Group 1 - The core viewpoint of the report indicates that the stock-bond yield spread has risen to 1.5%, positioned between +1 and +2 standard deviations, with a decrease in the valuation differentiation coefficient [1][58]. - Market sentiment is converging, with a decline in industry rotation intensity, and the market is currently favoring large-cap stocks over micro-cap stocks [1][59]. - The market structure shows a decrease in trading volume, with leading sectors being communication, electronics, and banking, while potential alpha opportunities exist within beauty care, social services, and retail [1][61]. Group 2 - The report highlights that the average daily trading amount of the Stock Connect has decreased by 50.6 billion yuan compared to the previous week, with a drop of 2.02 million in the average daily trading volume [1][96]. - The top three stocks in terms of Stock Connect trading volume are Ningde Times, North Huachuang, and Kweichow Moutai, with recent five-day price changes of -1.6%, 7.2%, and 1.8% respectively [1][96]. - Net inflow of leveraged funds is 0.1 billion yuan, primarily flowing into the electronics, communication, and pharmaceutical sectors [1][96]. Group 3 - Industry hotspots include the launch of the "Gift" feature in WeChat Mini Stores, which is expected to enhance user engagement and drive e-commerce growth [1][70]. - Jiangsu Province has initiated competitive allocation for offshore wind power projects for 2024, indicating ongoing progress in the offshore wind sector [1][71]. - The report notes the official release of the Doubao visual understanding model, which accelerates the commercialization of large models and opens up investment opportunities in AI applications [1][72]. Group 4 - The report suggests focusing on the cross-year market direction, with expectations for a continuation of the technology sector's performance, particularly in Doubao and WeChat's "Gift" feature [1][74]. - It emphasizes the importance of mergers and acquisitions, debt reduction, sustained demand growth, and certainty in growth as key investment directions for the medium to long term [1][80].

Investment Rating - The report maintains a "Strongly Outperform" rating for the industry, indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% over the next six months [41]. Core Insights - The report highlights the acceleration of domestic semiconductor material localization, with rapid expansion in downstream wafer factories, suggesting that leading companies will maximize their industry dividend advantages [19]. - The Ministry of Industry and Information Technology has set a target to establish over 100 new material standards by 2027, aiming for a more optimized standard system and significantly enhanced standard supply capabilities [60][81]. - The report notes that the price of gallium surged by 17% within a week following China's strengthened export controls, reaching $595 per kilogram, the highest price since 2011 [83]. Summary by Sections Overall Market Review - The Wind New Materials Index closed at 3614.66 points, down 1.71% week-on-week. Among six sub-industries, the semiconductor materials index fell to 6458.15 points, down 0.94% [18][26]. Key Company Weekly Performance - The top five gainers this week included Lianrui New Materials (20.36%), Huitian New Materials (11.06%), and Puyang Huicheng (9.4%) [57][36]. - The top five decliners were Changyang Technology (-12.54%), Jinbo Shares (-9.01%), and Aoke Shares (-8.34%) [58][80]. Recent Industry Hotspots - The report discusses the investment of approximately 1 billion yuan by Shanghai Jinhua Adhesive New Materials Co., Ltd. to expand its production capacity for new adhesive materials, including electronic and automotive adhesives [41][83]. - The report emphasizes the importance of the electronic glue sector, which is expected to see significant growth due to increased production capacity [41]. Related Data Tracking - In November, China's integrated circuit export value reached $13.755 billion, a year-on-year increase of 11%, while imports amounted to $33.864 billion, a year-on-year increase of 3.68% [86].

