Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.
Author: Chen Ming.
最近两个交易日，A股及港股市场行情都有所回温，不少上市公司的目标价，接连被外资机构上调。其中，美银证券将 $BILIBILI-W (09626.HK)$ 目标价从147港元上调至176港元，将京东集团目标价由145港元上调至173港元；野村证券将$TENCENT (00700.HK)$目标价从478港元上调至500港元，同时将美团目标价从151港元上调至224港元。
此外，里昂将$GWMOTOR (02333.HK)$The target price has been raised from HK$14.2 to HK$17, while reiterating an "outperform the market" rating; Citigroup has raised the target price of PetroChina's H shares from HK$7.5 to HK$8, maintaining a "buy" rating; Macquarie $PDD Holdings (PDD.US)$The target price for US stocks has been slightly increased from $224 to $227, reiterating an "outperform the market" rating.
How will Chinese assets evolve in the future?
Frequent target price upgrades
According to the latest research reports released by multiple foreign institutions $TENCENT (00700.HK)$Please use your Futubull account to access the feature.$MEITUAN-W (03690.HK)$Please use your Futubull account to access the feature.$JD-SW (09618.HK)$Please use your Futubull account to access the feature.$BILIBILI-W (09626.HK)$Please use your Futubull account to access the feature.$GWMOTOR (02333.HK)$ 、中石油、 $PDD Holdings (PDD.US)$ 等上市公司的目标价，被密集上调。
其中，野村证券的分析师在一份研报中表示，受国内和海外市场推动，腾讯第三季度网络游戏收入同比增幅可能加速至13%。得益于夏季表现尤为强劲的《地下城与勇士》手游，腾讯在中国市场的网络游戏收入注射了强心剂。
野村证券预计腾讯控股第三季总营收按年增加8%，与市场预测一致；预计腾讯控股第三季非国际会计准则净利润按年增加23%，比市场预测高出3%，因为毛利率持续扩张。由于收入组合转向高利润业务，预计腾讯控股第三季度毛利率可能按年改善4个百分点至53.6%，高于市场预期的53.4%。野村分别上调对腾讯控股2024和2025财年非国际会计准则净利润预测5%和3%，目标价由478港元升至500港元，维持“买入”评级。
野村证券还大幅上调了 $MEITUAN-W (03690.HK)$ 的目标价，将后者的目标股价从151港元上调至224港元，维持“买入”评级。此次评级调整基于美团强劲的盈利前景，主要得益于外卖服务和到店业务竞争环境的优化，以及配送员队伍的充足有效缓解了配送成本上升的压力。
Nomura Securities expects that Meituan's third-quarter revenue will increase by 20% year-on-year, in line with market expectations; the net income under non-general accounting principles has achieved a 111% year-on-year growth, exceeding the market's expectations by 3 percentage points, demonstrating a significant improvement in the company's core business profitability. Specifically, the operating profit of the core local commerce segment is expected to achieve a 37% year-on-year growth, benefiting from a 19% overall revenue growth drive, with food delivery business and unit economic indicators expected to grow by 15% and 24% respectively, reaching levels of 45.6 billion yuan and 1.42 yuan per order, in Chinese yuan.
Bank of America Securities also raised the target price of JD.com in Hong Kong. $JD-SW (09618.HK)$ and $BILIBILI-W (09626.HK)$ The investment bank expects that JD.com Group's third-quarter revenue will increase by 4.9% year-on-year, reaching 260 billion Chinese yuan, in line with market expectations. Among them, direct sales revenue is expected to increase by 4.1% year-on-year; net income under non-general accounting principles is expected to increase by 12% year-on-year, reaching 11.9 billion Chinese yuan, exceeding the market's expectations by 5%. Bank of America Securities believes that JD Retail and operations' more controllable profit growth strategy in the third quarter, especially reducing promotional activities during the off-season, is the main reason for the net income exceeding expectations.$JD LOGISTICS (02618.HK)$highlighted a more controllable profit growth strategy in the third quarter, especially reducing promotional activities during the off-season, as the main reason for the better-than-expected net income.
Bank of America Securities predicts that JD.com's revenue in the fourth quarter will increase by 6% year-on-year. Its net income under non-general accounting principles will reach 8 billion yuan, and points out that the company will actively invest in promotional activities in the fourth quarter to expand its market share in the surge of core category consumption demand. Bank of America Securities raised JD.com's H-share target price from HK$145 to HK$173 and reiterated a 'buy' rating.
In addition, Bank of America Securities raised Bilibili's target price from HK$147 to HK$176 and reiterated a 'buy' rating. It is expected that Bilibili will disclose its third-quarter performance in mid-November, with a chance to exceed expectations in the third quarter and a positive outlook for the fourth quarter. Bank of America Securities believes that Bilibili's main business trends are progressing well. Driven by the strong performance of the new game 'Three Hairs', the group's gaming business has grown well. Bank of America Securities expects Bilibili's advertising business momentum to continue in the second half of the year, with a 25% year-on-year growth, mainly benefiting from strong growth in video e-commerce and game advertising. Bilibili's gross margin structure is shifting towards a high-margin business model, coupled with cost optimization, it is believed that the company can achieve a break-even in the third quarter. Nomura Securities, on the other hand, raised Bilibili's U.S. stock target price from $18 to $24, rated 'buy', and expects Bilibili's third-quarter revenue to increase by 25% year-on-year to 7.3 billion yuan, 2% higher than market expectations.
