Industry Investment Rating - The investment rating for the beer and beverage industry is "Buy" [1]. Core Insights - The beer market is experiencing a further decline in demand, awaiting improvement. The overall industry review indicates a sequential weakening with low demand, as the beer production in Q3 2024 decreased by 4.4% year-on-year, consistent with the decline in Q2 2024. The revenue and sales volume of major A-share beer companies also saw a decline in Q3 2024, with revenue down by 3.3% and sales volume down by 3.0% year-on-year [1][7][11]. - The beverage sector is under pressure, with only Dongpeng Beverage showing significant growth. The overall revenue of beverage companies declined in Q3 2024, but Dongpeng maintained rapid growth. The industry is facing cost pressures, leading to increased sales expenses, which in turn suppresses the transmission of cost benefits to net profits [1][7][11]. Summary by Sections Beer: Market Demand Further Declines, Awaiting Improvement - **Industry Overview**: The beer production in Q3 2024 was 10.214 million kiloliters, down 4.4% year-on-year, reflecting a sequential decline in demand [7][11]. - **Volume and Price**: Sales volume and price per ton are under pressure. The main factors affecting beer consumption include weak dining demand and increased rainfall. Only Zhujiang and Yanjing achieved positive sales growth in Q3 2024, while Qingdao, Chongqing, and Budweiser faced declines [1][22]. - **Cost & Expenses**: There is still a margin for profit, but the elasticity of gross profit margins is shrinking. The price of barley continues to decline, while aluminum prices are rising, impacting the gross margin expansion of beer companies [1][7]. Beverage: Industry Demand Under Pressure, Dongpeng Stands Out - The beverage sector's revenue generally declined in Q3 2024, with Dongpeng Beverage being the exception, showing significant growth. The industry continues to face cost pressures, leading to increased sales expenses, which suppresses the transmission of cost benefits to net profits [1][7]. Investment Recommendations: Seize Scarce High-Prosperity Targets - The report suggests focusing on scarce high-prosperity targets, as companies with strong fundamentals continue to perform well despite market uncertainties. Key recommendations include Yanjing Beer, Dongpeng Beverage, and Master Kong Holdings, with additional attention to Qingdao Beer, Chongqing Beer, and China Resources Beer if consumer upgrades and cyclical reversals occur [1][7].

Investment Rating - The report rates the defense and military industry as "Buy" [2] Core Viewpoints - The consensus on the end of the small cycle adjustment in the industry has increased, and marginal improvements in the sector's prosperity are expected. The defense and military sector experienced a year-on-year revenue decline of 47% and a net profit decline of 14% in Q3 2024, ranking among the bottom third of 30 industry indices. However, the stock performance of leading companies like AVIC Shenyang Aircraft Corporation and Aero Engine Corporation has shown positive trends post-earnings disclosure, indicating a potential recovery [2][8] - The report emphasizes the importance of seeking certainty amid uncertainty, focusing on performance, structure, and policy support as core factors. Major military groups are holding quarterly operational meetings to strive for annual targets, with expectations for better performance in Q4 2024 and 2025 due to improved delivery and the conclusion of the 14th Five-Year Plan [2][8] - The report highlights three main investment lines: 1) Large aircraft and civil ship sectors with military trade growth potential; 2) Technology-driven sectors such as semiconductor chips and new materials; 3) Recovery in core businesses alongside satellite internet and low-altitude economy growth [9][10] Summary by Sections Weekly Insights - The consensus on the end of the small cycle adjustment in the defense and military sector has increased, with expectations for marginal improvements in performance [8] - The report notes that active funds have increased their holdings in the military sector for two consecutive quarters, indicating a positive outlook [8] Market Performance - The report provides insights into the performance of leading companies and the overall market trends within the defense and military sector [8] Valuation Analysis - The report includes a detailed valuation analysis of various companies within the sector, highlighting their earnings per share (EPS) and price-to-earnings (PE) ratios for 2024 and 2025 [3][4] Holdings Analysis - As of Q3 2024, the defense sector's heavy holdings accounted for 3.58% of active fund portfolios, indicating a significant interest in the sector [4] Investment Recommendations - The report suggests a low-valuation strategy, focusing on companies like Aero Engine Corporation, AVIC Heavy Machinery, and AVIC Xi'an Aircraft Industry Group, among others, as potential investment opportunities [10]

