In the last issue, I said: "The general judgment of Hong Kong stocks in April is that the front is high and the back is low", but I didn't expect the plot to reverse at the end of the month, and the index directly broke through the annual line. The Hang Seng Index runs at 16044.45-18031.16 points.
The context of the market is still relatively clear, the economic data at the beginning of the month led to the market can maintain an upward momentum, and in the middle of the month, Iran's retaliatory actions against Israel led to a correction in the global stock market across the board, and at the end of the month, with Blinken's visit to China and the central government's strong support for Hong Kong, the Hang Seng Index came out of a strong rally.
Before the index did not go out of the trend upward, the market mainly traded Middle East conflict-related varieties, such as non-ferrous aluminum China Hongqiao (01378), shipping gold stocks SITC International (01308), COSCO Shipping Holdings (01919); followed by Tencent (00700), Meituan (03690) as the representative of the weight category, as well as trade-in home appliances, such as Hisense home appliances (00921), Haier Smart Home (06690), etc., other penny stocks have also activated a batch, such as SenseTime (00020) and some real estate categories.
The market at the end of the month was extremely strong, which directly brought good expectations to the May market. The key is that the market launch is stimulated by the bullish remarks made by foreign investors, combined with the release of five capital market benefits for Hong Kong cooperation by the China Securities Regulatory Commission. Jointly promote the rapid strengthening of the Hang Seng Index.
Overall, after withstanding various pressures, the fundamentals brought relatively positive changes in May. Take a look at the Politburo meeting: Persist in taking advantage of the momentum, avoid tightening before and loosening later, and earnestly consolidate and enhance the positive trend of economic recovery. The meeting pointed out that it is necessary to actively expand domestic demand and implement the action plan for large-scale equipment renewal and trade-in of consumer goods. It mentions the need to make efforts to effectively implement the macroeconomic policies that have been determined, and to implement a proactive fiscal policy and a prudent monetary policy. It is necessary to issue and make good use of ultra-long-term special treasury bonds as soon as possible, speed up the issuance and use of special bonds, flexibly use policy tools such as interest rates and reserve requirement ratios, and increase support for the real economy. In terms of tone, the fiscal policy is relatively positive, and there is also hope for monetary policy to cut the reserve requirement ratio and interest rates. There are also new formulations for real estate, and the policy measures to digest the stock of real estate and optimize the incremental housing are studied as a whole, and the new model of real estate development is built to promote the high-quality development of real estate. This formulation downplays the three major projects, and the key to the future depends on how the funds are implemented. With the lifting of purchase restrictions across the country and various innovative trade-in initiatives, property sales are expected to bring marginal improvements.
According to the National Bureau of Statistics, in April, the manufacturing purchasing managers' index (PMI) was 50.4%, down 0.4 percentage points from the previous month, in line with market expectations, and it was in the expansion range for two consecutive months, and the manufacturing industry continued to maintain a recovery and development trend. In April, the non-manufacturing business activity index was 51.2%, down 1.8 percentage points from the previous month, still above the critical point, indicating that the non-manufacturing industry continued to expand. In addition, China's Caixin manufacturing PMI in April was 51.4, higher than the market expectation of 51, 0.3 percentage points higher than March, and hit a new high since March 2023, reflecting the continued acceleration of manufacturing production and business activities.
According to media reports, Putin will be sworn in on May 7 and will visit China after that. It is conducive to further enhancing mutual trust between the two sides, and Sino-Russian trade is expected to reach a higher level. In May, the leaders visited France, Serbia and Hungary. It is expected to bring orders in the direction of nuclear power, high-speed rail, and the Belt and Road Initiative.
Hong Kong's capital market ushered in a historic moment with the listing of Bitcoin spot ETFs and ETH spot ETFs. On the first day, related varieties rose across the board, and institutions said that the scale of management is expected to exceed $1 billion, compared with the US spot bitcoin ETF size of nearly $58.9 billion, Hong Kong's scale is still quite small, but the advantage is that it can attract those who hold Hong Kong ID cards. This move is conducive to enhancing the status of Hong Kong stocks as an international financial center.
