Investment Rating - The industry investment rating is "Buy" [1] Core Viewpoints - The Politburo meeting held on September 26 emphasized the unchanged favorable conditions for China's economy, including strong resilience and potential. It also highlighted the need for effective implementation of existing policies and the introduction of new measures to address emerging economic issues [3] - The meeting called for increased counter-cyclical adjustments in fiscal and monetary policies, including lowering the reserve requirement ratio and implementing significant interest rate cuts. It also stressed the importance of government investment through special bonds to stimulate the economy [3] - The report suggests a focus on four industry chains: (1) undervalued housing construction chain, recommending companies like China State Construction and Anhui Construction; (2) effective demand, with recommendations for China Communications Construction and China Electric Power Construction; (3) international engineering, benefiting from overseas investments, recommending China Steel International; (4) domestic cyclical demand, recommending companies like Honglu Steel Structure and Huatie Emergency [3] Summary by Sections Industry Overview - The report discusses the need for policies to stabilize the real estate market, including adjustments to housing purchase restrictions and lowering existing mortgage rates. These measures aim to improve the supply-demand structure in the real estate market [3] Investment Recommendations - The report recommends focusing on low-valuation housing construction leaders, effective demand enhancement, international engineering opportunities, and domestic cyclical recovery [3] Company Ratings - Specific companies are rated as "Buy," including: - China State Construction (601668.SH) with a target price of 5.92 CNY - China Railway (601390.SH) with a target price of 6.64 CNY - China Railway Construction (601186.SH) with a target price of 8.02 CNY - China Communications Construction (601800.SH) with a target price of 9.82 CNY - China Electric Power Construction (601669.SH) with a target price of 7.50 CNY - China Chemical (601117.SH) with a target price of 7.81 CNY - China National Materials (600970.SH) with a target price of 13.77 CNY - China Steel International (000928.SZ) with a target price of 7.76 CNY - Honglu Steel Structure (002541.SZ) with a target price of 13.96 CNY [9][10]

Investment Rating - The industry rating is "Hold" [1] Core Viewpoints - The central government has reinforced the demand for stabilizing the real estate market, with policies being progressively implemented. The People's Bank of China announced a reduction in reserve requirements, interest rates, and down payment ratios on September 24, followed by a Politburo meeting on September 26 that emphasized the need to promote stability in the real estate market [4][5] - The real estate market is expected to see positive impacts from ongoing policy support, with further measures anticipated after October to enhance market conditions. Although supply and demand remain weak, expectations have improved, leading to potential valuation recovery in the industry [7] - The report is optimistic about a rebound in the building materials sector, citing historical instances where policy shifts led to significant price increases in building materials [10][12] Summary by Sections Central Government Policies - The central government has made clear statements regarding the need to stabilize the economy and real estate market, with specific measures to control new construction, optimize existing stock, and improve quality [5][6] - Recent policy adjustments include relaxing purchase restrictions in major cities, which are expected to positively influence market dynamics [4][5] Market Conditions - Current indicators show weak demand for building materials, with cement prices and float glass prices declining. The overall performance of the building materials sector is under pressure, with expectations of weak results reflected in the upcoming quarterly reports [7] - Despite the weak reality, valuations in the sector are at historically low levels, suggesting potential for recovery as liquidity improves and government policies continue to support the market [7] Historical Performance - The report reviews past policy shifts and their impacts on the building materials sector, noting significant price increases following policy announcements in 2022. For instance, after the April 2022 Politburo