[huachuang auto] BYD: intraday oversold, brewing the next wave of products

on November 24, BYD's stock price hit a new low since March 22. The market is concerned about deepening current discounts, sales growth next year, and thus earnings fundamentals.

Looking back at the product cycle/life cycle of car companies, there is always a time point for rhythm switching. For BYD, facing the pressure of existing inventory, the price reduction impulse is to ensure the target of 3 million vehicles and to adjust the inventory status to meet the new product cycle.

Starting from next year's products:

1)DM5.0 will be launched soon (expected 1Q24, spring auto show), which is a major version update after the success of the 4.0;

2) The product sequence of equation Leopard, Tengshi and Look up is spread out;

3) Export countries and models increased.

From the perspective of market competition focus (20 years or more in 200000), its own product cycle and business rhythm, we are optimistic about the company's 2024 product cycle consolidation, as well as high-end, export market development.

it is estimated that the sales volume in 24 years is expected to exceed 3.5 million vehicles, with a profit of 45 billion yuan, corresponding to 16 times of the current PE. The squat is for take-off, and the dipped layout is recommended.

[China Post Medicine] Medicine 2024 Investment Strategy: If it is not very good, give priority to the layout of high-growth varieties inside and outside the hospital

pharmaceutical policy rebound, fundamentals improve, 2024 or meet the pharmaceutical sector bull market.

After 3 years of adjustment in the pharmaceutical sector, we remain optimistic about the 2024 sector.

from the policy side: since September, the anti-corruption correction and the state's clear attitude to encourage innovative drugs have injected "cardiotonic" into the industry and investors; From a fundamental point of view, the growth of 2023Q3 multi-sector is better than the market expectation. It is expected that the performance of 2023Q4 and 2024 will be improved in an all-round way, and the valuation and performance will be improved. From the perspective of funds, PE in the pharmaceutical sector has been at a low level, after the expected improvement, it has a strong attraction.

In summary, we believe that the large-scale market is already in place, and the pharmaceutical sector is expected to usher in a bull market in 2024.

under the normalization of anti-corruption, the hospital collection of varieties, medical information, prescription outflow, medical services are expected to benefit in the long term.

from Germany, Japan, the United States and other countries, medical anti-corruption will force domestic leading pharmaceutical companies to increase research and development and improve the level of internationalization, accelerate the process of prescription outflow and improve the degree of medical informatization, and also change doctors' diagnosis and treatment behavior and provide better quality and more economical medical services. under the background of normalization of domestic medical anti-corruption, sub-sectors such as centralized catalogue of pharmaceutical equipment, chain pharmacies, medical services and medical informatization are expected to benefit for a long term, the share of the leader is highly certain.

Beneficiary:

Blood products: robust: Tiantan biology, Hualan biology, Boya biology; Resilience: Perin biology;

innovative drug industry chain: stable: hengrui medicine, baiji shenzhou, junshi biology, yaoming biology, kanglong chemical industry; Flexibility: Yifan Biology, Lepu Biology, Rongchang Biology, Xinhua Pharmaceuticals, Fuhong Hanlin;

medical devices: stable: Mindray medical, United film medical, new industry, Huada Zhizao, Lepu medical, minimally invasive medical; Flexibility: Shengxiang Biology, Mike Biology, Haier Biology, Shanwai Mountain, Libang Instruments, Yahuilong, Huitai Medical, Cardiac Medicine, Microelectrophysiology-U;

pharmacies: stable: Yifeng pharmacy, common people, Yixintang, Jiuzhoutong; Flexibility: Shuyu Civilians, Jianzhijia, Dashenlin;

medical services: robust: Aier Ophthalmology, Huaxia Ophthalmology, Jinyu Medicine; Resilience: International Medicine, American Year Health, Preh Ophthalmology, New Mileage, Sima Ophthalmology, Dean Diagnosis;

Chinese medicine: robust: Lingrui Pharmaceutical, Tongrentang, Tianshili, Jiuzhitang; elasticity: Guizhou Bailing, Sunflower Pharmaceutical, Guilin Sanjin, Xintian Pharmaceutical.

[Oriental Chemical] Chemical Investment Strategy 2024: The overall trend continues for 23 years, structural or improvement

The overall boom will still hover at the bottom: the petrochemical index will be strong in 2023, but the base index will be weak.

