Essence of Securities Morning Meeting | Waiting for the expansion of dining and tourism policies to bring demand rebound and turning points in price and quantity.

The market shook and rebounded yesterday, with the three major indexes opening low and closing high, all closing in the red. The total turnover of the Shanghai and Shenzhen stock exchanges was 1.87 trillion, a decrease of 45.3 billion from the previous trading day. In terms of sectors, the sectors with the highest increase include power grid equipment, Hainan, and batteries, while quantum technology and gaming sectors had the highest decrease. At the close of yesterday, the Shanghai Composite Index rose by 0.23%, the Shenzhen Component Index rose by 0.37%, and the Growth Enterprise Index rose by 1.03%. At today's brokerage morning meeting, China Securities Co., Ltd. pointed out that a turning point is approaching in the medical equipment sector, with valuation and performance recovering simultaneously; Sinolink believes that various turning points are being confirmed, and the power sector is experiencing an economic upturn again; CICC proposed to wait for policy expansion in the catering and tourism sector to bring about demand recovery and a turning point in both quantity and price. China Securities Co., Ltd.: Turning point approaching in the medical equipment sector, with valuation and performance recovering simultaneously China Securities Co., Ltd. believes that the rise and fall of individual stocks in the medical equipment sector are expected to be related to factors such as the disclosure of third-quarter results, presenting structural investment opportunities in this sector. The fourth quarter is a high season for the flu, and it is recommended to pay attention to trends in respiratory testing-related businesses; during the "Double 11" shopping festival, it is recommended to monitor the online sales trends of household equipment companies. In the short term, it is recommended to seize the opportunities for companies with improved performance in 2026 and opportunities for valuation recovery. Several leading companies in the medical equipment industry segments are expected to experience accelerated growth in 2026. In the long term, opportunities for investment in the medical equipment industry come from innovation, going global, and mergers and acquisitions. The industry's innovative and international capabilities are being recognized, and valuations are being reassessed. It is recommended to focus on innovative medical device segments with significant growth potential, as well as directions such as mergers and acquisitions, brain-machine interfaces, AI healthcare, and robotic automation. Sinolink: Various turning points are confirmed, and the power sector is experiencing an economic upturn again Sinolink points out that in the photovoltaic energy storage sector, anti-internal consumption has led to a narrowing of losses in the third quarter, with some aspects turning losses around. In September, there was an increase in new installations by 9.7GW year-on-year, and a slight upward trend is expected in the fourth quarter. Sungrow Power Supply's performance exceeded expectations and warmed up the energy storage market, while the addition of storage to data centers is increasing in volume. The company continues to recommend leading overseas energy storage companies. In the hydrogen energy sector, Bloom turned losses around in the third quarter, with a double-digit decrease in SOFC costs and potential single orders from data centers, leading to continuous improvement in profit margins. Green hydrogen alcohols and fuel cells are included in the Five-Year Plan for new growth opportunities. In the power grid sector, the mid-term plan for the energy channel is being optimized in the Fourteenth Five-Year Plan, accelerating the construction of smart/microgrids, with strong prospects for Ultra High Voltage and intelligent development. Haidian's net profit in the third quarter increased by 30%, exceeding expectations, with overseas expansion in the power grid sector and high growth in data centers. The sector's revenue was 93.6 billion in the third quarter, with a net profit of 8.2 billion, an increase of 10% and 15% year-on-year respectively. CICC: Waiting for the expansion of policies in the catering and tourism sector to bring about demand recovery and a turning point in quantity and price CICC believes that in 2025, after experiencing widespread price pressures and same-store sales declines in 2024, the social service industry is showing signs of stabilizing and bottoming out (trending of price wars slowing down, stabilization or narrowing of declines in same-store sales). Looking ahead to 2026, it is recommended to await a recovery in domestic demand and policy expansion to bring about a turning point in quantity and price. It is recommended to focus on comprehensive leading companies with strong internal growth momentum and high-growth sector leaders, followed by industries and companies with strong cyclical attributes that are expected to reach a turning point and have potential elasticity. In the food and beverage sector, attention should be paid to the high base and competitive landscape disturbances in 2026, but high-quality, leading brands are expected to achieve relative stable performance growth and gradually replace single-unit and lower-tier chain brands' market shares. The resilience of fast food categories is evident, while differentiation in upscale dining brands continues. Companies with high growth potential and differentiation should be considered; the hotel sector's supply-demand relationship is still to be balanced and expected to slow down supply growth even as it remains positive against a backdrop of declining RevPAR for two years, with the turning point in RevPAR positive depending on business demand recovery. High-quality market leaders are expected to expand their market share even during industry downturns; the human services sector exhibits strong cyclical attributes, with a long-term trend of increasing penetration of flexible labor; duty-free sales are at the bottom, with marginal changes expected due to the closure of Hainan and channel expansion in the city; tourism price pressures and cost inputs have weakened the stability of revenue growth. Attention should be paid to the progress of various tourist projects and improvements in transportation as potential catalysts. This article is reprinted from "Cailianshe," GMTEight editor: Li Fo.