According to Wind statistics, as of April 26, 2024, 94 companies have lined up to apply for listing in Hong Kong. Among them are many star companies, such as Mixue Bingcheng, Horizon, iFLYTEK Medical, etc. Among them, Horizon is an intelligent driving technology company with a valuation of up to US$8.7 billion (about 63 billion yuan), and the market expects it to become the largest IPO of Hong Kong stocks this year. The valuations given by Hong Kong IPOs are generally low, and the average price-to-earnings ratio is currently only about 8 times. If the field is bigger, the funds will continue to enter the market.
On May 4, Berkshire Hathaway held a shareholders' meeting, and Chairman Warren Buffett will answer shareholders' questions on the spot. The investment direction and perception of the market will have a significant impact on the global capital market.
On May 2, the Federal Reserve will hold an interest rate meeting and announce its interest rate decision. The current meeting will continue to stand still, depending on what kind of guidance Powell's speech will bring. According to the current inflation continues to remain high, but the economic data is not ideal, there is a suspicion of stagflation, which is a very contradictory state, depending on how the Fed chooses.
It is estimated that some people will mention a point of view, that is, if the US stock market fails to get up and falls below the half-year line, will it have a negative impact on Hong Kong stocks? There are two situations in which there are two situations: If the Middle East conflict is becoming very extreme and major frictions between Israel and Iran break out again, in this case, the global stock market will be affected without exception. Putting this extreme case aside, the probability of a complete weakening of U.S. equities is not high. On the other hand, comparing the K-line charts on both sides, it is not difficult to find that when the US stock market is weak, the Hong Kong stock market is stronger. So the facts have given the answer. This has something to do with the fact that the valuation of Hong Kong stocks is at a historical bottom. I remember that in the previous article, I talked about the diversion of Japanese and Indian stock markets to Hong Kong stocks, and now this variable is also showing positive changes. The fuse is that the yen exchange rate has depreciated sharply, hitting a record high, which is more strange, and now Japan must be better than the worst time, and it is not easy to climb out of the quagmire of deflation, how can the exchange rate suddenly be beaten to the ground. It can only be understood that international capital is already starting to do it. The direct consequence is that funds are withdrawn from the Japanese stock market, and because of the linked exchange rate adopted by the Hong Kong stock market, it is logical for the funds to run to the Hong Kong stock market.
Although the market is optimistic about the market in May, it is also important to note that the retracement after the rise at the end of the month should not be too large, and it is best not to break the 10-day moving average. At the same time, the consequences of Israel's insistence on attacking Rafah will require close attention.
2024-05 Investment Strategy: Look for accelerated varieties
Zhitong Finance and Economics continued to outperform the market in April. In the same period in April, the Hang Seng Index rose by 9%; The top 10 gold stocks rose by 11.9% on average in April. The top ten gold stocks rose as follows: SITC International (01308) rose 24.9%, Fuyao Glass (03606) rose 21.8%, Xiaomi Group (01810) rose 19.7%, China Resources Power (00836) rose 11.5%, Kingsoft (03888) rose 10%, Tongcheng Travel (00780) rose 9.2%, Aneng Logistics (09956) rose 7%, Leapmotor (09863) rose 7%, GCL Technology (03800) rose 3.9%, Gao Wei Electronics (01415) rose 3.6%.
In April, gold stocks were okay, with half of the varieties rising by more than 10 points, and the relative gains were relatively balanced. In line with the strategy, "seek stability and grasp the rhythm".
For May, although everyone is relatively optimistic, there is a big problem that there are already funds at the end of last month to start the layout, so it is impossible to mine low-priced varieties. Therefore, the strategy for May is to look for accelerated varieties.
