智通港股解盘 | 地产利好持续催化 消费链条接踵而至

Zhitong Hong Kong Stock Dissolution | Real Estate Benefits Continue to Catalyze the Consumption Chain One After Another

Zhitong Finance ·  07/31/2023 19:44

[Anatomy Board]

Today, Hong Kong stocks surged higher and fell. Overall, they are still in a benign category; not all of them have made up the gap. The closing point was above the 20,000 mark. The volume has been increased to 182.6 billion dollars, indicating that market trading is active.

The market is divided on the news over the weekend. None of the points mentioned in the market essay last Friday have been fulfilled. There is only one Securities Regulatory Commission: the majority shareholders of listed companies must not use divorce, dissolution, liquidation, separation, etc. to circumvent holdings reduction restrictions. Those found to be in violation of the law will be dealt with seriously according to law and regulations. A patch has been released to close the cash out loophole, but this effort is limited. As a result, securities, insurance, etc. did not continue to gain strength; they all opened higher and fell. Among them, CITIC Securities (06030) adjusted a bit more, but CICC (03908) performed even stronger. This situation shows that market acceptance is OK, and the market has not given up hope for the future market. There are two main points of support. One is that it is not ruled out that there will be relevant favorable launches in the future; the other is that it is still optimistic about the general market. The next few days will be the real test.

On the positive side, news about real estate was intensively launched. Over the weekend, megacities actively and steadily promoted urban village renovation work deployment meetings were held, and many places began to follow up on implementation. Among Tier 1 and 2 cities, Beijing, Shenzhen, and Hefei took the lead in making statements. He said that implementation work will be implemented as soon as possible to better meet the needs of residents for rigid and improved housing, and promote the stable and healthy development of the real estate market. First-tier cities will undoubtedly be the “weather vane” of this round of real estate policy changes. The policy strength ranking is expected to be Guangzhou, Shenzhen, and the strongest, followed by Beijing and Shanghai. Examples include Guangzhou's R&F Real Estate (02777) and Green View China Real Estate (00095), which was converted into an urban village in Shenzhen, while Guangzhou Yuexiu Real Estate (00123) rushed higher and fell today due to excessive growth. Currently, market speculation about real estate is focused on penny stocks, such as Shimao Services (00873) and Sunac Services (01516). It is also exploring industrial chain directions such as conch cement (00914), China Resources cement (01313), Huaxin cement (06655), and China Liansu (02128), which are cement building materials, to show that funding approves the real estate line.

The direction of consumption has been mentioned over and over again. On July 31, the National Development and Reform Commission's “Measures to Resume and Expand Consumption” was announced to the public. The “Measures” state that priority is placed on restoring and expanding consumption. Specific policies can be summarized into four chains, including the automobile chain, the housing chain, the cultural tourism chain, and the digital chain. For example, purchasing and use in the automobile chain, new energy vehicles, demand for home purchases in the housing chain and corresponding industries such as home appliances, furniture, and building materials; paid vacations, large-scale events, and sporting events in the cultural tourism chain; and new infrastructure and new business formats in the digital chain. Judging from several chains, the automobile sector already shone brilliantly in July. The gold stock Xiaopeng Motor (09868) surged more than 90 points in July. It is expected that it will take a break in August, but low-level varieties still have potential, and building materials have followed real estate. Paid vacations are worth exploring, such as the travel industry's Ctrip Group (09961), Tongcheng Travel (00780), and Hong Kong China Travel (00308); food and beverage consumption is fully fermented today. For example, Haidilao (06862) is profitable. The medium-term net profit is expected to be no less than 2.2 billion yuan. It stands on the cusp today, directly surging 12.17%. At the bottom are Xiabu Xiabu (00520), Jiu Maojiu (09922), and Helens (09869). Food policy promotion is on the one hand, and whether one's own performance keeps up is the key. The digital chain market explores cloud businesses, such as Jinshanyun (03896) and Weimue Group (02013). Also, Lenovo Baiying joined hands with Meituan to build an IT service ecosystem and opened 2,500 service stores. This further opened up online channels for Lenovo (00992).

