Daily Research Report Selection | UBS lowered Tencent’s target price to HK$450, with a “buy” rating

Leave a Comment / 20/04/2022

“Daily Research Report Selection” keeps up with the latest research report trends of institutions, provides insight into and sorts out the most representative market, industry, and individual stock views, provides third-party institutional analysis and rating reference for Niu You, and helps Niu You give an overview of investment banking trends in one article , easily grasp the investment opportunities!

Today’s Focus

  1. Haitong Securities: Before there is an obvious signal of stabilization in the market, it is recommended to rely on high selling and low buying to reduce the cost of holding positions

  2. Zhongyuan Securities: Investors are advised to wait and see in the short-term, and continue to pay attention to the investment opportunities of low-valued blue-chip stocks in the middle.

  3. CICC: Crude steel proactively restricts production ahead of supply contraction, which will help improve and maintain industry profits

  4. Galaxy Securities: Real estate sales are still at the bottoming stage, looking forward to more supportive policies

  5. Soochow Securities: The pace of automotive intelligence is steadily moving forward, and it continues to be optimistic about investment opportunities in vehicle modules and connectors.

  6. Huatai Securities: Pay attention to home furnishing leaders with solid internal strength and second-tier leaders whose valuations are still low

  7. UBS: Downgrade Tencent Holdings (00700.HK) target price to HK$450, rating “Buy”

  8. Deutsche Bank: Downgrade JD.com-SW (09618.HK) target price to HK$354, rating “Buy”

  9. CITIC Securities: BYD’s (01211.HK) performance pressure point has passed, and subsequent net profit will improve quarter by quarter

  10. Nomura: Downgrade Ping An (02318.HK) target price to HK$80.33, rating “Buy”

  11. Guotai Junan (Hong Kong): Maintain “Buy” rating on China Merchants Bank (03968.HK) with a target price of HK$83.36

  12. Guosheng Securities: Maintain “Buy” rating on Li Ning (02331.HK), may achieve high double-digit growth throughout the year

Selected Research Viewpoints

1. Macro market

  • Haitong Securities: Before there is an obvious signal of stabilization in the market, it is recommended to rely on high selling and low buying to reduce the cost of holding positions

Haitong Securities pointed out that the market has a high probability of maintaining a volatile trend in the short term, but it does not rule out the possibility that the index will continue to drop. The bank said that there is no shortage of funds in the market. The main problem is that investors are in poor mood due to frequent hot-spot switching, and the failure of strong sectors to continue rising to lead the market as a whole goes up; and the spread of the epidemic has greatly affected the performance of hot-track stocks in the early stage. , it is difficult for a new track to take over the baton for a new round of impact in the short term. In terms of operation, before the market shows a clear signal of stabilization, reduce large capital operations and rely on high selling and low buying to reduce the cost of holding positions.

  • Zhongyuan Securities: Investors are advised to wait and see in the short-term, and continue to pay attention to the investment opportunities of low-valued blue-chip stocks in the middle.

Zhongyuan Securities pointed out that the current stock index is in a stage of weak consolidation, and the market outlook is faced with the choice of a breakthrough direction. Before the trend is clear, investors are advised to watch more and move less, and pay close attention to changes in policies, funds and external markets. The bank advises investors to wait and see in the short-term, and continue to pay attention to the investment opportunities of low-valued blue-chip stocks in the middle.

2. Industry sectors

  • CICC: Crude steel proactively restricts production ahead of supply contraction, which will help improve and maintain industry profits

CICC believes that under the drag of real estate demand, it is expected that crude steel consumption may still decline slightly in 2022. Therefore, no increase or a slight decline in crude steel output is an expected baseline scenario. The bank pointed out that the current market-oriented production reduction in the industry means that profits may remain low or even lose money for a period of time, but active production restrictions have pre-empted supply contraction, which will help improve and maintain industry profits in the long run.

  • Galaxy Securities: Real estate sales are still at the bottoming stage, looking forward to more supportive policies

Galaxy Securities believes that from January to March 2022, the sales area and sales amount will drop by 13.8% and 22.7% respectively. In March, the sales amount and sales area growth rate will be -18% and -26%, respectively Monthly -8pct, -7pct, the prosperity has been worse than any period since 2010, and the current sales are still in the bottoming stage; the average residential sales price in March was 9671, -8% year-on-year, -5% month-on-month, and the average sales price The decline reflects the price-for-volume sales strategy of housing companies. At present, the supply-side and demand-side policies are gradually exerting force, and the relaxation of policies in various places is also gradually increasing. However, according to the policy rhythm of 14-15 years, the degree of relaxation in various dimensions is far from enough. introduced.

