Source: Guojin Securities
[Guojin Securities] January gold stock portfolio
Sany Heavy Industry , Jerry Shares, Yangnong Chemical, Sanhua Intelligent Control, Ganfeng Lithium, Perfect World, Youzu Network , Luxshare Precision , Goertek , Goertek , Changdian Technology
Strategy | Li Lifeng: January A-share market strategy - still active can be done, focusing on two main configuration lines
Learning from history, January often shows a "comprehensive rise" or "structural" market, and it is currently a period of gradual layout of A-shares. We have sorted out the performance of the A-share market in January from 2009 to 2019. In the past 11 years, the years when A-shares showed a general rise in January were "2009 and 2013", and the years when A-shares showed a "structural" market were "2012, 2014, 2015, 2017, 2018 and 2019", while in January A-shares (i.e., 2010, 2011, 2016), the market was a comprehensive decline. The reason why the A-share market in January often performed relatively well may be mainly related to "loose currency and loose credit". Generally speaking, banks prefer the practice of "early issuance and early benefit", and credit usually shows the characteristics of "high at the beginning and low at the end". The scale of lending in the first quarter was the first in four quarters, and January was the highest peak of new credit in the first quarter. In addition, the new year work plans of various ministries and commissions at the beginning of the year, macro-control departments inspected banks, and some enterprises' design and planning blueprints were released one after another, continuously boosting risk appetite. If looking forward to January 2020, there is a high probability that A-shares will have a "spring turbulence" market, then at the current time, we recommend that investors gradually deploy A-shares in index adjustments.
Many recent risk events have been implemented one by one, and subsequent interpretations are likely to be evolving in the direction expected by the market. For example, the Sino-US trade relations have warmed up in stages, and the UK is likely to "soft Brexit" smoothly, and the US "impeachment" incident is safe. In addition, domestic macro decision-making departments have repeatedly emphasized "further reducing the comprehensive financing costs of small and micro enterprises", and the monetary easing environment remains. Therefore, we believe that the upward trend of the A-share market will continue, although there are disturbances from factors such as "new stock issuance, lifting of the ban, and Spring Festival" during the upward trend of A-shares; in terms of industry allocation, we focus on grasping two main investment lines. 1) The low-valuation blue-chip sectors represented by medium and long-term funds represented by foreign capital are mainly concentrated in leading companies in sub-sector sectors such as "big finance, real estate, and other consumption, cycles". The characteristics of such allocation targets are "continuously seize market share, relatively reasonable valuation, and continuous stable performance"; 2) Dig deep into the main lines of US stock mapping allocation under emerging industries, such as " Apple Industrial Chain, Electric Vehicle Industry Chain".
Risk warning: Overseas black swan events (political risks, downgrade of sovereignty rating, Sino-US trade, etc.), policy supervision (financial deleveraging, etc.).
Military Machinery | Wang Huajun— Sany Heavy Industry , Jerry Co., Ltd.
Sany Heavy Industry Recommended logic
Infrastructure support + update demand + stricter environmental protection + manual substitution four factors promote the construction machinery industry demand is strong, and the market share of excavators and automobile cranes is expected to continue to increase. The sales growth rate of Sany Excavator is expected to exceed 10% in 2020. The high growth rate of concrete equipment is expected to continue, and concrete machinery growth rate is expected to exceed 20% in 20 years. Crane is expected to have a large demand for large-tonnage cranes in 20 years, which is good for Sany Heavy Industry .
continues to promote Sany Heavy Industry , and firmly opposes the most globally competitive high-end manufacturing companies in China. It is estimated that the company's net profit from 2019 to 2021 will be 11.3 billion, 13.4 billion and 14.9 billion, respectively, with a corresponding PE of 12, 10 and 9 times, respectively. The target valuation of 2019 will be given 12 times, with a corresponding market value of 161 billion and a target price of 19.2 yuan.
risk warning: infrastructure real estate investment is lower than expected; sales in some products industry decline risk
Jerry shares recommendation logic
cycle + growth: oil and clothing equipment private enterprises leader, benefiting from the great development of shale gas in China. In 2019, domestic oil and gas upstream exploration and development investment increased by 22%, and fracturing equipment demand was strong; overseas market breakthroughs opened up space for growth.
