Report Industry Investment Rating Not provided in the content. Core Views - The bond market remained volatile in September. Regulatory disturbances occurred in the first half, and the better-than-expected China-US negotiations in the second half. The current financial market's interbank idle circulation is not severe, so there's no need for large-scale financial supervision. The central bank maintains a supportive stance, so the pattern of a ceiling on interest rates won't change. The 10-year Treasury bond at 1.8% and the 5-year at 1.6% have allocation value. It's recommended to seize the left-side opportunity, hold old 10-year Treasury bonds and 2 - 3-year medium to high-grade credit bonds in the short term, and gradually switch to 25T6 later [3]. - Under weak fundamentals, strict financial supervision is likely, but the regulatory risk in this round is limited compared to history. The current idle circulation problem in the financial market is not prominent, and the central bank's "anti-idle circulation" in the Q2 2025 monetary policy report mainly refers to the "enterprise - finance" level. The possibility of a systematic adjustment in the bond market is limited [3]. - The China-US phone call has a complex impact on the stock market. In the short term, it's more beneficial. For the bond market, the implementation of the negotiation results may delay the use of aggregate monetary policy tools in Q4. Considering the 10-year Treasury bond interest rate ceiling of about 1.9% in Q1 and the 10bp interest rate cut in May, the current 1.8% 10-year Treasury bond has significant allocation value [3]. - From September 15th to 19th, funds were slightly tight, and yields generally rose. The progress of China-US negotiations, poor Treasury bond issuance results, and Shanghai's property tax adjustment were negative factors, while the weak economic data in October was positive. The 10-year Treasury bond yield rose 1.19BP to 1.88%, and the 10-year CDB bond yield fell 0.93BP to 2.02% [3]. - As of September 14th, the wealth management scale increased slightly, and the duration decreased. The public fund duration decreased to 2.30, and the divergence degree decreased, with a slight increase in market consensus [3]. Summary by Directory 1. Whether to Worry about Strict Regulatory Risks - In a weak economic environment, financial institutions may engage in regulatory arbitrage due to profit - seeking motives under loose monetary conditions. However, the current financial market's idle circulation is not serious, and the central bank maintains a supportive attitude, so the bond market may adjust, but the pattern of a ceiling on interest rates remains [7][15]. 1.1 2013: On - balance - sheet Interbank Expansion and the Money Crunch - In the first half of 2013, the macro - background was weak fundamentals, loose monetary policy, and strong expectations of stimulus policies. Banks had a strong motivation for business expansion, leading to significant growth in interbank liabilities and a surge in wealth management business. The tightening of monetary policy and financial supervision had a significant impact on the bond market [16][21][25]. 1.2 2016: Liability - side Driven Capital Out of the Balance Sheet - In 2016, the economic downturn led to weak real - sector financing demand. Banks faced pressure on the liability side and used active liability management and asset - side allocation to form inter - bank chains. The financial de - leveraging starting from October 2016 and the subsequent tightening of fundamentals, inter - bank supervision, and monetary policy had a large impact on the bond market [28][35][38]. 2. How to View This Round of the Head - of - State Phone Call - Analyzing Trump's social media posts after the two phone calls, this round of the phone call achieved more results. It's expected that the scope of trade restrictions may be narrowed, and the fentanyl tariff may be reduced. For the stock market, it's more beneficial in the short term, but it may reduce the possibility of large - scale domestic incremental policies. For the bond market, it may delay the use of aggregate monetary policy tools in Q4, and the 1.8% 10 - year Treasury bond has allocation value [39][41][44]. 3. The Decline of the Bond Market Slows Down - From September 15th to 19th, the central bank's open - market operations were net injections, and funds were slightly tight. Bond yields generally rose, with the 10 - year Treasury bond yield rising 1.19bp to 1.88% and the 10 - year CDB bond yield falling 0.93bp to 2.02%. Different factors affected the bond market on each trading day [46][50][51]. 4. The Wealth Management Scale Increases Slightly - As of September 14th, the wealth management's existing scale reached 31.07 trillion yuan, with a week - on - week increase of 238.2 billion yuan. The new - issued wealth management scale from September 8th to 14th was 207.76 billion yuan. In September, the scale of fixed - income products increased, and the net - breaking rate decreased slightly [52][54][57]. 5. Duration - From September 15th to 19th, the public fund duration decreased by 0.02 to 2.30 compared to September 12th, with a weekly average of 2.39. The duration divergence degree decreased, and market consensus increased slightly [61].

