As the disclosure of the three quarterly reports gradually comes to an end, the valuation of various industries is becoming clearer. Under the current situation of low market operation, the layout of low valuation is an operational strategy that can be attacked and defended. Some people in the industry pointed out that the direction of the market is uncertain, but there is not much room for undervalued varieties to fall, and undervalued stocks with acceptable industry prosperity are expected to take the lead in the future rebound. Therefore, it is recommended that investors pay attention to industries with higher margins of safety, in which valuation repair expectations brought about by low valuations will be one of the main lines. At present, these industries are mainly concentrated in large financial, household appliances, photovoltaic and other industries.

① Big Finance

Valuation repair opportunities

During the recent market correction, the large financial sector has shown strong resilience, and industry analysis is related to the sufficient margin of safety brought about by its low valuation. It can be seen that with the gradual improvement of the macro environment, there are valuation repair expectations in the large financial sector, and investors are advised to focus on banking, securities and other segments.

For the banking sector, the margin of safety effect of low valuation is obvious, and the expectation of valuation repair is strong. CITIC Securities analyst Xiao Feifei pointed out that the central bank released a multi-dimensional positive signal, is expected to continue to steadily advance the next phase of monetary policy, structural monetary policy is still expected to increase the code, set the tone of real estate security risk, real estate policy space still exists, the central bank also guided to increase the intensity of urban investment debt, it is expected that more debt measures will be coordinated to follow up. As far as sector investment is concerned, it is recommended that the next stage focus on real estate credit risk mitigation and the landing of the urban investment debt model.

Dongxing Securities analyst Lin Jinlu also said that the recent marginal improvement in economic data shows that the momentum of economic recovery is gradually strengthening. In the third quarter of the regular monetary policy meeting, the central bank released a positive signal that monetary policy continues to support steady growth, while emphasizing the policy landing, implementation effect, is expected to maintain a strong sustainability of credit in the fourth quarter. We believe that the sector may usher in valuation repair opportunities under the expected improvement in net interest margin and asset quality. We are optimistic about the fourth quarter plate market. Long-term optimistic about the high growth of high-quality regional banks, it is recommended to pay attention to Ningbo Bank, Changshu Bank, Jiangsu Bank and so on.

In securities, institutions believe that the winning rate is higher in the fourth quarter. Yongxing Securities analyst Hu Jiang pointed out that the CSRC's timely adjustment of IPO, shareholder reduction and other systems in the early stage, as well as the moderate tightening of securities lending business this week, all show the firm will of supervision to boost the stock market. The intensive period of the fourth quarter meeting is coming. We believe that the counter-cyclical policy may continue to increase and accelerate the release, which is expected to boost market risk appetite. In the last 5 years and 10 years, the brokerage sector has had a higher winning rate in the fourth quarter, both in terms of relative and absolute returns. We believe that or with the fourth quarter meeting intensive, policy catalysis is expected to be strong, it is recommended to focus on the fourth quarter brokerage sector allocation value. At the individual stock level, it is recommended to pay attention to the current capital constraints, is expected to benefit from the optimization of wind control indicators of the head brokerages CITIC Securities, CICC and Huatai Securities.

Potential Stock Selection

Bank of Ningbo (002142)

personal loan growth bright eye

the company's second-quarter revenue grew 10.2 percent year-on-year, up from 8.45 percent in the first quarter. The company's annualized weighted average return on net assets was 16.15, up 0.11 percentage points year-on-year. Haitong Securities pointed out that the company's loans in the first half of the year increased by 18% year-on-year, of which personal loans increased by 24% year-on-year, accounting for 37.7 of the total loans. The average daily size of 23H1 corporate loans increased 19.28 percent year-on-year, of which the average daily size of personal loans increased 20.10 percent year-on-year. The main increment of individual loans comes from consumer loans and mortgage loans, and the overall growth is bright. Individual customer AUM increased by 23.8 year-on-year, accounting for 34.8 of total assets. The company's wealth management business has 9.04 million clients, up 18.6 year on year. Private banking customer AUM increased 40% year-on-year from 22Q2, and wealth management business grew rapidly.

