Industry Rating - The industry rating is **Buy** [1][2] Core Views - The CITIC media sector rose by 3.18% this week (Dec 9-13), outperforming the Shanghai Composite Index by 3.54 percentage points [4] - AI models and applications continue to land, boosting sector confidence, with related stocks showing significant gains [4] - The Ministry of Finance announced a 4-year extension of tax incentives for cultural institutions transitioning to enterprises, benefiting publishing and broadcasting sectors [4] - The Politburo meeting emphasized boosting consumption and expanding domestic demand, with cyclical sectors expected to benefit from economic recovery [4] Investment Recommendations Internet - Internet companies' PE ratios are generally in the high single-digit to low double-digit range for 2025 earnings expectations [5] - Recommended stocks: Tencent Holdings, Tencent Music, NetEase Cloud Music, Meituan, Kuaishou, Bilibili, Weibo, and Pop Mart [5] Gaming - The gaming sector is recommended due to policy improvements and strong market growth [5] - Recommended stocks: Perfect World, Century Huatong,恺英网络,姚记科技,创梦天地,神州泰岳,三七互娱,吉比特,电魂网络,冰川网络 [5] Publishing - Tax exemption policies for state-owned publishing enterprises have been extended for 4 years, enhancing dividend capabilities and investment value [5] - Recommended stocks: 中南传媒,皖新传媒,长江传媒,凤凰传媒,时代出版 [5] Film - The film industry is expected to see a supply inflection point, with the 2025 Spring Festival lineup potentially setting new box office records [5] - Recommended stocks: 猫眼娱乐,万达电影,光线传媒,阿里影业,博纳影业 [5] Marketing - Advertising confidence is expected to strengthen with macroeconomic recovery [5] - Recommended stocks: 分众传媒,兆讯传媒,蓝色光标,易点天下,引力传媒,因赛集团,省广集团 [5] State-Owned Enterprise Reform - Focus on state-owned enterprise reform and market value management [5] - Recommended stocks: 新媒股份,华数传媒,东方明珠,芒果超媒,中广天择,上海电影,唐德影视,电广传媒 [5] Key Company Performance Meituan-W - Q3 revenue: RMB 93.577 billion, up 22.38% YoY [42] - Q3 GAAP net profit: RMB 12.865 billion [42] - Core local commerce revenue: RMB 69.373 billion, up 20.25% YoY [42] Tencent Holdings - Q3 revenue: RMB 65.79 billion, up 8.0% YoY [42] - Q3 adjusted net profit: RMB 221.8 billion, up 45.0% YoY [42] Baidu - Q3 revenue: RMB 33.557 billion, down 3% YoY [43] - Q3 non-GAAP net profit: RMB 5.886 billion, down 19% YoY [43] Kuaishou-W - Q3 revenue: RMB 31.1 billion, up 11% YoY [47] - Q3 non-GAAP net profit: RMB 3.948 billion, up 24% YoY [47] Bilibili - Q3 revenue: RMB 7.3 billion, up 26% YoY [48] - Q3 non-GAAP net profit: RMB 236 million [48] 37 Interactive Entertainment - Q3 revenue growth driven by small games and stable operation of old games [49] - Q3 cash dividend: RMB 0.21 per share [49] Focus Media - Q3 advertising revenue driven by FMCG and internet sectors [52] - Expected 2024-25 revenue: RMB 12.612 billion and RMB 13.341 billion [52] Industry Data Film Market - Weekly box office (Dec 8-14): RMB 298 million, down 12.22% week-on-week [56] - Top 5 films: "好东西" (RMB 83.205 million), "孤星计划" (RMB 52.143 million), "破·地狱" (RMB 29.821 million), "误判" (RMB 22.714 million), "因果报应" (RMB 16.684 million) [56] TV Drama Market - Top 5 dramas by broadcast index: "我是刑警" (84.4), "猎罪图签2" (82.5), "九重紫" (82.3), "永夜星河" (81.8), "白夜破晓" (81.7) [62] Variety Show Market - Top 5 variety shows by broadcast index: "再见爱人第四季" (80.1), "现在就出发 第2季" (77.9), "奔跑吧茶马古道篇" (77.7), "生生不息大湾区季" (77.0), "种地吧第二季" (75.1) [67] Gaming Market - Top 5 mobile games: "王者荣耀", "金铲铲之战", "地下城与勇士：起源", "无尽冬日", "和平精英" [70] VC/PE Investments - Total of 9 VC/PE investments this week (Dec 9-13) [78] - Education: 3 investments [78] - Gaming: 1 investment [78] - Entertainment: 1 investment [78] - Local services: 4 investments [78]

Investment Rating - The industry investment rating is "Buy" [3]. Core Views - The Taiwan electronics index increased by 36.3% from the beginning of 2024 to the end of November, while the monthly decline in November was -0.4% [3][16]. - The revenue growth rates for key segments in the Taiwan electronics sector include: foundry services (YoY +31.2%), analog IC (YoY +10.9%), and assembly and terminals (YoY +9.7%) [30][42]. - The report suggests focusing on investment opportunities in AI server supply chains, mobile optical components, and advanced packaging industries [3][30]. Summary by Sections 1. Taiwan Electronics Sector Review for November 2024 - The performance of major electronic indices from January 2024 to November 2024 shows the following changes: Philadelphia Semiconductor Index +22.5%, Shenwan Electronics Index +19.9%, Shenwan Semiconductor Index +27.5%, and Taiwan Electronics Index +36.3% [16]. - The monthly performance for November 2024 indicates declines across several indices, with the Taiwan Weighted Index down by -2.4% [16]. 