Investment Rating - The investment rating for the company is "Accumulate (Maintain)" [3] Core Views - The company's profitability continues to improve, supported by flexible direct current (DC) transmission systems, contributing to performance growth [2][3] - The company reported a revenue of 9.586 billion yuan for the first three quarters of 2024, a year-on-year decrease of 11.49%, while the net profit attributable to shareholders was 895 million yuan, an increase of 10.41% year-on-year [3] - The gross profit margin has been consistently rising, indicating enhanced profitability, with Q3 2024 gross margins recorded at 24.52% [3][6] Summary by Relevant Sections Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 95.86 billion yuan, down 11.49% year-on-year, and a net profit of 8.95 billion yuan, up 10.41% year-on-year [3] - The company’s gross profit margin has shown a continuous upward trend, with Q1, Q2, and Q3 2024 margins at 18.27%, 22.74%, and 24.52% respectively [3][6] - The company’s operating cash flow for 2024 is projected to be 2.075 billion yuan, with net profit estimates for 2024, 2025, and 2026 at 1.558 billion yuan, 1.698 billion yuan, and 1.989 billion yuan respectively [13][14] Business Outlook - The company is expected to benefit from the acceleration of ultra-high voltage direct current (UHVDC) construction, with projected net profits for 2024, 2025, and 2026 being 1.278 billion yuan, 1.410 billion yuan, and 1.671 billion yuan respectively [6][12] - The company has secured a contract for the Gansu-Zhejiang ±800 kV UHVDC converter valve project, valued at 1.086 billion yuan, which is anticipated to enhance its performance [3][6] Market Position - The company is recognized as a leading player in the converter valve sector, with significant demand expected for flexible direct current projects, which are set to increase in the coming years [6][12] - The company’s market capitalization is currently 281.52 billion yuan, with a price-to-earnings ratio projected to decrease from 36.23 in 2022 to 17.03 by 2026 [3][14]

分析师：张刚 登记编码：S0730511010001 zhanggang@ccnew.com 021-50586990 晨会聚焦 -21% -16% -10% -5% 0% 5% 10% 15% 2023.11 2024.03 2024.07 2024.11 上证指数 深证成指 资料来源：Wind，中原证券研究所 | --- | --- | --- | |-------------------------|------------------|------------| | 国内市场表现 \n指数名称 | 昨日收盘价 | 涨跌幅 (%) | | 上证指数 | 3,367.99 | 0.66 | | 深证成指 | 10,827.19 | 0.78 | | 创业板指 | 2,022.77 | -0.47 | | 沪深 300 | 3,985.77 | 0.22 | | 上证 50 | 2,443.97 | -0.52 | | 科创 50 | 891.46 | 0.14 | | 创业板 50 | 1,924.26 | -0.67 | | 中证 100 | 3,768.81 | 0.20 | | 中证 500 | 5 ...

Investment Rating - The report maintains an "Outperform" investment rating for the electric power and utilities industry [2][8]. Core Insights - The electric power and utilities industry has shown stable performance with notable defensive characteristics. In the first three quarters of 2024, the industry achieved operating revenue of 1,874.80 billion yuan, a year-on-year increase of 0.19%, while net profit attributable to shareholders reached 194.69 billion yuan, up 9.67% [4][39]. - The overall profitability of the industry is steadily improving, with a return on equity (ROE) of 7.84% in the first three quarters of 2024, an increase of 0.17 percentage points from 2023. The gross margin and net margin reached 22.66% and 13.10%, respectively, both showing an upward trend compared to the same period in 2023 [4][45]. - The report highlights that power generation companies contributed over 80.24% of the net profit attributable to shareholders in the electric power and utilities sector, with hydropower and other generation being the most profitable sub-sectors [5][54]. Summary by Sections Industry Performance - The electric power and utilities industry has demonstrated robust operational performance, characterized by stability and defensive attributes. The first three quarters of 2024 saw a net profit margin of 13.10%, reflecting a continuous upward trend since 2020 [4][45]. - The financial expense ratio has been declining, reaching 4.54% in the first three quarters of 2024, down 0.26 percentage points from 2023, which supports improved profitability [4][48]. Contribution of Power Generation - Power generation companies accounted for more than 80% of the net profit in the electric power and utilities industry during the first three quarters of 2024. The top three contributors to net profit were thermal power, hydropower, and other generation [5][54]. - Hydropower and other generation sectors exhibited the highest profitability, with hydropower achieving a gross margin of 58.16% and a net margin of 43.87%, both showing significant year-on-year improvements [5][60]. Individual Company Performance - The report notes a divergence in individual company performance within the industry, with leading firms benefiting from high entry barriers and strong operational efficiencies. The thermal power sector has seen positive impacts from falling coal prices and regulatory changes [6][39]. - In Henan province, while overall revenue for electric power and utilities companies decreased by 2.81%, net profit attributable to shareholders increased by 30.89% in the first three quarters of 2024 [6][8]. Investment Recommendations - The report suggests maintaining a focus on leading companies in the hydropower and nuclear power sectors, which are expected to show stable performance and high dividend yields. Recommended companies include Yangtze Power, Guodian Power, China General Nuclear Power, and China National Nuclear Power [8].

