Today’s Focus

1. CITIC Securities: In 2022 or the year when commodities peak, the commodity price center may remain high

2. Lyon: Tax relief for car purchases is good for car companies

3. JPMorgan: Adjusting the target price of airline stocks, the industry prefers China Southern Airlines and Beijing Capital Airport

4. Credit Suisse: Downgrades global smartphone shipment expectations, lowers targets for many industry chain stocks

5. Zhongyuan Securities: Zhongyuan continues to pay attention to the investment opportunities of low-valued blue-chip stocks

6. JPMorgan: reiterates Alibaba-SW “overweight” rating, and is expected to achieve positive growth by the end of fiscal year 2023

7. CICC: Maintain Alibaba-SW “Outperform” rating, cut target price by 4% to HK$137

8. Goldman Sachs: Downgrade Alibaba-SW target price to HK$154, rating “Buy”

9. Nomura: Maintain NetEase-S “Buy” rating, lower target price to HK$195

10. Yamato: reiterates Fuyao Glass’s “buy” rating and lowers the target price to HK$57

11. UBS: Reiterate China Mobile’s “Buy” rating with a target price of HK$80

12. Goldman Sachs: Maintain AliHealth’s “Neutral” rating, with a target price of HK$7

Selected Research Viewpoints

1. Macro market

• CITIC Securities: In 2022 or the year when commodities peak, the commodity price center may remain high

CITIC Securities said that after the outbreak of the global epidemic in 2020, the global commodity market ushered in a comprehensive rise. The fundamental reason is that the contradiction between supply and demand is prominent, that is, demand rebounds rapidly and supply repairs slowly. To sum up, in 2022 or the year when commodities peak, the commodity price center may remain high, and the main export commodities of Russia and Ukraine, including crude oil, grains, fertilizers, aluminum, etc., may have strong anti-fall properties. . Entering 2023, commodity prices are expected to gradually fall, but compared with the level before the outbreak in 2019, the absolute value of their prices may still be high.

2. Industry sectors

• Lyon: Tax relief for car purchases is good for car companies

The State Council recently announced a series of measures to stabilize the economy, including a reduction of 60 billion yuan in vehicle purchase tax. Lyon expects the reduction in the purchase tax to drive demand for 1 million to 2 million new passenger cars, freeing the industry from its current predicament. Lyon believes that assuming the relief measures apply to all internal combustion engine (ICE) vehicles, at an average price of 166,800 yuan per vehicle (the same below), it will benefit 8.13 million vehicles, and the policy is expected to last for eight months; The purchase tax of diesel vehicles with displacement is halved, calculated at an average price of 120,000 yuan, benefiting 11.3 million vehicles. The policy is expected to last for 12 months.

Lyon expects that the policy will benefit GAC Group (02238.HK)$ and other automakers with high fuel vehicle sales flexibility and good gross profit margins. In addition, new energy vehicle start-ups such as $Xpeng Motors-W (09868.HK)$ may also be benefit.

• JPMorgan: Adjust the target price of airline stocks, the industry’s top choices are $China Southern Airlines (01055.HK)$ , $Beijing Capital Airport (00694.HK)$

JPMorgan issued a report stating that domestic travel will restart, and the International Air Transport Association recently moved forward the timeline for global air travel to return to pre-pandemic levels from 2024 to 2023, which means that once activities in China begin to normalize, there will be A bigger rebound.

JPMorgan upgraded Air China (00753.HK) from “Neutral” to “Overweight”. Top picks in the industry include China Southern Airlines and Beijing Capital Airport, and adjusted target prices for airline stocks across the board. Taking into account the latest traffic outlook, the bank forecasts a bigger loss for airline stocks in fiscal 2022 but a bigger rebound in fiscal 2024.

• Credit Suisse: Downgrades global smartphone shipment expectations and lowers target prices for many industry chain stocks

Credit Suisse said in a report that due to weak demand, it lowered its forecast for global smartphone shipments for the two years this year by 9% to 1.28 billion and 1.34 billion units respectively.

Credit Suisse also lowered its target price for shares related to the Android supply chain, reflecting weak demand and the depreciation of the renminbi. Among them, $ Sunny Optical Technology (02382.HK) $ target price fell to HK $ 155, the rating maintained “outperform”; $ AAC Technology (02018.HK) $ target price fell from HK $ 18.2 to HK $ 17.8, rating “Neutral” is also maintained. As for BYD Electronics (00285.HK), the target price was lowered from HK$14.2 to HK$13.1, and the rating was “underperform”.

• Zhongyuan Securities: Zhongyuan continues to pay attention to the investment opportunities of low-valued blue-chip stocks

Zhongyuan Securities pointed out that the overall trend of the number of new cases nationwide and in Shanghai is expected to continue to decline, and the process of orderly resumption of production and work has been accelerated in various places. In the future, the overall stock index is expected to continue to fluctuate upwards. At the same time, it is still necessary to pay close attention to changes in policies, funds and external factors. Investors are advised to pay attention to investment opportunities in the automotive, engineering construction, aerospace and military industries, and communications in the short-term, and continue to pay attention to investment opportunities in low-valued blue-chip stocks in the middle.

