Today's Viewpoint
1 Macro From the high-frequency data such as the decline in the growth rate of real estate and automobile sales since September, and the increase in the decline in coal consumption for power generation, the demand side is still weak, and it has dragged down the supply side. At present, it is urgent to take active actions in both short-term policies and long-term reforms. From the perspective of short-term policies, the policy authorities intend to increase liquidity supply through on balance sheet credit, bonds and other compliance methods without changing the general direction of strict financial supervision. In terms of fiscal policy, we effectively implemented tax and fee cuts to alleviate the pain of the real enterprise sector under internal and external pressure. The China US game is expected to continue in the short term, and the domestic agenda of stabilizing growth and promoting reform will become more urgent. On the whole, we are optimistic about the medium - and long-term growth and reform prospects in China.
2 Medicine Considering that the pharmaceutical industry as a whole has maintained steady growth, the pharmaceutical index has dropped 13.87 percentage points year to date. Recently, leading companies have also experienced a large callback, and we believe that the overall callback pressure of the pharmaceutical sector has been low. Considering the differentiation among companies, we believe that investment opportunities in the pharmaceutical sector will be individual and bottom-up. At present, there are a large number of companies with relatively appropriate cost performance in the sector. We tend to choose individual stocks with high performance growth, valuation within 20 times, and PEG significantly less than 1.
The monthly portfolio in September includes:
Beixin Building Materials （000786）、 Renhe Pharmaceutical （000650）、 Goldwind Technology （002202）、 Shuijingfang (600779), Aerospace Appliance (002025) Shaanxi Coal Industry （601225）、 Guizhou Moutai （600519）、 Four dimensional Tuxin （002405）、 Hualu Hengsheng （600426）、 Tongyuan Petroleum （300164）。
The undervalued portfolio includes:
Renhe Pharmaceutical (000650), China Communications Construction (601800), Europe Africa Technology (002456) CRCC (601186)、 Suzhou Keda （603660）、 Daqin Railway (601006), Beixin Building Materials (000786), Swellfun (600779), Siwei Tuxin (002405) Poly Real Estate （600048）。
Cash cow portfolio includes:
Beixin Building Materials (000786), Changchun Gaoxin (000661), Guizhou Maotai (600519) Ping An, China （601318）、 Yangtze Power (600900), Siwei Tuxin (002405), Poly Real Estate (600048) Zhengye Technology （300410）、 Jerry Shares (002353), Swellfun (600779).
This report is excerpted from the morning meeting research report released on September 25, 2018
Editor in charge: Ding Wen Practicing Certificate No.: S0130511020004
Rating system:
Galaxy Securities Industry Rating System: recommendation, cautious recommendation, neutral and avoidance.
Recommendation: It means that in the next 6 to 12 months, the industry index (or the industry index composed of companies covered by the analyst team) will exceed the average return of the exchange index (or the main index in the market) by 20% or more. The rating is given by analysts.
Caution: The industry index (or the industry index composed of companies covered by the analyst team) exceeds the average return of the exchange index (or the main index in the market). The rating is given by analysts.
Neutral: the average return of the industry index (or the industry index composed of companies covered by the analyst team) is equivalent to that of the exchange index (or the main index in the market). The rating is given by analysts.
Avoidance: The industry index (or the industry index composed of companies covered by the analyst team) is 10% or more lower than the average return of the exchange index (or the main index in the market). The rating is given by analysts.
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