The Shanghai Composite Index gradually stopped falling after approaching the half-year line, but the amplification of trading volume was not obvious in the market shock rebound. From the perspective of capital attitude, it is still mainly wait-and-see.

For the recent market, some analysts believe that the cautious attitude of funds before the year may continue, and the current index operation can go up or down, investors should not chase up and down, and the position is too heavy. In the short term, you can focus on thematic opportunities, such as performance forecasts, high dividends, and the current popularity of the Xiaohongshu concept.

Performance pre-increase: focus on sustainable growth

From the perspective of investment value, pre-performance stocks often reflect the improvement of the company's operating conditions and the improvement of performance. Companies with growth potential usually have a stronger foundation and can provide strong support for stock price growth. It can be seen that in recent years, due to a variety of factors, the performance of A-share listed companies has been significantly differentiated. According to the data, up to now, more than 240 Shanghai companies have released their 2024 annual report performance forecasts, of which more than 140 companies have seen year-on-year growth in performance, accounting for more than 60%.

For companies that have announced their earnings increases, from an investment perspective, investors need to pay attention to the reasons for the earnings increases, such as whether the increase is due to the strong growth of the company's core business or the growth caused by the low base of the previous period. Secondly, the outlook of the industry is crucial, if the industry as a whole is in a period of decline, the company's performance growth may be difficult to sustain, and future growth may be restricted; Finally, the valuation level is also one of the factors that need to be considered, if the market has fully responded to the company's performance forecast, the future expected earnings may be relatively limited, and conversely, if the market has not fully reacted to the performance forecast, then there may be potential investment opportunities.

To sum up, when investors choose pre-performance stocks, sustainable growth needs to be prioritized for research and analysis. Some analysts pointed out that the sustainability of the performance increase can be assessed through fundamental factors such as the company's previous financial statements, industry status, and market competitiveness. At the same time, investors can also examine the development trends and competitive landscape of the industry in which the company operates. For industries in a period of rapid development, the company's performance may mean that its competitive advantage in the industry is further consolidated.

It is worth mentioning that investors need to pay special attention to the performance forecast that is not sustainable. For example, the company may achieve net profit growth through one-time asset disposal or special accounting treatment, and the performance growth brought about by this short-term phenomenon is difficult to sustain.

A selection of potential stocks

Truide (300001).

Stay ahead of the curve

The company released a performance forecast for 2024, and it is expected to achieve a net profit attributable to the parent company of 835 million yuan to 933 million yuan, a year-on-year increase of 70% to 90%. Based on products such as box-type substations, complete sets of high-voltage intelligent switches and high-voltage prefabricated cabin modular substations, the company endows new attributes of digital and full-life cycle value services and value-added services, realizes the high-speed and sustainable development of "source-grid-load-storage" in multiple scenarios, and wins high recognition from the market and customers. In 2024, the company's cumulative winning bids and contract amounts will exceed 13 billion yuan. Donghai Securities pointed out that by the end of 2024, the company will operate more than 700,000 public charging terminals, including more than 420,000 DC charging terminals, with a cumulative charging capacity of more than 39 billion kWh and a maximum daily charging capacity of more than 48 million kWh; In 2024, the company's charging capacity will exceed 13 billion kWh, a year-on-year increase of more than 40%, and the technical advantages and scale of the charging network will continue to maintain its leading position in the industry. The company has more than 700 integrated charging stations for optical storage, charging and discharging, which have been landed in more than 140 cities.

ArcSoft Technology (688088).

The world's leading visual algorithm

The company has a rich product line of visual algorithms for mobile intelligent terminals such as smart phones and smart cars, and its main business income comes from the licensing of independent research and development of core technologies. At present, the main customers include Samsung, Xiaomi, OPPO, vivo, Honor, Moto and other world-renowned mobile phone manufacturers, as well as major domestic independent brands, some joint ventures and foreign brand automobile OEMs. The company expects that the net profit attributable to the owners of the parent company in 2024 will be about 178 million yuan, a year-on-year increase of about 101.16%. Haitong Securities pointed out that the company is deeply engaged in the field of machine vision and is a global leader in vision algorithms. The mobile phone business has high global coverage of customers and has close cooperation with chip manufacturers such as Qualcomm; From the mobile phone business to the automobile business, the company is forging ahead, and the automotive business will usher in rapid revenue growth in 2024; In the future, in the era of device-side intelligence, the company is expected to seize the advantages of card slots, continue to replicate the success of the mobile phone business, and usher in new development opportunities in the era of device-side AI.

North Huachuang (002371).