According to monitoring data from Zhuochuang Information, the increase in pig prices increased at the end of July, with the biggest one-day increase close to 0.8 yuan/kg. Due to losses in the past 7 months, farmers' expectations for an increase have erupted. Retail investors are generally reluctant to sell, pig supply has been tightened, pig prices have continued to rise, pig prices in many parts of the country have broken through the “8 yuan/kg mark” one after another, and are close to the cost line on the farming side. Generally speaking, the time when it is close to the cost price is when the industry is most pessimistic, which often means that the industry needs to change. The stock price of COFCO Jiakang (01610) also started rising from the bottom.

According to relevant media reports, Evergrande Auto (00708) is planning to raise 500 million US dollars through equity or debt financing to meet the capital requirements of Hengchi 5's production and marketing and the company's normal operations. According to data released by Evergrande Motor, as of May 31, 2023, more than 1,000 new energy vehicles have been delivered. However, this achievement falls far short of Evergrande's goal. Previously, Evergrande had set targets of “producing and selling 1 million vehicles in 2025 and 5 million vehicles in 2035.” In principle, it is obviously very difficult to rely on Evergrande's own financing to build a car. It's a bottomless hole, and it's hard to play around without hematopoietic function. The market itself is already full, unless big car companies are introduced to take a different approach. There was a rebound of nearly 60 points today. The news is that the funds are all behind the game, but it's hard to say with certainty.

The Hang Seng Index is expected to be repeated at 20,000 points. Jumping the gap is also a hidden danger. On the good side, the policy is still at a stage where benefits are continuously released. The latest data also boosted confidence. For example, the manufacturing PMI in July was 49.3%, up 0.3 percentage points from the previous month. The market weather vane still depends on securities; it is enough to maintain relative stability, but the “Belt and Road” is expected to generate another stimulus in the future. The driving force depends on real estate and consumption. As long as a change of hand is enough, even adjustments are relatively limited.

[Sector Focus]

This year marks the 10th anniversary of the “Belt and Road”. Overseas engineering development is expected to open a new chapter and continue to catalyze the market in the sector. There are multiple internal and external favorable resonances, and new orders for overseas projects have now shown a reverse trend at the bottom. Leading state-owned enterprises, international engineering companies, and high-quality private enterprises with overseas expertise are expected to continue to benefit from the market catalysis of the 10th anniversary of the “Belt and Road”. Economic development has driven an increase in demand for infrastructure, and some Southeast Asian and Middle Eastern countries have become hot spots for development. The resumption of diplomacy between Saudi Arabia and Iran has encouraged many countries in the Middle East to welcome a “diplomatic spring,” creating a stable environment for development. Multinational medium- to long-term plans represented by Saudi Arabia's “Vision 2030” have attracted worldwide attention, and it is expected that quality infrastructure projects will continue to be incubated.

Main varieties:China Railway (00390) signed a new contract amount of 606.37 billion yuan in the second quarter of 2023, with a cumulative new contract amount of 1273.75 billion yuan this year, an increase of 5.1% over the previous year; CRRC (01766) announced that the company signed several contracts from May to July 2023, with a total amount of about RMB 60.47 billion; China Communications Construction (01800) infrastructure investment continued to grow at a high rate. On July 28, Southbound Capital increased its holdings of China Communications Construction by 2,926 million shares for 3 consecutive days.

[Individual Stock Nuggets]

Green View China Real Estate (00095): Received Southbound Capital to increase its holdings by 3.152 million shares and opened a marketing center and model house in Baishizhou

On July 28, Southbound Capital increased its holdings of Green View China Real Estate by 3.152,000 shares. Of the past 5 trading days, there were 5 days that saw an increase in holdings of Southbound Capital, with a cumulative net increase of 7.690 million shares. Of the past 20 trading days, 13 days received an increase in holdings from Southbound Capital, with a cumulative net increase of 106.38 million shares. Up to now, Southbound Capital holds 567 million shares of the company, accounting for 11.1% of the company's issued common shares.

