Group 1 - The report indicates that the stock-bond price ratio suggests a potential rally in the stock market for the fourth quarter, supported by a significant policy announcement on September 24 [1][13] - Historical comparisons show that the current market situation resembles previous phases of recovery, with potential for further upward movement [2][4] - The report highlights that the current market conditions are similar to those in July 2014, where both periods experienced prolonged downturns followed by policy-driven recoveries [4][5] Group 2 - The analysis of past market recoveries indicates that the first phase of a rally typically shows strong performance, with an average increase of 32.4% across historical instances [2] - The report suggests that sectors with relatively low recent performance and low Relative Strength Index (RSI) should be prioritized for investment, specifically utilities, banks, coal, and oil and gas [10][13] - The report emphasizes the importance of monitoring sector performance during market corrections, noting that leading sectors can shift dramatically [6][8]

Economic Growth and Targets - The economic growth rate is expected to maintain resilience, with a target of 5% for the year achievable, as the first half of 2024 recorded a growth rate of 5%[1] - The growth rates for Q1 and Q2 were 5.3% and 4.7% respectively, with anticipated recovery in Q3 and Q4, projected between 4.8% and 5.1%[1] - Key industries contributing to GDP growth include industrial, information transmission, software, and leasing services, while other sectors showed a decline in contribution rates[1] Fiscal and Monetary Policies - The Central Political Bureau emphasized the need for stronger fiscal and monetary policies, indicating potential adjustments in reserve requirements and interest rates[15] - As of September, the central bank lowered the reserve requirement ratio by 0.5 percentage points and reduced the 7-day reverse repurchase rate to 1.50%[23] - The issuance of special bonds accelerated, with local governments issuing approximately 3.62 trillion yuan in special bonds by September, achieving 92.7% of the annual target[21] Infrastructure and Investment - Broad infrastructure investment grew by 7.87% year-on-year in the first eight months, while narrow infrastructure investment saw a slower growth of 4.4%[7] - The issuance of special bonds and ultra-long-term bonds is expected to support continued moderate recovery in infrastructure investment, projected to reach around 8% for the year[7] - Manufacturing investment growth was recorded at 9.1% for the first eight months, although a slowdown is anticipated due to external demand fluctuations[3] Consumer Spending Trends - Retail sales growth remained weak, with a total increase of 3.4% year-on-year in the first eight months, and a decline in growth rate noted in August[10] - Service consumption's share increased to 58.17% in the first half of the year, although it remains below the previous year's level[10] - Policies aimed at boosting service consumption are expected to further enhance its share, with significant potential for growth compared to the U.S.[10]

Group 1: Manufacturing PMI Insights - The manufacturing PMI for September 2024 increased by 0.7 percentage points to 49.8%, exceeding market expectations but remaining below the expansion threshold for five consecutive months[1] - The new orders index rose to 49.9%, ending a five-month decline, driven by seasonal factors and supportive policies[2] - The production index improved by 1.4 percentage points to 51.2%, indicating a return to the expansion zone as high temperatures and heavy rainfall effects diminished[3] Group 2: Economic Policy and Outlook - A series of monetary policy measures were implemented, including a 0.5 percentage point reduction in the reserve requirement ratio, injecting approximately 1 trillion yuan into the financial market[4] - The government is expected to enhance fiscal policies to support economic growth, positively impacting the manufacturing sector in October[5] - The employment index remained low at 48.2%, indicating ongoing challenges in the job market despite some recovery in production[6] Group 3: Non-Manufacturing PMI Trends - The non-manufacturing business activity index fell to 50.0%, a decrease of 0.3 percentage points, reflecting a contraction in the service sector[7] - The service sector's business activity index dropped to 49.9%, slightly below the critical line, influenced by the end of the summer consumption peak[8] - The construction sector showed slight improvement with a business activity index of 50.7%, but still below the average level since 2015[9] Group 4: Import and Export Dynamics - New export orders and import indices fell to 47.5% and 46.1%, respectively, indicating a decline in external demand amid increasing trade tensions[10] - The gap between new export orders and imports narrowed, with new export orders 1.4 percentage points higher than imports[11] - The overall outlook for exports remains challenging due to weak overseas demand and ongoing trade friction risks[12]