This year, the prices of upstream oil and gas and other resource products have remained high. Therefore, companies with larger upstream assets such as "three barrels of oil" have shown strong performance resilience, and have increased under the influence of factors such as the "one profit and five rate" assessment. The dividend rate and stock repurchase are obviously attractive when the market as a whole is not good.

And the basic chemical industry is mainly processing and manufacturing links, due to the supply side of the continuous production capacity, so that product profits have been hovering at the bottom.

Looking ahead to 2024, the capital expenditure cycle for bulk chemicals is still at its peak, and we expect the overall boom in the chemical industry to remain at the bottom.

Energy-intensive industries are expected to recover ahead of schedule: Although the overall prosperity is not good, there are still some structural opportunities.

In the past two years, overseas emerging developing countries have entered a capital expenditure cycle, boosting the consumption of basic chemical materials.

The heavy chemical industry, especially the high-energy-consuming industries similar to chlor-alkali chemicals, is unlikely to be transferred to emerging developing countries. The main reason is that these industries have extremely high power requirements.

And China has always had more restrictions on the development of high energy consumption industries, and it is expected that the growth rate of supply will continue to decrease in the future.

Therefore, we believe that the high-energy chemical industry is expected to gradually enter the boom cycle.

downstream fine chemical share increase: we remain optimistic about the continued improvement of the fundamentals of the downstream fine class.

From the natural gas data, European industrial production has not yet recovered, and natural gas supply and demand may further tighten in 24 years.

European chemical companies will continue to be affected by the unstable energy supply, and Europe's own advantages are in the fine chemical sector, which will make room for domestic companies to gain development opportunities to increase their share.

2024 We recommend continuing to focus on leading companies with strong overall competitiveness, such as Sinopec (600028, overweight), CNOOC (600938, buy), Rongsheng Petrochemical (002493, buy), Hengli Petrochemical (600346, buy);

basic chemical Wanhua chemical (600309, buy), Hualu Hengsheng (600426, buy), Baofeng energy (600989, buy), satellite chemical (002648, buy), Tongkun shares (601233, unrated), Xinfengming (603225, buy), Chuanheng shares (002895, unrated), Runfeng shares (301035, buy), Yangnong chemical (600486, increase).

and the two segmentation directions we are optimistic about: recommended attention

1) Zhongtai Chemical (002092, unrated) for high energy consumption;

2) Downstream Fine Chemical's Real Madrid Technology (603181, Buy), Leanlong (300596, Buy).

[Dongfang Electric New] Electric New Investment Strategy for 2024: The industry enters a new point in the cycle, perceiving new opportunities in the growth game

Photovoltaics: The industry cycle enters a new point in time, and the industry chain price game enters a pressure cycle.

In the first three quarters of 2023, China's new PV installed capacity was 128 GW, up 145 percent year-on-year, of which 61.79GW was added to centralized PV and 67.14.GW was added to distributed PV.

Considering the year-end rush, it is expected that more than 60GW will be installed in the fourth quarter and 189GW (AC side) will be expected for the whole year.

Energy storage: market expectations fluctuate, waiting for the sub-track thick and thin.

First half of 2023: overall performance is sluggish, waiting to be catalyzed.

Wind power: short-term bottlenecks limit industry volume, expected to bottom out to open the growth chapter.

Through the post-rush demand balance phase, land breeze sea breeze demand showed a steady recovery trend.

photovoltaic: optimistic about the photovoltaic glass link, supply-side administrative constraints bring opportunities, it is recommended to pay attention to Follett (601865), Armarton (002623), Jinjing Technology (600586).

optimistic about the silicon link cycle perspective profit is expected to bottom out first and then wait for a reversal, it is recommended to pay attention to Tongwei shares (600438), as well as optimistic about BC and HJT new technologies, it is recommended to pay attention to Aixu shares (600732), Longji Green Energy (601012), Otway (688516), Dyer Laser (300776), Maiwei shares (300751).

In addition, looking for alpha targets, it is recommended to pay attention to Jinfu Technology (300128), the company's optical silicone has entered the production line verification stage.

Industrial and commercial energy storage: economic improvement, optimistic about domestic growth opportunities from 0 to 1.

it is suggested to pay attention to relevant suppliers such as sunshine power supply (300274), solid dewei (688390), jinlang technology (300763) and costar (002518). it is suggested to pay attention to industrial and commercial energy storage development operators such as core energy technology (603105), jingke technology (601778), south grid energy (003035), suwen electric energy (300982) and sanhui electric (002857).