资料来源：Wind,中原证券 分析师：张刚 登记编码：S0730511010001 zhanggang@ccnew.com 021-50586990 晨会聚焦 证券研究报告-晨会聚焦 发布日期：2024 年 11 月 20 日 -21% -16% -10% -5% 0% 5% 10% 15% 2023.11 2024.03 2024.07 2024.11 上证指数 深证成指 资料来源：Wind,中原证券 | --- | --- | --- | |-------------------------|------------|------------| | 国内市场表现 \n指数名称 | 昨日收盘价 | 涨跌幅 (%) | | 上证指数 | 3,346.01 | 0.67 | | 深证成指 | 10,743.84 | 1.90 | | 创业板指 | 2,022.77 | -0.47 | | 沪深 300 | 3,976.89 | 0.67 | | 上证 50 | 2,443.97 | -0.52 | | 科创 50 | 891.46 | 0.14 | | 创业板 50 | 1,924.26 | -0.67 | | ...

Group 1 - The A-share market experienced a rebound with slight fluctuations, showing a pattern of decline followed by recovery, particularly in sectors like energy metals, computer equipment, communication devices, and power equipment [7][18] - The Shanghai Composite Index closed at 3,346.01 points, up 0.67%, while the Shenzhen Component Index rose by 1.90% to 10,743.84 points, indicating overall positive market sentiment [8][18] - The average price-to-earnings ratios for the Shanghai Composite and ChiNext indices are 14.11 times and 36.05 times respectively, which are at the median levels over the past three years, suggesting a suitable environment for medium to long-term investments [18] Group 2 - The trading volume on the two exchanges reached 15,969 billion yuan, which is above the median of the daily trading volume over the past three years, indicating active market participation [18] - Key sectors that showed strong performance included energy metals, electronic chemicals, semiconductors, and optical electronics, while sectors like banking, engineering construction, and coal showed weaker performance [7][10] - Short-term investment opportunities are recommended in communication equipment, power equipment, photovoltaic equipment, and energy metals, reflecting a focus on sectors likely to benefit from ongoing macroeconomic policies [18]

Investment Rating - The report maintains an "Outperform" rating for the agriculture, forestry, animal husbandry, and fishery industry [2][6]. Core Insights - The industry is expected to experience a recovery in profitability due to improved feed costs and a favorable supply-demand balance in the pig farming sector, particularly as the market enters a peak demand period towards the end of 2024 [5][46]. - The pet food sector shows significant growth potential driven by changing demographics and rising living standards, with a notable shift towards domestic brands [5][21]. - The animal health sector is poised for growth due to the introduction of new vaccines and increasing demand from large-scale farming operations [5][54]. Summary by Sections Market Review - The agriculture, forestry, animal husbandry, and fishery index has underperformed compared to the CSI 300 index, with a return of -0.61% from early 2024 to November 18, 2024, ranking 27th among 30 sectors [4][19]. - The pet food segment has shown strong performance, while the animal health segment has lagged behind [21]. Pig Farming - The pig farming sector is entering a phase of supply expansion, with expectations of strong price performance leading into the end of 2024, followed by a potential decline in 2025 due to seasonal demand fluctuations [5][46]. - The report highlights a significant increase in the market share of leading pig farming companies, with the top eight firms' market share rising from 4.59% in 2017 to 18.35% in 2023 [46][59]. Animal Health - The animal health market has been growing steadily, with a compound annual growth rate of 5.71% from 2016 to 2023, driven by increased focus on animal health products in large-scale farming [54][56]. - The introduction of new vaccines, particularly for African swine fever, is expected to open new market opportunities [57]. Seed Industry - The seed industry is positioned for growth as regulatory frameworks and policies supporting biotechnology become clearer, with significant investment potential in the sector [5][54]. Pet Food - The pet food market in China is projected to continue expanding, with a shift towards online sales and domestic product replacements, indicating substantial growth opportunities for related companies [5][21].