Investment Rating - The report maintains a positive outlook on the pharmaceutical sector, with a focus on undervalued stocks, overseas expansion, and essential hospital needs as key investment themes [2][8]. Core Insights - The pharmaceutical index rose by 11.15% this week, outperforming the CSI 300 index by 3.57 percentage points, ranking 8th in industry performance. Year-to-date, the pharmaceutical sector has declined by 7.18%, lagging behind the CSI 300 by 22.19 percentage points, ranking 29th [2][22]. - The current valuation level for the pharmaceutical industry (PE-TTM) is 28 times, with a premium of 83.57% over the entire A-share market, a 35.73% premium over the A-share market excluding banks, and a 122.82% premium over the CSI 300 [2][23]. - The best-performing sub-sectors this week include hospitals, vaccines, and medical consumables, which rose by 15.6%, 15.0%, and 14.1%, respectively. Year-to-date, the top three performing sub-sectors are APIs, chemical preparations, and pharmaceutical distribution, with increases of 3.0%, 1.6%, and 1.2% [2][29]. Summary by Sections Investment Strategy and Key Stocks - The report emphasizes three main investment directions: high-dividend OTC stocks, medical device exports including IVD and respiratory products, and essential medical needs post-medical corruption [2][8]. - Recommended stocks include: - Buy: Betta Pharmaceuticals (300558), Sino Medical (688108), Shanghai Laishi (002252), Rongchang Bio (688331), Yihe Jiaye (301367), Mayinglong (600993), and Meihua Medical (301363) [9][12]. - Hold: Hengrui Medicine (600276), New Industry (300832), East China Pharmaceutical (000963), and Ganli Pharmaceutical (603087) [9][12]. Market Performance - The report notes that the recommended stock portfolio increased by 11.7% last week, outperforming the market by 3.2 percentage points and the pharmaceutical index by 0.5 percentage points [12][21]. - The stable stock portfolio rose by 8.9%, outperforming the market by 0.4 percentage points but underperforming the pharmaceutical index by 2.3 percentage points [15][21]. - The Sci-Tech Innovation Board portfolio increased by 14.8%, underperforming the market by 6.4 percentage points but outperforming the pharmaceutical index by 3.7 percentage points [18][21]. - The Hong Kong stock portfolio rose by 6.0%, underperforming the market by 3.6 percentage points and the pharmaceutical index by 1.0 percentage point [21].

Investment Rating - The report provides a positive investment outlook for the machinery industry, focusing on sectors with clear growth potential and government support [1]. Core Viewpoints - General Equipment: 2024 marks a transition in the manufacturing inventory cycle, with expectations for improved demand despite current weak conditions. The inventory cycle is crucial for investment in general equipment, with orders expected to improve [2][4]. - Rail Transit Equipment: High investment levels are expected to continue in 2024, with a significant acceleration in railway investment anticipated in the second half of the year. The railway equipment sector is projected to see both order and valuation increases [2][31]. - Engineering Machinery: Short-term domestic demand is stabilizing, with overseas exports exceeding expectations. The long-term outlook remains positive as domestic demand is expected to bottom out [2][41]. - New Economy: The report emphasizes the importance of investing in low-altitude economy and humanoid robots, with 2024 being a pivotal year for the latter's production [2][44]. - Alpha Opportunities in Sub-sectors: Beyond the highlighted sectors, the report suggests focusing on undervalued, high-growth companies in niche markets [2]. Summary by Sections General Equipment - The manufacturing inventory cycle is transitioning from active destocking to passive destocking and active restocking, with demand expectations improving due to policy support [2][4]. - As of December 2023, industrial inventory levels began to recover, indicating a potential shift towards restocking [4][6]. Rail Transit Equipment - The railway investment for January to August 2024 reached 477.5 billion yuan, a year-on-year increase of 10.5%, with expectations for continued high investment levels [2][31]. - The railway operational mileage is projected to grow significantly by 2035, indicating a robust long-term outlook for the sector [28][29]. Engineering Machinery - Domestic excavator sales are expected to grow by 17% year-on-year in September 2024, with a recovery in demand anticipated [37][41]. - The global engineering machinery market is valued at over 1 trillion USD, with Chinese manufacturers increasing their market share internationally [41][42]. New Economy - The low-altitude economy market is projected to reach 6 trillion yuan by 2035, with significant growth opportunities in the humanoid robot sector [44][45]. - The report suggests focusing on key components and technologies within the humanoid robot industry for investment [46]. Alpha Opportunities in Sub-sectors - The report highlights the importance of identifying undervalued companies with growth potential across various sub-sectors, including rail transit and engineering machinery [2].

