中国A股会议总结：前景光明但海外需求面临风险

1、Equity Research Asia Pacific | ChinaChina Market StrategyChina A-share conference wrap-up: Brighter outlook but overseas demand at riskStrategy | StrategyFigure 1: Management tone in A-share conference corporate meetings7%214%Positiv Cautiously positive Neutral to positiveNeutral0%10%20%30%40%50%Sou

2、rce: Company data, Credit Suisse estimates; Note: as of aggregate market capitalization. Among the 60-plus companies that attended our China A-share conference, 37 were under our coverage. Companies from technology, industrials, consumer and auto sectors dominated. In terms of market capitalisation,

3、 technology, bank, consumer and industrials were better represented. A majority of corporates (57% in terms of aggregate market capitalisation) held a positive tone, with 7% and 22% cautiously positive and neutral/positive tone, respectively, and the remaining 14% holding a neutral tone. About half

4、of the companies anticipate an improvement in 2Q20 vs 1Q20, with 30% expecting worse performance in 2Q20 and the remaining 17% expecting no change. Technology is one of the most important sectors driving the improvement, accounting for about 55% of total market capitalisation; 9 out of 12 companies

5、that attended see a better 2Q than 1Q. Outlook appears even better into 2H20. 75% companies believe in a bright outlook with business improvement into 2H20, with only 3% anticipating deterioration. Technology companies looked relatively more conservative, given their exposure to overseas demand. Bas

6、ed on corporate feedback, 2% of the companies based on market capitalisation have already returned to the pre-outbreak level in 1Q20. Almost half of them will likely achieve full recovery to the pre-outbreak level in 2Q20, while 11% and 16% considered 3Q20 and 4Q20 more likely, respectively. Within

7、all sectors, travel companies are on track to recovery but gradually, expecting a full recovery into next year. Overseas demand (59% of total) is the most frequently mentioned risk by corporates as a result of potentially worse global recession for longer, well above domestic risk (18%) and competit

8、ion (19%). Product risk is also one important factor for pharma companies. We favour BYD, Weichai Power, CMB, Lens Tech, FII, BOE, Hans Laser, Sany, Zoomlion, Yantai Jereh and CITS. Salubris and LONGi are the least preferred. We like Weichai Power, Zoomlion and Sany due to Chinese governments massiv

9、e fiscal measures and accommodative monetary policy. FII should benefit from 5G/cloud infrastructure build. Hans Laser has attractive risk/reward.Research AnalystsEdmond Huang852 2101 6701 HYPERLINK mailto:edmond.huang edmond.huangContributing analystsBin Wang Horace Tse Yang Luo Pauline Chen Tony W

10、ang Kyna Wong Zhao Zhang Ivy JiHu Shen Gary ZhouChaolien Tseng Fei Zheng Jason LiuNick Li Wenting Yu Daniel CuiDISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse

11、 does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that couldFocus charts and tableFigure 2: Expectation of business in 2Q20 vs 1Q20 (as of aggregate market cap of companies)Figure 3: Exp

12、ectation of outlook in 2H20 vs 1H20 (as of aggregate market cap of companies)Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesFigure 4: Which quarter to fully recover to pre-outbreak level? (as of aggregate market cap of companies)Figure 5: Distribution of th

13、e biggest risk factors (as of aggregate market cap of companies)Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesFigure 6: Stock pick tableTickerCompany nameSectorRatingTPUpsideMarket cap (bn)2020PE2021PE2020 EPSgrowth2021 EPSgrowth2020PB2020ROE2020DYMost fav

14、orable002594.SZBYDAutoO80.039%145.267.962.144%9%2.74%0%000338.SZWeichai PowerAutoO18.027%111.510.811.723%-7%2.120%3%600036.SSCMBBankO42.022%866.08.57.512%13%1.316%4%002353.SZYantai JerehEnergyO34.028%25.516.614.913%11%2.314%1%600031.SSSanyIndustrialsO24.118%171.312.311.833%5%3.226%3%000157.SZZoomlio

