The 10 most optimistic stocks among institutions on Monday
Changan Automobile
UNI-K sales continue to climb, and "Avita" is gradually approaching
Event Overview
The company released June 2021 sales: June sales totaled 173,000 vehicles, year-on-year -11.0%, January-June cumulative sales 1.2008 million vehicles, cumulative year-on-year + 44.5%; June production totaled 165,000 vehicles, year-on-year -15.1%, January-June cumulative production 1.127 million vehicles, cumulative year-on-year 37.5%.
Analysis and judgment:
Independent growth slows down, Ford improves month-on-month
The company’s sales volume in June was 173,040 units, + 22.2%/-11.0% year-on-year and -6.2% month-on-month. We judge that the quarter-on-month decline was mainly affected by the lack of cores. It is expected that with the impact of the lack of cores beginning to ease in the third quarter, the company’s sales growth rate is expected to pick up; the cumulative sales volume from January to June was 12.08 million units, + 45.5%/+ 44.5% year-on-year in 19/20. The data of the Passenger Federation shows that the year-on-year growth rate of wholesale sales of narrow passenger cars in June was -5.1%, and the company’s sales growth rate was weaker than the market average. By brand:
1) Self-owned brands (Chongqing + Hebei + Hefei, the same below): June sales of 91,871 units, + 33.5%/+ 0.4% year-on-year in 19/20, -11.2% month-on-month; January-June cumulative sales of 701,926 units, + 79.1%/+ 67.0% year-on-year in 19/20.
2) Ford: Sales of 21,752 vehicles in June, + 34.7%/-1.7% year-on-year in 19/20 and + 11.7% month-on-month. We judge that the improvement in the month-on-month was mainly due to the increase in the contribution of the re-listing of the Ferrez model. From January to June, the cumulative sales volume was 120,994 vehicles, + 61.0%/+ 24.2% year-on-year in 19/20.
3) Mazda: June sales were 10,068 units, + 4.4%/-20.2% year-on-year and + 4.4% month-on-month; January-June cumulative sales were 60,330 units, -1.4%/+ 7.7% year-on-year.
The proportion of independent sales in June was 53.1%, -3.0pct month-on-month, mainly due to the monthly decline in sales of independent brands; Ford’s June sales proportion was 12.6%, + 2.0pct month-on-month. It is expected that with the improvement of product structure and high gross profit brought by the launch of new cars, it will contribute important increments in the future.
Investment advice
The bottom of the passenger car industry cycle drives demand to pick up, and the company’s strategic focus on two core assets of autonomy + joint venture is expected to fully benefit. Among them, 1) Changan independence, the product cycle will rise in volume and price; 2) Changan Ford bottom will rise, and the margin will improve. At the same time, the CHN architecture and high-end electric intelligent new brand jointly built by the company with Huawei and () are expected to achieve rapid progress for the company in the development of intelligence and electrification. We maintain the profit forecast unchanged: it is expected that the company’s revenue in 2021-2023 will be 928.14/1022/113.506 billion yuan, the net profit attributable to the parent will be 53.92/60 25/65.94 million yuan, and the EPS will be 0.71/0 79/0.87 yuan. The PE corresponding to the current stock price is 29/26/23 times, maintaining the buy rating.
Risk warning
Downside risks in the auto market; sales of old models are declining, and sales of new models are not up to expectations; cost reduction and control fees are not up to expectations; Changan Ford’s strategic adjustment effect is not up to expectations; Avita brand development is lower than expected.
ZTE
2021 H1 performance forecast Comments: Performance exceeds expectations, endogenous changes are born into the sun
Upgrade the performance forecast and maintain the overweight rating. Based on the consideration of gross profit margin and share, we slightly raise the company’s net profit forecast for 2021-2023 to 6.513 billion yuan (+ 7.5%), 8.181 billion yuan (+ 2.1%) and 10.261 billion yuan (+ 4.7%), corresponding to EPS of 1.41 yuan, 1.77 yuan and 2.22 yuan respectively. Considering the compounded growth rate of the company’s net profit in the next three years, give the PE of 30x in 2021, and lower the target price to 42.3 yuan (-7.7%), maintaining the overweight rating unchanged.
The company announced that the net profit of H1 in 2021 is expected to be 3.80 billion yuan – 4.30 billion yuan, an increase of 104.6% -131.5%. According to the median, the net profit in the single quarter of 2021Q2 is nearly 2 billion yuan, which is expected to hit a new high in operating profit. The main reasons for the high net profit growth are: 1) the company optimizes the market structure, and it is expected that the three business lines will have good revenue growth; 2) its own management and R & D capacity enhancement brings about continuous recovery and improvement of gross profit margin; 3) the transfer of up to 90% of ZTE’s equity, confirming the pre-tax profit of about 800 million yuan; the overall performance exceeds market expectations.
