Investment Rating - The report indicates a positive outlook for the tourism industry, highlighting a strong recovery and growth potential [51][52]. Core Insights - The tourism market is experiencing a robust rebound, with domestic tourist visits and revenue projected to reach 5.62 billion visits and 5.75 trillion RMB in 2024, reflecting year-on-year growth of 14.8% and 17.11% respectively [51][52]. - In Shaanxi province, the integration of cultural tourism is yielding significant results, with 2024 domestic tourist visits expected to reach 0.31 billion and revenue at 376 billion RMB, marking increases of 16.5% and 12.3% year-on-year [51][52]. - The company is focusing on its core business in cultural tourism, enhancing its performance and cableway transport offerings, and aims to create new growth poles through strategic investments totaling 1.86 billion RMB [53][52]. Summary by Sections 1. Tourism Industry Recovery - Nationally, the tourism market is recovering strongly, with significant increases in both visitor numbers and revenue, particularly during holiday periods [6][10]. - In Shaanxi, the tourism sector is showing resilience, with notable growth in visitor numbers and revenue, especially in key cities like Xi'an [10][13]. 2. Diverse Business Model - The company's revenue is primarily derived from tourism performance, cableway operations, and dining services, with tourism performance contributing over 50% of total revenue [18][22]. - The governance structure is robust, supported by state-owned capital, ensuring compliance and risk management [19][22]. 3. Financial Performance - The company has turned profitable, with revenue reaching 1.26 billion RMB and net profit at 0.51 billion RMB in 2024, reflecting year-on-year growth [52][33]. - The gross profit margin has stabilized around 70%, indicating improved profitability and operational efficiency [34][33]. 4. Investment Projects - The company plans to invest in several key projects, including the Taishan Show City and various cableway services, to enhance capacity and service quality [46][53]. - A total investment of 1.86 billion RMB is planned, with 1.56 billion RMB to be raised through fundraising efforts [53][46].

22 Dec 2025 Presentation：AI开花、科技自立，计算机拐点将至 AI Blossoms, Tech Independence, Computer Turning Point Approaches 杨林Lin Yang lin.yang@htisec.com Equity – Asia Research 本研究报告由海通国际分销，海通国际是由海通国际研究有限公司，海通证券印度私人有限公司，海通国际株式会社和海通国际证券集团其他各成员单位的证券 研究团队所组成的全球品牌，海通国际证券集团各成员分别在其许可的司法管辖区内从事证券活动。关于海通国际的分析师证明，重要披露声明和免责声明，请 参阅附录。(Please see appendix for English translation of the disclaimer) APPENDIX 2 重要信息披露 本研究报告由海通国际分销，海通国际是由海通国际研究有限公司(HTIRL)，Haitong Securities India Private Limited (HSIPL)，Haitong International Japan K.K. ( ...

Investment Rating - The report suggests a focus on three main lines of domestic demand: quality leaders with low valuations, affordable luxury brands, and low valuation high dividend companies [2][38]. Core Insights - NIKE's FY26Q2 performance exceeded expectations with revenue of USD 12.43 billion, a 0.6% year-on-year increase, surpassing Bloomberg's consensus of USD 12.24 billion. However, net profit attributable to shareholders fell by 31.9% to USD 790 million, exceeding expectations of USD 550 million [39]. - The North American market showed a neutral growth of 9%, leading global markets, while the Greater China region experienced a 16% decline in revenue, expected to continue adjusting throughout the fiscal year [39][40]. - The report highlights a positive outlook for the Spring/Summer 26 global orders, with a 40% increase in World Cup-related orders compared to 2022 [39]. Summary by Sections Market Performance - The A-share market saw a 2.18% increase in the textile and apparel sector, outperforming the Shanghai Composite Index by 2.46 percentage points [6]. - The textile manufacturing sector rose by 1.56%, while the apparel and home textile sector increased by 2.66% [6]. Industry Data Tracking - In November 2025, China's apparel retail sales grew by 3.5% year-on-year, while the textile and apparel export decreased by 5.2% [16][20]. - The report notes that the inventory-to-sales ratio in the U.S. apparel sector declined, indicating a potential improvement in demand [41]. Key Announcements and News - NIKE's stable support for distributors is noted, with mixed impacts on OEMs. The company anticipates a low single-digit decline in revenue for FY26Q3, with a projected gross profit margin decline of 1.75-2.25 percentage points year-on-year [40]. - The report mentions significant growth in the Asia-Pacific market for Birkenstock, with a 31% increase in revenue, highlighting the potential for structural growth opportunities in the affordable luxury segment [32].