Changshu Bank (601128)

Debt-side cost optimization

The company expects net profit to grow by about 21% in the first three quarters. Due to the relatively high proportion of its own time deposits, the company is relatively less affected by the deposit regularization impact, and benefit more from the trend of deposit interest rate reduction, we estimate that the optimization of the cost of the debt side provides a certain degree of support for Changshu Bank's interest margin, and this support is expected to continue. Horizontally, the company relies on its own long-term deep cultivation of small and micro business, the village bank contribution to the continuous improvement of the high interest margin to maintain the industry in the extremely excellent level of revenue and performance growth. Zhongtai Securities pointed out that as of the end of September, the company's non-performing loan ratio was basically the same as that of the half year, maintaining the historical best level of 0.75 percent. The company focuses on personal business loan delivery, excellent wind control and constantly sinking channels to broaden the market. The company's interest margin remained stable to drive revenue growth, business model focus, customer structure continued to be small and scattered, asset quality remained at an excellent level, it is recommended to actively pay attention.

CITIC Securities (600030)

Lead Grow

The company is backed by CITIC Group, as a major subsidiary of a large central enterprise group, with significant resource advantages. The company's management strategy forward-looking, interpretation of excellent entrepreneurship, leading the company to the industry leader and gradually expand the advantages. The company's incentive mechanism industry-leading, international talent team to promote the implementation of the strategy. The company's capital operation is mature, bear market mergers and acquisitions, bull market financing, business layout is extensive, comprehensive advantages highlighted. China Merchants Securities pointed out that as the only aircraft carrier-class brokerage with total assets of more than one trillion yuan in the industry, the company's asset scale ranks first in the industry. The income structure is balanced, the capital business and the fee-based business help the company to cross the bull and bear, and the large self-employed contribution is the first. Net revenue through the bulls and bears long-term leading the industry, and the advantages continue to expand. The company's leading edge continues to expand, and is expected to benefit more from the accelerated development opportunities brought about by the deepening reform of the capital market, to achieve competitive barriers to strengthen, earnings growth leading, earnings quality excellent.

Huatai Securities (601688)

stock base trading industry first

the company's stock-based trading market accounted for 8.08, continuing to maintain the industry's first. The company continued to promote the product and service innovation of the "zangle fortune pass" platform, continuously upgraded the financial management and trading service system, and effectively improved the stickiness of customers. in the first half of 2023, the average monthly activity of "zangle fortune pass" was 8.85 million, ranking first in the APP category of securities companies. 96.24 of the company's trading customers traded through "zangle fortune pass. Haitong Securities pointed out that in the first half of 2023, asset management income reached 2.09 billion billion yuan, up 24.9 percent year-on-year. As of the end of the mid-term period, Huatai's management scale declined slightly, but its profitability improved. Public funds realized income of 0.431 billion yuan, up 14% year on year. Among the holding funds of the company, the management scale of southern fund is 1.88 trillion yuan, of which 1.1 trillion yuan is public offering. Huatai Berry has assets under management of 355.9 billion yuan, of which 334.9 billion yuan is public offering management.

② Household appliances

Welcome layout window period

from the income side, the home appliance sector began to improve from the second quarter, with the sub-sectors achieving year-on-year growth. the stable price of raw materials, the depreciation of exchange rate and the decline of sea freight support the quarterly improvement of the profit level. the current valuation of the home appliance sector is relatively low, and the second half of the year is expected to see a double increase in performance and valuation. Some industry insiders suggest that investors pay attention to the repair of the export industry chain, demand improved month-on-month export-oriented small household appliances.

Yang Ce, an analyst at china galaxy Securities, also pointed out that as the disclosure period of the third quarter report approaches, high-quality white electricity and clean electrical appliances enterprises benefit from the recovery of demand, the downward movement of material prices and the fall of sea freight. Black electricity and kitchen electricity leaders are expected to benefit from the improvement of the industry pattern and the iteration of product upgrading, and the home appliance industry welcomes the layout window period.