meeting, the building materials index saw cumulative gains of 3.8%, 7.6%, 15.6%, and 1.5% over subsequent weeks [10][12] - The report highlights that the consumption building materials index experienced even greater gains, indicating a strong correlation between policy support and market performance [10][12]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 6.78 CNY per share, compared to the current price of 5.98 CNY [4]. Core Insights - The company is expanding its presence in the South China tourism market by acquiring a 64% stake in Mangshan Tourism for 307 million CNY, which will increase its ownership to 84% [1]. - The company has signed a 39-year concession agreement for five projects at Danxia Mountain, further enhancing its operational footprint in the region [1]. - The Mangshan Scenic Area has a high forest coverage rate of 95% and was recognized as the first "barrier-free mountain tourism scenic area" in China [1]. - The Danxia Mountain is a national 5A-level scenic area and a UNESCO Global Geopark, indicating its significance in the tourism sector [1]. - The company aims to leverage the synergy between Mangshan and Danxia Mountain to tap into the consumer potential of the Greater Bay Area [1]. Financial Performance - The company reported a revenue of 722 million CNY in 2023, with a projected increase to 931 million CNY in 2024, reflecting a growth rate of 29% [3]. - The net profit for 2023 was 151 million CNY, expected to rise to 201 million CNY in 2024, indicating a growth rate of 32.7% [3]. - The EBITDA for 2023 was 278 million CNY, with projections of 370 million CNY for 2024 [3]. - The company anticipates a net profit of 2.01 billion CNY, 2.71 billion CNY, and 3.02 billion CNY for the years 2024, 2025, and 2026, respectively [1]. Valuation Metrics - The report suggests a price-to-earnings (P/E) ratio of 36 times for 2024, which corresponds to a reasonable value of 6.78 CNY per share [1]. - The projected earnings per share (EPS) for 2024 is 0.19 CNY, increasing to 0.28 CNY by 2026 [3].

Company Rating - Buy/Buy rating for NetEase (NTES.O) and NetEase-S (09999.HK) with a current price of $86.98/133.10 HKD and a fair value of $132.34/206.01 HKD [1] Core Views - NetEase reported 24Q2 revenue of 254.9 billion RMB, a YoY increase of 6% but a QoQ decrease of 5% [2] - Gross margin improved by 3.08 percentage points to 62.9% in 24Q2 [2] - GAAP net profit attributable to shareholders was 6.759 billion RMB, while Non-GAAP net profit was 7.819 billion RMB, with a Non-GAAP net margin of 30.68% [2] - Game-related value-added services revenue reached 200.56 billion RMB, a YoY increase of 6.7%, with mobile games contributing 76.4% of online game revenue [2] - New games such as "World Beyond," "Naraka: Bladepoint Mobile," and "Marvel Duel" contributed to performance growth [2] - The company has a strong pipeline of games, including "Marvel Rivals" and "Where Winds Meet," expected to launch within the year [2] Business Performance - Mobile games revenue grew by 16.06% YoY to 147.25 billion RMB, while PC games revenue slightly declined by 0.05% to 45.49 billion RMB [2] - Classic mobile games like "Fantasy Westward Journey" and "Identity V" maintained strong performance, with "Identity V" showing significant improvement in revenue rankings [2][9] - NetEase's Youdao segment reported a 9.54% YoY increase in revenue to 1.322 billion RMB, with a focus on AI+education driving future growth [11] - Cloud Music's H1 revenue reached 4.07 billion RMB, exceeding expectations, with a 48% YoY increase in gross profit and a 176% YoY increase in net profit [12] Financial Projections - NetEase's total revenue is projected to be 1.09 trillion RMB in 2024, 1.225 trillion RMB in 2025, and 1.336 trillion RMB in 2026 [2] - Non-GAAP net profit is expected to be 33.3 billion RMB in 2024, 37.2 billion RMB in 2025, and 40.7 billion RMB in 2026 [2] - The SOTP valuation method yields a fair value of $132.34 per ADS (US) and 206.01 HKD per share (HK) [2] Game Pipeline and Strategy - NetEase has a robust game pipeline, including "Marvel Rivals" and "Where Winds Meet," which are expected to launch within the year [2] - The return of Blizzard games in China is expected to provide additional support to the PC gaming segment [2] - Long-term growth is supported by the company's strong R&D capabilities and its ability to consistently produce high-quality games [2] Segment Valuation - The gaming segment is valued at 574.5 billion RMB based on a 20x PE multiple [16] - Youdao is valued at 3.1 billion RMB with a 1x PS multiple [17] - Cloud Music is valued at 13.2 billion RMB with a 16x PE multiple [18] - The total SOTP valuation for NetEase is 596.6 billion RMB, translating to $850 billion USD or 661.5 billion HKD [18]

