Since the beginning of the yearGlobal stock marketGeneral increase, the United StatescurrencyThe policy shift and the smooth progress of Sino-US negotiations have pushed the global capital market into the Risk on model again. However, since the beginning of February, with the announcement of the macro data of various countries and the release of the 18Q4 financial report of the US stock market, the global stock market performance has begun to differentiate and gradually entered the stage of fundamental verification. Short-term Hong Kong stocks are still inPerformanceDuring the vacuum period, we will pay attention to China's macroeconomic data and the progress of China-US negotiations.
1,From instigation to performance verification
1Since the end of the month, the global stock market has shifted from general to market.Since the beginning of the year, global stock markets have generally risen, which is the instigation market led by US stocks. In fact, US stocks began to rise from December 26, 2018, from 18/12/26-19/1/31, US stocks in the Nasdaq index rose 17.6%, Dow Jones index rose 14.7%, S&P 500 rose 15% The Nikkei 225 index rose 8.5%, the Hang Seng Index rose 8.9%, and the German DAX index rose 5%. However, since the end of January and the beginning of February, the global major market index has begun to differentiate, the US stocks are still relatively good, the German and Japanese stock markets began to weaken. From the 19/2/1-19/2/8 period, the Nasdaq index rose 0.4%, the S&P 500 rose 0.1%, the Dow Jones index rose 0.4%, while the Nikkei 225 index fell -2.1%, the German DAX index fell. -2.4%. The performance of stocks within the US stocks also began to differentiate, such as the S&P 500 heavyweights, Apple (19/2/1-2/8 rose 2.8%, the same below), Facebook (up 0.4%), Naifei (up 2.4) %) continued to rise, while Google (down 2%), Amazon (down 7.6%), JP Morgan Chase (down 2%) and other stocks have begun to pull back.
The global stock market has moved from collective incitement to fundamental verification.From the end of the 18th year to the end of January 19th, the global stock market generally rose. The core comes from the shift of the Fed's monetary policy, the easing of Sino-US trade friction, and the instigation caused by the rising global stock market risk appetite. On November 28, 18, Fed Chairman Powell said that the actual situation in the United Statesinterest rateAlready close to neutralinterest rateThis means that the Fed’s rate hike process is expected to end early. On January 4th, Federal Reserve Chairman Powell said that the Fed will closely observe the changes in the US economy and the financial market situation, and be patient with tightening monetary policy, and said that the Fed is ready to adjust monetary policy if necessary, including adjusting the reduced balance sheet. Process etc. In addition, the Sino-US trade negotiations are progressing smoothly. From January 7 to 9, the Sino-US economic and trade delegation conducted a three-day consultation and made positive progress. However, since the end of January and the beginning of February, with the announcement of the macro data of various countries, and the US stocks successively disclosed the financial report of 18Q4, the global stock market began to move from collective incitement to fundamental verification. From the macroeconomic fundamentals of various countries, the fundamentals of the United States continue to be good, and the US manufacturing industry in JanuaryPurchasing manager index(PMI) is 56.6, which is not only higher than the previous value of 54.1, but also higher than the market expectation of 54. The macroeconomic data of Europe and Japan began to weaken. The initial PMI of the manufacturing sector in the Eurozone was 50.5 in January, lower than the expected 51.4, the lowest since November 2014. Germany's January manufacturing PMI was 49.9, lower than the expected 51.5, which was the first time in four years that it fell below the line of glory. Japan's manufacturing PMI in January was 50.3, a 29-month low. And on February 7, the EU lowered its economic growth forecast and lowered the Eurozone's 2019 growth forecast from the previous forecast of 1.9% to 1.3%. The weak macroeconomic data of Germany and Japan also triggered the correction of the stock index. US stocks have been announced with the 18Q4 financial report. Since the end of January, the trend of internal stocks has gradually diverged. Among the weighted stocks of the S&P 500 index, stocks with more-than-expected earnings such as Facebook and Google have increased by 16% since the announcement of the 18Q4 earnings report. 3%, better than the S&P 500 in the same period. The 18Q4 earnings report fell below 7% after the announcement of Twitter earnings, far less than the S&P 500 index (1%).
