Brokerage Morning Meeting Highlights | Focus on Directions with High Earnings Visibility

Yesterday, the market experienced fluctuations throughout the day, with the ChiNext index dropping over 2%. The total trading volume in the Shanghai and Shenzhen markets was 1.79 trillion yuan. In terms of sectors, concepts like military industry, grid equipment, PCB, internet finance, fiber optics, and underground pipeline networks showed active performance. On the downside, the agriculture sector underwent fluctuations. By the close, the Shanghai Composite Index fell by 0.97%, the Shenzhen Component Index dropped by 1.88%, and the ChiNext index decreased by 2.39%. Huatai believes that priority should be given to directions with high performance visibility; China Securities Co., Ltd. thinks that despite economic prosperity, valuations are being suppressed and seeks positive variables for demand; CICC asserts that "Healthy China" leads the way, leading to a reconstruction of trillion-yuan sectors. Huatai: Prioritize directions with high performance visibility In terms of allocation, the market is shifting from an expansion narrative to a repricing of capability and profit quality. The tightening of short-term liquidity expectations may suppress valuations. During this performance vacuum period, attention should be paid to whether there are new catalysts and order confirmations on the industrial side, as well as statements from the September FOMC meeting. Emphasis should be placed on directions with high performance visibility, such as communication equipment, semiconductor equipment/materials, and PCBs, and secondly, consider re-evaluation opportunities in AI applications. China Securities Co., Ltd.: Economic prosperity is recognized but valuations are suppressed; seek positive variables for demand In Q2, lithium battery energy storage achieved high prosperity in revenue, while the decline in offshore wind and photovoltaics reflects that the industry is currently lingering at the bottom, and the power equipment industry continues to enter a prosperous cycle, particularly with outstanding performance in export chains. However, concerns about the future have suppressed the sector's valuations. On the capacity expansion front, the industry as a whole remains moderate. Investment suggestions: The large storage, household storage sectors, lithium batteries, and materials started to realize performance growth in Q2; the supply-demand situation remains good, but recently faced challenges from changes in the external environment, resulting in a significant drop in valuation levels, warranting continued attention. In the paradigm of order or marginal pricing changes, focus should be on the order change in the domestic gas turbine supply chain, AIDC, and European offshore wind sectors. CICC: "Healthy China" leads the way, reconstructing trillion-yuan sectors The deepening of the Healthy China strategy and the rising social health awareness anticipate resilient growth in functional food and beverage consumption. Policy-wise: In July this year, the State Council issued the "14th Five-Year Plan for Expanding Consumption," which clearly promotes healthy consumption and develops nutritious and healthy leisure foods and beverages, as well as health products, to steadily increase consumption of life-related goods. Health-oriented upgrades have become a clearly defined product upgrade direction in policy. From a societal perspective: an aging population combined with public health events has catalyzed an increase in public health awareness, leading to a rise in health consumption willingness. Looking to Japan: The food labeling system is gradually being improved, driving accelerated expansion in Japan's functional food and beverage market. Comparing with this, the growth resilience of Chinas functional food and beverage market is also promising. This article is reproduced from "Cailian Press," edited by Jiang Yuanhua.