Investment Rating - The report rates the defense and military industry as "Buy" for specific companies and "Hold" for others, indicating a positive outlook on the sector's growth potential [3]. Core Insights - The low-altitude communication system is identified as the foundational infrastructure for the digitalization of the low-altitude economy, with current infrastructure being relatively weak. The basic scenarios for low-altitude communication can be categorized into command control communication, data transmission communication, and auxiliary access communication, each with varying requirements for bandwidth and latency [2][17]. - The perception capabilities required for low-altitude flight are more complex than those for traditional civil aviation due to the increased environmental complexity. Key aspects include obstacle avoidance, navigation and positioning, and meteorological services [2][26]. - Current technological pathways for low-altitude communication and perception include ADS-B, 5G-A, surveillance radar, and navigation systems centered around Beidou. These technologies are crucial for enhancing low-altitude traffic management and communication capabilities [2][19]. - The report anticipates that the integration of various technologies and the development of satellite internet and millimeter-wave technology will empower low-altitude communication and perception in the medium to long term [2][5]. Summary by Sections Introduction - The realization of communication, navigation, and surveillance (CNS) functions is a core goal for constructing low-altitude infrastructure, which is essential for the development of the low-altitude economy [13][14]. Communication Needs - The demand for low-altitude communication is evolving, with applications expanding to include command control, data transmission, and auxiliary access. Different scenarios require specific performance metrics, such as Mbps-level upload rates and low latency [17][19]. Perception Requirements - Low-altitude flight necessitates advanced perception capabilities, including obstacle avoidance, which is critical for ensuring safety in complex environments. The need for high-precision navigation and reliable meteorological services is also emphasized [26][27]. Technological Pathways - The report outlines key technologies for achieving low-altitude communication and perception, including ADS-B for air traffic management, 5G-A for integrated sensing and communication, and advanced radar systems for monitoring low-altitude targets [2][19]. Outlook - The report reviews the iterative upgrades of the UTM system by NASA, highlighting that multi-modal monitoring data and communication capabilities are key drivers for enhancing low-altitude traffic management. It suggests that policy planning at the provincial level will accelerate technological development [2][5]. Investment Recommendations - The report recommends focusing on leading companies in the domestic low-altitude industry, including those in air traffic management and materials, as well as manufacturers of complete systems and core subsystems [2][3].

Investment Rating - The report rates the basic chemical industry as "Buy" [2] Core Viewpoints - In Q3 2024, the overall net profit growth of the industry declined quarter-on-quarter, with significant absolute profit increases in sectors such as food and feed additives and phosphorus chemicals. The revenue growth rate (year-on-year) for Q3 2024 was -0.23%, a decrease of 4.90 percentage points quarter-on-quarter. The net profit growth rate (year-on-year) for Q3 2024 was -22.14%, down 24.60 percentage points from Q2 2024. The absolute net profit for Q3 2024 decreased by 26.31% quarter-on-quarter, with notable increases in food and feed additives and phosphorus fertilizers [2][9][11]. Summary by Sections Revenue and Profit - The revenue growth rate for the basic chemical industry in Q3 2024 decreased by 0.23% year-on-year and fell by 4.90 percentage points quarter-on-quarter. Most sub-industries experienced a decline in revenue growth rates [9][11]. - The net profit growth rate for Q3 2024 was -22.14% year-on-year, with a quarter-on-quarter decline of 24.60 percentage points [11][12]. - Absolute net profit for Q3 2024 was 33.196 billion CNY, reflecting a quarter-on-quarter decrease of 26.31% and a year-on-year decrease of 22.14% [17]. Profitability - The industry’s overall ROE (Return on Equity) for Q3 2024 was 1.33%, showing a slight decline quarter-on-quarter and year-on-year [24][26]. - The gross profit margin for Q3 2024 was 15.42%, slightly up from Q2 2024 but down from Q3 2023 [21][22]. Operational Quality - The asset-liability ratio for Q3 2024 showed a slight increase, while inventory levels decreased and cash flow improved [9][11]. - The net cash ratio improved, indicating better liquidity in the industry [9][11]. Investment - Capital expenditure in Q3 2024 was 85.7 billion CNY, reflecting a quarter-on-quarter decrease of 0.7% [9][11]. - The proportion of investment cash flow to operating income increased, with many sub-industries showing a rise in investment cash flow quarter-on-quarter [9][11]. R&D - R&D expenses decreased by 3.73% year-on-year in Q3 2024, with the R&D expense ratio remaining stable at 2.53% [9][11]. Sub-industry Selection and Investment Recommendations - The report suggests focusing on sub-industries with improving indicators, such as carbon fiber, food and feed additives, and phosphorus chemicals, which showed positive trends in both revenue and profit growth [19][20].

