20220323-马银证券_香港_-每日港股简评_3页_651kb

Summary of Market Overview and Sector News

Core Content

The Hong Kong stock market experienced a rebound yesterday, driven by the rally in tech stocks. Key highlights include:

• Alibaba-SW (9988 HK) surged over 10% following the announcement of a record USD25b share buy-back program.
• The Hang Seng Index rose 667 points to 21,889, with a daily turnover of HKD140.3b.
• Chinese ADRs gained between 5% and 11% overnight.
• The Hang Seng Index is expected to open approximately 200 points higher today, reaching 22,100 points.

Main Points

Market Trends

• Tech sector led the market recovery.
• Positive sentiment is supported by the anticipated rise in the Hang Seng Index.
• Several companies will release their FY21 results today, including:
  • AAC Tech (2018 HK)
  • China Mobile (941 HK)
  • Geely Auto (175 HK)
  • Haidilao (6862 HK)
  • Tencent (700 HK)

Hong Kong's Latest COVID Policy

• On 21 March, Chief Executive Carrie Lam announced a phased lifting of pandemic control measures.
• First phase (starting April 21): Restaurants can resume dining-in between 6:00 pm and 10:00 pm with a maximum of 4 people per table. Gyms, game centres, beauty salons, massage parlours, religious places, and sports venues will also reopen.
• Second phase: Bars, pubs, party rooms, karaoke parlours, and swimming pools will be allowed to reopen.
• Third phase: Caps in restaurants and bars will be lifted, and operating hours will be extended.
• These changes are expected to positively impact retailers, landlords, and property players.

Key Company Highlights

China Merchants Bank (3968 HK)

• 4Q21 net profit reached RMB26.3b (+27% YoY).
• Driven by lower provisions (-19% YoY) and non-interest income growth (+18% YoY).
• Net interest income increased 15% YoY, with NIM stable at 2.48%.
• Key positives:
  1. Modest recovery in NIM.
  2. Improved asset quality with NPL/coverage ratio at 0.91%/483.9%.
  3. Strong growth in non-interest income (asset management, wealth management, and custodian fees).
• The strong results are expected to support its share price near the 10-day moving average (c. HKD58) in the short term.

CR Cement (1313 HK)

• 2021 revenue rose 9.7% YoY, in line with expectations.
• Net profit fell 13.3% YoY to HKD7.7b, missing market expectations.
• The miss was due to higher production costs.
• Unit production costs surged to HKD347 per ton in 4Q21.
• Unit raw material costs increased 26% YoY due to environmental regulations.
• Post-results, market cut earnings estimates for 2022/23E due to cost pressures.

China Power Int'l (2380 HK)

• Recorded a net loss of RMB516m, in line with previous profit warnings.
• Thermal power segment had a net loss of RMB2.1b.
• Solar and wind power segment saw a 51% increase in net profit to RMB1.8b.
• The company will not seek a spin-off of its renewable segment.
• Potential A-share listing is under further study.
• Employee incentive scheme is pending government approval.
• 2022E plans include accelerating renewable energy development, targeting 7GW of new capacity with greenfield projects.
• Total capex for renewable capacity expansion is estimated at RMB36b.

Li Ning (2331 HK)

• FY21 profit beat expectations with sales and net profit growing 56% and 136% YoY, respectively.
• Gross profit margin (GPM) expanded to 53.0%, and net profit margin (NPM) reached 17.8%, surpassing Anta's (2020 HK) NPM in the past three years.
• 1Q22 sales growth for the offline channel was strong, in the range of 30%-40%, but slowed to mid-teen % after recent lockdowns.
• FY22 sales growth is expected to be in the high-teens to low-twenty % range, which is seen as conservative due to pandemic uncertainties.
• Analysts remain positive about Li Ning, citing strong earnings visibility and resilient performance in a challenging macro environment.

Disclaimer

This document is a general market commentary and not an investment recommendation. It is prepared for information purposes only. The information is based on data from recognized sources but is not independently verified. MIB (HK) does not take responsibility for any reliance on this content. There may be risks associated with international investments, and MIB (HK) recommends consulting a financial advisor for personalized advice.