Morning Brief

MarketResearch MorningBrief [November12th,2024] MorningBrief ZHOUJinyu021‐38674924zhoujinyu011178@gtjas.comS0880516080007 Contents TopRecommendations ●CoalSector:In‐depthReport ●NonferrousMetalsSector:UpdateReport ●Active(Passive)AssetAllocation:MajorAssetAllocation ●XindeNewMaterial(301349):OW,TP@RMB36.29↓ LatestReports ●YangtzeOpticalFibre(601869):OW,TP@RMB38.46 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 CoalSector:In‐depthReport Xinjiangisrichincoalresources,readytocaterforhugedemand.Inthemediumandlongterm,asthemaincoalproducingareasincentralandeasternChinafacetheriskofcoalresourcedepletionandoutputreduction,thestrategicimportanceofXinjiangcoalwillbecomemoreprominent.Offeaturedcompanies,werecommendthosewithbothcoalminingcapacityandcoalchemicalprojectsinXinjiang,includingShenhuaEnergy(601088),ShaanxiCoal(601225),ChinaCoalEnergy(601898),YankuangEnergy(600188)andPingdingshanCoal(601666).JinnengHoldingShanxiCoal(601001)isanotherbeneficiary. NonferrousMetalsSector:UpdateReport Wemaintain“Overweight”ratingforthelithiumandcobaltsub‐sectors. Lithium.Thelithiumholders’strongwilltosustainlithiumpriceandtherecoveryofdownstreamdemandhaveresultedinshortageofthesupplyofspotlithiumore.Offeaturedcompanies,wesuggest“Overweight”ratingforYongxingMaterials(002756),GanfengLithium(002460),TianqiLithium(002466),Youngy (002192),ChengxinLithium(002240)andZanggeMining(000408).OtherbeneficiariesincludeSinomineResource(002738),TibetMineral(000762),JiangxiSpecialMotor(002176),SaltLake(000792),TA&AUltraClean(300390),KedaIndustrial(600499),TibetSummitResources(600338)andSichuanNewEnergyPower(000155). Cobalt.Cobaltpriceremainslowduetoslackdownstreamdemand.Mostcobaltproducersareenteringthedownstreampowerequipment&alterativeenergymanufacturingindustriessoastoreducetheircostsbymeansofintegratedproductionofcobalt,nickelandprecursor.Offeaturedcompanies,wepreferHuayouCobalt(603799),HanruiCobalt(300618),CMOC(603993)andGEM(002340). Active(Passive)AssetAllocation:MajorAssetAllocation Wemaintain“StandardPosition”forUSstocks.Trump’selectionwillreducethespeculationsonmajorassetpricingandthereforeincreasetheriskappetiteofthemarket. Wemaintain“StandardPosition”forUST‐bonds.Becauseofthemarginalcontractionandcooling‐downofUSeconomy,thepivotalinterestratestillhashighpossibilitytogodowninfuture.ButtheresilienceofUSeconomywillrestrictsuchdecline,andtherearealsobiguncertaintiesabouttheinterestratecutroutemapandpaceoftheFedReserve. Wemaintain“OverweightPosition”forChinaT‐bond.RMBinterestratetendstogoup,duetounbalancedcreditsupplyanddemandcharacterizedwithfinancingdemandandinsufficientassetsupply.Theconfirmationofthedirectionandstrengthofproactivefiscalpolicieswillhelptorecuperatetheeconomy. XindeNewMaterial(301349):OW,TP@RMB36.29↓ [Rating:OW(Prv:OW);TP:RMB36.29(Prv:N/A);MP:RMB35.83;Mkt‐Cap:RMB3655mn] TheCompanywasindeficitin2024Q1~3duetoincreasingbusinesscompetitions.Accordingly,rwelowerourforecastsoftheCompany’s2024‐2026EPStoRMB0.01(‐1.77),0.72(‐1.74)and1.16.ButtakingintoaccounttheCompany’sstatusastheonlylistedcompanyincathodecoatingmaterialindustry,andinreferenceofthePBofcomparablecompanies,wesuggest2024PBof1.34xandlowerthecorrespondingtargetpricetoRMB36.29.“Overweight”ratingmaintained. LatestReports YangtzeOpticalFibre(601869):OW,TP@RMB38.46 [Rating:OW(Prv:OW);TP:RMB38.46(Prv:RMB38.46);MP:RMB30.67;Mkt‐Cap:RMB23245mn] TheCompanyannounceditsplantopurchasetheequitiesofPentaLaserandCutliteandconsolidatethetwocompaniesintoitsfinancialstatements.Becausethisdealisonlyinthepreliminarystageofaframeworkagreement,wemaintainourforecastsoftheCompany’s2024‐2026netprofitofRMB724mn,1,016mnand1,330mn,andcorrespondingEPSofRMB0.96,1.34and1.76.WemaintaintargetpriceofRMB38.46and“Overweight”rating. SectorRatingsoftheMonth RatingSector OW BuildingMaterials,ComprehensiveFinance,Insurance,CommercialBanking,Coal,Food&Drink, Pharmaceutical,RealEstate,MachineryManufacturing,Transportation,ConstructionEngineering,NonferrousMetals HouseholdAppliances,TransportationEquipment,MassMedia&Cultural,Agriculture,Textile& NT UWInformationTechnology,InformationScience Garments,Retailing,PowerEquipment,SocialServices,PublicUtilities,Iron&Steel Note:TheratingsabovearemadebyGTJAStrategyTeam,whichmaynotalwaysbeinlinewiththeopinionsofGTJAindustryanalystsduetodifferentemphasesandtimerangeswhentheseratingsaremade. MarketStrategyWeeklyViewpoint(LastUpdate:November10th,2024)A‐ShareStrategyWeekly:UntilThisYearend A‐sharemarketmayrunintoshort‐termcorrections,andthegeneralmarkettrendwillbeclearbytheendofthisyear.Inlinewithourpredictionforthereboundoflarge‐capstocksinourstrategyreportdatedonNovember3rd,ShanghaiCompositeandChiNextreboundedby5.51%and9.32%thisweek.Thechangeoftheauthority’sattitudetowardeconomicsituationandcapitalmarketisthecornerstoneforA‐sharemarkettoleveloffandfollowamedium‐termN‐shapedcurve.Newsupportivepolicypackagehasalsobeenlaunched.Meanwhile,Trump’selectionasUSnewpresidenthasreducedgeopol