Investment Rating - The report maintains a "Buy" rating for the media industry, consistent with the previous rating [1]. Core Insights - The report highlights the recent developments in AI models, including the launch of ByteDance's new Doubao AI video model and the upgrade of Google's Gemini 1.5 model [1]. - Domestic AI model products have shown varied web traffic, with Kimi leading at 5.4651 million visits, followed by Wenxin Yiyan at 4.4039 million visits, both experiencing declines [1][14]. - The report emphasizes the potential of AI to enhance various sectors such as gaming, marketing, education, and film, recommending companies like Tencent, NetEase, and Huace Film [1]. Summary by Sections Domestic AI Dynamics - According to SimilarWeb, the web traffic for major domestic AI models from September 16 to September 22, 2024, shows Kimi at 5.4651 million visits (down 6.39%), Wenxin Yiyan at 4.4039 million visits (down 10.97%), and Doubao at 3.0218 million visits (down 1.60%) [1][14]. - App download statistics indicate Kimi at 158,600 downloads (up 2.81%), while Doubao saw a significant drop to 152,090 downloads (down 24.79%) [1][15]. Overseas AI Dynamics - The report notes that ChatGPT continues to lead in web traffic among overseas AI models, with a steady increase in new domain visits, while Claude's traffic has slightly increased [1]. Investment Recommendations - The report suggests focusing on companies that leverage AI for content creation in gaming, marketing, education, and film, highlighting Tencent, NetEase, and Huace Film as key players [1].

Investment Rating - The report assigns a "Buy" rating to the company with a current price of 27.98 CNY and a fair value of 33.20 CNY [2]. Core Insights - The company plans to acquire a subsidiary of ZhiBang Technology, enhancing its capabilities in the computing power business. The acquisition will allow the company to hold a 60% stake in the joint venture, with ZhiBang holding 40% [3][11]. - The company's computing power business is expanding from servers to network devices, which is expected to enhance product and business synergy. The acquisition is anticipated to improve revenue scale and profitability, although the impact will depend on the integration process [3][11]. - The company benefits from being a major server partner of Huawei, capitalizing on the trend of domestic substitution in computing power. In the first half of 2024, the company's self-branded business revenue reached 2.66 billion CNY, a year-on-year increase of 45.5% [3][12]. - Earnings per share (EPS) are projected to be 2.0, 2.4, and 2.7 CNY for 2024, 2025, and 2026 respectively. The report gives a 17x PE ratio for 2024, corresponding to a fair value of 33.20 CNY per share [3][39]. Summary by Sections Acquisition and Business Expansion - The company signed an equity acquisition and joint cooperation agreement with ZhiBang Technology on September 27, 2024, to acquire all business entities in mainland China [11]. - The acquisition is expected to create strong synergies between the two companies, leveraging ZhiBang's network device products and the company's distribution channels [11][12]. Market Trends and Growth Drivers - The domestic switch market is projected to reach 79.6 billion CNY in 2024, with a year-on-year growth of 16.2%. The company is well-positioned to benefit from the increasing penetration of high-end switches in AI computing clusters [12][13]. - The report highlights the ongoing trend of domestic substitution in computing power products, driven by policy support and technological advancements [13][19]. Financial Projections - The company's revenue is expected to grow from 129.1 billion CNY in 2024 to 145.9 billion CNY in 2026, with a compound annual growth rate of 7.9% [39][41]. - The self-branded product segment is projected to see significant growth, with expected revenues of 2.57 billion CNY in 2024, growing at a rate of 70% [39][40]. Competitive Position - The company is a key partner in Huawei's server ecosystem, which enhances its market competitiveness and allows it to leverage Huawei's technological advancements [14][19]. - The report notes that while the self-branded business is growing rapidly, it faces challenges from product homogenization and intense competition in the market [14][16].