Investment Rating - The report indicates a positive outlook for the computer industry, suggesting it is a high-elasticity sector benefiting from cyclical trends [2][5]. Core Insights - The computer industry is currently experiencing a high PE ratio of 42 times, which is recognized for its growth potential despite being lower than the historical average of 52 times over the past decade, indicating significant allocation value [2][5]. - Fund holdings in the computer sector have decreased, with a total market value of 37.89 billion yuan in Q2 2024, reflecting a low allocation ratio of 1.7%, which is the lowest in the past five years, suggesting a potential bottoming out of the sector [2][5]. - Recent policy measures have been introduced to stimulate the market, including a reduction in the reserve requirement ratio and measures to encourage long-term capital inflow, which are expected to enhance trading volumes and positively impact financial IT sectors [3][13]. Summary by Sections Industry Review - As of September 30, 2024, the computer industry's PE (TTM, overall method, excluding negative values) stands at 42 times, which is high among first-level industries, indicating continued market recognition of its growth potential [2]. - The historical average PE for the computer index over the past decade is 52 times, and the current PE is significantly lower than this average, presenting a notable investment opportunity [2]. - The total market value of heavy-holding stocks in the computer sector was 37.89 billion yuan in Q2 2024, with a low allocation ratio of 1.7%, marking a significant decline and highlighting the sector's bottom characteristics [2]. Industry Strategy - From September 24 to September 26, multiple policy measures were announced, leading to a significant increase in market activity, with trading volumes reaching 2.4 trillion yuan on September 30, a 74% increase from the previous day [3][13]. - The financial IT sector is expected to benefit from increased trading demand and the promotion of financial innovation, with a focus on both C-end trading software and B-end financial IT systems [13][16]. - The promotion of financial innovation is progressing with a pilot program expanding from 47 institutions in 2020 to 198 institutions by 2021, indicating a growing demand for IT systems in financial institutions [16].

Investment Rating - The report maintains a bullish outlook on the pharmaceutical sector for Q4 2024, indicating a positive investment sentiment towards the industry [1]. Core Viewpoints - The pharmaceutical and biotechnology index rose by 28.14% in the week before National Day, outperforming the CSI 300 index by 2.62 percentage points. However, the sector has declined by 7.18% year-to-date, lagging behind the CSI 300 index by 22.19 percentage points [2][3]. - The current valuation level for the pharmaceutical sector is at 28 times PE-TTM, with a premium of 85.4% relative to all A-shares and 122.82% relative to the CSI 300 index. The best-performing sub-sectors this week include hospitals, vaccines, and medical R&D outsourcing, with increases of 46.9%, 38.5%, and 33.5% respectively [2][3]. - The significant rise in the pharmaceutical sector is attributed to recent macroeconomic policy support, including a reduction in the reserve requirement ratio and interest rates, as well as structural monetary policy tools aimed at enhancing capital market support [2][3]. Summary by Sections Market Review - The pharmaceutical sector has shown a mixed performance in 2024, with a notable decline in the first half of the year, but recent policy changes have bolstered investor confidence [2][3]. - The report highlights the importance of macroeconomic policies and their impact on the sector's performance, particularly in Q4 [2][3]. Innovation Drugs and Formulations - The report emphasizes the significance of high-quality innovation and commercialization achievements, with a focus on the supportive policies for innovative drug development [4][6]. - The revenue for the drug sector in the first half of 2024 reached 200.3 billion yuan, reflecting a 2.1% increase, while net profit grew by 11.1% to 25.51 billion yuan [4][6]. - The report notes that the global sales of domestic innovative drugs are increasing, with significant sales growth in overseas markets [4][8]. Medical Devices - The medical device sector reported a revenue of 1,013 billion yuan in the first half of 2024, marking a 3.9% increase, with a net profit of 223 billion yuan [13][15]. - The report identifies three main directions for growth in the medical device sector: international expansion, recovery in essential medical needs post-anti-corruption measures, and innovation in medical devices [14][15]. - The report anticipates a recovery in demand for medical devices due to the implementation of new policies and the normalization of hospital procurement processes [15][19].

Investment Rating - The report maintains a positive outlook on the pig farming industry, suggesting that the current market conditions are not overly pessimistic [1]. Core Insights - The breeding stock of sows has decreased, alleviating the pressure of oversupply in the market. As of the end of Q2 2024, the breeding sow inventory was 40.38 million heads, a year-on-year decrease of 2.59 million heads, or 6.0% [2]. - Pig prices have stabilized at high levels, with prices maintaining above 18 yuan per kilogram since June and peaking above 20 yuan in August [2]. - The price of piglets has rapidly declined, dropping below the cost price of 350 yuan, which may suppress further capacity growth [2]. - The total pig inventory at the end of Q2 was 415.33 million heads, a year-on-year decrease of 1.98 million heads, or 4.6% [6]. - The average profit per pig sold reached 608 yuan in August, indicating improved cash flow for farming households [19]. Summary by Sections Supply Side Analysis - The breeding sow inventory peaked at 43.90 million heads in December 2022 and has been on a downward trend since then, with a notable decrease in Q4 2023 [2]. - The national pig inventory showed a slight increase in Q2 2024, but overall levels remain low compared to previous years, limiting the potential for increased market supply in the latter half of the year [6]. - The market is expected to see a supply gap in mid-2024 due to significant disease outbreaks affecting pig populations [6]. Price Trends - The wholesale price of pork has shown resilience, with a notable increase in consumer prices reflecting a recovery in demand [19]. - The report indicates a cautious optimism regarding consumer confidence, which may improve as the peak pork consumption season approaches [19]. Financial Health of Companies - The report highlights that listed pig farming companies are facing high debt levels, which may restrict their capacity for growth [15]. - Despite the financial pressures, the overall profitability in the pig farming sector has shown signs of recovery, with major companies reporting improved operational conditions [19].

