Zhitong Tip:
According to Morgan Stanley, market demand and cost control will boost Cheng Yilong's second-quarter income and adjusted net profit in the second quarter of 00780, which are 9% and 15% higher than market expectations, respectively, and revenue in the second quarter is expected to increase by 30% over the same period in 2019. 35%
HSBC research said that due to the expected increase in income and profit margins, Cheng Yilong (00780) raised its profit forecast for next year by 5% and 10%, and is expected to accelerate growth in the second quarter compared with the same period in 2019, mainly due to the rapid recovery of the domestic tourism market.
China Bank International said that the increase in the controlling shareholder of Tianlun Gas (01600) will enhance market confidence or become a short-term stock price catalytic event, with a target price as high as HK $9.90.
China Bank International believes that the correction in the share price of BYD Holdings (01211) provides a good buying opportunity, and BYD Semiconductor is expected to exceed previous market expectations in terms of fundamentals and valuation, with a target price of HK $282.
Xiaomo is optimistic about the fundamentals of the shipping sector, and even though there are signs of easing in terminal congestion in the United States, it believes that Cosco Marine Holdings (01919) will still benefit from the positive outlook for terminal demand this year and the overall tight supply.
Cheng Yilong's (00780) first-quarter results exceeded expectations and the adjusted profit increased by 279.5% compared with the same period last year.
Morgan Stanley: maintain Cheng Yilong (00780) "increase" rating target price by 4.5% to HK $23
Morgan Stanley raised its earnings per share forecast for Tongcheng Yilong (00780) for the period from this year to 2023, and revised upward its cycle, summer peak season and growth, all of which are more visible and strong than its peers, the momentum of growth continues into 2022 and the terms of Wechat are updated. will help the valuation to be further revalued.
According to the report, the company's revenue in the first quarter of this year was 1.61 billion yuan (the same below), down 10% from the same period last year and 3% higher than the market forecast, while the adjusted net profit was 296 million yuan, 19% higher than the market forecast. Due to a V-shaped rebound in travel demand in March, total revenue increased by 10-15% compared with March 2019, while the number of booked rooms increased by 80%. Market demand and cost control will push the company's revenue and adjusted net profit guidance for the second quarter of this year 9% and 15% higher than market expectations, respectively. Revenue in the second quarter of this year is expected to increase by 30% to 35% compared with the same period in 2019, a significant improvement over the first quarter.
Credit Suisse: maintain Cheng Yilong (00780) "outperform market" rating target price raised 7.5% to HK $21.50
Credit Suisse said that the same Cheng Yilong (00780) first-quarter revenue beat the bank and the market expectations, adjusted profit of 297 million yuan, also beat expectations. Although affected by the epidemic from January to February, local tourism recovered in March, hotel revenue returned to 94% in the first quarter of 2019, and ticketing revenue is slowly recovering. The bank said revenue and profit guidance in the second quarter beat expectations, mainly due to the continued recovery in tourism demand in the second quarter, the company reiterated its full-year growth target.
HSBC Research: upgrade Cheng Yilong (00780) to "buy" target price by 40% to HK $21
HSBC research said that due to the faster-than-expected recovery of profit margins and the rapid recovery of the domestic tourism market, it upgraded the rating and target price of Tongcheng Yilong (00780) and raised its profit forecast for this year and next year by 5% and 10%, as revenue and profit margins are expected to improve. The bank expects the company to accelerate growth in the second quarter of this year compared with 2019 because of the rapid recovery of the domestic tourism market. For example, during the "May Day International Labour Day" holiday, the total number of tourists exceeded 3% of the 2019 level; air or train ticket volume rebounded in April to 96% and 92% of 2019 levels in the same period; and the company strategically put marketing costs into brands, activities and user access channels to capture demand. According to the company's guidelines, net income in the second quarter of this year will increase by 30 to 35 per cent compared with 2019, with non-GAAP net profits ranging from 350 million to 400 million yuan.
The major securities firms are unanimously optimistic that the controlling shareholder will increase its stake in Tianlun Gas (01600), which will be regarded as HK $9.90 by China Bank International.
Citigroup: maintain Tianlun Gas (01600) "Buy" rating target price of HK $9
Citigroup said Mr. Zhang Yingzen, the controlling shareholder of Tianlun Gas (01600), would buy 141 million shares of the company from IFC & IFC Global Infrastructure Fund, the second largest shareholder, at HK $7.50 per share. After this acquisition, Mr. Zhang's total interest in Tianlun Gas will increase from 53.87% to 67.92%. Citigroup believes that the acquisition will eliminate the suspense caused by the reduction of IFC & IFC Global Infrastructure Fund's holdings and reduce the pressure on the stock to sell. The bank expects Tianlun gas retail sales to grow 25 per cent year-on-year in 2021, including more than 30 per cent year-on-year growth in April, and will maintain positive cash flow this year. Citigroup believes that the company's 2021 forward price-to-earnings ratio of 6.3 times, the valuation level is still very attractive.
