Morning Brief
MarketResearch MorningBrief [November7th,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●OverseasMarketStrategy:UpdateReport ●AutomobileSector:UpdateReport ●OilSector:UpdateReport ●AirChina(601111):OW,TP@RMB13.52 ●T&SCommunications(300570):OW,TP@RMB80.88↑ LatestReports ●PowerChina(601669):OW,TP@RMB7.31 ●ChinaOilfieldServices(2883.HK):OW,TP@HKD9.17↓ ●NORINCOIntl(000065):OW,TP@RMB16.00↓ ●ChinaEnergyEngineering(601868):OW,TP@RMB2.96 ●BaofengEnergy(600989):OW,TP@RMB19.69↓ ●HongqiChain(002697):OW,TP@RMB6.80↓ ●Jiajiayue(603708):OW,TP@RMB14.36↑ 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 OverseasMarketStrategy:UpdateReport Understrongeconomicrealityandweakexpectations,U.S.stockshadbeenhittingnewhighs.Recently,themarkethaspricedinthepossibilitythatTrumpwinsthepresidentialelectionandhasstartedtotradeonre‐inflationandgeopoliticalriskagain,whichsentgold,USDandothersafehavenassetshigh.Next,weanticipatetheshort‐termvolatilityandsensitivityofU.S.stockmarkettobeamplifiedbythreekeyfactors,includingFedReserve’sinterestcut,U.S.presidentialelectionandtheFY2024Q3reportsandforwardguidancethisNovember. WhentheU.S.T‐bondyieldsturndownwardagain,thepricingofU.S.stockmarketwillfocusontheeconomicfundamentalsandindustrysituationsunderfiscalandmonetaryeasingagain.Unlessanyofthethreemajormedium‐termuncertainties(i.e.economicdownslide,much‐higher‐than‐expectedinflationandchaosofinternalpolicy‐makingsystem)appears,themedium‐termoutlookofU.S.stockmarketwillbefine.Inthemediumandlongrun,wepreferthestocksoflessconcentratedholding,smallersellingpressureandbetterbusinessearningsforecasts,inparticular,theS&P500companiesofbetterdownstreamdemandandthefieldsfavoredbythepresident‐to‐be. AutomobileSector:UpdateReport ThevotingdateforU.S.presidentialelectionisNovember5th,2024.BeingahardcoresupporterofTrump,MuskmayenjoypolicybenefitsifTrumpiselectedpresidentagain.Theriskappetiteofthemarketremainshigh,andautopilot,robotandotherhigh‐risk‐appetitesub‐sectorsremainthemajortrendsoftheautomobileindustry.Ofsub‐sectorsandfeaturedcompanies,weprefer(1)automobilemanufacturing:JianghuaiAutomobile(600418),BYD(002594),CFMotorPower(603129),ChanganAutomobile(000625),GreatWallMotor(601633)andLiAuto(2015.HK);(2)autopilot:Xingyu(601799),Keboda(603786),DesaySV(002920),Foryou (002906),W‐Ibeda(688071)andBaolong(603197);(3)alternativeenergy:Tuopu (601689),ShuanghuanDriveline(002472),Xinquan(603179),Yinlun(002126),Rayhoo (002997),ZhenhuaAutoParts(605319),Huguang(605333),Songyuan(300893)and IKD(600933). OilSector:UpdateReport TheimplementationofthepoliciesmadebytheNPCStandingCommitteeinearly‐NovemberandthecontinuedinterestcutbytheFedReservethisNovembermaystimulatethecommoditiesdemandinthenearfuture.Takingadvantageoflowcost,bigproductioncapacitygrowthpotentialandlowstockvaluation,thewhite‐horseleadingcompaniesinthemidstreamanddownstreamoilindustrieswillattractstockmarketattention.Offeaturedcompanies,werecommendBaofengEnergy(600989),SatelliteChemical(002648),HengliPetrochemical(600346),RongshengPetrochemical(002493),Tongkun(601233),Xinfengming(603225),CNOOC(0883.HK)andPetroChina(0857.HK).Ontheotherhand,inviewoftheriseofthebusinessclimateofoffshoreoilengineeringindustryinthenexttwoorthreeyears,werecommendChinaOilfield Services(2883.HK),CNOOCEnergy(600968)andSinopecEngineering(2386.HK). AirChina(601111):OW,TP@RMB13.52 [Rating:OW(Prv:OW);TP:RMB13.52(Prv:RMB13.52);MP:RMB7.58;Mkt‐Cap:RMB125780mn] TheCompany’s2024Q3profitwasmuchhugerthanmarketexpectation.Aftertherecoveryofthedemandandsupply,theriseofCompany’spivotalprofitmayoutrunexpectation.WemaintainourforecastsoftheCompany’s2024‐2026netprofitofRMB0.8bn,6.1bnand15.0bn.Wesuggestcontrarianinvestmentduringthelowbusinessseason.WemaintaintargetpriceofRMB13.52and“Overweight”rating. T&SCommunications(300570):OW,TP@RMB80.88↑ [Rating:OW(Prv:OW);TP:RMB80.88(Prv:RMB52.80);MP:RMB74.00;Mkt‐Cap:RMB16807mn] TheCompany’s2024Q3resultswerebetterthanmarketexpectation.WeraiseourforecastsoftheCompany’s2024‐2026netprofitfromRMB187mn,279mnand367mntoRMB231mn,351mnand461mn,andEPStoRMB1.02,1.55and2.03.Withreferencetothesectorvaluation,wesuggest2025PEof51.18xandraisethecorrespondingtargetpricetoRMB80.88(from52.80).“Overweight”ratingmaintained. LatestReports PowerChina(601669):OW,TP@RMB7.31 [Rating:OW(Prv:OW);TP:RMB7.31(Prv:RMB7.31);MP:RMB5.80;Mkt‐Cap:RMB99912mn] Becauseoftheslowdownofconstructionengineeringprojects,theCompany’s2024Q1~3resultswerelowerthanexpectation.Accordingly,welowerourforecastsoftheCompany’s2024‐2026EPSfromRMB0.82,0.91and0.98toRMB0.72(‐5%yoy), 0.75(+5%yoy)and0.79(+5%yoy).WemaintaintargetpriceofRMB7.31(2024PEof10x)and“Overweight”rating. ChinaOilfieldServices(2883.HK):OW,TP@HKD9.17↓ [Rating:OW(Prv:OW);TP:HKD9.17(Prv:N/A);MP:HKD7.54;Mkt‐Cap:HKD35978mn] ThesuspensionoftheMiddleEastbusinessordersandtheraidoftyphoonsdepressedtheCompany’searningsin2024Q3,andwelowerourforecastsoftheCompany’s2024‐