Channel, offline performance is starting to take off. Meng Xin, an analyst at Founder Securities, pointed out that household appliances, as local consumption or affected by factors such as consumers' travel and the imminent promotion of the Double Eleven, performed flat during the Mid-Autumn Festival and National Day promotion period, but the overall margin is expected to improve and achieve steady growth under the low base effect. According to channels, due to the imminent promotion of the Double Eleven, the promotion period of the Mid-Autumn Festival and National Day may face the problem of insufficient traffic, and the promotion period, it is expected to perform better than online.

with the real estate end to build a bottom to improve and promote consumption policy gradually force, home appliance domestic demand is expected to be supported, overlay festival promotion is coming, to help the release of home appliance consumption vitality. The gradual de-stocking of overseas inventories, the lower exchange rate of the RMB against the US dollar, the continued decline in sea freight and other favorable factors resonate, and the improvement in exports is expected to continue. Yang Ce said that from the valuation point of view, the plate valuation is still in a low position, the margin of safety is high. It is suggested to pay attention to three main investment lines: 1. is expected to benefit from the improvement of exports of white power leading, recommend Midea Group, Gree Electric Appliance and Haier Zhijia; 2. is expected to benefit from the improvement of real estate marginal kitchen electricity, recommend boss electrical appliances, Martians, Yitian Intelligence; 3. domestic and foreign festival promotions to drive the recovery of clean electrical appliances, recommend Cobos, Stone Technology and so on.

Potential Stock Selection

Midea Group (000333)

Accelerated Performance Growth

The company's performance growth accelerated in the first half of the year, achieving operating income of 197.796 billion billion yuan, a year-on-year increase of 7.69, and achieving a net profit of 18.232 billion billion yuan, a year-on-year increase of 13.98. The company's products and channel optimization overlay summer pull, domestic sales to achieve steady growth, in the context of overseas demand pressure, the company's export scale against the trend to improve, highlighting the operating strength. Beijing Capital Securities pointed out that benefiting from the improvement of raw material costs and product price increases, the company's gross profit margin in the first half of the year increased by 2.1 to 25.2, of which the gross profit margin in the second quarter increased by 2.3pct to 26.4. Under the combined influence, the company's net interest rate increased by 0.6 to 9.4 percent year-on-year in the first half of the year, of which the net interest rate in the second quarter increased by 0.7 to 10.3 percent year-on-year, and the company's profitability has improved since 2023. The company's C- side by building a double high-end brand to achieve profit optimization, B- end business scale is also expected to further enhance the performance elasticity.

Haier Zhijia (600690)

Profitability Continues to Improve

The company insists on upgrading its product structure, actively laying out the middle and high-end markets, and iteratively upgrading its product experience through research and development of original technologies. At the same time, deepen the global contact layout, offline expansion of home building materials and other pre-class channels and online to strengthen the content of e-commerce layout, traffic acquisition capacity to improve. Is not the company's gross margin of 30.44, of which the domestic business benefited from the improvement of product structure, global platform research and development, procurement and research and development side of the digital transformation, bulk raw material prices fell, gross margin increased year-on-year. Everbright Securities pointed out that the company is positioned as the world's leading brand, through the seven brand strategy to provide smart family better life solutions, privatization of H-share subsidiaries significantly improve governance efficiency, the company's products are expected to steadily increase the market share of domestic and foreign sales, a new round of employee stock ownership plan to support the performance upward. In the long run, digital transformation will reduce costs and increase efficiency, and the company's profitability will continue to improve.

