Morning Brief

MarketResearch MorningBrief [September27th,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●ConsumerElectronicsSector:UpdateReport ●ComputerSector:UpdateReport ●OceanShippingSector:UpdateReport ●Hutchmed(0013.HK):OW ●JNBYDesign(3306.HK):OW,TP@HKD20.90 ●Food&BeverageSector:UpdateReport LatestReports ●TCLElectronics(1070.HK):OWSectorRatingsoftheMonthMarketStrategyWeeklyViewpoint 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 ConsumerElectronicsSector:UpdateReport AIbigmodelshavepromotedtheintelligentupgradingofARglasses.OpticalwaveguideandmicroLEDcanprovideabrighter,sharperandmorecontrastingvisualexperience.Lightweightandhigh‐performancechipsandsensoryinteractionsensorskeptoniterating.Thefast‐growingARindustrywillbenefittherelatingsupplychaincompanies.Offeaturedcompanies,werecommendCrystal‐Optech(002273),Goertek(002241),Longcheer(603341)andBestechnic(688608). ComputerSector:UpdateReport ThefastgrowthoftheHuaweicomputerecosystemwillbenefittherelatingcompanies.Offeaturedcompanies,werecommendChinasoftIntl(0354.HK),iSoftStone(301236)andTalkweb(002261).OtherbeneficiariesincludeDigitalChina(000034),Hoperun(300339),Vastdata(603138),ChinaSoftware(600536),ArcherMind(300598),ChinaGreatWallTech(000066)andChengduHi‐TechDevelopment(000628). OceanShippingSector:UpdateReport Wesuggestcontrarianinvestmentandmaintain“Overweight”ratingfortheoilshippingindustry.Inthepasttwoyears,thereorganizationofworldtradeandtheeastwardmigrationofrefinerieshavegivenrisetohugedemandforoilshipping.Meanwhile,thecapitalutilizationoftheoilshippingmarkethasrisentothebottlenectin2024H1.Therefore,theprosperityoftheoilshippingindustrywillbebiggerandlastlongerthanexpectation.Asthemarketmayhavemisunderstoodtheinfluencesofthedescendingoilpricesonoilshipping,wesuggestcontrarianinvestment.Offeaturedcompanies,wemaintain“Overweight”ratingforNanjingTanker(601975),COSCOEnergyTransportation(600026),ChinaMerchantsEnergyShipping(601872)andCSSC(HK)Shipping(3877.HK). Hutchmed(0013.HK):OW [Rating:OW(Prv:OW);TP:N/A(Prv:N/A);MP:HKD;Mkt‐Cap:HKDmn] OnSeptember24,themedialauthorityofJapanapprovedtheCompany’sFRUZAQLA(i.e.fruquintinib)totreatterminalorrecurrentcolorectalcancerthatisincurableandunresectableafterchemotherapy,makingFRUZAQLAthefirstinnovativetargetedtherapy(regardlessofthebiomarkerstatusofthepatient)forthetreatmentofmetastaticcolorectalcancerinJapaninmorethanadecade.Sofar,thismedicinehasbeenapprovedbyChina,US,EuropeandJapan.AnditssalesinEuropeandJapanwillcontributetotheCompany’sFY2024revenue.Weareoptimisticaboutitssalesinoverseasmarket.Wemaintain“Overweight”rating. JNBYDesign(3306.HK):OW,TP@HKD20.90 [Rating:OW(Prv:N/A);TP:HKD20.90(Prv:N/A);MP:HKD15.18;Mkt‐Cap:HKD7875mn] TheCompanyisalendingclothdesigncompanyinChina.Weforecastthe Company’sFY2025‐2027netprofitofRMB869mn,904mnand987mn.Currentstockpricecorrespondsto2024‐2026PEof9x,8xand8x.BasedontheaveragevalueofPEandDCFvaluation,wesuggesttargetpriceofRMB19.0(orHKD20.9)and“Overweight”rating. Food&BeverageSector:UpdateReport Thekeynoteofgovernmentpoliciesbecamemoreactive,andthelowvaluationofthefood&beveragesectormaymakeiteasiertoseetheameliorationofmarketexpectations.Offeaturedcompanies,ourfirstchoiceistheoversoldcompaniesofconfirmedgrowthinliquorandsnackfoodsub‐sectors.Indetal,wesuggest“Overweight”ratingfor(1)liquor:Wuliangye(000858),YingjiaDistillery(603198),FenWine(600809),KweichowMoutai(600519),King’sLuckBrewery(603369),ZJLD(6979.HK)andChinaResourcesEnterprise(0291.HK);(2)snackfood:ThreeSquirrels(300783),ChachaFood(002557),YanKerShopFood(002847)andJinzaiFood(003000); (3)beer:TsingtaoBrewery(600600),YanjingBrewery(000729),TingyiHolding(0322.HK)andUni‐president(0220.HK). LatestReports TCLElectronics(1070.HK):OW [Rating:OW(Prv:OW);TP:N/A(Prv:N/A);MP:HKD5.00;Mkt‐Cap:HKD12605mn] ThelatestUSSection337InvestigationbyITCagainstsmarttelevisionbelongstonon‐standardpatentdispute.Astherespondent’spatentlicensinghasbecomeanimportantsourceofrevenue,thepurposeoftherespondentshouldbeobtainingcompensationthroughreachingasettlement.Beingaleadingbrowngoodsmanufacturer,theCompanyhastakenbigbenefitfromthegovernmentsubsidiesonthereplacementpurchaseofhomeappliances.Anditscompetitivepowerhasbecomeincreasinglystrongerintheglobalmarket.WemaintainourforecastsoftheCompany’s2024‐2026EPSof2024‐2026EPSofHKD0.56(+90%yoy),0.68(+21%yoy) and0.76(+13%yoy).Wemaintain“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,Iron&Steel Note:TheratingsabovearemadebyGTJAStrategyTeam,whichmaynotalwaysbeinlinewiththeopinionsofGTJAindustryanalystsduetodifferentemphasesandtimer