Investment Rating - The report assigns a "Buy" rating for the computer industry, indicating an expectation that stock performance will exceed the market by more than 10% over the next 12 months [1]. Core Insights - The application themes in the past week were influenced by the release of the Doubao product ecosystem, leading to a rotation in industry performance from enterprise applications to consumer terminals and back to computing power [11]. - The report emphasizes the importance of generative AI applications, highlighting three main aspects: 1) improvement and upgrade of existing product forms, 2) stock price changes exceeding commercial realization expectations, and 3) liquidity overflow as a primary basis for stock performance [11]. - The report suggests continued focus on AI-related subfields and provides additional stock recommendations, particularly those with low absolute or relative valuations and strong certainty of marginal changes [11][19]. Summary by Sections Current Recommendations - Key recommended stocks include: 1. Unisplendour Corporation 2. Newland Group 3. Zhongwang Software 4. Fourth Paradigm 5. Kingdee International 6. Cambricon Technologies 7. Vertex Software [11][12][13][15][16][18][28][29]. Market Trends - The report notes that the computer industry index rose by 0.49% over the past week, ranking 4th among all industries, while the Shanghai Composite Index fell by 0.70% [22]. - It highlights that the industry is expected to see fundamental improvements and thematic trends in 2025, with several sectors showing strong certainty of opportunities [34]. Valuation Insights - As of December 20, 2024, the report indicates that Unisplendour Corporation has a 2025 PE ratio of 26, which is lower than its peers, suggesting a favorable valuation [8]. - The report also discusses the potential for significant revenue growth in the AI chip market, driven by demand from major commercial clients, with expectations for a clearer market position by Q1 2025 [28]. Sector-Specific Developments - The report discusses the anticipated acceleration of the HarmonyOS in 2025, which is expected to bridge the gap between PC and terminal operating systems, enhancing confidence in downstream industry applications [20]. - It also mentions the potential for significant growth in the intelligent driving sector, driven by policy catalysts and industry iterations, with a focus on domestic intelligent driving chips and related technologies [35].

Investment Rating - The industry investment rating is "Buy" [12] Core Insights - The report indicates that the arbitrage trading return rate has increased, while cross-border capital inflow has slowed down. In November 2024, the net settlement of foreign exchange by banks was 29.7 billion yuan, a year-on-year increase of 196.1 billion yuan, showing significant improvement compared to the same period in 2022 and 2023, but a noticeable decrease compared to September and October [12][22] - The report highlights that the exchange rate of the RMB has slightly appreciated, with the SDR to RMB exchange rate at 9.52, reflecting a 0.25% appreciation from the previous period. The USD, EUR, JPY, and GBP against the offshore RMB have changed by +0.29%, -0.36%, -1.23%, and -0.02% respectively [12][22] - The 10-year US Treasury yield has increased by 12 basis points, while the 10-year Chinese government bond yield has decreased by 8 basis points, leading to a significant widening of the China-US interest rate spread [12][55] Summary by Sections Foreign Exchange Settlement Tracking - In November 2024, the bank's customer foreign exchange settlement rate was 33.39%, a decrease of 0.7 percentage points from October. The rates for goods trade, services trade, and capital and financial projects were 50.32%, 42.97%, and 10.80% respectively, with changes of -2.4%, -0.4%, and -0.1% from October [43] Arbitrage Trading Returns - The report notes a significant widening of the China-US interest rate spread, with the 10-year China-US Treasury yield spread at -2.82%. The actual annual returns from arbitrage trading of US Treasuries in RMB for the past year were 4.72%, 3.49%, 3.39%, and 3.24% for 1Y, 5Y, 10Y, and 30Y respectively, showing increases of +0.81 percentage points, +0.67 percentage points, +0.64 percentage points, and +0.64 percentage points [55] Major Economic Indicators - The report provides insights into major economic indicators, noting that the unemployment rate in China for November was 5.00%, remaining stable month-on-month, while the youth unemployment rate (ages 16-24) decreased by 1.0 percentage points to 16.10% [12][64]