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company is undergoing a comprehensive transformation towards AI+ business model, leveraging AI intelligence as its core and focusing on industry models and intelligent terminals [7] - The company has joined Huawei's Robot to Cloud (R2C) protocol, enhancing its technological influence in the robotics and cloud intelligence sector [7] - The traditional business remains stable while new business lines are expected to open a second growth curve for the company [7] - Revenue projections for 2025-2027 are estimated at 49.62 billion, 61.58 billion, and 75.13 billion RMB, with corresponding net profits of 9.05 billion, 11.77 billion, and 14.36 billion RMB [7] Financial Performance - Revenue for 2023 is projected at 3,251 million RMB, with a growth rate of 43.5%, and is expected to reach 4,962 million RMB in 2025, reflecting a growth rate of 26.2% [6][8] - The net profit for 2023 is estimated at 179 million RMB, with a significant growth rate of 75.7%, projected to increase to 905 million RMB by 2025, with a growth rate of 41.2% [6][8] - Earnings per share (EPS) is expected to be 0.40 RMB in 2023, increasing to 1.35 RMB in 2025 [6][8] - The price-to-earnings (PE) ratio is projected to be 59.4 in 2023, decreasing to 28.2 in 2025 [6][8] - Return on equity (ROE) is expected to rise from 5.6% in 2023 to 24.9% in 2025 [6][8]

Core Viewpoints - The report maintains a positive outlook on the building materials industry, indicating a potential stabilization in the supply chain due to ongoing anti-involution efforts [1][4]. Industry Analysis - The anti-involution movement is expected to continue impacting the real estate supply chain, with the photovoltaic industry leading the way through a combination of gradual policy adjustments and market-oriented measures [6]. - Recent government initiatives aim to address issues such as chaotic competition and unreasonable procurement practices, which are anticipated to enhance market efficiency and fair competition within the building materials sector [6]. - The cement industry is experiencing improved supply-demand dynamics, with various regions implementing staggered production schedules to stabilize prices. For instance, companies in Jiangxi, Sichuan, and other provinces are reducing output significantly during peak season [6]. - Investment recommendations highlight the cement sector's attractive dividend yield and the expectation of price recovery, with specific companies like Conch Cement and Huaxin Cement being emphasized for potential investment [6]. Investment Recommendations - The report suggests actively monitoring the cement sector due to its favorable fundamentals, with a focus on companies such as Conch Cement and Huaxin Cement, while also considering related photovoltaic industry stocks like Qibin Group [6]. - The consumer building materials sector is expected to see a reversal of its current challenges, with anticipated stabilization in demand and pricing, leading to improved performance for companies like Sangke Tree and Rabbit Baby [6].

Economic Outlook - The overall economy is expected to stabilize with structural reforms accelerating, supported by continuous fiscal efforts and a recovery in the real estate sector [3][11][19] - The "反内卷" (anti-involution) policy is anticipated to drive a rebound in PPI, benefiting industries such as coal and photovoltaics [5][30] - The technology sector is experiencing a significant surge, with new technologies like AI expected to empower a growth cycle lasting over a decade [3][6][45] Old Economy Insights - The "反内卷" policy is likely to push PPI to a turning point, with historical data indicating that PPI recoveries correlate with economic cycles [5][30] - During PPI upturns, stock market trends generally rise, with the greatest elasticity observed during the initial stages of PPI recovery [35][37] New Economy Insights - The current technology sector trend is still in its early stages, with historical patterns showing that industry trends require a conducive macroeconomic environment and liquidity [6][45] - Emerging technologies such as AI, low-altitude economy, deep-sea technology, and quantum technology are at a critical juncture, with potential for explosive growth in the next two years [6][45] Funding Landscape - In a low-interest-rate environment, there is a significant shift of household savings towards equity assets, with the current allocation in stocks and funds at 15%, compared to 40% in developed markets [7][19] - Public fund issuance is expected to see a turning point as net asset values recover, with a historical correlation indicating that 80% of funds reaching positive net values leads to increased issuance [7][19] Investment Strategy - The investment strategy should focus on three main lines: old economy sectors benefiting from PPI recovery, new economy sectors driven by AI and overseas expansion, and consumer sectors emphasizing emotional consumption [8][45] - Specific sectors to watch include metals, coal, and new energy for the old economy, while AI hardware and applications are key for the new economy [8][45]

Real Estate - New home sales in Wind 20 cities increased by 18.26% week-on-week and 38.03% year-on-year, with first and second-tier cities showing over 40% growth compared to last year[7] - Shanghai's second-hand home sales surged by 84.06% year-on-year, while Shenzhen's increased by 114.04%[22] Investment - Commodity prices generally rose, with rebar prices increasing by 0.70% to 3299 yuan/ton, and cement price index up by 0.62%[31] - Glass futures prices rose by 3.15% to 1212 yuan/ton, and asphalt prices increased by 1.35%[31] Production - Steel mill blast furnace operating rate slightly increased to 84% while oil asphalt operating rate decreased to 34.4%[44] - PTA operating rate rose by 2.3 percentage points to 77.29%[50] Consumption - Movie box office revenue increased significantly by 131.94% to 830.29 million yuan, with metro ridership and domestic flights also exceeding seasonal expectations[51] - Average wholesale price of pork decreased by 2.01% to 19.48 yuan/kg, while vegetable prices fell by 1.78%[61] Export - SCFI index dropped significantly, while BDI index increased, indicating mixed signals in export demand[58]

