Morning Brief

MarketResearch MorningBrief [October29th,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●BondMarket:SpecialReport ●AgricultureSector:UpdateReport ●Active(Passive)AssetAllocation:UpdateReport ●QuantitativeResearch:UpdateReport ●ZhongfuInfo(300659):OW,TP@RMB25.73 ●NorthNavigation(600435):OW,TP@RMB18.90↑ LatestReports ●SinofuseElectric(301031):OW,TP@RMB128.49↑ ●LivzonPharma(000513):OW,TP@RMB43.96 ●JiuzhouPharma(603456):OW,TP@RMB20.33↑ ●Feilihua(300395):OW,TP@RMB58.97↑ ●NhwaPharma(002262):OW,TP@RMB33.60↑ ●RainbowChemical(301035):OW,TP@RMB58.23 ●HaidGroup(002311):OW,TP@RMB59.80↓ ●XingyuAutomotiveLighting(601799):OW,TP@RMB172.23 ●UEFurniture(603600):OW,TP@RMB13.80↑ ●XinjiEnergy(601918):OW,TP@RMB10.92 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 BondMarket:SpecialReport Forthetimebeing,thestock‐fundcashflowisstillbeingledbyindividualinvestors.Thefinancialinstrumentsinwhichindividualinvestorsholdalargeshare,suchasmoneymarketfundsandassetmanagementproducts,havebiginfluencesonthecashoutflowofthebondmarket.Incomparison,thefinancialinstrumentsinwhichinstitutionalinvestorsholdalargeshare,suchashybridbondmarketfunds,havenoobviouschangeseitherinnetvalueorasset(i.e.stocks,bonds)allocationproportionsandhavenosignificantincreaseoftheirstockpositions.Suchphenomenonisalsoreflectedbytheexpansionofpassiveindexstockfundsbutnocontractionofbondfundssincelate‐September.Nevertheless,becausethepreviousStateCouncil’spressconferencetookplacetheendof2024Q3andthetimewindowformarketresponsewasveryshort,iftheequitymarketkeepsonskyrocketinginfuture,thepossiblepositionswitchofinstitutionalinvestorswillboostthebond‐to‐stockcashflow. AgricultureSector:UpdateReport OurrecommendationsforthisNovember:(1)pighusbandry:MuyuanFoods(002714)andWensFoodstuff(300498);(2)seeds:Dabeinong(002385)andYLPHigh‐Tech(000998).Ofthepetfoodsub‐sector,wepreferChinaPetFoods(002891),PetalPetNutrition(300673)andGambolPet(301498). Active(Passive)AssetAllocation:UpdateReport Wemaintain“StandardPosition”forUST‐bonds,andwearemorecautiousaboutIndianstocksandlowertheratingofIndianstocksto“StandardPosition”. Thisweek(October21st–October25th,2024),ourDomesticActivePortfoliorecordedweeklyreturnof0.71%andexcessreturnof0.26%(c.f.benchmarkindexreturnof0.45%),andourGlobalActivePortfoliorecordedweeklyreturnof‐0.33%andexcessreturnof‐0.04%(c.f.benchmarkindexreturnof‐0.29%).AsofOctober27th,2024,DomesticActivePortfoliorecordedcumulativeexcessreturnof2.84%(annualizedreturnof8.98%)andcumulativeabsolutereturnof6.55%(annualizedreturnof21.48%),andGlobalActiverecordedcumulativeexcessreturnof2.76%(annualizedreturnof8.72%)andcumulativeabsolutereturnof4.73%(annualizedreturnof15.23%). QuantitativeResearch:UpdateReport In2024Q3,fundsincreasedthepositionofpowerequipmentandnon‐bankfinancesectors,andthepositionsoftelecom,automobileandwarindustrysectorswereatrecordhigh.(1)Fundsincreasedthepositionsofmanufacturing(+2.76%,qoqandsamebelow)andfinancial(+0.84%yoy),andreducedthepositionsofscience‐tech(‐0.48%)andupstreamanddownstreamcyclicalsectors.(2)Electronicsectorremainedthebiggestheavy‐weightsector.Thepercentagesofthepositionsofpowerequipment,non‐bankfinanceandhomeappliancessectorsincreased,whilethatof publicutilities,nonferrousmetalsandelectronicsectorsdecreased.Thepercentagesofthepositionsofautomobile,telecomandwarindustrywereatabove90%oftheirhistoricalquantilesince2010. ZhongfuInfo(300659):OW,TP@RMB25.73 [Rating:OW(Prv:N/A);TP:RMB25.73(Prv:N/A);MP:RMB18.33;Mkt‐Cap:RMB4773mn] WeforecasttheCompany’s2024‐2026EPSofRMB(‐0.26),0.68and1.38.BasedonthemedianofPEandPSvaluations,wesuggesttargetpriceofRMB25.73(2025PEof37.65x)and“Overweight”rating. NorthNavigation(600435):OW,TP@RMB18.90↑ [Rating:OW(Prv:OW);TP:RMB18.90(Prv:RMB12.22);MP:RMB11.66;Mkt‐Cap:RMB17520mn] Becauseofthedecreaseoftheanticipatednewbusinesscontracts,welowerourforecastsoftheCompany’s2024‐2026EPSfromRMB0.16,0.22and0.27toRMB0.13, 0.21and0.27.WithreferencetothevaluationsofcomparablecompaniesandalsotakingintoaccounttheCompany’suniquepositionintheindustrialchain,wesuggest2025PEof90xandraisethecorrespondingtargetpricetoRMB18.9.“Overweight”ratingmaintained. LatestReports SinofuseElectric(301031):OW,TP@RMB128.49↑ [Rating:OW(Prv:OW);TP:RMB128.49(Prv:RMB90.00);MP:RMB107.97;Mkt‐Cap:RMB7156mn] TheCompanyisaleadingfuserproducerinChina,benefitingfromthedemandfromalternativeenergyindustriesandtherisingpenetrationof800‐voltplatforminalternativeenergyvehicles.WelowerourforecastsoftheCompany’s2024‐2026EPSfromRMB2.86,4.17and5.74toRMB2.83,4.15and5.70.TheCompanydeservessomepremiuminstockvaluationforitsleadingshareindomesticmarket.Wesuggest2025PEof30.93x(20%abovesectoraverage)andraisethecorrespondingtargetpricetoRMB128.49(from90).“Overweight”ratingmaintained. LivzonPharma(000513):OW,TP@RMB43.96 [Rating:OW(Prv:OW);TP:RMB43.96(Prv:RMB43.96);MP:RMB38.00;Mkt‐Cap:RMB35222mn] TheCompanyreported2024Q3revenueofRMB2.799bn(‐5.6