Household storage: inventories are gradually bottoming out, waiting for demand to recover.

it is suggested to pay attention to suppliers with high overseas market share and high performance flexibility, recommend penghui energy (300438), a battery core supplier with a high proportion of household storage income, and recommend paneng technology (688063), a leading brand of overseas household storage. it is suggested to pay attention to hemai shares (688032), deye shares (605117), yuneng technology (688348), solid dewei (688390) and jinlang technology (300763).

Wind power: "sea wind" and "overseas" business climate improvement and the ability to resist the risk of deflation in the industry.

daijin heavy industry (002487), haili wind power (301155), tianshun wind energy (002531), taisheng wind energy (300129) and tianneng heavy industry (300569), leading leaders in the tower pipe pile link;

optimistic about the high-quality pattern leader of the submarine cable link, it is recommended to pay attention to the Oriental cable (603606), sail cable (605222);

optimistic about the improvement of midstream parts business climate, it is recommended to pay attention to Zhenjiang shares (603507), Hengrun shares (603985), Riyue shares (603218), Jinlei shares (300443), new strong joint (300850).

[League of Nations Computer] Hikvision: Global Security Leader, Opening a New Era of AIOT

Security leader transforms intelligent IOT, leading industry innovation and upgrading

Hikvision is a global leader in the field of security, deep in the field of video surveillance, for many years ranked first in the industry in the world.

according to Omdia's report, hekangweishi will have a market share of 25.9 in the global video surveillance field in 2022, far exceeding Dahua shares, which is ranked second, and will maintain the first position in the industry for many consecutive years.

In 2021, with security technology innovation as the core, the company will reposition its business area in "intelligent IOT", and is committed to serving IOT perception, artificial intelligence and big data technology in all walks of life, leading the new future of intelligent IOT and opening up a new space for long-term growth.

Intelligent securityOpen the growth ceiling, AIoT market prospects are broad

With the breakthrough of AI technology and the continuous innovation of product functions, the company has gradually expanded to the field of "pan-security", and intelligent development has become a new engine of industry growth.

According to the forecast of the China Business Industry Research Institute, the market size of China's intelligent security software and hardware is expected to reach 91.3 billion billion yuan in 2025 and 14.02 CAGR in 2023-2025.

In addition, the "pan-security" field has the characteristics of user dispersion, low project unit price, non-standardized high "fragmentation", the company with years of video surveillance data accumulation, is expected to grasp the industry development opportunities, further deepen the moat, fully enjoy the dividends of industry development.

According to IDC's forecast, the global Internet of Things (enterprise-class) expenditure is expected to expand to US $1.1 trillion in 2026, with a compound growth rate of 10.7 percent from 2022 to 2026, with broad prospects.

Internal follow-up mechanism stimulates innovation vitality and incubates "core growth engine"

In 2015, the company established a unique internal follow-up investment mechanism, implemented innovative business subsidiary project follow-up investment, through reasonable equity distribution and decision-making mechanism, deeply bound the interests of the company's platform, core employees and innovative business, and continuously enabled the development of innovative business.

To date, the company has hatched eight innovative business platforms.

2016-2022, the company's innovation business revenue increased from 0.648 billion yuan to 15.07 billion yuan, CAGR reached 68.95 percent, and revenue contribution increased from 2.03 percent to 18.12 percent, gradually becoming the company's core growth engine.

Earnings Forecast, Valuation & Rating

we forecast the company's operating income from 2023 to 2025 to be 856.73/953.95/110.866 billion yuan respectively, with a growth rate of 3.01/11.35/16.22 respectively, and a 3-year CAGR of 10.06. The net profit attributable to the parent was 133.48/162.12/19.923 billion yuan respectively, with a year-on-year growth rate of 3.98/21.46/22.89 respectively. EPS is 1.43/1.74/2.14 yuan/share respectively.

comparable company's 24-year average PE is 19 times. in view of the company's leading market position in the global security field, the company is given 25xPE in 2024, with a corresponding market value of 405.3 billion yuan and a target price of 43.50 yuan. it is covered for the first time and is given a "buy" rating.