Monetary Policy Changes - The Federal Reserve lowered the benchmark interest rate by 25 basis points to a range of 4.25% to 4.50%[4] - The dot plot indicates a reduction in the expected number of rate cuts for next year from 4 to 2[4] - Fed Chairman Powell stated that if inflation does not consistently move towards 2%, the pace of rate cuts may slow down[4] Economic Data Insights - The Q3 annualized GDP growth rate was 3.1%, exceeding both the previous and expected values of 2.8%[24] - The core PCE price index for Q3 was 2.2%, higher than the previous and expected values of 2.1%[24] - The final value of Q3 real personal consumption expenditures was 3.7%, above the previous value of 3.5%[24] - November retail sales increased by 0.7%, surpassing both the previous and expected values of 0.5%[24] Market Reactions - Following the Fed's announcement, the US stock indices experienced significant declines, influenced by hawkish comments from Fed officials and the adjusted rate cut expectations[4] - The market now anticipates only one rate cut in 2025, reflecting a substantial cooling of rate cut expectations[4][14] Asset Performance - Major global asset classes showed mixed performance, with the Russian Ruble appreciating by 5.36% against the Renminbi, while CBOT soybean oil fell by 6.37%[4][66] - The S&P 500 index declined by 1.99% this week, while the Dow Jones Industrial Average fell by 2.25%[30][60] Labor Market Trends - Initial jobless claims decreased to 220,000 from the previous 242,000, indicating a tightening labor market[24] - Continuing claims also fell to 1.874 million from 1.879 million, further suggesting labor market resilience[24]

Industry Investment Rating - Stronger than the market (maintained rating) [4] Core Views - The integration of Apple's ecosystem with domestic large models is key to the landing of AI phones in China [1] - Apple's AI features require local partners to address technical and regulatory challenges for successful implementation in China [1] - Apple is in talks with Tencent and ByteDance to integrate their AI models into iPhones sold in China, which could accelerate the localization of Apple's AI features [1][75] - The successful integration of domestic large models into Apple's ecosystem and the smooth landing of localized iPhone AI experiences are expected to boost Apple's sales in China and create growth opportunities for related industry chains [1] Market Performance - The electronics sector rose by 0.22% this week, ranking second among all industries [29] - The semiconductor sub-sector saw the largest increase, up 5.40%, while electronic chemicals had the smallest increase, up 0.43% [11] - Notable stock performers in the SW electronics sector include Mingyang Circuit (up 26.19%) and Fullhan Microelectronics (up 25.16%), while Guanghua Technology (down 15.51%) and *ST Meixun (down 12.72%) were among the biggest decliners [12] Valuation Analysis - The overall PE (TTM) of the electronics industry this week was 57.14x, slightly higher than the previous week [16] - Sub-sector valuations: consumer electronics (31.05x), electronic chemicals (59.06x), components (39.25x), other electronics (62.89x), optoelectronics (58.43x), and semiconductors (92.96x) [18] Industry Dynamics - Micron announced progress on its next-generation HBM4 and HBM4E processes, with HBM4 expected to enter mass production in 2026 [20] - TSMC's Kumamoto factory in Japan is set to begin mass production this year, using 22/28nm and 12/16nm process technologies [21][58] - Apple is in early discussions with Tencent and ByteDance to integrate their AI models into iPhones sold in China [59] - Huawei led the global wearable device market in the first three quarters of 2024, with a 44.3% year-on-year increase in shipments [60] - India's PC and tablet market is expected to grow by 17% in 2024, driven by strong demand in the education sector [61][62] - Global AR/VR headset shipments grew by 12.8% in Q3 2024, with Meta maintaining a 70.8% market share [63][64] - AMOLED panels are projected to account for 43% of display panel market revenue by 2028, up from 34% in 2022 [66] - Samsung Display plans to continue selling its 8th-generation LCD equipment as it shifts focus to OLED production [67][69] - OLED laptop penetration is expected to exceed 5% by 2027, driven by Apple's adoption of OLED technology in MacBooks [71][72] Company Dynamics - Notable shareholder changes include Guoxin Technology (reducing holdings by 0.58%) and Laite Optoelectronics (reducing holdings by 2.00%) [53] - Mingyang Circuit saw significant shareholder reductions, with multiple entities reducing their stakes [90]