Lion Capital has raised $GWMOTOR (02333.HK)$ target price. Lion Capital's research report points out that Great Wall Motor's globalization is accelerating, overseas sales maintain high growth, expansion has begun to show initial results, with the goal of reaching an export sales volume of 580,000 units next year. In the domestic market, Great Wall Motor has started a new vehicle cycle, which should support further growth. Lion Capital has raised Great Wall Motor's target price from HK$14.2 to HK$17 and reiterated an 'outperform' rating.
Citigroup has raised $PETROCHINA (00857.HK)$ target price from HK$7.5 to HK$8, maintaining a 'buy' rating. Citi's report states that under weakening oil prices, PetroChina's resilient natural gas business will support dividends. It believes that the market has not fully reflected the group's reduced reliance on oil revenue, expecting the contribution of natural gas to pre-tax profit to increase from approximately 41% last year to around 60% from 2024 to 2026. With the group generating strong free cash flow, there is potential for an increase in future dividend payout ratios.
Macquarie will $PDD Holdings (PDD.US)$ The target price for US stocks has increased from $224 to $227, and the 'outperform' rating has been reiterated. This decision is based on optimistic expectations for PDD's Temu business rapid growth, with Temu's revenue contribution expected to account for half of the group's total revenue by 2025. Macquarie pointed out that amid the current escalating geopolitical uncertainties, it believes the high-end consumer market (HCM) will become an important growth pillar for PDD, potentially bringing significant profit growth prospects in the future. At the same time, the stable domestic e-commerce market landscape is expected to support the healthy growth of PDD's core advertising revenue and cash flow from online marketing services.
Analysts: Market is expected to oscillate upwards.
On the secondary market, on Monday, the three major A-share indexes hit the bottom and rebounded. By the close of trading, the Shanghai Composite Index rose by 0.68%,$Shenzhen Component Index (399001.SZ)$up 0.62%.$Chinext Price Index (399006.SZ)$Decreased by 0.44%. A-share total daily turnover was 1.9 trillion yuan, above the median of the daily trading volume in the past three years. As for the Hong Kong stock market,$Hang Seng Index (800000.HK)$closing slightly up by 0.04%,$Hang Seng TECH Index (800700.HK)$up by 0.79%.
Central China Securities' analyst Zhang Gang pointed out that the average P/E ratios of the Shanghai Composite Index and the Chinext Price Index are 14.03 times and 36.80 times respectively, at the average level of the median in the past three years, suitable for medium-to-long-term layout. Zhang Gang mentioned that with the continuous implementation of domestic macro control and growth promotion policies, the future stock indices are expected to maintain a volatile upward trend overall, while still closely monitoring changes in policies, fund availability, and external factors. Investors are advised to focus on short-term investment opportunities in the military, automotive, home appliance, and communications services industries.
Yang Chao, a strategist analyst at Galaxy Securities, believes that the current A-share market valuation is at a historically moderate level. On one hand, investors have improved expectations for the domestic macroeconomy, while on the other hand, uncertainties such as the U.S. presidential election continue to create disturbances. Looking ahead, A-shares are expected to fluctuate upwards.
In terms of allocation,
Bullish on the technology growth sector. The disclosed third-quarter reports show that most companies in the semiconductor sector are expected to perform well. In the future, finance will increase its support for the technology sector, making the outlook for technology stocks promising.
Bullish on the consumer sector. As the work of replacing old consumer goods continues, it will drive rapid growth in sales of key consumer goods such as automobiles, home appliances, and home furnishings, which is conducive to boosting performance recovery. Meanwhile, the valuation of the consumer sector is currently at historically low levels, making it a high investment value.
Continuing to be bullish on the dividend sector with strong hedging properties. Before the trend in macroeconomic data improves and before the results of the US presidential election are announced, investor risk appetite is expected to remain low overall. Therefore, investors will continue to invest in high-dividend stocks for their hedging properties.
UBS Group's Director of China Internet Research, Fang Jincong, stated that with recent implementation of China's macro policies and coordinated support for the economy by various departments, although consumer confidence still needs time to recover, the market sentiment has improved. Fang Jincong mentioned that currently participants in the internet industry are optimistic about the future, favoring platform companies over content companies. At the same time, there is expected to be room for the online penetration rate of the local lifestyle market to increase.
Fang Jincong mentioned that competition in China's internet industry has eased, with platforms moving towards cooperation, which will help improve monetization rates, thereby driving revenue growth and margin improvement. Currently, the PEG (price-to-earnings growth ratio) of China's internet industry is around 1.1 times, at the historical average level. However, considering factors such as China's economic stimulus policies taking effect and easing competition, it is believed that the internet sector's valuation is still undervalued and has room to rise, with a PEG of 1.3 times considered a more reasonable expectation.
Editor/Rocky