Group 1: Lithium Battery - The lithium battery index decreased by 0.06%, outperforming the Shanghai and Shenzhen 300 index [11] - In October 2024, China's new energy vehicle power battery installation reached 59.20 GWh, a year-on-year increase of 51.02% [12] - The prices of battery-grade lithium carbonate and lithium hydroxide increased by 5.26% and 0.70% respectively [13] - The report suggests maintaining attention on investment opportunities in the lithium battery sector due to favorable macro policies [13] Group 2: Chemical Industry - The basic chemical industry index fell by 3.53%, underperforming the Shanghai and Shenzhen 300 index [15] - The report highlights potential demand growth for chemical products related to the real estate sector due to supportive policies [15][16] - It also suggests focusing on alternative routes to crude oil and the phosphate chemical industry due to supply tightness [16] Group 3: New Materials - The new materials index dropped by 3.98%, underperforming the Shanghai and Shenzhen 300 index [19] - The report emphasizes the growing demand for new materials in manufacturing and suggests focusing on semiconductor materials with low domestic replacement rates [19] - It highlights the strategic importance of high-end diamond materials and recommends investing in companies with technological reserves [19] Group 4: Light Industry Manufacturing - The light industry manufacturing index decreased by 3.03%, slightly outperforming the Shanghai and Shenzhen 300 index [21] - The report indicates a recovery in the home furnishing sector driven by new real estate policies and suggests focusing on leading companies with strong fundamentals [21][22] Group 5: Agriculture, Forestry, Animal Husbandry, and Fishery - The agriculture, forestry, animal husbandry, and fishery index fell by 6.17%, underperforming the Shanghai and Shenzhen 300 index [25] - The report recommends focusing on the pig farming sector and the rapidly growing pet food segment as potential investment opportunities [25] Group 6: Securities - The securities index experienced a decline after reaching a new high, indicating a period of adjustment [30] - The report suggests maintaining attention on the securities sector due to potential structural opportunities [31] Group 7: Photovoltaics - The photovoltaic industry index decreased by 4.55%, with a significant drop in trading volume [33] - The report indicates that the market demand for photovoltaics remains strong, with upcoming procurement projects expected to drive growth [34] - It recommends focusing on leading companies in specific segments such as photovoltaic glass and integrated components [34] Group 8: Power and Utilities - The power and utilities index fell by 3.25%, slightly outperforming the Shanghai and Shenzhen 300 index [36] - The report highlights stable profitability in the sector, with a net profit of 194.69 billion yuan in the first three quarters of 2024, a year-on-year increase of 9.67% [37] Group 9: Media - The media index increased by 1.27%, significantly outperforming the Shanghai and Shenzhen 300 index [39] - The report suggests that government policies aimed at boosting domestic consumption will benefit sectors like film, entertainment, and advertising [42] Group 10: Computing - The computing industry index decreased by 3.48%, underperforming the Shanghai and Shenzhen 300 index [10] - The report notes challenges in high-end chip manufacturing due to tightening policies from major foundries [43]