Investment Rating - The report recommends a "Buy" rating for China Power and China Shipbuilding, with a focus on the marine engine sector and related companies [2][14]. Core Insights - The marine engine sector is experiencing a supply-demand imbalance, with demand for ship engines steadily increasing due to environmental technology transitions and market changes. The report highlights that the global market for marine engines is expected to reach approximately 650 billion CNY annually from 2025 to 2030, with potential growth to 1500 billion CNY in the long term [2][12][23]. - The report emphasizes that the profitability of marine engines is on an upward trend, with the average price of low-speed engines increasing by 4% in 2023 compared to 2022, reaching 44.17 million CNY per unit [2][39][68]. - The report identifies China Power as a leading manufacturer in the low-speed engine market, benefiting from technological advancements and market positioning, with a domestic market share of 78% and an international market share of 39% [2][60]. Summary by Sections 1. Industry Overview - The marine engine is a critical component of shipbuilding, accounting for about 20% of the total ship cost. The report notes that the engine's order and delivery cycles lag behind those of the shipbuilding sector, with a typical delay of 6-9 months [2][51][56]. 2. Demand Dynamics - Demand for marine engines is closely tied to new ship orders, driven by market conditions, aging fleets, and environmental upgrades. The report estimates that global demand for marine engines will reach approximately 22.5 million horsepower annually from 2024 to 2025, with a significant portion of this demand coming from the aftermarket, which is projected to be worth 100-120 billion CNY annually from 2024 to 2030 [2][12][23]. 3. Supply Conditions - The supply of marine engines is characterized by a weak recovery and a strong concentration of market share among leading manufacturers. The report indicates that the supply-demand situation is expected to remain tight, with environmental transitions and the trend towards larger vessels accelerating market concentration [2][12][23]. 4. Profitability Outlook - The report forecasts a long-term upward shift in profitability for marine engines, driven by stable demand and rising prices. The average profit margin for China Power is expected to improve as the company capitalizes on its market position and technological advancements [2][12][23]. 5. Key Players - The report highlights major players in the marine engine market, including China Power, HHI, and HSD, noting that China Power has significantly increased its market share in recent years [2][60][33].

Investment Rating - The industry investment rating is "Buy" with a focus on the military industry sector [36]. Core Viewpoints - The consensus on the end of the small cycle adjustment in the industry is increasing, suggesting a focus on leading companies with clear demand expectations and supply scarcity [47]. - The report emphasizes the importance of the current overall allocation value of the sector, especially in the context of annual valuation switching [47]. - The report highlights the potential for sustainable focus on state-owned enterprise reforms, which may enhance market value management [47]. Summary by Relevant Sections Military Industry Investment Strategy - The report outlines four key investment strategies for the military sector based on the PB-ROE model: 1. Focus on stable growth in ROE, particularly in military trade, aviation engines, large aircraft, and maintenance, with attention to companies like Aviation Industry Corporation of China and others [1]. 2. Emphasize turnaround strategies, focusing on companies likely to experience ROE cycle bottoms and reversals [1]. 3. Highlight the trend of improving ROE elasticity and potential space, with a focus on new quality forces such as efficient cost-performance weapons and commercial aerospace [1]. 4. Monitor the impact of state-owned enterprise reforms on sustainable growth [1]. Company-Specific Insights - **Aviation Power**: Expected revenue of 49.76 billion yuan in 2024, with net profits projected at 1.52 billion yuan [2]. - **Guorui Technology**: Anticipated significant growth in radar business and low-altitude safety services, with expected related transactions exceeding 9.56 billion yuan in early 2025 [3]. - **Guangwei Composite Materials**: Projected net profits of 0.93 billion yuan in 2024, with a focus on carbon fiber applications in aerospace and wind energy [4]. - **Zhongke Xingtu**: Positioned to benefit from the rapid development of the aerospace industry and digital economy, with a focus on low-altitude economic infrastructure [5]. - **Haige Communication**: Comprehensive coverage in wireless communication and Beidou navigation, with expected growth from partnerships in high-precision services [6]. Market Performance - As of December 20, 2024, the military industry index has shown a relative performance of 10.12% compared to other indices [8]. Fund Holdings - As of Q3 2024, the military sector accounted for 3.58% of active fund holdings, indicating a slight increase from the previous quarter [14]. Future Projections - The report anticipates significant growth in net profits for various companies in the military sector, with projections for 2024-2026 indicating a positive trend in profitability and valuation metrics [51][53][54].