The Zhitong Finance App learned that Fangzheng Securities released a research report saying that a number of policies have recently been fully implemented. Under both monetary and fiscal policies, Fangzheng Securities expects that the transmission of the stimulus chain will drive a gradual recovery in consumption. In this process, the beauty care sector, which has strong growth potential, strong catalysts, and lower valuations, is expected to benefit first.

The main views of Fangzheng Securities are as follows:

The main line of US protection: The policy is fully strengthened, and the beauty care sector is expected to benefit first

Industry changes: (1) Chuangjian Medical's proposed listing on the new third board has been approved. The company is one of the leaders in the entire restructured collagen industry chain. The products include multiple collagen types such as type I, type II, type III, small molecules, and XVII small molecules. In 2023, the company's revenue was 0.283 billion yuan/ +61%, and net profit was 63.6491 million yuan/ +80%. Among them, in 2023, recombinant collagen raw materials and terminal products each accounted for about 50% of revenue.

(2) Shierjia's announcement revealed that the company's product “recombinant type III humanized collagen freeze-dried fiber” has completed clinical trial registration, and clinical trials can already be carried out. It is the company's first superficial injectable filler product. It improves skin condition through the moisturizing and hydrating effects of recombinant type III humanized collagen contained in it. The first clinical trial was registered this time, marking the company's first step in expanding its medical and aesthetic business, laying the foundation for a new curve of growth in the company's medical and aesthetic business.

(3) Huaxi Biotech's Xiangtan production base was put into operation, with a total planned investment of 0.2 billion yuan. It has a 10,000 grade clean production workshop and laboratory for medical devices. The base's products cover a series of medical device products such as injectable cross-linked sodium hyaluronate, sodium hyaluronate gel, medical biogels, etc., with an estimated annual output value of hundreds of millions of yuan.

(4) Sihuan Pharmaceutical announced an exclusive sales agreement signed with the Korean biopharmaceutical company Hugel for injectable botulinum toxin Letibao. The agreement was unanimously confirmed by both parties, and the contract was renewed until the end of 2030.

(5) Langzi Co., Ltd. announced that it intends to jointly sign a “joint venture contract” with related parties Langxi Aesthetics and Boheng No. 3. It plans to invest 15 million yuan, 20 million yuan, and 65 million yuan respectively to invest in the establishment of Langxi Ziyan, which intends to mainly engage in the production and operation of Class III medical devices.

Core view: Recently, a number of policies have been fully implemented. Under both monetary policy and fiscal policy, the bank expects that the transmission of the stimulus chain will drive a gradual recovery in consumption. In this process, the beauty care sector, which has strong growth potential, strong catalysts, and lower valuations, is expected to benefit first.

(1) Beauty care has strong resilience and strong growth potential. 24H1 showed strong growth resilience as a whole, driven by segmented high-potential racetracks and strong leaders. The Q3 leading line of domestic goods continued to grow rapidly under the trend of rising domestic goods; in addition, the new medical and aesthetic materials Wei Yimei and Aisufei continued to exceed expectations during the off-season.

(2) October is about to usher in the Double 11 Promotion. As the focus of Tmall and Douyin completely shifts to GMV growth and abandons vicious low price competition, the Double 11 promotion is expected to be better than 618. At the same time, the rising trend of domestic goods continues and may exceed expectations; as the peak medical and aesthetic season approaches, upstream performance is expected to recover significantly month-on-month, and the growth of new products is still exploding.

(3) Market sentiment continued to decline against the background of overall lackluster in the early period. The current valuation is in a historical low range, and the share of public offering positions for some targets is in a historically low range, and it is expected that there will be strong recovery flexibility.

It is recommended to focus on targets: (1) Definitive leading targets: “Perea”, “Aimeike”, “Giant Bio”, “Jinbo Bio”, etc.;

(2) High-growth flexible targets: [Shangmei Shares], [Marumei Shares], [Runben Shares], [Jiangsu Wuzhong], [Kedi], [Shuyang Shares], etc.;

(3) The leading targets of predicament reversal: [Huaxi Biotech], [Bethany], [Shiljia], [Shanghai Jiahua], [Freda], [Furui Medical Technology], etc.;

(4) The targets for the recovery and flexibility of the entire industry chain: [Covex Co., Ltd.], [Dengkang Dental], [Beautiful Garden Healthcare], etc.

Main retail line: Mingchuang Premium took a stake in Yonghui Supermarket, and the old store Gold adjusted the price for the second time in the year on 9/23

Industry changes: (1) On September 23, Mingchuang Premium plans to acquire 29.4% of Yonghui supermarket's shares for 6.27 billion yuan, including 21.08%, 4.05%, and 4.27% of the shares held by Dairy Company, Jingdong World Trade, and Suqian Hanbang respectively. After the transaction is completed, Mingchuang Premium will become the largest shareholder of Yonghui Supermarket.

(2) On September 25, the Shanghai Municipal Government announced that this round of service vouchers will invest 0.5 billion yuan in municipal finance. According to the share of consumption in various fields and public demand, the distribution of consumer voucher funds is 0.36 billion yuan, accommodation 90 million yuan, movies 30 million yuan, and sports 20 million yuan.

(3) According to the late LatePost, Taobao and Tmall will soon be officially connected to JD Logistics and is expected to be launched in mid-October. After that, when Taotian merchants select product delivery methods in the system, they will have more options from JD Logistics. At the same time, JD will also connect to Cainiao Express and Cainiao Station.

(4) On September 25, JD announced the opening of the country's first JD Olay offline store in Jiangyin City, Wuxi, Jiangsu Province, and the launch of Ole's official flagship store.

