Source: Brokerage China
"How is the company's overseas business progressing?" This is a high-frequency focus when researching listed companies in recent public offerings.
Wind data shows that since the second quarter, the number of public fund researchers in the top number of listed companies in the research records, "progress in going overseas" is the focus, Tianfu Communications, Zhongji Innolight, Desay SV, Nine Company, Aohua Endoscopy and other companies have been asked about "overseas market expansion" and "proportion of overseas revenue" and other issues, involving industries distributed in communications, electronics, auto parts, home appliances, health care, etc.
The "going overseas" business has attracted attention
From the perspective of secondary market performance, the stock prices of many companies with outstanding overseas business performance have risen recently, such as Sailun Tire, which recently hit a record high, and the 2023 annual report said that the company's export revenue reached 19.265 billion yuan, a year-on-year increase of 12.99%, accounting for 74.16% of the total operating income; The gross profit margin was 30.78%, which was much higher than that of the domestic business.
It is worth mentioning that Wind data shows that as of the end of the fourth quarter of last year, more than 100 public fund products bought the stock, and the total proportion of public offering positions increased from 23.9% at the end of the third quarter to 32.52% at the end of the fourth quarter.
According to the first quarterly report of Sailun Tire, there are two public offerings that have entered the top ten circulating shareholders of the company, namely China Merchants Anhua Bond and Dacheng New Industrial Mix. In the first quarterly report of China Merchants Anhua Bonds, the fund manager said that exports may continue to boom, and companies with export advantages and large long-term growth space are worthy of continuous research and attention.
In addition, white goods, light industry, construction machinery and other overseas sectors have achieved a "double harvest" of performance and stock price, such as Hisense video, Hisense home appliances, Haixing power, Yutong bus, etc.
Fan Kun, fund manager of the Rongtong Fund, who added a part of the export chain in the first quarter, said that the core of increasing the export chain is to see the cost and supply chain integrity advantages based on the manufacturing industry. On the other hand, the rise of cross-border e-commerce and other platforms has also driven some high-quality enterprises to go overseas. In addition, the global re-industrialization process is accelerating, and the layout of the world's multiple manufacturing centers has also boosted China's exports, and it has been clearly observed that some categories have opened up new markets in Asia, Africa and Latin America.
Two major factors support the high prosperity of export-related industries
It can also be seen from the disclosed quarterly report of A-shares that the prosperity of overseas related industries is high.
Taking the small household appliance industry as an example, most of the small household appliances enterprises that announced their financial reports had outstanding performance in the first quarter, and among the 23 small household appliances listed companies, 19 net profits rose year-on-year, and the main reason for the company's disclosure of good performance was the growth of export revenue.
As shown in Roborock's first-quarter report, the revenue in the first quarter was 1.841 billion yuan, a year-on-year increase of 58.69%, and the net profit attributable to the parent company was 399 million yuan, a year-on-year increase of 95.23%. Roborock said that the company's advantages in actively exploring domestic and foreign markets in the early stage have been further continued and expanded, and through the deep cultivation and rationalization of channels, the sales volume of the company's products has increased significantly compared with the same period last year, and the improvement of operating performance and profitability has also led to an increase in net cash inflow from operating activities.
The recent stock price performance of many stocks in the industry has also been outstanding, with Ecovacs rising by more than 70%, and the stock price has hit a new high this year. Roborock, No. 9 Company, etc. rose by more than 30%.
For the first quarterly report, Chen Fuquan, fund manager of the Agricultural Bank of China, said that from a structural point of view, the prosperity of enterprises with a large proportion of overseas business is relatively high, and export-related industries and companies have performed well in the growth of revenue and profits.
In his view, there are two reasons for the high prosperity of the external demand sector: from a short-term perspective, due to the improvement of overseas demand, especially the replenishment of durable goods in the early stage of the epidemic and the destocking in the later stage of the epidemic, and then re-enter a new round of replenishment cycle, driving exports to the United States in fields such as furniture, textiles, and hand tools.
From a long-term perspective, the product strength of domestic enterprises continues to improve, and the cost performance gradually surpasses that of overseas competitors, bringing about a further increase in overseas market share. This is even more evident in high-end manufacturing such as machinery, power equipment, and automobiles. Judging from the first quarterly report, the exports of ships, buses, tires, transformers, meters, passenger cars and other fields have strong performance, which proves the logic of China's products to continue to expand their global share after continuously improving their competitiveness.
Exports will continue to be a very important investment opportunity for A-shares
Recently, a number of fund managers have expressed optimism about the long-term investment trend of export logic.
The 10 billion fund manager Industrial Securities Global Fund recently expressed its optimism about the medium and long-term trend of exports. The house moved said that not only the export of manufacturing, but also the mainland has begun to make further exports to consumer goods and services. At present, many typical industries, including new energy, home appliances, mobile phones, service industries, CXO, including TikTok, have a leading export penetration rate in the world.
Qiao Qian believes that compared with the past exports based on low-end manufacturing, the disruption of the global supply chain caused by the epidemic has provided opportunities for the export of mid-end, mid-to-high-end and even high-end products in the mainland, and Chinese products have reached the mid-to-high-end level, the service capacity is also very strong, and the products are very cost-effective, and this part of the logic can be continued. With the improvement of national strength, the export of consumer goods and cultural output can be more and more recognized by the world.
"In the market economy environment, products and enterprises with excellent cost performance can always stand out in the global competition, so as to continuously generate new investment opportunities overseas." Chen Fuquan believes that in the environment of continuous involution of the domestic industry, more and more enterprises will continue to improve their cost control capabilities, constantly polish product design and performance, and their competitiveness in the global market is expected to be further improved, and they will have the opportunity to gain higher market share in some countries and fields. In addition, due to the relatively mild competitive environment in overseas markets, the profit margin of overseas products is relatively higher, and some export boom enterprises have stronger upward elasticity in profits.
The market is worried about the sustainability of China's exports, but from the actual situation, due to the profit-seeking nature of the market economy, there will be more structural adjustments in trade between countries, and the core is still the competitiveness of products in the global market. Therefore, as long as Chinese enterprises continue to improve their product strength, there is still a lot of room for Chinese enterprises to export, and from the perspective of medium-term investment, exports will still be one of the most important investment opportunities for A-shares.
Editor-in-charge: Wan Jianyi
Proofreading: Gao Yuan
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