in the first quarter, with an average decline of 30.9% compared with the same period last year. Of the public environmental protection industry targets that announced the Q1 performance forecast, more than 60% of the performance declined compared with the same period last year. Most of them are caused by non-operating factors. Under the influence of the epidemic, the project business and the progress of project construction have been blocked. Public utilities: the epidemic situation dampens the demand, so it is recommended to pay attention to the thermal power targets with large profit flexibility in the second quarter. Under the impact of the epidemic, the electricity demand of the whole society is insufficient, the priority of superimposed thermal power grid is low, and thermal power enterprises are expected to be under pressure in the first quarter. In the second quarter, under the trend of imported coal price pressure and continuous loose supply and demand, the downward pressure on coal prices continues to increase, and the annual long-term agreement price can be reduced. At the same time, the domestic epidemic is expected to achieve complete control, electricity demand continues to pick up, and thermal power performance is about to be released in the second quarter. It is recommended to pay attention to the relevant undervalued thermal power targets, including [Huadian International] [Huaneng International] [Construction Investment Energy] [Wanneng Power] [Jingneng Power] and [Inner Mongolia Huadian].
"Environmental protection and public use | Thermal power industry series report 1: how to repair thermal power valuation? "
Background: industry profitability deviates from valuation trend. We believe that the core contradiction lies in performance flexibility. First of all, the concentration of coal supply is increased, imported coal is controlled by the National Development and Reform Commission, and there is less room for coal prices to fall in this round than in the previous cycle, so it is difficult to fall back to the 2015 low. Secondly, the cancellation of coal-fired benchmarking price makes the adjustment frequency of thermal power price faster, the adjustment time difference between coal price and electricity price is greatly shortened, the excess return of the downward cycle of coal price will not exist, the attribute of counter-cycle will be weakened, and the flexibility of industry performance is limited. How to fix the valuation? Performance is still the core, and dividends are also crucial. The valuation of thermal power is at an all-time low, the pessimistic expectation of electricity price is expected to be lifted, the coal price for the whole year may exceed expectations, and the performance flexibility can be expected. In addition, the low valuation will enhance the company's demand to maintain the market value, and the future dividend policy is expected to be more friendly. Optimistic about industry valuation repair. It is suggested that we should pay attention to the leading thermal power industry [Huadian International] and [Huaneng International] (Atroh), as well as local energy companies [Inner Mongolia Huadian], [Jiantou Energy] and [Jingneng Power], [Wanneng Electric Power] [Changyuan Power].
"Dianxin | Dangsheng Technology covers for the first time: high nickel products have significant advantages and strong layout in overseas markets."
How to look at the three-yuan positive industry? From the perspective of industry attributes: the three-yuan positive pole is a typical asset-heavy industry, and the pricing model is cost plus. Thinking about the industry: the ternary cathode faces a "trend" and two "problems". One trend: the trend of high nickel content. Problem one: the industry pattern is scattered. Problem 2: the proportion of raw materials is too high, it is difficult to seek excess advantage. How to look at the current management situation of Dangsheng? The small improvement in profitability in the face of adversity is the embodiment of core competitiveness. Where is the future performance growth point of Dangsheng? High nickel products are one of the profit growth points in the future. With the layout of the global industrial chain, overseas markets are the second point of profit growth in the future. The rapid expansion of high nickel production capacity is the guarantee of future profit growth. It is estimated that the operating income of Dangsheng Technology in 2020 and 2021 is 29.19 yuan and 4.092 billion yuan respectively, an increase of 28% and 40% over the same period last year, and the net profit is 3.52 yuan and 496 million yuan respectively, with an eps of 0.81 yuan and 1.14 yuan per share, corresponding to 30.02X and 21.29X respectively. The target price is 39.9 yuan, and the PE is 35X in 2021, giving a "buy" rating for the first time. Risk hint: electric vehicle sales are not as expected, high nickel growth is not as expected, and production capacity is not as expected.
"Dianxin | Kodali: Huizhou capacity release boosts performance, and will continue to increase its main business."
