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This week, the latest stocks that institutions are paying attention to are revealed.

According to statistics from Securities Times Databao, this week (August 19 to August 23), 65 institutions conducted a total of 2,356 ratings, and a total of 617 stocks were given "buy" ratings (including buy, increase holdings, strong recommendation, and recommendation) by brokerage research reports.

The stock with the highest level of institutional attention is Jinhui Liquor, with 30 institutions participating in the rating, followed by Anjing Foods with 28. In addition, many food and beverage stocks such as Yanjing Beer, Jinshiyuan, Jinzi Food, Shede Wine, and Yingjia Gongjiu have 15 or more institutions rating them.

Slow down but not stall

Many wine companies are still favored by institutions

Recently, Jinhui Liquor released its semi-annual report showing that in the first half of this year, it achieved operating income of 1.754 billion yuan, a year-on-year increase of 15.17%; and net profit of 295 million yuan, a year-on-year increase of 15.96%. In the first half of 2023, the growth rates of these two were 24.25% and 20.06% respectively.

Compared with the slowdown in Jinhui Liquor's revenue and net profit growth, Jinshiyuan has continued its high growth trend since 2023. In the first half of this year, Jinshiyuan achieved operating income of 7.304 billion yuan, a year-on-year increase of 22.36%; net profit attributable to shareholders of 2.461 billion yuan, a year-on-year increase of 20.08%; net cash flow from operating activities of 1.247 billion yuan, a year-on-year increase of 56.09%.

However, under the rapid growth, Jinshiyuan is also facing a situation where contract liabilities are reduced and dealers are not optimistic about future product sales. As of the end of June, the company's contract liabilities were 627 million yuan, a significant decrease of 73.86% from the end of 2023. This figure also hit a new low in the interim report since 2021.

Overall, this trend is no longer an isolated case in the liquor industry. The revenue, net profit and contractual liabilities of many listed liquor companies have declined or their balances have decreased.

In the past two years, due to factors such as the decline in demand, high inventory has become a problem plaguing the liquor industry, which has also led to increased cash flow pressure and reduced profit margins for terminal retailers. Liquor companies have been digesting inventory through promotions and strengthening channels, but the problems of overcapacity and imbalance between supply and demand are still obvious.

Dong Baozhen, chairman of Lingtong Shengtai Investment Management and manager of Feijitai Fund, believes that the liquor industry's destocking work may need to continue for some time. Based on past market experience, large-scale destocking by companies is inevitably accompanied by large-scale dumping in exchange for volume, which leads to a sharp drop in market liquor prices.

In the long run, many institutions are still optimistic about the liquor sector. In a recent research report, Zheshang Securities mentioned that the leading liquor companies may usher in a new cycle of growth rate shifting, and the performance growth in the next 2-3 years will "slow down but not stall", and the liquor industry will still maintain positive growth. The agency believes that although the consumption scene is weak, it has not disappeared, and consumption upgrades can still be expected in the medium and long term.

Shanghai Securities said that Jinhui Liquor adheres to the principle of "promoting development through transformation and promoting growth through hard work", and its product structure has been significantly improved. The market growth rate of its base in the province is relatively fast, and the market outside the province is gradually penetrating. The scale of revenue and profit is stable and improving, and the "buy" rating is maintained. Guolian Securities believes that in view of the stable performance of Jinhui Liquor's base market and the continuation of the structural upgrading trend, the "buy" rating is maintained.

As for the liquor sector, Donghai Securities' research report recommends paying attention to high-end liquors and regional leaders, such as Kweichow Moutai, Wuliangye, Luzhou Laojiao, Jin Shiyuan, and Yanjing Gongjiu.

9 stocks received rating upgrades from institutions

This week, 9 stocks had their ratings upgraded by institutions, including Shengong Co., Ltd., Parallel Technology, China Telecom, and Elis.

According to YiHai Business Statistics, the size of China's supercomputing cloud service market was 2.07 billion yuan in 2021, and is expected to reach 11.19 billion yuan in 2025, with a compound growth rate of 52.4% from 2021 to 2025, providing huge momentum for the commercialization and market expansion of China's overall supercomputing services.

Parallel Technology, a leading domestic supercomputing cloud service provider, has experience, technology and first-mover advantages in the industry and turned losses into profits in the first half of this year. Southwest Securities raised its rating to "buy" with a maximum target price of 44.4 yuan.

In addition, among the stocks rated by two or more institutions this week, the latest closing prices of 11 stocks have room for an increase of more than 100% compared with the consensus target price predicted by the institutions. Among them, Rongchang Biopharma has room for an increase of more than 148%.

Kidney disease has received more and more attention from pharmaceutical companies in recent years. Institutions predict that the next 10 years will be the golden period for the development of the chronic kidney disease market. Frost & Sullivan data also shows that the global IgA nephropathy treatment drug market is expected to increase from US$567 million in 2020 to US$1.196 billion in 2025, with a compound growth rate of 16.1%, while the Chinese market will increase from US$37 million to US$109 million, with a compound growth rate of 24.6%.

As the overall valuation of the pharmaceutical sector has been lowered, Rongchang Bio's stock price has also retreated nearly 70% from its historical high. Rongchang Bio recently announced that the company's clinical study of tadasipu injection for the treatment of primary membranous nephropathy in adult patients has obtained implicit approval for clinical trials from the Center for Drug Evaluation (CDE) of the National Medical Products Administration. In May, Rongchang Bio announced that the domestic Phase III clinical trial of tadasipu for the treatment of IgA nephropathy has completed patient enrollment.