Boss Electric(002508)

Fixes better than market expectations

the company with high-end brand positioning, perfect omni-channel layout, category market share continued to lead. Benefit store traffic rebound overlay sinking channel expansion smoothly, retail channels recovery growth, traffic to the line transfer trend is obvious, e-commerce channels are higher than double digits, guarantee delivery progress smoothly, engineering channels to achieve high growth. Looking ahead to the second half of the year, with the company's deep distribution to promote, overlay emerging categories to good, revenue is expected to achieve double-digit growth. CITIC Securities pointed out that the company's gross profit margin and net profit margin in the second quarter were 49.7 per cent and 15.8 per cent, up 3.7 per cent and 0.8 per cent year-on-year, with profitability repaired and slightly higher than market expectations at the beginning of the year. We expect the company's profitability to remain strong in the second half of the year, driving performance growth. As a domestic kitchen power leader, the company through deep distribution to improve the market share of smoke stoves, relying on brand awareness and channel heritage to enjoy dishwasher and other emerging categories of dividends, future performance growth certainty is higher.

Stone Technology (688169)

Flexibility is worth looking forward to

the company in the first quarter and second quarter of 2023 to achieve revenue of 11.6, 2.214 billion yuan, respectively, -14.68, 41.57 percent, respectively, to achieve home-to-home net profit of 2.04, 0.535 billion yuan, year-on-year -40.42, 95.53 percent, the second quarter of the company's revenue and performance growth rate turned positive. Beijing Capital Securities pointed out that thanks to the low price of raw materials, the depreciation of the RMB exchange rate, the reduction of technology and supply chain costs, and the improvement of product structure, the company's gross profit margin increased by 2.87 to 51.07 in the first half of the year, and the gross profit margin in the second quarter increased by 2.88 to 51.71. Superimposed on the impact of changes in fair value and tax returns, the company's net interest rate increased by 0.83 to 21.92 percent year-on-year in the first half of the year, and the net interest rate in the second quarter increased by 6.68 to 24.18 percent year-on-year, and the company's profitability continued to improve. Sweeper industry pattern continues to optimize, leading brand market share continues to improve, overlay sweeper overseas demand rebound, the company's performance elasticity is worth looking forward.

③ Photovoltaic

Marginal improvement supports sentiment warming

In 2022, China's new PV installed capacity was 87.41GW, up 59.27 year on year. From January to August 2023, China's photovoltaic installed capacity was 113, up 54.46 percent year-on-year, and the industry business climate continued to rise. Cinda Securities analyst Wu Hao pointed out that since this year, the price of photovoltaic 182/single crystal modules has dropped from about 1.8 yuan/W to about 1.2 yuan/W, down about 35% year on year. We judge that the overall industry supply is relatively loose in 2024, and the low-priced modules are expected to further stimulate the global photovoltaic market demand. It is estimated that the global photovoltaic installed capacity is expected to reach 449GW and 544GW in 2024-2025.

the overall shipment volume of the industry is expected to increase month on month in the third quarter. it is estimated that the shipment growth rate of the leading enterprises can reach 20%, and the shipment growth rate of the leading enterprises in TOPCon layout is more significant. In terms of earnings, Guojin Securities analyst Yao Yao pointed out that benefiting from the increase in component production in the third quarter, the demand for auxiliary materials is good, most of the auxiliary material links shipments increased significantly month-on-month, and the profit improved month-on-month. The fourth quarter for the domestic centralized traditional installation season, we expect industry shipments will continue to maintain month-on-month growth, is expected to be in the middle and lower reaches of the earnings are still in the downward channel, TOPCon/BC and other advantages of capacity layout leading, overseas high-profit market capacity and channel layout leading corporate earnings certainty is stronger.

Yao Yao also pointed out that the photovoltaic industry has recently shown an increasingly obvious trend of improvement on the supply side. considering that the market's concern about this round of "serious overcapacity" is one of the core reasons for the decline of the plate over the past year or so, the signal of continuous marginal improvement on the supply side will effectively support the warming of the plate sentiment and the bottoming out of the market, and the industry has room for repair.

photovoltaic industry chain, Debang Securities analyst Peng Guangchun suggested that investors pay attention to several main lines. The first is the integrated component enterprises Jingke Energy, Longji Green Energy, Jingao Technology and Trina Solar Energy, which have the advantages of quantitative profit and new battery chip technology superposition. The second is the battery link with high profit certainty and the emergence of new technologies, such as Tongwei shares, Aixu shares, Junda shares, etc. The third is TCL Central and Shuangliang Energy Saving, a silicon chip enterprise with its own efficiency or the logic of quantity increase.

