瑞信-中國股票策略-中國A股會議總結(jié)：管理層依然樂觀-2021.5.17-41正式版

17May2021AsiaPacific|HongKongEquityResearchResearchBulletinChinaMarketStrategyChinaA-shareconferencewrap-up:managementremainsupbeatAmongthe55companiesthatattendedourChinaA-shareconferencethisyear,39(71%oftotal)areunderCScoverage.Overallspeaking,majorityofthecorporatesbelieveinabrightoutlookas85%ofCScoveredcompaniesholdapositivetone,withtheremaining15%holdinganeutraltone.Amongtheonlysixcompanieswithaneutraltone,fouroutofthemarefromtheautosectorwhiletheothertwoarefromtechnologyandmaterialsrespectively.Forautopartssuppliers,theglobalchipshortageimposeschallenges.Bycomparison,greatmarketdemandiswidelymentionedbysemiconductormanufacturers.Amongthe55companiesthatattendedourChinaA-shareconferencethisyear,39(71%oftotal)areunderCScoverage.Intermsofcompanynumbers,technology,industrialsandautosectorsarebetterrepresentedas22outof39companiesarefromthesethreesectors.Intermsofmarketcapitalization,technology,financials,andutilitiesarebetterrepresented.Figure 1: Management tone among CS coveredFigure2:A-shareconferencecompaniesinCScoveragebycompaniesinA-shareconference sector

ResearchAnalystsEdmondHuang/85221016701edmond.huang@KarenYu/85221016257karen.yu@JasmineWang/85221017181jasmine.wang@Source:CreditSuisseestimates,CompanydataSource:CreditSuisseestimates,companydataOverallspeaking,majorityofthecorporatesbelieveinabrightoutlookas85%ofCScoveredcompaniesattendingthisconferenceholdapositivetone,withtheremaining15%holdinganeutraltone.Amongtheonlysixcompanieswithaneutraltone,fouroutofthemarefromautosectorwhiletheothertwoarefromtechnologyandmaterialsrespectively.Forautopartssuppliers,theglobalchipshortageimposeschallenges.Bycomparison,greatmarketdemandiswidelymentionedbysemiconductormanufacturers.Figure3:ManagementtoneofCScoveredcompaniesFigure4:%ofsectormanagementtonebyCScoveredthatattendedA-shareconferencebysector companiesthatattendedA-shareconferenceSource:CreditSuisseestimates,CompanydataSource:CreditSuisseestimates,CompanydataCompanymeetingtakeawaysAutoChanganAuto(000625.SZ)AsiaPacificRegionSpeaker:ZhonghuaJIE,IRDirectorDISCLOSUREAPPENDIXATTHEBACKOFTHISREPORTCONTAINSIMPORTANTDISCLOSURES,ANALYSTCERTIFICATIONS,LEGALENTITYDISCLOSUREANDTHESTATUSOFNON-USANALYSTS.USDisclosure:CreditSuissedoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Monday,17May2021Tone:PositiveKeytakeaways:CompanytargetsoverallChang'angroup2021salesvolumeup15%YoYto2.15millionunits.Indetail,itsChang'anbrandpassengervehicletargets15%YoYto860K,andChang'anFordJValsotarget15%YoYto290Kunits(220K/70KforFordbrand/Lincolnbrand)alongwithflatYoYinMazdaJV.CompanyattributeditsFordJV'sAprilsalesvolumedrop(down25%YoY/34%MoM)duetheautochipsupplyshortage,whichwasduetotheFordglobalsupplychainissue.Previously,Fordmotorhadguidedlosinghalfofplannedproductionin2Q21becauseofsemiconductorshortage.FordJVhadtriedtoallocatethechiptohighprice/highmarginproductslikeLincolnbrandproducts,FordEdgeSUVandFordExplorerSUV.Chang'anlocalbrandoperation'schipsupplyissuewasmuchbetterthanFordJV.,whosecurrentsituationwasbetterthanthebeginningofthisyea.Managementguidedthesituationtofurtherimproveinupcomingmonths,likeMayandJune.Managementarequitehappyabout1Q21grossmarginoflocalbrandoperation,whichisamulti-yearhighduetoitsimprovingproductmixandrisingvolumescale.Companyguidedits2021fullyearcomponentsourcingcostreductiontargetofRmb2.0billionor6%YoY,with5%/15%/30%/50%tobookedin1Q21/2Q21/3Q21/4Q21.Inanotherword,thegrossmarginwillincreasesequentiallyafterthecomponentcostreductionkickin.ManagementguideditsCS75andUNI-TSUVs'grossmarginexceeded20%,andUNI-KSUVmarginexceed25%duetothehighersellingprice.ReferringthecooperationwithHuawei,Chang'anhadstarteditsjointR&Dcenterin2019focusingon"Level4"autonomousdriving,5Gconnectedvehicle,C-V2X,smartcockpitinfotainment,andnewenergyvehicle.Basingonthiscooperation,Chang'an,HuaweiandCATLjointedannouncedtobuildanewhigh-endbrand"CHN"whosefirstproduct(codeE11)willbeamid-sizedall-electricSUVbasedonChang'anEMP2(efficientmodularplatform)technology.TargetingtocompetewithTesla"ModelY","E11"willshowcaseatend-2021andstartmass-production&deliveryin2022with"Level4"autonomousdrivingcapability.ReadFullDocumentNingboJoysonElectronicCorporation(600699.SS)AsiaPacificRegionSpeaker:AlexXiang,IRManagerTone:NeutralKeytakeaways:Intermsofautochipshortage,thecompanyguidedshortagesituationwillbefurtherworsenedinMayandgraduallyrecoverfrom3Q21.Companyseesthemarginofautoelectronicssegmentbeingunderpressurein1Q21already,giventhehighersourcingcostsofautochipandlogisticexpensesincurred.Joysonwillputefforttosafeguarditssupplychainamidautochipsupplytightening.Autosafetybusinesstoimprove.Joysonstillincurred~Rmb50mnrestructurecostsin1Q21andexpectstherewillstillbecertainamountofrestructurecoststhroughout2021.However,companyalsoguidedtheprofitabilityofautosafetybusinesswillimprovethanksto(1)neworderkickinwithhighermarginvs.existingorder;and(2)improvedefficiencywithlessincrementalcostsincurred.Companyalsobelievesitsautosafetybusinessexposureisbetterthanotherautosafetysuppliers,thankstoitsstrongpresenceinChinaandJapanmarket.ThemargininChinaandJapanmarketishigherthaninEuropeandNorthAmericamarket.Long-termtarget.CompanyguideditaimstoachieveRmb60-70bn/15bn/10bnrevenueforitsautosafety/autoelectronics/JoyNextsegmentin2024-25.Margin-wise,companyalsotargetstoachieve5%netmarginforitseachbusinesssegment(beforeconsolidation)inthelongrun.ReadFullDocumentNingboXushengAutoTechnology(603305.SS)AsiaPacificRegionSpeaker:XiaofenZhou,BoardsecretaryTone:NeutralKeytakeaways:Companyguidedtheimpactofautochipsupplyshortageislimitedandtheproductionplanisontracktoitsfullyear2021target.Theneworderlaunchandrampingupisontrack,includingTeslaChina-ChinaMarketStrategy 2Monday,17May2021madeModelY,BMW,ZF,etc.Companyisconfidenttoachieveits2021fullyearrevenuetarget.AluminumpricingsurgeresultinanegativeimpacttomarginofXusheng.Companyguidedthealuminumpricingroseto>Rmb20kpertoninMayfromRmb16kpertonin1Q21andthehighpricingofaluminumcontinuestoputpressureonitsmarginoutlook.Xushengalsoinitiatedpricehikerequesttoautomakersandcertainproductshavealreadyachievedpricehike.Xushenghopestoachievebreakthroughofnewcustomerexpansion.Inpreviousyears,XushengsuccessfullyexpandeditsOEMcustomersfromTeslatootherautomakersandtier-1suppliers,includingGreatWallMotor,LUCIDMotor,ZF,Valeo,etc.CompanytargetstopenetrateintootherEuropeanautomakersamidmorereplacementofsteelwithaluminumtrendinEVstage.Companybelievesitsbetter-than-peersmarginmainlycomesfrom(1)strongcompetitivenessinin-housemolddesign;(2)higheryieldresultedfromsuperiormachiningwork;and(3)highconsistencyanddesigncapabilityofproduct.ReadfulldocumentSAICMotor(600104.SS)AsiaPacificRegionSpeaker:ZhouLiangFeng,IRTone:NeutralKeytakeaways:SAIC-GMJV'sAprilsalesvolumedeclined40%MoMat80kunitswasmainlyduetochipshortage.Managementexpectedchipshortagetobealleviatedfrom3Q21.beforethat,Q2productionwillbeheavilyimpacted.Managementsaidthecompany's2021fullyearvolumetargetof6.17millionunitslookschallenging.KeyvolumegrowthdriverwillbeRoewe&MGlocalbrandoperationandSAIC-GM-Wuling,whileSAIC-GMandSAIC-VWJVsvolumearelikelystayflatYoY.RefertotheweakperformanceofVWID.4XSUV(625/922unitsinMarch/April)-VWMEB(modularelectric-drivetoolkit)'sfirstproductinChina,managementattributedtheperformancetothisproducts'averagefunction.WhilemostEVcustomersareyounggenerationandpreferspecialfeatureslikefastaccelerationandsmartdriving.SAIC'snewhigh-endbrand"IM"targetthepricelevelofaboveRmb400,000,whichwillcompetewithNIO,Audi,Benz,andBMW."IM'receivedaround3,000unitsordersinceApril'sShanghaiautoshow,andwillstartdeliveryatend-2021."IM"brandwillusethe"Level3+"autonomousdrivingsolutionfromMomenta,anautonomousdrivingstart-up(SAICjoinMomenta'sCseriesfundingin1Q2021).Localbrandoperation's"Rbrand"pureEVwillcooperatewith"Luminar"Lidarand4Dimagingradarinitsupcoming"ES33"largesizeSUV.ReadFullDocumentYutongBus(600066.SS)AsiaPacificRegionSpeaker:PengLiu,IRManagerTone:NeutralKeytakeaways:Companytargeted13%YoYvolumegrowthinfullyear2021to47kunitswithexportaskeydriver-up33%YoYto5,000units(including1,000unitNEVbus).Managementguidedthepublicbuses'replacementcycleisaround6-8years.Thuspublicbuses'stronggrowthin2013(up20%YoYto62.9kunits)mightboostthebusdemandrecoverythisyear.Atthesametime,managementalsoguidedthenegativefromfallingcentralgovernmentsubsidyforelectricbus-down10%/20%/100%in2021/2022/2023.ThusYutongbusonlytarget13%YoYvolumegrowthin2021.ManagementguidedrecentlytourismrelatedbusdemandhadrecoveredrapidandYutongsold>700tourismbusinApril,whichwashigherthanlevelbeforeCovid-19.Keyweaknessstillcomefrompublicbusdemand(mainlyEVbus)andschoolbuses.Recently,Yutonghadsignedanexportorderof1,002units(including741unitEVbus)withMowasalat,theQatarpublictransportcompanyforFIFAWorldCup2022.Managementguidedatleasthalfofthiswilldeliverin2021.Managementguidedfullyear2021grossmargintargetwas~20%vs.17.5%in2020.Keydriversare(a)increasingsalesvolumescale-above-mentioned13%YoYgrowthtarget,(b)sequentiallyincreasingsellingprice,whichcouldoffsetthenegativefromrawmaterialpriceincrease.Companyalsoguideditsbatterysouringpricetoremainstabledespitethebatteryrawmaterialpricerise.Referringtocompany'splanningforautonomousdrivingbus,Yutongmainlyplayaroleasbussupplierinsteadofarobo-busoperator.CurrentlyYutongin-housedeveloped"Level3"busandcooperateChinaMarketStrategy 