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 8.44 CNY per share based on a 10X P/E ratio for 2025 [2][8]. Core Insights - The company is a leading domestic fabric dyeing enterprise, expected to increase its market share due to recovering downstream demand and the exit of small capacities. The dyeing business benefits from integrated supply chain advantages, with profit margins significantly above the industry average. The company has entered the global procurement supply chains of renowned international brands such as ZARA, M&S, Wal-Mart, and VF, with indirect exports accounting for approximately 60% of its business. In H1 2024, the dyeing business achieved revenue of 1.935 billion CNY, a year-on-year increase of 5.88%, and a total profit of 239 million CNY, up 5.59% year-on-year [1][6][7]. Summary by Sections Company Overview - The company operates in dual main businesses: dyeing and gold jewelry. Established in 1998 and listed in 2004, it focuses on "textile dyeing + gold jewelry" and supports industries such as thermal power, non-woven fabric production, industrial water, sewage treatment, dyeing machinery, and maritime logistics. In Q1-Q3 2024, the company reported revenue of 8.678 billion CNY, a year-on-year increase of 18.34%, and a net profit attributable to shareholders of 475 million CNY, up 5.23% [6][7][8]. Business Segments - The dyeing segment processes various mid-to-high-end fabrics, with an annual processing capacity of 1.02 billion meters. The company is recognized as one of the top ten competitive enterprises in the dyeing industry in China, with its "Feihang" brand enjoying high market recognition. The company operates under a processing model, which allows for low inventory and quick cash turnover [15][16]. Gold Jewelry Segment - The company is a leading gold processing enterprise, with an annual production capacity of 80 tons, ranking second in the domestic market. Following the acquisition of Shenzhen Shangjinyuan, the company aims to enhance its market share in the gold jewelry sector. In H1 2024, the gold jewelry segment generated revenue of 3.424 billion CNY, a year-on-year increase of 33.58%, with a total profit of 94 million CNY, up 49.26% year-on-year [7][8][16]. Financial Performance - The company forecasts EPS of 0.75 CNY, 0.84 CNY, and 0.91 CNY for 2024, 2025, and 2026, respectively. The projected revenue for 2024 is 11.478 billion CNY, with a growth rate of 18.8% [2][90].

Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected stock performance that will exceed the market by more than 15% over the next 12 months [46]. Core Insights - The company is positioned strongly in the EGR (Exhaust Gas Recirculation) market, which is expected to grow significantly due to stricter emission standards and the rise of hybrid vehicles [17][70]. - The EGR market is projected to reach approximately 5.2 billion yuan by 2030, with a CAGR of 19.6% from 2024 to 2030, driven by increasing penetration rates in both light and heavy-duty diesel engines as well as hybrid passenger vehicles [71][72]. - The company has a competitive edge in the EGR market, holding a 40% market share, and is well-equipped with technological capabilities and product diversity [17][70]. Financial Summary - The company's revenue is projected to grow from 1,148 million yuan in 2022 to 3,771 million yuan by 2026, reflecting a compound annual growth rate (CAGR) of approximately 36.5% [2]. - Operating profit is expected to increase significantly from 71 million yuan in 2022 to 433 million yuan in 2026, indicating strong operational efficiency improvements [2]. - Net profit attributable to the parent company is forecasted to rise from 76 million yuan in 2022 to 384 million yuan in 2026, showcasing robust profitability growth [2]. Key Financial Ratios - The company's asset-liability ratio is projected to increase from 40.9% in 2022 to 53.9% in 2026, indicating a rising leverage position [3]. - The EBITDA is expected to grow from 155 million yuan in 2022 to 594 million yuan in 2026, reflecting improved earnings before interest, taxes, depreciation, and amortization [2]. - Earnings per share (EPS) is anticipated to rise from 0.37 yuan in 2022 to 1.66 yuan in 2026, demonstrating strong earnings growth potential [2].