Investment Rating - The report suggests a positive outlook for the electronic industry, indicating a transition from recovery to prosperity in the second half of 2024, recommending holding stocks and minimizing trading activity [3]. Core Insights - The electronic index's PB valuation has risen above the historical -1 standard deviation, with a PEG of 0.81 for the next three years, indicating a high safety margin for investments [3]. - Global demand for consumer electronics is expected to continue, driven by AI, with significant expectations for a replacement cycle [3]. - The report emphasizes the importance of semiconductor materials, equipment, and components in the upcoming demand cycle [3]. - AI and XR will be the focal points of global electronic innovation investments in 2024, with opportunities identified in AI smartphones, smart driving, humanoid robots, and advanced packaging [3]. - The report highlights the ongoing trend of domestic semiconductor localization and the expected growth in the CCL (Copper Clad Laminate) industry due to the recovery in demand from consumer electronics, automotive, and home appliances [6][9]. Summary by Sections Copper Clad Laminate (CCL) Industry - The CCL industry is entering a recovery phase, with demand from consumer electronics and automotive sectors expected to improve [6]. - High-speed CCL is anticipated to grow due to the increasing requirements from Nvidia's AI accelerator cards [7]. - The industry is expected to see a significant EPS recovery in 2024 as production rates improve [8]. PCB Industry - The scarcity of data communication PCB capacity is highlighted, driven by AI server demands [9]. - The PCB industry is experiencing a recovery in production rates, with AI server and switch demands contributing to this trend [10]. - The report predicts that PCB manufacturers with significant exposure to AI servers will see substantial performance elasticity in 2024 [11]. Digital SoC - The AIoT market is showing positive demand trends, with significant growth expected in wearable devices and personal audio products [12]. - Domestic SoC manufacturers are beginning to penetrate the high-end automotive market, gaining market share from foreign competitors [12]. Power Semiconductors - A notable recovery in mid-to-low voltage power semiconductors is observed, with strong demand from consumer and automotive electronics [16]. - The report indicates that the overall market for SiC power devices is expected to grow significantly by 2025 [16]. Analog IC - The analog IC market is projected to recover in 2025, driven by demand from consumer electronics and automotive sectors [20]. - The report notes that the domestic analog industry is likely to consolidate, improving the supply landscape [20]. OLED Industry - Korean manufacturers currently dominate the OLED market, but domestic manufacturers are increasing their market share in AMOLED smartphone panels [22][25]. - The report anticipates a significant increase in demand for flexible OLED panels in the coming years [25]. Consumer Electronics - The report suggests that AI may initiate a new innovation cycle for Apple, with the iPhone 16 expected to be a leading AI smartphone [26]. - A series of new Android devices are set to launch in Q4 2024, which may lead to a recovery in the Android supply chain [26].

通信行业2024Q4投资观点 AI连接需求旺盛，通信技术持续迭代 www.swsc.com.cn 西南证券研究发展中心 通信研究团队 2024年10月 投资要点 1 AI浪潮催生算力要求，推理侧连接需求持续提升。AIGC带来的超大算力需求拉动通信基础设施建设 及扩容，光模块作为数据传输的基础部件，需求首先迎来爆发。同时随着光连接高速率、大密度方 向发展，22年为800G元年，市场出货量约为万只级别，23年逐步起量，24年随着大模型厂商加速 AI建设，加单意愿强烈、节奏频繁，预计将迎来爆发式增长。同时随着芯片速率翻倍，英伟达的 B100和H200等产品将逐步标配1.6T光模块，光模块更新迭代也将加速。中国光模块企业占据全球 60%以上的市场份额，进入市场较早，先发优势显著，拿下北美订单具有高确定性，同时业绩能见 度高、落地性强，建议持续关注。 卫星互联网建设序幕拉开，将带来新一轮资本投入。卫星互联网建设需求具有较高确定性：其一， 卫星互联网在国家安全领域的重要作用已得到充分显现，建设自主可控的宽带卫星星座刻不容缓； 其二，低轨轨道资源和通信频段资源稀缺，在国际电联"先占先得"规则下，我国需要快速抢占低 轨卫星资 ...