Domestic Macro - The National Cooperative Federation of China held its eighth congress on November 24, emphasizing the need for comprehensive reform and development in cooperative services [1][4] - The People's Bank of China announced a 10,000 billion yuan MLF operation on November 25, with a net injection of 1,000 billion yuan to maintain liquidity in the banking system [1][4] - The State Council launched the 14th National Policy Promotion Week to reduce the burden on enterprises on November 25 [1][4] - The National Data Bureau initiated pilot projects for data resource development in 12 state-owned enterprises, focusing on traditional and emerging sectors [1][4] - The Ministry of Commerce and five other departments issued a plan to enhance the adaptability of supply and demand in consumer goods, aiming for significant improvements by 2027 [1][4] Industry Policies - The Ministry of Housing and Urban-Rural Development announced a focus on urban renewal actions in four key areas on November 21 [2][5] - The Ministry of Industry and Information Technology launched commercial trials for satellite IoT services on November 22, supporting the development of new industries [2][5] - The Ministry of Industry and Information Technology initiated the creation of national emerging industry development demonstration bases, aiming to establish around 100 parks and 1,000 enterprises by 2035 [2][5] - The National Space Administration released an action plan to promote high-quality development in commercial aerospace on November 25 [2][5] Local Policies - The Shanghai Municipal Government issued measures to deepen the reform of drug and medical device regulation to promote high-quality development in the pharmaceutical industry on November 24 [6][18] - The Guizhou Provincial Development and Reform Commission held a meeting to address price competition issues on November 25 [6][18] - Guangdong Province introduced a financial support plan for enterprises to conduct industry chain integration and mergers on November 26 [6][18] Overseas Dynamics - The Chinese Foreign Ministry urged Japan to fulfill its commitments to China in practical actions on November 21 [7][20] - The G20 leaders' summit concluded on November 23, emphasizing multilateral cooperation and common development [7][20] - The European Parliament approved the "European Defense Industrial Plan" on November 25, aimed at strengthening the EU's defense capabilities [7][20] - The New Zealand Reserve Bank lowered its benchmark interest rate by 25 basis points to 2.25% on November 26, indicating potential further easing [7][20]

Group 1 - Northbound capital is estimated to have a slight net inflow of 3.7 billion yuan in the recent week, compared to a net outflow of 18.3 billion yuan in the previous week [7] - The top active stocks in the northbound trading include Zhongji Xuchuang with a total transaction amount of 20.5 billion yuan, accounting for 9% of the stock's weekly trading volume [7] - The recent week saw a significant net inflow of flexible foreign capital estimated at 6.6 billion yuan, reversing the previous week's outflow of 7.7 billion yuan [7] Group 2 - Southbound capital inflow into e-commerce retail reached a new high since October, with a total of 27.1 billion Hong Kong dollars flowing into the Hong Kong stock market in the recent week [11] - Stable foreign capital saw an outflow of 12.2 billion Hong Kong dollars, while flexible foreign capital experienced an outflow of 7.5 billion Hong Kong dollars [11] - The inflow from Hong Kong or mainland local funds was 6.1 billion Hong Kong dollars, indicating a diverse source of capital inflow [11] Group 3 - In the Asia-Pacific market, foreign capital saw a net outflow from Japan amounting to 403.2 billion yen in the latest week, contrasting with a net inflow of 521.9 billion yen in the previous week [20] - In India, foreign institutional investors injected 1.66 billion US dollars into the stock market in October, reversing a previous outflow of 2.7 billion US dollars [20] Group 4 - In the US and European markets, global mutual fund capital saw a net inflow of 25.5 billion US dollars into the US equity market in September, compared to a net inflow of 3.6 billion US dollars in the previous month [23] - The European equity markets experienced mixed results, with net inflows of 1.8 billion US dollars in Germany and 16.9 billion US dollars in France, while the UK saw a slight outflow of 0.4 million US dollars [23]

