Morning Brief

MarketResearch MorningBrief [June28th,2024] MorningBrief DINGDan0755‐23976735dingdan@gtjas.comS0880514030001 Contents TopRecommendations ●JiuliMetals(002318):OW,TP@RMB30.20↑ ●PowerChina(601669):OW,TP@RMB7.50 ●Wholesale&RetailSector:UpdateReport ●CoalSector:UpdateReport ●ConstructionMachinerySector:UpdateReport ●PharmaceuticalSector:SectorStrategy LatestReports ●King’sLuckBrewery(603369):OW,TP@RMB78.26 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 JiuliMetals(002318):OW,TP@RMB30.20↑ [Rating:OW(Prv:OW);TP:RMB30.20(Prv:RMB22.50);MP:RMB22.92;Mkt‐Cap:RMB22397mn] TheCompanyreported2023revenueofRMB8.568bn(+31.07%yoy)andnetprofitofRMB1.489bn(+15.58%yoy),and2024Q1revenueofRMB2.389bn(+42.3%yoy)andnetprofitofRMB328mn(+40.95%yoy),betterthanexpectation.Accordingly,weraiseourforecastsoftheCompany’s2024‐2026netprofittoRMB1.472bn(from1.472bn),1.675bn(from1.534bn)and1.886bn,andEPStoRMB1.51,1.71and1.93.Withreferencetothevaluationsofcomparablecompanies,wesuggest2024PEof20xandraisethecorrespondingtargetpricetoRMB30.2(from22.5)andmaintain“Overweight”rating. PowerChina(601669):OW,TP@RMB7.50 [Rating:OW(Prv:OW);TP:RMB7.50(Prv:RMB7.50);MP:RMB5.50;Mkt‐Cap:RMB94744mn] OnMay23,PresidentXiattendedaconferenceabouttheelectricpowersystemreforms.OnMay29,theStateCouncilpromulgatedthe“ActionPlanforEnergySavingandCarbonEmissionReduction2024‐2025”.Inthefirstfivemonthsofthisyear,theCompany’snewbusinessordersrose7%yoytoRMB478.5bn,ofwhich,thenewordersofenergyandelectricpowerengineeringrose28%yoytoRMB288.4bn.WeforecasttheCompany’s2024‐2026EPSofRMB0.82(+9%yoy),0.91(+10%yoy)and 0.98(+8%yoy).WemaintaintargetpriceofRMB7.5(2024PEof9x)and“Overweight”rating. Wholesale&RetailSector:UpdateReport OnJune11,Chinareleased“OpinionsonExpandingCross‐borderE‐commerceExportandPromotingOverseasWarehouseConstruction”. Thelong‐termoutlookofexportremainsfine,andweprefertheexportersofstablebusinessperformancewhicharerelativelyinsensitivetoexternalrisks.Offeaturedcompanies,weprefer(1)cross‐bordere‐commerce:(B2B)CommoditiesCity(600415);(qualitygoods)Anker(300866),SailvanTimes(301381)andZiel(301376);(B2C)HuakaiYibai(300592),Jihong(002803)andGigaCloud(GCT);(2)Miniso(9896.HK),Sumec(600710)andMeorient(300795);(3)thecandidateIPOs. CoalSector:UpdateReport Webelievetheon‐goingrevaluationofthecoalsectornotonlycamefromthefundamentalchangesofthedemandandsupplystructureandtherising“publicutilitiesattribute”,butalsoreflectedtherarityofrisk‐freehigh‐dividendassetinvestmentstrategies. Offeaturedcompanies,weprefer(1)(stableandforeseeablehighbusinessearnings)ShaanxiCoal(601225)andShenhuaEnergy(601088);(2)(integratedcoal‐powerproduction)XinjiEnergy(601918)andShaanxiEnergy(001286);(3)(long‐termcontracts)HengyuanCoal&Power(600971),PingdingshanCoal(601666),HuaibeiMining(600985)andShanxiCokingCoal(000983);(4)(SOEReforms)China CoalEnergy(601898);(5)(PCIcoal)Lu’anEnergy(601699);(6)(turnaroundofbusinessfundamentals)ShanxiCoalIntl(600546). ConstructionMachinerySector:UpdateReport Thankstoimportsubstitution,riseofelectricvehiclesandpolicysupportonrealestateandinfrastructureconstruction,thesalesofexcavatorsarelikelytorevive.Offeaturedcompanies,werecommend(1)(mainengineplants)XCMGConstructionMachinery(000425)andZoomlion(000157);(2)(non‐excavatormachinery)HengliHydraulic(601100);(3)(aerialworkplatform)DingliMachinery(603338).LiugongMachinery(000528)isanotherbenefic PharmaceuticalSector:SectorStrategy Theprofitgrowththepharmaceuticalsectorisexpectedtobottomout.Innovativedrugsaregoingtoenjoymoreandmorepolicysupports.Themarketsentimentsandsectorvaluationhavebeenmovingdownwardforthepastthreeyears,andnowthePEGofthepharmaceuticalsectorisreasonable. Asforstockselection,wefocuson“Improvement”and“Innovation”.Werecommendthefollowingfeaturedcompanies: (A‐shares)HengruiPharma(600276),ZelgenBiopharma(688266),NhwaPharma(002262),JingxinPharma(002020),Sanjiu(000999),Taiji(600129),YunnanBaiyao (000538),Mindray(300760),SonoscapeMedical(300633),NewIndstriesBioEngineering(300832),WolwoBiopharma(300357)andSinopep‐AllsinoBiopharma(688076); (H‐shares)BeiGene(6160.HK),Hutchmed(0013.HK),InnoventBio(1801.HK),Akeso(9926.HK)andAKMedical(1789.HK). LatestReports King’sLuckBrewery(603369):OW,TP@RMB78.26 [Rating:OW(Prv:OW);TP:RMB78.26(Prv:RMB78.26);MP:RMB47.45;Mkt‐Cap:RMB59526mn] Nowtheliquorindustryisinthesecondhalfoftheinventorycycle,buttheCompanyisalwaysabletobeattheunfavorablebusinessclimate.WemaintainourforecastsoftheCompany’s2024‐2026EPSofRMB3.04,3.67and4.26.WemaintaintargetpriceofRMB78.26and“Overweight”rating. SectorRatingsoftheMonth RatingSector OW BuildingMaterials,ComprehensiveFinance,Insurance,CommercialBanking,Coal,Food&Drink, Pharmaceutical,RealEstate,MachineryManufacturing,Transportation,ConstructionEngineering,NonferrousMetals HouseholdAppliances,TransportationEquipment,MassMedia&Cultural,Agriculture,Textile& NT UWInformationTechnology,InformationScience Garments,Retailing,PowerEquipment,SocialServices,PublicUtilities,Iro