Highlights of the securities morning meeting | Innovation 2.0 is expected to accelerate, there is still room for improvement in the localization rate of segmented tracks.

Yesterday, the market opened low and closed high, with the ChiNext Index leading the gains and the Sci-Tech Innovation 50 Index rising by 4.7%. The total turnover of the Shanghai and Shenzhen stock markets was 2.51 trillion, a decrease of 173.8 billion from the previous trading day. Overall, more stocks rose than fell, with over 3900 stocks in the entire market rising. In terms of sectors, the semiconductor, Sora concept, solid-state battery, and energy metal sectors led the gains, while the Hainan, banking, coal, and food processing sectors led the declines. By the end of the trading day yesterday, the Shanghai Composite Index rose by 0.51%, the Shenzhen Component Index rose by 2.03%, and the ChiNext Index rose by 3.05%. At today's brokerage morning meeting, Huatai stated that it is expected that securities companies will have good profit elasticity by 2025; Galaxy Securities pointed out that orderly capacity expansion, focusing on MLCC and release film with significant localization potential; Tianfeng believes that there is hope for the acceleration of innovative finance 2.0, and there is still room for improvement in the localization rate of segmented races. Huatai: It is expected that securities companies will have good profit elasticity by 2025 Huatai stated that the capital market has experienced many significant events since the beginning of the year, and the underlying logic of the capital market has changed. Currently, the regulatory authorities are building a new ecosystem that values investment from top to bottom, creating a positive cycle of funds, investments, and assets, which is a new model different from the past. As an important intermediary in the capital market, securities companies have a solid foundation for industry operation due to the favorable policies. With increased brokerage/two-way financing trading volumes, investment elasticity, and mergers and acquisitions business growth, it is expected that there will be good profit elasticity by 2025. The industry valuation is at historical median, public offering positions have room for improvement, and it is recommended to focus on opportunities in quality leading companies, mergers and restructuring themes, brokerage and investment performance resilience. Galaxy Securities: Orderly capacity expansion, focusing on MLCC and release film with significant localization potential Galaxy Securities pointed out that benefiting from the stabilization and recovery of downstream terminal market demand for appliances, smartphones, new energy vehicles, and other markets, the overall passive component sector continued its prosperity from the second quarter. Overall demand is stable, and the growth of some companies' financial expenses is mainly due to exchange losses. Currently, inventory levels are maintained at healthy levels, with stable demand from end manufacturers and distributors. At present, the industry's overall capacity expansion is orderly, with new capacity in mainland China, the Philippines, and Japan focusing on high-capacity miniaturization and other high-end products. Considering the continuous growth in demand for passive components from new energy vehicles, AI servers, AI smartphones, among others, the prosperity of the passive component industry is expected to continue into next year. With the continuous expansion of high-end MLCC capacity in China, products are continuously evolving towards high capacity, high voltage, high frequency, high reliability, etc., gradually replacing foreign high-end products, and leading companies are continuously increasing their share of high-end MLCC products. At the same time, the potential for the localization of related supporting supply chains is worth paying attention to. Domestic MLCC release film manufacturers are expected to seize a certain share of the international market with local supply and service advantages, thereby accelerating the domestication and substitution process of the MLCC release film industry chain. Tianfeng: Innovative finance 2.0 is expected to accelerate, with room for improvement in the localization rate of segmented races Tianfeng stated that with refined sinking + focused categories + special funds, innovative finance 2.0 is expected to accelerate. Looking back at innovative finance, party-government/industry innovation is expected to accelerate: party and government innovation at or above the municipal level started in 2020, will be completed in 2022, and innovation in industry will enter the 2.0 stage of county-level sinking + industry expansion from 2023. The replacement path will gradually move from "key links, some markets" to "entire industry chain, entire industry", gradually deepening into the core systems. Considering that the innovative finance mission is entering the "settlement" stage, with special funds added to fiscal funds and information technology funds in the second half of 2024, the trend of refined sinking + focused categories is clear, and party and government departments at all levels are beginning to accelerate. According to CCID CONSULTING, the number of PCs in the party-government field is close to 30 million units, as of early 2023, in the past few years, only about 7 million PCs in the party and government field have been replaced. Assuming another 3.6 million PCs will be replaced in 2023, there is nearly 20 million PCs replacement space remaining. Looking at the degree of localization in various aspects of the innovative finance industry chain, the application software and IT security fields are relatively mature, but the localization of chips, operating systems, and databases is less than 10% (as of 2021), indicating there is still significant room for improvement. This article is reproduced from "Cailianshe." Editor: Xu Wenqiang.