Investment Rating - The report rates the food and beverage industry as "Overweight" [2] Core Insights - The Double Eleven sales exceeded expectations, with a total online sales of 1,441.8 billion RMB, a year-on-year increase of 26.6%. The retail sales of consumer goods in October reached 4,539.6 billion RMB, growing by 4.8% year-on-year, indicating a recovery in consumer demand [3][8] - The report highlights that while the liquor sector is experiencing a downward trend, expectations have been sufficiently reflected in the market, showcasing a valuation advantage for certain stocks [4][11] - The snack, seasoning, and dairy product sectors are showing marginal improvements, with significant performance noted during the Double Eleven sales [4][19] Summary by Sections 1. Double Eleven Exceeds Expectations and October Retail Improvement - The total online sales during Double Eleven reached 1,441.8 billion RMB, a 26.6% increase year-on-year. The retail sales of consumer goods in October were 4,539.6 billion RMB, with a year-on-year growth of 4.8% [8] - Food categories saw a 10.1% increase, while beverage sales slightly declined by 0.9% [8] 2. Liquor: Gradual Adjustment with Sufficient Expectations - The liquor industry is focusing on stabilizing prices and reducing inventory. Major brands like Moutai and Wuliangye are adjusting their channel strategies to optimize market conditions [9][10] - The report anticipates that the liquor sector will continue to adjust through 2025, with a focus on maintaining market share and improving product structures [10][11] 3. Consumer Goods: Snack and Dairy Product Marginal Improvements - The snack sector is expected to see improved performance, with brands like Three Squirrels and Qiaqia Foods highlighted as key players [4][19] - Dairy product leaders such as Yili and Mengniu are showing signs of recovery, with inventory levels improving significantly [19] 4. Investment Recommendations - The report suggests focusing on undervalued growth stocks in the liquor sector, including Wuliangye, Shanxi Fenjiu, and Luzhou Laojiao. For snacks, Three Squirrels and Qiaqia Foods are recommended, while for seasonings, Hai Tian and Zhongju High-tech are advised for increased holdings [4][23]

Industry Investment Rating - The report maintains an **Overweight** rating for the construction engineering industry, consistent with the previous rating [2] Core Views - The report highlights the importance of **state-owned enterprise (SOE) reforms** and **Belt and Road initiatives**, recommending key companies such as China Communications Construction, China Energy Engineering, and China Railway Construction [2] - The **market value management** of SOEs is emphasized, with specific focus on improving operational efficiency and profitability through mergers, equity incentives, and share buybacks [3] - The **Belt and Road initiative** continues to drive infrastructure projects globally, with significant progress in Latin America and Europe, particularly through projects like the Qiankai Port in Peru and the China-Europe Railway Express [5] - The **real estate market** is showing signs of stabilization, with policies aimed at reducing taxes and expanding urban renewal projects to nearly 300 cities [6] Key Company Recommendations State-Owned Enterprises (SOEs) - **China Communications Construction (CCC)**: Recommended for its strong performance in infrastructure projects, with a dividend yield of 2.67% and a PB ratio of 0.63 [8] - **China Railway Construction (CRCC)**: Highlighted for its high dividend yield of 3.74% and a PB ratio of 0.49, making it a key player in the infrastructure sector [8] - **China State Construction Engineering (CSCEC)**: Noted for its robust order book, with a dividend yield of 4.49% and a PB ratio of 0.56, particularly strong in real estate development [8] Belt and Road Initiative - **China Railway Group (CREC)**: Actively involved in Belt and Road projects, including the Qiankai Tunnel in Peru, with a dividend yield of 3.20% and a PB ratio of 0.55 [5] - **China Energy Engineering (CEE)**: Recommended for its role in energy and infrastructure projects under the Belt and Road initiative, with a dividend yield of 1.08% and a PB ratio of 0.97 [8] Real Estate and Urban Renewal - **Anhui Construction Engineering Group**: Highlighted for its high dividend yield of 5.30% and involvement in urban renewal projects [6] - **Jiangsu Provincial Construction Group**: Recommended for its strong performance in real estate development, with a dividend yield of 6.00% [6] Sector-Specific Recommendations Infrastructure and Energy - **China Power Construction (PowerChina)**: Recommended for its dominant position in hydropower and pumped storage projects, with a dividend yield of 2.35% and a PB ratio of 0.74 [8] - **China Metallurgical Group (MCC)**: Noted for its involvement in mining and infrastructure projects, with a dividend yield of 2.13% and a PB ratio of 0.69 [10] Urban Development and Smart Cities - **Tunnel Co Ltd**: Recommended for its expertise in urban infrastructure and smart city projects, with a dividend yield of 4.80% and a PB ratio of 0.73 [8] - **Huashi Group**: Highlighted for its role in smart city and AI-driven infrastructure projects, with a dividend yield of 3.57% and a PB ratio of 1.19 [8] Financial Metrics and Valuation - The report provides detailed financial metrics for key companies, including **dividend yields**, **PB ratios**, and **PE ratios**, with a focus on companies with low PB ratios and high dividend yields, such as **China Railway Construction (PB 0.49)** and **China State Construction Engineering (PB 0.56)** [8][10] - Companies like **China Communications Construction** and **China Railway Group** are highlighted for their strong order books and potential for valuation re-rating due to improved cash flows and asset quality [8][10]

