In January this year, A shares fell sharply again, and many small and medium-sized stocks fell sharply. However, heavy stocks stationed by major institutions, such as "Chinese prefix" and banks, are still relatively resistant to falling, reflecting the essence of "looking at quality when falling. With the disclosure of the quarterly report of public funds in 2023, fund holdings have gradually surfaced, and "keeping up with the big army" is a major direction of future investment. Judging from the changes in fund holdings, the fourth quarter of 2023 is not small. Some analysts believe that from the perspective of fund position increase, consumer electronics, medicine, household appliances and other industries that have obtained fund holdings can choose opportunities to allocate on dips.

A

Consumer Electronics Terminal Demand Continues to Recover

terminal demand has shown some signs of recovery. Deng Yao, an analyst at Guocai Securities, pointed out that looking forward to 2024, on the one hand, the fundamentals of the consumer electronics industry will gradually improve as inventory returns to a reasonable level. On the other hand, traditional terminals are expected to generate more new demand under AI empowerment. At the same time, MR, as a new terminal product, is also expected to push consumer electronics into a new growth cycle under the guidance of brands such as Apple. Combined with market factors, the technology industry as a new growth engine, is expected to remain a continuous hot spot in 2024, while consumer electronics as a relatively low valuation of varieties, and in recent years, the demand side of the pessimistic factors released more fully, with a certain configuration cost-effective.

Yao Kang, an analyst at Societe Generale Securities, pointed out that the increase in the consumer electronics sector lies in new products represented by wearing. Apple successfully released its first MR product in 2023, representing that consumer electronics has entered the era of spatial computing. MR is the main line of the next round of market. It is recommended to focus on the following directions, the first is to benefit from the recovery in demand for mobile phones and computers, performance elasticity is greater quality targets. The second is the target of future performance that can benefit from downstream customer innovation, including micro-innovation in XR and mobile phones. Investors are advised to focus on consumer electronics leaders that benefit from the recovery in demand and enter a new round of innovation cycle, such as Lixun Precision, Changying Precision, Zhuhai Guanyu, Obi Zhongguang-UW, Transonic Holdings, Lante Optics, Jepter, Smart Cube, etc.

Potential Stock Selection

Lixun Precision (002475)

depth layout AR, VR, MR, continue to expand the integrated layout

the company in the AR, VR, MR field focus on a complete product depth layout, play its own advantages in product technology, lean production, automation, etc., the future will be deep benefit product release. In addition, the company continues to improve the integrated layout of the industrial chain, the acquisition of Qorvo assembly test plant, through this acquisition, it will further improve the layout of the consumer electronics RF front-end module package. Guotai Junan Securities pointed out that the company's consumer electronics business ushered in the harvest period, automotive and communications business accelerated growth. The company's mobile phone assembly coverage of the types of models continue to enrich, product yield and profitability continue to improve, the future performance elasticity is considerable. At the same time, its automotive business product layout is comprehensive, and it continues to introduce new customers for smart cars, which will continue to grow at a high speed in the future. In addition, its communications business extends from component and module products to assembly, and continues to increase the layout of products such as photoelectric transmission, power supply and thermal management.

Changying Precision (300115)

electronic connector giant, benefit product volume

The company is mainly engaged in the development, production and sales of electronic connectors and intelligent electronic products, precision components, new energy connectors, structural parts and modules, consumer electronics precision structural parts and modules, robots and industrial Internet. Huaxin Securities pointed out that the company's consumer electronics business month-on-month improvement mainly benefited from the gradual recovery of downstream demand. According to estimates, the global MR market size is expected to increase to $1224 billion at a compound growth rate of 43.2 per cent in 2023-2032. As a leader in the precision structural parts industry, the company has participated in the development of XR products for all head customers in the industry and is working with a number of large customers to develop the next generation of XR products, and is expected to continue to benefit from the release of large customer MR products in the future. In addition to high-end head-to-head devices, we believe that AIPC and AI phones are also expected to accelerate penetration in 2024, which will drive the consumer electronics industry into a new cycle of product innovation.

Zhuhai Guanyu (688772)

Consumer Electronics Battery Giant, Growing Space

The company is one of the world's leading suppliers of consumer polymer soft-packed lithium-ion batteries, and its current products include consumer batteries, power batteries and energy storage batteries. Consumer products have expanded horizontally to drones and wearables, with customers including Dajiang, BOSE, Meta, Google, etc. The continuous expansion of emerging electronics is expected to bring opportunities for the company's sustainable development. West China Securities pointed out that the company's consumer PACK business continued to improve. In the first half of 2023, the company's consumer cell PACK self-supply ratio was nearly 32%, up 4.55 year on year. With the steady increase in the proportion of PACK self-supply in the future, the unit price of the company's products is expected to continue to grow, driving the revenue space to increase. The company actively layout laminated battery technology, and downstream head terminal manufacturers close cooperation, is expected to provide momentum for the company's growth in the future. In addition, the rapid development of the company's power and energy storage business will further open the growth ceiling.