China has initially established a foundation similar to that of the United States' large-scale shale gas development, and the demand for fracturing equipment has increased significantly; it is estimated that China's total demand for fracturing equipment will continue to grow rapidly in 2020.
is expected to maintain a growth of 15-20% from 2019 to 2021. Global oil and gas exploration and development capital expenditure is expected to maintain a compound growth of 5-10% from 2019 to 2021.
Company orders are growing at a high rate. In 2018, new orders were 6.1 billion yuan, a year-on-year increase of 43%. New orders increased by 31% year-on-year in the first half of 2019, of which the new orders for core business, drilling and completion equipment increased by more than 100%.
profit forecast: The company's net profit from 2019 to 2021 is 1.26/1.78/2.33 billion yuan, a year-on-year increase of 106%/41%/31%; EPS is 1.32/1.86/2.43 yuan; PE is 23/16/12 times. Give 25 times PE in 2020, with a reasonable market value of 45 billion yuan, and a "buy" rating.
Risk warning: Shale gas development is lower than expected, subsidies are lowered; oil price drop risk; overseas business risk
Chemical|Chen Yi—Yangnong Chemical
Yangnong Chemical Recommendation Logic
dicamba business will usher in marginal improvement: ① The impact of extreme weather on demand for dicamba is gradually repaired; ② With the solution of the drift problem, the degree of promotion of dicamba is increased; ③ The promotion of double anti-seed seeds in the Brazilian market will bring about the growth of demand for dicamba. The company's dicamba business has expectations of both volume and price increase.
Youjia Phase III and Phase IV will open up growth space: Youjia Phase III will pass the environmental impact assessment in November this year and is expected to be put into production in the second half of 2020. Youjia Phase IV and Pier Project will pass the environmental impact assessment in the second half of next year. Overall, the production of Youjia Phase III and Phase IV projects will bring about an increase of about 2.7 billion in revenue and an increase of 640 million in net profit.
Agriculture and Sinochem Crops continued to exceed expectations. Thanks to the smooth promotion of the patented product 9080, the price increase of some pesticide products in Shenyang Science and Technology Innovation, and the company's patented products were good, Sinochem Crops and Sinochem Crops performed well in the third quarter of 2019. We believe that the performance of Agriculture and Sinochem Crops will continue to grow.
profit forecast: The company's net profit attributable to shareholders in 2019, 2020 and 2021 is expected to be RMB 1.207 billion, RMB 1.34 billion and RMB 1.476 billion; EPS is RMB 3.90, RMB 4.33 and RMB 4.76 respectively. As a leading pesticide enterprise, the company has given the company a 17-fold PE in 2020 with a target price of 73.61 yuan in consideration of the future Youjia project and growth potential and marginal improvements in dicamba. Give a "buy" rating, firmly recommend it!
risk warning: dicamba exports are lower than expected; thrin product prices fall; Youjia project construction progress is lower than expected
Auto | Chen Xiao—Sanhua Intelligent Control
Sanhua Intelligent Control Recommendation Logic
Home appliance business is the "ballast stone" of performance, and the auto zero business leads future growth. The company is the global leader in refrigeration control components. The home appliance business, which currently accounts for 87% of the revenue, is growing steadily, and is constantly deepening its binding with major customers. The market share of electronic expansion valve , four-way reversing valve, solenoid valve, Omega pump and other products is leading the world. The orders for the automotive zero business, which account for 13% of revenue, have fully blossomed, which will be the engine of performance growth in the next five years.
is expected to share the dividends of Tesla Model3, and has the potential to upgrade from a subordinate component supplier to a thermal management system supplier. Exclusively supply Model 3 thermal management components, including thermal expansion valves, electronic expansion valves, electronic oil pumps, oil coolers, water-cooled plates, battery coolers, briquettes and other products, with a bicycle worth about 2,000 yuan; and exclusively supply Model S/X electronic expansion valves. Master the core components of the thermal management system, have the potential to develop a thermal management system for new energy vehicles, and become a first-level supplier of vehicle manufacturers. The value and voice of bicycles have been improved, and the demonstration effect generated by the Tesla industry chain is conducive to the company's expansion and further development of high-quality customers.