Investment Rating - The industry rating is "Hold" as of November 3, 2024 [4]. Core Insights - The home appliance sector's Q3 2024 total revenue reached 357.1 billion yuan, a year-on-year increase of 1.7%, with a net profit of 31.3 billion yuan, reflecting a 0.7% increase year-on-year. The gross margin was 26.4%, down 1.5 percentage points year-on-year, and the net profit margin was 8.8%, down 0.1 percentage points year-on-year [2][15][17]. - Revenue is expected to improve in Q4 2024, driven by policy support and promotional activities, with domestic sales likely to recover following a 10.5% year-on-year increase in retail sales in Q3 [2][16]. - The profitability of the sector has declined for the first time in three years, with the gross margin and net profit margin both decreasing. However, white goods have shown resilience with a net profit margin increase of 0.8 percentage points [2][17]. Summary by Sections Investment Recommendations - White goods are expected to maintain stable growth, benefiting from the trade-in policy. Recommended stocks include Haier Smart Home, Hisense Home Appliances, and Gree Electric. Companies like Hisense Visual, Boss Appliances, and Roborock are also expected to benefit from the recovery in domestic demand [3][20]. Weekly Market Review (October 28 - November 1, 2024) - The Shanghai and Shenzhen 300 index fell by 1.7%, while the home appliance sector index dropped by 2.9%. The black appliance index rose by 16.1%, and the white appliance index fell by 4.5% [3][21]. Industry Performance Data - For Q1-Q3 2024, the sector's total revenue was 1,085 billion yuan, up 5.3% year-on-year, with a net profit of 95.5 billion yuan, up 7.7% year-on-year. The gross margin was 26.8%, down 0.2 percentage points year-on-year, and the net profit margin was 8.8%, up 0.2 percentage points year-on-year [15][18]. Sales Data Overview - In the week of October 21-27, 2024, significant year-on-year increases were observed in offline and online sales across major appliance categories, including air conditioners (offline +82.2%, online +47.1%), refrigerators (offline +79.5%, online +72.3%), and washing machines (offline +68.7%, online +68.4%) [22][23]. Price Trends - As of November 2024, the prices of major panel sizes have slightly decreased, indicating potential cost pressures in the industry [10]. Company Performance - The report covers 62 listed companies in the home appliance sector, with specific mentions of white goods, kitchen appliances, small appliances, and black appliances, highlighting their respective performances and market positions [14][20].

Investment Rating - The industry investment rating is "Hold" [1] Core Viewpoints - The Ministry of Industry and Information Technology released the "Implementation Measures for Cement and Glass Industry Capacity Replacement (2024 Edition)" on October 31, which tightens cement replacement requirements and aims for a new round of supply-side reform focused on capacity optimization. The cement and glass industry is expected to benefit from this policy, with potential valuation recovery as the real estate market stabilizes [2][10][12] - The report suggests actively monitoring growth-oriented and highly valued consumer building materials, as well as leading companies in cement and glass that are showing positive changes in supply [2][12] - The report highlights the resilience of leading companies in the consumer building materials sector, which are expected to have significant long-term growth potential despite the current downturn in the real estate market [2][12] Summary by Sections Cement and Glass Capacity Replacement - The new measures prohibit the replacement of low-efficiency capacity and require alignment between registered and actual capacity, which may lead to the exit of inefficient small capacities [10][11][12] - The cement industry is expected to see a reduction in low-efficiency production lines, particularly those below 2500 tons, which are often unprofitable and may be phased out [12] Consumer Building Materials - The consumer building materials sector is supported by stable long-term demand and increasing industry concentration, with leading companies showing strong operational resilience [2][12] - Key companies to watch include SanKeTree, Rabbit Baby, Beixin Building Materials, and others, which are expected to perform well despite the current market conditions [2][12] Cement Prices - As of November 1, 2024, the national average cement price is 417 RMB/ton, showing a month-on-month increase of 5.66 RMB/ton and a year-on-year increase of 44.33% [2] - The report anticipates continued price increases in the cement market, with major players like Conch Cement and Huaxin Cement being highlighted for their potential [2][12] Glass and Fiberglass - The fiberglass market is currently experiencing weak price stabilization, while the electronic yarn market remains steady [2][12] - The average price of float glass as of November 1, 2024, is 1368 RMB/ton, with a month-on-month increase of 7.8% but a year-on-year decrease of 34.8% [2][12] - Leading glass companies are expected to benefit from improved demand and reduced supply, with companies like Qibin Group and Shandong Yaobang being noted for their low valuations [2][12]

