This article comes from: Wang Yang Strategy Research, author: Wang Yang Chen Hao
Abstract& nbsp;
Main points of investment
We believe that Hang Seng Technology has ushered in a turning point and entered the strategic configuration window. The reason is that Hang Seng Technology, represented by the platform economy, ushered in the resonance of valuation floor, policy floor and profit floor.Related companies are Tencent Holdings, Meituan-W, Xiaomi Group-W, Kuaishou-W and so on.
Recently, with the gradual clearing of risks in US stocks, Hang Seng Technology will gradually usher in the turning point and seize the allocation opportunity brought about by short-term fluctuations in US stocks.
1. Bottom of valuation: full adjustment
In terms of the position of Hang Seng Technology:
For one thing, Hang Seng Technology has fallen by 69% since the beginning of 21 years, which is close to the extreme adjustments in history, such as the Nasdaq in 2002, the Shanghai Composite Index in 2008 and the gem in 2015.
Second, the repurchase scale of Hang Seng Technology components has exploded over the past 22 years, far exceeding the level of the same period in previous years.
Third, the price-to-earnings ratio of Hang Seng Technology is 2.3% since July 20, and the price-to-book ratio is 0.7%.
Taking history as a mirror, after the overfall of the NASDAQ in 2002, the Shanghai Composite Index in 2008 and the gem in 2015, the subsequent repair of the index is considerable.
2. Policy bottom: increasingly clear
Since the meeting of the Financial Committee on March 16, the policy bottom of the Internet platform has become increasingly clear, and warm wind has emerged frequently in areas such as platform economy and games, supporting the improvement of industry fundamentals and risk appetite.
On March 16, the meeting of the Financial Committee mentionedWith regard to the economic governance of the platform, the relevant departments should improve the established plan in accordance with the principles of marketization, the rule of law, and internationalization, persist in making progress in the midst of stability, and through standardized, transparent, and predictable supervision, steadily promote and complete the rectification and reform of large platform companies as soon as possible, red lights and green lights should be set up to promote the stable and healthy development of platform economy and improve international competitiveness.
On April 29, the meeting of the political Bureau of the CPC Central Committee mentionedIt is necessary to promote the healthy development of the platform economy, complete the special rectification and reform of the platform economy, implement regular supervision, and introduce specific measures to support the standardized and healthy development of the platform economy.
3. Bottom of profit: gradually emerging
Combined with the point of view of the Internet Group, Hang Seng Technology, represented by the Internet platform, has the highest weight, and its fundamentals may hit bottom in Q2.
On the one hand, with the recovery of the economy and the epidemic, the overall performance will improve; on the other hand, the game industry can look forward to the increment of offshore business, and the e-commerce industry can see a slowdown in competition.
Combined with the Wind consistent profit forecast, Alibaba-SW, Meituan-W, Xiaomi Group-SW, JD.com Group-SW, Baidu Group-SW and other net profit growth all bottomed out in 2021 and improved in 2022 and 2023.
Risk Tips:The epidemic repeatedly exceeded expectations; the conflict between Russia and Ukraine exceeded expectations.
& nbsp; as a whole, we believe that Hang Seng Technology has reached a turning point and entered the strategic configuration window. The reason is that Hang Seng Technology, represented by the platform economy, ushered in the resonance of valuation floor, policy floor and profit floor. Related companies are Tencent Holdings, Meituan-W, Xiaomi Group-W, Kuaishou-W and so on.
Recently, with the gradual clearing of risks in US stocks, Hang Seng Technology will gradually usher in a turning point and seize the allocation opportunities brought about by short-term fluctuations in US stocks.
As far as the position of Hang Seng Technology is concerned, on the one hand, Hang Seng Technology has fallen by 69% since the beginning of 21 years, which is close to the extreme adjustments in history, such as the Nasdaq in 2002, the Shanghai Composite Index in 2008 and the gem in 2015; second, the repurchase scale of Hang Seng Technology components has exploded over the past 22 years, far exceeding the level of the same period in previous years. Third, the price-to-earnings ratio of Hang Seng Technology is 2.3% since July 20, and the price-to-book ratio is 0.7%.
