Investment Rating - The report maintains a "Positive" outlook on the defense and military industry, indicating an expected upward trend in the fundamentals of the sector [3]. Core Insights - The industry is experiencing a recovery in order volumes across the supply chain, with a projected total revenue of approximately 71.2 billion yuan for 43 key companies in Q3 2024, reflecting a year-on-year increase of 9.1%. However, the total revenue for Q1-Q3 2024 is expected to decline by 7.0% year-on-year [3][4]. - The report highlights that the recovery in the upstream electronic components and high-end materials sectors is expected to see year-on-year growth of 10.6% and 13.2% respectively in Q3 2024, despite a decline in the first three quarters of the year [3][4]. - The midstream subsystem is projected to see a 2.5% decrease in Q3 2024, while the midstream structural components are expected to grow by 22.4% in the same period [4]. - The downstream main engine manufacturers are anticipated to achieve a 9.2% increase in Q3 2024, with a 4.9% growth expected for the first three quarters [4]. Summary by Sections Upstream - The upstream electronic components and high-end materials sectors are expected to recover, with significant contracts announced for stealth materials and metamaterials [3][4]. - The total revenue for the upstream sector is projected to be 40.99 billion yuan in Q3 2024, with a year-on-year decline of 7.2% [5]. Midstream - The midstream subsystem is expected to see a revenue decrease of 2.5% in Q3 2024, while structural components are projected to grow by 22.4% [4]. - The total revenue for the midstream sector is projected to be 50.17 billion yuan in Q3 2024, reflecting a year-on-year decline of 22.9% [5]. Downstream - The downstream main engine manufacturers are expected to see a revenue increase of 9.2% in Q3 2024, with a total revenue of 8.04 billion yuan for the quarter [4]. - The total revenue for the downstream sector is projected to be 3,520.7 billion yuan, with a year-on-year growth of 14.0% [9]. Investment Themes - The report identifies two main investment themes: high-end combat capabilities and new quality combat capabilities, focusing on stable growth in main engine manufacturers and high-end materials [3][4]. - Recommended stocks include a mix of high-end combat capabilities and new quality combat capabilities, such as 中航沈飞 (AVIC Shenyang Aircraft Corporation) and 航天电子 (Aerospace Electronics) [3][4].

Investment Rating - The report maintains a "Positive" outlook on the utility and environmental sectors, particularly highlighting the recovery in thermal power generation and the favorable policies for the environmental industry [3]. Core Insights - The report emphasizes the rapid increase in demand for new production capacities in the electricity sector, with hydropower maintaining high output and thermal power showing signs of recovery. Industrial electricity consumption from January to August 2024 reached 41,411.55 billion kWh, a year-on-year increase of 6.48% [3][6]. - In the natural gas sector, a relaxed supply-demand balance partially offsets geopolitical impacts, leading to an overall decline in global gas prices. As of October 11, 2024, the Henry Hub spot price was $2.31/mmBtu, reflecting a weekly decrease of 6.96% [3][20]. - The environmental sector is expected to benefit from debt restructuring and liquidity support measures, which could enhance the performance and valuation of companies within this space [3][34]. Summary by Sections Electricity - Industrial electricity consumption increased by 6.48% year-on-year, with significant growth in the chemical and non-ferrous metal industries, while the black metal smelting industry saw a decline [6][9]. - Hydropower generation showed a year-on-year increase of 15.97% for the first nine months of 2024, supported by favorable water conditions [3][14]. - The report recommends several companies in the electricity sector, including Yangtze Power and Guizhou Power, due to expected price increases and strong demand [3][19]. Natural Gas - Global gas prices are on a downward trend, with the Northeast Asia LNG spot price at $13/mmBtu, down 0.76% week-on-week [20][29]. - The report suggests focusing on integrated natural gas companies like ENN Energy and China Gas, which are expected to benefit from cost reductions and improved sales [3][33]. Environmental - The report highlights the government's plan to increase debt limits for local governments, which is expected to directly benefit the environmental sector by improving cash flow and profitability [3][34]. - Recommended companies include Hongcheng Environment and Yongxing Shares, which are expected to benefit from the debt restructuring and liquidity measures [3][34].