Investment Rating - The report assigns a "Hold" rating for the construction materials industry, consistent with the previous rating [1]. Core Viewpoints - The construction materials sector is currently facing weak demand from real estate, but there are signs of improvement in expectations. With ongoing central government support for the real estate market, the sector's valuation is expected to recover from its bottom. The industry fundamentals are anticipated to improve as real estate sales stabilize, and the continuous policy support is likely to contribute to this stabilization [2][12]. - The report highlights strong operational resilience among leading companies in the sector, particularly in retail construction materials supported by demand for second-hand and existing home renovations. Leading cyclical material companies are still showing significant excess profits at the bottom of the cycle. The report recommends focusing on growth-oriented and highly valued consumer construction materials, cement leaders with price increase catalysts, and opportunities in fiberglass leaders at the bottom of the market [2][12]. - The report identifies several key companies to watch, including Sanke Tree, Rabbit Baby, Beixin Building Materials, Weixing New Materials, China Liansu, Dongpeng Holdings, and Oriental Yuhong, among others [2]. Summary by Sections 1. Policy Support and Sector Opportunities - The report discusses a series of policies announced on September 24, 2024, aimed at supporting economic development, including a 50 basis point reduction in reserve requirements and interest rate cuts. These measures are expected to enhance liquidity and stimulate the real estate market [12]. - The political bureau meeting on September 26 emphasized the urgency of stabilizing the economy and real estate market, indicating further policy measures to support market recovery [12]. 2. Cement Sector - Cement demand has shown signs of recovery, particularly in East China, where prices have significantly increased. As of September 27, 2024, the national average cement price was 386 RMB/ton, reflecting a month-on-month increase of 4.5 RMB/ton and a year-on-year increase of 27 RMB/ton. However, the overall demand remains insufficient to stabilize the market, leading to price fluctuations [2][12]. 3. Fiberglass and Composite Materials - Fiberglass prices have stabilized, but demand for electronic yarn remains weak. As of September 26, 2024, the average price for 2400tex winding direct yarn was 3670 RMB/ton, showing a slight decrease of 0.07% month-on-month but an increase of 9.71% year-on-year. The report notes that leading companies in this sector are well-positioned [2][12]. 4. Glass Sector - The float glass market is beginning to de-stock, with improved transactions in photovoltaic glass. As of September 27, 2024, the average price for float glass was 1166 RMB/ton, down 3.5% month-on-month and down 45% year-on-year. The report suggests that leading glass companies are currently undervalued [2][12].

Investment Rating - The industry investment rating is "Buy" with a target of outperforming the market by over 10% in the next 12 months [1]. Core Insights - The report highlights a significant acceleration in premium growth for both life and property insurance, driven by factors such as lower traditional insurance interest rates and increased savings willingness among residents. The premium growth rate for life insurance companies from January to August was 16.1%, up from 13.1% in July, benefiting from demand release due to interest rate adjustments [1]. - The report indicates that the premium growth for life insurance is notably higher than that of listed insurance companies, with Ping An at 8.9%, China Life at 5.9%, and New China Life at 1.9% [1]. - For property insurance, the premium income growth rate from January to August was 5.5%, showing an increase from 4.3% in July. The report notes that the growth rate differences among listed insurers are primarily due to their focus on optimizing profitability and managing loss-making insurance types [1]. Summary by Sections Life Insurance - The premium growth rate for life insurance in August was 68.4%, significantly higher than the previous value of 16.1%, driven by lower interest rates and a favorable comparison base [1]. - Health insurance saw a monthly premium growth rate of 17.4%, up from 9.3%, attributed to strong promotional efforts by insurance companies [1]. - Universal insurance premiums decreased by 2.1% year-on-year, while investment-linked insurance premiums increased by 29.3%, showing a slight decline from the previous 33.7% [1]. Property Insurance - The premium growth for property insurance continues to accelerate, with the growth rate for auto insurance in August at 4.5%, improving from 4.1% [1]. - Non-auto insurance premium growth was 15.8%, slightly down from 17.1%, primarily due to a high comparison base [1]. - The report notes that the market share for major insurers as of the end of August was led by PICC Property & Casualty at 32.8%, followed by Ping An Property at 18.1% [1]. Investment Recommendations - The report suggests maintaining a "Buy" rating for the insurance sector, emphasizing the positive outlook for asset recovery and high profitability in the industry. Specific stocks recommended for attention include China Pacific Insurance, New China Life, China Taiping, Ping An, China Life, China Property & Casualty, and AIA [1][2].

