Today’s Focus

1. CCB International: The overall trend of Hong Kong stocks is expected to be bright and bright, and August-September will be an important observation window

2. CICC: The key factor affecting exports is overseas economic trends

3. CITIC Construction Investment: Liquor sales in June indicate a turning point in the economy, and it is advisable to resolutely increase positions

4. Everbright Securities: optimistic about the investment opportunities driven by the two-way optimization of supply and demand in the automotive sector

5. Guotai Junan: Supply down, expected price up, continue to recommend the pig breeding sector

6. Morgan Stanley: Maintain Meituan-W “overweight” rating, target price of HK$240

7. BofA Securities: Maintain Alibaba-SW “Buy” rating, target price of HK$159

8. CICC: Maintain Sunny Optical Technology’s “Outperform” rating, with a target price of HK$168

9. Credit Suisse: Downgrade Bilibili-SW target price to HK$314, rating “Outperform”

10. Shenwan Hongyuan: For the first time, Li Ning has a “buy” rating, and continues to be optimistic about the growth potential of national brands

11. Morgan Stanley: Raise COSCO SHIPPING Energy’s target price to HK$4.71, downgrade to “underweight”

Selected Research Viewpoints

1. Macro market

• CCB International: The overall trend of Hong Kong stocks is expected to be bright and bright, and August-September will be an important observation window

CCB International believes that in the first half of the year, Hong Kong stocks have confirmed the bottom of the valuation (3.15), the bottom of the policy (the 3.16 Gold Stability Meeting and the subsequent series of meetings to stabilize growth and stable expectations) and the bottom of the economy (the end of April and the beginning of May), and the second half of the year may welcome. Come to the bottom of the profit (before and after the interim report). Hong Kong stocks are expected to be bright in the second half of the year, and the volatility center will gradually rise. August-September will be an important observation window, US monetary policy will reach an important crossroads, and the market will also test and confirm the bottom of Hong Kong stocks during the July-August mid-term report season.

The bank expects that Hong Kong stocks will fluctuate in the second half of 2022. Considering the possibility of another change in style in the second half of the year, it is recommended to shift from overweight value to a balanced allocation between value stocks and growth stocks.

• CICC: The key factor affecting exports is overseas economic trends

CICC believes that the low base has pushed up exports, but the higher-than-expected data mainly reflects the rush to work after the epidemic has eased, while pure external demand factors may be gradually weakening. This confirms the earlier view that the epidemic alone has a limited impact on the supply side of exports, and the key factor affecting exports is the trend of overseas economies. In the context of high oil prices and the accelerated tightening of monetary policies in developed economies, the base has risen rapidly after the superposition of August, and it is expected that the export growth rate may decline.

2. Industry sectors

• CITIC Construction Investment: Liquor sales in June indicate a turning point in the economy, and it is advisable to resolutely increase positions

The research report of CITIC Construction Investment pointed out that the liquor market was out of the bottom shock, seized the inflection point in June and made an active layout, focusing on high-end wine and sub-high-end leading opportunities. The resilience of the liquor industry chain has been significantly enhanced, and the current growth cycle is still there. Judging from the month-on-month performance of the market during the Dragon Boat Festival, there is a signal of consumption recovery. After June, as economic activities begin to climb, the catering industry chain will gradually recover, and the banquet consumption scene will gradually return to normal. The dynamic sales are expected to continue to improve during the year, driving expectations from cold to warm, and the liquor market will oscillate from the bottom and recover upwards. Judging from the valuation level, most liquors are currently at the average valuation level of the past five years. In the long run, some leading liquor companies have a 3-year 1-fold space under the neutral assumption. In the short-term, the inflection point of moving sales in June indicates the inflection point of the economy, and it is advisable to resolutely increase warehouse.

• Everbright Securities: optimistic about the investment opportunities driven by the two-way optimization of supply and demand in the automotive sector

Everbright Securities pointed out that the auto industry is experiencing the most intensive and most intensive stage of favorable policy support since 2015. It is expected that policy support and two-way optimization of supply and demand may lead to a clearer trend of production and sales throughout the year. 1) The whole vehicle is expected to have the highest elasticity at the turning point of the industry boom, and the ASP increase of the whole vehicle in 2022E is expected to continue. 2) Parts, firmly optimistic about the opportunities for independent parts suppliers to rise upward; among them, the shortage of supply chain may further catalyze the development of domestic enterprises, optimistic about the gradual release of new designated core independent parts suppliers, and the improvement of product structure/market share rising trend.

• Guotai Junan: Supply down, expected price up, continue to recommend the pig breeding sector

The Guotai Junan Research Report pointed out that the supply is down and the expected price is up, and the pig breeding sector is continuously recommended. From the monthly report in May, it can be found that the volume decreases and the weight increases, and the overall supply continues to decrease. It is expected that the supply pressure is expected to gradually decrease in the future, and the price is expected to fluctuate upwards. In May, the price rose to the cash cost line, the listed companies continued to lose profits, the power to clear production capacity is still there, and the sawtooth-shaped production capacity reduction may continue in the future.