According to the annual report released by the company in 2019, Q4 revenue in 2019 was 530 million yuan, up 0.4% from the previous month, down 19% from the same period last year; the net profit from the home was 90 million yuan, up 37% from the previous month, an increase of 136% over the same period last year; and deducting 87 million yuan from non-net profit, an increase of 40% from the previous year and 140% from the same period last year. Sub-business: the company gradually withdrew from low-margin automotive structures, reduced the pressure to reduce the price of superimposed products as the capacity profit margin increased, and the gross profit margin of lithium batteries returned to 30%, an increase of 9Pct compared with the same period last year. Fixed increase project: the company's production capacity is expected to reach 6 billion yuan in 2022, which lays a solid foundation for the company's follow-up high-speed development. Investment advice:
The last round of investment peaked in 2018. Since 2019, the company has entered the capacity utilization cycle of the Huizhou + Jiangsu plant, and the price of superimposed structures has slowed down, and the gross profit margin of lithium battery structures has returned to 30%. The Jiangsu factory will further release its production capacity this year, and the company is expected to continue to maintain a volume-profit rise. Taking into account the impact of the epidemic, downgrade the performance in 2020 and raise the performance in 2021. It is estimated that the net profit of homing in 2020-2021 will be RMB 285 million (the original forecast is RMB 405 million), maintaining the "buy" rating!
"Merchants | Jiafa Education: net profit increased by 65% compared with the same period last year, and intelligent education rose rapidly."
The company announced its 2019 annual report that the company's revenue in 2019 was 583 million yuan, an increase of 49.30% over the same period last year, of which Q1-4 revenue was 75 million yuan, 217 million yuan, 110 million yuan and 181 million yuan respectively, accounting for 12.90%, 37.14%, 18.83% and 31.12%, respectively. It is proposed to distribute a cash dividend of 3 yuan (including tax) to all shareholders for every 10 shares, and use the capital accumulation fund to increase 5 shares for every 10 shares for all shareholders. In 2019, the company paid a cash dividend of 79.906 million yuan, with a dividend rate of 38.97%. Revenue in 2019 was 583 million yuan, an increase of 49.30% over the same period last year. Maintain earnings forecasts and give buy ratings. The company's main business is R & D, production and sale of educational information products with independent intellectual property rights and brands and provide users with related services, including wisdom recruitment and wisdom education two product series. We estimate that the EPS of the company in 20-22 is 1.2,1.57 and 2.07 yuan respectively, and the PE is 27x, 20x and 15x respectively.
"Merchants | from the perspective of industrial comparison: the flagship of urban integrated services set sail"
With the rapid development of urban service market, Yuhetian has created a flagship of quality. Yuhetian: the advantage of scale is significant, and the service can be replicated. Overseas Chinese Bank of Environmental Protection: based in Guangdong, integrated service is the first place. Enlighten the environment: state-owned holding, comprehensively upgrade the strategic layout. Longma sanitation: sanitation equipment starts, municipal sanitation develops rapidly. Financial comparison: the scale of Yuhetian is growing rapidly and the management efficiency is outstanding. Income: Yuhetian sanitation has grown rapidly in recent years, and the leading advantage is remarkable. Gross profit margin: Yuhe Tianhuan has significant advantages and operating efficiency. ROE has outstanding performance and high asset turnover. Maintain earnings forecasts and give buy ratings. The main business is integrated environmental hygiene management services such as property cleaning and municipal sanitation, and the main business has not changed since its establishment. After years of development, the company insists on creating a professional and refined service system, establishes a good brand image, and continues to expand its business coverage. now it has become a large-scale and influential comprehensive environmental health management service operator in the industry. We estimate that the company's 20-21 net profit is 530 million and 810 million, respectively, and the corresponding PE is 36x and 23xPE respectively.
"Home Appliances | Weekly View: the growth rate of weekly sales of most categories in all channels has picked up, and the decline in sales in March has narrowed."
With the exception of air conditioners, the data of the last week all continued the trend of positive growth last week. Among them, the dishwasher increased the most. From a month-on-month point of view, the air-conditioning month-on-month decline is further expanded. In addition, the month-on-month growth rate of vacuum cleaners also decreased slightly, while the month-on-month decline of other categories narrowed. Aowei omni-channel sales data released in March, online white electricity air conditioning and washing machines are a downward trend, of which air conditioning dropped more. In the long run, short-term fluctuations bring opportunities for leading enterprises to integrate the market, and it is difficult for the world to generate alternative capacity. And the forced suspension of overseas economic activities is a short-cycle event, and overseas governments are also speeding up their response and action to the epidemic. It is suggested that we should actively pay attention to Gree Electric Appliances, Midea, and Haier Smart Home, the three major white power leading companies.
"Home Appliances | Gree Appliances: the company has issued a buyback plan, and management incentives have been gradually landed."
