Investment Rating - The report maintains an "Outperform" rating for multiple companies in the healthcare sector, including JD Health, WuXi Biologics, Alibaba Health, and others, while China National Pharmaceutical Group is rated "Neutral" [1]. Core Insights - The Hang Seng Healthcare Index rose by 0.6% during the week of May 12-16, 2025, outperforming the Hang Seng Index by 8.6 percentage points year-to-date, with a total increase of 25.0% since the beginning of the year [4][30]. - The internet healthcare sector led gains with a 7.7% increase, while other sectors like CXO/research services and pharmaceutical distribution also saw positive growth [5][31]. - The report highlights that despite external volatility, China's pharmaceutical industry is expected to benefit from domestic policy support for innovation and improving procurement conditions [5][31]. Summary by Sections Weekly Performance Review - The Hang Seng Healthcare Index increased by 0.6%, while the Hang Seng Index rose by 2.1% during the specified week [4][30]. - Year-to-date, the Hang Seng Healthcare Index has outperformed the Hang Seng Index by 8.6 percentage points, with a total increase of 25.0% [4][30]. Sub-sector Performance - Internet healthcare saw a significant increase of 7.7%, followed by CXO/research services at 2.6% and pharmaceutical distribution at 1.3% [5][31]. - The pharmaceutical and biotech sectors faced initial pressure due to an executive order from Trump aimed at reducing prescription drug prices, but valuations recovered by the end of the week [5][31]. Market Dynamics - Trump's executive order on May 12 requires pharmaceutical companies to align U.S. drug prices with those in other developed countries, aiming for "most favored nation" pricing [7][34]. - The report suggests that the impact of this order on Chinese pharmaceutical companies will be limited, as most do not generate direct revenue from the U.S. market [15].

Investment Rating - The report assigns an "Outperform" rating to multiple companies within the discretionary consumption sector, indicating a positive outlook for their performance relative to the market [1][3][5]. Core Insights - The pet and U.S. hotel sectors have shown the best performance this week, with valuations in most sectors still below the average of the past five years [1][4][13]. - The report highlights that the average increase for leading companies in the pet sector was 9.1%, driven by favorable trade negotiations and the commencement of the 618 pre-sale [4][15][17]. - Valuation analysis indicates that most sub-sectors are trading below their historical averages, suggesting potential investment opportunities [5][9][19]. Sector Performance Review - Weekly performance rankings: Pet > U.S. Hotel > Credit Card > Cosmetics > Gambling > Sportswear > Luxury Goods > Snacks [7][14]. - Monthly performance rankings: Pet > U.S. Hotel > Gambling > Cosmetics > Sportswear > Credit Card > Luxury Goods > Snacks [14]. - Year-to-date (YTD) performance rankings: Pet > Luxury Goods > Cosmetics > Snacks > Credit Card > U.S. Hotel > Sportswear > Gambling [14]. Valuation Analysis - As of May 16, 2025, the expected P/E ratios for various sectors are as follows: - Sportswear: 15.6x (77% of 5-year average) - Luxury Goods: 18.4x (52% of 5-year average) - Gambling: 14.2x (23% of 5-year average) - Cosmetics: 36.8x (91% of 5-year average) - Pet: 50x (51% of 5-year average) - Snacks: 24.3x (37% of 5-year average) - U.S. Hotel: 29.4x (18% of 5-year average) - Credit Card: 32x (61% of 5-year average) [5][9][18][19].

