Morning Brief

MarketResearch MorningBrief [May15th,2024] MorningBrief BAOYanxin0755‐23976830baoyanxin@gtjas.comS0880513070005 Contents TopRecommendations ●ElectronicComponentsSector:UpdateReport ●ComputerSector:UpdateReport ●AutomobileSector:UpdateReport ●Wholesale&RetailSector:UpdateReport LatestReports ●DingdongMaicai(DDL.N):OW ●DigiwinSoftware(300378):OW,TP@RMB29.26 ●Holike(693898):OW,TP@RMB12.64↓ ●MengtianHome(603216):OW,TP@RMB12.18↓ ●KingcleanElectric(603355):OW,TP@RMB34.19 SectorRatingsoftheMonthMarketStrategyWeeklyViewpoint 本报告内容译自同日发布的简体中文报告《国泰君安晨报》，报告观点及内容如有任何不一致的地方，一律以该简体中文版报告为准。 TopRecommendations ElectronicComponentsSector:UpdateReport Thankstotheclearrecoveryofthedownstreamdemand,aturnaroundoftheelectronicindustryhasarrived.Offeaturedcompanies,werecommendHuatianTech(002185),ForehopeElectronic(688362),AMEC(688012),Piotech(688072), Crystal‐Optech(002273),Hikvision(002415),Giantec(688123),ShennanCircuits(002916),WUSPrintedCircuit(002463),AvaryHolding(002938),ShengyiTech(600183),LuxsharePrecision(002475)andFoxconnIndustrialInternet(601138). ComputerSector:UpdateReport OpenAIlaunchedanewgenerationofflagshipgenerationmodelGPT‐4oanddesktopAppatthefirstspringnewproductlaunchpressconference.ThismodelbroughtanessentialchangeofAIAssistantproductsandpushedthelevelofmulti‐modalinteractionstoanewheight.Offeaturedcompanies,werecommendDigiwinSoftware(300378),Wondershare(300624),ArcSoft(688088)andIflytek(002230).OtherbeneficiariesincludeRundaMedical(603108)andArcvideo(688039). AutomobileSector:UpdateReport Wesuggesttwoclues:exportofChinese‐brandautos,andexportofforeign‐brandautosmadeinChina. ThefirstclueistheexportofChinese‐brandautostoEastEurope,SoutheastAsiaandMiddleEast,whichhasalsocreateddemandfortherelevantautoparts.Ofautomanufacturers,werecommendGreatWallMotor(601633),ChanganAutomobile(000625),BYD(002594)andGeelyAutomobile(0175.HK);ofautopartssuppliers,werecommendZhenhuaAutoParts(605319)andRayhoo(002997). ThesecondcluesistheexportofTesla,Volkswagenandotherforeign‐brandautosmadeinChina,whichhasalsocreateddemandfortherelevantautoparts.Offeaturedcompanies,werecommendJianghaiAutomobile(600418),ShuanghuanDriveline(002472),Xinquan(603179),Tuopu(601689),IKD(600933),Sonavox (688533),Xusheng(603305),Pivot(301181),Xingyu(601799),Keboda(603786)and Huayu(600741). Wholesale&RetailSector:UpdateReport Thebusinessclimateofcross‐bordertraderemainshigh,andwerecommendthefollowingtwotypesofexporters.OnearethetopbrandswithAmazon.comofstablebusinessoperationandgoodprofitgrowthpotential,suchasAnkerInnovations(300866),ZielHomeFurnishing(301376)andSailvanTimes(301381).TheotherarethoseinsensitiveorlesssensitivetoUSsanctionsfortheirlowUS‐elementproducts,suchasCommoditiesCity(600415),HuakaiYibai(300592),FocusTech(002315),Jihong(002803)andGigacloudTech(GCT.US).WealsorecommendtheleadingexportersincludingMiniso(9896.HK),Sumec(600710)andMeorient(300795).Inaddition,itisalsoadvisabletopayattentiontotheprogressofnewcompanylisting. LatestReports DingdongMaicai(DDL.N):OW TheCompanyreported2024Q1revenueofRMB5.024bn(+0.53%yoy),GAAPnetprofitofRMB(‐6.62mn)andadjustednetprofitofRMB14.02mn(positivenon‐GAAPnetprofitforconsecutive6quarterssince2022Q4),ofwhichGMVwasRMB5.525bn(+1.36%yoy),inlinewithexpectation.TheCompanyfocusesonitscoremarketandprofitgrowth,andhasmanagedtoincreaseitscashflow.Thankstosmallercompetitionsininternetretailingmarket,theCompanyisabletoimproveitsprofitmargin.Wemaintain“Overweight”rating. DigiwinSoftware(300378):OW,TP@RMB29.26 [Rating:OW(Prv:OW);TP:RMB29.26(Prv:RMB29.26);MP:RMB17.88;Mkt‐Cap:RMB4819mn] Becausethedownstreamindustriesareyettorecover,welowerourforecastsoftheCompany’s2024‐2026EPStoRMB0.68(‐0.05),0.85(‐0.04)and1.05.WemaintaintargetpriceofRMB29.26(2024PEof42.86x)and“Overweight”rating. Holike(693898):OW,TP@RMB12.64↓ [Rating:OW(Prv:OW);TP:RMB12.64(Prv:RMB14.43);MP:RMB8.84;Mkt‐Cap:RMB2752mn] Duetotheslowdownofdownstreamdemand,welowerourforecastsoftheCompany’s2024‐2026EPStoRMB0.79(from1.11),0.87(from1.22)and0.95.Withreferencetothevaluationsofcomparablecompanies,welowertargetpricetoRMB12.64(from14.43).“Overweight”ratingmaintained. MengtianHome(603216):OW,TP@RMB12.18↓ [Rating:OW(Prv:OW);TP:RMB12.18(Prv:RMB17.16);MP:RMB10.35;Mkt‐Cap:RMB2319mn] Duetotheunstabledownstreamdemand,welowerourforecastsoftheCompany’s2024‐2026EPStoRMB0.58(from1.32),0.68(from1.46)and0.79.Withreferencetothevaluationsofcomparablecompanies,welowertargetpricetoRMB12.18(from17.16).“Overweight”ratingmaintained. KingcleanElectric(603355):OW,TP@RMB34.19 [Rating:OW(Prv:OW);TP:RMB34.19(Prv:RMB34.19);MP:RMB28.90;Mkt‐Cap:RMB16582mn] TakingintoaccounttheentryofRayvalTechintotheCompany’sconsolidatedfinancialstatementsin2023H2,weraiseourforecastsoftheCompany’s2024‐2026toRMB2.07(from1.95;+6%yoy),2.34(from2.20;+13%yoy)and2.61(+12%yoy).Withreferencetothevaluationsofcomparablecompanies,wemaintaintargetpriceofRMB34.19(2024PEof16.5x)and“Overweight”rating. SectorRatingsoftheMonth RatingSector OW BuildingMaterials,ComprehensiveFinance,Insurance,CommercialBanking,Coal,Food&Drink, P