Investment Rating - The report maintains an "Overweight" rating for the investment banking and brokerage industry [1] Core Insights - The release of the new market value management guidelines by the China Securities Regulatory Commission (CSRC) is expected to enhance market liquidity and investor expectations regarding share buybacks by listed companies [4][5] - The guidelines optimize the scope, requirements, and penalties for companies engaged in market value management, removing the mandatory nature of share buyback mechanisms [5] Summary by Sections New Guidelines Overview - On November 15, the CSRC published the "Guidelines for Market Value Management of Listed Companies" to implement the new "National Nine Articles" [5] - The guidelines have been refined based on feedback since the draft was released, focusing on responsibilities of directors and executives, disclosure requirements, and execution of valuation enhancement plans [5] Key Changes in Guidelines - The scope of companies subject to market value management has been expanded to include companies in the CSI A500 and the mid-cap 200 index of the ChiNext, with less stringent disclosure requirements [5][9] - Long-term undervalued companies are now defined as those whose stock prices are below their audited net asset value for 12 consecutive months, with specific disclosure requirements for those with a price-to-book ratio below the industry average [5][12] - The guidelines encourage, rather than mandate, the establishment of share buyback mechanisms in company charters or internal documents [5][9] Market Impact - The new regulations are anticipated to boost investor confidence in share buybacks, leading to an increase in the number of companies implementing such measures [5] - The brokerage sector is expected to benefit from improved market liquidity, with specific stock recommendations including China Galaxy and CITIC Securities [5][14] Valuation Metrics - As of November 15, the brokerage sector's price-to-book (PB) ratio stands at 101%, indicating potential for growth compared to historical highs of 125% in 2020 and 217% in 2014 [5][11]

Investment Rating - The report maintains an "Overweight" rating for the aviation and oil transportation sectors [5]. Core Insights - The aviation sector is expected to see significant reduction in losses during Q4 due to falling oil prices and rising ticket prices, with a recovery in supply and demand anticipated to drive profitability upwards [6]. - The oil transportation sector is influenced by trade rhythms affecting short-term freight rates, with a positive outlook on supply and demand dynamics [6]. Summary by Relevant Sections Aviation - Recent declines in oil prices and increases in ticket prices are projected to lead to a substantial reduction in losses during Q4 compared to the previous year. The international flight capacity is being increased to absorb demand, and domestic business travel is showing signs of improvement [6]. - The Q3 earnings of the aviation sector exceeded 2019 levels, with a 14% year-on-year decline in net profit for A-share airlines, yet still surpassing Q3 2019 figures. Revenue grew by 5% year-on-year, indicating sustained demand for air travel [6][20]. - Major airlines such as Air China, Juneyao Airlines, and China Southern Airlines are recommended for "Overweight" ratings due to their expected performance in the upcoming quarters [6]. Oil Transportation - The oil transportation market is experiencing short-term fluctuations in freight rates driven by trade patterns. The report suggests monitoring for opportunities to invest against the trend [6]. - The report highlights that the supply of oil tankers remains rigid, with new orders being limited, which is expected to support steady growth in oil transportation demand [6]. - Companies like China Merchants Energy, COSCO Shipping Energy, and China Merchants Industry are also rated as "Overweight" due to their favorable positioning in the market [6].

