Consumption - Domestic demand is recovering, with service consumption potential being significant, as evidenced by high visitor numbers at Shanghai Disneyland and ongoing winter tourism demand in Hainan[3] - Automotive sales show a slight decline, with retail and wholesale volumes at near-average levels for recent years[6] - Food and beverage prices are rising due to pre-holiday stocking, with agricultural product wholesale prices reaching recent highs[6] Investment - Real estate sales are showing marginal improvement, with new home transaction area declines narrowing from 33.7% to 23.4% year-on-year[18] - Infrastructure investment is supported by improved fiscal spending, although November's spending remains below last year's levels[18] - Land transaction area has seasonally increased, but the land premium rate has dropped to 1.8%, indicating ongoing price competition[18] Trade and Export - Port operations are showing marginal improvement, with an increase in the number of outbound vessels compared to the previous week[24] - Domestic export freight rates have risen by 0.6%, with Ningbo and Shanghai seeing increases of 3.2% and 3.1% respectively[24] - The Baltic Dry Index (BDI) has dropped by 12.9% due to excess shipping capacity and seasonal factors affecting international trade[24] Production - Production rates are showing divergence across sectors, with high operating rates in formaldehyde and lithium iron phosphate, while polyester and lithium battery demand support production[26] - Steel and photovoltaic industries are experiencing mixed performance, with upstream and downstream sectors showing different trends[26] Prices and Inflation - Industrial product prices are declining, with the Consumer Price Index (CPI) showing structural differentiation in price movements across categories[42] - The Producer Price Index (PPI) continues to decline, with coal prices dropping and Brent oil prices also decreasing, reflecting weak winter demand[42] Liquidity - The Renminbi continues to strengthen, with the exchange rate against the US dollar improving from 7.0554 to 7.0410[46] - The 10-year government bond yield has decreased by 0.9 basis points to 1.83%[47]

Economic Overview - The national economy in November 2025 showed characteristics of "stable production, differentiated consumption, and pressured investment" with industrial production recovering to normal levels after holiday disruptions[2] - Emerging industries continue to be the main support for production and investment, although industrial growth has slightly slowed down, indicating significant industry differentiation[6] Production Insights - The industrial added value in November increased by 4.8% year-on-year, a slight decrease of 0.1 percentage points from the previous month, while month-on-month growth improved by 0.44 percentage points[8] - The production-sales rate for industrial enterprises was 96.5%, showing a month-on-month increase of 0.1 percentage points, with the export delivery value decline narrowing from 2.1% to 0.1%[8] Consumption Trends - Retail sales growth in November was 1.3% year-on-year, marking a continuous decline for six months, with large-scale retail sales dropping by 2.0%[20] - The promotional season had limited impact on consumer spending, with online retail growth decreasing from 8.1% to 5.4%[22] Investment Analysis - Fixed asset investment from January to November decreased by 2.6% year-on-year, with November showing a month-on-month decline of 12.0%[26] - Manufacturing, broad infrastructure, and real estate investments saw declines of -4.5%, -11.9%, and -30.3% respectively, indicating a challenging investment environment[26] Risk Factors - There is an increasing uncertainty in external trade and a potential unexpected decline in domestic demand, which could further pressure economic growth[37]

Investment Rating - The report maintains an "Outperform" rating for Wuliangye [2][10][17] Core Insights - Wuliangye's 29th Distributor Conference emphasized "Consensus, Co-construction, and Shared Benefits," outlining strategies for long-term growth amid industry restructuring [3][12][13] - The company is focusing on three core strategies: restructuring manufacturer-retailer relationships, innovating pricing strategies, and enhancing internationalization efforts [3][13] - Wuliangye aims to increase its market penetration among younger consumers and expand its product offerings, particularly targeting banquet scenarios [4][14] Financial Projections - Revenue projections for 2025-2027 are RMB 744 billion, RMB 773 billion, and RMB 814 billion, respectively, with net profits of RMB 255 billion, RMB 261 billion, and RMB 273 billion [6][17] - The expected diluted EPS for the same period is RMB 6.6, RMB 6.7, and RMB 7.0 [6][17] - The target price has been adjusted from RMB 164 to RMB 161, reflecting a 24x PE for 2026 [6][17] Market Dynamics - The liquor industry is experiencing a shift from simultaneous volume and price growth to a focus on quality-price balance, with demand stratification expected to deepen [5][15] - The report anticipates a recovery in demand for mid-tier products (RMB 1,000-1,500) and growth in the mass market (below RMB 300) [5][15]