Investment Rating - The report assigns an "Buy" rating for the company for the first time [2][45]. Core Views - The company has a strong foundation in the braking industry and is rapidly expanding its intelligent electronic control business, which is expected to drive significant revenue growth [7][45]. - The company is diversifying its product offerings based on its core braking business, with ongoing international expansion expected to contribute significantly to revenue [7][45]. Summary by Sections Company Overview - The company has been deeply engaged in the braking market for over 20 years and has established itself as a leading domestic manufacturer [11]. - The main business segments include mechanical braking, intelligent electronic control, and mechanical steering [15]. Financial Performance - The company reported a revenue of 51.64 billion yuan in the first half of 2025, with a year-on-year growth of 30% [7][19]. - The intelligent electronic control segment's revenue share has increased significantly, from 27% in 2020 to 47% in 2024, while mechanical braking's share has decreased from 72% to 46% during the same period [18]. Revenue and Profit Forecast - Projected revenues for 2025-2027 are 128.2 billion yuan, 160.4 billion yuan, and 193.9 billion yuan, respectively, with corresponding net profits of 14.1 billion yuan, 17.2 billion yuan, and 21.1 billion yuan [6][41]. - The company expects to maintain a compound annual growth rate (CAGR) of 29% in revenue from 2025 to 2027 [6]. Product Expansion and Internationalization - The company is expanding its product categories based on its braking technology, including steering and suspension systems, and has developed three ADAS solutions [29][33]. - The company has successfully entered international markets, initially supplying General Motors and later expanding to other major clients like Stellantis and Volvo [36][37]. Valuation and Comparables - The report provides a relative valuation analysis, comparing the company with peers such as Desay SV and Top Group, with projected PE ratios for 2025-2027 at 22.7, 18.6, and 15.2 times, respectively [6][46].

1. Report Industry Investment Rating - No specific industry investment rating is provided in the report. 2. Core Views of the Report - The FOMC resolution was in line with expectations, with a dovish tone focusing on employment risks. The Fed cut the federal funds rate target range by 25 basis points in September 2025, the first rate cut of the year. The statement showed concerns about economic downside risks and employment, and there was internal disagreement mainly on the speed of rate cuts [2]. - The dot - plot indicated two more rate cuts this year, but Powell's speech at the press conference was hawkish. He emphasized data - driven decisions and that the current policy was not misaligned, and the exit of restrictive monetary policy remained uncertain [2]. - Powell's hawkish remarks reversed the initial market reaction. In the short term, the US Treasury yield curve may show a bull - steepening pattern, and the US dollar may remain weak. The Fed's rate cuts are beneficial to China's external environment, opening up space for aggregate monetary policies [3]. 3. Summary According to the Directory 3.1 What to Focus on in the Fed's Interest - Rate Meeting 3.1.1 FOMC Resolution Starts to Focus on Employment Downside Risks - The September 2025 FOMC resolution had three points of focus compared to July: adding descriptions about rising unemployment in the fundamental assessment, highlighting employment downside risks in the risk assessment, and only new Fed governor Milan voting against the resolution, preferring a 0.5 - percentage - point rate cut [7]. - The market's immediate reaction to the resolution was mild as it had almost fully priced in the rate cut before the meeting. The S&P 500 rose 0.19%, 2 - year and 10 - year US Treasury yields declined, gold prices rose, and the US dollar index weakened slightly [9]. 3.1.2 Dot - Plot Shows Two More Rate Cuts This Year - The Fed's September 2025 economic forecast showed a slight decrease in the risk of stagnation and an increase in the risk of inflation. GDP growth forecasts were raised, unemployment forecasts were slightly lowered, inflation forecasts were slightly raised, and the median federal funds rate for 2025 decreased, indicating two more rate cuts this year [11]. - The narrowing of the central tendency suggested that the Fed believed the predictability of the economy was increasing [12]. 3.1.3 Press Conference Speech Is Hawkish, Reinforcing the Fed's Data - Driven Inertia - Powell's speech at the press conference was hawkish. He emphasized the Fed's independence, stating that decisions were based on data and economic understanding, and individual influence was exerted through persuasion [19]. - He also emphasized that the current restrictive policy was still applicable, the rate cut was a result of risk balancing, and future decisions would be data - dependent [19]. - The market prices were affected by his hawkish remarks. The S&P 500 fell, US Treasury yields rose, gold prices dropped, and the US dollar index increased [20]. 3.2 How to View the Market - In the short term, the US Treasury yield curve may show a bull - steepening pattern. The market may further price in the remaining rate cuts this year, with the 2 - year US Treasury rate expected to fluctuate between 3.44% - 3.84% and the 10 - year rate between 3.9% - 4.3% [21]. - The US dollar index may remain weak, possibly falling below 96. The Fed's rate cuts, weak US economic data, and policy uncertainties contribute to this trend. The Fed's rate cuts are beneficial to China's external interest - rate environment, allowing for the possibility of aggregate monetary policies [23].