3Monday,17May2021witharobo-taxitechnologycompanyon"Level4"driverlessbus.Keycustomersforrobo-busarelocalgovernmentownedpublicsbusoperatingcompanies.Forfuelcellbus,Yutongtargettosell300unitin2021vs.35unitin2020.Yutongguidedtheelectricbusesaremoresuitableforurbanarealow-speeddrivingpublicbusgivenitsfrequentstopduringurbantrafficandfixedroute,whilefuelcellbusesaremoresuitableforlongdistancehighspeeddriving.ReadFullDocumentBankCMB(H)(3968.HK)AsiaPacificRegionSpeaker:ChenDewen,InvestorRelationsManagerTone:PositiveKeytakeaways:NIMtrend.MaintaintheviewofpressureonthedownsideinFY21.CMBsawsignsofstabilizationandriseinloanyieldbutnotverysignificant.Thetrendstillneedsfurtherconfirmation,andtheupsidewillbelimitedastheguidancetoreducefinancingcostforrealeconomyisstillthere.MorecompetitionfordepositsasM2growthslowsgradually,despiteregulatorymeasurestocontroldepositcost.CMBisconfidentinmaintainingarelativelystableliabilitycost.LoandemandisstillstrongbutweakensMoM.Localgovernmentinvestmentstartedlatethisyearanddemandfrompropertyreduced,butdemandfrommanufacturingremainedintact.Loanquality.NPLformationofcreditcardloanshasnormalizedtopre-COVIDlevelinApril.DemandforcreditcardloansrecoveredbetterthanexpectedwithgoodgrowthinApril.AlthoughnegativeimpactfromCOVID-19fades,CMBstillseeshighriskincreditcardbusinesscitingmulti-platformborrowing.Itwillmaintainstablegrowthincreditcardloansandimproveclientandassetquality.WMPincome.Banksloweredfeeratetoretainclientsinthetransitionperiod.Lookingforward,scaleofbalanceisstillimportant.It'salsoimportanttoprovideclientswithhigherreturns,whichCMBWMsubsidiarystrivestoachieve.Regulatorscouldconsiderlongergraceperiodforcashmanagementproducts.TherewillbedirectcompetitionwithmutualfundsbutbankWMPsaremoreconvenientforbankcustomers.LimitedrevenueimpactfromWealthConnect.ReadFullDocumentConsumerHaierSmartHome(A)(600690.SS)AsiaPacificRegionSpeaker:AnitaSun,IRDirectorTone:PositiveKeytakeaways:2021guidance:Companyhasseenacontinuedmomentuminbothdomestic/overseasmarketinApr/May'21(double-digitgrowth)andguidedadouble-digitpercentagegrowthforbothtoplineandbottomline,withmarginexpansionforthefullyear.Sellingexpenseratioin2021isexpectedtodropbackto2018level.Domesticsalesgrowthofrefrigerator/washingmachineisexpectedtodeliverhigh-singledigit%growthwhileair-con/kitchenappliancetoseedouble-digit%.Overseasmarketshallachievedouble-digitgrowthYoYinallcountries(inlocalcurrency).Managementguided2021CAPEXofRmb7bn(Rmb5bnformaintenanceandRmb2bnforcapacityexpansioninIndiaandRussia).GPMtargetamidinputcostsinflation.CompanywillstrivetomaintainaflatGPMindomesticmarket,andithastakeninitiativestooffsetinputcostsinflation:1)closelyinvolvingsuppliersintoproductsdesign,andflexiblecycletoprocurerawmaterials(reducethepurchasecyclefrom3mto1moreven1week);2)digitalizationtoenhanceoperationefficiency(streamlineSKUby40%toachievecentralizedproduction);3)ASPinflationdrivenbylaunchingnewproducts.CompanyisconfidentinoverseasGPMthankstoeasierpricehikeinmorematuremarkets.Overseasmarginmid-termtargets.Underpinnedbyproductsinnovation,productioncapacityexpansion,andmarketsharegain,companytargetsoveralloverseasNPMtoimprovefromcurrentChinaMarketStrategy 4Monday,17May20213%toabove5%incomingyears.US/Europe/Australiatoachieve8%/3-4%/above5%.Air-conditionerdemand.Companyhasindicatedtheindustrychannelinventoryiscurrentlyatahealthylevel(Haier1-3month),andtheweatherwouldbeakeyindicatorforair-condemandthisyear.Companytargetstoachieve20%marketshareinair-coninmid-term,with~30%mktshareinmid-tohigh-endcategoriesdrivenbyCarsarte(expectingCarsarteair-conrevenuecontributiontoraisefromcurrent7%to10%).ReadFullDocumentHangzhouRobam(002508.SZ)AsiaPacificRegionSpeaker:AmberTao,IRManagerTone:PositiveKeytakeaways:2021guidance:Companyguidesdouble