Morning Brief
MarketResearch MorningBrief [November1st,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●SteelSector:UpdateReport ●YangtzePower(600900):OW,TP@RMB34.32 ●HuaxinCement(600801):OW,TP@RMB17.67↑ ●WanhuaChemical(600309):OW,TP@RMB90.76 ●Active(Passive)AssetAllocation:UpdateReport LatestReports ●ChinaCommunicationsConstruction(601800):OW,TP@RMB14.10 ●AppTec(603259):OW,TP@RMB71.82↑ ●Hualu‐HengshengChemical(600426):OW,TP@RMB26.84 ●Lu’anEnvironEnergy(601699):OW,TP@RMB18.55↑ ●NewChinaLife(601336):OW,TP@RMB61.40 ●Midea(000333):OW,TP@RMB90.72↑ ●Wuliangye(000858):OW,TP@RMB175.00↑ ●GFSecurities(000776):OW,TP@RMB20.80↑ ●JueweiFood(603517):OW,TP@RMB23.32↑ ●BTGHotels(600258):OW,TP@RMB17.00 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 SteelSector:UpdateReport Wemaintain“Overweight”ratingforthesteelsector.Mostofthesteelcompaniesarenowbelow1xPB,andsomeofthemareevenbelow0.5x.Weanticipatethelatestpolicysupportwillhelptoelevatethestockvaluationofthesteelcompanies. Offeaturedcompanies,werecommend(1)(productstructureupgrading)ValinSteel(000932);(leadingtechnologiesandproductstructure)Baosteel(600019);(lowcostandbettermanagement)XinyuSteel(600782);(2)(highbusinessclimateofspecialsteelandnewmaterials)CITICSpecialSteel(000708)andYongjinTech(603995);(hugedomesticdemandforboilerandoilfieldpipes)WujinStainless(603878),JiuliMetals(002318)andShengtakNewMaterial(300881);(high‐temperaturealloys)TolandAlloy(300855);(newmaterials)POCO(300811)andXianglouNewMaterial(301160);(3)(therisingdemandforupstreamresources)HBISResources(000923),ErdosResources(600295),DazhongMining(001203)andAnning(002978). YangtzePower(600900):OW,TP@RMB34.32 [Rating:OW(Prv:OW);TP:RMB34.32(Prv:RMB34.32);MP:RMB27.58;Mkt‐Cap:RMB674833mn] TheCompanyreported2024Q1~3revenueofRMB66.3bn(+14.6%yoy)andnetprofitofRMB28.0bn(+30.2%yoy),ofwhich,2024Q3revenuewsRMB31.5bn(+17.3%yoy)andnetprofitwasRMB16.7bn(+31.8%yoy),betterthanourexpectation.WemaintainourforecastsoftheCompany’s2024‐2026EPSofRMB1.43,1.51and1.60.TheCompanyisaleadinghydropowercompanywithhighdistributionratio.WemaintaintargetpriceofRMB34.32and“Overweight”rating. HuaxinCement(600801):OW,TP@RMB17.67↑ [Rating:OW(Prv:OW);TP:RMB17.67(Prv:RMB13.79);MP:RMB15.20;Mkt‐Cap:RMB31601mn] TheCompanyreported2024Q1~3revenueofRMB24.716bn(+2.29%yoy),netprofitofRMB1.138bn(‐39.26%yoy)andnetprofitbeforenonrecurringgains/lossesofRMB1.063bn(‐41.69%yoy),ofwhich,2024Q3revenuewasRMB8.482bn(+1.78%yoy),netprofitwasRMB408mn(‐40.17%yoy)andnetprofitbeforenonrecurringgains/losseswasRMB383mn(‐41.34%yoy),inlinewithexpectation.WemaintainourforecastsoftheCompany’s2024‐2026EPSofRMB0.91,1.09and1.34.Takingintoaccountthehikeofcementpricesin2024Q4andtheameliorationofthedemandandsupplyin2025afterproductioncapacityreplacement,carbonemissionandotherpolicies,andalsowithreferencetothevaluationsofcomparablecompanies(2025PEof16.22x),weraisetargetpricetoRMB17.67andmaintain“Overweight”rating. WanhuaChemical(600309):OW,TP@RMB90.76 [Rating:OW(Prv:OW);TP:RMB90.76(Prv:RMB90.76);MP:RMB75.25;Mkt‐Cap:RMB236266mn] TheCompanyreported2024Q1~3revenueofRMB147.6bn(+11.35%yoy)andnetprofitofRMB11.093bn(‐12.93%yoy),ofwhich,2024Q3revenuewasRMB50.54bn(+12.48%yoy,‐0.73%qoq)andnetprofitwasRMB2.92bn(‐29.41%yoy,‐27.33%qoq), lowerthanexpectation.Accordingly,welowerourforecastsoftheCompany’s2024‐2026EPSfromRMB6.27,7.51and8.50toRMB4.62,6.00and7.94.With referencetothevaluationsofcomparablecompanies,wemaintaintargetpriceofRMB90.76(2025PEof15.13x)and“Overweight”rating. Active(Passive)AssetAllocation:UpdateReport Basedonourquantmodelsandactiveallocationtheories,wesuggestthefollowingA‐sharesectorrankingforactiveassetallocationforthisNovember:(1)top5sectors:computer,telecom,non‐bankfinance,electronicandmedia;(2)lowest5:coal,realestate,publicutilities,petrochemicalandsteel. Growthstylesectorsaccountforthemajoritypartofthetop25%sectors,butnon‐bankfinancesectoralsoranksaheadandhashighoddstoreappremiumyield.Theproportionsofstabilizationstyleandcyclicalstylesectorsdecreasedsharply,andthereisalsopolarizationamidthefinancialsector.Weadvisetochoosea“dumbbell‐shaped”balancedallocationportfolioconsistingofnon‐bankfinancesectorandgrowthstylesectors. LatestReports ChinaCommunicationsConstruction(601800):OW,TP@RMB14.10 [Rating:OW(Prv:OW);TP:RMB14.10(Prv:RMB14.10);MP:RMB10.28;Mkt‐Cap:RMB167344mn] Becausetheprogressoftheinfrastructureinvestmentoftheconstructionindustrywasslowerthanexpectation,welowerourforecastsoftheCompany’s2024‐2026EPSfromRMB1.62,1.78and1.95toRMB1.50(+3%yoy),1.56(+4%yoy)and1.60(+3% yoy).WemaintaintargetpriceofRMB14.10(2024PEof9.4x)and“Overweight”rating. AppTec(603259):OW,TP@RMB71.82↑ [Rating:OW(Prv:OW);TP:RMB71.82(Prv:RMB52.96);MP:RMB52.00;Mkt‐Cap:RMB150176mn] TheCompanyreported2024Q3revenueofRMB10.461bn(‐1.96%yoy)andnetprofitofRMB2.293bn(‐17.02%yoy),inlinewithexpectation.WemaintainourforecastoftheCompany’s2024EPSofRMB3.34.Inviewoftherisingearningsfollowi