2. Revenue Situation of Key Taiwanese Electronics Companies (a) Segment Comparison - The fastest-growing segments in terms of revenue include foundry services (YoY +31.2%), analog IC (YoY +10.9%), and assembly and terminals (YoY +9.7%) [30]. (b) Foundry Services - TSMC reported revenue of NT$276.1 billion in November 2024, with a YoY increase of 34% [30][33]. - UMC achieved revenue of NT$20 billion in November 2024, reflecting a YoY growth of 7% [30][33]. 3. Key Company Stock Performance - The top five Taiwanese electronics companies with the highest stock price increases in November 2024 include Inventec, Largan Precision, Compal Electronics, ASUS, and Wistron [25]. - Conversely, the companies with the largest declines include Nanya Technology, Silergy Corp, Winbond Electronics, Macronix, and JMicron Technology [25]. 4. Revenue Performance of Key Segments - The report highlights that the revenue for the foundry segment is showing strong growth, with TSMC leading the market [30][33]. - The analog IC segment also shows positive growth trends, indicating a robust demand in the market [30][42].

Investment Rating - The industry investment rating is "Buy" [2] Core Views - The growth rate of life insurance premiums for listed insurance companies has generally narrowed, which is in line with market expectations. However, the impact of demand front-loading is gradually dissipating. For the period from January to November, the year-on-year growth rates of original premiums for Ping An, China Life, New China Life, and Taikang Life were 8.5%, 4.8%, 2.1%, and 2.2%, respectively, compared to 9%, 4.9%, 1.8%, and 2.4% in the previous month. The single-month premium growth rates for November were -0.9%, +4.2%, +10.5%, and -2.2%, showing an overall improvement compared to October [2][5] - The cumulative premium growth rate of Ping An continues to lead, primarily driven by new business creation that supports renewal premium growth. Looking ahead, the reduction in the preset interest rate is expected to shift the product structure towards participating insurance, necessitating close attention to the situation of the 2025 New Year sales. Additionally, the new products driven by the interest rate reduction in 2025 are expected to improve the interest spread and value rate, promoting stable and continuous growth in value [2][5] - The growth rate of property insurance premiums continues to expand. For the same period, the year-on-year growth rates of premiums for PICC Property, Ping An Property, and Taikang Property were 5.1%, 6.8%, and 7%, respectively, compared to 4.8%, 6.5%, and 7.4% in the previous month. The single-month growth rate of auto insurance increased from 6.4% in October to 7.5% in November, benefiting mainly from policies promoting scrapping and replacement [2][5] Summary by Sections Life Insurance - The year-on-year growth rates of original premiums for major life insurance companies have shown a narrowing trend, with Ping An leading in cumulative premium growth due to strong new business performance [2][5] - The impact of demand front-loading is diminishing, and the base from the previous year is relatively low due to regulatory changes [2][5] Property Insurance - The property insurance premium growth rates have shown a consistent expansion, with notable increases in both auto and non-auto insurance segments [2][5] - The growth in auto insurance is supported by rising vehicle sales and favorable policies, while non-auto insurance growth is driven by low base effects [2][5] Investment Recommendations - The report suggests maintaining a "Buy" rating for the insurance sector, highlighting the favorable conditions for profit growth and the current low valuation levels of insurance stocks. Specific stock recommendations include China Taikang, China Life, and Ping An [2][5]