Investment Rating - The report maintains a positive outlook on the computer industry, recommending key targets such as Hand Enterprise, Wuxi Unicomp Technology Co., Ltd., Beijing Kingsoft Office Software, Newland Digital Technology, Hikvision, Hygon, and Dawning Information Industry [3][9]. Core Insights - The AI foundation model industry in China is experiencing accelerated productization and capitalization, with significant advancements from Volcengine, which released Doubao 1.8 and Seedance 1.5 Pro, achieving global leadership in multimodal capabilities and processing over 50 trillion tokens daily [10]. - Zhiyuan AI and MiniMax have successfully passed HKEX hearings and are expected to list in early 2026, providing a quantifiable market valuation benchmark for the industry [10]. - The Ministry of Industry and Information Technology has issued L3 autonomous driving permits, marking a transition to conditional commercialization, with specific models from Changan and BAIC Arcfox approved for limited road use [11]. - Domestic GPU companies are actively pursuing capital market entry to support R&D and market expansion, with TianShu ZhiXin planning to raise 300 to 400 million USD and other companies like Biren Technology and Kunlun Chip Technology advancing their listings [12]. Summary by Sections AI Foundation Models - The report highlights the rapid advancements in AI technology, particularly with the release of Doubao 1.8 and Seedance 1.5 Pro, which have significantly reduced operational costs for enterprises [10]. - The successful IPO preparations of Zhiyuan AI and MiniMax are expected to enhance the industry's financial landscape and provide a basis for future valuations [10]. Autonomous Driving - The issuance of L3 autonomous driving permits signifies a critical step towards commercial applications, with safety regulations emphasizing the responsibility of manufacturers over drivers [11]. GPU Market Developments - The report notes a surge in domestic GPU companies seeking public listings to fund advanced chip development, reflecting strong market interest and a shift towards self-reliance in semiconductor technology [12].

Investment Rating - The report indicates a positive outlook for the real estate sector, suggesting that quality developers will benefit from the expected policy support in the coming year [2][18]. Core Insights - Last week, major cities experienced a rebound in real estate transactions, driven by strong expectations for next year's policies, which will aid market consolidation and the development of new real estate models [2][18]. - In the 51st week of 2025, new home sales in 30 major cities reached 2.27 million square meters, reflecting a week-on-week increase of 15.4% but a year-on-year decrease of 30.3% [19]. - First-tier cities sold 520,000 square meters, up 10.4% week-on-week but down 42% year-on-year, while second-tier cities sold 1.27 million square meters, up 13.45% week-on-week but down 30% year-on-year [19]. - The cumulative sales from December 1-18, 2025, in 30 cities totaled 5.27 million square meters, up 33% from November 2025 but down 30% year-on-year [19]. - Second-hand home sales in 24 cities also saw a rise, with 2.13 million square meters sold, up 1.71% week-on-week but down 25.3% year-on-year [20]. - The land transaction growth in 100 cities rebounded, with land supply at 11.48 million square meters and transactions at 46.03 million square meters, resulting in a supply-to-sales ratio of 0.25 [21]. Summary by Sections New Home Sales - In the 51st week of 2025, new home sales in major cities showed a significant week-on-week increase, with first-tier cities experiencing a 10.4% rise and second-tier cities a 13.45% rise [19]. - The cumulative sales from December 1-18, 2025, indicate a positive trend compared to the previous month, although year-on-year comparisons remain negative [19]. Second-hand Home Sales - Second-hand home sales also increased slightly, with a 1.71% rise week-on-week across 24 cities, although year-on-year figures still reflect a decline [20]. Land Transactions - The report highlights a rebound in land transactions, with a notable increase in both supply and sales, indicating a more active land market [21]. - The cumulative land transfer revenue for the year shows a decline compared to the previous year, but the recent week’s performance suggests a potential recovery [21]. Inventory and Clearance Cycle - The inventory clearance cycle in 35 cities has increased, indicating a longer time required to sell existing inventory, which may impact future sales dynamics [22].