-digit%toplinegrowthwithamediumnumberof15%YoY(20%ifbetter-thanexpectedperformanceofnewcategoryproducts).Bychannel,revenuegrowthforretail(+innovationchannel)/construction/e-commercetargetsat>10%/15%/20%YoY.Companyalsoexpectsdoubledigit%growthforsalesincomingyearsdrivenbynewcategoryproducts'robustgrowthandmarketshareexpansion.Managementalsoindicatespotentialmargincontractiondueto1)fasternewcategoryexpansionwithmargin(>50%)lowerthanitstraditionalproductslikegasstove/rangehood(c.60%);2)moreaggressivepricingstrategy;and3)inputcostsinflation.Intermsofdividend,companyexpectsnolessthan30%payoutratiogivensolidearningsgrowthin2021.Newcategoryproductstodrivegrowth.Companytargets200k-250k/400k-480kunitssalesofwashingmachinein2021/22underpinnedbyitsenlargedproductioncapacityandstrongconsumerdemandforitsChinesehouseholdstailor-madedesign,andthemanagementseesRobam'sretailmarketsharerankingtoboostfromno.3tono.2withinamonth,andachieveno.1within2-3years.ReformofMingqibrand.CompanytargetsRmb300mnsalesin2021forMingqi,underpinnedbyexpansiontoonlinechannelsupportedbyRobame-commerceteam;2)categoryexpansionofintegratedstoveandadoptingmoreaggressivepricingstrategy;and3)internalcompetitionamongthreeinternaloperationteams:offlineretailteam,onlineteaminchargeoftraditionalcategory,andonlineteaminchargeofintegratedstove.Initiativestakentomoderatemarginpressure.Companyhastakenmeasurestominimizethemarginpressurefromhigherrawmaterialprice:1)increasingproductionefficiencyby10%in2021;2)enhancingitsbargainingpowerwithsuppliersbyeconomyofscales;and3)pricehikefornewlylaunchedproducts.ReadFullDocumentLuzhouLaojiao(000568.SZ)AsiaPacificRegionSpeaker:ChuanWang,InvestorRelationsManagerTone:PositiveKeytakeaways:Distributorprofitabilityisafocusfor2021.Managementaimstoimprovedistributorreturnsandreverseitsnegativechannelmark-up(excludingsalesrebates)fromthisyear,asanefforttofurtherenhancedistributors'supportforitsbrands.Laojiaoretainsitsfollowing-Wuliangyepricestrategy,givenarelativelybenigncompetitivelandscapeofpremiumbaijiu.S&Dexpenseratiolikelybacktonormallevels.LaojiaohighlightedthatthisyearitsS&Dratiomaymovetowards2018/19levelsfromanabnormallowseenin2020,duetoexpensecutsamidthepandemic.Thecompanyplanstoshiftitsexpenseinvestmenttomid-range/low-endproductsfromGuojiao1573tounderpinincomingbrandrejuvenationofcertainproducts.2025targets.LajiaostateditsambitioustargettoreturntoNo.3intermsofrevenueby2025(equivalentto20%-plussalesCAGRbyourestimate),andguidedalargelyflatnetmargin.Managementcompensation.LaojiaoexpectsthatmanagementcompensationcoulddoublethisyearthankstoitsmanagementincentiveschemeannouncedinlateApril2021,ifaseriesofoperatingtargetssuchassales,profitandproductionaremet.Sauce-flavorboom.Laojiaoagreesthatsauce-flavorbaijiuhasbeenrapidlygainingmarketshareinthepastseveralyears,butremainsinaprematurestage.ThecompanyseeslimitedimpactonGuojiaowhichiswellpositionedinthepremiumsegment,whileworriesthatsauce-flavorbaijiucouldfurtherintensifycompetitioninthemid-range/sub-premiumsegments.ChinaMarketStrategy 