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of 27.50 CNY per share based on a 25x PE ratio for 2026E [4][11]. Core Insights - The company is a leading player in the Chinese oatmeal market, with its competitive advantages in brand marketing, product innovation, supply chain, and distribution channels continuing to expand. The report anticipates significant growth potential and profit elasticity for the company in the future [1][4]. - The oatmeal market in China has seen rapid growth, with a compound annual growth rate (CAGR) exceeding double digits over the past seven years, and it is expected to continue growing as health awareness increases [4][26]. Financial Summary - The company's total revenue is projected to grow from 1,578 million CNY in 2023 to 3,221 million CNY by 2027, reflecting a CAGR of approximately 19% [3][11]. - Net profit attributable to the parent company is expected to rise from 115 million CNY in 2023 to 320 million CNY in 2027, with a significant increase in earnings per share (EPS) from 0.52 CNY to 1.43 CNY over the same period [3][11]. - The report forecasts a net asset return (ROE) improvement from 7.9% in 2023 to 18.4% in 2027, indicating enhanced profitability [3][11]. Market Dynamics - The report highlights the increasing health consciousness among consumers, which is driving the rapid penetration of oatmeal in the market. The oatmeal segment has grown from a market size of approximately 40-50 billion CNY in 2018 to around 114 billion CNY in 2023, with expectations to reach 125 billion CNY by 2025 [26][32]. - The company has established a strong market position, surpassing competitors and achieving a market share of over 20% in 2023, solidifying its status as the leading brand in the oatmeal sector [33][35]. Competitive Advantages - The company has a comprehensive competitive edge, including a strong marketing strategy, a full supply chain layout, and robust product innovation capabilities. This has allowed the company to maintain its leadership position in the oatmeal market [4][33]. - The report emphasizes the company's ability to respond quickly to market trends and consumer demands, which has been crucial in expanding its product offerings and market reach [4][33].

Investment Rating - The report maintains a positive long-term outlook on thermal power, indicating a favorable investment rating for the sector [1]. Core Insights - The Energy Bureau has penalized five cases of collusion in power plant pricing, reflecting ongoing anti-competitive measures in the industry [4]. - Downstream manufacturing sectors, such as photovoltaic (PV) and machinery, are experiencing export growth, which is beneficial for the national economy [4]. - Moderate electricity price increases are seen as supportive of energy storage development and carbon neutrality goals, while lowering prices could hinder these objectives and miss global demand opportunities [4]. - The second round of electricity bidding may yield lower prices compared to the first round, with specific examples from Jiangxi and Jilin indicating price reductions [4]. - November saw a negative growth rate in thermal power generation, with industrial power generation showing a year-on-year increase of 2.7% [4]. - Fixed asset investment in the power and utilities sector grew by 10.7%, contrasting with a 2.6% decline in overall fixed asset investment [4]. - The retail power price spread in Anhui remains stable, with average retail prices at RMB 0.4182/kWh and wholesale prices at RMB 0.3970/kWh [4]. - Qinghai's spot power price is capped at RMB 0.65, which is hindering the development of energy storage solutions [4].

Performance Overview - Southeast Asia ETF rose by 1.59%, with Malaysia leading the gains while Vietnam weakened[37] - The Southeast Asia Technology ETF dropped by 4.76%, underperforming the broader Southeast Asia ETF by 6.36 percentage points[37] Country-Specific Performance - iShares MSCI Indonesia ETF fell by 0.42%, underperforming by 2.02 percentage points, indicating a stable market with mixed macro growth expectations[38] - iShares MSCI Singapore ETF decreased by 0.81%, underperforming by 2.40 percentage points, reflecting cautious market sentiment due to diverging business confidence[38] - iShares MSCI Thailand ETF increased by 0.44%, underperforming by 1.16 percentage points, amid limited monetary easing effects and structural growth challenges[38] - iShares MSCI Malaysia ETF rose by 3.73%, outperforming by 2.14 percentage points, supported by local currency appreciation and external capital inflows[38] - Global X MSCI Vietnam ETF dropped by 1.00%, underperforming by 2.59 percentage points, as market sentiment reversed due to concerns over domestic debt risks[38] Market Risks - Key risks include macroeconomic downturns and geopolitical uncertainties, which could impact market performance[36]

Investment Rating - The report maintains a focus on the innovative drug and medical device industry chain, indicating a high level of interest in this sector [1][6]. Core Insights - The innovative drug sector is experiencing high prosperity, with a recommendation to pay attention to pharmaceutical companies that are likely to see a revaluation of their value, such as Jiangsu Heng Rui Medicine, Hansoh Pharmaceutical Group, 3SBio, Sichuan Kelun Pharmaceutical, and Jiangsu Nhwa Pharmaceutical [6][25]. - The report highlights the Biopharma/Biotech sector, which is expected to see performance improvements as innovative pipelines are realized, with companies like Innovent Biologics, BeiGene, and others being of particular interest [6][25]. - Attention is also drawn to CXO and upstream companies benefiting from innovation, including WuXi AppTec and WuXi Biologics [6][25]. - The report emphasizes the potential recovery of leading medical device companies such as United Imaging Healthcare and Lepu Medical [6][25]. Summary by Sections A-Shares Performance - In the third week of December 2025, the A-share pharmaceutical sector performed similarly to the overall market, with the Shanghai Composite Index rising by 0.03% and the SW Pharma and Biotech index falling by 0.1%, ranking 19th among Shenwan primary industries [8][10]. - Sub-sectors that performed relatively well included pharmaceutical commerce (+4.9%), medical equipment (+1.2%), and medical services (+0.5%) [10][25]. - Notable individual stock performances included Anhui Huaren Health Pharmaceutical Co., Ltd. (+55.9%), Luyan Pharma (+36.8%), and ShuYu Civilian (+35.7%) [13][25]. Hong Kong and U.S. Market Performance - The Hong Kong pharmaceutical sector underperformed the market, with the Hang Seng Healthcare index down by 1.8% and the Hang Seng Index down by 1.1% [19][25]. - In contrast, the U.S. pharmaceutical sector outperformed the market, with the S&P Healthcare Select Sector rising by 0.6% compared to the S&P 500's 0.1% increase [19][25].

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].