Investment Rating - The industry investment rating is "Buy" [3] Core Insights - The Central Rural Work Conference emphasized the importance of food security and the acceleration of the industrialization of biological breeding, with a focus on stabilizing grain planting areas and enhancing the supply capacity of important agricultural products [1][2] - The conference proposed to improve the land contracting and transfer mechanisms, which is expected to further release the value of agricultural land [1] - Investment opportunities in the planting industry chain are highlighted, particularly in the context of increasing uncertainties in international trade and the strategic significance of food security [1] Summary by Sections Investment Rating - The industry is rated as "Buy" with expectations of strong performance relative to the market over the next 12 months [3] Key Events - The Central Rural Work Conference took place on December 17-18, 2024, focusing on rural reform and the promotion of rural revitalization [1] Food Security and Agricultural Technology - The conference underscored the need to ensure national food security and enhance the supply capacity of key agricultural products, with a specific mention of the role of biological breeding in increasing crop yields [1] - The period from 2024 to 2026 is designated as a demonstration phase for the industrialization of genetically modified corn, with an increase in planting areas from 4 million mu to 10 million mu [1] Land Reform and Agricultural Value - The conference called for the implementation of further rural reforms, including extending land contracts and innovating financing mechanisms for rural revitalization, which is expected to optimize land resource allocation and increase agricultural land value [1] Investment Recommendations - The report suggests focusing on companies involved in the planting industry chain, such as Longping High-Tech, Denghai Seeds, Dabeinong, and Chuanying High-Tech, as well as companies like Beidahuang, Sukang Agricultural Development, and Yasheng Group that are expected to benefit from improved land transfer mechanisms [1]

Investment Rating - The investment rating for the computer industry is "Buy" [2][9]. Core Viewpoints - The launch of the new generation core trading system tender by Everbright Securities marks a significant development in the industry. The goals for this system include transitioning from a centralized proprietary architecture to a distributed, low-latency, and open architecture, utilizing a technology stack that emphasizes high availability, performance, low latency, scalability, and loose coupling [2]. - Companies with successful full-stack domestic innovation cases in the core trading system field, such as Vertex Software and Huari Technology, are expected to have a competitive advantage as more securities firms initiate tenders for new generation core trading systems [2]. - The report anticipates that as more securities firms successfully implement new generation core trading systems, there will be an increase in demand for related technology solutions, particularly for Vertex Software and Hengsheng Electronics [2]. Summary by Sections Industry Developments - Everbright Securities has initiated a tender for its new generation core trading system, with a focus on modernizing its technology architecture [2]. - Recent developments in the core trading system sector include the successful launch of systems by Guosen Securities and strategic partnerships between firms like Guotai Junan and Hengsheng Electronics [2]. Company Analysis - Vertex Software is highlighted as a key player in the market, with a strong track record and recognition among securities firms, indicating a potential for market share growth due to the shift towards new generation core trading systems [2]. - Hengsheng Electronics is also noted for its contributions to the new generation core trading system, with recent successful implementations [2].

