Source: Brokerage China Author: Zhou Le
Good news is coming from China's assets.
On the evening of July 1, the latest sales data released by several new energy vehicle companies in China greatly exceeded expectations. Among them, BYD sold 341,700 new energy vehicles in June, a year-on-year increase of 35%; Sokon automobile sold 41,457 vehicles in June, an increase of more than 631% year-on-year; the sales data disclosed by Chinese new energy vehicle companies listed on the Hong Kong and U.S. stock markets are also very impressive. NIO delivered 57,373 vehicles in the second quarter, exceeding the delivery guide and a year-on-year increase of 144%. As a result, new energy vehicle stocks rose across the board.
In the latest half-year market strategy outlook released by Qianbi private fund Jinglin Asset Management, it is pointed out that from this year, the "liquidity" of the Chinese economy will gradually improve. In the second half of the year, investors can expect many data to have an upward trend, and the stability and certainty of various economic policies and industrial policies will also be significantly better than the past three years. At present, the valuations of many leading companies are extremely low, and such opportunities "will only appear once in many years."
Jinglin Asset Management, a major player in the domestic holding of U.S. stocks, has received frequent attention from the market for its latest investment views. As of the end of the first quarter of 2024, Jinglin's total holding market value in the US stock market amounted to US $3.226 billion (approximately RMB 23.4 billion), of which Chinese concept stocks accounted for a large part.
Good news coming in a dense manner.
On the evening of July 1, the new energy vehicle sector of A shares received a lot of good news, as the latest sales data released by many new energy vehicle companies greatly exceeded expectations. Specifically:
BYD announced that in June 2024, its sales of new energy vehicles reached 341,700 units, compared with 253,000 units in the same period last year; sales of new energy vehicles with a value of RMB 1 billion to 3 billion reached RMB 401 million, RMB 1.288 billion and RMB 60 million, respectively, from January to June 2024. Meanwhile, the total installed capacity of new energy vehicle power batteries and energy storage batteries was about 16.101 GWh in June 2024, and the total installed capacity from January to June 2024 is estimated to be around 72.555 GWh.
Chongqing Sokon Industry Group Stock announced that its sales of new energy vehicles in June 2024 reached 41,457 units; the sales of Sokon automobile reached 41,457 units, an increase of 631.42% year-on-year; the sales of new energy vehicles this year amounted to 200,949 units, an increase of 348.55% year-on-year.
The latest sales data released by SAIC Motor Corporation shows that the sales of new energy vehicles exceeded 93,000 in June 2024, and the cumulative sales of new energy vehicles exceeded 460,000 in the first half of the year, a year-on-year increase of 24%.
At the same time, Chinese new power vehicle companies listed on the Hong Kong and US markets also disclosed impressive sales data.
Among them, Xiaomi's data shows that the delivery of SU7 in June 2024 exceeded 10,000, and the delivery estimate for July is expected to continue to exceed 10,000.
NIO announced that it delivered 21,209 vehicles in June 2024, an increase of 98.1% year-on-year; delivered 57,373 vehicles in the second quarter, exceeding the delivery guide, and an increase of 143.9% year-on-year; and delivered a total of 87,426 new vehicles in the first half of 2024, a year-on-year increase of 60.2%.
Xpeng Motors announced that it delivered 10,668 electric vehicles in June 2024, a year-on-year increase of 24% and a month-on-month increase of 5%; accumulated delivery of electric vehicles in the first half of the year was 52,028 units, a year-on-year increase of 26%.
Jinko Intelligent Technology publicly released its latest delivery volume, with a delivery of 20,106 units in June 2024, a sharp increase of 89% year-on-year and an increase of 8% month-on-month, breaking the 20,000 mark for the first time and setting a new record. In the first half of this year, Jinko delivered a total of 87,870 units, up 106% year-on-year.
Li Auto announced that it delivered 47,800 new vehicles in June 2024, a year-on-year increase of 46.7%; and delivered 108,600 new vehicles in the second quarter, a year-on-year increase of 25.5%; as of June 30, 2024, Li Auto's cumulative delivery volume reached 822,300 units.
Li Xiang, chairman of Li Auto, revealed that the sales volume of Li Auto L6 in June exceeded 20,000 units, and under the dual effect of improving store efficiency, Li Auto returned to the top of China's new energy vehicle sales list.
Geely Auto announced that its total sales volume in June 2024 was 166,085 vehicles, a year-on-year increase of about 24%. Geely Auto announced that it has decided to raise its annual sales target by about 5%, to 2 million vehicles.
The statement by the giant was released with a bang.
On July 1st, China Securities reported that Qianyi Private Equity Asset Management issued its latest semi-annual market strategy outlook on June 30th. Qianyi Asset Management stated that starting from this year, China's economy's "liquidity" will gradually improve. The "reduction of the down payment ratio for real estate and the adjustment of mortgage interest rates" is an important policy turning point. In the second half of the year, investors can expect a lot of data to show upward trends. The stability and determinacy of various economic policies and industrial policies will also be significantly better than the previous three years. At present, many leading company valuations are extremely low, and such opportunities "only appear every few years."
Qianyi Asset Management specially mentioned the Chinese companies listed on the Hong Kong and US stock markets, whose valuations have continued to decline in the past three years. Studying the fundamentals of these companies carefully, three characteristics of their operations have emerged:
1. More cautious capital expenditure;
2. More focused on the development of core businesses;
3. Better shareholder return plans.
Qianyi Asset Management pointed out that these companies are indispensable basic platforms in ordinary people's lives. After experiencing excessive competition and divergent expansion, these companies have discovered that the core business may be their own cake, and doing a good job in this area and returning to the investor is what needs to be done concretely.
Qianyi Asset Management stated that the valuation levels of these core businesses are 8-16 times PE, and the core business has gradually restored growth. Profits grow faster than income, and most of the free cash flow is used to repurchase stocks or dividends, and their balance sheets hold a large amount of net cash, almost no interest-bearing debt. If the reasonable valuation level of similar overseas companies is compared, the average valuation of these companies should also increase by 20%-30% on the current basis. Considering the possibility of an average annual performance growth of about 15% in the next three years, plus an average annual dividend repurchase rate of 4%-7%, simple mathematics can calculate a potential increase of around 100% in future three-year stock prices.
Qianyi Asset Management pointed out that these companies use most of the free cash flow to repurchase stocks. If they continue to do so for several years, it is equivalent to reducing the total number of shares by 4%-5% each year, and EPS will significantly increase. These opportunities are similar to China Shenhua, China Mobile, China Petroleum, etc. three years ago.
Qianyi Asset Management is one of the few domestic giants with a large holding of US stocks, and its latest investment views have frequently received market attention.
Qianyi's 13F quarterly report shows that as of the end of the first quarter of 2024, Qianyi holds a total of 37 individual stocks and 2 ETFs, with a total market value of 3.226 billion US dollars (approximately RMB 23.4 billion), an increase of 15.13% from the end of the fourth quarter of last year's 2.802 billion US dollars, with Chinese concept stocks occupying half of the territory.
In the first quarter, Qianyi bought four Chinese concept stocks: Tencent Music, JD.com, Ctrip, and Alibaba, with holdings of 1.46 million shares, 170,200 shares, 102,500 shares, and 57,100 shares, respectively.
Editor/Lambor