Morning Brief

MarketResearch MorningBrief [October8th,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●MacroResearch:UpdateReport ●A‐ShareStrategyWeekly:KeepClimbing ●OverseasMarketStrategy:HongKongStocks ●Non‐bankFinancialSector:UpdateReport ●ConstructionSector:UpdateReport ●Active(Passive)AssetAllocation:SpecialReport ●ActiveQuantitativeReport:UpdateReport LatestReports ●SouthernAirlines(1055.HK):OW ●EasternAirlines(600115):OW,TP@RMB5.94↓ ●SouthernAirlines(600029):OW,TP@RMB7.74↓ ●AirChina(601111):OW,TP@RMB13.52↓ ●AirChina(0753.HK):OW ●EasternAirlines(0670.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 MacroResearch:UpdateReport DuringtheNationalDayholidays(Oct1st—7th,2024),theheatoftourismwashigh.Roadtripremainedthemostpopularchoice,andtheproportionoflong‐distancetravelincreased.Meanwhile,theboxofficeincomeofcinemasstayedlow,butpercapitatourismspendingmightleveloff.Homesalesboomedafterthelaunchingofnewrealestatepolicies,butthesustainabilityisinquestion.Tourismandcateringincomegrewconsiderably. Duringthesameperiodoftime,theexpectationsforFedReserve’sinterestratecutcooleddown;theexpectationsfortheBankofJapan’sinterestratehikesloweddown;theexpectationsfortheEuropeanCentralBank’sinterestratecutincreased,whichcontinuedtofavorstrongUSdollar.Oilpricesstayedhigh,duetotheescalatinggeopoliticalrisk.AndthedeclineoftheexpectationsforworldwiderecessionfavoredUSstocks,Japanesestocksandbulkcommoditiesprices. A‐ShareStrategyWeekly:KeepClimbing A‐shareindicesmaykeepclimbing,andgrowthstocksmayoutperformothers.A‐sharemarketwitnessedahistoricbigrisebeforetheNationalDay(October1st,2024)andHSIgainedanother10%duringtheNationalDayholidays(October1st—6th,2024),makingChinastockmarketthebeststockmarketintheworldsofarthisyear.AswesaidinourweeklyreportsdatedonSeptember24thandSeptember29th,thedrasticchangeoftheauthority’sattitudetowardseconomicpoliciesandcapitalmarket,asreflectedbythefinancialpolicyeasingandtheactivesignalssentbythePolitburothisSeptember,istheessentialcauseforthisroundofbullmarket.Infact,thegraveeconomicstatisticsandoutlookatpresent,ratherthandeliveringamaterialimpactonChinastockmarket,willfurtherstrengthenoptimisticmarketexpectationsformoreandmorepolicystimulus.Beforethestartingofthisbullishrun,themarkethadbeenclearedalready,afteryearsofretreatsandshortselling.Themaindriversofthecurrentbullmarketarethedeclineofrisk‐freeinterestrateandtheriseofriskappetite.WeanticipatetheoptimisticmarketsentimentstocontinuetopushupShanghaiCompositetotheleveloftheyears2021‐2022.Theremaybesomecorrectionsafterthesharprise,andtheoutlookofA‐sharemarketwillseetotheyearendconditions.Nowthevaluationofheavy‐weightstocksisrecoveringquickly,andgrowthstocksaremoreabletooutperformothers. Thedeclineofrisk‐freeinterestrateisthekeydriverofthisroundofbullmarket,andETFshavebiginfluencesonstockindicesandtradingstructurethistime.Therisk‐freeinterestrateofChinastockmarketisnottheyieldofTreasurybond.Becausetheadjustmentoffinancialpoliciesisslowerthanthedeclineofthedomesticdemand,theopportunitycostofstockholdingisgoingup.Theauthority’sremarksof“implementingpowerfulinterestratecut”mayhelptolowertherealinterestrateandrisk‐freeinterestrateandthusencouragenewcashinflowintothestockmarket.Inparticular,underthecurrentcircumstanceofextreme“assetthirst”,thebullishrunandthewealtheffectofA‐sharemarkethavemadeA‐sharesoneoftherareprofitableassetsforoff‐marketfunds.Inthepasttwoweeks,thesizesofbonds(excluding convertiblebonds)andmoneymarketETFsshrankbyasmuchas5.39%and18.28%,whilethesizeofstockETFsdoubled.Theentryofbroad‐baseETFs,asanewinstrumentrecentyears,havean“instant”effectontheriseofstockindices.TheturnoverofETFshasrisenfromlessthan2%ofthetotalturnoverofShanghaiandShenzhenstockmarketsin2021to7%sofar,almostthesameasthatofmargintrading.TheproportionsofbothETFsandmargintradingareexpectedtocontinuetogoup.Inthepasttwoweeks,theindicesofthelargeststockETFturnoverswereCSI300,CSI1000,STAR50,ChiNextandCSI500. Asforsectorselection,weanticipategrowthstockstotaketheleadofmarketriseaftervaluestocks,andthestockmarketoutlookwillseetotheyearendconditions.Forthecausesofbig‐powercompetitionanddomesticeconomictransformation,thecurrenteconomicpolicies,fiscaldisciplinesandfinancialoversightoftheauthoritieslaymoreemphasison“constructinglong‐termmechanism”.Afterwerecommendedthelow‐valuationblue‐chipstocksastheprioritychoiceonSeptember24th,wenowadvisetomoveontothesectorssensitivetothedeclineofrisk‐freeinterestrateandtheriseofriskappetite.Tobespecific,werecommend(1)(risingtradingvolume;M&A)non‐bankfinance;(2)(risingriskappetite)computer,mediaandwarindustry;(3)(growthstocksofstable2025Ebusinessprospectandlowstockvaluation)electronic,automobile,telecom,powerequipment(battery),pharmaceuticalandgrowthconsumergoods. Asforinvestmentthemes,werecommend(1)“FinancialIT”:securitiesITandfinancialITapplicationinnovation;(2)“DiscretionaryConsumption”:medicalservicesand