Potential Stock Selection

JinkoSolar (688223)

Performance Exceeds Market Expectations

the company forecast the first three quarters to achieve a net profit of 61.4-6.54 billion yuan, with an increase of 266-290, non-net profit 58.3-6.23 billion, with an increase of 285-311. Third quarter net profit of 23-2.7 billion yuan, with an increase of 198-250, ring increase of 5%-23%, non-net profit of 22.9-2.69 billion yuan, with an increase of 222-278, ring increase of-1%-16%, performance exceeded market expectations. Soochow Securities pointed out that the company's integration continues to increase. It is estimated that by the end of 2023, the production capacity of silicon wafers, batteries and components will be 85, 90 and 110GW, with N-type accounting for more than 75% and overseas integration capacity exceeding 12GW. In terms of production capacity, Shanxi 56GW integrated large base, the first and second phases of 14GW each are expected to be put into operation in the second quarter of 1. 2024, the third and fourth phases are expected to be completed and put into operation in 2025.

Longji Green Energy (601012)

Market share expected to increase

the company's performance in the first half of the year maintained a rapid growth trend, and product shipments maintained growth, achieving 52.05GW of silicon wafer shipments, up 31.37 year on year, of which 22.98GW was sold to the outside and 29.07GW was used for its own use. Battery module shipments were 29.92GW, up 54.91 year on year, of which module shipments were 26.64GW and battery external sales were 3.28GW. Dongguan Securities pointed out that the company has made it clear that it will focus on developing BC battery technology in the next 5 to 6 years, and that future investment projects will adopt BC technology. In the first half of the year, the company invested 3.42 billion yuan in research and development, accounting for 5.29 of its revenue. It has a number of patents in BC technology, with more than 100 patents from battery to packaging. In the future, with the expansion of BC battery products, the company is expected to have stronger competitive strength in a number of application scenarios, further increase market share.

Tongwei (600438)

Further increase in capacity

The company's annual battery production capacity reached 90GW as of the first half of the year, and is expected to reach 100GW by the end of the year, with a component production capacity of 55GW. The company has a leading edge in silicon and batteries, moving into components and expanding production capacity, and quick results. And the company intends to invest in a total of 32GW pull rods and slicing projects, the future from industrial silicon to component vertical integration layout can be expected. Dongguan Securities pointed out that since the second half of the year, polysilicon prices have rebounded. In the future, with the gradual production of downstream N-type technology production capacity, the N/P silicon material price difference is expected to gradually expand. The company's N-type material supply in the first half of the year has increased significantly, and the sales of N-type products An increase of 447. In addition, during the year, the company increased the layout of upstream raw materials, planning to build 300000 tons and 400000 tons of industrial silicon projects in Baotou and Guangyuan respectively, of which the first phase of the project is planned to be completed and put into operation before the end of 2024, the overall cost of silicon will continue to optimize in the future.

TCL Central (002129)

Accelerating Advantage Capacity Expansion

The company continues to promote the release of advanced production capacity, optimize and upgrade product structure and promote the sustainable development of global business. As a creator and leader in the photovoltaic industry, the company will uphold the concept of intensive innovation, integrated innovation, joint innovation and collaborative innovation, based on technological innovation and flexible manufacturing capabilities, and consolidate the right to define, scale and price the silicon wafer link. Debang Securities pointed out that the company accelerated the expansion of production capacity, crystal link, with the expansion of 50GW solar grade monocrystalline silicon material smart factory capacity, the end of 2023 is expected to further increase production capacity to 180GW. In 2023, the newly-added Yinchuan 35GW high-purity solar energy ultra-thin monocrystalline silicon chip smart factory project and supporting projects have been started, further promoting the acceleration of the company's G12 silicon chip advanced production capacity, optimizing the product structure, giving full play to the company's G12 strategic product scale advantages, cost advantages and market advantages, and further consolidating the company's leading position and market share in the photovoltaic silicon chip market.