Investment Rating - The report maintains a positive outlook on the pharmaceutical industry, rating it as "Overweight" [3][19]. Core Insights - The pharmaceutical sector experienced a decline of 6.0% this week, underperforming compared to the Shanghai Composite Index, which fell by 3.6% [5][11]. - The Guangdong province aims to develop a biopharmaceutical and health industry cluster exceeding 1 trillion yuan by 2027, with a pharmaceutical industrial scale surpassing 500 billion yuan [11]. - Key clinical trial results were announced for Broady's BGM0504, showing significant weight loss in participants, with reductions of 10.8%, 16.2%, and 18.5% in different dosage groups [11]. - Heng Rui's paclitaxel (albumin-bound) received FDA approval in the U.S., marking it as the first manufacturer to gain approval for this generic drug in the U.S. market [11]. - The overall valuation of the pharmaceutical sector stands at 26.4 times PE (2024E), ranking 4th among 31 primary industries [7][11]. Market Performance - The pharmaceutical sector's performance this week ranked 18th among 31 sub-industries, with various segments showing declines, including hospitals (-9.8%), offline pharmacies (-8.8%), and blood products (-8.8%) [5][7]. - The report highlights the upcoming third-quarter earnings disclosures for listed companies, recommending attention to those expected to exceed performance expectations, such as Heng Rui, BeiGene, and Aibao Medical [11]. Key Events - Guangdong's action plan for high-quality development in the biopharmaceutical industry includes 38 key tasks aimed at innovation and industry aggregation [11]. - The IPO registration for Shantou Ultrasound has been approved, indicating growth in the medical imaging and industrial non-destructive testing sectors [11]. - Ruikang Pharmaceutical announced a dual improvement action plan focusing on quality and cost reduction, aiming to enhance profit margins in its drug and device distribution segment [12][13].

行 业 及 产 业 建筑装饰 行 业 研 究/ 行 业 点 评 证 券 研 究 报 告 2024 年 10 月 13 日 地方化债迎来转机，企业现金流有望获得修复 看好 ——申万宏源建筑周报（20241008-20241011） 本期投资提示： 证券分析师 袁豪 A0230520120001 yuanhao@swsresearch.com 唐猛 A0230523080003 tangmeng@swsresearch.com 研究支持 唐猛 A0230523080003 tangmeng@swsresearch.com 联系人 唐猛 (8621)23297818× tangmeng@swsresearch.com ⚫ 一周板块回顾：板块表现方面， SW 建筑装饰指数-2.36%，沪深 300 指数 -3.25%，相对收益为+0.89pct，板块表现强于大市，在 31 个板块排名中 排第 8 位。周涨幅最大的三个子行业分别为基建央企（+0.18%）、家装 （-2.73%）、生态园林（-4.02%），对应行业内三个公司：中国铁建 （+4.71%）、中天精装（+0.74%）、蒙草生态（+40.82%）。年涨幅最 大的 ...

Investment Rating - The report maintains a "Positive" outlook for the automotive industry, highlighting optimistic expectations for demand release and market recovery [3]. Core Viewpoints - The report emphasizes that fiscal policies are expected to stabilize the economy, which will help restore market risk appetite. The automotive sector is anticipated to benefit from continued government support for vehicle replacement programs, leading to increased sales and valuation resonance [3][4]. - The report notes a significant increase in retail sales of passenger vehicles, with a total of 656,700 units sold in the 39th week of 2024, representing a 42.59% increase month-over-month [4]. - The report identifies key players in the industry, including leading domestic automakers such as BYD, Li Auto, and Geely, as well as component manufacturers with overseas expansion capabilities [3][4]. Industry Situation Update - Retail sales of passenger vehicles reached 656,700 units in the 39th week of 2024, with traditional energy vehicles at 329,700 units and new energy vehicles at 327,000 units, marking a penetration rate of 49.79% for new energy vehicles [4]. - Raw material prices have generally decreased, with traditional vehicle raw material price index showing a month-over-month increase of 9.4% and a week-over-week decrease of 0.9% [4][9]. - The total transaction value in the automotive industry for the week was 443.73 billion yuan, reflecting a 258% increase compared to the previous week [4]. Market Situation Update - The automotive industry index closed at 5,897.11 points, down 4.57% for the week, ranking 11th among the primary industries in terms of weekly growth [4][19]. - A total of 15 stocks in the automotive sector rose, while 264 stocks fell, with the largest gainers being Jingu Co., Xingmin Zhitong, and Jianghuai Automobile [4][25]. Investment Analysis Opinions - The report suggests focusing on domestic leading manufacturers like BYD and those with overseas expansion capabilities such as Great Wall Motors and Chery [3][10]. - It highlights the trend towards smart technology, recommending attention to companies like Huawei and various smart component manufacturers [3][10]. - The report also emphasizes the importance of strong performance growth and overseas expansion capabilities among component manufacturers [3][10].

