Zhitong Daily Daxing Research Report 丨 Agency pointed out that China Mobile (00941) proposed to buy back is a positive surprise Tencent (00700) won the citi and Damo singing well

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Citi said Tencent (00700) was subject to a six-month lock-up period on Sea shares, coupled with its commitment to maintain a long-term relationship with Sea, and believed that its fundamental outlook for both sides of the reduction in Sea had not changed.

UBS said that China Mobile (00941) intends to repurchase no more than 10% of Hong Kong stocks after February 7, which is a positive surprise, and it is expected that the repurchase program will be implemented due to valuations at a low level in nearly 10 years.

Daiwa believes that the steady development of Simoll International's overseas business will lead to sustainable growth, but has lowered its 2021-23 earnings forecast by 2%-5% to reflect the conservative pace of recovery in China.

Goldman Sachs put Li Ning (02331) on the list of "sure to buy" as the industry's first choice; The 2021-26 earnings forecast was also revised up 0% to 14% to reflect increased visibility in sales momentum.

Tencent (00700) was sung by the institution as high as HK$703 and as low as HK$650

Citi: Maintain Tencent's (00700) "Buy" rating with a target price of HK$703

Citi said Tencent (00700) reduced its holdings in Singaporean gaming and e-commerce company Sea (SE. US) 2.6% stake, Sea's successful business expansion over the past few years, coupled with strong stock price performance, Tencent's sale of its 2.6% stake is expected to cash out about $3 billion, believing that it will release funds that will enable Tencent to fund some social projects and reallocate funds to new technology projects. The bank believes that Tencent's declining stake in Sea will reduce potential conflicts for the company's plans to launch more games directly around the world. Subject to a six-month lock-up period on Sea shares, and its commitment to maintain a long-term relationship with Sea, the bank believes that tencent's reduction in Sea's fundamental outlook for both parties has not changed.

DaMo: Gave Tencent (00700) an "overweight" rating with a target price of HK$650

Damo said Tencent (00700) reduced its holdings in Sea (SE. US) reflects its continued commitment to long-term growth with affiliates while unlocking a small portion of the investment value. Tencent recently announced that it will reduce its stake in Singaporean gaming and e-commerce company Sea by about 14.5 million shares, down from 21.3% to 18.7%, and is expected to cash out to $3.1 billion, but reiterated its intention to hold the majority of Sea's equity for a long time, and the existing business relationship between the two sides will continue. Under the lock-up period, Tencent will not be able to further sell Sea shares in the next six months.

China Mobile (00941) intends to buy back is a positive surprise and has been unanimously sung by the bank

Damo: China Mobile (00941) was given an "overweight" rating with a target price of HK$65

Damo said that China Mobile (00941) announced that it plans to exercise shareholder authorization to repurchase up to 10% of issued H shares (2.05 billion shares), which the bank believes is a positive signal to the market and can offset the dilution effect of some A-share issuances. The bank said the actual number of potential buybacks is unknown (and there may be no buybacks), but the minimum free float threshold for shares required by the HKEx is 25% (including all market offerings), meaning that the group can only repurchase up to 7.8% of the issued H shares.

UBS: China Mobile (00941)'s proposed buyback is a positive surprise reaffirming the "buy" rating

UBS said that China Mobile (00941) intends to buy back no more than 10% of Hong Kong stocks after February 7, which is a positive surprise. At the same time, it is expected that in 2022 Chinese mainland services revenue and net profit of the telecom industry will rise by 7%/9%, and the fundamental recovery trend of telecom companies will last for many years, while strong performance and corporate governance performance will give investors renewed confidence in the sector. According to the report, it was noted that China Mobile had not repurchased in the H-share market before. Investors also generally expect good news such as improved dividend policies after China Mobile announced its return to the A-share market. With valuations at nearly 10-year lows, the bank expects the buyback program to be implemented.

Yamato: Reiterates the "Buy" rating of Smore International (06969) with a downward target price of HK$60

Yamato said that Smol International (06969) atomized e-cigarette products (PMTA) or approved in the first half of this year, coupled with regulations implemented in China in the second half of the year, will become a catalyst for stock prices. However, the 2021-23 earnings forecast was revised down by 2%-5% to reflect the conservative pace of business recovery in China and the belief that steady overseas business development will lead to sustainable growth. According to the report, the stock price of Simmer International (06969) has fallen by 12% in the past two days, which is believed to be related to the company's adjustment of business growth guidance. However, the bank pointed out that after communicating with management, there will be no major changes in the market outlook, and the recovery in the fourth quarter of last year is roughly in line with expectations, believing that the stock price has been over-adjusted, and believes that investors have once again ushered in a good opportunity to enter the market.