15、nIndustrialsO9.740%54.011.610.46%12%1.412%4%000725.SZBOETechO4.926%132.131.417.9125%75%1.55%0%601138.SSFIITechO17.020%281.515.713.8-3%na2.818%1%002008.SZHans LaserTechO38.418%34.824.619.2120%28%3.614%1%300433.SZLensTechTechO26.342%81.521.217.544%21%3.115%0%601888.SSCITSTravelO105.017%175.756.327.1-3

16、3%108%8.114%1%Least favorable002294.SZSalubrisHealthcareU16.1-18%20.431.120.5-9%52%2.89%2%601012.SSLONGiUtilitiesU25.0-22%120.920.317.48%na3.718%1%Source: Company data, Refinitiv Datastream, Credit Suisse Equity ResearchChina A share conference wrap-up: Brighter outlook but overseas demand at riskAm

17、ong the 60-plus companies which attended our China A share conference company meetings, 37 are under our coverage. Companies from technology, industrials, consumer and auto sectors dominated. In terms of market capitalisation, technology, bank, consumer and industrials were better represented.Outloo

18、k improving for 2Q and 2HA majority of corporates (57% in terms of aggregate market capitalization) held a positive tone, with 7% and 22% of companies cautiously positive and neutral to positive tone, respectively, based on attending companies comments during the corporate meetings. The remaining 14

19、% held a neutral tone during the meeting. On an aggregate market capitalisation basis, about half of the companies expect an improvement in 2Q20 vs 1Q20. There are still 30% of the companies expecting worse performance in 2Q20, with the remaining 17% expecting the situation to remain the same as 1Q2

20、0. Technology is one of the most important sectors driving the improvement, accounting for about 55% of total market capitalisation; 9 out of the 12 companies in this sector foresee a better 2Q than 1Q, implying a relatively faster business recovery. Looking into 2H20, the outlook appears even bette

21、r, according to managements feedback. In terms of market capitalisation, 75% believe in a bright outlook with business improvement into 2H20, while only 3% think their business may deteriorate compared with 1H20. Technology companies were relatively more conservative given their exposure to overseas

22、 demand.Half of the companies could fully recover in 2Q20Based on corporate feedback, 2% of the companies on market capitalisation basis have already returned to the pre-outbreak level in 1Q20. Almost half of them will likely achieve a full recovery to the pre-outbreak level in 2Q20, while 11% and 1

23、6% consider 3Q20 or 4Q20 more likely, respectively. Within all sectors, travel companies are on track to recovery but gradually, expecting a full recovery into next year.Overseas demand as the biggest risk to corporatesGiven so many uncertainties domestically and globally, overseas demand was the mo

24、st frequently mentioned risk that corporates are facing now, well above domestic demand and competition. In terms of aggregate market capitalisation, overseas demand was the top concern for companies that attended, with nearly 60% facing potential downside in overseas demand as a result of potential

25、ly worse global recession for longer. Competition came second at 19%, along with domestic demand at 18%. Product risk was also one important factor for pharma companies.Sector comments and stock callsWe favour BYD, Weichai Power, CMB, Lens Tech, FII, BOE, Hans Laser, Sany, Zoomlion, Yantai Jereh and

26、 CITS. Salubris and LONGi are the least preferred.We like Weichai power, Zoomlion and Sany due to the Chinese governments massive fiscal measures and accommodative monetary policy. We like Lens given its leadership in glass casing and content gain. We also favor BOE due to panel cycle likely picking

27、 up in 2H. FII should benefit from 5G/cloud infrastructure build despite some downside risk for iPhone demand in 2H. Hans Laser has attractive risk/reward and low market expectation. We retain our UNDERPERFORM rating on Salubris as the companys 2020 earnings would face even more pressure from GPO im

28、plementation and its transformation from generic to innovative drug producer is unlikely to deliver positive impact until 2022/23.Outlook improving for 2Q and 2HAmong the 60-plus companies which attended our A share conference company meetings, 37 are under our coverage. The key topics widely discus

29、sed during the company meetings include the business outlook in 2Q20 and 2H20, expected timeline for full recovery, as well as the biggest risks the companies are facing. Based on the feedback from listing companies that attended and our sector analysts, we summarised the business outlook of the 37