Investment Rating - The report does not explicitly provide an investment rating for the luxury goods industry, but it highlights significant trends and performance metrics that could inform investment decisions. Core Insights - There is a notable divergence in purchasing intent for luxury goods, with high-net-worth individuals (HNWIs) maintaining robust consumption while the middle class shows a significant decline in luxury purchasing intent [2][9]. - High-end brands exhibit significant performance differentiation, with MIU MIU showing strong growth momentum, while GUCCI continues to face challenges [3][10]. - The jewelry sector demonstrates steady growth, particularly during holiday periods, with brands like Van Cleef & Arpels leading in performance [4][11]. - Sales of high-end skincare products are weakening, while consumers are increasingly focused on value-for-money in cosmetics [4][12]. - The gold jewelry sector is performing well, with Laopu Gold emerging as a key growth driver [4][13]. Summary by Sections Purchasing Intent and Consumer Behavior - In 2024, the middle class (annual household income of 1.5 million to 5 million RMB) showed a double-digit year-on-year decline in luxury purchasing intent, while HNWIs, particularly black card and platinum card holders, maintained mid-single-digit growth in consumption [2][9]. Brand Performance - High-end brands like Hermès, LV, Dior, CHANEL, and Prada experienced a "high open low walk" sales growth pattern in early 2025, with MIU MIU standing out for its strong performance, while GUCCI has been under pressure with continuous negative growth [3][10]. Jewelry Sector - Jewelry brands, including Bulgari, Tiffany, and Cartier, maintained moderate growth, with Van Cleef & Arpels showing the strongest performance among jewelry brands [4][11]. Skincare and Cosmetics - Sales growth for high-end skincare products has slowed, with brands like Lancôme and La Mer particularly affected. Consumers are prioritizing cost-effective makeup options, prompting high-end brands to enhance customer loyalty through personalized services [4][12]. Gold Jewelry Sector - Laopu Gold has significantly outperformed competitors in the gold jewelry sector, with positive sales growth in early 2025. The brand's expansion strategy is supported by increased store area and prime location allocation in shopping malls [4][13].

Investment Rating - The report does not explicitly state an investment rating for the food and beverage industry, but it discusses various growth opportunities and challenges within the sector. Core Insights - The expansion of snack SKUs and category extension is driving customer base growth, particularly in lower-tier and untapped markets, indicating significant store opening potential [1][4][13] - Initial investment and average daily store efficiency are positively correlated across different store types, with A+ core business district stores requiring the most investment and showing the highest efficiency [2][9] - The turnover of non-snack goods is slower compared to snacks, which may pressure overall store efficiency despite SKU expansion [3][10] - Own-brand and white-brand products have higher gross profit margins, and their proportion is expected to increase, enhancing profit margins for stores [11] - The "money-saving supermarket" model is being piloted to improve average order value and customer reach, although it faces challenges such as supply chain maturity [12] - There is substantial potential for further expansion in the snack store market, especially in areas with lower population density [4][13] Summary by Sections Market Overview - The report highlights the ongoing trends in the snack market, emphasizing the importance of SKU expansion and category diversification to attract a broader customer demographic [3][10] Store Performance - Different store types exhibit varying levels of initial investment and daily efficiency, with A+ core business district stores leading in both metrics [2][9] Product Strategy - The introduction of non-snack items aims to broaden the customer base, although these products have slower turnover rates, impacting overall efficiency [3][10] - The report notes that self-branded and white-branded products yield higher gross profit margins, suggesting a strategic focus on increasing their share in the product mix [11] Business Model Innovations - The "money-saving supermarket" model is being tested in various regions, aiming to enhance customer engagement and sales performance, despite facing operational challenges [12] Growth Potential - The report identifies significant opportunities for new store openings in lower-tier and untapped markets, supported by established supply chain networks [4][13]

[Table_Title] 研究报告 Research Report 18 May 2025 香港策略 Hong Kong Strategy 冲高回落印证资金谨慎，维持审慎观望等待回调 Market Pullback Affirms Cautious Risk Appetite; Maintain Prudent Wait-and-See 周林泓 Amber Zhou 李加惠 Jiahui Li, CFA amber.lh.zhou@htisec.com jh.li@htisec.com [Table_yemei1] 观点聚焦 Investment Focus [Table_summary] (Please see APPENDIX 1 for English summary) 上周，我们提示需警惕中美贸易缓和后资金获利了结，并建议等待科技股回调再行布局。本周港股行业普遍上 扬，红利板块领涨科技；A股则是红利上涨而科技下跌。整体而言，受中美联合声明的刺激，本周市场冲高后回 落，恒生指数和恒生科技指数涨2%；A股上证综指涨0.8%，创业板指涨1.4%，而科创50跌1.1%。 联合声明落地后，中美贸易谈判将进入更 ...