Investment Rating - The report maintains an "Overweight" rating for the automotive industry, consistent with the previous rating [7][12]. Core Insights - The Xiaomi supply chain is expected to enter a new phase of heightened expectations, with the second pure electric SUV anticipated to be officially launched in H1 2025 [8][9]. - The Q4 passenger car sales are projected to remain strong due to the support of trade-in policies, although there may be fluctuations during policy gaps [9][12]. - The market risk appetite is currently high, with the Xiaomi supply chain, Tesla supply chain, and robotics being the main focus areas within the automotive sector [9][12]. Summary by Sections Investment Recommendations - Recommended automotive stocks include Jianghuai Automobile, BYD, Changan Automobile, Great Wall Motors, and Li Auto, with beneficiary stocks such as Seres, Xpeng Motors, Geely, and Dongfeng Motor Group [9][12]. - For the Tesla supply chain, recommended stocks include Top Group, Shuanghuan Transmission, Rongtai Technology, Wuxi Zhenhua, New Spring, and Yinlun Holdings, with beneficiary stocks like Shiyun Circuit and Sanhua Intelligent Control [9][12]. - In the smart technology sector, recommended stocks are Xingyu Co., Kobot, Desay SV, Huayang Group, Huayi Technology, and Baolong Technology [9][12]. - For the high-growth new energy sector, recommended stocks include Ruihu Mould, Huguang Co., Songyuan Co., and Aikedi [9][12]. Market Trends - The new Xiaomi model is expected to enter a pre-heating phase, with the official unveiling of the SU7 on December 28, 2023, and its market launch on March 28, 2024 [9][12]. - The Full Self-Driving (FSD) technology is continuously being iterated, with significant mileage achieved in the FSD version [9][12]. - Anticipated policy benefits for Tesla with the potential re-election of Trump, which may support Tesla's autonomous driving qualifications and production capacity in North America [9][12].

Investment Rating - The report maintains an "Overweight" rating for the tourism industry [6]. Core Insights - The report emphasizes the importance of focusing on sectors with high prosperity and bottom improvement, particularly in education, internet platforms, and tourism [5]. - Key recommendations include companies like Tuniu, Ctrip Group, and Changbai Mountain in the tourism sector, as well as educational firms such as New Oriental and Doushen Education [5]. - The report highlights the impact of the extended holiday policy, which adds two days off for citizens, potentially boosting local consumption [5]. Summary by Relevant Sections Social Services Industry - The report notes the increase in public holidays, which may enhance consumer spending during peak seasons [5]. - The opening of new stores, such as the first offline Red Corner coffee shop by Xiaohongshu, indicates growth in the social services sector [5]. Retail Industry - Xiaohongshu's e-commerce reported a significant increase in merchants achieving over 10 million in sales during promotional events, indicating a robust retail environment [5]. - Dingdong Maicai's revenue for Q3 2024 reached 6.538 billion yuan, a 27.21% increase year-on-year, showcasing strong growth in the retail sector [5]. Tourism Industry - The report highlights significant performance discrepancies among tourism companies, recommending firms like Tongcheng Travel and Ctrip Group for their strong earnings potential [5]. - The extended holiday policy is expected to increase local consumption time, benefiting the tourism sector [7]. Key Company Announcements - Dingdong Maicai reported a Q3 2024 revenue of 6.538 billion yuan, up 27.21% year-on-year, with a single-quarter GMV of 7.267 billion yuan, reflecting strong market performance [5]. - Zhongjiao Holdings projected a net profit of approximately 420-590 million yuan for the 2024 fiscal year, indicating a growth of 5.4%-10.3% compared to the previous year [5]. - Nayuki Tea reported significant sales growth in its sugar-free beverage series, with a 16.4% increase year-on-year [5].