Industry Investment Rating - The report maintains a positive outlook on the insurance industry, particularly focusing on the potential for increased equity allocation by insurance funds to navigate the low-interest-rate environment [2] Core Views - Insurance funds are expected to increase their allocation to equity assets, particularly high-dividend stocks and long-term equity investments, to enhance portfolio returns and mitigate the impact of declining fixed-income yields [2] - The report highlights the necessity of equity investments for insurance funds, given the long-term higher returns compared to fixed-income assets, both domestically and internationally [2] - The current equity allocation in the insurance industry (20.9% as of 24Q3) still has room to grow, with a regulatory cap of 25% for companies with a solvency adequacy ratio between 150% and 200% [2] Background: Declining Long-Term Interest Rates and Asset Shortage - Long-term interest rates have been declining, leading to lower returns on fixed-income assets, which are the largest component of insurance fund portfolios [2] - Non-standard assets, which previously offered higher returns, are maturing, and their supply is decreasing, further pressuring insurance funds to find alternative investments [2] - The bond allocation in the insurance industry has reached a relatively high level (45.4% in 2023), and further increases may not be necessary, especially as the duration gap has narrowed [2] - There is significant room for increasing equity asset allocation, with the current equity allocation at 20.9% compared to the regulatory cap of 25% [2] Necessity and Direction of Equity Allocation - Equity assets have historically provided higher long-term returns compared to fixed-income assets, making them essential for improving portfolio returns [2] - The future direction of equity allocation will focus on high-dividend stocks and long-term equity investments, which offer stable income and strategic synergies [2] - High-dividend stocks, when classified under the OCI (Other Comprehensive Income) account, provide stable dividend income without causing volatility in the profit and loss statement [2] - Long-term equity investments, despite their lower current allocation (e.g., 4.5% for China Life, 4% for Ping An), offer higher returns over the long term and are expected to see increased allocation [2] High-Dividend Asset Allocation Scale - Assuming a compound growth rate of 11% for insurance fund utilization from 2023 to 2026, the high-dividend investment scale is projected to reach between 1.16 to 1.5 trillion yuan by 2026 [2] Investment Recommendations - The report recommends several insurance companies, including China Pacific Insurance (A/H), China Life Insurance (A/H), China Taiping (H), Ping An Insurance (A/H), China P&C Insurance (H), New China Life Insurance (A/H), and AIA Group (H) [2] Key Data and Trends - The bond allocation in the insurance industry increased from 34.6% in 2017 to 45.4% in 2023, while non-standard assets decreased from 40.2% to 32.7% over the same period [2] - The net investment yield for listed insurers has been declining, with China Life dropping from 4.6% in 2017 to 3.7% in 2023, and Ping An from 5.8% to 4.2% [2] - The average investment yield for China Pacific Insurance's equity assets from 2013 to 2022 was 7.3%, higher than fixed-income assets (5.1%) and cash (1.6%) [2]

Investment Rating - The report maintains a "Buy" rating for the company [5]. Core Views - The introduction of external investor BARRIE into the wholly-owned subsidiary Duncan Company is expected to enhance the competitiveness of the company's cashmere business. The investment involves a cash increase of £9.562255 million, with BARRIE acquiring 40% equity in Duncan Company at a valuation of approximately £47.115948 million [2][3]. - Duncan Company, a renowned cashmere yarn manufacturer, has shown a total revenue of 218.532 million yuan in the first three quarters of the year, despite a net loss of 0.0623 million yuan. The partnership with BARRIE, a key client and supplier to luxury brands like Chanel, is anticipated to strengthen long-term ties with high-end customers and improve financial strength [3]. - The company is expected to achieve steady growth in performance, focusing on expanding its wool and cashmere business while enhancing production capacity in Ningxia and Vietnam. The high gross margin of self-produced and self-sold cashmere products is on the rise [3]. - Earnings per share (EPS) forecasts for 2024-2026 are projected at 0.60 yuan, 0.67 yuan, and 0.76 yuan, respectively. Based on a 14x price-to-earnings ratio, the reasonable value is estimated at 8.37 yuan per share [3]. Financial Summary - Revenue (in million yuan) is projected to grow from 3,950 in 2022 to 5,984 in 2026, with growth rates of 14.6%, 12.4%, 10.7%, 10.9%, and 9.8% respectively [4]. - Net profit (in million yuan) is expected to increase from 390 in 2022 to 558 in 2026, with growth rates of 30.7%, 3.7%, 8.1%, 11.6%, and 14.4% respectively [4]. - EPS is forecasted to rise from 0.54 in 2022 to 0.76 in 2026, with a corresponding price-to-earnings ratio decreasing from 13.30 to 10.15 [4].