Investment Rating - The industry investment rating is "Buy" [3] Core Insights - The banking sector overall declined by 0.5%, underperforming the Wind All A index, with state-owned banks showing a slight increase of 0.4% while other categories like joint-stock banks and rural commercial banks experienced declines [2][51] - The report indicates that the performance of H-shares in the banking sector outperformed A-shares, with H-share banks rising by 0.8% [2][51] - The average price of bank convertible bonds increased by 0.45%, but this was still 1.33 percentage points lower than the performance of the China Securities convertible bond index [2][52] - Earnings growth expectations for A-share banks in 2024 remain largely unchanged compared to previous forecasts [2][52] Summary by Sections 1. Current Observation - The observation period is from December 9 to December 13, 2024, with data sourced from Wind [2][51] - The banking sector's performance ranked 17th among all industries, indicating a weaker performance compared to the overall market [2][51] 2. Investment Recommendations - Concerns regarding the impact of bond market supply on year-end interbank liquidity are alleviated, as recent interest rates have significantly decreased due to liquidity easing and adjustments in interbank deposit policies [2][53] - The report anticipates that credit demand may be less robust than in previous cycles, but the direct impact on terminal demand could be stronger, suggesting a different elasticity relationship between volume and price compared to past cycles [2][53][54] 3. Sector Performance - The banking sector's overall decline of 0.5% was noted, with state-owned banks performing better than other categories [2][51] 4. Individual Stock Performance - The top-performing A-share banks included Ruifeng Bank (+1.92%), Bank of China (+1.57%), and Beijing Bank (+1.21%), while the worst performers were Yunnan Rural Commercial Bank (-2.94%) and Xiamen Bank (-2.64%) [2][51] 5. Convertible Bond Performance - The average price of bank convertible bonds rose by 0.45%, with specific bonds like Chongqing Bank's convertible bond facing a potential redemption condition based on stock price performance [2][52] 6. Earnings Forecast Tracking - The earnings growth rate for A-share banks in 2024 is expected to remain stable, with only minor adjustments noted for a few banks [2][52]

Investment Rating - The industry investment rating is "Buy" [5] Core Viewpoints - Credo reported record revenue for FY25Q2, with a year-over-year increase of 63.6% and a quarter-over-quarter increase of 20.6%, driven primarily by the growth in AEC business demand [25][26] - The company expects FY25 revenue to grow by 100% or more year-over-year, and FY26 revenue to achieve approximately 50% year-over-year growth [25][26] - AEC products are expected to see accelerated demand in data center short-distance interconnections, with specific applications identified in major companies like Amazon and NVIDIA [27][28] Summary by Sections 1. Core Viewpoints - Credo's FY25Q2 revenue reached $72.034 million, marking a record high, with significant contributions from AEC business [25] - The company anticipates FY25Q3 revenue between $115 million and $125 million, representing a 67% quarter-over-quarter growth [25] - AEC technology offers advantages in power consumption, deployment flexibility, and cost compared to traditional DAC and AOC solutions [26][27] 2. Industry Data Updates - As of the end of 2023, China has built 3.377 million 5G base stations, a net increase of 1.065 million from the previous year, accounting for 29.1% of total mobile base stations [52] - In October 2024, domestic smartphone shipments reached 29.674 million units, with 5G smartphones accounting for 90.1% of the total [54] - The number of 5G users in China reached 5.46 billion as of October 2024, with significant growth in mobile internet traffic [59][72] 3. Market Performance - The communication sector outperformed the CSI 300 index by 2.92 percentage points this week, with a sector increase of 1.91% [30] - The communication sector has shown a year-to-date increase of 28.2%, significantly outperforming the CSI 300 index [33] 4. Recommendations - The report suggests focusing on companies like Ruikeda, Zhaolong Interconnect, and Xinyi Sheng, which are positioned to benefit from the growing AEC market demand [28]

Investment Rating - The industry investment rating is "Buy" [4] Core Views - M1 growth has significantly rebounded, supported by the acceleration of demand deposits, with a month-on-month increase of CNY 1.58 trillion in November, leading to a 2.4 percentage point rise in M1 growth to -3.7% [1][27] - Social financing growth remained stable month-on-month, with credit increment continuing its previous weak trend, primarily due to policies supporting fiscal debt and consumption stimulation, which have improved corporate liquidity but have a slower impact on credit demand compared to project investments [1][2] - The government debt issuance has increased, with net financing of CNY 1.31 trillion in November, reflecting a year-on-year increase of CNY 0.16 trillion [2] - The demand for medium- and long-term loans from residents has improved, with an increase of CNY 0.07 trillion in November, likely due to the ongoing