Investment Rating - The report rates the basic chemical industry as "Overweight" [3] Core Viewpoints - The 10 trillion local debt resolution policy is expected to drive economic recovery, benefiting related products. Recommended are resilient companies with long-term growth potential and leading players in new materials with stable demand growth [5][6] - The chemical sector is currently in a bottoming phase, with significant pressure on profitability. The third quarter of 2024 saw a year-on-year revenue decline of 4.51% and a net profit drop of 16.34%. However, capital expenditure is decreasing, indicating potential for future supply-demand improvement [6][16] - The outcome of the U.S. elections is likely to strengthen expectations for falling oil prices, which could benefit related fine chemical products [5][6] Summary by Sections Market Performance and Price Tracking - The Shanghai Composite Index rose by 3.52% while the basic chemical index fell by 3.53%, ranking 15th among 30 sectors [12][13] - Key price increases included sulfur (+13.36%), MAP (+10.28%), and vitamin A (+7.33%) [6] Investment Recommendations - Recommended companies benefiting from domestic demand include Wanhua Chemical, Hualu Hengsheng, and Longbai Group. New material leaders recommended are Ruifeng New Material and Blue Sky Technology [17][18] Key Company Tracking - Wanhua Chemical reported Q3 revenue of 147.6 billion yuan, a year-on-year increase of 11.35%, but net profit fell by 12.67% due to maintenance and increased costs [22][23] - Hualu Hengsheng's Q3 revenue was 25.18 billion yuan, up 30.16% year-on-year, but net profit decreased by 32.27% due to price pressures [28][29] - Juhua Co. maintained growth in Q3, with a focus on the refrigerant market, despite price declines in other segments [33][34] Sub-industry Insights - The new materials sector is expected to grow, with recommendations for companies like Blue Sky Technology and Ruifeng New Material, which have strong growth potential and technological advantages [45]

Investment Rating - The report maintains an "Overweight" rating for the wholesale and retail industry, consistent with the previous rating [2]. Core Insights - October retail sales exceeded expectations, driven by the early "Double Eleven" shopping promotions and the significant impact of the trade-in policy on consumer spending [4]. - The total retail sales in October showed a year-on-year growth of +4.8% (up from +3.2% in September) and a month-on-month increase of +1.6 percentage points [5]. - The retail sales excluding automobiles grew by +4.9% year-on-year (up from +3.6% in September) and +1.3 percentage points month-on-month [5]. - The retail sales for enterprises above designated size in October increased by +6.2% year-on-year (up from +2.6% in September) and +3.6 percentage points month-on-month [5]. Summary by Sections Investment Recommendations - Continue to focus on high-growth and bottom-improving sectors, including: 1. Education and internet platforms with high growth expectations: recommended companies include卓越教育集团, 思考乐教育, 新东方, 途虎-W [5]. 2. Affordable overseas selections: recommended companies include 名创优品, 小商品城, 绿联科技, 安克创新 [5]. 3. Tourism companies with varying performance: recommended companies include 同程旅行, 携程集团-S, 三特索道, 九华旅游, 长白山 [5]. 4. Long-term logic for gold jewelry under the backdrop of the rise of national trends: recommended companies include 老铺黄金, 潮宏基, 老凤祥 [5]. 5. Thematic directions: supermarket adjustments (recommended: 永辉超市), policy expectations (fertility and tourism), and education AI (beneficiary: 豆神教育) [5]. Retail Sales Performance - In October, retail sales of goods showed a year-on-year increase of +4.8% with a month-on-month increase of +1.6 percentage points, while the retail sales of enterprises above designated size increased by +6.8% month-on-month [5]. - The performance of various categories in October was notably influenced by the "Double Eleven" promotions and the trade-in policy, with cosmetics and home appliances showing strong growth [5]. - Online retail sales growth accelerated, with the online retail sales of physical goods reaching 123,632 billion yuan, a year-on-year increase of +8.8% [5]. Category-Specific Insights - Cosmetics grew by +40.1% year-on-year, while gold and silver jewelry saw a decline of -2.7% year-on-year but improved by +5.1 percentage points month-on-month [5]. - Home appliances experienced a year-on-year growth of +39.2% with a month-on-month increase of +18.7 percentage points [5]. - The online penetration rate for physical goods retail reached 25.9% in October, slightly up by +0.2 percentage points [5].