Relatively clear opportunities include overseas chains, including textile OEM, two-wheeled electric exports, overseas small commodity stores, and so on. Domestic consumption is optimistic about the further restoration of dental and hot pot bases. The real estate chain plus the construction machinery at the infrastructure end. In terms of policy, the "Opinions on Several Policies and Measures for Continuing to Promote the Integrated and High-quality Development of the Yangtze River Delta" is expected to stimulate express logistics.
There is also a quarterly report from Nvidia this month, which is expected to stimulate related semiconductor packaging if it exceeds expectations again. It is estimated that there will be a lot of messages at the AI level, and the more flexible ones should be communication. The focus of medicine is on obesity and weight loss.
It is expected that there will be some changes in real estate and finance during the break in May, and at the same time, gold and non-ferrous metals will also fluctuate from time to time with changes in the international environment. But this opportunity is not easy to grasp.
Specific varieties:
Consumption: MINISO (09896)
Manufacturing: Shenzhou International (02313)
半导体:ASMPT(00522)
Bottom material: Yihai International (01579)
Communications: China Comservice (00552)
Dentistry: Angelalign(06699)
Logistics: Zhongtong Express (02057)
Pharmaceutical: Hansoh Pharmaceutical(03692)
Machinery: Sany International (00631)
Two-wheeled electric: Yadea Holdings (01585)
The detailed list is as follows:
1，名创优品(09896)
The company's performance exceeded expectations, and profitability continued to improve. In 23Q4, the company achieved revenue of 3.84 billion yuan, an increase of 54% year-on-year, a record high in a single quarter; The adjusted net profit was 660 million yuan, an increase of 77% year-on-year, a record high, and the adjusted net profit margin was 17.2%, an increase of 2.2 pct year-on-year. The company's co-branded Chiikawa was officially launched in stores and online channels across the country on April 8, and sales were hot, and there was a phenomenon of queuing overnight. According to MINISO's FY2023 annual report, the average annualized revenue of a single store is 2.1 million yuan, and the unit price of customers is 37.6 yuan, and the sales data of Chiikawa pop-up stores is significantly higher than the average store level of MINISO. Domestic consumption has recovered, and overseas store expansion has accelerated. In the single quarter of 2023Q4, there was a net increase of 124 Miniso stores in China, a net increase of 174 overseas, and a net increase of 26 in TOPTOY; In 2023, a total of 973 companies will be opened, of which 601 will be added by Miniso in China, 372 by overseas, and 31 by TOPTOY. The target of 450-650 net additions in China and 350-450 overseas companies has been completed; In 2023Q4, the overseas direct business achieved more than 80% for three consecutive quarters, and in 2023Q4, it contributed more than half of the overseas business revenue for the first time, driving further significant improvement in profitability.
2, Shenzhou International (02313)
The company achieved double-digit sales growth in 2023, with Adidas being a major contributor to the top four customers of Shenzhou International's China factory, with all major global and domestic brands except Nike recording double-digit growth in orders. With the end of destocking of brand customers, the company's capacity utilization rate has recovered, coupled with the efficiency improvement of overseas new factory operations and the elimination of unfavorable production environment in 2022, the company's gross profit margin in 2023 will increase by 2.2ppt to 24.3% from last year's low base, and the gross profit margin will increase to 26%+ in 2H23. In terms of brands, European and American sports brand customers will be in the destocking stage in 2023, and Uniqlo's retail performance will be relatively good, with revenue increasing by 3% year-on-year; After 2 years of development, Lululemon's revenue accounted for 2%+. Domestic brands such as Anta and Li Ning accounted for about 11% of the revenue, an increase of about 2ppt year-on-year. The scale and efficiency of overseas production capacity have been improved, and the profit contribution has gradually increased. In 23 years, the company's overseas garment production accounted for 53% (+7pp year-on-year), of which the Cambodian base accounted for 26% (+4pp year-on-year) with the improvement of efficiency and staff expansion. The total number of employees in '23 was 92,000 (-2.4% year-on-year), of which the proportion of overseas employees rose to 57% (+5pp year-on-year). With the improvement of overseas integration facilities, the operation efficiency of overseas factories has gradually improved.