30、companies within our coverage. Within the attending companies under our coverage, technology, industrials, consumer and auto dominated. In terms of market capitalisation, technology, bank, consumer and industrials were better represented.Figure 7: Sector distribution of attending companies (as of nu

31、mber of companies)Figure 8: Sector distribution of attending companies (as of aggregate market capitalization)Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesExpecting better 2Q20 vs 1Q20Based on attending companies comments during corporate meetings, we fou

32、nd a majority of corporates (57%) held a positive tone, with 7% and 22% of companies cautiously positive and neutral to positive tone, respectively (in terms of aggregate market capitalisation). The remaining 14%, however, held a neutral tone during the meetings. The distribution as of number of com

33、panies is a bit different, with 71% expressing positive tone and 24% holding neutral tone.Looking into sectors, management in industrials, utilities and energy were relatively optimistic, with 100% in positive tone. Travel companies are tracking a gradual recovery compared with other sectors, with 9

34、6% of them striking a positive tone. Meanwhile, attending companies in materials and healthcare were more conservative, with a relatively higher portion of neutral tone.Figure 9: Management tone at corporate meetings (as of aggregate market capitalization)Figure 10: Management tone at corporate meet

35、ings (as of number of companies)Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesOn an aggregate market capitalisation basis, about half of the companies expect an improvement in 2Q20 compared with 1Q20, while still 30% expect worse performance in the second

36、quarter. The remaining 17% expect the condition to l likely remain the same as 1Q20.Technology is one of the most important sectors driving improvement, accounting for about 55% of total market capitalisation; 9 out of the 12 companies in this sector foresee a better 2Q than 1Q, implying a relativel

37、y faster business recovery.As regards to the number of companies, 67% of companies will likely have better performance and nearly 20% may see worse performance in the second half. Compared to the distribution based on market capitalisation, it implies that more companies with smaller size have more

38、optimistic view at least in the short term.Figure 11: Expectation of business in 2Q20 vs 1Q20 (as of aggregate market cap of companies)Figure 12: Expectation of business in 2Q20 vs 1Q20 (as of number of companies)Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estima

39、tesMore improvement in 2H20 vs 1H20When we look into 2H20, the outlook appears even better, according to management feedback. In terms of market capitalisation, 75% believe in a brighter outlook with business improvement into the second half, while only 3% think their business may deteriorate compar

40、ed with 1H20. The remaining 22% expect a flat 2H20 versus 1H20.In the technology sector, the percentage of companies expecting a brighter outlook in the second half is 49%, lower than the overall universe at 75% and also slightly lower the sectorspercentage of better outlook in 2Q at 55%. This indic

41、ates that technology companies are more likely to be affected by uncertainties in global demand as the global virus outbreak will likely bring more visible impact starting in 2H20. The situation is quite similar when we summarise based on number of companies.Figure 13: Expectation of outlook in 2H20

42、 vs 1H20 (as of aggregate market cap of companies)Figure 14: Expectation of outlook in 2H20 vs 1H20 (as of number of companies)Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesHalf of the companies could fully recover in 2Q20Based on corporate feedback, 2% of

43、 the companies on market capitalisation basis have already returned to the pre-outbreak level in 1Q20. Almost a half will likely experience a full recovery to the pre-outbreak level in 2Q20, while 11% consider 3Q20 more likely, followed by 16% aiming at 4Q20. Industrial companies expect to see relat

44、ively faster recovery compared with corporates from other sectors, with nearly 83% likely to be back to normal in the second quarter. Auto sector is also resilient, with 75% of attending companies to fully recover in 2Q20. For technology names, nearly 45% are forecast to be fully back to normal leve

45、l in 2Q20.Among all the attending companies, materials, energy and travel sectors are expected to undergo a longer period before full recovery back to the pre-outbreak level. 60% of consumer names will likely resume full business level in 3Q20. Energy names need more time to fully recover, with half

46、 of them expecting the most probable time as next year. Travel companies are on track to recovery but gradually, expecting a full recovery into next year.Figure 15: Which quarter to fully recover to pre-outbreak level? (as of aggregate market cap of companies)Figure 16: Which quarter to fully recove