Comment:Together with Huawei, China Unicom, the Shanghai Municipal Government Council, and the Shenzhen Urban Transportation Planning and Design Research Center, Greenview China has jointly planned the “151 Blueprint” for smart Baishizhou, focusing on the three major systems of smart cities, smart communities, and smart families. The plan covers over 120 core scenarios. The sellable value of the first phase of the project is expected to reach nearly 40 billion dollars. Once the first phase of the project enters the market, it means that a large amount of capital will return to the market, and the company's scale and profits will grow by leaps and bounds. At the same time, in the current context where the market is worried about the breakdown in the cash flow of housing enterprises, the safety of Green View will also be strongly strengthened. Combined with the current most popular theme of urban village renovation, it is undoubtedly the most authentic target in the market.

China Liansu (02128): Consumer building materials retail sales have recovered significantly, and demand has gradually improved since July

Retail sales of construction and decoration materials fell 6.70% year-on-year from January to June 2023, down 0.1 percentage points from January-May. Among them, June fell 6.80% year on year, and the decline was 7.80 percentage points narrower than the previous month. The consumer building materials retail side benefited from the completion and restoration of real estate, and demand improved markedly. There is a certain time lag between consumer building materials procurement (retail) and real estate completion. Retail sales of consumer building materials in June are in line with the recovery on the previous real estate completion side. It is expected that the continued recovery in future real estate completion will continue to drive an increase in demand on the retail side of consumer building materials.

Comment:Demand has gradually improved since July. The 23H1 capacity utilization rate increased 10% + year on year. The market share of companies affected by the epidemic has increased. At the same time, the company is opening up new markets. The main business invests an average of 1 billion dollars a year to build new bases in Guangxi and Gansu. In the future, production capacity will be increased through intelligent and automated transformation and upgrading. Capital expenditure on new energy will slow down somewhat. Previously, it was planned to invest around 1 to 2 billion yuan, but now it will be kept below 1.5 billion yuan, and the investment rate will slow down. The components already have 2-3 more production bases at the South China headquarters, and the layout of batteries and energy storage has begun. The company's products match the demand of the old reform to a high degree. The company has participated in the sale of real estate and products for the maintenance of public buildings and old renovation projects. The demand side has improved markedly, and the current valuation has a good margin of safety.

Zulong Entertainment (09990): “Madtale” is estimated to have a turnover of over 300,000 US dollars in the first week and is optimistic about “Flash”'s contribution performance in the short term

The card game “Madtale: Idle RPG” released by Zulong Entertainment has recently been launched overseas, and the market is based on high expectations for this game. “Madtale: Idle RPG” earned more than 220,000 US dollars overseas in the first week of launch, according to the monitoring of point-to-point data from global mobile apps and game data monitoring service providers. Considering that other revenue is not within the scope of monitoring and that platform shares are not included, it is reasonable to estimate that the total turnover of the game's first week overseas was over 300,000 US dollars. On the first day of launch, the game performed well overseas. The game soon entered the top 10 of the iOS Strategy Free List in France, Germany and other countries on the first day of its launch, and ranked 9th in the US iOS Strategy Free List on the first day.

Comment:In May, the total net revenue of “In the Name of Shining” overseas and the net revenue of the domestic app store reached 10.423,500 US dollars, the highest net revenue for the game overseas and the app store since its launch. Considering that other revenue is not within the scope of monitoring and that platform shares are not included, it is reasonably estimated that the game's overseas sales volume and total domestic app store sales have exceeded 15 million US dollars. China Galaxy Securities pointed out that it is optimistic about the contribution of the new tour “Flash” to 2023's performance in the short term, and the bank is optimistic about the company's R&D strength and multi-category game matrix in the long term. It is expected that performance will improve during the year as new products are gradually launched in the future. According to reports, after Zulong Entertainment launched the “In the Name of Shining” national uniform in March, no new products were launched in the second quarter. Currently, there are no games in Pipeline that have received an edition number. According to financial reports, the company expects to launch the Avatar IP mobile game “Avatar: Return to Pandora” for the world this year.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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