3,ASMPT(00522)
The company adjusted its product structure, resulting in a quarter-on-quarter increase in gross profit margin in the fourth quarter. In 24 years, the demand for AI and other products will continue to rise, which is expected to drive the further expansion of production lines such as CoWoS, and drive the company's equipment demand to increase. The future space of AI computing power is still huge, and COWOS packaging, as a bottleneck link in the industrial chain, will continue to benefit from the increase in demand in the future. Sequential improvement was the main focus, with automotive and industrial continuing to account for the highest percentage of the company's sales revenue in terms of end-market applications. The company is well positioned in the high-frequency-wide memory (HBM) ramp-up cycle, and the hot-press soldering (TCB) technology meets the packaging requirements of advanced HBM. ASMPT is a major supplier of 2.5D advanced packaging hot press die bonding (TCB), which is used in TSMC's CoWoS and HBM products. Chip industry giants such as SK hynix and TSMC revealed that the inflection point of demand has arrived, and the long-awaited recovery of the chip industry may be underway. The company's order volume is expected to rebound moderately this year, and the consumer electronics terminal market is an important driving force. The company covers TCB, hybrid bonding, Fan-out and other equipment, especially TCB is more accurate and efficient in bonding thinner substrates, and the second-generation products have received a large number of customer orders for OSAT and logic chips. The company is expected to benefit from comprehensive coverage of advanced packaging solutions and accelerated iteration of TCB equipment.
4, Yihai International(01579)
In 2023, the main revenue will be 6.148 billion yuan, flat year-on-year; The net profit attributable to the parent company was 853 million yuan, a year-on-year increase of 14.9%, and the net profit margin attributable to the parent company was 13.85% (+1.81pct). The company announced a dividend plan for 2023, with a cash dividend of 767 million yuan at the end of the year, with a dividend payout rate of 90%, a record high. F&B demand picked up and revenue delivered strong recovery growth. Haidilao is open to joining, which will focus on steady expansion and have a certain marginal contribution to Yihai International. In 2023, the Group will launch 24 new hot pot seasoning products, 37 Chinese compound seasoning products, and 40 convenient instant food products. As of 31 December 2023, the Group had a total of 62 hot pot seasoning products, 68 Chinese compound seasoning products and 72 convenience instant food products on sale. In terms of products and channels, the revenue of hot pot seasoning in 2023H2 was 2.438 billion yuan, a year-on-year increase of 8.7%. Among them, related parties and third parties achieved revenue of 1.060 billion yuan and 1.378 billion yuan respectively, an increase of 34.5% and -5.2% year-on-year respectively. The growth of hot pot seasoning of related parties mainly benefited from the return to normalcy of the economic and social environment, which led to an increase in offline consumer demand.
5. China Comservice (00552)
In 2023, the company's revenue and net profit were in line with expectations, operating costs increased by +5.3% year-on-year to RMB131.4 billion, and gross profit margin increased by 0.2ppt year-on-year to 11.6%. The company announced that it will increase the dividend ratio to 42% in 2023, an increase of 2ppt year-on-year, and continue to increase the dividend return, and the company's dividend ratio has contributed good returns to investors. The company's industrial digitalization business developed rapidly, and revenue from applications, content and other businesses increased by 16.8%. The company grasped the strategic emerging business development opportunities, and the revenue of each customer market grew well. Revenue from operators, inbound customers and overseas markets increased by +4.7/6.3/15.3% year-on-year to RMB817/634/3.5 billion yuan, respectively. Among them: 1) In the inbound market, the company focused on strategic emerging businesses such as industrial digitalization and photovoltaic new energy, and the new contracts signed in the inbound market increased by about 8% year-on-year to 87 billion yuan, of which the new contracts signed in the strategic emerging business of inbound customers increased by about 19% year-on-year. 2) In the operator market, the company seized the opportunity of computing power development, and the number of new contracts signed in the operator market increased by about 8% year-on-year. In 2023, the new contract value of strategic emerging business will be 59 billion yuan, a year-on-year increase of +31%, accounting for nearly 30% of the total new contracts of +6ppt.
