News

Patterned stock picking and uptrend trading

  Stock picking without a profit model is often random. If a person speculates and invests in transactions sometimes, short-term speculation for a while, and medium-to-long-term transactions for a while, if a person cannot form regular and data-based transactions, he will be like a straggler fighting guerrillas, and it is difficult to achieve long-term stable profits.
  A set of trading mode is actually equivalent to a highly automated production line in a modern factory. Each link of the transaction has clear implementation standard parameters, and the law of transaction formation is the foundation of long-term profit.
Features of stock selection in trading mode:

  First, stock selection forms a pattern, and the selected varieties have certain characteristics that are highly similar.
  Second, risk control must have a strategy and formulate a specific stop loss range.
  Third, the selected target varieties have a high degree of activity, high volatility, and strong expectations for future market growth.
  Fourth, the selected target varieties have a high probability of reaching the target within N days in the market outlook.
  Fifth, among the successful varieties, there must be stocks that perform particularly well. Among the profitable varieties, there must be a certain percentage of transactions to earn huge profits.
  There are two core logics in stock selection, the first is the upward direction, and the second is the size of the upside.
  First, choose a variety with a clear upward trend, and the magnitude of the upside space is the second item to be considered. What you need to do when choosing a symbol for an uptrend is not to predict whether it will rise, but to guard against when it will peak.
How to profit from trading uptrend varieties? There are three logical ways to profit:

  First, buy and hold to enjoy uptrend profits.
  Second, sell high and sell low in an uptrend channel to earn the difference.
  Third, intervene in the accelerated upward phase of the upward trend to earn profits in the accelerated upward phase.

  The interim reporting period of Hong Kong stocks and the fundamental verification phase since July have come to an end, and the downward pressure on earnings brought by the interim report should no longer be the main reason for the decline of Hong Kong stocks. In the medium term, the Hang Seng Index has fallen from a high of 22,449 on June 28 to a low of 19,189 on August 24, with a cumulative decline of 14.5%. This round of adjustment has reflected the twists and turns of most economic recovery rhythms and downward pressure on earnings.
  Positive factors worthy of attention include: ① policy support from the National Standing Committee; ② clearer profit path; ③ better-than-expected performance of technology stocks such as Meituan (3690.HK) and JD.com (9618.HK); ④ Tencent ( 0700.HK) and AIA (1299.HK) and other large blue-chip listed companies have restarted repurchase; ⑤ Relatively low valuations give Hong Kong stocks downward protection, and the re-entry of US stocks into tight trading may lead to capital flow from west to east again.
  In stock selection, the valuation margin of safety should be the primary condition, and at the same time, the company’s fundamentals should be expected to improve earnings. The strategy should still be based on bargain-hunting layout and long-term holding.
LK Technology (0558.HK): Super-large die-casting machine leader set sail

  The integrated die-casting can quickly increase the volume, and equipment manufacturers are the first to benefit. Integrated die-casting has attracted widespread attention from car companies due to its features such as streamlining processes, shortening manufacturing time, and reducing costs. With Tesla’s pioneering of integrated die-casting on Model Y, the industry has ushered in vigorous development. Zhang Liangwei, an analyst at Soochow Securities, predicts that with the maturity of the integrated die-casting technology for multiple components such as the rear bottom plate, front cabin frame, and battery pack, as well as the increase in penetration rate, economies of scale will become prominent, further promoting the popularization of this technology. According to estimates, from 2022 to 2025, the market space of integrated die casting will rapidly increase to 36.8 billion yuan, with a CAGR of 193%. Considering the rapid increase in downstream volume, equipment manufacturers are expected to benefit first. It can be expected that the demand for large-scale die-casting machines will explode, and the proportion of superimposed high-tonnage die-casting machines will increase, and the industry is expected to achieve both volume and price increases.
  First of all, LK Technology is the leader of super-large die-casting machines, and has been cultivating die-casting machines for many years. The company’s products cover three major directions: die-casting machines, injection molding machines and CNC machining centers. The company was founded in 1979 and listed on the Hong Kong Stock Exchange in 2006. It has 9 production bases and more than 60 sales and service centers. The company has a relatively high market share in the field of super-large die-casting machines (estimated to be more than 90% in 2021), and has longer experience accumulation and project advantages than its competitors.
  In addition, it can be focused on that Tesla helps the flywheel to open, which has a significant competitive advantage. Tesla is an important promoter of the growth curve of LK Technology. Starting from the second half of 2020, Tesla has purchased multiple 6000T-level die-casting machines from LK Technology, involving factories in California, Texas, Berlin, and Shanghai, China. The company has seized the time window, and after 1-2 years of precipitation, it has strong competitive advantages in terms of process and solution maturity, brand awareness, supply chain management and customer responsiveness, and is in a positive cycle. The market is worried about the deterioration of the competition pattern in the future, but Zhang Liangwei, an analyst at Soochow Securities, believes that the company has established strong barriers through key customer service, and domestic demand for die-casting machines will also contribute a large increment.
  In terms of future performance, it can be seen that LK Technology has full orders in hand, and long-term growth can be expected. The company has factories in Shenzhen, Ningbo and other places. At present, the production capacity of super-large die-casting machines is in short supply, and the order schedule is full. With the increase in domestic customers, the proportion of revenue from the largest customer is also declining. We believe that the integrated die-casting industry is in the early stage of industrial explosion, and the demand for upstream equipment, materials, molds, etc. is relatively certain. As an industry leader, the company is expected to enjoy this round of dividends and achieve steady growth for a long time.
Minth Group (0425.HK): Performance is expected to grow rapidly in the second half of the year

