Phillip Securities Group
Please note that the Day Light Saving of Europe and US will be effective on April 1st and March 11th respectively. The trading hours for those relevant contracts will be 1 hour earlier. Any questions, please contact us at 22776677.For details, please visit our foreign futures website or contact us at 22776677.Moreover,the spread of USD/JPY is low as one pip.Please click here for details
 
  Phillip Investor Notes

31-03-2020(Tue) 30-03-2020(Mon) 27-03-2020(Fri) 26-03-2020(Thu) 25-03-2020(Wed)
Page : 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 |
Investor Notes - Phillip Securities (HK) Ltd
Past Investor Notes  
Phillip Home Send to Friends Free Subscription Give Comments ¤¤¤åª©
29 Jan, 2020 (Wednesday)

            
NISSIN FOODS(1475)
Analysis¡G
Nissan Foods (1475) announced that it will form a joint venture company which in turn will establish a wholly foreign-owned enterprise (WFOE) in Shanghai . The JV Company and the PRC WFOE will engage in import and sale of Japanese brand food and beverage products in the PRC, and target to commence the business in Shanghai by second quarter of 2020. The Board believes that the foregoing joint venture arrangements would enable the Group to provide further diversified products to satisfy customers` increasing demand for Japanese brand food and beverage products in the PRC, including Shanghai and other first tier cities in the PRC. (I do not hold the above stock)
Strategy¡G
Buy-in Price: $5.90, Target Price: $7.00, Cut Loss Price: $5.45


SH PHARMA(2607)
Analysis¡G
In the pharmaceutical manufacturing sector, the company focuses on key products and continuously increases its market share, such as tanshinone IIA sodium sulfonate injection. From January to September 2019, it realized sales revenue of RMB 1.14 billion, a YoY increase of 76.39%. According to the life cycle of different products, the company has formulated a differentiated terminal strategy, and the promotion effect is significant. In addition, the company continued to accelerate innovation transformation. From January to September 2019, R & D expenditure was RMB 860 million, an increase of 13.74% YoY; 73 invention patent applications were completed, 24 invention patent authorizations, and 20 utility model authorizations, totaling 117 patents. On September 17, the company signed a joint venture agreement with BIOCAD, the largest biopharmaceutical company in Russia, to introduce adalimumab biosimilars, trastuzumab biosimilars, bevacizumab biosimilars, and PD-1 products. Permanent and exclusive R & D, production, sales and other commercialization rights of the six blockbuster biopharmaceuticals in Greater China, including the joint venture company, will be the sole platform for BIOCAD in Greater China.
Strategy¡G
Buy-in Price: $14.50, Target Price: $16.00, Cut Loss Price: $14.00



GWM (2333.HK) - Inventory Reduction Led to Considerable Sales Decline in the End Month

Investment Summary

Inventory Reduction Led to Considerable Sales Decline in the End Month

GWM (Great Wall Motor) released the sales data of December, with wholesale sales of 106,000 vehicles, decreasing 21% yoy and 8% mom. The total annual sales volume was 1.06 million vehicles, up 0.7% yoy.

The main reasons for the yoy decline in sales in December: 1) according to the usual practice, the company needs create a more favourable inventory environment for the coming year and actively control the pace of wholesale; 2) at the same time, as the spring festival comes earlier this year, the timing for inventory reduction will also be moved up. Seeing from the terminal retail, the demand for the company's products is still relatively strong, with retail sales of about 112,000 vehicles in December, up 7.5% yoy and a strong mom growth of 47.7%, which is far better than the decrease of 5.4% yoy and 35% mom growth of the industry as a whole.

Key Models Remained Robust

Key models continued to maintain steady growth, with sales of H6/M6/F7 of about 42,000/19,000/10,000, respectively, up -17%/26%/-6.4% yoy. Since the launch of the 2019 M6 in the third quarter, its sales volume has continued to rise, approaching 20,000 vehicles at the end of the year. 770,000 Haval models were sold in the whole year, the same as that of the previous year. 9,394 vehicles WEY models were sold, with cumulative sales of 100,000 vehicles for the year, down 28%. Great Wall Pao, the high-end pickup truck brand that was launched in October continued to climb steadily, with sales of 6,259/7,020 vehicles in the following two months after launch, driving the sales of pickup trucks up by 7.85% to 149,000 vehicles throughout the year. We believe that the pressure on the downward movement of the vehicle structure in the cold cycle environment of the car market will be partially offset by the scale benefit of stabilizing sales volume. It is expected that the company's bicycle profit will show a yoy flat trend in the fourth quarter and a slight decline from the previous quarter.