Full of orders in hand

The company expects that the net profit attributable to the parent company in 2024 will be 5.17 billion yuan to 5.95 billion yuan, a year-on-year increase of 32.6% to 52.6%. Pacific Securities pointed out that the company has studied customer needs, enriched the product matrix, broadened the process coverage, and the main business continued to maintain a good development trend, and the market share has steadily increased. In addition, with the continuous expansion of the company's revenue scale, the advantages of the platform have gradually emerged, the operating efficiency has continued to improve, and the cost and expense ratio has steadily decreased. The total amount of new orders signed in 2023 will exceed 30 billion yuan, providing an effective guarantee for the company to achieve rapid growth in 2024. At the same time, as of the end of the third quarter of 2024, the company's contract liabilities reached 7.783 billion yuan, maintaining a high level. In terms of inventory, the company's inventory amount increased from 16.992 billion yuan at the end of 2023 to 23.229 billion yuan at the end of the third quarter of 2024, and the company's orders in hand were relatively full.

Haiguang Information (688041).

Market share continues to expand

The company's estimated operating income in 2024 will be 8.72 billion yuan-9.53 billion yuan, a year-on-year increase of 45.04%-58.52%; The net profit attributable to the parent company for the whole year is expected to be 1.81 billion yuan to 2.01 billion yuan, a year-on-year increase of 43.3% to 59.1%. The significant increase in revenue and profit was mainly due to the company's continued cultivation in the general computing market and the expansion of market share due to technological innovation. Minsheng Securities pointed out that based on Haiguang CPU and DCU series products, the company actively supports the industry to build data centers and computing platforms, promotes the deep integration of intelligent computing and numerical computing, comprehensively promotes the large-scale application of AI in many important fields such as smart cities, biomedicine, industrial manufacturing, and scientific computing, and accelerates the landing process of the "AI+" industry. In 2024, the company's CPU products will show excellent market expansion capabilities, and the application fields will be further expanded, which will strongly support complex application scenarios such as data centers, cloud computing, and high-end computing.

High dividends: one of the long-term allocation directions

Historically, high-dividend strategies not only have a strong resistance to declines in volatile markets, but also tend to have better relative returns when the market is facing a correction. According to the statistics of Guosen Securities, the high-dividend strategy has had a significant advantage in four situations, including rapid market upswing, rapid adjustment, shock interpretation, and long-term bear-bull switching, including the comprehensive bull market from 2006 to the end of 2007, the phased adjustment in 2008 and the first half of 2022, the "bear-bull-bear switch" from 2015 to 2018, and the "structural bull" in 2021.

As for the reasons for the dominance of the dividend style in the market in recent times, Kaiyuan Securities analysis pointed out that, firstly, due to the influence of domestic policies and market expectations, the recent policy density has decreased, the market consensus has changed from "high expectations" to "neutral expectations", and the market risk appetite has contracted; Secondly, from the perspective of funds, due to the resonance of factors such as the reduction of policy density, the weakening of the money-making effect and the convergence of risk appetite, the trend of the strength and weakness of allocation and transactional funds is mainly reflected in the dominance of dividend assets. Looking ahead, the dividend style is sustainable in the short term.

The analysis points out that dividend assets have the characteristics of stable dividends and high proportions. This can also be seen in the way the CSI Dividend Index is compiled. The compilation of the CSI Dividend Index requires "continuous cash dividends in the past three years and the average dividend payout ratio in the past three years and the dividend payout ratio in the past year are both greater than 0 and less than 1", and "according to the ranking of the average cash dividend yield in the past three years from high to low, the top 100 listed company securities are selected as the index sample", and the existence of such requirements aims to improve the "linear extrapolation" of the high dividend payment behavior of dividend assets, so as to obtain a "certainty premium" in the case of rising uncertainty in the external environment.

The underlying logic of dividend investment driven by high dividends has not changed, and dividend assets are still one of the important directions for long-term allocation. Jianghai Securities said that if there is a continuous adjustment in the market trading style, it is expected to promote more funds to pay more attention to high-dividend assets, which in turn will bring about a simultaneous repair of trading activity and stock prices.

A selection of potential stocks

Yutong Bus (600066).

The sales volume ranks first in the industry

In 2024, the company will rank first in the industry with a sales performance of 42,052 buses above 6 meters, a year-on-year increase of 28.37%, and a market share of 33.36%. With a cumulative sales volume of 13,795 units, the new energy bus company above 6 meters firmly occupies the top position in the industry, with a year-on-year increase of 93.26% and a market share of 24.06%. In addition, the company's bus export orders continue to continue, and new energy has achieved remarkable results in going to sea. Haitong Securities pointed out that the state has strengthened its efforts to promote the electrification of urban buses, updated urban buses that are 8 years old and above and power batteries beyond the warranty period, and increased the average subsidy per vehicle from 60,000 yuan to 80,000 yuan. With the in-depth implementation of the trade-in policy of new energy buses, it is expected to promote the replacement of old vehicles, provide a broader market space for new energy buses, and the company's new energy bus sales will also increase with the market. As a leader in buses and new energy buses going overseas, the company has opportunities for long-term value growth.