Third, individual stocks

• JPMorgan: Reiterates $Alibaba-SW(09988.HK)$ “overweight” rating, expected to achieve positive growth by the end of fiscal year 2023

JPMorgan released a research report saying that it reiterated its “overweight” rating on Alibaba-SW. It is expected that adjusted earnings per share will return to positive growth of 27% in the March 2023 quarter and 29% in fiscal 2024. It is believed that the stock price has not reflected Earnings growth has picked up and there is still upside. The company is on track to achieve positive growth by the end of fiscal 2023 as it drives profit recovery through cost optimization. According to the report, management said the gross merchandise volume (GMV) of the company’s core online shopping platforms Tmall/Taobao fell by 11%-13% year-on-year (lowteens) in April, slightly higher than market expectations, due to a stronger stock price reaction. The market is expected to have downside risks in the near future, and its core momentum has weakened. It is believed that its future quarterly profit margin will show positive surprises, which will become a key share price driver. It is also expected that management’s cost optimization will drive its ongoing cost-saving new initiatives, with successive improvements in the coming quarters.

• CICC: Maintain $Alibaba-SW(09988.HK)$ “Outperform” rating, target price down 4% to HK$137

CICC released a research report saying that it maintains Alibaba-SW “Outperform” rating. Considering the downward shift in the valuation of e-commerce, the target price is lowered by 4% to HK$137, and the core e-commerce is adjusted from 14xP/E in fiscal year 2023 to 13xP/E, corresponding to the 2023/24 fiscal year non-GAAP price-earnings ratio of Hong Kong stocks is 19/15 times, with 69% upside potential. Due to the impact of the epidemic, the revenue for the 2023/24 fiscal year will remain unchanged, and the non-GAAP net profit forecast will be lowered by 7%/1% to 131.8/169.1 billion yuan.

• Goldman Sachs: Downgrade $Alibaba-SW(09988.HK)$ target price to HK$154, rating “Buy”

Goldman Sachs published a research report that, under macro factors and fierce competition, Alibaba-SW’s fourth-quarter results were still better than expected, with revenue and adjusted EBITA higher than market expectations by 4% and 9%. Based on the latest business forecasts, Goldman Sachs lowered the target price from HK$180 to HK$154, rated “Buy”, and lowered Alibaba-SW2023-2025 revenue forecasts by 4%, 6% and 7% respectively. It is expected that China’s commercial CMR The compound annual growth rate from 2022 to 2025 is 9%.

• Nomura: Maintain $NetEase-S(09999.HK)$ “Buy” rating, lower target price to HK$195

Nomura released a report stating that NetEase-S performed solidly in the first quarter, with total revenue increasing by 15% year-on-year, 4% higher than market expectations. Among them, online game revenue increased by 15% year-on-year, in line with market expectations. NetEase has a strong balance sheet with $13 billion in net cash, or 20% of its latest market value, the bank said. And its online gaming business is one of the few sectors that is defensive in the face of a macroeconomic slowdown or lockdowns, with the much-anticipated new game “Diablo Immortal” set to launch in China on June 23, The bank believes that the group’s online game business will have better prospects.

However, since the launch of “Diablo Immortal” was later than the bank’s original estimate, Nomura lowered NetEase’s profit forecast for this year and next by 1% and 2% respectively. The latest estimate is that its profit excluding the online search engine “Youdao” will be Year-on-year growth of 15% and 14%. The bank also lowered the target price of NetEase-S from HK$203 to HK$195 and maintained a “buy” rating.

• Yamato: Reiterates “Buy” rating on Fuyao Glass (03606.HK)$ , and lowers target price to HK$57

Daiwa published a research report pointing out that Fuyao Glass will face both challenges and opportunities in the next few quarters. It is expected that the increasing popularity of dimming glass will improve the company’s product mix, but the company’s profit margin in the second quarter may decline, so Fuyao Glass will be lowered 2022-23 The annual EPS forecast is 12-18%, and the target price is lowered from HK$70 to HK$57, but the “buy” rating remains unchanged.

The report pointed out that since the beginning of the year, the price of soda powder has rebounded by 12%, while the average price in the second quarter is 50% higher than that of the first quarter. At the same time, the Shanghai epidemic may cause auto parts manufacturers to reduce production. It is expected that the gross profit margin of Fuyao Glass will drop to less than 35% in the second quarter. The report mentioned that the reduction of the purchase tax for some passenger cars in the mainland in the next few months will drive the sales of cars to increase by 10-16 million units. Yao Glass will benefit in 2022-23.

• UBS: Reiterate $China Mobile (00941.HK)$ “Buy” rating, target price HK$80

UBS released a research report saying that it reiterated China Mobile’s “buy” rating with a target price of HK$80, suggesting that investors can wait until early June to find opportunities to buy. The company currently offers a forecast dividend return of 8.8% this year, with an estimated 10% CAGR in 2022-24, and has also committed to a 70% payout ratio in 2023. According to the report, the bank recommends paying attention to the acquisition opportunities that the company has ushered in recently, saying that it will be ex-divided on May 25. According to statistics over the past ten years, the stock price has dropped on average 10 days after ex-dividend (including the ex-dividend date). 3%.

• Goldman Sachs: Maintain $Alibaba Health (00241.HK)$ “Neutral” rating, target price HK$7

Goldman Sachs issued a report stating that AliHealth’s revenue in the second half of fiscal year 2022 was 6% and 3% higher than the bank’s and market expectations, respectively, while gross profit and adjusted losses were in line with the bank’s expectations. The bank maintains a “Neutral” rating on Ali Health and a target price of HK$7.

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