CICC DAILY FOCUS：TODAY’S KEY TOPICS

　　Joincare Pharmaceutical (600380.SH): A frontrunner in the inhalation preparation industry - Initiate with OUTPERFORM

    　　We initiate coverage with an OUTPERFORM rating and a SOTP-based target price of Rmb24.90 (45.2x 2020e and 37.3x 2021e P/E), offering 25.3% upside. Joincare has accelerated R&D of inhalation preparations; synergies between production and marketing to facilitate commercialization of its products. R&D platforms to boost growth in the long term. Our 2020 and 2021 EPS forecasts are Rmb0.55 and Rmb0.67, a CAGR of 20.2%. Stock is trading at 36.1x 2020e and 29.8x 2021e P/E.

    　　Xinyi Glass (00868.HK): Resilient despite headwinds; sales volume and prices to rise in 2H20 - Maintain OUTPERFORM

    　　Xinyi Glass announced 1H20 results: Revenue fell 4% YoY to HK$7.13bn and net profit declined 34.9% YoY to HK$1.38bn.Excluding HK$486mn one-off gains from disposing its equity stake of Xinyi Solar in 1H19, 1H20 recurring profit fell slightly YoY, in line with our forecast. We expect sales volume and prices to rise in 2H20 thanks to market uptrend and capacity expansion.Given higher sales volume and price assumptions, we raise our EPS forecasts by 6% to HK$1.11 and 5% to HK$1.29. We maintain an OUTPERFORM rating. The stock is trading at 10.8x 2020e and 9.3x 2021e P/E. As we roll over valuation to 2021, we raise our TP by 39% to HK$14.9 (13.4x 2020e and 11.6x 2021e P/E), offering 24% upside.

    　　GreatStar Industrial (002444.SZ): Global market share for hand tools rising rapidly - Maintain OUTPERFORM

    　　GreatStar Industrial is one of the largest hand tool manufacturers with strong profitability in China. We are optimistic about the firm’s rising global market share for hand tools, and we expect the firm to achieve rapid growth in markets of laser measuring tools and tool cases and cabinets. We reiterate our OUTPERFORM rating. As the firm’s global market share is rising faster than expected, we raise 2021 earnings forecast by 5.1% to Rmb1.44bn and maintain 2020 earnings forecast.Stock is trading at 17.3x 2020e and 14.5x 2021e P/E. We believe its valuation is attractive. Due to potential improvement in the firm’s longer-term growth and valuation rollover, we raise our TP by 44% to Rmb26.74 (20x 2021e P/E, 38% upside).Maintain OUTPERFORM.

    　　NIO (NIO.US): Delivery volume strong; new orders hit record high in July - Maintain OUTPERFORM

    　　NIO announced its delivery volume increased 322% YoY to 3,553 units in July. Delivery volume remained strong and incremental orders hit a record high in July. EC6 was launched at a reasonable price, which may expand customer base. Sales channels expansion continued and BaaS promotion stayed on track. We revise our 2020 and 2021 net loss forecasts to Rmb8.37bn and Rmb4.75bn based on new assumptions for sales volume and cost. We use EV/sales unit valuation method to evaluate the firm. Given strong sales volume, ample orders and production capacity expansion, we raise the valuation to Rmb4mn EV/sales unit and lift TP 11% to US$15, offering 26% upside.