Daiwa: Downgraded Xinhua Insurance (01336) to a "hold" target price target of HK$22

Daiwa raised Xinhua Insurance (01336) 23% of its 2021 EARNINGS forecast to reflect good investments, but now forecasts a 32% and 24% year-on-year decline in the value of new business in 2021-22, mainly due to the decline in the number and quality of the brokerage team. According to the report, Daiwa incorporated the ESG factor into the financial forecasting and valuation framework of Xinhua Insurance (01336), indicating that the Group's latest insurance product strategy includes providing insurance protection and wealth management. The bank believes that in the long run, its product innovation will help to increase premiums, such as taking the lead in launching rural critical illness insurance products and accident injury insurance for the elderly. However, the bank said human resources were a major weakness for Xinhua Insurance, which expected the group to lose 210,000 brokers last year and estimated that the number of its brokers would continue to decrease this year.

Goldman Sachs: Maintaining Li Ning's (02331) "Buy" rating the target price was raised to HK$122

Goldman Sachs column Li Ning (02331) in the "sure to buy" list, as the industry's first choice; The 2021-26 earnings forecast was also revised up 0% to 14% to reflect increased visibility in sales momentum. However, in view of the slower recovery in the second half of fiscal 2022, the profit forecasts of Tuobao (06110) and Baosheng International (03813) from 2021 to 2026 were revised down by 5% to 18%. The report said that although the performance of different brands differed last year and the market was worried about weak consumer sentiment, it is still confident in the growth of China's sportswear market, and raised the forecast for the compound annual growth rate of industry sales from 12% to 13% from 2021 to 2026.

Goldman Sachs said that China's sportswear market will account for only 7% of the entire apparel market in 2020, far lower than the 31% in the United States. According to the urban population in 2019, the average consumption of sneakers in Chinese was 0.88 pairs, compared with 1.89 pairs in the United States; In terms of average selling price, China is $36 per pair and the United States is $61. The bank believes that both sales volume and average selling price have room to rise. Assuming that the proportion of clothing and footwear combinations in 2026 and 2019 is similar, the average average annual growth rate of average selling prices will be 3.5%, and the per capita consumption of sports shoes for the urban population will rise to 1.36 pairs. In addition to the general increase in sports participation and spending power, the growth drivers include outdoor, children and women in three categories.

Huaan Securities: The OMO model of the first "buy" rating given to Gushengtang (02273) has successfully created a new scene of "Internet + Chinese medicine"

Huaan Securities said that Gushengtang (02273) is a leading TCM diagnosis and treatment service provider, combining traditional Chinese medicine and new means to create an OMO online + offline business model, which has been successfully verified. The bank believes that the company has strong business integration, epitaxial expansion and endogenous management capabilities, and is expected to quickly promote the implementation of the strategy in the next two years by raising funds after logging on to the Stock Exchange, continue to expand the coverage area of offline business, continuously optimize the online platform, and eventually build China's largest intelligent, product-based and platform-based new TCM doctor system. The bank is optimistic about the company's strong business integration capabilities, refined operations, AND HIS system to further empower the company. It is believed that the company's revenue in 2021/2022/2023 will reach 1281/1681/2189 million yuan, gross profit of 571/762/1007 million yuan, gross profit margin of 44.6%/45.3%/46%, net profit of -122/203/289 million yuan, corresponding to PE-84/50/35x. Adjusted net profit is expected to reach $155/220/310 million in 2021/2022/2023, corresponding to P/E42/40/38x, with an adjusted net profit margin of 12%/13%/14%.

The company is the first share of TCM chain suppliers, revenue continues to expand, profitability continues to increase, the future development can be expected: Gushengtang is one of the largest private TCM medical service chain groups in China, since its establishment in 2010, it has provided offline and online TCM medical and health services and TCM-related products for residents of 31 provinces and 343 cities, and 42 offline chain TCM pavilions covering 11 cities in North China, East China and South China. In 2020, it served 1.654 million customers and landed on the Stock Exchange in December 2021. In 2018/2019/2020/2021H1, the company achieved operating income of 726.2/896.2/925.4/598.2 million yuan, respectively, and the 2018-2020 CAGR was 12.9%.