Auto Zero business is blooming everywhere, holding nearly 16 billion orders.With its absolutely leading automotive expansion valve products, the company has entered the supply system of mainstream electric car companies in Europe and the United States: it has entered the BMW supply chain, one of the most difficult to access, and exclusively supplied the CLAR/FAAR-WE platform, with a total sales of approximately 600 million in life cycle, and the related models are expected to be mass-produced in 2022; it has won General Motors electronic water pumps (expected to have sales of nearly 1 billion by 2027), electric vehicle platform BEV3 battery cooling components and multiple thermal management valve products (exclusive, sales of nearly 2 billion in 6 years). The company currently holds nearly 16 billion orders and has guaranteed performance.
profit forecast: The company's net profit attributable to shareholders from 2019 to 2021 is expected to be RMB 1.417/1.451/1.495 billion, respectively, with the corresponding EPS of RMB 0.51/0.53/0.54. The company is given a target price of 20.14 yuan, corresponding to the 2020 38x valuation, and the buy rating is maintained.
risk warning: car market is sluggish; new energy vehicles development is lower than expected; Model 3 sales are lower than expected; new energy source vehicle heat management system development and loading fails to meet expectations; home appliance industry growth rate declines; commercial refrigeration development customers do not meet expectations; refrigeration products market share declines; exchange rate fluctuates.
Nonferrous metals | Zeng Zhiqin—Ganfeng Lithium Industry
Ganfeng Lithium Industry Recommendation Logic
ml0Lithium Industry Supply and Demand Structure has been greatly improved. Benefiting from the significant contraction on the supply side and the significant improvement on the demand side, the excess pressure in the lithium industry has dropped sharply, and the supply and demand pattern has improved significantly compared with expectations. We expect an excess of 83,000 tons of LCE in 2020, a significant reduction of 112,000 tons of LCE from the previous expected 195,000 tons of LCE.
company has become the global leader in lithium industry. The company's current lithium salt production capacity is about 80,000 tons, forming the world's number one lithium industry group with Yabo and SQM in the United States. The production capacity of other manufacturers is below 50,000 tons of LCE, and the core constraints are limited resources and insufficient sales. Looking back, the industry as a whole will show a trend of the strong being always strong, and the company's leading position is expected to be further enhanced.
is moving forward in parallel with the upper, middle and lower reaches of
, and the vertical ecological chain map appears. The company actively builds vertical ecological chain business, which will help enhance the synergy effect of various business segments and reduce the fluctuations caused by the rise and fall of lithium prices on the company's profits.
resource side: Layout high-quality lithium resources, the bottlenecks of the past have become the advantage today. 1) Ganfeng Lithium was constrained by the bottleneck of upstream resources in the early days, but the company currently has nearly 20 million tons of LCE, and the former resource bottleneck has transformed into the company's strong advantage; 2) The cost of Cauchari-Olaroz salt lake is extremely low and is expected to increase the company's lithium carbonate gross profit margin by 10pct in 2021.
Smelting end: Enter the supply chain of international leading automakers, and the smelting capacity expands in an orderly manner. 1) The company has outstanding lithium salt technology and obvious cost advantages. Establish long-term strategic cooperative relationships with battery manufacturers such as Panasonic, LG Chem, CATL, and BYD , and deeply bind to international leading car companies such as Tesla , Volkswagen , and BMW. 2) Triple high nickelization opens up the lithium hydroxide space. We expect the consumption to be 410,000 tons (excluding NCM-622) by 2025, with a base CAGR of 56% based on 2018. ;3) It is expected that the company's total lithium hydroxide production capacity in 2021 will reach 81,000 tons, surpassing the United States Yabo and ranking first in the world.
battery terminal: the business is progressing steadily, and the vertical ecological chain map is emerging. The traditional battery business is progressing steadily, and the TWS battery production line has been put into production. The wearable device market is vast and the company already has certain first-mover advantages.
profit forecast: The company's net profit attributable to shareholders from 2019 to 2021 is expected to be RMB 48/63/1.05 billion, respectively, -61%/+32%/+68% year-on-year; the corresponding EPS is RMB 0.37/0.49/0.82.
risk warning: supply shrinks less than expected; new energy vehicle sales are lower than expected; inventory sells a large amount of causing the price of lithium salt to be under pressure; production capacity is lower than expected; asset impairment loss risk.
