Lining Anta Olympic Stocks Rebounded Sharply In July

With the approaching of the Olympic Games, some Olympic concept stocks in Hongkong market have rebounded sharply.

Since the beginning of this month, Lining (02331.HK), Anta sports (02020.HK) and China trend (03818.HK) have increased by 10%.

As of yesterday, Lining has risen 18.8% yuan to 19.726 yuan from 16.6 yuan (HK $, the same below) at the beginning of the month, and Anta has risen from 21% yuan to 6.48 yuan from 5.37 yuan in the beginning of the month. The trend of China listed last year was also approved by investors, from 2.88 yuan to 11% yuan to 3.2 yuan.

Lining, director of Fair Capital Management in Hongkong, told the first financial daily that during this time, the adjustment of Hongkong market was larger. However, the rebound in the market of Anta and Anta was mainly due to the fact that these companies had nothing to do with the US real estate industry which caused the fluctuation of the international market. As the sporting goods companies mainly concentrated in the mainland, these companies successfully attracted the eyes of international investors by the chance of the Olympic Games.

He believes that the market oversold in the previous period has triggered recent investor compensation for many potential stocks.

Lining, chief financial officer of Chen Weicheng, revealed last month that the company had completed the entire year's orders in the first half of the year, and the order amount was in line with the company's annual target.

Starting from the third quarter of this year and the four quarter of the year, Lining's products will increase by 3% to 5%, and the gross profit margin is expected to be around 48%.

As for the trend of China, Qin Dazhong, chief executive officer, said shortly after the shareholders' meeting that orders for the three quarter of spring, summer and autumn this year increased by more than 50% compared with the same period last year, which is better than expected.

Under the promotion of performance, international investment banks also have a good view of the Olympic theme stocks in the mainland.

At the beginning of this month, the research published by Lehman brothers pointed out that Lining will benefit from the business opportunities brought by the Olympic Games for the retail industry. Its brand with the national influence and the dominant position in the market, as well as the executive ability of the management, will help to benefit from the fast-growing sporting goods market.

The report rated Lining as "better than big city".

Credit Suisse also maintained Lining's investment proposal better than big city, and estimated its target price was 29.46 yuan.

According to the Credit Suisse Research Report, Lining and other sportswear manufacturers' shares were oversold before, which has already overreflected that the business growth prospects will be worse after August Beijing Olympic Games.

The bank believes that the market potential of mainland sportswear is strong, and it is a good investment opportunity for investors before it released interim results in August.

Merrill Lynch Securities for the first time put Anta sports into research shares and gave a "buy" rating, with a target price of 10 yuan, calling it a strong integrator for the middle and low level sporting goods market in the mainland.

The valuation of Olympic stocks has been on the high side. With the expansion of Lining, Anta and China, investors at this stage may have to be more careful.

Ye Shangzhi, a stock strategist and first Shanghai Securities researcher, told reporters that "after the oversold market, the market will seek the proper theme stocks for hype. Now it is just the Olympic Games, and the big cities are stable these days. Investors will seize the opportunity to launch a short speculation on the trend of Lining, Anta and China."

He believes that from now until the Olympic Games, these subject stocks still have the opportunity to rise, but he also cautioned that the stock price valuation of these stocks is actually not low, and the rate of retail entry has not been very high.

From yesterday's close, Lining's forecast price earnings ratio is 37.7 times, and Anta's P / E is 22.5 times. Because China's stock market is less than one year, it has not forecast PE, but its static P / E has reached 17.65 times, which is not low.

Ye Shangzhi believes that the Hongkong market generally can accept is not more than 20 times the P / E ratio.

From yesterday's closing price, the shares have been significantly touted by the market.

Choy also believes that although the Hang Seng Index has been built and stabilized recently, it does not mean that the risk has been lifted.

He estimated that on the eve of the Olympic Games from July 23rd to August 8th, investors should be especially cautious unless the market has clearly bottomed out.

"If you are a value investor, it is not the best time to copy these Olympic stocks. If you are short selling, you think there is a nearly 10% increase in the Olympic Games before that is another matter."

He said.