Short-term Hong Kong stocks are still in a period of performance vacuum, and the mid-term turning point is awaiting confirmation of the decline in earnings.Since 2019, the Hang Seng Index has increased by 8%, and the growth rate in the major global market indexes is relatively leading. In terms of industry performance, industry (up 12%), real estate (up 11.4%), information technology (up 9.7%), and consumer goods manufacturing (up 9.6%) were among the top gainers, while utilities (up 3.7%) and finance The industry (7.2%) and the telecommunications industry (up 8.4%) have relatively small increases. In January, the amount of funds under the south was -1.25 billion, a slight decrease from the 4 billion in December 2018, and far lower than the monthly average of 21.6 billion yuan in the south of 2016-2017. Since February, the global stock market has gradually moved from the collective incitement in January to the fundamental verification. However, unlike the intensive disclosure of the recent annual report in the United States, the current disclosure rate of listed companies in Hong Kong stocks (as of 2/8) is still low, and only 2,350 Hong Kong-listed companies are listed. 148 companies disclosed the 18-year annual report. Only 4 of the 50 constituent stocks of the Hang Seng Index disclosed the annual report. After March, Hong Kong stocks will enter the period of intensive disclosure of the annual report. Short-term Hong Kong stocks are still in a period of performance vacuum, focusing on China's economic fundamentals and the impact of China-US negotiations on its progress. In the medium term, Hong Kong stocks have been continuously adjusted since March/February. One of the important factors affecting the adjustment is the decline in Hong Kong stocks' earnings, and the accumulation of all Hong Kong stocks.Net profitThe growth rate dropped from 28.8% in 2017 to 9.2% in 2018Q2. At present, the growth rate of net profit of Hong Kong stocks is still falling. This round of profit bottoming characteristics is similar to the 2002-05 period, that is, W-shaped bottoming. This round of profit improvement began on the left side of the second quarter of 2016. Now it is the second bottoming down process. We expect the right bottom to be in the second and third quarters of 2019. From a valuation point of view, this round of Hang Seng Index PE (TTM, the same below) rose from 9.6 times 16/2 to 13.6 times the highest at 18/2, the lowest point in Hong Kong stocks (Hangsheng Index 24,540/10/30) Point) PE has a minimum drop of 10 times, which has reached the lower limit of the historical valuation core range (10-18 times), and has been 12% from low to high since 1973/5. Compared with the bottom of the history of Hong Kong stocks, Hong Kong stocks have had a market bottom PE (TTM) of 11.3 times at 1895 on December 7, 1987 and 8.1 times at 6545 points on August 13, 1998, and September 21, 2001. 13.1 times of 8894 points, 8.3 times of 10676 points on October 27, 2008, and 7.9 times of 18279 points on February 12, 2016. The lowest point of this round of HSI (2440/10/30 24540 points) It is also at the bottom of history, and the valuation advantage of historical Hong Kong stocks is highlighted. In the short-term, Hong Kong stocks are still in the inflation stage of the performance vacuum period, and the right turning point needs to wait for the profit decline to confirm. Since 2018, high-dividend stocks of Hong Kong stocks have outperformed the market, and historically, high-dividend stocks performed better when Hong Kong stocks were adjusted. The high-dividend stocks in the bottoming period were better strategies. For details, see the previous report, “Hong Kong Stocks Simple and Practical Strategy: High Dividend Strategy – 20170829".
2,Focus on the company
2.1Greentown Service: Seeing the future and seeing the future
Twenty years of growth, the quality of Greentown. The company was established as a subsidiary of Greentown China in 1998. It was listed on the Main Board of the Hong Kong Stock Exchange in 2016 and was transferred to the Shenzhen-Hong Kong Stock Connect in 2017. As of June 2018, Greentown's service business has covered 24 provinces, municipalities and autonomous regions, and 134 cities across the country, with a total service area of approximately 310 million square meters.
The three major businesses develop synergistically to enhance the company's value.
1) Property management services: The scale of management continued to expand and the gross profit margin remained stable. As of June 30, 2018, the company is in chargecontractWith a construction area of 150.8 million square meters and a contract reserve project area of 160.3 million square meters, it can be delivered in the next 3-4 years as a pipe area, providing a solid foundation for the Group's future scale growth. The business is concentrated in the Yangtze River Delta, the Pearl River Delta and the Bohai Rim region. The revenue contribution of the Yangtze River Delta region reached 71%, and the gross profit margin increased steadily to 11.9%.
2) Consulting services: Due to the volatility of the market environment, the “Green Alliance” was launched to cut into the stock market. The company's consulting services mainly include property services and management consulting services under construction, with 2018H1 accounting for 83% and 17% respectively. The property-based services under construction are subject to fluctuations in revenue growth due to the market environment. For example, in 2016, a large number of contracts were terminated prematurely in the hot real estate market. In terms of consulting services, in 2016, the company launched the “Greentown Alliance” to fully export mature management models and experience to expand into the stock market.