(5) On September 26, according to Yibang Dynamics, the 2024 Tmall Shuang11 pre-sale has already begun. The overall pace of Tmall Shuang11 will move forward by about one week this year. Pre-sale will begin on October 14, and the first wave of payments will be paid from October 21 to 24.

(6) On September 27, Gaoxin Retail, the parent company of Da Runfa, announced on the Hong Kong Stock Exchange that the company's shares have temporarily stopped trading on the Hong Kong Stock Exchange Limited from 9:39 a.m. on September 27, 2024, pending an announcement containing the company's insider information in accordance with the Company's Takeovers and Mergers Code.

(7) Recently, with the Federal Reserve's interest rate cut, the price of gold continued to rise. Old-fashioned gold began its second price increase in the year on 9/23. According to statistics, the overall increase in this price adjustment is between 4% and 11%.

(8) Chow Tai ?$#@$ issued an announcement this week announcing that Mr. Zheng Zhigang, the company's executive director, will resign as the company's executive director due to further personal investment in public services and other personal matters. The change will officially take effect on September 26, 2024.

Core view: (1) At present, there is some pressure on the performance of offline retail in the current environment. Recently, Mingchuang Premium took a stake in Yonghui Supermarket. The bank believes that after Mingchuang becomes Yonghui's largest shareholder, it will accelerate the integration and transformation of the Chinese retail industry. This change may encourage other retailers to strengthen cooperation or carry out similar mergers and acquisitions. It is recommended to continue to pay attention to relevant targets such as “Yonghui Supermarket”.

(2) In the gold and jewelry sector, gold prices continued to rise after the Federal Reserve cut interest rates. This week, it fluctuated at a high level in the 590-600 yuan/gram range (previously fluctuated at 550-570 yuan/gram from July to early September). The price of gold will rise again, which may affect the sales of the 11 terminals to a certain extent. However, dealers at the previous September Order Fair may have completed orders and benefited from this round of gold price increases, so the short-term Q3 listed companies' reporting side may have been less affected by this round of gold price increases. Furthermore, after the shift in monetary policy, sector valuations may be repaired, and the sector's overall dividend ratio is high. Focus on 1) leaders Zhou Daifu, Lao Fengxiang, Chao Hongji, Zhou Dasheng, China Gold, and Caibai shares; 2) the target of explosive growth in performance.

Main line of textile clothing: domestic monetary policy shift. Textile clothing focuses on sports industry chain and investment opportunities in high-dividend sectors

Industry changes: (1) Good News Bird raises capital from major shareholders to supplement working capital and repay bank loans. News Bird issued an announcement on September 28. The total amount of capital raised in the issuance to Mr. Wu Zhize, the majority shareholder, did not exceed RMB 0.8 billion, and the issue price was 2.8 yuan/share. After deducting the relevant issuance fees, all funds raised are used to supplement working capital and repay bank loans. After the issuance was completed, the total shareholding ratio of Mr. Wu Zhize and his co-actors increased from 38.09% to 48.22%.

(2) Semma Apparel issued equity incentives. On September 25, Semma Apparel announced equity incentives, granting 97.2335 million share stock options to 144 eligible incentive recipients at an exercise price of 3.69 yuan/share. Stock options granted under the incentive plan are exercised in three instalments 12 months after the date of authorization. The share ratios for each instalment are 40%, 30%, and 30%, respectively. The incentive plan assesses the company's performance indicators on an annual basis during each implementation period: net profit threshold of 1.2 billion yuan (yoy +7.0%) in 2024, challenge value of 1.3 billion yuan (yoy +15.9%); net profit threshold value of 1.5 billion yuan and challenge value of 1.7 billion yuan in 2025; net profit threshold of 1.8 billion yuan and challenge value of 2.2 billion yuan in 2026.

(3) Robust Healthcare spent 0.12 billion to acquire 75.2% of the US GRI shares. Robust Healthcare acquired 75.2% of Global Resources International Inc. (a global medical consumables and industrial protection company founded in 2000 and headquartered in Georgia, USA) for $0.12 billion. This acquisition has improved the global production and logistics layout, enhanced local operating capabilities in the US and Europe, enriched product lines, and strengthened R&D capabilities. It is an important step for the company to firmly move in the strategic direction of globalization, and is a landmark.

Core view: On September 19, the Federal Reserve announced interest rate cuts. On September 24, a joint press conference of the three financial departments proposed a liquidity combination policy, marking a shift in domestic monetary policy. In this context, textile clothing focuses on: (1) Sports brands that are currently at the bottom of valuation. The fundamentals of domestic sports brands are under pressure in the short term, and there is currently no marginal improvement trend. However, past sports industry performance proved its track excellence. Under the interest rate cut cycle, focus on high-quality sports leaders Anta Sports, Li Ning, and Tep International, and 361 degrees, which are currently at the bottom of the valuation range.

(2) Men's clothing sector with high dividend rates. The overall performance of the middle and high-end menswear sector has been under pressure this year, but the overall sector has maintained a high dividend rate level, and the current dividend rate is high. At the press conference of the three financial departments on 9/24, a new monetary policy tool was created, namely creating special reloans to repurchase shares and increase holdings to guide banks to provide loans to listed companies and major shareholders to support the repurchase and increase of stock holdings. The policy favors menswear sectors with high dividend rates and steady overall performance, such as Binyinlevin, Heilan Home, Agor, and Happy Bird.

(3) The short term is basically aimed at the good manufacturing sector. On the manufacturing side, overseas brand inventories are basically healthy, and the improvement trend of subsequent orders is strong; most sports brands in Europe and the US have performed well in Q2 and the 24-year guidelines are optimistic. In the future, it is expected that manufacturing data will continue to verify trends, and excellent performance in the sector is expected.