6, Angelalign(06699)
In 2023, Angelalign will achieve operating income of 1.476 billion yuan, a year-on-year increase of 16.2%; In 2023, the total number of invisible orthodontic cases will be about 245,000, a year-on-year increase of 33.2%. The domestic business maintained steady growth, and the international business developed rapidly. In 2023, the company's total revenue in the international market will reach 145 million yuan, and the number of cases reached in the international market will reach 33,000, and the number of cases in the international market will reach 23,600 in the second half of 2023, a significant increase over the first half of the year. Angelalign has launched a new generation of KiD front traction solution, providing dentists with a new treatment option that combines orthopedic treatment into one. In 2023, Angelalign children's products will continue to maintain strong growth. Products and services cover more than 30 countries and regions around the world, and Europe has become one of the fastest growing markets. The company has orderly promoted the collaborative empowerment of its holding company and leading orthodontic product manufacturer in Brazil in medical design and intelligent manufacturing, including providing online training and on-site counseling for the A-Treat digital orthodontic solution design platform and the iOrtho cloud service platform, and helping Aditek upgrade its intelligent manufacturing base in Brazil, so that it has two major production centers in China and South America, laying the manufacturing foundation for strong global growth.
7. ZTO Express (02057)
The company's annual business volume was 30.20 billion pieces, a year-on-year increase of 23.8%, with a market share of 22.9%, ranking first in the industry, and achieving the annual business volume growth target of 20-24%. In terms of profitability, for the whole year of 2023, the revenue will be 38.419 billion yuan, a year-on-year increase of 8.6%; net profit was 8.755 billion yuan, a year-on-year increase of 31.5%; Among them, the company's operating income in the fourth quarter was 10.62 billion yuan, a year-on-year increase of 7.6%, and the net profit attributable to ordinary shareholders was 2.19 billion yuan, a year-on-year increase of 1.3%. In 2023, the company's express delivery order volume will increase by 23.8%, and the market share will increaseIn 2023, China's express delivery industry will continue to recover, and the business volume will maintain rapid growth, and the business volume of Zhongtong Express Service will reach 30.2 billion pieces in 2023, a year-on-year increase of 23.8%, and the market share will reach 22.9%, an increase of 0.8pct year-on-year, of which the company's express service volume in the fourth quarter of 2023 will be 8.703 billion pieces, a year-on-year increase of 32.0%, and the market share will be 22.3%. In terms of dividend buyback: The board of directors of the company has approved the declaration of a regular cash dividend on a semi-annual basis from 2024, and the total semi-annual dividend shall not be less than 40% of the company's distributable profit for that fiscal year. In addition, the company's board of directors has approved an expansion of the share repurchase program by $500 million to $2 billion, with an extension of one year to June 30, 2025.
8，翰森制药(03692)
In 2023, the company's revenue from innovative drugs and cooperative products will be 6.87 billion yuan, accounting for 67.9% (+14.5pct YoY), of which the revenue from cooperative products will be 700 million yuan, mainly for the down payment of B7H4 ADC authorized to GSK, and the company expects that the down payment of about 1.3 billion yuan authorized by another B7H3 ADC to GSK will be recorded in 24 years. The company has established a number of innovative R&D platforms such as ADC, bispecific antibodies, siRNA, etc., and the proportion of innovative drug revenue continues to increase. In terms of sub-sectors: 1) The revenue of the anti-tumor business in 23 years was 6.17 billion yuan (+11.7% YoY), and although the price was under pressure after Amele was included in the medical insurance in March 2023, the volume doubled, and the sales are expected to increase by about 12% year-on-year in 2023 and nearly 20% year-on-year in 24; 2) Anti-infective business revenue of RMB1.27 billion in 23 years (+1.6% YoY), central nervous system business revenue of RMB1.37 billion in 23 years (-8.5% YoY), and other business revenue of RMB1.30 billion in 23 years (+16.3% YoY). In 2023, the company entered into a number of commercialization collaborations, including the out-licensing of GSK, the introduction of Antengene selinexor, and the expansion of EGFRxcMET bispecific antibody collaboration with Biotheus in March '24. Hansoh Pharma has initiated and accelerated the late-stage study of HS-20094 in patients with type 2 diabetes and overweight/obesity in China. In the next three years, with the approval of these new products/new indications, it is expected to accelerate the company's performance growth.
9,Trinity International(00631)
Sany International has maintained a growth trend for many years, and its core performance indicators have achieved double-digit high growth, and in recent years, it has continuously broken through record highs. In 2023, the mining equipment business will achieve revenue of 11.8 billion yuan, a year-on-year increase of 19%; The logistics equipment business achieved revenue of 5.8 billion yuan, a year-on-year increase of 26%. In terms of mining equipment, the overall sales reached 13 billion yuan, of which the sales of mining trucks exceeded 5 billion yuan for the first time, and Sany International has become the largest supplier of mining trucks in China. In terms of logistics equipment, the market share of small port machinery reach stackers and forklifts increased to 68% and 67% respectively, maintaining a leading position in the market. Dagang signed orders of 2.64 billion yuan last year, hitting a record high, providing strong support for the certainty of subsequent revenue growth. In 23 years, the company achieved overseas business revenue of 6.36 billion yuan, a year-on-year increase of +50.7%, and the total revenue accounted for a year-on-year increase of +4.2pct; Among them, the overseas revenue of the logistics equipment segment was 3.554 billion yuan, a year-on-year increase of +68.75%. In recent years, Sany International has continued to extend outward and mergers and acquisitions, and in June 23, the company consolidated Sany Petroleum Technology, and in 2023, the revenue of petroleum equipment business will be 1.5 billion yuan, and the income of emerging business will be 1.2 billion yuan. In the future, the volume of new business orders will become the flashpoint of performance growth.
10，雅迪控股(01585)
The company's performance growth rate in 2023 is outstanding, achieving revenue of 34.8 billion yuan, a year-on-year increase of 12%; The net profit attributable to the parent company was 2.64 billion yuan, a year-on-year increase of 22.2%. Yadea sold a total of 16.52 million electric two-wheelers throughout the year, an increase of 18% year-on-year. In terms of products, in 2024, the company will launch the Guanneng 6th generation series products equipped with the new TTFAR6.0 system, and its terminal price is higher than the Guanneng 5 series 1150 yuan (the price of the new Guanneng 6th generation products is 4000+ yuan), and the dynamic sales rate of the Guanneng 6 series will reach 35% as of March, driving the company's mid-to-high-end products (mainly Guanneng) to account for 40%. In terms of channels, the number of distributors will reach 4,000 by the end of 2023, and the number of distribution outlets will increase to more than 40,000. Overseas markets may enter the harvest period to help the company's secondary growth. In 2023, the company will further accelerate its expansion in Southeast Asia, and in early 2024, the foundation stone of the Bac Giang plant in Vietnam (designed capacity of 2 million vehicles) has been laid. Yadea is expected to enjoy the development dividend of overseas markets through its gradually improving layout in Southeast Asia, open up new sales increments, and the market growth elasticity can be expected. On the performance side, in 2023, the company will increase R&D investment in core components and platform-based engineering systems, with the aim of improving the self-production rate and wildmatch rate of parts; At the same time, the company actively promotes new mid-to-high-end products, and there is still enough room for profitability improvement. Yadea has a leading layout in sodium batteries, and the company plans to acquire Lingbo Electronics, a leading electronic control company, for 350 million yuan to further strengthen the technical barriers of sodium batteries.
(Text / Wan Yongqiang, Director of Zhitong Financial Research Center)
Disclaimer: The stocks in this article are only for discussion and should not constitute investment advice. The stock market is risky, and investors need to be cautious