Quantitative Models and Construction Methods - **Model Name**: Oversold Rebound Signal **Model Construction Idea**: This model identifies potential short-term rebounds in industries that have experienced significant price declines, aiming to capture mean-reversion opportunities[14] **Model Construction Process**: The model uses historical data to identify oversold conditions based on predefined thresholds. Once the signal is triggered, the model evaluates the subsequent holding period performance, including average returns, win rates, and profit-loss ratios over 5-day and 10-day horizons[14][15] **Model Evaluation**: The model demonstrates strong performance in backtesting, with high win rates and favorable profit-loss ratios, indicating its effectiveness in capturing short-term rebounds[14][15] - **Model Name**: Platform Breakout Signal **Model Construction Idea**: This model identifies industries breaking out of consolidation phases, signaling potential upward momentum[14] **Model Construction Process**: The model monitors price movements to detect breakout patterns from established price ranges. Once a breakout is confirmed, the model tracks the performance over specific holding periods, analyzing metrics such as average returns, win rates, and profit-loss ratios over 5-day and 10-day horizons[14][15] **Model Evaluation**: The model shows moderate effectiveness, with reasonable win rates and profit-loss ratios, suggesting it can capture breakout opportunities but with less consistency compared to the oversold rebound signal[14][15] - **Model Name**: Stock Price Pressure Model **Model Construction Idea**: This model evaluates short-term selling pressure across industries to identify sectors with lower resistance to price increases[17] **Model Construction Process**: The model calculates theoretical selling pressure for each industry and ranks them accordingly. Industries with the lowest pressure are identified as having higher potential for price appreciation[17][18] **Model Evaluation**: The model effectively highlights sectors with lower selling pressure, which historically outperformed the market in backtesting[17][18] Model Backtesting Results - **Oversold Rebound Signal** - 5-day average return: 4.56% - 5-day win rate: 71% - 5-day profit-loss ratio: 1.87 - 10-day average return: 7.22% - 10-day win rate: 62% - 10-day profit-loss ratio: 1.66 - Average holding period: 5.2 days - Average holding return: 6.30% - Overall win rate: 76% - Overall profit-loss ratio: 2.3[14][15] - **Platform Breakout Signal** - 5-day average return: 3.30% - 5-day win rate: 62% - 5-day profit-loss ratio: 1.45 - 10-day average return: 5.10% - 10-day win rate: 61% - 10-day profit-loss ratio: 1.70 - Average holding period: 9 days - Average holding return: 6.77% - Overall win rate: 60% - Overall profit-loss ratio: 2.15[14][15] - **Stock Price Pressure Model** - Backtesting shows that holding the five industries with the lowest selling pressure generated approximately 15% excess returns relative to the Wind All A Index during the testing period[18][19]

Group 1: Market Trends - Last week, passive funds turned to a net outflow, with total A-shares trading volume decreasing slightly, while A500 ETF continued to expand, leading to a decline in the share of CSI 300 ETF, indicating a substitution effect[2] - The total number of stock ETFs is 812, with a total scale of CNY 2.89 trillion, where broad index ETFs account for 59.4% of the scale[2] - Last week, stock ETFs saw a net outflow of CNY 191.5 billion, reversing the slight net inflow from the previous week[2] Group 2: Sector Performance - Passive funds continued to flow into food and beverage sectors, while outflows were observed in electronics and new energy sectors[2] - The net inflow of passive funds in the food and beverage sector was CNY 16.8 billion, with major inflows into stocks like Kweichow Moutai and Wuliangye[2] - Cumulative net inflow of passive funds in the last eight weeks reached CNY 1830.3 billion, with significant outflows from non-bank financials and media sectors[2] Group 3: ETF Performance - The median premium/discount rate for ETFs is currently 0.07%, with only 1.1% of ETFs having a premium rate exceeding 1%[2] - The concentration of individual stock holdings in passive funds increased, with the top 10 stocks accounting for 44.7% and the top 20 for 63% of the total holdings[2] - Passive funds are currently overweight in technology, consumer, and financial sectors, while underweight in cyclical and midstream manufacturing sectors[2]