Third, individual stocks

• Morgan Stanley: Maintain $Meituan-W(03690.HK)$ “Overweight” rating, target price of HK$240

According to a research report released by Morgan Stanley, Meituan maintains an “overweight” rating with a target price of HK$240. Investors are advised to look beyond short-term challenges and maintain a constructive view on long-term prospects.

In the report, management expressed a positive view of the post-pandemic recovery trend, with core business objectives remaining unchanged. The bank expects that, compared with the high base in the same period last year, the company’s order volume for the company’s takeaway catering business in the second quarter of this year will be flat year-on-year, and the unit revenue forecast for the delivery business will remain unchanged. At the same time, it is expected that under the subsidy control measures, the operating profit margin of the delivery business can be improved year-on-year, and the subsidy level may have room for further reduction in the future.

• BofA Securities: Maintain $Alibaba-SW(09988.HK)$ “Buy” rating, target price HK$159

Bank of America Securities released a research report saying that it maintained Alibaba-SW “buy” rating with a target price of HK$159. The company said that the value of general commodities in the mainland market recorded a low double-digit year-on-year decline in April. The supply and fulfillment capacity began to recover in late May, and made significant progress in early June, but it has not yet reached the normal level. It is expected that the bottleneck problem will occur in June. fully resolved within.

The bank believes that the digitization of traditional industries is still a long-term trend, and in industries involving more data and algorithms, Alibaba should have an advantage over cloud services provided by traditional IT and equipment companies. At the same time, the company believes that the live broadcast business is part of the Alibaba platform, and Alibaba’s back-end capabilities, multi-format touchpoints and user insights are still unmatched by video platforms.

• CICC: Maintain $Sunny Optical Technology (02382.HK)$ “Outperform” rating, target price HK$168

CICC released a research report saying that it maintains Sunny Optical’s “outperform industry” rating with a target price of HK$168, which has a 43.8% upside potential compared to the current share price.

According to the report, the company released the shipment data in May. The shipment of mobile phone lenses was 91 million pieces, mainly due to the early purchase of goods by customers in April, but the year-on-year decline trend was similar to that of the overall mobile phone industry. 49.542 million pieces. The bank believes that the supply of mobile phone camera module products is gradually getting rid of the influence of the high base last year, and the future growth rate will gradually return to a rational level; the shipment of vehicle lens units is 6.03 million pieces. Weakening car demand also has a short-term impact on the momentum of pulling goods; other optoelectronic products shipped 5.26 million pieces. Investors are advised to pay close attention to and track the potential inflection point of improvement in mobile phone product shipments between the second and third quarters.

• Credit Suisse: Downgrade $BILIBILI-SW(09626.HK)$ TP to HK$314, Rated “Outperform”

According to Credit Suisse’s rating report, Bilibili’s total revenue in the first quarter increased by 30% year-on-year to RMB 5.05 billion based on strong advertising revenue growth of 46% year-on-year, roughly in line with expectations; its gross profit margin recorded 16%, according to The quarterly decline of 3 percentage points was in line with expectations; due to higher R&D expenses, the adjusted net loss was 1.66 billion yuan, down 5% from market expectations. The bank said that considering the impact of the epidemic on the mainland, it lowered its profit forecast for this year by about 9%, lowered its target price from HK$338 to HK$314, and maintained its rating of “Outperform”.

• Shenwan Hongyuan: Initially assigns a “Buy” rating to $LI Ning (02331.HK)$ , and continues to be optimistic about the growth potential of national brands

Shenwan Hongyuan released a research report stating that it first gave Li Ning a “buy” rating, and it is expected to achieve a net profit of 4.7/5.9/7.2 billion yuan in 2022-24. Product R&D and popular model creation capabilities continue to increase, channel structure and retail operation quality continue to be optimized, and market share and profitability are expected to continue to increase. The epidemic and the pressure from the high base in the second quarter have eased, and there are obvious signs of improvement in fundamentals. Online sales took the lead in recovering growth, releasing a clear signal of recovery. The growth of the sports track is very certain and the space is large, and the rising trend of domestic products is unstoppable. We continue to be optimistic about the growth space of national brands.

• Morgan Stanley: Raise the target price of COSCO SHIPPING Energy (01138.HK) to HK$4.71, downgrade to “underweight”

According to a research report released by Morgan Stanley, the target price of COSCO SHIPPING Energy was raised from HK$4.08 to HK$4.71, and the profit forecast for this year to 2024 was raised by 288%/25%/29%, mainly reflecting the increase in the forecast of the freight rate of refined oil products. However, due to the limited room for profit growth brought about by cargo shipping, the company believes that the recent stock price increase is unreasonable, and the rating is downgraded to “underweight”. According to the report, the share price of COSCO SHIPPING Energy has outperformed the industry index by 80 percentage points since the beginning of the year, and it is believed that the market has reflected that with the rise in crude oil and refined oil prices, the tanker shipping market may turn around. However, the bank expects crude oil shipping to remain sluggish this year at a severe loss level, while cargo shipping demand may remain high, but COSCO SHIPPING Energy has few related businesses.

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