Investment Rating - The industry investment rating is "Buy" [1] Core Views - The performance of the eight major state-owned construction enterprises is under pressure, with revenue declining by 3.9% year-on-year in the first three quarters of 2024, and a 7.4% decline in Q3 2024. The net profit attributable to shareholders decreased by 9.8% in the first three quarters and by 15.2% in Q3 [1][12][13] - The cash flow situation is under pressure, with a significant increase in the cash payment ratio compared to cash receipts, indicating a worsening cash flow environment [1][8] - The report highlights the differentiation in performance among state-owned enterprises, with some showing resilience in cash flow and profitability, particularly in specialized engineering sectors [1][8] Summary by Sections Section 1: Performance Differentiation of State-Owned Enterprises - The report emphasizes the need to focus on asset recovery, overseas expansion, and equipment upgrades as new growth drivers for state-owned enterprises [1][8] Section 2: First-Level State-Owned Enterprises - The eight major state-owned construction enterprises achieved a total revenue of 5 trillion yuan in the first three quarters of 2024, with a year-on-year decline of 3.9%, which is less than the overall construction sector's decline of 4.9% [12] - In Q3 2024, their revenue was 1.6 trillion yuan, down 7.4% year-on-year, again outperforming the overall sector [12] Section 3: Second-Level State-Owned Enterprises - The second-level state-owned enterprises showed a mixed performance, with some companies like China Steel International and China Nuclear Construction improving their cash flow significantly [1][8] Section 4: Investment Recommendations - The report recommends focusing on state-owned enterprises with strong asset recovery potential and those benefiting from equipment upgrade policies, suggesting specific companies such as China Railway Construction and China Communications Construction [1][8]

Investment Rating - The report maintains a "Buy" rating for the real estate industry as of November 3, 2024 [2]. Core Insights - The real estate market is experiencing a downward trend in sales, with state-owned enterprises showing relative stability compared to private firms. In September 2024, the top 100 real estate companies achieved sales of 273.6 billion yuan, a year-on-year decline of 38.1%, with the decline expanding by 10.3 percentage points month-on-month [10][23]. - The market is expected to stabilize due to government policies aimed at preventing further declines, which may catalyze improvements in market fundamentals and corporate valuations [1][2]. Summary by Sections 1. Sales Performance - The sales performance of real estate companies is under pressure, with state-owned enterprises performing better than private firms. In September 2024, the sales amount for key listed companies was 181.4 billion yuan, down 40.3% year-on-year, with a month-on-month decline of 12.1 percentage points [10][23]. - The new opening absorption rate in key cities fell to a historical low of 38% in September 2024, indicating increased difficulty for companies in selling their inventory [12]. 2. Land Acquisition - There was a marginal improvement in land acquisition, with 44 sample companies acquiring land worth 32.6 billion yuan in September 2024, a month-on-month increase of 257% [2]. - The average gross profit margin for land acquisition among 12 major companies was 29%, reflecting an 8 percentage point increase month-on-month [2]. 3. Financing - Overall financing for real estate companies reached 150.4 billion yuan in September 2024, a month-on-month increase of 5% but a year-on-year decrease of 11% [2]. - The average financing cost for domestic bonds was 2.91%, reflecting a month-on-month increase of 44 basis points [2]. 4. Valuation and Investment Recommendations - The report notes a divergence in performance among real estate companies, with overall sector valuations recovering. The report suggests focusing on the continued recovery of fundamental performance and the valuation repair of key real estate companies [2][10]. 5. Price Trends - The average selling price for tracked companies in September 2024 was 17,417 yuan per square meter, a year-on-year decrease of 8.4% [16]. - The average selling price for the top 100 companies was 17,914 yuan per square meter, showing a year-on-year increase of 6.1% [16]. 6. Company Recommendations - The report includes a list of recommended stocks within the real estate sector, all rated as "Buy," indicating a positive outlook for these companies [5].