Investment Rating - The report maintains a positive outlook on the securities industry, expecting a double-digit year-on-year growth in performance for Q3 2024 [3]. Core Insights - The securities sector is projected to see a continued narrowing of revenue and net profit declines in the first nine months of 2024, with a forecasted revenue decline of 5% year-on-year and a net profit increase of 9% year-on-year [3]. - Q3 2024 is expected to show a revenue increase of 15% year-on-year and a net profit increase of 28% year-on-year, indicating a trend of sequential growth [3][4]. - Key companies such as Huatai Securities and China Galaxy are expected to report significant profit increases, while others like CITIC Securities and Guotai Junan are projected to see declines [3][10]. Summary by Sections Investment Business - The report highlights a strong performance in the equity market driven by positive signals from the National Financial Committee, with a notable increase in self-operated business revenue expected in Q3 2024 [4]. - The bond market is also showing slight increases, with the CSI All Bond Index rising by 0.52% year-on-year [4]. Brokerage and Margin Financing - Trading activity has rebounded, with average daily trading volume in Q3 2024 reaching 677.6 billion yuan, although this is still down 15% year-on-year [4][7]. - The report notes a recovery in the issuance of equity funds, with 51.8 billion units issued in Q3 2024, a 23% increase year-on-year [4]. Asset Management - The asset management business is expected to maintain resilience, with public fund sizes growing, particularly in bond funds, which saw a 26% year-on-year increase [5][7]. - The report anticipates a slight increase in asset management revenue of 0.4% year-on-year for the first nine months of 2024 [5]. Investment Banking - The investment banking sector is expected to see a marginal improvement in IPO activities, with Q3 2024 IPO volume at 15.3 billion yuan, down 86% year-on-year but up 94% quarter-on-quarter [6][7]. - Bond underwriting remains a strong support for the business, with a total underwriting volume of 3.9 trillion yuan in Q3 2024, reflecting a 3% year-on-year increase [6]. Investment Analysis Recommendations - The report suggests focusing on leading institutions like CITIC Securities and China Galaxy that are expected to benefit from capital market reforms and improved risk control indicators [5]. - It also highlights the potential of merger and acquisition-focused firms such as Guotai Junan and Haitong Securities, as well as undervalued firms like Huatai Securities that may exceed performance expectations [5].

Investment Rating - The report maintains a "Positive" rating for the real estate and property management industry [2][3]. Core Insights - The real estate market is viewed as a barometer for the macro economy, with recent policies aimed at stabilizing the market and ensuring housing delivery [3][26]. - Recent data indicates a significant decline in new home sales, with a 28% week-on-week drop in major cities, and a 29% year-on-year decrease in October [3][6][8]. - The report highlights a shift in policy focus from supply-side to demand-side measures, with an emphasis on improving residents' balance sheets and stimulating housing demand [3][27]. Industry Data Summary New Home Sales - In the week of October 5-11, 2024, 34 major cities recorded a total of 190,000 square meters in new home sales, down 28% from the previous week [3][6]. - Year-to-date, new home sales have decreased by 31.2% compared to the previous year [8][9]. Inventory Levels - As of October 11, 2024, the total available residential area in 15 major cities was 97.59 million square meters, with a slight decrease of 0.3% week-on-week [19][21]. - The average monthly inventory turnover for the last three months was 25 months, indicating a high level of inventory [19][21]. Policy Developments - Recent government measures include increasing debt limits to support local governments in managing debt risks and promoting market stabilization [26][27]. - Specific local policies have been implemented, such as the cancellation of housing purchase restrictions in certain cities and adjustments to down payment ratios for housing loans [27][30]. Company Dynamics - Sales figures for major real estate companies in September showed significant declines, with China Overseas reporting 188.2 billion yuan, down 33% year-on-year [3][26]. - The report tracks stock performance, noting that the SW Real Estate Index fell by 8.31%, underperforming the broader market [3][26]. Investment Recommendations - The report recommends focusing on companies with strong product offerings and those poised for valuation recovery, including names like Poly Developments and China Overseas [3][27].

Investment Rating - The report maintains a positive outlook on the home appliance industry, indicating a "Buy" recommendation due to the expected growth driven by government policies and market dynamics [3][5]. Core Insights - The home appliance sector has shown resilience, outperforming the Shanghai and Shenzhen 300 Index, with a decline of 2.3% compared to a 3.3% drop in the index [3][6]. - The issuance of 300 billion yuan in government bonds to support the "old for new" policy is expected to stimulate rapid growth in energy-efficient appliances [3][12]. - The report highlights significant growth in exports, particularly in air conditioning and refrigeration, with air conditioning exports increasing by 31.49% year-on-year in August 2024 [4][22]. Summary by Sections Industry Dynamics - The "old for new" policy has been fully implemented, with 150 billion yuan allocated to local governments to promote appliance upgrades [3][12]. - Major companies like Lek Electric have announced substantial cash dividends, indicating strong financial health and shareholder returns [3][13]. Sales Data - In August 2024, the air conditioning sector produced 11.77 million units, a 3.39% increase year-on-year, with total sales reaching 13.06 million units, up 7.31% [4][22]. - The refrigerator sector saw production of 8.42 million units, a 7.45% increase, with exports rising by 21.70% [4][27]. - The washing machine sector reported production of 8.11 million units, a 12.71% increase, with exports growing by 17.48% [4][28]. Investment Highlights - The report identifies three main investment themes: 1. White goods benefiting from favorable real estate policies and high dividend yields [5]. 2. Export growth driven by recovering orders and currency depreciation [5]. 3. Core component manufacturers experiencing increased demand due to the overall industry growth [5]. Market Trends - The report notes a significant increase in consumer interest in energy-efficient appliances, driven by government subsidies and changing consumer preferences [42][49]. - The "old for new" policy is expected to lead to a long-term promotional period, altering traditional sales strategies in the home appliance market [48][49]. Company Performance - Key companies such as Gree Electric and Midea have shown resilience, with Gree holding a 22.59% market share in air conditioning sales as of August 2024 [4][25]. - Lek Electric's dividend distribution reflects strong operational performance, with a total cash dividend of 860 million yuan announced for the first half of 2024 [3][39].