5G scale procurement via bidding started, and the company’s various businesses were born into the sun. Recently, domestic operators’ 5G scale procurement via bidding started, and the investment in 2021 showed the characteristics of low before and high after, which better supported the high growth of the annual performance. At the same time, based on the core competitiveness of the company’s chips, algorithms, architectures, databases, etc., it has laid the foundation for business expansion in 5G industry applications, enterprise digitalization, automotive electronics and other fields. The three business lines of operators, government and enterprises and consumers will be further expanded.
Endogenous changes are obvious, moving towards high-quality development. The company has strong competitive product advantages under continuous R & D investment, superimposed supply chain, operation and management improvement, gross profit margin and net profit margin will increase, profitability will continue to increase, and it has been on the track of high-quality growth.
Risk warning: The epidemic has led to unclear investment by overseas operators and the risk of Sino-US trade friction.
Fuman Electronics
Rising platform IC star
The main business is growing rapidly, and the new product categories are constantly expanding: the company currently has more than 1,000 kinds of various IC products, and continues to enrich the product line. The company takes the lead in card position small pitch & MiniLED driver chip high-quality track, fast charging chip layout is leading, power management chip product line is rich, and actively layout in the field of radio frequency IC, with power management chip design, packaging and testing integrated supply capabilities. The company conducts strategic layout in the two aspects of core product depth development and industrial chain breadth extension, and gradually transforms from a single chip provider to a platform-based analog IC solution service provider. The future growth space is broad. Quarter 1, 2021, thanks to the company’s new product superposition and production, the sales volume and price of mature market products have risen simultaneously, the company’s performance has achieved rapid growth, and its profitability has been greatly improved.
LED driver chips are booming, and the company’s products are accelerating in volume: small-pitch LED displays have reached the sweet spot of price, which has significantly stimulated the application demand in related scenarios, and the product has penetrated rapidly. At the same time, under the trend of small-pitch LED displays, with the narrowing of the lamp bead spacing, the number of display driver chips used per unit area has increased exponentially. In the current semiconductor price surge, LED lighting driver chips are not sensitive to price at the end point app store due to their low price base, so there is a large room for price increase. Superimposed with a large amount of chips, it is expected to contribute considerable revenue growth to relevant LED lighting driver chip manufacturers. The company’s LED driver chip layout is perfect, and the technical competitiveness is strong, which can meet the diverse application needs of downstream. The company is the first to break through in the field of small pitch LED display driver chips with a pitch of 1~ 0.3mm, and relies on the comprehensive competitive advantages of technological innovation, product quality, cost performance and the ** to quickly occupy the relevant market, accumulating (), Chau Ming, () and other high-quality customer resources, is expected to continue to increase market share.
The fast charging market is accelerating its expansion, and the company continues to expand its high-end customers & applications: The fast charging market is in the stage of accelerated expansion, the industry’s prosperity continues to improve, and the potential app store volume is very considerable. The company has a complete fast charging IC solution, and the PD protocol chip has strong competitiveness. The company vigorously promotes the update of fast charging technology, strengthens its technological leadership and product competitiveness, and the fast charging chip continues to expand to high-end customers such as Aoji and Aohai and high-end applications such as standard power supplies, highlighting its market dominance.
The RF domestic replacement space is vast, and the company actively plans to open up a new growth space: the RF front-end chip market is booming, and the domestic replacement space is vast. The company vigorously deploys the RF IC field, and the RF switch and RF PA have been successfully mass-produced. By increasing the production capacity of 5G RF chips, promoting the R & D and upgrading of RF chips, and expanding to the 5G RF chip fields such as SAW filters, LTCC products, and WiFiFEM through endogenous epitaxy acceleration, it is expected to open up a new growth space.
Profit forecast and investment rating: We maintain the company’s 2021-2023 operating income forecast of 24.11/35 billion yuan, yoy + 188.4%/45.8%/35.1%, maintain the company’s 2021-2023 net profit forecast of 10.11/14 billion yuan, yoy + 906.3%/39.4%/29.3%, and achieve EPS of 4.93/6 88/8.89 yuan, corresponding to 30/22/17 times PE. Considering that the company’s product categories and app stores in the LED driver IC/power management IC/RF IC market are expected to continue to expand, referring to the average PE (62 times) of comparable companies in 2021, give the company 62 times the target PE in 2021, the target price is 305.66 yuan, and the target market value is 62.682 billion yuan, and maintain the "buy" rating.
Risk warning: market demand is not as expected; new product launches are not as expected; customer development is not as expected.