Media | Gao Bowen - Perfect World, Youzu Network
Overall, the game industry has high performance certainty and clear 5G logic, which is mainly contributed by two aspects. One is that the game reserves are sufficient. Tencent's League of Legends, DNF, Tianya Mingyue Dao, and various A-share manufacturers also have a large amount of game reserves. In fact, the games of major manufacturers are mainly online in Q2, and the year-on-year situation in Q1 is better.The second is that the game goes overseas, and domestic games perform well. Tencent's "Call of Duty" has a monthly turnover of US$60 million, setting the best Tencent's overseas results. In addition, Douyin is developing very rapidly overseas and will become an important helper for domestic games to go overseas in the future. Douyin has always been among the top 10 best-selling apps in the United States. On the
5G application, games are the easiest to implement and the fastest commercialization. On the one hand, cloud game will bring new market growth; on the other hand, the industrial chain pattern will be optimized, the application store share will decline, and the CP and capabilities will be improved. We can see that recently, manufacturers such as Huawei Cloud and Migu have actively cooperated with A-share game CP parties.
Perfect World Recommendation Logic
New games performed well and had sufficient game reserves. "New Smiling Proud Wanderer" has been online for 10 days, maintaining the top 10 best-selling level of IOS, and performing outstandingly. In 20 years, games such as "Fantasy New Zhu Xian" will still be launched, and will continue to contribute to performance growth.
is one of the targets with the richest R&D matrix among A-share game companies. In terms of types, it is involved in console games, PC games, mobile games and domestic steam platforms; in terms of categories, in addition to classic IPs such as "Zhu Xian" and "Perfect World", it is also involved in diversified categories such as women's and two-dimensionality. It also benefits from 5G's promotion to the entire industry and the improvement of CP's bargaining power.
film and television business has gradually improved marginally due to policies. The company still has nearly 20 high-quality dramas to make reserves, and its growth is expected.
profit forecast: The company's net profit in 2019-21 is expected to be 2.11 billion, 2.45 billion and 2.81 billion, corresponding to EPS 1.64/1.90/2.17. Corresponding to 20 times of PE in 20 years, we expect that the PE in the gaming industry will reach between 25-30 in the future.
risk warning: game is not as expected online, and the buying cost has increased significantly
Youzu Network Recommendation Logic
old games are stable, and new games perform well. Games such as " Young Three Kingdoms " and " Saint Seiya " are relatively stable. "The Three Kingdoms 2" has been launched less than 3 weeks ago, and the IOS best-selling list has remained at the top 10, with outstanding performance, with a record of 200 million in the first month.
20 has sufficient game reserves and guaranteed performance growth. "Mountain and Sea Mirror Flower" is expected to be launched in 20Q1, "Shao San Zero" is expected to be launched in 20Q1, "Grave Robbers' Chronicles" is launched in the summer, and "Game of Thrones" (Global Server) is launched in 20Q2, etc., and continue to contribute to performance growth.
5G cloud gaming has increased the valuation of the sector, and the company took the lead in cooperating with Huawei Cloud. 5G cloud gaming is expected to improve the market space of the gaming industry and the bargaining power of R&D parties in the long run. Youzu Network has signed a cooperation agreement with Huawei, and the cloud game version of "The Three Kingdoms 2" and " Angel Age " are expected to be launched in the future.
As the game goes online, prepaid accounts are expected to improve. The company has a large number of prepaid accounts, including advertising prepayment, IP authorization funds, etc. With the launch of the new game, advertising consumption and IP authorization funds are amortized, and prepaid accounts are expected to improve.
profit forecast: The company's net profit in 2019-21 is expected to be 1.13 billion, 1.34 billion and 1.56 billion, corresponding to EPS 1.27/1.51/1.76. Corresponding to 15 times the PE in 20 years, we expect the PE in the gaming industry to reach between 25-30 in the future.