Zheng Coal Mining Machine (601717).

Increased profitability

In the first three quarters of 2024, the company achieved operating income of 27.839 billion yuan, a year-on-year increase of 2.2%; net profit was 3.059 billion yuan, a year-on-year increase of 23.97%; The non-net profit was 2.773 billion yuan, a year-on-year increase of 26.66%. Among them, the coal machinery segment achieved operating income of 14.527 billion yuan, a year-on-year increase of 2.5%; The net profit attributable to the parent company was 2.984 billion yuan, a year-on-year increase of 25.69%. The coal machinery sector is still the company's main source of profit and growth point. Zhongyuan Securities pointed out that the company's gross profit margin in the third quarter report was 24.02%, a year-on-year increase of 2.15 percentage points, and the net profit margin was 11.91%, a year-on-year increase of 2.22 percentage points. It is mainly due to the optimization of the revenue structure of the coal machinery sector, the decline in material costs, and the increase in the proportion of revenue of products with higher profit margins in the current period, which promotes the increase in gross profit margin. On the whole, the company's fundamentals have grown steadily, the valuation level is lower than that of peer listed companies, and the dividend has been more generous in recent years, with higher dividend yields.

China Shenhua (601088).

High dividends are guaranteed

The company is an energy giant with the layout of the whole industrial chain of the upstream and downstream of coal, with outstanding competitive advantages in the coal business, and has the characteristics of stable profitability, outstanding scale advantage and integrated operation. The company's long-term coal proportion is high, and the decline in coal prices has a limited impact on the company's profitability. In 2024, the supply and demand of coal will remain basically balanced, and the port price (5,500 kcal) will remain above 800 yuan/ton under the support of marginal factors; According to the research of the National Energy Group Institute of Technology and Economics, coal demand will peak in 2028, and the peak plateau period from 2029 to 2037 will be guaranteed. Everbright Securities pointed out that the company's dividend ratio has always been greater than 70% since 2020 and 75% in 2023. In the context of production and sales, price and dividend ratio, the company's profits and dividends are guaranteed in the next few years.

COSCO Shipping Holdings (601919).

The dividends of the leading container transportation are stable

The company has undergone two restructuring and mergers and acquisitions of China Shipping Group and OOCL, forming a business model that focuses on container business and vertically extends port logistics. At present, the company's container shipping business is leading in the world, and its capacity share ranks first in the world, and its profitability exceeds that of Maersk, an overseas leader. From 2022 to the first half of 2024, the company will continue to pay dividends of 50%, with a cumulative dividend of nearly 90 billion yuan. The company's net cash flow from operating activities increased simultaneously, laying a solid foundation for the company to continue to pay cash dividends to investors, as well as to transform to digital intelligence and green and low-carbon, and enhance its core competitiveness. Huayuan Securities pointed out that the trend of large-scale and alliance ships in the container transportation industry continues to develop, and the industry concentration continues to increase, so that the shipping company has stronger bargaining power in the market. Despite the challenges of a large number of new ship deliveries, in the context of the Red Sea bypass, demand recovery and increased industry concentration, it is expected that the freight rate in the container shipping market will remain higher than the level in 2023, and the company's profit in 2025 may still be considerable.

Xiaohongshu concept: strong short-term explosiveness

On the news side, TikTok may be removed from major mobile phone app stores in the United States on January 19, 2025, even if it may resume listing in the future, out of the avoidance of uncertainty in the future, TikTok users in the United States have turned to other platforms, among them, China's Xiaohongshu platform has undertaken a large amount of traffic. On the evening of January 13, TikTok has rushed to the top of the free list of iOS app stores in the United States. In the secondary market, Xiaohongshu concept stocks started strongly, and many stocks continued to rise and fall, and the attention of funds continued to rise.

The head ecological platform has ushered in an opportunity to expand the development of the circle, or have an important impact on the ecology of related upstream and downstream industries. Ni Shuang, an analyst at Huajin Securities, pointed out that many U.S. users facing a TikTok ban have chosen to join Xiaohongshu, posting content on Xiaohongshu, sharing their lives and ideas, and even expressing dissatisfaction with the ban. In the short term, the platform ecosystem is booming, but in today's era of ideological pluralism and great power games, the importance of cybersecurity governance is increasingly evident. In the medium and long term, for the influx of overseas users, platform functions and compliance and security issues need to be optimized and improved urgently, and the introduction of relevant policies is expected to further regulate the diversified, healthy and long-term development of the network ecosystem.