5Monday,17May2021ReadFullDocumentAngelYeast(600298.SS,NotCovered)AsiaPacificRegionSpeaker:LuGao,InvestorRelationsKeytakeaways:2021targets.Managementsaidtherecouldbesomeupsidetoits15%toplinegrowthtargetthankstogoodsalesgrowthYTD,andretainedits10%profitgrowthtargetmainlyduetocostheadwind.2Q21update.For2Q,Angelaimsata10%-plussalesgrowthpartlyduetochannelpre-stockingin1Q,andexpectsflatnetprofitYoYonahighcomparisonbase.Costinflation.YTDAngelhasprocuredaround80%ofmolassesneededfor2021,versus100%inregularyearsduetoithassloweddownitsprocurementpaceonhigher-than-expectedcostincrease.Thecompanysawa10%-plusincreaseYoYinmolassescostin1Q,andforeseesthemagnitudetoincreasein2Qandbeyond.Pricehike.Thecompanyhasincreasedpricesofcertainproductsin1Q,whichrepresentedaround60%ofitstotalrevenue.Andmanagementdoesnotexpectfurtherpricehikesforbothdomesticandoverseasmarketsinthenearfuture,aspriorpricehikeshavecoveredcostincreases.2025outlook:(1)Rmb15-17bnrevenue,equivalenttoa11%-14%fiveyearCAGR;(2)Totalproductioncapacityof350-400ktonsfromcurrent270ktons;(3)Globalmarketshareof15%fromcurrent12%.ReadFullDocumentChongqingBrewery(600132.SS,NotCovered)AsiaPacificRegionSpeaker:XiaoweiZhang,SecuritiesRepresentativeKeytakeaways:2021outlook.Thecompanyreiteratedmid-single-digit/mid-tohigh-singledigitvolume/revenuegrowthtargetfor2021.S&Mexpenseisexpectedtonormalisethisyear.Premiumisation.Thecompanyhasbeenconsistentlymakingpushinpremiumisationbyupgradingexistingproductsandintroducingnewproductsacrossbothinternationalandlocaldomesticbrandportfolio,suchasSomersby,alcohol-freeChongqingBeer,ChongqingYuyueBeertargetinghotpotconsumptionoccasions,etc.Costpressureandpricehikes.Thecompanynotedoverallcostpressure(primarilyincommodityandtransportationcosts)appearstobemanageablesofar,anditplanstomitigatethepressureprimarilythroughproductmixupgradeandcostsavinginitiatives,whiledirectpricehikesincertainregionsremainanoptiondependingonmarketconditions.BigCitiesexpansionplan.ThecompanyexpandedthenumberofBigCitiesfrom9in2017to38exiting2020.In2020,salesvolumegrowthinBidCitiesreacheddoubledigitYoYvs.3%foroverallcompany.In2021,thecompanyplanstofurtherincreasethenumberofBigCitiesto41,withadditional20BigCitiesdedicatedtoexpansionofWusu.Wusubrand.Wusucurrentlyisstillatanearlystageofitsproductlifecycle,accordingtothecompany,withregionexpansion,channelpenetration(moderntrade,O2O,e-commerceetc.),anddistribution/POSdevelopmentsidentifiedasstrategicprioritiesforthenexttwoyears.CurrentlyRedWusuistheonlyavailableWusuSKUoutsideofXinjiang,perthecompany.ReadFullDocumentHaidGroup(002311.SZ,NotCovered)AsiaPacificRegionSpeaker:ZhijianHuang,BoardSecretaryKeytakeaways:YTDfeedbusinessupdate.Totalfeedsalesvolumereached~3.5mntonsin1Q21,up20%+YoY,withaquatic/poultry/hogfeedvolumeup~20%/lowsingledigit/130-140%YoY,respectively.EnteringApril-May,bothpoultryandhogfeedvolumegrowthaccelerated,whilepoultryfeedvolumegrowthisexpectedtoreboundinMayaftersomesoftnessinApril.Costpressure.Thecompanynotedmeaningfulcostpressurethisyear,andplanstomitigatetheChinaMarketStrategy 