Investment Rating - The report suggests prioritizing investments in foreign trade, followed by domestic demand, with a focus on the export manufacturing sector for clearer performance recovery by 2026 [38]. Core Insights - In September 2025, US apparel and accessories retail sales grew by 6.7% year-on-year, although the inventory-sales ratio declined both year-on-year and month-on-month [38]. - The current overseas K-shaped consumption trend shows strong performance in both high-end and mass value-for-money segments [38]. - Key targets for investment include Huali Industrial Group, Stella International Holdings, Shenzhou International, and Best Pacific International, with specific focus areas in home textiles, affordable luxury, and low valuation high dividend companies [38]. Summary by Sections Industry Data Tracking - In October 2025, China's apparel retail sales increased by 6.8%, while textile and apparel exports decreased by 12.6% [16]. - The cumulative textile and apparel exports from January to October 2025 amounted to approximately $243.94 billion, reflecting a year-on-year decline of 1.79% [18]. Market Performance - The A-share textile and apparel sector rose by 2.75% in the last week, outperforming the broader market [6]. - The current PE valuation for the textile and apparel sector stands at 20.65 times, below the historical average of 24.70 times [10]. Key Announcements and News - Huitai Textile reported a 6.7% decline in revenue for the six months ending September 30, 2025, primarily due to tariff disruptions and low capacity utilization [33]. - Kappa's parent company reported a 49% increase in profit for the first half of the fiscal year, indicating strong brand and operational performance [34].

Investment Rating - Investment advice: The report suggests a focus on the accelerating US-China space computing competition, highlighting key companies to watch [3][9]. Core Insights - The US-China space computing race is intensifying, with Musk proposing a space AI satellite plan and Beijing initiating the construction of a gigawatt-level space data center [3][9]. - The US "Genesis Plan" aims to integrate resources from 17 national laboratories to accelerate foundational research in key areas such as nuclear fusion and biotechnology [3][9]. - Chinese companies are demonstrating full-stack AI capabilities, with Alibaba's Qwen app achieving over 10 million downloads and DeepSeek's math model reaching international gold standards [3][9]. Summary by Sections Space Computing Developments - Musk envisions deploying AI computing centers in space within 4-5 years, with plans for 100 gigawatts of solar AI satellites annually, which is equivalent to a quarter of US power [3][9]. - Beijing's plan includes a three-phase approach for the gigawatt-level space data center, focusing on key technology breakthroughs, cost-reducing assembly, and mass production from 2025 to 2035 [3][9]. US Research Initiatives - The "Genesis Plan" was initiated by an executive order in November 2025, aiming to identify 20 national challenges within 60 days and showcase initial results within 270 days [3][9]. - Collaboration with private sector companies like NVIDIA and AMD is part of the plan to enhance computational resources for scientific research [3][9]. Chinese AI Innovations - Alibaba's Qwen app, based on the Qwen3 model, has become one of the fastest-growing AI applications globally, indicating a significant breakthrough in the AI to consumer market [3][9]. - DeepSeek's math model, DeepSeekMath-V2, has introduced a self-verification mechanism, achieving gold-level performance in international competitions [3][9].

Group 1: Global Market Trends - The S&P 500 index rose by 3.73%, while developed market stock indices increased by 3.41% during the week of November 24-28, 2025[7] - Commodities saw a general increase, with COMEX copper up by 5.64% and London gold rising by 3.80%[7] - The US dollar index fell by 0.71%, and the Chinese yuan appreciated by 0.44% against the dollar[7] Group 2: US Economic Indicators - Manufacturing new orders (excluding aircraft) grew by 4.02% year-on-year in September, indicating continued growth[8] - The US retail and food service sales increased by 4.26% year-on-year in September, but the growth rate has slowed compared to previous months[12] - The US housing price index fell to 338.25 in September, with a year-on-year growth rate of 1.36%, down from 1.57% in August[8] Group 3: Monetary Policy Expectations - The expectation for a Federal Reserve rate cut in December has surged to 80%[20] - European Central Bank President Lagarde stated that current interest rates are appropriately set, with no immediate need for adjustment[21] - The Bank of Japan's December rate hike expectations have not increased, with a cautious stance from its committee members[25]