Gree Electric Appliance issued a notice on the plan to buy back some of the public shares. We believe that under the condition that Gree Electric Appliance maintains a high dividend level, it is unlikely that 4% of the equity incentive will be fully realized in 20 years, and the regular buyback plan is more likely, which will further strengthen the long-term nature of the company's future business objectives. After the equity transfer, the management incentive has gradually landed, which further strengthens the long-term nature of the company's future business objectives. In the short term, the outbreak of the epidemic has challenged the fundamentals of home appliance companies and hampered performance growth in 2020. However, from a long-term point of view, short-term fluctuations have brought opportunities for leading enterprises to integrate the market. We will not adjust our profit forecast for the time being. Net profit for 19-21 is 270.0, 309.1 and 34.3 billion respectively, corresponding to dynamic valuations of 12.0,10.5 and 9.4 times, respectively, maintaining the "buy" rating.
"Building materials | Zhou's point of view: from resuming work to catching up, the demand for building materials has rebounded significantly"
In terms of cement, the demand for cement has been delayed in February-March and released significantly in April, so we continue to be optimistic about the rise in volume and price. We remind you to pay attention to the following changes: changes in the structure of requirements downstream of ①. ② cement prices are expected to rise in mid-April, ③ Henan wrong peak good overall price trend, ④ Xinjiang prices fell sharply, ⑤ forecast shows that the following week East China, South China, Central China and other regions to sunny, cloudy weather, conducive to continuous construction downstream. Consumer building materials, 2-3 months delayed completion and decoration demand is making up, throughout the year continue to be optimistic about the three major logic: B-end model, completion pick-up, and increased industry concentration. In terms of macro policy, 1) March social finance exceeded expectations. 2) pay attention to the housing construction demand brought about by the new urbanization. The demand for building materials has improved, and it is optimistic that the data will continue to pick up in April. Decoration demand is currently shown as the accelerated release of suppressed demand in February-March, and is optimistic about consumer building materials leaders throughout the year.
"Petrochemical | CNOOC development coverage for the first time: CNOOC's offshore oil and gas multi-service provider"
Oil service industry: 1) Global oil service moderate recovery. World crude oil capital expenditure is expected to continue to rise slightly by 6% in 2019, with the bulk of the increase shifting from shale gas to traditional oil and gas development projects. 2) Offshore oil suit is a bright spot in the world. As oil prices began to pick up in the past 16 years, capital expenditure on offshore crude oil development rebounded significantly. At the same time, offshore oil and gas has greatly reduced the development cost and achieved obvious cost reduction and efficiency. 3) domestic upstream exploration capital expenditure has maintained a rapid growth. Investment in exploration and development of China's three major oil companies rose to 371.4 billion yuan in 2019, up 23% from the same period last year. CNOOC will achieve its target of 850-95 billion by 2020. The company's core competitiveness: 1) energy technology covers the whole mining process; 2) the only offshore FPSO integration provider; 3) energy logistics helps the construction of the whole industry chain; 4) environmental protection and energy conservation to ensure sustainable production. Risk tips: oil company capital expenditure risk caused by falling oil prices; default risk of current projects; large asset impairment risk.
"Iron and Steel | Weekly View: accelerating the resumption of key projects in Hubei may significantly drive downstream demand."
The accelerated recovery of downstream demand makes steel demand ushered in an upward period, steel inventory removal is relatively smooth, steel social inventory this week continues the downward trend. At the same time, with the return of personnel, the resumption of logistics and the return of funds, the supply of steel mills is also gradually released. This week, the total output of the five major steel mills is 9.83 million tons, an increase of 5.00% from the previous month. On the whole, the social inventory of steel has declined rapidly for four consecutive weeks, and the strength may continue to be maintained in the short term. The impact of the epidemic on downstream demand may further stimulate an improvement in fundamentals in the medium to long term. Recommended targets: Valin Iron and Steel, Mingguang, Fangda Special Steel, New Steel, Nanjing Iron and Steel, Liugang, Songshan, CITIC Special Steel, Jiuli Special Materials, Yongxing Materials.
"Iron and Steel | Jinling Mining: the target of domestic traditional iron ore may benefit from the upward price of ore"
The company's own mines, iron powder and pellets are the main sources of revenue. Iron ore is heavily dependent on the outside world as the target of local traditional iron ore, which is expected to benefit from rising ore prices. Investment advice: combined with the company's historical PB trend, we give the company a reasonable valuation of 1.10X in 2020, corresponding to a market capitalization of 3.975 billion, according to the current equity, the corresponding target price is 6.68 yuan, covered for the first time, given a "buy" rating. Risk tips: overseas epidemic control led to no large-scale contraction of the supply side, demand contraction led to a decline in mineral prices, the epidemic led to an increase in mining costs and transportation costs, unexpected deviations in the mining of the company's mining resources and its own operating risks.