Investment Rating - The report maintains a "Positive" outlook on the petrochemical industry, particularly highlighting the recovery in the polyester filament market and the expectations for the "Silver Ten" season [4][6]. Core Insights - The fundamentals of polyester filament have improved since late September, driven by cooler weather, stabilized oil prices, and favorable domestic macro policies, leading to a recovery in downstream demand [4][6]. - The report anticipates a continued recovery in polyester filament profitability in the fourth quarter, supported by both domestic and external demand improvements [14][15]. - The upstream sector is experiencing rising oil prices, with Brent crude oil futures closing at $79.04 per barrel, reflecting a week-on-week increase of 1.27% [19][21]. - The refining sector shows an increase in overseas refined oil crack spreads, while olefin spreads have decreased [40][42]. Summary by Sections Polyester Filament Market - Since late September, the polyester filament market has shown signs of recovery, with downstream operating rates reaching annual highs due to increased demand for autumn and winter fabrics [8][11]. - Inventory levels across the industry have declined, with polyester filament stocks at their lowest since the Spring Festival [11][14]. - The report expects continued improvement in profitability for polyester filament in Q4, with a favorable supply-demand balance anticipated [14][15]. Upstream Sector - As of October 11, Brent crude oil futures closed at $79.04 per barrel, with a week-on-week increase of 1.27% [19][21]. - U.S. commercial crude oil inventories increased by 5.81 million barrels, while gasoline and distillate inventories decreased [21][28]. - The report notes a slight increase in the number of active drilling rigs in the U.S., indicating a potential uptick in oil production [28][30]. Refining Sector - The report highlights an increase in the Singapore refining product crack spread to $8.73 per barrel, indicating improved refining margins [42][44]. - The price of PTA has risen, with the average spot price in East China reaching 5088.33 RMB per ton, reflecting a week-on-week increase of 5.40% [67][69]. - The report suggests that refining profitability is expected to gradually improve as economic recovery continues [15][40]. Investment Recommendations - The report recommends focusing on high-quality refining companies such as Hengli Petrochemical, Rongsheng Petrochemical, and Dongfang Shenghong, as well as polyester filament companies like Tongkun Co., Ltd. [15][15]. - It also highlights the potential for expansion in ethane-to-ethylene projects in China, recommending Satellite Chemical as a key player [15][15].

Investment Rating - The report maintains a positive outlook on the non-bank financial sector, particularly highlighting the long-term investment value of brokerage firms [4]. Core Insights - Central fiscal efforts are expected to boost investment confidence, with a series of incremental policies aimed at supporting economic development [4]. - The brokerage sector is anticipated to benefit from increased market activity and policy catalysts, with significant trading volumes recorded [4][12]. - The insurance sector is also expected to gain from new policies and market conditions, particularly through innovative financial instruments [4]. Summary by Sections Market Review - The Shanghai Composite Index closed at 3,217 points, down 14% from its peak of 3,674 points [4]. - The average daily trading volume in the A-share market was 25.49 trillion yuan, reflecting a 2.38% decrease from the previous period [13]. - The non-bank index reported a slight decline of 0.64% during the week [8]. Industry News and Announcements - The report discusses the merger plan between Guotai Junan and Haitong Securities, which is expected to reshape the industry landscape [4][23]. - The introduction of a 500 billion yuan swap facility by the central bank is anticipated to enhance liquidity for securities, funds, and insurance companies [17][25]. - The insurance sector is encouraged to participate in new financial instruments that could improve their investment returns [4]. Key Data Tracking - As of October 11, 2024, the 10-year government bond yield was 2.14%, with a slight decrease of 1.26 basis points [12]. - The average daily margin trading balance was reported at 15,884.03 billion yuan, indicating a decrease from the previous year [13]. - The insurance sector's performance is expected to improve, with New China Life Insurance forecasting a net profit increase of 95%-115% year-on-year for Q3 2024 [4].