Investment Rating - The report initiates coverage on Zhihu-W (2390 HK) with an "Outperform" rating, targeting a price of HK$14.80 [2][5][24]. Core Insights - Zhihu is positioned as China's leading Q&A-centric online content community, leveraging generative AI to enhance content supply and commercial conversion, which is expected to unlock new monetization opportunities [3][19]. - The company aims to achieve its first annual adjusted profit in 2025, with a focus on improving operational efficiency and reducing costs [8][22]. - The integration of AI tools is transforming the community ecosystem, significantly increasing user engagement and monetization potential [23]. Financial Overview - For FY25, total revenue is projected to decline by 24% to RMB 27.5 billion, with adjusted net profit expected to be RMB 33.34 million, marking a return to profitability [9][20]. - The company reported a total revenue of RMB 6.589 billion in Q3 2025, a 22% year-over-year decline, but better than market expectations [20][21]. - Adjusted gross profit margin is expected to improve from 60.6% in FY24 to 61.7% in FY25, indicating a focus on margin expansion [17][20]. Business Segment Outlook - Online marketing services are anticipated to bottom out in Q4 2025, with management confident in maintaining revenue levels in 2026 [21]. - Paid membership services are being refined to enhance user experience and community integration, with projected revenue of RMB 344 million for Q4 2025 [21][22]. - The vocational education segment has reached breakeven and is now included in the "Other" business category, contributing to overall revenue stability [21][22]. Valuation Analysis - The report assigns a price-to-sales (P/S) ratio of 1.2 for FY25, reflecting a cautious valuation approach due to ongoing business adjustments [13][24]. - The target price of HK$14.80 is based on the company's unique positioning in the Q&A community and the anticipated benefits from AI integration [5][24].

Investment Rating - The report assigns an "Outperform" rating to several companies in the discretionary consumption sector, including Pop Mart, Anta Sports, Huazhu Group, Miniso, Li Ning, Atour Group, New Oriental Online, and Xtep International [1][5]. Core Insights - The report highlights the stable long-term growth of Luckin Coffee despite facing short-term margin pressures, indicating resilience in the F&B sector [2]. - The introduction of new children's meal sets by Taier emphasizes the trend towards fresh and healthy dining options, reflecting consumer preferences [2]. - The report notes the expansion of Midea's automotive parts production in Mexico, which supports local manufacturing for North American electric vehicle clients [2]. - The implementation of new national standards for smart home appliances starting May 1, 2026, is expected to enhance product quality and consumer trust in the home appliances sector [2]. Summary by Sections Company Performance - Guming and Pop Mart were the top performers this week, with stock price increases of 12.6% and 12.8% respectively [3][7]. - SuperHi International reported a revenue of $21 million for Q3 2025, a year-on-year increase of 7.8%, but faced a significant drop in net profit due to increased foreign exchange losses [2][5]. - Chagee's Q3 results showed a revenue decline of 9%, with adjusted net profit down 22% [2][5]. Market Trends - The report indicates a growing trend in the F&B sector towards fresh and healthy meal options, as seen with Taier's new children's meal offerings [2]. - The smart home appliance market is set to evolve with the introduction of new standards, which will likely drive innovation and consumer adoption [2].

Investment Rating - The report initiates coverage on Weibo-SW (9898 HK) with an "Outperform" rating, targeting a price of HK$107.00 [2][12][26] Core Insights - Weibo maintains a unique position in the Chinese social media landscape, characterized by a large user base, rich social connections, and effective marketing solutions. The application of generative AI is expected to enhance monetization efficiency [3][20] - The company's Q3 2025 results showed mixed performance, with total revenue of US$442.3 million, a 5% year-over-year decline, and online advertising revenue down 6% in USD terms [21][9] - Management expresses confidence in achieving full-year profit targets and commits to annual shareholder returns, with a history of distributing approximately US$200 million in dividends each year [5][24][25] Financial Performance - For FY2025, total revenue is projected at US$1.725 billion, a 2% decrease from the previous year, with adjusted net profit expected to be US$461 million [10][17] - The gross profit margin is forecasted to be 76.5% in FY2025, with an adjusted operating profit margin of around 30% [17][24] - The report anticipates a gradual recovery in advertising revenue, particularly in Q4, supported by events like the Double 11 shopping festival [22][4] Business Outlook - Weibo's community engagement remains strong, with significant growth in user interaction metrics, indicating a solid foundation for future monetization [23][9] - The report highlights the resilience of certain sectors, such as e-commerce and automotive, while noting challenges in gaming and consumer electronics due to budget constraints [4][22] - The company is exploring new monetization channels, including membership services and content payment scenarios [9][10] Valuation Analysis - The report assigns a valuation multiple below the industry average, reflecting Weibo's stable user base and moderate growth phase. The target price is set at 8x FY26 PE [12][26] - Comparatively, Weibo's valuation metrics are positioned lower than those of other internet companies, indicating potential for upside as market conditions improve [12][13]