Feng Cuiting, an analyst at Zheshang Securities, said that the current point in time is in the early stage of a new round of Xiaohongshu going overseas, and the main beneficiary direction is advertising agency services and e-commerce operators, and the target can focus on Leo shares, Tiandi Online, Gravity Media, Blue Cursor, Tianxiaxiu, Fushi Holdings, Jiayun Technology, Huayang Lianzhong, etc. Worth buying in the field of e-commerce cooperation, one network and one creation, Huayang Lianzhong, etc.; Dianguang Media, Yao Ji Technology, Tianxiaxiu in the field of MCN institutions, etc.

A selection of potential stocks

Heaven and Earth Online (002995).

Acquisitions complement each other's strengths

The company plans to acquire 100% of the equity of Jiatou Group through the issuance of shares and cash payment. Jiatou Group is an Internet marketing technology service provider, with its self-developed ADX advertising trading system as the core, using big data and advertising trading algorithms and other auxiliary technologies to provide customers with accurate and efficient matching, and is committed to improving the automation, digitization and intelligence level of enterprises in Internet marketing. Cinda Securities pointed out that Jiatou Group has a complete R&D team for real-time bidding advertising transactions, and has rich technical reserves in the fields of big data, advertising trading algorithms and machine learning. The company has a wealth of media resources, digital content production and application related technical reserves. After the completion of this transaction, the two parties will optimize the existing product functions based on their respective business advantages, provide better services to various customers, and jointly explore new AI intelligent marketing products, and continue to apply AI technology to marketing strategies, material content generation, marketing effect optimization and other fields, so as to achieve continuous extension of service scenarios and continuous expansion of business scale.

Gravitational Media (603598).

A leader in content marketing

The company is a leading content marketing company in China, with brand marketing as the cornerstone business, and has made all-round efforts in social marketing, e-commerce marketing and operation services. After 20 years of deep cultivation in content marketing, the company has outstanding qualifications and customer advantages, has the top qualifications of Alibaba and Byte dual platforms, has served more than 1,000 well-known brands in total, and continues to explore innovative business development such as short dramas and going overseas, and empowers content creation and traffic distribution through AI technology. Kaiyuan Securities pointed out that the company will fully deploy Xiaohongshu in 2021, with more than 100 customer services and more than 70% of the double investment customers, and has become an in-depth partner of Xiaohongshu. In addition, in 2024, the company will join hands with Whale Kinetic Energy to build a sharing meeting, which is expected to rely on Whale Kinetic Energy's Hongmeng full-scene smart marketing platform to expand new application scenarios. In terms of AI, the company uses AI to empower marketing business, self-developed "nuclear AI" to improve the efficiency of content output, and cooperates with Lanzhou Technology to build an "AIGC Joint Laboratory" to assist in content generation and traffic distribution, and the subsequent commercialization space is expected to be opened.

Blue cursor (300058).

Two-wheel drive growth

The company's overseas platform business was officially launched, and the overseas programmatic platforms BlueX and AIDSP under the AI paradigm were strategically launched. Among them, BlueX's business model is similar to AppLovin's advertising delivery system Axon 2.0, including ADX, SDK and delivery platform, based on its years of experience in programmatic advertising technology, through the platform empowerment to achieve high-precision traffic distribution, to provide high-quality traffic for global advertisers; It will start internal operations in mid-2024 and has a revenue scale of more than one million dollars. Based on the company's self-developed BlueAI, AIDSP will reshape the global traffic bidding engine, and will deeply collaborate with the overseas agency business to reconstruct user growth, creativity and traffic models with AI. Caixin Securities pointed out that the company's globalization strategy is gradually deepening, and the programmed platform with the help of AI is expected to further improve quality and efficiency, and is expected to contribute new performance growth points to the company under the two-wheel drive.

It's worth buying (300785).

Long-term growth and orientation drive

On the product side, the company's "What is worth buyingGEN2" has entered the internal testing stage in the third quarter of 2024, and is gradually increasing the volume based on internal testing data and user feedback, and the company may cooperate with more external partners in the future to build a "AI + interest" two-wheel driven consumption ecology. Kaiyuan Securities pointed out that in terms of AI, the company is positioned as a "large model consumption information provider", and has reached cooperation with large models and applications such as Kimi, Zhipu Qingyan, Xunfei Xinghuo, Conch AI, MiniMax, Tencent Yuanbao, Huawei Hongmeng, etc., and has comprehensively promoted AI industry co-creation, technological innovation, marketing ecology and other fields. In terms of its own AI products, the company has built its own AI product matrix, including "1 large consumption model, 2 databases, 3 engines, and 4 types of applications", and continues to promote the efficiency of AI-enabled businesses. In terms of overseas business, the company's wholly-owned subsidiary, Hainan Numerical Technology Co., Ltd., established three overseas wholly-owned subsidiaries/grandchildren in the first half of 2024, and "AI + going overseas" is expected to drive the company's long-term growth.