Investment Rating - The coal mining industry is rated as "Buy" in the report [2]. Core Viewpoints - The report highlights that macroeconomic policies are favorable, leading to a stable and positive outlook for coal prices, with the sector exhibiting both value and elasticity [2][52]. - Recent market dynamics show a slight increase in thermal coal prices, with the CCI5500 thermal coal price reported at 870 RMB/ton, reflecting a week-on-week increase of 2 RMB/ton [8][52]. - The report anticipates that coal prices will maintain a stable upward trend due to improving macroeconomic expectations, seasonal increases in non-electric demand, and low inventory levels across various segments [52][54]. Market Dynamics - Thermal coal prices have continued to rise slightly, with domestic port prices increasing by 2 RMB/ton, and cumulative increases of 37 RMB/ton (+4.4%) since late August [8][25]. - The average capacity utilization rate of 100 sample thermal coal mines was reported at 87.5%, with a week-on-week increase of 0.4 percentage points [13]. - Inventory levels at major ports have decreased, with a reported 6,413,000 tons at mainstream ports, down 1.7% week-on-week [13]. Industry Outlook - The coal industry index has risen by 13.5% this week, underperforming the CSI 300 index by 2.2 percentage points, while year-to-date, the coal index has increased by 11.1%, outperforming the CSI 300 by 3.2 percentage points [52]. - The report emphasizes that the overall coal price is expected to rise slightly due to seasonal demand increases and low inventory levels, despite some supply constraints from safety inspections and maintenance [54][55]. - Key companies recommended for investment include China Shenhua, Shaanxi Coal and Chemical Industry, and others that are expected to benefit from improved demand and production recovery [2].

Investment Rating - The industry investment rating is "Buy" [1] Core Views - The policy environment for the real estate market has reached a significant turning point, with the central government emphasizing the need to stabilize the market and prevent further declines. Key measures include increasing loan support for "white list" projects, adjusting purchase restrictions, and lowering existing mortgage rates, with an expected average reduction of around 50 basis points [2][12][13] - New home transaction volumes have shown a seasonal rebound, with a week-on-week increase of 62.1% in new home sales across 51 cities, although year-on-year figures remain down by 33.7%. The second-hand housing market also saw a rise, with a 51.4% increase in transaction volumes week-on-week [2][20][25] - The land market is experiencing a narrowing decline in transaction volumes, with a year-on-year decrease of 18.2% in land sales revenue for September 2024 [2][12] Summary by Sections 1. Policy and Market Tracking - The central government has called for measures to stabilize the real estate market, including increasing loan support and adjusting housing purchase policies. The average reduction in existing mortgage rates is projected to be around 50 basis points, with the down payment ratio for second homes lowered to 15% [12][13] - Local policies have also been implemented, such as the cancellation of purchase restrictions in Guangzhou's Nansha District and the establishment of housing ticket systems in Jiangsu [12][14] 2. Key City Transaction Data - In the week ending September 26, 2024, the monitored 51 cities recorded a total new home transaction area of 433.2 million square meters, marking a 62.1% increase from the previous week but a 33.7% decrease year-on-year [20][25] - The transaction volumes in major cities showed significant week-on-week increases, with Guangzhou up by 71.0%, and cities like Hangzhou and Suzhou seeing increases of 187.9% and 143.2%, respectively [25] 3. Development Sector Insights - Overall transaction volumes in September have been weak, with both new and second-hand home sales showing a decline compared to August. However, the recent policy announcements are expected to positively impact market sentiment and transaction volumes in the near future [3][12] 4. Property Management Sector Insights - The property management sector has seen a rebound, with the Hang Seng Index rising by 13.0% and the average increase in the property management sector at 11.4%. Leading state-owned enterprises and non-defaulting private companies have shown significant stock price increases [3]