3) Park business: The layout of the five major directions, business growth. The park's service growth rate reached 66.4% in 2013-2017, which is the fastest growing business. Currently, it has five major directions: product and service, home life service, park space service, property asset management service and cultural education service.
Highlights of the company: 1) Deeply ploughing the first and second lines, the management scale has a large room for improvement. We estimate that the Greentown service will focus on 40 large and medium-sized cities across the country, and the management scale after five years is expected to reach 500 million square meters. 2) The value-added service architecture has been completed, opening up future growth space. In the first half of 2018, Greentown Services generated a gross profit of 56.4% with 31.2% of value-added service revenue, and the proportion of net profit created will be higher. We believe that the deep-seated strategy of the Hangzhou region indicates that the development of the park's business can be separated from the constraints of the management field, resulting in a doubling of revenue and opening up room for growth in future business development. 3) Equity incentives are in place and the management model is excellent. On September 21, 2018, the company granted a total of 133.5 million share options to the directors and senior management, with an exercise price of HK$6.116 per share, valid for ten years.
Investment suggestion: Give “outperform” rating. We estimate that the EPS of the company in 2018 and 2019 will be RMB 0.19 and RMB 0.24 respectively. According to the closing price of the company on January 30, 2019, the price is HKD 7.02 (that is, RMB 6.17), which corresponds to 32.50 times and 25.73 times of PE in 2018 and 2019. . We give the listed company 28-30XPE in 2019, with a reasonable value range of RMB 6.72-7.20 (HK$7.64-8.19), giving the company a “Outperform” rating. Risk warning: the new property management project was not as expected; the park business was not as good as expected.
(Green City Service, 02869.HK, Tu Lilei, S0850510120001, Jin Jing, S0850518120002)
2.2Sunny Optical Technology: Three-shot power, car life - how long the slope is, how thick the snow is
Mobile phone lens and module, car lens leader. The company is the world's second largest mobile phone lens and module manufacturer, the largest car lens manufacturer. Optics is the best track in hardware. The company relies on strong technical strength to continue to grow rapidly. In 2009-2017, revenue CAGR 43%, net profit CAGR 54%.
Mobile phone lens: extremely high moat, three photos bring dividends. Equipment, processes and patents have created a very high moat. Da Liguang and Sunny Optical share a total of about 50%, and earn most of the profits in the industry, while other companies are basically at a loss. In 2018, 1) Huawei's new products lead the popularity of three photos; 2) other brands follow up; 3) 6P, 7P and other product structure improvements are beneficial to maintain the stability of ASP.
Mobile phone lens module: The penetration rate of three photos is expected to increase significantly, and the company is taking profits from the head. The module industry leads the profit cycle by technological innovation. Starting in the second half of 2017, dual-camera has matured and module competition has begun to intensify. Sunny Optical is a leader in the module industry. It has excellent MOB/MOC packaging, three-shot, 3D and other technologies. It can enjoy the benefits of technological innovation at the earliest; we expect Android 3P penetration rate to increase significantly to 1019-2020. %, 25%, Sunny Optical lens module business is expected to benefit.
Car lens: longer slope, thicker snow. At present, there is only one bicycle camera, and the perfect ADAS function is required, which requires 5-8, and the single price of the car lens is 10 times that of the mobile phone. We believe that from 2018 to 2020, Tesla's new car-powered LEX-class ADAS will be introduced to the market. Around 2021, some international car companies will introduce L4-level ADAS, leading the car lens into a new era. Sunny Light is the world's leading automotive lens lens. In recent years, it has accelerated its growth rate beyond the industry. At the same time, the company's automotive modules have entered the Tier 1 supplier and entered a wider ramp.
profit predictionWith investment advice. We expect the company to achieve net profit of 30.87, 41.86 and 5.540 billion yuan, respectively, from 2018 to 2020, with a year-on-year growth rate of 6.38%, 35.60% and 32.36% respectively; realized earnings per share of 2.81, 3.82 and 5.05 yuan respectively; Value and company growth rate, given 2018 PE 18-20X, corresponding to 68.76-76.40 yuan / share, according to 1 Hong Kong dollar = 0.88 yuan, corresponding to 78.14-86.82 Hong Kong dollars / share, giving an out-of-market rating.
Risk warning: mobile phone shipments fell, three-shot, 3D and other advances were less than expected, and the module price war exceeded expectations.
(Article source: stock market decision)