recovery in the real estate market [2] - Corporate liquidity has further improved, with corporate deposits increasing by CNY 1.07 trillion year-on-year in November [3] Summary by Sections Overall Situation - M1 growth rebounded significantly, with a month-on-month increase in demand deposits contributing to a rise in M1 growth to -3.7% [1][27] Government Sector - Government debt issuance accelerated, with net financing of CNY 1.31 trillion in November, reflecting a year-on-year increase of CNY 0.16 trillion [2] Resident Sector - Medium- and long-term loan demand from residents improved, with an increase of CNY 0.07 trillion in November, attributed to the recovery in the real estate market [2] Corporate Sector - Corporate liquidity improved, with corporate deposits increasing by CNY 1.07 trillion year-on-year in November [3] Non-Bank Sector - Non-bank deposits showed a significant decrease, as the arbitrage space between interbank deposits and general deposits shrank [3]

Investment Rating - The investment rating for the company is "Buy-A/Buy-H" [1] Core Views - The report emphasizes that the investment logic for bank stocks will shift from dividend logic to recovery logic by 2025, with companies like China Merchants Bank (CMB) being sensitive to economic recovery [13][36] - The report highlights several key factors driving the positive outlook for CMB, including a rebound in consumer demand, improved deposit dynamics, a favorable capital market environment, and resilient non-interest income [14][37][201] Summary by Sections Introduction - The report discusses the significant changes in the domestic and international policy and economic environment since Q3 2024, indicating a positive shift in policy direction and the potential for economic recovery [36][171] Value Banking: Profitability Across Cycles - CMB has maintained a leading position in return on equity (ROE) among peers, benefiting from a strong retail banking focus and effective risk management [72][117] - The bank's low-cost funding and high-quality non-interest income contribute to its robust profitability [72][117] Economic Recovery and CMB's Potential for Excess Returns - The report anticipates a recovery in retail demand and credit growth as economic policies take effect, particularly in key regions like the Yangtze River Delta and the Pearl River Delta [37][173] - CMB's deposit structure is expected to improve, with a projected increase in the proportion of demand deposits, positively impacting net interest margins [14][195] - The capital market is expected to recover, leading to a rebound in wealth management income, which is a significant contributor to CMB's revenue [201][202] Profit Forecast and Investment Recommendations - The report forecasts a net profit growth of 0.32% and 1.95% for 2024 and 2025, respectively, with earnings per share (EPS) projected at 5.65 and 5.76 CNY [231] - The report maintains a target price of 55.63 CNY for A-shares and 54.91 HKD for H-shares, suggesting a favorable valuation compared to current market prices [231][232]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 14.82 CNY per share, indicating an upside potential from the current price of 12.83 CNY per share [4]. Core Views - The company has been selected for a project with China Mobile for the development of integrated terminal chips, with a contract value of 31.06 million CNY, which is expected to enhance its collaboration in the Beidou field [2][3]. - The company is expanding its presence in the civilian market, particularly in satellite communication and low-altitude economy scenarios, leveraging its comprehensive industry chain layout [3]. - Earnings per share (EPS) forecasts for 2024, 2025, and 2026 are projected to be 0.19 CNY, 0.37 CNY, and 0.52 CNY respectively, reflecting a positive outlook driven by advancements in aerospace information technology and the Beidou system [3]. Summary by Sections Investment Rating - Current Price: 12.83 CNY - Target Price: 14.82 CNY - Previous Rating: Buy - Report Date: December 13, 2024 [4]. Project and Collaboration - The company has been awarded a contract for the development of integrated terminal chips, which is expected to accelerate its collaboration with China Mobile in the Beidou sector [2][3]. Market Expansion - The company is focusing on the civilian market, particularly in satellite communication and low-altitude economy, with a full industry chain layout that includes chips, modules, antennas, and terminals [3]. Financial Forecast - Projected EPS for 2024, 2025, and 2026 are 0.19 CNY, 0.37 CNY, and 0.52 CNY respectively, indicating growth potential [3].