Investment Rating - The report maintains a positive investment outlook for the coal sector, recommending a focus on key players such as China Shenhua Energy, Shaanxi Coal and Chemical Industry, and China Coal Energy, while also keeping an eye on Yanzhou Coal Mining and Jinneng Holding [3]. Core Insights - The coal price is expected to stabilize, with a bottom range projected between 680-700 RMB/ton. The demand is currently at a median level compared to the past five years, and port inventories are showing a downward trend. The report anticipates a rebound in coal prices to over 800 RMB/ton by November [3][4]. - The coal sector is believed to have reached a cyclical bottom in Q2 2025, with a reversal in supply-demand dynamics. A new upward cycle for coal and downstream thermal power demand is expected to begin in the second half of 2026 [3][4]. Summary by Sections Coal Price Trends - As of December 19, 2025, the price of Q5500 coal at Huanghua Port is 721 RMB/ton, down 42 RMB/ton (-5.5%) from the previous week. The price of Q5000 coal at the same port is 620 RMB/ton, also down 42 RMB/ton (-6.3%) [6][12]. - Domestic coal prices are generally declining, while international prices are mixed, with Newcastle coal prices showing a slight increase [41][49]. Supply and Demand Dynamics - Domestic coal supply remains stable, with imports expected to decrease. The report notes that the demand for coal is improving significantly during the off-peak season, with Q3 profits anticipated to rebound [3][4]. - As of December 19, 2025, the total inventory of coking coal at three major ports is 279.7 million tons, down 7.1% from the previous week [58]. Long-term Contracts and Pricing - The annual long-term contract price for Q5500 coal at Northern Ports is 694 RMB/ton, reflecting a month-on-month increase of 10 RMB/ton (1.5%) [34]. - The report indicates that the long-term contract prices for coking coal have remained stable compared to the previous week [59]. Key Market Events - The report highlights significant developments in coal transportation infrastructure in Inner Mongolia, which is expected to enhance coal logistics efficiency and capacity [81]. - It also notes that coal prices have continued to decline in early December, with various types of coal experiencing price drops [81].

Investment Rating - The report assigns an "Outperform" rating to multiple companies in the Chinese staples sector, including Guizhou Moutai, Wuliangye, and Yanjing Beer among others [1]. Core Insights - The global beer industry is undergoing a profound transformation, shifting from cyclical fluctuations to structural changes, driven by health consciousness and generational shifts in consumption [3][10]. - In China, the beer market faces unique challenges, including a transition to value-driven consumption, the failure of traditional distribution models, and intensified cross-industry competition [17][18]. Summary by Sections Global Beer Industry Transformation - Global beer sales are projected to decline by 1% in 2024, remaining below pre-pandemic levels, with significant shifts in consumer behavior noted, particularly among younger generations [10][12]. - Health awareness is leading to a reduction in alcohol consumption, with 49% of American consumers planning to drink less, a trend that is even more pronounced among Generation Z [12][17]. Strategic Directions for Chinese Beer Companies - **Leadership and Efficiency**: Establishing a dominant position in the local market is crucial for global expansion. Companies should focus on high-end product quality, optimizing cost structures, and building strong regional brands before expanding nationally [4][19]. - **Diversification**: Successful diversification should focus on product synergy, channel reuse, and brand extension, with a high success rate in expanding into related categories like low-alcohol and soft drinks [5][37]. - **Internationalization**: Companies should adopt a cautious approach to internationalization, starting with exports and partnerships in Belt and Road countries to mitigate risks [6][7]. Investment Recommendations - The report suggests that Chinese beer companies should enhance operational efficiency, innovate product offerings tailored to local tastes, and pursue diversification and internationalization strategies that are risk-controlled [7][34]. - Key investment lines include operational improvements leading to value reassessment, beneficiaries of structural upgrades, and pioneers in emerging categories [7][34].

Investment Rating - The report assigns an "Outperform" rating to BaiRong Cloud, indicating an expected relative return exceeding 10% over the next 12-18 months [14]. Core Insights - BaiRong Cloud launched its ResultsCloud platform, which aims to transform the business model from "selling tools" to "selling outcomes" through three major technological innovations and a RaaS (Results-as-a-Service) model [1][6]. - The introduction of silicon-based employees (AI Agent-like applications) represents a fundamental shift in production factors, moving from human reliance to human-machine collaboration [1][6]. - The company plans a three-phase strategy: consolidating fintech advantages and improving silicon-based employee standards from 2025-2026, expanding into vertical sectors like healthcare and education from 2027-2028, and becoming a global leader in silicon-based productivity by 2029-2030 [2][6]. Summary by Sections Technological Innovations - The ResultsCloud platform features a three-layer architecture: AI Infra reasoning engine, AgentOS lifecycle management, and AgentStore commercialization applications [2]. - The AI Infra reasoning engine enhances inference performance by 300% compared to general frameworks, while AgentOS allows for rapid deployment of silicon-based employees within two weeks [2]. Product Offerings - The AgentStore has launched four key products: 1. BaiYing for customer service and marketing, improving customer satisfaction by 40% 2. BaiCai for recruitment, reducing hiring cycles to 28 days and increasing productivity by 5 times 3. BaiJian for cross-border legal and tax services, enhancing efficiency by 90% and reducing costs by 70% 4. BaiZhi for knowledge production, compressing cycles to 4 days and boosting efficiency by 400% [2]. Strategic Importance - The large-scale application of silicon-based employees is expected to redefine core competitiveness in enterprises, with early adopters of human-machine collaboration gaining a competitive edge in the digital economy [3][6]. - BaiRong Cloud's transition from a model service provider to a rental provider of AI employees could lead to a disruptive transformation in the B-end AI and software industries, expanding its business scope beyond finance [3][6].

