UBS Securities: looking forward to communication railway dairy, traditional Chinese medicine and other industries in the fourth quarter

According to UBS Securities, the economic growth in the fourth quarter will reach the bottom in a phased manner, and liquidity will be in a neutral and tight state The results of China Daily show that the growth of non-financial industry performance is mainly achieved by adding leverage and cost saving At the same time, the risk of receivables in non-financial industry has increased significantly, and the proportion of receivables in revenue has reached a new high in 10 years As a result, there are still downside risks to the market's 2013 performance expectations In this context, relatively optimistic about communication equipment, railway equipment, dairy products and traditional Chinese medicine Communication equipment: after the peak of 3G construction, the prosperity of communication equipment industry continued to decline In the future, the communication equipment industry is expected to be stimulated by favorable policies, and the boom will continue to pick up The executive meeting of the State Council held on July 12 this year called for improving the coverage and service quality of 3G networks and promoting the issuance of 4G licenses within the year It is expected to bring huge business opportunities to communication equipment manufacturers On August 17, the State Council of China released the implementation plan of "broadband China" strategy, and deployed the broadband development goals and paths in the next eight years, which means that the "broadband strategy" has risen from department action to national strategy, and broadband has become the national strategic public infrastructure for the first time From the perspective of financial performance, the capital expenditure of communication equipment industry has continued to decline since 2012 At present, it has only a single digit growth, and the growth potential of future net profit is considerable Railway equipment: the third quarter's performance or the "12th Five Year Plan" railway investment has been increased to 3.3 trillion yuan, and there is still the possibility of increase in the future After the Ministry of Railways cancelled the merger into China Railway Corporation (hereinafter referred to as "China Railway Corporation") Subtle changes have taken place in the way of investment and financing of railway construction The construction investment funds are basically satisfied by bonds and loans In the future, it will open the door to private capital On Wednesday, China Railway Corporation also tendered and issued the fourth railway construction bond of 20 billion yuan in 2013 Despite the great interest pressure, but in the context of high-speed rail demand, it is close to 80% of the critical point of car purchase However, the capacity formed by the construction peak in 2008 and 2009 is expected to gradually change into the peak of opening to traffic from 2013 to 2015, stimulating the demand for equipment There are various signs that the railway equipment industry will have a good time in the future, and the third quarter's performance may exceed expectations The dairy Zhongbao, a popular consumer, shows that traditional consumer enterprises are still hedging against the weakness of demand by reducing costs and reducing labor expenditure Taking clothing, retail and food and beverage as examples, Zhongbao's performance is still lower than expected, and the consistent expected decline in performance may not be over Relatively speaking, the dairy industry in the mass consumer goods is worth looking forward to First of all, the price of pork has come out of the previous low The rise of pork price brings pressure on the cost of meat products industry According to the consensus expectation of 2014's performance growth, the growth rate of net profit in the meat industry is 24%, which is also lower than the growth rate of 31% in dairy products Secondly, the government's crackdown on high price and poor quality milk powder and anti-monopoly measures help to increase the share of domestic milk powder At the same time, the State encourages large state-owned enterprises to become bigger and stronger, which makes the market's expectation of future industry acquisition and merger rise Therefore, the prosperity of dairy industry is expected to continue to rise, which has been verified by the results of the report, and the performance of the whole year is likely to exceed expectations Traditional Chinese medicine still has a comparative advantage in the field of medicine short-term anti commercial bribery and will not change the long-term growth trend of the industry It is expected that the performance growth of traditional Chinese medicine will maintain 30% and 25% in 2013 and 2014, and it still has a comparative advantage in the consumer industry, but there is little room for short-term valuation improvement Since the drug regulatory bureau separated from the health sector, accelerating the approval of new drugs is conducive to the promotion of industry innovation, as well as the pace of new drugs launched by pharmaceutical enterprises with strong innovation ability However, since the first half of the year, the overall growth of the pharmaceutical sector has been huge, and there is no room for valuation improvement in the short term It is expected that the differentiation of the pharmaceutical sector will be more significant in the second half of the year If the recent valuation has been reversed, the investment value of the Chinese medicine sector will increase.