Transsion Holdings (688036)

domestic mobile phone stealth giant, is expected to maintain high growth

according to the company's 2023 performance forecast, the company achieved revenue of 19.1 billion yuan in the fourth quarter of 2023, a new high in single-quarter revenue since its listing. At the same time, considering the company's continued promotion of new market development strategy and its current share in Africa, South Asia and other emerging markets, we expect the company's revenue to maintain rapid growth in 2024. Guohai Securities pointed out that the current market share in some new markets has reached a stage where it can rely on its own volume to grow naturally. The company has entered a good situation in the new market, with continuous acceleration of turnover and continuous improvement of profitability. On the other hand, Africa and other companies in the traditional advantage market, due to the possible end of the Fed's interest rate hike cycle, most African countries inflationary pressures have eased, with the increase in spending power, the suppressed demand for replacement is expected to be released in 2024 interest rate cut cycle, promoting the rapid recovery of the company's traditional advantage market.

B

medicine unexpected factors do not change development prospects

With the valuation of the pharmaceutical industry close to the historical bottom, the risk is fully released and the margin of safety is sufficient. Some people in the industry pointed out that although some pharmaceutical giants have recently seen their share prices plummet due to unexpected factors, the pharmaceutical industry as a whole has continued to develop due to stable market demand, and companies with certainty and sustainability in performance growth are more scarce and are expected to bring excess returns. On the other hand, companies with marginal improvement in prosperity or inflection points are expected to have upward flexibility in valuation and performance.

from the institutional position, the fourth quarter of 2023, the whole fund pharmaceutical position accounted for 13.57 percent, up 1.39 percent month-on-month; Among them, the pharmaceutical theme fund's pharmaceutical position accounted for 95.55 percent, up 0.92 percent month-on-month; Excluding the pharmaceutical theme fund, the position was 7.68 percent, up 1.2 percent month-on-month. Medical equipment, chemical agents sub-sector position ratio increased significantly.

Industry fundamentals, the third quarter of 2023 is the absolute bottom of the pharmaceutical industry performance in the next few years, the industry competition pattern has been further optimized, the market share of compliance leading enterprises is expected to further increase. Guoxin Securities analyst Zhang Jiabo pointed out that the valuation level, the market year-to-date adjustment, the wrong kill some of the fundamentals of high-quality growth stocks, based on the pharmaceutical industry just need attributes and the future potential of a steady stream of incremental demand, we recommend the current position to increase the allocation of the pharmaceutical industry.

in terms of plate opportunities, Zhang jinghan, an analyst at shenwan hongyuan securities, pointed out that the state Council has issued a document emphasizing the development of silver economy. with the continuous deepening of the aging degree in China, facing the increasing unmet medical needs of the elderly, it is suggested to pay attention to the layout of related fields of listed companies such as hengrui medicine, yaomingkang, maiwei biology, bolui medicine, nuotai biology, key kai technology, etc, it is recommended to pay attention to the innovative pharmaceutical enterprises with FIC product layout, such as Baili Tianheng, Baiji Shenzhou, Junshi Bio, Microcore Bio, etc. It is recommended to pay attention to the companies with good and sustainable performance in the fourth quarter of 2023, Notai Bio, Tebao Bio, Cain Technology, Aibo Medical, Hongbo Pharmaceuticals, Jiudian Pharmaceuticals.

Potential Stock Selection

Hengrui Medicine (600276)

The first class of new drugs have sufficient reserves and the internationalization process has accelerated

the company's year-on-year growth in the third quarter of 2023 was in line with market expectations. In the first three quarters, the company's gross profit margin was 84.4, up 1.1 from the same period last year, reflecting the increasing proportion of innovative drugs with high gross profit in the company's overall revenue. After the collection of generic drugs, innovative drugs have become the main driving force for the company's performance growth. At present, the company has a total of 6 first-class new drugs in the listing application stage, which has become the main driving force for the company's performance growth in the next two to three years. Shen Wanhongyuan Securities pointed out that the company began to adjust the direction of its internationalization strategy in 2022. The company will receive a certain percentage of sales commission after the cumulative development and sales milestones agreed in the four cooperative contracts reach 2.512 billion US dollars and the products are listed. Overall, the company's pipeline is extremely rich, the follow-up authorization cooperation is expected to continue to cash in, accelerate the internationalization process, improve the success rate of the sea.