Investment Rating - The report assigns an "Accumulate" rating for the company, indicating a potential increase of 5% to 15% relative to the CSI 300 index over the next six months [35]. Core Insights - The company, WuXi AppTec, established in December 2000, provides integrated drug development and manufacturing services to global pharmaceutical, life sciences, and medical device companies. Its main business segments include chemistry, testing, biology, high-end therapeutic CTDMO, and domestic new drug development services [17]. - In the first three quarters of 2024, the company reported revenue of 27.702 billion yuan, a year-on-year decline of 6.23%, and a net profit attributable to shareholders of 6.533 billion yuan, down 19.11%. Adjusted non-IFRS net profit was 7.346 billion yuan, a decrease of 10.05% compared to the previous year [18]. - The company has seen a significant increase in active customers, with over 800 new clients added in the first three quarters of 2024, bringing the total active customer count to over 6,000. The backlog of orders reached 43.82 billion yuan, a year-on-year increase of 35.2% [19]. Financial Performance - The comprehensive gross margin for the first three quarters of 2024 was 40.65%, slightly down by 0.65 percentage points year-on-year. The net profit margin was 23.83%, down 3.75 percentage points from the previous year [18]. - The revenue distribution by region shows that the U.S. accounted for 176.2 billion yuan, a year-on-year increase of 7.6%, while Europe generated 35.3 billion yuan, up 14.8%. In contrast, revenue from China was 51.6 billion yuan, down 3.9% [19]. - The chemistry business remains the primary revenue and profit source, contributing 72.31% of total revenue and 78.18% of gross profit in 2023 [19]. Business Segments - The testing business, the second-largest segment, generated revenue of 4.62 billion yuan in the first three quarters of 2024, a decline of 4.9% year-on-year. The adjusted non-IFRS gross margin for this segment was 34.6%, down 4 percentage points from the previous year [24]. - The biology segment reported revenue of 1.83 billion yuan, a decrease of 3.6% year-on-year, with an adjusted non-IFRS gross margin of 38% [24]. - The high-end therapeutic CTDMO business saw revenue of 850 million yuan, down 17% year-on-year, with a negative adjusted non-IFRS gross margin of -29.7% [25]. Earnings Forecast - The company is projected to achieve earnings per share of 3.16 yuan, 3.49 yuan, and 3.83 yuan for the years 2024, 2025, and 2026, respectively. The corresponding dynamic price-to-earnings ratios are expected to be 16.74, 15.17, and 13.80 [25].

Core Insights - The report highlights the ongoing fluctuations in the A-share market, with the financial and power sectors leading the gains amidst a broader market consolidation [4][11][12] - Economic data has not met expectations, leading to a cautious outlook for market recovery, with a focus on monitoring future economic indicators [7][9][10] Market Performance - As of the latest data, the Shanghai Composite Index closed at 3,323.85, down 0.21%, while the Shenzhen Component Index closed at 10,544.02, down 1.91% [3] - The average price-to-earnings ratios for the Shanghai Composite and ChiNext are at 14.12 and 37.22, respectively, indicating a mid-level valuation suitable for long-term investment [7][11] Economic Indicators - The unemployment rate in 31 major cities decreased to 5.0% in October, down by 0.1 percentage points from the previous month [4][7] - The M2 money supply grew by 7.5% year-on-year as of the end of October, while M1 saw a decline of 6.1%, indicating a mixed economic outlook [7][9] Industry Analysis - The food and beverage sector experienced a decline in revenue growth, particularly in the liquor segment, which saw a drop from 15.19% to 0.73% year-on-year [12][14] - The gaming and advertising sectors are under scrutiny due to performance pressures, with a focus on potential recovery in the upcoming quarters [15][17] Investment Recommendations - The report suggests focusing on sectors such as finance, power, coal, and steel for short-term investment opportunities, given their current performance trends [7][11] - In the semiconductor industry, a recovery trend is noted, with significant growth in revenue and profit for chip design companies, driven by demand in various tech sectors [26][27] Sector-Specific Insights - The communication sector showed strong performance, with a 6.61% increase in the index, outperforming major indices [30][31] - The pet food export market is showing growth, with a 25.9% increase in exports year-to-date, indicating a robust demand in the pet economy [19][20] Conclusion - The report emphasizes the importance of monitoring economic data and sector performance to identify potential investment opportunities, particularly in the context of ongoing market fluctuations and policy changes [4][7][9]

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