Investment Rating - The report initiates coverage with an OUTPERFORM rating for H&H International Holdings, targeting a price of HK$17.00 from the current price of HK$13.45 [1][2]. Core Insights - H&H International Holdings is a leading global enterprise in high-end family nutrition and health products, established in 1999 and headquartered in Hong Kong. The company operates in three main segments: Baby Nutrition and Care (BNC), Adult Natural Health Nutrition and Care (ANC), and Pet Nutrition and Care (PNC), with products sold in over 20 countries [3][9]. - The company has shown significant revenue growth, with a projected increase in net profit from a loss of RMB 54 million in 2024 to RMB 641 million in 2026, reflecting a substantial recovery and growth trajectory [7][12]. Financial Overview - Revenue for 2025 is estimated at RMB 14.13 billion, representing an 8% increase from 2024, with net profit expected to reach RMB 415 million, marking an 873% increase year-on-year [7][12]. - The gross profit margin is projected to improve from 60.6% in 2024 to 61.8% by 2027, indicating enhanced operational efficiency [7]. Business Segment Performance - The ANC segment has shown robust growth, with revenue reaching RMB 52.4 billion in the first three quarters of 2025, a 6% year-on-year increase. Swisse, a key brand in this segment, maintains the number one market share in China [4][44]. - The BNC segment has experienced a remarkable recovery, with revenue increasing by 24% year-on-year to RMB 39.7 billion in the first three quarters of 2025, driven by strong sales of infant formula [5][45]. - The PNC segment also demonstrated steady growth, achieving RMB 15.9 billion in revenue, up 8.2% year-on-year, with brands like SolidGold and ZestyPaws leading the market [6][12]. Market Dynamics - The high-end nutrition and health products market in China is driven by economic growth, urbanization, and rising disposable incomes, leading to increased consumer demand for premium health products [19][25]. - The adult nutrition segment is benefiting from heightened health awareness among consumers, while the baby nutrition market is expected to continue growing due to increasing quality demands from parents [26][32]. Strategic Initiatives - H&H has adopted a multi-brand strategy to enhance its global presence, with significant investments in R&D and marketing to support product innovation and market penetration [10][12]. - The company is focusing on digital health ecosystems and sustainable development, aiming to leverage technology for improved consumer engagement and operational efficiency [10][12].

Investment Rating - The report assigns an "Outperform" rating to RENOVA, indicating an expected total return over the next 12-18 months that exceeds the relevant market benchmark by more than 10% [17]. Core Insights - RENOVA is positioned to benefit from strong growth prospects in renewable energy, particularly in Asia, which currently has the highest growth rate for renewable energy globally [2][3]. - The company aims to achieve a cumulative installed capacity of 5 GW and an EBITDA of 60 billion yen by 2030, reaffirming its guidance for fiscal year 2026 with expected revenues of 90.5 billion yen and an EBITDA of 31.6 billion yen, representing a 36% year-on-year increase [2][3]. - RENOVA's project development is progressing as planned, with significant advancements in biomass and energy storage projects, including a 15 MW operational storage project in Himeji and a 200 MW BESS project in Texas expected to commence operations in FY2027 [3][2]. Summary by Sections Company Background - RENOVA is an independent renewable energy company in Japan, focusing on expanding its renewable energy capacity across Japan and Asia, leveraging a favorable policy environment for clean energy development [2]. Mid-term Plans and FY2026 Guidance - The company has reiterated its mid-term development plan announced in May, targeting 5 GW of installed capacity and 60 billion yen in EBITDA by 2030, with specific guidance for FY2026 including revenues of 90.5 billion yen and an EBITDA of 31.6 billion yen, exceeding market expectations [2]. Capacity Expansion Progress - RENOVA's project timelines are on track, with the biomass power plant in Osaka recovering from previous operational issues and the Himeji storage project performing well. The company also highlighted its involvement in three additional storage projects with a total capacity of 215 MW [3][2].