China Bank International: maintain Tianlun Gas (01600) "Buy" rating target price of HK $9.90
China Bank International said that the increase by the chairman of Tianlun Gas (01600) would send two clear signals to the market: 1) the controlling shareholders have confidence in the future development of the company, and 2) set a short-term floor price of HK $7.50 per share for Tianlun Gas. The bank believes the equity deal will boost market confidence in the company. Tianlun's share price has been roughly flat over the past month. At present, the company trades at 6.3 times forward 2021 earnings, and the valuation is still very attractive. The bank believes that the chairman's stake increase may become a short-term stock price catalytic event.
UBS: maintain PetroChina's (00857) "Buy" rating and raise its target price by 8.3% to HK $3.90
UBS said PetroChina (00857) shares outperformed the market, mainly rising 40 per cent from their November low, but failed to follow oil prices back to pre-epidemic levels. The company's earnings have recovered well this year, and higher production costs provide strong operating leverage for oil prices, but after years of low valuations, the company's share price has failed to keep up with market earnings forecasts. The bank raised its profit forecast for this year by 42 per cent and expects earnings to rise 2.85 times. It is expected to hand over its best earnings performance since 2014. It is believed that the market is likely to restore confidence, such as the impact of a break-up pipeline, which could have a positive impact on share price performance.
UBS: maintain Sinopec's (00386) "buy" rating target price of HK $4.90
UBS predicts that Sinopec's (00386) exploration and mining and chemicals business will lead to a profit upgrade and is expected to achieve its best profit performance since 2013 this year. Although the company's share price has outperformed the market so far this year, it has yet to capture potentially strong growth. The bank raised its earnings per share forecast for the year to 2023 by 29%, 21% and 13% respectively, and its latest forecast for this year's earnings is 87% better than the same period a year earlier.
China Bank International: reiterate that the "buy" rating callback of BYD Holdings (01211) provides a good buying opportunity with a target price of HK $282.
China Banking International said that the spin-off and listing of BYD's semiconductor business was carried out in an orderly manner and became a catalyst for short-term share price gains. The shift in monetary policy to expectations triggered a correction in the stock price in the near future, but the bank is still optimistic about the company's medium-and long-term upward momentum, based on 1) BYD's leading position of new energy vehicles is expected to be consolidated with the release of DM-i series capacity; 2) external battery supply is expected to land this year; and 3) under the background of lack of core, the listing valuation of BYD Semiconductor is expected to exceed expectations.
The report mentioned that the listing of BYD Semiconductor growth Enterprise Market has been carried out in an orderly manner. On the evening of May 11, BYD released a pre-plan to spin off its semiconductor business to be listed on the growth Enterprise Market (gem). BYD directly owns 72.30% of BYD Semiconductor and is the controlling shareholder of BYD Semiconductor. BYD Semiconductor's main business is the R & D, production and sales of power semiconductors, intelligent control IC, intelligent sensors and optoelectronic semiconductors, the main products include IGBT, SiCMOSFET, MCU, battery protection IC, AC-DCIC, CMOS image sensors, embedded fingerprint identification, electromagnetic and pressure sensors, LED light sources, LED lighting, LED display and so on. The bank believes that BYD Semiconductor is expected to exceed previous market expectations in terms of fundamentals and valuation in the context of the reverse globalization of semiconductors and the lack of cores in automotive semiconductors.
In terms of new energy vehicle sales, 1) the release of blade battery capacity; and 2) the gradual expansion of new models such as DM-i series (Qin PLUSDM-i, Tang DM-i, Song PlusDM-i) will help to promote the rapid growth of new energy sales. Looking ahead, the bank expects BYD's car sales to improve month-on-month and lead to a quarter-on-quarter improvement in earnings.
Xiaomo: significantly increase the target price of COSCO Sea Holdings (01919) by 50% to HK $24, and its rating is "overweight".
Xiaomo said that the company's share price has continued to outperform the market since its better-than-expected results in the first quarter, rising 23% since the beginning of May, while the national index has risen only 3% over the same period. After a huge increase so far this year, share prices are expected to continue to fluctuate in the short term as some investors lock in profits. The bank will continue to be bullish on the fundamentals of the shipping sector, benefiting from a positive terminal demand outlook and overall supply constraints this year and next, even though there are signs of easing in US terminal congestion. In addition, the bank also takes a positive view on the latest guidelines of international peers Maersk and Hapag-Lloyd. Maersk specifically points out that industry demand growth is expected to continue into the fourth quarter, and both companies say that the recent Trans-Pacific contract negotiations have yielded satisfactory results.