6Monday,17May2021pressurethrough:1)rawmaterialsourcingfromoverseassuppliers;2)feedformulaadjustments;and3)scaleeffectinrawmaterialprocurement.Breedingbusiness.Thecompanytargetshogsalesvolumeof1.6-1.8mn/2.5-3mnheadsin2021/22,withaquaticbreedingbusinessexpectedtoprovidesomeoffsetduringhogpricedowncycle.Internally-raisedpigletmixisexpectedtoreach50%thisyear,perthecompany.Feedindustryconsolidation.Thecompanynotedfaster-than-expectedfeedindustryconsolidationin2020amidexitsofsmallplayers,withacquisitionof~30productionplantsin2020and10-20plantssofarin2021bythecompany.Movingforward,thecompanypreferstoexpandpoultry/hogfeedcapacityviaM&Awhichwillbemoreeconomical,whileexpandingaquaticfeedcapacitythroughself-construction.2025feedbusinesstarget.The40mntonfeedsalesvolumetargetfor2025setintheshareincentiveschemeimpliesa22%CAGRin2020-25,withaquatic/poultry/pigfeedexpectedtoaccountfor25%/50%/25%,accordingtothecompany.ReadFullDocumentEnergyYantaiJerehOilfield(002353.SZ)AsiaPacificRegionSpeaker:ZhiGangZhang,DirectorandBoardSecretaryTone:PositiveKeytakeaways:Improvingnewordermomentum.Jereh’s4M21neworderssawaturnaroundandregistereda6.6%YoYgrowthforthemonth,areversalfromthe8.2%YoYdeclinein1Q21.Theimprovedordermomentummainlycamefromoilfieldequipmentmanufacturingandnaturalgasequipmentmanufacturingsegments.Ifsegregatedbyregion,overseasmarkethasseenanotablepickupinnewordersinthepasttwomonths,whiledomesticmarketisstilllukewarmduetotheearlypartofthe14thFive-YearPlan.Electrifying.Managementheldapositiveviewontheoutlookofelectricfracturingpumpequipment,andrecentdatapointssuggestthatthisisgainingtractionamongthemainstreampressurepumpmarket.Inthedomesticmarket,PetroChinaincludedtheelectricfracturingpumpequipmenttoitsannualequipmentprocurementforthefirsttime.IntheNorthAmericamarket,managementguidedtheproportionofelectricfracturingpumpequipmentcouldpotentiallyincreasefrom~2%in2021to30-50%in3-5yearsassubstitutionkicksin.TheseimplyapromisingoutlookforJereh’selectricfracturingpumpequipmentinthecomingyears.Shaleoil/gaspolicysupport.China’sNationalEnergyAdministrationproposedtoincludeshaleoilinthe14thFive-YearPlan,ontopofshalegaswhichwerealreadybeingincludedinthe13thFive-YearPlan.ManagementbelievedthepolicysupportwillbeakeycatalysttoJerehinthe14thFive-YearPlanperiod,duringwhich2H21and2022areexpectedtowitnessarobustgrowthinthedomesticmarket.ReadFullDocumentHengyiPetrochemical(000703.SZ,NotCovered)AsiaPacificRegionSpeaker:YuWU,SecuritiesRepresentativeKeytakeaways:LatestprogressofPMBproject.ToseizethepromisingrefinedoilproductmarketinSoutheastAsia,HengyiinitiatedthePulauMuaraBesar(PMB)PhaseIIprojectin2H20withexpectedcapitalexpenditureofRmb13bn.TheconstructionofPMBPhaseIIisexpectedtolastforathree-yearperiod,aimingtocommissionin1Q24.ThePMBPhaseIIisdesignedwitharefiningcapacityof14mt/year,ethylenecapacityof1.65mt/yearandothercapacitiesinaromaticsaswellascorrespondingdownstreamproducts.Operatinglandscape.PMBproject’srefiningoilproductismainlytargetedfortheSoutheastAsiamarketincludingBrunei,Vietnam,Malaysia,Singaporeetc.,whichisdifferentfromotherChineseindependentrefiners.Accordingtomanagement,theprojectenjoysataxexemptionfromBruneigovernmentovera14-yearperiod(18%businesstaxchargedonforeigninvestors).ManagementexpectsthetaxexemptionperiodtobeextendedafterthecommissionofPMBPhaseII.Crackspread.ForthePMBproject,management’sguidanceisthattherefinerybreakevenpointisaroundUS$4-5/boe.Hengyi’srefinedoilproductsarecurrentlyprofitable,withgasolinespreadatUS$9-10/boe,dieselspreadatUS$7-8/boeandjetfuelspreadatUS$5/boe.ChinaMarketStrategy 7Monday,17May2021Chemicalfiber.AsoneoftheleadingplayersinthedomesticPETmarket,HengyicurrentlyhasaPETcapacityat7.5mt/year,representing12%oftotaldomesticcapacity.Managementguidedthatt