Investment Rating - The industry investment rating is "Buy" [4] Core Insights - The Central Economic Work Conference has set the policy framework for the coming year, emphasizing a more proactive fiscal policy and moderately loose monetary policy, which is expected to stabilize market expectations and boost domestic demand [1][2] - Continuous deepening of capital market investment and financing reforms is highlighted, with a focus on enhancing the role and function of the capital market, aiming to facilitate the entry of long-term funds [2] - The report suggests that the policy shift will create opportunities for growth in the capital market, particularly benefiting the brokerage sector and the asset side of insurance companies [2] Summary by Sections Policy Framework - The Central Economic Work Conference emphasized the need for timely and effective policy implementation to stabilize the economy and enhance market confidence [1] - The focus is on early and concrete actions to ensure sufficient policy strength in response to external pressures [1] Capital Market Reforms - The report notes that the capital market is expected to play a crucial role in stabilizing economic expectations and boosting domestic demand [2] - Reforms are anticipated to ease restrictions on IPOs and refinancing, with a gradual increase in the number of IPOs expected in 2024 [2] - There is a strong push to channel long-term funds from social security, insurance, and wealth management into the capital market [2] Investment Recommendations - The report recommends focusing on brokerage firms and insurance companies, as the policy changes are likely to enhance their profitability and valuation recovery [2] - Specific stocks to watch include Dongfang Caifu, Tonghuashun, Huatai Securities, CITIC Securities, Guotai Junan, Zhongjin Company, China Galaxy, and招商证券 [2] - For insurance companies, attention is drawn to China Pacific Insurance, New China Life, China Taiping, China Life, Ping An, and China Property Insurance, as the equity market recovery is expected to benefit their asset side [2]

Investment Rating - The report rates the industry as "Overweight" with a focus on domestic ship power leaders such as China Power [3]. Core Viewpoints - The shipbuilding industry exhibits strong cyclical characteristics, with maintenance services extending the upward trend of the industry. The value of low-speed engines accounts for approximately 10% to 15% of total shipbuilding costs, driven by new ship orders and the increasing penetration of high-value dual-fuel engines [3][240]. - The maintenance market for low-speed engines is expected to gradually concentrate among leading manufacturers, as shipowners pursue both technical reliability and cost-effectiveness [3][242]. - The optimization of lifecycle costs is crucial for achieving a win-win situation between shipowners and maintenance providers, with innovative service models being developed [3][243]. - Maintenance services are characterized by light assets, high margins, and sustainability, providing cash flow support during downturns in the shipbuilding cycle [3][244]. Summary by Sections 1. Ship Diesel Engine Maintenance: Broad Space, High Value, Long Prosperity - Low-speed engines are the main power systems for maritime transport, accounting for 10% to 15% of shipbuilding costs [67]. - Regular maintenance is essential for the longevity and performance of ship equipment, with maintenance costs often being 1 to 2 times the purchase costs [3][79]. 2. Learning from Others: Optimizing Lifecycle Costs for Mutual Benefits - MAN Energy Solutions leads in market share and has established a comprehensive service network to support its products [99][100]. - Wärtsilä's lifecycle agreements are a key growth driver in marine services, with a significant increase in service orders and net sales [126][128]. 3. Competitive Landscape: Global Network, Advanced Technology, and Cost Advantages - The maintenance market is dominated by patent holders, manufacturers, and authorized service providers, with a focus on reliability and economic efficiency [165][169]. - Manufacturers are increasingly becoming the preferred choice for shipowners due to their reliability and cost advantages [184]. 4. Navigating Cycles: Maintenance Business Smooths Cycles and Enhances Efficiency - The maintenance business provides cash flow support during downturns, helping companies navigate through challenging periods [244][220]. - The integration of upstream design and downstream services is essential for enhancing competitiveness in the shipbuilding industry [233][234]. 5. Investment Recommendations - The report suggests focusing on domestic ship power leaders like China Power, benefiting from the ongoing improvement in the shipbuilding industry and the transition to low-carbon shipping [3][240].