Risk warning: The game is not as expected, and the buying cost has increased significantly
Electronics|Fan Zhiyuan— Luxshare Precision, Goertek
Luxshare Precision Recommendation Logic
Apple new phone sales exceed expectations. The company is expected to achieve rapid growth with the increase in share and the double production of Airpods: New phone sales exceeded expectations in 2019, the company's growth momentum was strong, and the share of motors and acoustics continued to increase. As the number of new models of Apple gradually increased, the company's wireless charging and LCP antenna businesses will actively grow. Airpods has strong demand and the company has expanded production vigorously. Currently, Airpods Pro is selling well. The company is the exclusive supplier and is actively benefiting. Airpods will become the company's strong growth driver in the next three years.
Apple is expected to get out of the sluggish with the help of 5G mobile phone in 2020, and the company is actively benefiting: Apple has a large innovation in 2020, and is expected to get out of the sluggish with the help of 5G replacement. The sales outlook for Apple 5G mobile phones in 2020 is optimistic.It is expected that the new Apple phones in the second half of 2020 will support 5G and add new LCP antennas. As the main supplier of Apple mobile phone LCP antennas, the company will actively benefit. The company's motor business increased significantly last year to major customers, and the share and profitability of the acoustic business were also increasing. In the first half of the year, Apple will release iPhone SE2. The company is expected to not be slow in the off-season. It will start stocking up Apple new phones in the third quarter, and its performance is expected to grow rapidly.
is actively deploying Apple Watch and Sip, and is expected to achieve growth relay next year: Currently, the company provides wireless charging reception and transmitting end, watch strap, antenna and other products for Apple in the field of Apple Watch. Next year, it is expected to enter the manufacturing and Sip support of the fifth generation of Apple Watch. In addition to supporting Apple Watch, Sip is expected to be equipped with Airpods in the future. In addition, in the 5G era, Sip will be used more and more Sip, and its performance is expected to continue to grow rapidly.
profit forecast: We expect the net profit from 2019 to 2021 to be RMB 42, RMB 6.5 billion, and RMB 9.1 billion, respectively, with EPS of RMB 0.78/1.21/1.7 yuan, respectively, and the current price (35.19 yuan) corresponds to PE of RMB 44.8/28.9/20.7 times, respectively.
risk warning: Airpods Pro sales do not meet expectations, Apple mobile phone sales do not meet expectations, and 5G mobile phone penetration is lower than expected.
Goertek's recommendation logic
TWS is highly certain, which helps the company's performance reversal in 2019: It is expected that the shipment of TWS for large customers will continue to grow rapidly from 2019 to 2021, and at the same time, the Android customer TWS will begin to increase the volume on a large scale. The company is the core supplier of the whole machine OEM of Airpods. Benefiting from the increase in market share, the shipment growth rate is expected to lead the industry; in the first half of 2019, due to the yield issue, the gross profit margin has been affected. With the significant increase in Q3 yield, the company's Airpods shipment and gross profit margin have further increased. The increase in TWS in the next two years will be the core driving force of the company's overall performance.
acoustic precision components business resumes growth in 2020: In 2020, 5G smartphones are about to increase, and global smartphone shipments will resume growth. At the same time, Android smartphones follow Apple to upgrade acoustic performance (waterproof, dustproof, stereo), and Android acoustic components ASP still has room for improvement. In addition, with the expansion of downstream applications of acoustic components products, the growth rate of demand for MEMS microphones will remain above 10% in the next three years, and the company's precision components business is expected to achieve slight growth from 2020 to 2021.
is optimistic that VR/AR will continue the company's long-term performance: VR/AR, as the most revolutionary product in the post-smartphone era, will usher in new development opportunities in the 5G era, and it is expected that multiple VR products will be released next year and the following year. Since 2016, the company has been the exclusive OEM factory of Sony and Oculus VR glasses, and has long been deeply involved in upstream VR component products. At the same time, in 2018, the company signed an exclusive production partner agreement with WaveOptics, which is in the first echelon of the AR optical waveguide lens field, helping the company establish its leading position in the field of AR glasses OEM. I am optimistic about VR/AR glasses becoming the driving force for the company's long-term development.
valuation and financial forecast: The net profit attributable to shareholders in three years is expected to be RMB 1.289, RMB 2.53 and RMB 3.6 billion, respectively, with EPS of RMB 0.39/0.77/1.1 yuan, and the current price of RMB 19.79 is 49.9, RMB 25.7 and RMB 17.8 times, respectively.
risk warning: TWS sales are lower than expected, the acoustic business is fierce, and the price is declining.