  Minth Group is an auto parts company with global layout and management capabilities. It has a stable and huge customer base and has successfully entered the supply system of world-class OEMs. The company’s battery box business is rapidly advancing, and new product orders continue to grow, providing strong support for the continued growth of future performance. Wang Qiang, an analyst at Essence International, believes that the impact of the epidemic and chips on the auto market will be greatly weakened in the second half of the year, and the performance of Minth Group will return to high growth.
  First of all, Minth Group’s performance in the first half of the year was better than expected. In the first half of the year, the revenue was 7.3 billion yuan, an increase of 8.9% year-on-year, the net profit was 660 million yuan, a year-on-year decrease of 27.0%, and the adjusted net profit decreased by 4.5% year-on-year, and the performance was better than expected.
  In the revenue structure of Minth Group, traditional business accounts for a large proportion, and the proportion of battery boxes has increased significantly. In the first half of the year, the products that accounted for the largest proportion of revenue were metal and decorative parts, accounting for 33%, plastic parts accounted for 27%, aluminum parts accounted for 23%, battery boxes accounted for 6%, and others accounted for 11%. The battery box business is developing rapidly, and the company is gradually expanding to peripheral products based on the technology and craftsmanship of the battery box. It has successfully developed front and rear crash modules, sub-frames, die-casting structural parts and other products and has received orders one after another, helping the company to gradually move closer The battery box and the chassis structure are integrated.
  It is worth noting that Minth Group has sufficient orders on hand, and orders for battery boxes account for the largest proportion. At present, Minsit has orders of 180 billion yuan, of which battery boxes account for 38%, metal and decorative strips account for 17%, plastic parts account for 22%, aluminum parts account for 22%, and others account for 1%. In 2022, Minth Group plans to undertake a total of 12 billion new business orders, an increase of 10% over the original plan. In the first half of the year, it has undertaken 9.3 billion orders, of which traditional products account for 35% and innovative new products account for 65%. Orders from traditional fuel vehicles accounted for 21%, and new energy vehicles accounted for 79%.
  In terms of battery box business, Minth Group has undertaken an order for battery boxes for a global platform model from Mercedes-Benz, becoming its largest partner for battery boxes; The company’s status as the core supplier of battery boxes in the Stellantis system; Minth obtained battery box orders from Lucid, the second largest new car manufacturer in North America. In terms of intelligent exterior decoration, the company has obtained orders for luminous signs and luminous grilles from Geely, Volkswagen and GM and other customers; and won an order for intelligent B-pillar assembly from a Chinese brand, becoming the global model group to independently complete intelligent pillar assembly. One of the few suppliers to develop. In terms of smart tailgate, the company entered Nissan’s supplier system for the first time and obtained orders for Venucia models.
  Internationally, Federal Reserve Chairman Powell reiterated his determination to fight inflation at the annual meeting of the U.S. central bank, but in general, Powell’s speech continued the idea of ​​​​the press conference after the July interest rate meeting, and there was not much information that exceeded market expectations, 2.25%- A neutral rate of 2.5% has never been the Fed’s ultimate goal, and the market has prematurely filled expectations for the Fed to ease its tightening efforts, especially the unrealistic expectation of a rate cut next year, ultimately triggering a sell-off in risky assets. The core PCE of the United States in July increased by 4.6% year-on-year. Although the year-on-year growth rate has probably peaked in February this year, the growth rate of 4.6% is still far from the target of 2%.
  Zhongtai International believes that the stage of the rapid rise in the current round of interest rate hike expectations in the United States is likely to come to an end, because whether the more “hawkish” St. The dovish San Francisco Fed President Daly expects the target rate to be at 3.4% by the end of the year, and in a marginal sense, each rate hike in September, November and December will not be higher than in July. Therefore, the current cycle of interest rate hikes and the high probability of pressure have peaked in July, and a turning point began in September. The pressure on the denominator is expected to ease in the third quarter, and the pressure on the numerator will be an important factor affecting U.S. stocks.

error: Content is protected !!