  • Soochow Securities: The pace of automotive intelligence is steadily moving forward, and it continues to be optimistic about investment opportunities in vehicle modules and connectors.

Soochow Securities believes that the current automotive intelligence, as a major development trend in the automotive industry, will bring users a higher experience such as better driving, interaction and entertainment, and at the same time, it will bring further improvements in signal transmission, delay and computing power. promote. Therefore, the bank continues to look at leading players in automotive modules, connectors, PCBs and other links. With the gradual increase in future car sales and the penetration rate of automotive intelligence, it will bring better development to all aspects of the automotive intelligent industry chain. Chance.

  • Huatai Securities: Pay attention to home furnishing leaders with solid internal strength and second-tier leaders whose valuations are still low

Huatai Securities pointed out that under the influence of the epidemic, it is more necessary and urgent to maintain stable growth in the future. Recently, local real estate stability maintenance policies are being implemented continuously, which is expected to support the restoration of home furnishing valuations. Under the difficult situation, the leading alpha ability is outstanding, and the logic of raising shares is quickly realized. , it is recommended to pay attention to the home furnishing leader with solid internal strength and the second-tier leader whose valuation is still low.

Third, individual stocks

UBS released a report, lowering the target price of Tencent (00700) by HK$450 from RMB460 and rating it “Buy”. The bank is bullish on Tencent, believing it will re-accelerate growth later this year, but investors expect limited upside in the near term, and slightly lowered its revenue forecast for this year to reflect macroeconomic headwinds. The bank believes that Tencent’s management is scrutinizing multiple businesses, especially loss-making businesses such as video or cloud computing, and focusing on efficiency improvements rather than growth.

Deutsche Bank issued a rating report stating that JD.com (09618.HK) was unstable in the short term due to the recent outbreak of Omicron and the epidemic prevention and control measures adopted in many parts of the mainland, and the target price was lowered to HK$354, with a “buy” rating. However, the bank noted that demand remained strong in the company’s key categories, especially fast-moving consumer goods. The bank expects that mainland logistics activities will gradually recover from May, and fully recover in the third quarter of this year. It is believed that the second quarter may become the most difficult quarter for the company this year.

  • CITIC Securities: $BYD Shares (01211.HK)$ The time of greatest performance pressure has passed, and subsequent net profit will improve quarter by quarter

CITIC Securities pointed out that in the first quarter of 2022, BYD Group (00175) sold 286,000 new energy passenger vehicles, accounting for about 26.7% of the domestic new energy passenger vehicle market share, ranking first for four consecutive quarters. Under the pressure on the cost side in Q1, it is judged that the net profit per vehicle of the company’s automobile business can still reach about 1,000 yuan. The bank said that the time when the company’s auto business performance was under the greatest pressure has passed. With the subsequent fall in the price of lithium carbonate and the elasticity of profits brought about by the price increase of models, the company’s strong order volume will be superimposed, and the company’s subsequent net profit will improve quarter by quarter.

Nomura cut Ping An’s (02318.HK) after-tax operating profit forecasts for 2022 and 2023 by 2.6% and 5.7%, with estimated growth of 0.1% and 2.8%, respectively, and cut its 2022 and 2023 new business value forecasts by 6.5% and 6.4% %, an estimated decline of 18% and an increase of 7.7%, respectively, citing weak investment returns and slower growth in the life insurance business. The bank maintained the “buy” rating of Ping An, and the target price was lowered from HK$83.17 to HK$80.33.

Guotai Junan (Hong Kong) maintains a “buy” rating on China Merchants Bank (03968), and expects earnings per share in fiscal 2022-24 to be 5.253 yuan/6.044 yuan/6.913 yuan (up 13.9%/15.1%/14.4% year-on-year), target price HK$83.36. The bank stated that, as the largest joint-stock commercial bank in mainland China, China Merchants Bank has a good management structure framework and standardized governance, and its operations and performance will not undergo major changes due to changes in the positions of senior executives; it is estimated that the company’s net fee and commission income Relatively good growth will still be achieved, and asset quality will remain relatively stable and improve.

  • Guosheng Securities: Maintain $LI Ning (02331.HK)$ “Buy” rating, may achieve high double-digit growth throughout the year

Guosheng Securities released a research report saying that it maintains the “buy” rating of Li Ning (02331.HK), based on the high popularity of the industry, strong product/brand power and commodity, retail and channel strategies, optimistic about the company’s future growth, and adjusted 2022-24 respectively. The estimated net profit attributable to the parent is 4.749/5.849/7.094 billion yuan, and the current price corresponds to 27 times the PE in 22 years. The bank said that the company’s Q1 flow performance was excellent, and it may achieve high double-digit growth throughout the year.

Editor/Jeffrey

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