Group 1 - The report introduces a "two-step" framework to analyze the funding landscape of the Hong Kong stock market, categorizing funds into long-term and short-term foreign capital, domestic capital, and Hong Kong capital [1][8][9] - Despite a marginal decline in the proportion of foreign capital, it continues to dominate the Hong Kong stock market, accounting for over 60% of the total funding, with stable foreign capital holding approximately 11.6 trillion HKD and flexible foreign capital around 5.2 trillion HKD as of May 13, 2025 [19][22][24] - The report highlights a significant increase in the proportion of southbound funds, which have gained marginal pricing power in the Hong Kong market, with their market value share rising from 8% in September 2020 to 20% by May 2025 [24][25][38] Group 2 - The trading behaviors of different funding types in the Hong Kong stock market exhibit clear differences, with stable foreign capital favoring long-term holdings, while flexible foreign capital tends to engage in short-term speculation [30][31] - Southbound funds show a lower turnover rate and a tendency to buy on dips, indicating a contrarian investment strategy, with a negative correlation between their net buying and the Hang Seng Index's performance [31][37] - Recent trends indicate that since March 2025, while foreign capital has been flowing out, southbound funds have been consistently flowing in, with a record net purchase of 356 billion HKD on April 9, 2025 [37][38]

Investment Ratings - The report assigns an "Outperform" rating to multiple companies including Pop Mart, Anta Sports, Haidilao, and others, while Budweiser Asia is rated "Neutral" [1]. Core Insights - The report highlights significant developments in the F&B and designer toys sectors, including the successful IPO of Green Tea Group and strategic investments in 52TOYS by Wanda Film and China Ruyi [2][6]. - Honey Snow Ice City has signed a procurement agreement worth 4 billion RMB with Brazil for coffee beans and other products, indicating a strong international expansion strategy [2]. - Ruixing Coffee plans to establish over 30 Brazilian coffee-themed stores, further enhancing its market presence [2]. - Starbucks has launched a new ready-to-drink tea and coffee series, tapping into the growing beverage market [2]. Weekly Performance Summary - In the F&B sector, notable performers include Guoquan (+22.2%), DPC Dash (+4.7%), and Tongqinglou (+2.3%), while underperformers include CAHGEE and HELENS, both down by 7.7% [3][7]. - In the designer toys sector, MINISO and BLOKS showed strong performance with increases of 12.1% and 11.9% respectively, while Pop Mart had a modest increase of 2.4% [3][7].

Investment Rating - The report suggests a positive outlook for the aerospace and defense sectors, particularly highlighting companies like Howmet Aerospace, Loar Holdings, Safran, and VSE for their growth potential in high-performance components and services [5]. Core Insights - The report indicates that technology giants are likely to increase capital expenditures for data centers due to tariff pressures and uncertainties, with Meta raising its AI data center capex forecast to between $64 billion and $72 billion for 2025 [2][18]. - The U.S. defense spending is projected to increase, with a significant arms sales agreement worth $142 billion reached between the U.S. and Saudi Arabia, which may impact regional military balances [3][37]. - The industrial robotics sector is expected to maintain a steady growth trajectory, with global installations projected to remain around 541,302 units in 2024, despite a slight decline in 2023 [39][45]. Summary by Sections Data Centers - Meta has adjusted its AI data center capital expenditure forecast upwards, attributing the increase to tariff impacts and supply chain adjustments [2][18]. Energy Construction - The U.S. government is expected to face legal challenges regarding the rollback of energy efficiency regulations, while Virginia has initiated a pilot for a utility-scale virtual power plant [22][23]. - GE Vernova announced a $14.2 billion energy agreement to support Saudi Arabia's power generation and grid stability [71]. Aerospace - The aerospace sector is witnessing a recovery, with companies like Howmet Aerospace and Safran positioned to benefit from increased demand for aerospace components and services [5][26]. - The price index for aircraft engines and components has shown stability, with a year-on-year increase of 2% [28][32]. Defense - The U.S. defense price index for government spending was stable in Q4 2024, reflecting a 2.1% year-on-year increase, indicating ongoing government investment in defense capabilities [38]. Robotics - The industrial robotics market is projected to see continued growth, with a significant share of installations coming from the automotive sector, which accounted for 25% of total installations in 2023 [39][45]. - The report highlights a robust demand for automation technologies driven by nearshoring trends and supportive policies like the Inflation Reduction Act [45]. Industrial Equipment - The gas turbine price index has increased by 7.24% year-on-year, driven by supply-demand dynamics and the growth of AI data centers [49][51]. - The report notes that the price index for electric transformers has remained stable, with slight year-on-year increases [56][58].