Junshi creature (688180)

Products under research are abundant, and market volume is imminent

the company has more than 50 products under research, covering many diseases such as malignant tumors, self-immunity and metabolic diseases. currently, 4 products have been approved for listing. 4 products such as BTLA monoclonal antibody, PCSK9 monoclonal antibody and IL-17A monoclonal antibody are in clinical phase iii, nearly 30 products under research are in clinical trial phase, and more than 20 products under research are in preclinical development phase. In addition, overseas FDA-approved nasopharyngeal cancer indications, achieved the milestone of domestic innovative drugs, and has achieved a cumulative external authorization in more than 50 countries, is expected to continue to harvest milestone payments and sales share. BTLA monoclonal antibodies have been approved by the FDA and NMPA for Phase III clinical trials, leading the global clinical progress. Northeast Securities pointed out that the company is currently selling three drugs. In the first three quarters of 2023, the company achieved drug sales revenue of 0.892 billion billion yuan, a year-on-year increase of 68%. The proportion of drug sales revenue in operating income is gradually increasing, and it is expected that products will continue to be released, and their own hematopoietic capacity will be further strengthened.

Nuotai Biology (688076)

Raising investment funds in place, improving comprehensive competitiveness

the company benefits from the rapid growth of the global GLP-1 market, downstream customers' enthusiasm for research and development of simeglutide and demand for APIs remain strong, and sales of simeglutide APIs are expected to increase significantly this year. In addition, with the virus such as A- stream to replace the new crown and gradually occupy the dominant position, the domestic demand for phosphate oseltamivir capsules rose rapidly, driving the company's phosphate oseltamivir capsules, phosphate oseltamivir raw materials sales volume. Minsheng Securities pointed out that the company's convertible bonds were successfully issued, and the raised investment funds were mainly used for "oligonucleotide monomer industrialization production project" 0.132 billion yuan, "API manufacturing and green production promotion project" 0.21 billion yuan, "API product research and development project" 0.032 billion yuan, and "supplementary working capital project" 0.06 billion yuan, which will help the company expand the field of oligonucleotide drugs and further enrich the variety reserve of API drugs. Continuously improve the company's comprehensive competitiveness in the field of peptides and small molecules.

Yunnan Baiyao (000538)

scarce traditional Chinese medicine brand, large market expansion space

The company is the representative of domestic national traditional Chinese medicine brands. The core products of Baiyao series continue to achieve rapid growth, continue to maintain the market leading position in many business fields, and rank 34th in the 2022 China Best Brand list. For many years, it has been successively selected into the Top 100 Chinese Pharmaceutical Industry list of the Ministry of Industry and Information Technology and the Fortune 500 list of China. As of the first half of 2023, the company's health division had revenue of 3.25 billion yuan, an increase of 0.8 percent over the same period last year, and its market share continued to rise to 25 percent. Yunnan Baiyao Aerosol, the main product, had revenue of more than 0.9 billion yuan in the first half of the year, an increase of 18.2 percent over the same period last year. Pudilan Xiaoyan, Huoxiang Zhengqi Water and other products have achieved rapid growth. DBS Securities (China) expects the company's 2023-2025 revenue of 405.9 yuan, 454.0 yuan, 50.8 billion yuan, due to the company's profitability recovery faster than expected, up the return of net profit of 41.6 yuan, 47.4 yuan, 5.22 billion yuan, respectively, to maintain the "stronger than the market" rating.

C

Steady performance of household appliances High margin of safety

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, superimposed on the impact of festival promotion waste heat, to help the release of home appliance consumption vitality. Some analysts pointed out that overseas inventories are gradually de-stocked, and the improvement in exports is expected to continue. In terms of valuation, sector valuations remain low and the margin of safety is high. From the allocation ratio, the fourth quarter of 2023 public offering heavy warehouse in the home appliance industry allocation ratio of 2.55, an increase of 0.12, since the first quarter of the allocation ratio continued to improve.

sector revenue growth turned positive year-on-year, benefiting from improved real estate completions, demand release from epidemic suppression and export growth. In the first three quarters, the operating income of the household appliance industry increased by 6% year-on-year, and the net profit attributable to the parent increased by 12.01. At the same time, with the optimization of the product structure of home appliance enterprises, as well as the relief of raw material pressure superimposed on the continued decline in shipping prices, sector profitability improved, the first three quarters of the sector gross margin of 25.42, up 1.94 percent year-on-year. Yang Ce, an analyst at China Galaxy Securities, pointed out that with the improvement of the real estate end and the gradual promotion of consumption policies, domestic demand for home appliances is expected to be supported, superimposed on the festival promotion, to help the release of the vitality of home appliance consumption. 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. In terms of valuation, sector valuations remain low and the margin of safety is high.