Products and Channels Enhanced to Promote Domestic and Overseas Market Footprint

At the beginning of 2019, GWM released Haval µì" globalized strategy. It planned to spend five years to achieve annual sales of 2 million vehicles, making Haval the world's leading professional SUV brand. At present, the annual sales volume of 770,000 Haval models means that the compound annual growth rate in the next five years will reach 21%. Considering that the domestic SUV industry has entered the red ocean market, the process of overseas market footprint is expected to accelerate. Haval already has established overseas KD assembly plants in Malaysia, Ecuador, Tunisia and Bulgaria. Besides, a complete vehicle manufacturing plant in Tula, Russia has been completed, with an annual output of 80,000 vehicles in the first phase and 150,000 vehicles in the second phase. This will expand Haval's sales in Russia as well as the eastern European market. Recently, GWM signed an agreement with General Motors to acquire the latter's Tarigan plant in India that has an annual output of 165,000 complete vehicles and 160,000 power assemblies. India's auto market is still in its growing phase, with a total sales volume of 4.4 million vehicles in 2018, a CAGR of about 8% in the past decade and a population of only 22 vehicles per 1,000 inhabitants. There is huge room for future development.

In addition, the Spotlight Automotive, a joint venture with BMW, is nearly built and is expected to commission in 2022. The brand will be producing MINI fuel-fired cars for export and engaging in research and development of pure electric cars.

In terms of new products, when the new platform of GWM is put into production in the second half of 2020, it will make up for the weaknesses of the company's lightweight products and provide a stronger engine power distribution system. We are looking forward to the launch of two new SUV models built on this platform. New energy brand Ora will also launch a new electric vehicle R2. The first hydrogen fuel cell vehicle is expected to be officially launched in 2022.

Investment Thesis

In terms of valuation, we adjust our target price to HK$6.45, equivalent to 11.7/10.3/8.7x P/E and 1.0/0.9/0.9x P/B ratio in 2019/2020/2021. We give the rating of ¡§Accumulate¡¨. (Closing price as at 20 January)

Risk

New vehicle sales fall short of expectations

The SUV market dramatically worsens

The progress of new energy vehicle project is poorer than expectations

Financials

Click Here for PDF format...




Recommendation on 29-1-2020
RecommendationAccumulate
Price on Recommendation Date$ 5.970
Suggested purchase priceN/A
Target Price$ 6.450
Writer Info
Zhang Jing
(Research Analyst)
Tel: (+86 21 51699400-103)
Email:
zhangjing@phillip.com.cn

Local Index
       Index    Change   Change%

World Index
       Index    Change   Change%
  

A-H spread
Stock Code H share
Price
A share
Price
H share
discount


Oversea Research Reports


Investment Service Centre



Enquiry : 2277 6666 OR investornotes@phillip.com.hk
If you cannot read this e-mail in the proper format, please click here to view the web version.

Information contained herein is based on sources that Phillip Securities (Hong Kong) Limited and/or its affiliates ( the ¡§Group¡¨) believe to be accurate. The Group does not bear responsibility for any loss occasioned by reliance placed upon the contents hereof. The Group (or its employees) may have interests in relevant investment products. For details of different products¡¦ risks, please view the Risk Disclosures Statement on http://www.phillip.com.hk.

If you DO NOT wish to receive further marketing emails from us, please click HERE to opt-out.

ª©Åv©Ò¦³¡A ½¦L¥²¨s¡C

Copyright(C) 2020 Phillip Securities (HK) Ltd. All Rights Reserved.


Copyright © 2011 Phillip Securities Group. All Rights Reserved [ Risk Disclosures Statement ] [ Terms and Conditions ] [ Personal Data Policy ]