Morning Brief

MarketResearch MorningBrief [October18th,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●OilSector:UpdateReport ●ComputerSector:UpdateReport ●COSCOEnergyTransportation(600026):OW,TP@RMB22.96 ●SemiconductorIndustry:IndustryStrategy LatestReports ●XCMGConstructionMachinery(000425):OW,TP@RMB8.22 ●V‐Test(688372):OW,TP@RMB83.30↓ ●ChinaLife(601628):OW,TP@RMB60.71↑ 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 OilSector:UpdateReport ThefriendlyattitudeoftheMinistryofFinance,togetherwiththelatestfinancialsupportsfromtheauthority,hasledtotheexpectationforhigherdomesticcommoditiesandrawmaterialsdemand.Riskappetiteincreased,andmarketconfidencerestored.Meanwhile,geopoliticalriskcontinuedtosendoilpriceshigh.Thelowcostofoilindustryhasenabledittoincreaseitsoutputquicklyupontherecoveryofdownstreamdemand.Andthelowstockvaluationsoftheleadingwhite‐horsecompaniesinthemidstreamanddownstreamindustriesarequiteattractivetoinvestors.Offeaturedcompanies,werecommendBaofengEnergy(600989),SatelliteChemical(002648),HengliPetrochemical(600346),Rongsheng Petrochemical(002493),Tongkun(601233),Xinfengming(603225),CNOOC(0883.HK)andPetroChina(0857.HK).Ontheotherhand,inviewofthelong‐termriseofthebusinessclimateofoffshoreoilengineeringindustryinthenexttwoorthreeyears,werecommendChinaOilfieldServices(2883.HK),CNOOCEnergy(600968)andSinopecEngineering(2386.HK). ComputerSector:UpdateReport FollowingtheadvanceofITapplicationinnovationindustry,thedevelopmentoftheITapplicationinnovationserversandHarmonyOSPCsfortheCPCandgovernmentofficesmayrunbeyondmarketexpectations.Offeaturedcompanies,werecommendKingsoft(688111),Talkweb(002261),iSoftStone(301236),ChinasoftIntl (0354.HK),IEITSystems(000977),Transwarp(688031)andUnisplendour(000938).OtherbeneficiariesincludeVastdata(603138),Taiji(002368),ZhongfuInfo(300659),Hygon(688041),DawningInfo(603019),ChinaGreatwallTech(000066)andLoongson(688047). COSCOEnergyTransportation(600026):OW,TP@RMB22.96 [Rating:OW(Prv:OW);TP:RMB22.96(Prv:RMB22.96);MP:RMB12.90;Mkt‐Cap:RMB61543mn] TheCompanyannounceditsplantopurchaseandintegratethechemicallogisticssupplychainofitsparentgroup.Becausethelimitedsizeoftheassetsofthesupplychaintobepurchased,thispurchasewillnotreversetheCompany’sprofitgrowth.Onthesameoccasion,theCompanyoffereditsfirstmidyeardividenddistribution,forthecauseofmarketvaluemanagement.WeanticipatetheCompany’shigh‐dividendpolicytocontinuethroughouttheyear.Thoughundergeopoliticalpressurein2024H2,theoutlookofabigbullofoilshippingindustryremainsunchanged.Weadvisetomakecontrarianinvestmentrathertradingonthehighseason.WemaintainourforecastsoftheCompany’s2024‐2026netprofitofRMB5.5bn,7.0bnand8.0bn,andmaintaintargetpriceofRMB22.96and“Overweight”rating. SemiconductorIndustry:IndustryStrategy Lastweek,amongtheseventechnologyindustriestracked,semiconductorwastheonlyindustrywhichclosedhigh.Itsselectedindexrose3.2%,outperformingShanghaiCompositeby6.8%pt.Oftheothersixindustries,powerbatteries(‐7.1%) andphotovoltaic(‐6.6%)werethebiggestlosers.However,duetothehighmarketvolatilitylastweek,theweeklyperformancedidnotfullyreflecttheindustrytrend.AslearnedfromthestatisticsofSemiconductorIndustryAssociation,thesalesgrowthofsemiconductorsinglobalmarketwasaround20%.ThegrowthrateinChinawas19%,closetothegloballevel.Fromtheperspectiveofindustrylifecycle,thedevelopmentandbusinessperformancesofsemiconductorindustryarestableandamelioratingatpresent. Despitethehighbusinessclimateofsemiconductorindustryandthebetter‐than‐expectedbusinessresultsofalternativeenergyindustry,themarketcompetitionsremainfierce.Incapitalmarket,theregulatoryauthoritieshavelaunchedmultiplemeasuresrecentlytosupportITapplicationinnovationandM&A,whichhasurgedtraditionalindustryenterprisestostartcross‐businessacquisitionsofhigh‐techcompanies. LatestReports XCMGConstructionMachinery(000425):OW,TP@RMB8.22 [Rating:OW(Prv:OW);TP:RMB8.22(Prv:RMB8.22);MP:RMB7.65;Mkt‐Cap:RMB90394mn] In2024H1,thesalesofhoistersandotherconstructionmachineryslumpedduetotheslackdemandfromrealestateindustry.Meanwhile,theexportwasnotsatisfactorybecauseofthelowdemandfromU.S.andEurope.Accordingly,welowerourforecastsoftheCompany’s2024‐2026EPStoRMB0.53(from0.65),0.67(from0.77)and0.83.WemaintaintargetpriceofRMB8.22and“Overweight”rating. V‐Test(688372):OW,TP@RMB83.30↓ [Rating:OW(Prv:OW);TP:RMB83.30(Prv:RMB100.28);MP:RMB59.72;Mkt‐Cap:RMB6798mn] TheCompanyistheleadingthird‐partyICtestingserviceproviderinChina.Takingintoaccountthedepreciationcostofthenewproductionequipmentandthedividendexpenses,welowerourforecastsoftheCompany’s2024‐2025EPStoRMB1.19(from1.84)and2.34(from2.82).Butinviewofthelong‐termprofitgrowthpotential,weraise2026EPSforecasttoRMB4.45(from3.90).Withreferencetothesectorvaluation(2024PEof53x)andalsotakingintoaccounttherisingproportionoftheCompany’shigh‐endproducts(high‐computingpowerchipandhigh‐reliabilityautomotivechiptesting),wesuggest2024PEof70xandlowert