Morning Brief

MarketResearch MorningBrief [November8th,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●ValinSteel(000932):OW,TP@RMB6.13 ●AgricultureSector:UpdateReport ●HomeAppliancesSector:SpecialReport ●NORINCOIntl(000065):OW,TP@RMB16.00↓ ●Active(Passive)AssetAllocation:MajorAssetAllocation ●Active(Passive)AssetAllocation:UpdateReport LatestReports ●GeneralScienceTech(601500):OW,TP@RMB6.08 ●LinglongTyre(601966):OW,TP@RMB28.27 ●LianchuangElectronic(002036):OW,TP@RMB12.50↓ ●TayhoAdvancedMaterials(002254):OW,TP@RMB11.74↓ 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 ValinSteel(000932):OW,TP@RMB6.13 [Rating:OW(Prv:OW);TP:RMB6.13(Prv:RMB6.13);MP:RMB4.85;Mkt‐Cap:RMB33507mn] TheCompanyreported2024Q1~3revenueofRMB111.242bn(‐7.18%yoy)andnetprofitofRMB1.771bn(‐56.86%yoy),inlinewithexpectation.Becausethedownstreamdemandofthesteelindustryremainsweak,welowerourforecastsoftheCompany’s2024‐2026netprofitfromRMB4.568bn,5.030bnand5.673bntoRMB2.852bn,3.281bnand3.806bn,andthecorrespondingEPStoRMB0.41,0.47and 0.55.Withreferencetothevaluationsofcomparablecompanies,wemaintaintargetpriceofRMB6.13(2025PBof0.73x)and“Overweight”rating. AgricultureSector:UpdateReport IftheUSraisestariffsonChinaagainafterTrumptakesoffice,ChinamayretaliatebymeansofreducingthegrainimportfromUS.ThebeanandcornimportfromUSwillcontinuetogodown.Inordertostrengthenitsfoodsecurity,Chinawilllayemphasisontheoutputandtransgenictechnologydevelopmentofseeds,fromwhich,theseedcompanieswhichhaveadvantagesinseedproductsandtechnologicalreserveswilltakebenefit.Offeaturedcompanies,werecommendYLPHigh‐Tech(000998).OtherbeneficiariesincludeWinallSeed(300087),FengleSeed(000713),KangnongSeed(837403),Dabeinong(002385),DenghaiSeeds(002041),SKIAD (601952)andHeilongjiangAgriculture(600598). HomeAppliancesSector:SpecialReport Generallyspeaking,webelievetheleadingcompaniesofhighproportionofwhitegoodsbusiness,balanceddistributionofotherproducttypes,widecoverageinlower‐tiermarketsandcompetentlocaldistributorsaremoreabletorealizeandsustainfastprofitgrowth.Offeaturedcompanies,werecommendMidea(000333)(2024PE:14.1x),Haier(600690),GreeAppliances(000651)(7.7x),Haier(600690)(13.7x),HisenseAppliances(000921)(11.1x),TCLElectronics(1070.HK)(10.6x),HisenseVisual(600060)(14.3x),Vatti(002035)(13.6x),Robam(002508)(14.1x),Roborock(688169)(20.1x)andEcovacs(603486)(25.1x). NORINCOIntl(000065):OW,TP@RMB16.00↓ [Rating:OW(Prv:OW);TP:RMB16.00(Prv:RMB19.13);MP:RMB11.87;Mkt‐Cap:RMB11897mn] TheCompanyreported2024Q3quarterlynetprofitgrowthof15.9%yoy,withslightincreaseofcashoutflow,inlinewithourexpectation.Becauseoftheslowdownoftheprofitgrowthofpowergenerationbusinessin2024Q1~3,welowerourforecastsoftheCompany’s2024‐2026EPSfromRMB1.09,1.30and1.51toRMB1.01(+10%yoy),1.10(+10%yoy)and1.21(+9%yoy).WelowertargetpricetoRMB16(2024PEof15.8x).“Overweight”ratingmaintained. Active(Passive)AssetAllocation:MajorAssetAllocation Wemaintain“StandardPosition”forUSstocks.Trump’selectionwillreducethe speculationsonmajorassetpricingandthereforeincreasetheriskappetiteofthemarket.Despitesomemarginalcontraction,USeconomyremainsresilientandrelativelysound.Trump’staxcutproposalwill,tosomeextent,improvetheearningsofsmallandpro‐cyclicalbusinesses.Becauseofbetter‐than‐expectedbusinessearningsorlower‐than‐expectedliquidity,cyclicalsectorsmayoutperformscience‐techgrowthsectorsforsometime.Tobespecific,broad‐baseindices,DJIandS&P500mayoutperformNasdaq. Active(Passive)AssetAllocation:PassiveAssetAllocationMonthly InOctober2024,themonthlyreturnsandtheYTDreturnsofourmodelswere:DomesticAssetBLModel1(+1.0%,+7.5%),DomesticAssetBLModel2(+0.95%, +6.38%),DomesticAssetRiskParityModel(+0.31%,+5.99%)andMacroFactorAssetAllocationModel(+0.0%,+4.92%). LatestReports GeneralScienceTech(601500):OW,TP@RMB6.08 [Rating:OW(Prv:OW);TP:RMB6.08(Prv:RMB6.08);MP:RMB5.25;Mkt‐Cap:RMB8345mn] Takingintoaccounttheimpactsfromrawmaterialspricesandexchangeloss,welowerourforecastsoftheCompany’s2024‐2026EPSfromRMB0.44,0.64and0.76toRMB0.34,0.52and0.61.ButbecausetheCompanyhasrealizedrelativelyfastgrowthofproductioncapacityandhasstronggrowthpotential,wemaintaintargetpriceofRMB6.08(2025PEof11.69x)and“Overweight”rating. LinglongTyre(601966):OW,TP@RMB28.27 [Rating:OW(Prv:OW);TP:RMB28.27(Prv:RMB28.27);MP:RMB20.06;Mkt‐Cap:RMB29358mn] TheCompany’s2024Q3resultswereinlinewithexpectation.WemaintainourforecastsoftheCompany’s2024‐2026EPSofRMB.48,1.78and2.01.TakingintoaccounttheCompany’sbusinessexpansionintoSerbiaanditstaxcutinThailand,wemaintaintargetpriceofRMB28.27(2025PEof16.06x)and“Overweight”rating. LianchuangElectronic(002036):OW,TP@RMB12.50↓ [Rating:OW(Prv:OW);TP:RMB12.50(Prv:RMB13.20);MP:RMB11.26;Mkt‐Cap:RMB12032mn] Duetotheunsatisfactoryrecoveryofdownstreamdemand,welowerourforecastsoftheCompany’s2024‐2026EPStoRMB0.02(‐0.31),0.25(‐0.28)and0.34.WithreferencetothevaluationsofcomparablecompaniesandalsotakingintoaccounttheCompany’sleadingpositioninautomo