Investment Rating - The report maintains a "Buy" rating for key companies in the liquor industry, including Guizhou Moutai, Shanxi Fenjiu, and others [4]. Core Insights - The liquor industry is experiencing a downward trend in revenue growth due to weak demand during traditional peak seasons like the Mid-Autumn Festival and National Day. High-end liquor shows slight growth, while mid-range and other categories face significant declines [1][9]. - The overall revenue growth for high-end liquor companies remains stable, with Guizhou Moutai leading the sector. However, mid-range liquor is under pressure, and real estate liquor is facing substantial negative growth [2][9]. - Profit margins are generally stable, but there is a noticeable divergence across different price segments, with high-end liquor maintaining strong margins while mid-range and real estate liquor experience declines [2][23]. Summary by Sections 1. Q3 2024 Overview - Q3 is traditionally a peak season for the liquor industry, but this year has seen weak demand, leading to a continued decline in overall revenue growth. High-end liquor shows slight increases, while mid-range and real estate liquor face significant negative growth pressures [1][9]. 2. Financial Report Analysis (a) Volume and Price Performance - The overall production continues to decline, but the rate of decline is slowing due to improved competition dynamics. High-end liquor prices are under pressure due to weak demand in business and gifting sectors [13][14]. (b) Revenue Analysis - High-end liquor companies achieved a combined revenue of CNY 215.34 billion in the first three quarters, a year-on-year increase of 13.5%. In Q3 alone, revenue reached CNY 64.34 billion, up 9.6% [2][18]. - Mid-range liquor saw a revenue decline of 0.4% in Q3, while real estate liquor experienced a significant drop of 17.6% [2][19]. (c) Profit Analysis - The average gross margin for the liquor sector was 81.4% in Q3, showing a slight year-on-year increase. High-end liquor margins remain stable, while mid-range and real estate liquor margins are under pressure [23][25]. (d) Cash Flow and Advance Payments - Sales collection aligns with revenue trends, with high-end liquor companies showing strong performance. However, advance payments have decreased due to weak demand and low confidence among distributors [3][19]. (e) Performance Expectations - Profit forecasts have been generally downgraded due to weak demand, with high-end liquor expected to meet annual targets, while mid-range and real estate liquor face downward adjustments [3][19]. 3. Investment Recommendations - The report suggests that Q4 will be a slow season for liquor consumption, with expectations for a recovery in demand around the upcoming Spring Festival. Key recommendations include Guizhou Moutai, Shanxi Fenjiu, and others [3][19].

Industry Rating - The industry rating is **Buy**, maintaining the previous rating of Buy [1] Core Views - The sportswear and footwear downstream brand retail industry faced pressure in Q3 2024 but remained resilient, with domestic leading brands maintaining healthy and controllable inventory levels [2] - The upstream sportswear and footwear manufacturing industry continued to grow in Q1-Q3 2024, with some companies showing performance divergence in Q3 [3] Downstream Brand Retail Industry - In Q3 2024, Anta's main brand saw mid-single-digit year-on-year growth in retail sales, while FILA experienced low-single-digit decline [2] - Li Ning's main brand saw a mid-single-digit decline, while Xtep achieved mid-single-digit growth [2] - 361 Degrees' main brand offline sales grew by approximately 10%, and its children's line also grew by 10% [2] - Pou Sheng International's net operating income decreased by 10.8% year-on-year, and China Dongxiang's sales declined by high-single digits [2] - Overall, the sportswear brand retail industry saw a slowdown in Q3, primarily due to reduced foot traffic, but inventory levels remained healthy [2] Upstream Manufacturing Industry - In Q1-Q3 2024, the sportswear manufacturing industry achieved revenue of 67.07 billion yuan, a 10.6% year-on-year increase, and net profit of 4.25 billion yuan, a 20.4% year-on-year increase [3] - In Q3 2024, the manufacturing industry (excluding Shenzhou International) achieved revenue of 23.55 billion yuan, a 14.0% year-on-year increase, and net profit of 1.38 billion yuan, a 5.1% year-on-year increase [3] - Companies like Huali Group and Zhiqiang International saw growth in revenue and net profit, while Fengtai Enterprise and Yueqi International experienced declines [3] Investment Recommendations - For the downstream brand retail industry, focus on leading companies like Anta Sports, Li Ning, and Xtep International, which are expected to maintain high industry prosperity and healthy inventory levels [3] - For the upstream manufacturing industry, despite uncertainties in U.S. trade policies, leading companies like Huali Group and Shenzhou International are expected to maintain steady growth due to their strong competitiveness and global capacity layout [3] Market Performance - In Q3 2024, the sportswear brand retail sector slightly outperformed the Hang Seng Index, with the sector rising 19.9% compared to the Hang Seng's 19.3% [10] - The sector's performance was driven by government policies aimed at stimulating economic and consumption growth, which boosted investor confidence [10]