Group 1: Market Performance - In Q1 2025, retail sales of sportswear brands in Southwest China faced pressure, with NIKE and ADIDAS experiencing significant year-on-year declines, particularly NIKE, which saw a more pronounced drop[2] - FILA, Li-Ning, and Lululemon also reported year-on-year sales declines, indicating inventory and profit pressures across the sector[2] - Despite increased store traffic, the turnover rate and average transaction value decreased year-on-year, primarily due to delayed seasonal changes and adverse weather conditions[2] Group 2: Inventory and Pricing - Inventory levels are slightly higher but controllable, with low discount rates and sell-through rates observed across brands[3] - NIKE and ADIDAS maintained similar discount ranges, but NIKE's discounts have deepened compared to last year, while ADIDAS's discounts have slightly increased[3] - Li-Ning and Anta have stable discount rates, while FILA's discount rate has slightly decreased, and Lululemon maintains a high pricing strategy[3] Group 3: Brand Strategies and Consumer Trends - NIKE is undergoing a strategic adjustment, with a focus on footwear over apparel, leading to competitive disadvantages in the apparel category[4] - ADIDAS has improved its market position in China through localization and brand strategy adjustments, focusing on consumer needs and establishing stable distributor relationships[4] - FILA's sales performance is above market average due to its expansion into specialized categories and enhanced promotional strategies[4]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies involved in RISC-V chip verification and AI computing power [1]. Core Insights - The explosive growth in AI computing power is driving a revolutionary upgrade in chip validation paradigms, highlighting the inadequacy of traditional validation methods for the complexity of RISC-V chips [3][9]. - The open-source nature of RISC-V is seen as critical for breakthroughs in China's semiconductor industry, with modular instruction extensions and low-cost licensing models enabling customized architectures [4][10]. - The dual drive between AI and chip design presents new challenges, necessitating a shift towards "efficiency-first" design principles and forward-looking extensibility in architecture [5][11]. Summary by Sections Event Overview - On May 14, 2025, Synopsys and BlueCore Technology held a roundtable discussion focusing on RISC-V chip validation, addressing the "impossible triangle" dilemma, hardware-accelerated validation methodologies, and strategies for co-building verification tools in an open-source ecosystem [2][8]. Validation Paradigms - Traditional validation methods struggle with the complexity of RISC-V chips, exacerbated by architectural flexibility and increasing core counts, leading to an expanded validation space [3][9]. - Synopsys proposed the Shift Left strategy, moving validation to the architecture exploration phase, which combines hardware emulation with virtual prototyping platforms to significantly reduce cycle times [3][9]. Open-Source Ecosystem - BlueCore emphasized that RISC-V's modular instruction extensions and low-cost licensing model provide freedom for customized architectures, although challenges remain in server application porting and low-power validation [4][10]. - Synopsys' full-stack toolchain has streamlined development, enabling clients to boost performance by 20% and reduce power consumption by 10% [4][10]. AI and Chip Design - The conflict between compute demand and energy efficiency is pushing designs towards "efficiency-first" principles, while the mismatch between AI iteration speed and chip development cycles requires forward-looking extensibility [5][11]. - The integration of FPGA prototyping with AI and functional safety requirements highlights the depth of technological convergence needed in the industry [5][11]. Future Path - The dialogue outlines a clear path for AI-RISC-V co-evolution, transitioning validation from "tool-driven" to "AI-empowered" and moving ecosystems from "single-point breakthroughs" to "full-chain collaboration" [5][12].