摩根士丹利：中国工业_反弹思考_股票目前交易情况

Investment Rating - The industry view is rated as Attractive [6][39]. Core Insights - The China Industrials sector has rallied approximately 36% since September 24, 2024, trading at 16x 1-year forward PE, which is slightly below the 10-year average of 20x despite weak fundamentals [4][6]. - The report suggests that the 2016-2019 period is the most comparable for valuation reference, with expectations of a Rmb2 trillion fiscal package to support the economy [4][6]. - In a base case scenario, the sector is trading close to baseline multiples, with an expected upside of 4-12% for general machinery, automation, railway, and heavy-duty trucks, while construction machinery's valuation is already above the 2016-2018 comparable period [3][9]. - If stronger stimulus policies are implemented, a potential upside of 20-60% on multiples is anticipated [3][4]. Summary by Sections Sector Performance - The report indicates that the market is rising due to expectations of more fiscal policies to support the economy, with a focus on local government financing, infrastructure capex, and modest consumption boosts [4][6]. - The industrial sub-sectors are trading close to the comparable cycle in the base case scenario, with 4-50% further upside room for various sub-sectors [9][17]. Stock Recommendations - Preferred stocks include Hengli Hydraulic, Shuanghuan, Hongfa, Sinotruk, and CRRC, which exhibit solid fundamentals and reasonable valuations [3][6]. - The report highlights early cycle names like Shuanghuan and Hongfa as likely beneficiaries of a consumption boost, while late cycle names may lag [6][21]. Valuation Methodology - The report applies various valuation methodologies, including P/E and P/B ratios, to derive price targets for specific companies, indicating a fair valuation based on historical averages [22][28][35]. - For example, Zhejiang Shuanghuan Driveline is assigned a 20x 2025e P/E, while Jiangsu Hengli Hydraulic is assigned a 25x 2025e P/E, reflecting its undervaluation and higher long-term growth potential [22][35].