Investment Rating - The report initiates coverage on Baidu with an "OUTPERFORM" rating, indicating an expectation of performance exceeding the market average [1]. Core Insights - Baidu is focusing resources on the development and monetization of AI technologies, with AI-driven new business revenues growing by over 50% year-on-year, contributing 39% to core revenues [2][21]. - The Apollo Go business is expanding rapidly, with weekly fully driverless orders exceeding 250,000 and cumulative orders surpassing 17 million, indicating significant growth potential [3][22]. - Traditional advertising is under pressure, while cloud services continue to show strong growth, with expectations of a 14% decline in core advertising revenue and a 14% increase in cloud revenue in Q4 [3][24]. Financial Summary - Baidu's revenue for Dec-24 is projected at RMB 133,125 million, with a slight decline expected in subsequent years [17]. - Net profit is forecasted to decrease significantly in Dec-25 to RMB 18,707 million, before recovering in the following years [17]. - The gross profit margin is expected to decline from 50.3% in Dec-24 to 43.1% in Dec-25, with a gradual recovery anticipated thereafter [17]. Valuation and Price Target - The report employs a Sum-of-the-Parts (SoTP) valuation method, estimating a target price of HK$171 per share, corresponding to an 18x PE ratio for FY25 [4][25]. - Key components of the valuation include traditional search ads valued at US$2.2 billion, AI cloud services at US$3.5 billion, and Robotaxi at US$57.3 billion [4][25]. Business Segment Outlook - The traditional advertising segment is facing challenges, but the cloud business is expected to maintain high growth rates, driven by demand for large language models [10][24]. - AI-related businesses are being prioritized, with significant revenue growth reported in AI cloud infrastructure and AI-native marketing services [2][21][22].

Investment Rating - The report initiates coverage with an "OUTPERFORM" rating, indicating expected performance above the market average [2][13]. Core Insights - New Oriental is recognized as a leading integrated education service provider in China, excelling in various segments including K-12 and overseas services. The company is leveraging generative AI to enhance operational efficiency and content quality, which is expected to support margin expansion [3][20]. - For FY26, the company anticipates a significant increase in shareholder returns, announcing a total of US$490 million in shareholder returns, including a cash dividend of US$190 million and a share buyback plan of US$300 million [5][25]. - The financial outlook for FY26 includes projected revenues of US$5.37 billion, with a net profit of approximately US$561 million, reflecting a profit margin of 10.4% [9][18]. Summary by Sections Financial Performance - In Q1 FY26, total revenue grew by 6.1% year-over-year to US$1.523 billion, exceeding previous guidance [21]. The adjusted operating profit increased by 11.3% to US$335.5 million, with an operating profit margin of 22% [4][24]. - The deferred revenue reached US$1.906 billion, marking a 10% year-over-year increase [21]. Business Segments - The K-12 segment is expected to accelerate in Q2 FY26, with high school growth projected at 12% and K9 new initiatives at 21% [22]. - The overseas business, while facing macroeconomic pressures, showed slight growth in Q1 FY26, with expectations of a 5% decline in Q2 due to high base effects [23]. Shareholder Returns - The company has committed to a shareholder return plan with a payout ratio exceeding 50%, reflecting confidence in future profit growth [5][26]. - The expected dividend yield is approximately 5% based on the latest market capitalization [25]. Valuation - The target price is set at HK$49 per share, based on an 18x price-to-earnings ratio for FY26, indicating a strong valuation relative to peers [2][13].