guolian securities analyst Guan quansen pointed out that the domestic sales of household appliances in 2024 is expected to usher in a new cycle, and the prospect of going to sea is promising. the superimposed valuation dividend advantage is outstanding, maintaining the industry's "stronger than the big market" rating. it is suggested to pay attention to white power leaders with strong certainty of stable growth and high dividend advantage, and recommend midea group, Haier zhijia, hisense household appliances and Gree electric appliances; benefiting from the pattern optimization and product upgrade of the black power tap, recommended Hisense video, domestic and foreign penetration and share continued to increase, the brand out to sea on behalf of the sweeper leader, recommended stone technology, pay attention to Cobos, in addition to continue to pay attention to the boss electrical appliances, Supor, Bear electrical appliances and so on.

Potential Stock Selection

Midea Group (000333)

White power tap, continuous global layout

Under the background of weakening domestic market demand and overseas market repair, the company relies on the annual operating principle of stable profit and driving growth to achieve steady growth in revenue performance. As a white power leader, the rolling incentive plan is deeply bound to the core backbone, promoting the development of the business sector and the steady growth of performance. In the third quarter of 2023, the company's operating income increased by 7.32 percent year-on-year, and its net profit increased by 11.93 percent year-on-year. The company has submitted an application for H-share listing, and the global layout is expected to further deepen its development. Citic Jiantou Securities pointed out that globalization, high-end and intelligence are the future direction of the white power industry. Relying on long-term cultivation and accumulation, Midea has a leading market share in various categories of domestic home appliances. With continuous global resource allocation and industrial investment, Midea has continuously achieved global breakthroughs by relying on the world's leading manufacturing level and scale advantages. White power consumption is expected to stabilize and recover, and the company's performance is expected to grow rapidly.

Cobos (603486)

sweeping robot tap, operation gradually improved

The company's overall revenue is expected to rise slightly in 2023, but profitability is under pressure due to increased competition in the domestic industry. It is estimated that if revenue is flat year-over-year in 2023, single-quarter revenue growth in the fourth quarter of 2023 will be about 3.9 percent. The company's overseas business market share and revenue share are steadily increasing, mowing robots in the European market in the first year beyond the established business target, 2024 is expected to grow rapidly. Guotou Securities pointed out that the company as a leader in sweeping robots, with technology, channels, supply chain advantages, the industry's leading position continues to consolidate. The company continues to expand its business, and the brand and commercial robotics business are expected to contribute to the incremental revenue performance. The Company's operations in 2023 are under pressure due to the industry environment and competitive factors. Sweeper category penetration rate to improve the space is large, 2024 sweeper industry business climate is expected to recover, the company's profitability is expected to be optimized after the industry pattern continues to improve.

Hisense Video (600060)

Color TV taps, opening up new growth curves

the company is the leader of the domestic color TV market, in 2021 established the "1 plus 4 plus N" industrial structure layout, display technology as the axis, color TV business as the basic disk, laser, commercial display, chip, cloud services and other new business vertical development. Minsheng Securities pointed out that the company's domestic sales around Hisense and Vidda two core brands operation, of which Hisense brand is the cornerstone brand, covering the middle to high-end market, the original ULEDX, breaking through the LCD display ceiling, Toshiba TVS as Hisense high-end series of supplementary rich product matrix. Vidda is positioned as a consumer electronics technology trendy brand, a defensive brand set up to deal with Internet TV, with a more cost-effective price band, with online share rising rapidly from less than 5% in 2021 to nearly 10% at present. The company actively explore new growth curve, in the panel controllable, large screen trend, the logic of the company's revenue is expected to continue to thicken, profitability is expected to further enhance.

Trio Aurora (300625)

Overall lighting solution provider, performance pre-increase

The company has become one of the most comprehensive competitive lighting brands in China. The product quality and brand have accumulated a good market reputation in the lighting industry, especially in the field of commercial and engineering lighting. The main products include LED lighting products, lighting control and other products, covering the main places and industries that need lighting and lighting, it has strong brand and market advantages in the field of commercial lighting, tooling lighting and other professional lighting, and is the overall lighting solution provider in the lighting industry. The company's lighting control and other products include switches, sockets, ventilation fans, Yuba, integrated ceilings, etc. It has a strong sales channel network and marketing team, and has a number of stable dealers and distributors who have cooperated for many years in major 1. second-tier cities across the country. The company expects the net profit attributable to shareholders of listed companies to be 190.4534 million yuan to 209.4987 million yuan in 2023, an increase of 100-120% year-on-year.