Specialized and innovative “Little Giants” enterprises are vanguard enterprises that focus on market segmentation, strong innovation ability, high market share, master key core technology, and excellent quality and efficiency. The bank believes that “Little Giant” is a high-quality innovative enterprise that the capital market should focus on.
The Zhitong Finance App learned that Tianfeng Securities published a research report saying that specialized and innovative “little giants” enterprises are vanguard enterprises that focus on market segmentation, strong innovation ability, high market share, master key core technology, and excellent quality and efficiency. The bank believes that “Little Giant” is a high-quality innovative enterprise that the capital market should focus on. The “Specialized and Innovative” targets recommend Rena Intelligence (301129.SZ), Narei Radar (688522.SH), Green Energy Charging (600212.SH), and Hammer Technology (300084.SZ).
The new consumption direction focuses on the theme of “new types of tobacco”. With the successive clarification of domestic and foreign regulations, it will effectively push up the industry threshold, increase concentration, and benefit leading upstream and downstream enterprises in the industry. The industry is expected to enter a new stage of compliance development; focusing on the “bioeconomy” theme, it has received increasing attention since 23 years, and ecological restoration has ushered in historical development opportunities. Follow Smore International (06969), Yinghe Technology (300457.SZ), Jabiyou (688089.SH), etc.
The direction of new technology, focusing on the “robot” theme, the technological progress of large AI models, and the country's emphasis on humanoid robots have driven many robot teams to release humanoid robot prototypes or product plans one after another, bringing new opportunities to the development of the intelligent sensor industry; focusing on the “controllable nuclear fusion” theme, China has achieved important milestones in the nuclear fusion energy development process since 2023, and domestic and foreign private capital has accelerated; focusing on the theme of “intelligent driving”. Computing power leasing has emerged as a new business model, which is expected to drive a breakthrough in autonomous driving. We recommend companies focusing on computing power, AI, etc. in the automotive sector. Follow Yongding Co., Ltd. (600105.SH), Coli Sensor (603662.SH), Double Ring Drive (002472.SZ), etc.
Tianfeng Securities's views are as follows:
1. “Specialization, Excellence, and Innovation” theme: With focus on forging expertise, “little giants” carry big innovation. With imbalances in the global economy and the complexity of the international environment, the safety of China's industrial chain, supply chain, and innovation chain has been seriously challenged. Solving the “stuck neck” problem in core technology has become an important task in constructing a new development pattern. The key is to focus on “repairing shortcomings” and “forging long boards” in key links in the industrial chain. Specialized and new small and medium-sized enterprises focus on a certain link in the industrial chain and actively integrate into the collaborative support system of technology, products and services of large enterprises, which can effectively play the role of repairing the chain and strengthening the chain. As of November 29, 2023, there are 12,192 “little giant” enterprises that have passed the review and certification of the Ministry of Industry and Information Technology and entered actual cultivation. Specialized and innovative “Little Giants” enterprises are vanguard enterprises that focus on market segmentation, strong innovation ability, high market share, master key core technology, and excellent quality and efficiency. We believe that “Little Giants” are high-quality innovative enterprises that the capital market should focus on. “Specialized and Innovative” target recommendations: 1) Rena Intelligence - one-stop low-carbon smart heating solution provider [joint coverage with machinery and building materials teams]; 2) Narei Radar - phased array radar “little giant”; 3) Green Energy Huichong - domestic DC charging stations and energy storage “little giants”; 4) Haimer Technology - “little giant” in the field of oil service equipment [Joint coverage with the mechanical team].
II. New consumption directions
1. “New tobacco” theme: the rise of disposable e-cigarettes in overseas markets, waiting for domestic demand to recover
The global sales scale of new tobacco reached US$65.52 billion in 2022. Against the backdrop of the global epidemic being basically controlled, the year-on-year growth rate reached 20.0%. Regulations in various countries are constantly improving, and FDA approval is speeding up. Over the past few months, the FDA has successively approved the listing and sale of e-cigarette products from brands such as Japanese Tobacco Logic, NJOY, British and American Tobacco Vuse Solo, Vibe, and Ciro. Domestic: The demand side is on the rise, and the implementation of regulations is accelerating the optimization of the competitive pattern on the supply side. With the successive clarification of domestic and foreign regulations, it will effectively push up the industry threshold, increase concentration, and benefit leading upstream and downstream enterprises in the industry, and the industry is expected to enter a new stage of compliance development. The 2024 proposal continues to focus on: 1) The proposed focus on atomization supply chain investment targets: Smore International (leading global atomization equipment manufacturer), Foxin Technology, and Yinghe Technology. 2) Tobacco supply chain: Recommended focus: China Tobacco Hong Kong, China Bolton.