Taking history as a mirror, after the overfall of the NASDAQ in 2002, the Shanghai Composite Index in 2008 and the gem in 2015, the subsequent repair of the index is considerable.
1.1 range of adjustment
Hang Seng Technology has been adjusting continuously since the beginning of 2021, with the largest decline of about 69% during the period.
Taking history as a mirror, the adjustment rate of about 70% is close to the extreme adjustment in history. Specifically, the Nasdaq index fell 78% from March 2000 to October 2002, the Shanghai Composite Index fell 72% from October 2007 to November 2008, and the gem index fell 55% from June 2015 to November 2015.
Further, we find that after the overfall, the index repair is more considerable. Specifically, from October 2002 to January 2004, the Nasdaq repair rose 92% from the bottom, the index rose 103% from November 2008 to August 2009, and the gem index rose 61% from September 2015 to November 2015.
1.2 buy nbsp; buy back a new high
Hang Seng Technology stocks have been heavily repurchased since 2021.In the face of frequent pullbacks in the market since last year, a number of Hang Seng technology stocks began to buy back.
The repurchase scale of Hang Seng Technology components reached an all-time high in 2021. The total amount of repurchases of Hang Seng Technology components in 2021 reached HK $12.6 billion, far exceeding the 2020 level (HK $500m).
Since 2022, the buyback scale of Hang Seng Technology components has exploded again. As of May 12, 2022, the repurchase of Hang Seng Technology shares has reached HK $8.8 billion, far exceeding the level of the same period in previous years and a year-on-year growth rate of 70 per cent.
1.3 roomnbsp; bottom of valuation
The valuation of Hang Seng Technology has bottomed out and the configuration is cost-effective.Judging from the valuations of Hang Seng Technology and the Hang Seng Index: as of May 12, Hang Seng Technology PE (TTM) was at 2.3 per cent since its listing in July 20, while PB was at 0.7 per cent since its listing. The Hang Seng Index PE (TTM) is at 11.1 per cent over the past decade, while PB is at 0.3 per cent over the past decade.
Since the meeting of the Financial Committee on March 16, the policy bottom of the Internet platform has become increasingly clear, and warm wind has emerged frequently in areas such as platform economy and games, supporting the improvement of industry fundamentals and risk appetite.
Platform economy:On March 16, the meeting of the Financial Committee mentionedWith regard to the economic governance of the platform, the relevant departments should improve the established plan in accordance with the principles of marketization, the rule of law and internationalization, persist in making progress in the midst of stability, and through standardized, transparent and predictable supervision, steadily promote and complete the rectification and reform of large platform companies as soon as possible, red lights and green lights should be set up to promote the steady and healthy development of platform economy and improve international competitiveness.On April 29, the meeting of the political Bureau of the CPC Central Committee mentionedIt is necessary to promote the healthy development of the platform economy, complete the special rectification and reform of the platform economy, implement regular supervision, and introduce specific measures to support the healthy development of the platform economy..
Games:Eight months later, the game version approval was launched again, and 45 games such as "Master Potter", "Sand Stone Town time" and "Sword net 3 Origin" were successfully approved on April 11.
Combined with the point of view of the Internet Group, Hang Seng Technology, represented by the Internet platform, has the highest weight, and its fundamentals may hit bottom in Q2.On the one hand, with the recovery of the economy and the epidemic, the overall performance will improve; on the other hand, the game industry can look forward to the increment of offshore business, and the e-commerce industry can see a slowdown in competition.
Combined with Wind consistent profit forecastAlibaba-SW, Meituan-W, Xiaomi Group-SW, JD.com Group-SW, Baidu Group-SW and other net profit growth all bottomed out in 2021 and improved in 2022 and 2023.
one、The epidemic situation repeatedly exceeded expectations.
2. The conflict between Russia and Ukraine exceeded expectations.