Morning Brief
MarketResearch MorningBrief [October9th,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●A‐ShareStrategySpecial:OvercapacityandStockMarket ●ETFMarket:SpecialReport ●Active(Passive)AssetAllocation:EquityFactors ●TelecomSector:UpdateReport ●AirlinesSector:UpdateReport LatestReports ●Huaxiang(603112):OW,TP@RMB16.35 ●PostalSavingsBank(601658):OW,TP@RMB6.31↑ ●CayiVacuumContainer(301004):OW,TP@RMB121.30↑ 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 A‐ShareStrategySpecial:OvercapacityandStockMarket China’smanufacturingindustryiscurrentlyunderthepressureofstructuralovercapacity,especiallythetraditionalresourcegoodsindustries(i.e.buildingmaterials–cement/glass,steelandchemicals)andtheadvancedmanufacturingindustries(specialequipment,powerequipment,nonferrous‐energymetals,automobileandTMTequipment). Asforthetraditionalindustries,thesolutiontoovercapacitycountsonthesupplyside,inparticular,themandatorycapacityreductioninformofslowingdownnewcapacitygrowthandcuttingexistingcapacities.Aslearnedfromthepastrecords,theappearanceoftheturningpointofproductpriceisanimportantsignalfortheameliorationofovercapacitypressureaswellastheriseofstockprice.Sofar,theturningpointofproductpriceisyettobeobserved. Asfortheadvancedmanufacturingindustries,fastergrowthofdemandismoreabletoassuageovercapacity.Thesignalsofthedemandside,suchastheeconomicpolicypackages,householdconsumptionpromotion,newtechbreakthrough,overseasmarketexpansionandreplacementpurchase,aregoodreferenceforstockprice.Takingintoaccountboththeproductioncapacitylifecycleandstockmarketperformances,weprefertheleadingcompaniesinsemiconductor,constructionmachinery,batteryandautomobileindustrieswhosedownstreamdemandhashitbottomorstartedtorecover. ETFMarket:SpecialReport Forthetimebeing,wesuggestthefollowingstrategiesforETFinvestment.First,inthepreliminarystageofmarketrebound,weadvisetomoderatelyholdsomebroad‐baseindexETFs(e.g.CSI300,ChiNextandSTAR50)whicharepopularamonginvestorsortheETFsthattakebenefitfromthedeclineofrisk‐freeinterestrateandtheriseofriskappetite(e.g.non‐bankfinance,computer,media,warindustryandHongKonginternetsectors).Second,inthestageofmixedsectorperformances,weprefertheETFslinkedtothesectorswhicharethesurebeneficiariesofgovernmentpolicies(e.g.securities,realestate,homeapplianceandelectricvehicles)andthegrowthsectorsofstableFY2025earningsandlowvaluation(e.g.electronic,automobile,telecom,powerequipment(battery)andpharmaceutical).Itshouldbenotedthattheproductsofrelativelyactiveperformancesduringthestageofmixedsectorperformancesarethepreferablechoicelater. Active(Passive)AssetAllocation:EquityFactors Ofsinglefactorsthisweek(September30th–September30th,2024),thebestthreeCSI300factorswere5‐dayTradingValue/Volatility,AnalystCoverageandAnalystForecastedRevenueGrowth‐FY3;thebestCSI500factorswereAnalystForecastedRevenuegrowthFY3,AnalystForecastedSP20‐dayChangeand5‐dayTradingValue/Volatility;thebestCSI1000factorswereAnalystForecastedRevenueGrowth‐FY3,AnalystForecastedROE‐FY120‐dayChangeandAnalystForecasted Revenue‐FY3120‐dayChange;thebestthreeCSI2000factorswereAnalystCoverage,5‐dayTradingValue/VolatilityandAnalystForecastedRevenue‐FY3120‐dayChange;thebestthreeCSIAll‐SharesfactorswereAnalystForecastedRevenueGrowth‐FY3,AnalystForecastedROE‐FY3and5‐dayTradingValue/Volatility. Ofmajorfactors,thebestthreeCSI300factorswereMarket‐cap,EarningsandAnalystBetter‐than‐expectation;thebestthreeCSI500factorswereMarket‐cap,GrowthandEarnings;thebestthreeCSI1000factorswereMarket‐cap,GrowthandAnalyst;thebestthreeCSIAll‐SharesfactorswereGrowth,Better‐than‐expectationandMarket‐cap. TelecomSector:UpdateReport Wesuggestfourcluesforthetelecomsector.FirstistheriseofAIindustryworldwide,especiallytheintegrationofAItechnologieswithphotoelectricindustry.SecondisthehighdividenddistributionandnewbusinesstransformationofSOEs.Thirdisthethematicinvestmentinthebreakthroughsinlow‐altitudeeconomy,satellitecommunicationsandvehicle‐mountedcommunications.ForthistheturnaroundoftheleadingcompaniesinInternet‐of‐Things,submarinecableandotherpromisingbusinessesduringtheeconomicrecovery. AirlinesSector:UpdateReport Inviewofthelong‐termvalueofairlinescompanies,wesuggestcontrarianinvestmentinthelowseason.Inthelongrun,theprofitmarginofairlinescompanieswillgoup,becauseoftherisingpenetrationratio,thehugemarketpotential,thelimitedairspaceschedulingresources,themarket‐orientedairfaresandslowergrowthofairfleetsize.In2024,thedemandandsupplyarestillinthestageofrecovery.Despitethehighfuelpricesin2024H1,airlinescompaniesmanagedtoreducetheirdeficitsagain.Therecoveryofinternationalflightsandthegrowthofdemandarebothontheway.Wemaintain“Overweight”ratingforAirChina(601111),JuneyaoAirlines(603885),SouthernAirlines(600029),SpringAirlines(601021)andEasternAirlines(600115). LatestReports Huaxiang(603112):OW,TP@RMB16.35 [Rating:OW(Prv:OW);TP:RMB16.35(Prv:RMB16.35);MP:RMB13.70;Mkt‐Cap:RMB5982mn