2. “Bioeconomy” theme: The warm current has melted under the glacier, just wait for spring to bloom
1) Ecological management: Since 23 years, it has received increasing attention, and ecological restoration has ushered in historical development opportunities. Key recommendations: Mengcao Ecology (China's leading grass industry) [joint coverage with building materials team]; 2) Biomass energy: The domestic biodiesel pilot was proposed again at the end of 23, and the domestic market may become a new growth point following Europe. Focus on: Excellent New Energy (China's biodiesel UCOME production leader) [joint coverage with public environmental protection teams], Yamataka Huanneng (China's leading producer of biodiesel raw oil UCO, the only domestic listed company whose main business is the resource utilization of food waste); 3) Bio-based degradable materials: domestic and foreign market demand for polylactic acid is greatly affected by policies, and new fields such as fiber and 3D printing have risen to prominence. Focus on: Haizheng Biomaterials (total operational capacity of 60,000 tons, 150,000 tons of new production capacity to be built) [Joint coverage with the chemical team], COFCO Technology (leading corn deep processing, with a production capacity of 30,000 tons of polylactic acid and products); 4) Bioprocessing & new fermentation products: The correlation between stock price performance and performance changes is strong, and the pace of new production capacity release is the focus of tracking. Recommended attention: Jiabiyou (with HMOS pilot production technology based on synthetic biology), Luther Environment (leading biofermented feed for liquor lees) [Joint coverage with public environmental protection teams]; Recommended focus: Bailong Chuangyuan (one of the few manufacturers in the world that can industrialize the production of alloketone sugar products)
III. The direction of new technology
1. “Robotics” theme: humanoid robots have entered the era of mass production, and intelligent sensors have benefited from rapid development!
2023 is a “highlight moment” for the humanoid robot industry. Technological progress of large AI models and the country's emphasis on humanoid robots have driven many robot teams to release humanoid robot prototypes or product plans one after another, bringing new opportunities to the development of the intelligent sensor industry. We recommend paying attention to the importance of intelligent sensors in humanoid robots. Key recommendations: 1) Coli Sensing: the domestic mechanical sensor leader, which has already stocked several robot sensor seed projects, is expected to be the first to achieve mass production of torque sensors for humanoid robots with high cost effectiveness [joint coverage with mechanical teams]; 2) Obi Zhongguang: the domestic 3D vision leader, the domestic robot vision sensor market share is as high as 71%, and collaborating with Microsoft Nvidia to empower global developers.
2. “Controlled Nuclear Fusion” theme: Technology and industrial progress resonate and breakthrough, it's time to welcome high-temperature superconductivity!
Since 2023, China has achieved important milestones in the nuclear fusion energy development process, and domestic and foreign private capital has been deployed at an accelerated pace. We recommend focusing on suppliers with core benefits in starting construction of controllable nuclear fusion devices, focusing on Lianchuang Optoelectronics - the leading supplier of high-temperature superconducting magnets in China (high-temperature superconducting magnets are the best choice for second-generation compact tokamak devices, accounting for nearly half of the cost), and we recommend focusing on Yongding Co., Ltd. - the main supplier of high-temperature superconducting strip [Tianfeng Communications Team Coverage], Guoguang Electric (filters, shielding module thermal helium leak detection equipment, cladding, etc.) [Tianfeng military team coverage].
3. “Intelligent driving” theme: computing power base+Nvidia Omniverse, helping intelligent driving develop by leaps and bounds!
In the context of a new round of rapid development of global AI technology, computing power, as the “engine” behind the big AI model, has received unprecedented attention, and global computing power demand has ushered in a sharp rise. Computing power leasing has emerged as a new business model and is expected to drive a breakthrough in autonomous driving. We recommend companies that focus on computing power, AI, etc. in the automotive sector, focusing on: 1) dual-ring transmission - a reformer in the gear industry, leading global suppliers in the smart car era; 2) Alt-receiving support from Nvidia to build a smart car computing power base, join hands with Wuxi Enlightenment to build a supercomputing center, and launch the first Omniverse project in the automotive industry, which will jointly promote the localization and downstream introduction of Omniverse in China. 3) Landai Technology - Benefiting from the wave of intelligent electrification of automobiles, the company's transmission business is growing rapidly.
Risk warning: Risks related to new types of tobacco (new tobacco policy changes, sales/enterprise development falling short of expectations, risk of accelerated market competition), risks related to individual stocks such as Rena Intelligence, Narei Radar, Green Energy, Haimer Technology, Mengcao Ecology, Excellent New Energy, Mountain High Energy, Haizheng Biotech, COFCO Technology, Bailong Chuangyuan, Jabiyou, Luther Environment, Coli Sensing, Obi Zhongguang, Lianchuang Optoelectronics, Alte, Double Ring Drive, and Blue Dai Technology.