Essence of Securities Morning Meeting | Large cylinder bore engine is the "new quality productivity" in the engine industry

September 10th news, the market fluctuated and differentiated all day yesterday, with the Shanghai Composite Index opening low and continuing to hit a new low, while the ChiNext Index explored the bottom and rebounded. Overall, more stocks fell than rose, with over 3000 stocks in the entire market falling. The turnover of the Shanghai and Shenzhen markets was 518.6 billion, a decrease of 24 billion from the previous trading day. In terms of sectors, the sectors of cell immunotherapy, private hospitals, tourism, and diversified finance led the gains, while sectors such as ride-sharing cars, automobile manufacturing, coal, and banks led the declines. As of the close of yesterday, the Shanghai Composite Index fell by 1.06%, the Shenzhen Component Index fell by 0.83%, and the ChiNext Index rose by 0.06%. At today's securities morning meeting, China Securities Co., Ltd. pointed out that the military industry sector as a whole was under pressure in the first half of the year, and new growth momentum in new fields was beginning to show. CITIC SEC stated that large bore engines are the "new productive force" of the engine industry, and Huatai pointed out that it is waiting for the bottom of the real estate industry's inventory and profit, and is optimistic about property companies with core resources and stable operations. China Securities Co., Ltd.: The military industry sector as a whole was under pressure in the first half of the year, and new growth momentum in new fields is beginning to show China Securities Co., Ltd. stated that the military industry sector as a whole was under pressure in 24H1, and new growth momentum in new fields is beginning to show. The interim report of the military industry sector showed a decline in revenue and a continuous decline in profitability. In 2024H1, the national defense and military industry sector achieved a total operating income of 299.4 billion yuan, a year-on-year decrease of 1.32%; and a net profit attributable to the mother of 17.801 billion yuan, a year-on-year decrease of 24.61%. Overall, in 2024H1, national defense and military industry companies still show structural characteristics, with the shipbuilding sector being the main driver of revenue growth. In addition to shipbuilding, the growth rates of aviation, aerospace, information technology, and ground combat arms have all experienced different degrees of noticeable decline compared to 2023H1. The midstream and upstream industrial chains are also accelerating their bottom exploration process. CITIC SEC: Large bore engines are the "new productive force" of the engine industry CITIC SEC stated that large bore and high horsepower engines are the core source of excess profits and key to industry upgrades. Large bore engines specifically refer to large engines with a bore diameter exceeding 150mm, mainly used in power generation and ships, and are the "new productive force" waiting to be unleashed in the engine industry. The unit price of large bore engines can reach from hundreds of thousands to tens of millions of yuan; it is expected that the global market space for large bore engines in 2026 will be 150,000 units, corresponding to a CAGR of 9% from 2022 to 2026. Currently, the global large bore engine market is monopolized by a few overseas players with a stable market structure. CITIC SEC believes that Chinese companies are expected to accumulate strength, seize opportunities - internally open up domestic alternatives, externally tap overseas markets, and ultimately achieve the upgrade of the engine industry, and seize a global market share in the high-end engine market. In addition, large bore engines provide a clear barrier and stable demand for profit sources, and are expected to increase profit elasticity for leading Chinese companies. Huatai: Waiting for the bottom of the real estate industry's inventory and profit, optimistic about property companies with core resources and stable operations Huatai pointed out that, continuing the previous analysis framework, the key listed property companies in the A/H-share market were analyzed from the four dimensions of performance, sales, expansion, and financing in the 2024 interim report. The real estate industry has yet to emerge from the pains of transformation, destocking is still ongoing, and in the face of maintaining inventory and maintaining profits, the profitability of leading property companies is also being tested. But under a policy support environment that progresses steadily, with the efforts of property companies to transform themselves, market confidence may gradually recover, and the industry will eventually reach a new balance. In this process, property companies with core resources and stable operations and property management companies are more optimistic. This article is reprinted from "CaiLian Press", edited by GMTEight: Chen Wenfang.