Monetary Policy Decisions - The Federal Reserve lowered the benchmark interest rate by 25 basis points to a target range of 4%-4.25%[4] - Slightly over half of the FOMC officials anticipate at least two more rate cuts this year, while only one cut is expected next year[4] - The decision to cut rates was based on a "shift in the balance of risks," with employment growth slowing and the unemployment rate edging up[4] Employment and Inflation Outlook - The unemployment rate rose to 4.3% in August, the highest since late 2021, indicating a shift towards a surplus in the labor market[7] - The Fed maintained its 2025 unemployment rate forecast at 4.5% and PCE inflation at 3%[10] - Inflation has increased, with commodity prices contributing significantly to this rise, although the increases are expected to be moderate and possibly one-time shocks[4][10] Economic Growth Projections - The Fed revised its 2025 GDP growth forecast upward to 1.6% and 2026 to 1.8%[11] - Economic activity is described as slowing, with consumer spending declining in most regions due to economic uncertainty and tariffs[11] - Rate cuts may lower credit costs, potentially boosting consumer confidence and stabilizing the economy next year[11] Market Reactions and Risks - Following the announcement, U.S. stock markets initially rose but then fell, with bond yields increasing and the dollar index fluctuating[13] - Risks include higher-than-expected inflation, tighter monetary policy from the Fed, and a sharper-than-anticipated economic downturn[16]

Policy Measures - On September 16, nine departments jointly issued policies to expand service consumption, focusing on five key areas: cultivating service consumption platforms, enriching high-quality service supply, stimulating new consumption, enhancing financial support, and improving statistical monitoring systems[2] - The report outlines 19 specific measures aimed at promoting the quality and expansion of service consumption, thereby unleashing domestic demand potential[2] Industry Insights - In the cultural and tourism sector, the added value of cultural and related industries reached CNY 5.95 trillion in 2023, while tourism and related industries added value was CNY 5.48 trillion[2] - Domestic travel is projected to reach 5.615 billion trips in 2024, with total consumption expected to hit CNY 5.75 trillion[2] - The sports industry is anticipated to grow significantly, with a focus on introducing high-quality international sports events and fostering grassroots sports events like "Village Super" and "Su Super" to create new consumption growth points[2] Investment Recommendations - Service retail sales are expected to grow by 6.2% year-on-year in 2024, outpacing goods retail sales by 3 percentage points[2] - Per capita service consumption expenditure is projected to increase by 7.4%, contributing 63% to overall per capita consumption growth[2] - Investment focus areas include "new" cultural tourism projects, quality sports event IPs, and long-term care insurance-related enterprises in the elder care sector[2] Risk Factors - Potential risks include slower-than-expected policy progress, lower-than-expected economic growth, and weaker-than-expected consumer sentiment recovery[2]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The report highlights that Kingdee International is acquiring a 62.8% stake in Yunzhijia for 68 million yuan, which will increase its ownership from 7.5% to 70.3% and allow for consolidation in financial statements [7] - Yunzhijia has transitioned to profitability, with a net profit of 4.66 million yuan in the first four months of 2025, aligning with Kingdee's subscription and AI-focused strategy [7] - The acquisition is expected to enhance Kingdee's mobile office capabilities and create a unified entry point for AI and collaboration tools, improving user experience in cloud ERP [7] - The financial impact of the acquisition is anticipated to be limited in the short term, with projected revenues for 2025-2027 at 7.01 billion, 7.90 billion, and 8.95 billion yuan respectively [7] Financial Performance Summary - Revenue for 2023 is projected at 5.68 billion yuan, with a growth rate of 16.71%, and expected to reach 7.01 billion yuan in 2025, reflecting a growth rate of 12.03% [6][8] - The company is expected to achieve a net profit of 151 million yuan in 2025, with a significant increase in net profit growth rate of 270.97% in 2026 [6][8] - Earnings per share (EPS) is projected to turn positive in 2025 at 0.04 yuan, increasing to 0.31 yuan by 2027 [6][8] - The price-to-earnings (P/E) ratio is expected to decrease from 346.26 in 2025 to 48.25 by 2027, indicating improving valuation metrics [6][8]