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YITAI COAL(3948)
Analysis：
Yitai Coal (3948) is a large-scale clean energy enterprise integrating railway and coal-related chemical industry with coal production, transportation and sales as the basis. As the largest local coal enterprise in Inner Mongolia, the Company directly owns and controls 9 coal mines in total. Its coal products are typical“environmental-friendly”and high-quality thermal coal, and have the advantages of medium to high calorific value, medium to low ash content, ultra-low sulphur content, ultra-low phosphorous content, and low moisture content. They are the best types of coal among the large-scale coalfield development in China. According to its positive profit alert, the Group expects that the net profit attributable to the shareholders of the Company for the six months ended 30 June 2022 will be approximately RMB7.03 billion, a year-on-year increase of approximately 167% as compared with the corresponding figures for the six months ended 30 June 2021. (I do not hold the above stock)
Strategy：
Buy-in Price: $11.30, Target Price: $12.30, Cut Loss Price: $10.50
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KUNLUN ENERGY(135)
Analysis：
The company is an energy company controlled by China National Petroleum Corporation. The company's business includes natural gas sales, LPG sales, LNG processing & terminals, and exploration & production. In 2022 H1, the company delivered an excellent performance. Total revenue was 83.9 billion yuan (RMB, the same below), up 29.5% YoY; retail gas sales were 13.5 billion cubic meters, up 12.1% YoY; profit attribution to equity holders was 3.47 billion yuan, up 38.8%. We expected that the company will benefit from the coal-to-gas policy, and the company's gas sales volume will increase significantly in the next few years. The management of the company said that the company has sufficient cash, and there will be plenty of investment and M&A plans in the future, such as the merger of city-gas distributors and the construction of LNG terminals, bringing more gas sources and opportunities for the company to distribute gas. Therefore, we expect the company's natural gas sales will continue to grow, and the company has a long-term investment value.
Strategy：
Buy-in Price: $6.36, Target Price: $7.41, Cut Loss Price: $5.78
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Xtep International (1368.HK) - 1H2022 Positive profit alert in line with consensus
1H2022 Positive profit alert in line with consensus Xtep announced the operation data of 2Q2022. Xtep core brand products retail sell-through (including offline and online channels) grew by mid-teens (30 % – 35 % growth in 1Q2022), retail discount level at 25% – 30% (25% discount at 1Q2022). For the six months ended 30 June 2022, core brand products retail sell-through (including offline and online channels) grew by 20 % – 25 %, and inventory turnover was around 4.5 months (about 4 months in 1H2021, 1Q2022), estimated to be related to the impact of the COVID. Xtep also expected to record a significant increase of not less than 35% in its unaudited consolidated profit attributable to shareholders for 1H2022 as compared to that for the corresponding period in 2021, which is also in line with market consensus. Such increase was primarily due to a not less than 35% growth in consolidated revenue mainly attributable to: (1) remarkable sales fair orders resulting from encouraging retail performance of the core Xtep brand and Xtep Kids` business driven by their breakthrough in product innovation, retail channel upgrade and increased brand awareness; and (2) an impressive YoY revenue growth of over 100% for Saucony under the professional sports segment owing to its strong retail sales particularly in its e-commerce business. Adverse impact of COVID on the economy is fading in June, 618 sales growth 64% The adverse impact of the latest round of COVID outbreaks on the economy is fading, and the resumption of work and production in key cities, core brand products sales are expected to gradually improve. In fact, according to the 618 Shopping Festival sales data in 2022, Xtep recorded a 64% YoY online sales growth to RMB650mn, while the online sales of the core Xtep brand surged 61% to RMB590mn and those of Xtep Kids swelled 103% to RMB75mn. Saucony's even rocketed 135%, the most among all international sports shoe brands during the Festival. Company valuationIn 2Q2022, Xtep's core brand products retail sales growth slowed down due to the impact of the resurgence in pandemic. However, Xtep continues to cooperate with international brand distributors and launched a new store in Tangshan Rongda Shopping Mall with Pou Sheng in July. With the expansion of quality channels, which may help the sales growth of core brand and offset the impact of the COVID in the first half of the year. We adjust our FY2022E EPS forecast to RMB0.43 (down slightly compare with March 2022 report), with TP at HKD13.01, represents of 26.2x P/E (equivalent to the average P/E ratio of the past 2 years plus 1 standard deviation). We downgrade our investment rating to “Neutral”. Risk factors1) Resurgence in COVID in mainland; 2) Weak domestic growth and consumer spending in sportsware; 3) Intensified competition in the industry; and 4) Slower-than-expected in new brands development. Financial
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| Recommendation on 25-8-2022 | | Recommendation | Neutral | | Price on Recommendation Date | $ 12.800 | | Suggested purchase price | N/A | | Target Price | $ 13.010 |
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