47、r to pre-outbreak level? (as of number of companies)Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesFigure 17: Distribution within sector: which quarter to fully recover to pre-outbreak level?Source: Company data, Credit Suisse estimates; Note: as of number

48、of companiesOverseas demand as the biggest risks to corporatesGiven so many uncertainties domestically and globally, overseas demand was the most mentioned risk that corporates are facing now, well above domestic risk and competition. We identified the biggest risk factors based on management feedba

49、ck and found that the risk factors generally fell into five categories: (1) overseas demand, (2) domestic demand,competition, (4) supply chain, and (5) product risk. In terms of aggregate market capitalisation, overseas demand was the top concern for attending companies, with nearly 60% facing poten

50、tial downside in overseas demand while virus combat measures in some overseas regions still have a long way to go. Competition came second at 19%, followed by domestic demand at 18%. 3% of attending companies had concerns over supply chain, mainly on the supply of components from overseas. Product r

51、isk was also one important factor for pharma companies.The distribution based on number of companies is similar, except that domestic demand ranked second ahead of competition, indicating that more small companies were worried about domestic demand.Figure 18: Distribution of the biggest risk factors

52、 (as of aggregate market cap of companies)Figure 19: Distribution of the biggest risk factors (as of number of companies)Source: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesOn a sector level, the major risk factor for auto names was overseas demand, with managem

53、ents of 75% attending companies regarding it as the top risk. Within the technology sector, out of the 12 companies in total, 8 considered overseas demand as one of the biggest risks; domestic demand was also mentioned by 8 companies. Competition and supply chain risk also drew attention, both highl

54、ighted by 2 companies. For the consumer sector (mainly home appliance names), competition factor was considered as the biggest concern, with 60% of attending companies concerned about the intensifying competition. The concern over demand for consumer sector lay in the overseas aspect, as the remaini

55、ng 40% of the attending companies pointed to overseas demand as the biggest risk. Industrial names also regarded demand as a major risk, as half of them selected domestic demand and 33% picked overseas demand as biggest risks.Figure 20: Summary of attending listcosTickerCompany nameSectorManagementB

56、usiness in Outlook in 2H20 Expected timeBiggest riskstone2Q20 (vs1Q20)(vs 1H20)of full recovery to pre-outbreak level002594.SZBYDAutoPositiveBetterImprove2Q20Overseas demand000625.SZChangan AutoAutoPositiveBetterImprove2Q20Supply chain600699.SSNJECAutoNeutralWorseImproveNext yearOverseas demand00033

57、8.SZWeichai PowerAutoPositiveBetterFlat2Q20Overseas demand600036.SSCMBBankNeutral to positiveWorseImprove2Q20Asset quality000001.SZPABBankN/AWorseImprove2Q20Asset quality600690.SSHaier Smart HomeConsumerPositiveSameImproveNext yearOverseas demand002242.SZJoyoungConsumerPositiveBetterImprove3Q20Compe

58、tition000333.SZMideaConsumerPositiveBetterImprove4Q20Overseas demand002508.SZRobamConsumerNeutralBetterImprove3Q20Competition601933.SSYH SuperstoresConsumerN/ASameDeteriorate3Q20Competition600309.SSWanhua ChemicalEnergyN/ABetterImproveNext yearOverseas demand002353.SZYantai JerehEnergyPositiveBetter

59、Improve3Q20Domestic demand000999.SZCR SanjiuHealthcarePositiveSameFlat3Q20Domestic demand002294.SZSalubrisHealthcareNeutralWorseImprove3Q20Product risk300012.SZCTIIndustrialsPositiveBetterImprove2Q20Domestic demand601100.SSHengliIndustrialsPositiveBetterFlat2Q20Domestic demand300124.SZInovanceIndust

60、rialsPositiveBetterFlat2Q20Overseas demand002050.SZSanhuaIndustrialsPositiveSameImprove4Q20Overseas demand600031.SSSanyIndustrialsPositiveBetterFlat2Q20Domestic demand000157.SZZoomlionIndustrialsPositiveBetterFlat2Q20Competition600019.SSBaosteelMaterialsNeutralSameImproveNext yearOverseas demand0007