Semiconductor | Zheng Biyu - Changdian Technology
Changdian Technology Recommendation Logic
2020 is the year of Changdian's performance reversal. The main reasons are two: the rebound in the industry's prosperity and the significant improvement in superimposed management. In terms of the prosperity of the
industry, we believe that the growth rate of the domestic logic packaging and testing industry will increase from -1% growth in 2020 to 10%-15%. This is mainly due to the increase in the overall demand for semiconductors, and the transfer of sealing and testing orders for customers like Huawei HiSilicon to the domestic market.
We believe that semiconductor demand will recover in 2020, mainly for several reasons:
is firstly because 5G has driven semiconductor-related demand. The use of semiconductors per 5G mobile phone is more than twice that of 4G mobile phones. We expect 5G mobile phone sales to be 180-220 million next year, and 400 million units in 2021. This will be an important reason for the significant year-on-year growth of the mobile phone semiconductor market in the next few years.
is followed by the recovery of the server market. We judge that this year will be a recession of 8%, and the growth rate will be higher than 10% next year.Since September this year, we have seen a year-on-year increase of more than 30% in Xinhua's leading indicator in the cloud server market. In terms of
storage, we judge that the inventory destocking phase will end in the second half of next year and demand will recover.
and then the closed test order is transferred to the domestic market. HiSilicon's sales revenue was US$7.6 billion in 2018. We believe that revenue is expected to reach US$19 billion by 2023, so the demand for cover orders here will reach US$3 billion. In terms of upstream and packaging and testing capacity utilization rate, the wafer foundry SMIC and Huahong capacity utilization rates are close to full load, and UMC is almost 90%. Since June, the capacity utilization rate of some domestic packaging and testing plants has also approached full load. We believe that this high prosperity can continue next year.
Changdian currently has the top two customers, customer A and Huawei. Customer A will have a new iPhone SE version next year and UWB will be available all year round next year, so we believe that the profitability of the Korean factory will recover very quickly. Then there is Huawei. Now Changdian has taken about 20% of HiSilicon's order share, and we believe it is expected to reach 40% by 2023. Additional investments in fixed assets of Huawei and South Korean factories were also announced this year, so the high growth of orders is also very certain.
The improvement of management layer is a very important reason why we are optimistic about Changdian. The management of Changdian began to complete the change in the second half of this year, and the management team of SMIC began to take over daily management in full. Some important changes are that after they came in, they began to build a large headquarters structure, and took over the investment and personnel authority to the headquarters, and then the integration of the Singapore factory of Xingke Jinpeng is also continuing.
finally shows performance. We believe that in terms of revenue, revenue growth rate will be 15%-20% next year and after the year, and will turn losses into profits this year, and achieve a net profit attributable to shareholders of 500 million next year and 900 million year after the year, and the gross profit margin will increase from 10.8% this year to 15% year after the year.
Conclusion: In the medium and short term dimensions of 1-3 years, we are optimistic about the performance reversal caused by the improvement of industry prosperity and management improvement. In 5-10, we believe that Changdian has the hope of achieving the level of Sun and Moonlight, whether in terms of revenue scale or profitability.
profit forecast: It is estimated that the company's net profit attributable to shareholders in 2019 will be RMB 90 million, RMB 490 million and RMB 820 million, respectively, corresponding to EPS of RMB 0.05, RMB 0.30 and RMB 0.51, respectively. We give the company a 3.0-fold P/B valuation in 2020, with a target price of 25.3 yuan.
risk warning: Sino-US trade friction; industry production capacity expansion too fast; StarKingjinpeng integration is less than expected; TSMC/Intel focuses on advanced packaging; restricted shares are unblocked
