Market Rebound: 4 Industries Top Research Focus

In the week leading up to the National Day holiday, a group of astute institutional investors flocked to listed companies for research and surveys. As the market warms up, institutions are looking for investment opportunities and new highlights for their investment portfolios by understanding the companies' business plans for the fourth quarter and the future, as well as their capacity utilization rates.

Choice data indicates that from September 23 to October 8, over 260 A-share companies received institutional research, with four companies receiving favor from more than a hundred institutions, including prominent names such as Goldman Sachs Group, Morgan Stanley, and Freshwater Springs. In terms of industry distribution, companies in the machinery equipment, electronics, pharmaceutical and biological, and automotive sectors received a significant number of institutional research visits.

Four industries become hot research fields

Accompanying the strong rebound in the A-share market, institutional investors conducted research on over 260 companies from September 23 to October 8.

Statistics show that the machinery equipment, electronics, pharmaceutical and biological, and automotive sectors were closely watched by institutions, with 38, 37, 26, and 26 companies in these sectors being researched, respectively. The company receiving the highest frequency of research was Inovance Technology, a domestic leader in industrial control, with a total of 6 times. In terms of the degree of attention, Roborock Technology was the most favored by institutions, with a cumulative reception of 135 institutional visits.

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Looking at the sub-tracks, the semiconductor track in the electronics industry and the automotive parts track in the automotive industry were the most favored by institutions, with a total of 40 companies being researched, more than 40% of which were STAR Market companies and all belonged to the semiconductor industry. In terms of the content of the research, the company's latest technology and product progress, business planning, and capacity were all inquired about.

The reporter noticed that several foreign asset management giants frequently appeared on the research lists of listed companies.

Among them, Boyu Capital was the most active in research, having researched Inovance Technology, Pharmaron, Haoyuan Medicine, and five other companies since September 23. Goldman Sachs Group followed closely, researching Inovance Technology, China Resources Microelectronics, Jinko Energy, and four other companies. In addition, overseas giants such as Point72, Morgan Stanley, and Jefferies & Company also visited several leading companies in various industry fields.

Reviewing the research content of foreign institutions on more than 50 companies, capacity utilization rate and the progress of domestic and foreign business have become the two most concerned themes. Taking China Resources Microelectronics as an example, the company received research from several foreign institutions including Goldman Sachs Group and Fidelity Funds on September 24 and September 27. The research minutes show that institutions conducted research around the company's capacity utilization rate and future outlook, the situation of capacity layout in the past two years, and the progress of the third-generation semiconductor business.

Multi-dimensional excavation of performance growth pointsIn the first half of the year and even the first three quarters, many industry companies have achieved impressive performance growth through the expansion of their main business. In response, many institutional researchers have tried to capture the investment opportunities hidden within by questioning their future growth and development prospects.

InTech (HuiChuan Technology) received institutional research in 6 batches within a week. In the first half of the year, the company's industrial robot business achieved rapid growth, with the six-joint robot business accounting for about 30%. The expansion pace and future expectations of this product have attracted institutional attention. InTech stated that as the company gradually supplements its six-joint robot product line, and accumulates and applies knowledge in processes such as welding and grinding, the company's robot products are gradually expanding into fields such as the automotive industry. Currently, the company's high-load six-joint robots have begun to form batch sales. The industrial robot business is expected to become one of the important products for the company's future growth.

In recent years, Foxconn has seized the AI opportunity to inject new momentum into business growth. In the first half of the year, the company's AI server-related 400G and 800G high-speed switches achieved a year-on-year revenue growth of 30%, and in the second quarter alone, it was a year-on-year increase of 70%. The sustainability of the company's AI business growth has been questioned by institutional investors. The company stated that the explosion of AI computing power demand will promote the acceleration of data center switches to 800G upgrades, and it is expected that the company will achieve a large shipment of 800G switches in the fourth quarter, which will have a positive impact on revenue and profits.

"The application scenarios of injection molding machines are extensive, and the company is optimistic about the continuous positive development of the injection molding machine market. In addition, the rapid development of overseas export business of injection molding machines has also brought good influence to the company. In the future, as the downstream industries of injection molding machines gradually recover, the industry is expected to achieve stable and healthy growth." In response to institutional investors' inquiries about the injection molding machine cycle and future growth rate, Yizhi Mi replied in this way.

A batch of new projects is about to be put into production.

Entering October, the disclosure of the third quarter report of listed companies is about to begin. The company's capacity utilization rate and production situation have also become the focus of institutional investors. Many companies have set the project production schedule for the second half of the year or next year, and revealed the progress of related capacity landing.

New Way CNC stated in institutional research: "At present, the designed production capacity of the company's first, second, and third phases is 2.5 billion yuan, of which the third phase has started to be put into production since July 2022 and has basically completed the production. The designed production capacity of the fourth phase project is 700 million yuan, which is currently under construction. It is expected that the main project will be completed by the end of this year and will be put into production in the first half of 2025." New Way CNC stated that the company's capacity design and development strategy planning are matched, and the current production is basically full.

Since this year, the global semiconductor industry demand has bottomed out and rebounded, and the industry has gradually entered an upward interval. Correspondingly, the indicators such as the capacity utilization rate of domestic semiconductor companies have also been significantly improved.

As one of the leading domestic power semiconductor IDM companies, China Resources Microelectronics revealed the current capacity situation in the research. The company introduced that since May, the company's capacity utilization rate has been increasing month by month. At present, the capacity utilization rate of 6-inch and 8-inch has been fully loaded, and the 12-inch material is also in a full-loaded state; from 2025, the increase will mainly rely on the Shenzhen 12-inch production line, which is expected to be connected at the end of this year and will gradually climb in the next two years.

"The company is promoting capacity construction according to the established strategic plan, and the current layout can meet the development of the company in the next few years." China Resources Microelectronics stated.At the same time, the production capacity of biopharmaceutical companies is also of great concern to institutional investors. "Regarding the fundraising investment project, the dosage form production capacity will be advanced according to the normal construction progress, and it is expected to reach production in 2026, with the overall project designed to have a production capacity of 10 billion tablets, and the first phase of the fundraising investment project is 6 billion tablets," said Fuyuan Pharmaceutical when asked about the production status of the fundraising investment project.

Tonghe Pharmaceutical received research from institutions such as Bosera Fund, Freshwater Spring, and Yintai Fund. Regarding the utilization rate of factory capacity, Tonghe Pharmaceutical introduced that the first phase of the company's second factory started mass production in July, and it is conservatively estimated that the utilization rate of capacity in the second half of the year should reach 60%, with an output value of about 150 million yuan.

In the first half of 2024, Tonghe Pharmaceutical achieved a business income of 382 million yuan. "Among this, the output value from the first phase of the second factory is 79.85 million yuan. In 2025, it is expected that the utilization rate of the second factory's capacity will exceed 60%," the company said.