继续演绎。铜，供给端，本周铜精矿现货TC持稳处于低位，矿山新增 产能有限与冶炼产能扩张的矛盾仍在继续演绎，多家矿企确定2025年 铜精矿长单TC/RC分别为21.25美元/吨和2.125美分/磅。需求端，临近 年底，多数精铜杆厂在手订单较为充足但新增订单减少，且年底或转 向回款和安排检修。全球铜库存52.44万吨，环比-3.22万吨，同比 26.27万吨。我们认为，美联储降息方向确定，铜供需紧平衡对铜价构 成强支撑；中长期，随美联储降息加深提振投资和消费，同时打开国 内货币政策空间，叠加美国大选后宽货币宽财政带来的通胀反弹将支 撑铜价中枢上移。个股：铜矿推荐紫金矿业、洛阳钼业，小而优关注 铜陵有色、西部矿业、金诚信，其他关注河钢股份、藏格矿业等；电 解铝推荐中国铝业、中国宏桥，关注天山铝业、南山铝业、云铝股 份、神火股份等；锡建议关注锡业股份、兴业银锡、华锡有色。 ➢ 新能源金属：锂，24全年过剩局面未改，旺季虽然反弹但高度有 限，仍需通过锂价超跌实现供需再平衡；中长期看，锂矿为电动车产 业链最优质且弹性大的标的，关注股票和锂价双底部战略性布局机 会。稀土，商家情绪极度悲观，年关将至开始大跌属于经营策略上变 ...

Core Views - The rise of China's AI industry may reshape global perceptions of the US tech system, potentially suppressing dollar financing and impacting the existing pricing system [2] - Rapidly rising US real interest rates may reflect intensifying stagflation pressures, increasing the risk of economic downturn [2] - US PCE data indicates potential downward pressure in the services sector, while durable goods manufacturing remains strong [2] - US stocks face dual pressures from stagflation and the rise of China's AI applications, further exacerbating risks [2] - Trump's potential implementation of domestic circulation policies could maintain high US real interest rates in a stagflation scenario, mitigating economic downturn risks [2] - Mid-term optimism for gold, autonomous and controllable leaders, cyclical core assets, state-owned enterprises, and AI applications Long-term optimism for state-owned enterprises, the Belt and Road initiative, new consumption, Hong Kong's Hang Seng Tech O2O, semiconductor equipment, military, and traditional manufacturing leaders [2] Market Review and Style Shift - Broad-based indices showed mixed performance, with the STAR 50 and SSE 50 indices gaining [38] - The technology sector outperformed, while consumer and cyclical sectors saw deeper declines [21] - Market style may be entering a transition window, with high-beta, large-cap, and institutionally heavy stocks showing smaller declines [40] - Foreign investors' futures positions diverged, with IC, IM, and IH net short positions narrowing, while IF net short positions widened [64] Industry Performance - Technology sector led gains, with semiconductors, communication equipment, and components outperforming [73] - Fisheries, entertainment goods, and hotel catering sectors underperformed [73] - Hard tech sectors such as semiconductors and communication equipment led in relative outperformance against the SSE Index [73] Economic Data and Forecasts - The Fed reduced its 2025 rate cut expectations from four to two, citing persistent inflation pressures [15] - US PCE inflation in November was weaker than expected, with core goods inflation rising and core services inflation slowing [32] - US real consumption growth weakened, with core goods consumption stronger than core services consumption [92] - Fed's economic data forecasts show improved expectations for 2025 US economy, with stronger inflation expectations [15] Next Week's Focus - Key data to watch include US Federal Reserve bank reserve balances and China's industrial enterprise profits [77] Sector and Asset Allocation - Mid-term focus on gold, autonomous and controllable leaders, cyclical core assets, state-owned enterprises, and AI applications [2] - Long-term focus on state-owned enterprises, the Belt and Road initiative, new consumption, Hong Kong's Hang Seng Tech O2O, semiconductor equipment, military, and traditional manufacturing leaders [2]

Investment Rating - The industry rating is "Outperform the Market" [9] Core Insights - The semiconductor sector has shown significant price fluctuations, with notable increases in companies like Huagong Information (+5.9%) and Cambricon (+19%), while others like Longxin Zhongke have decreased (-7.4%) [1] - ByteDance's recent upgrade of its Doubao large model is expected to benefit domestic computing power companies, indicating a positive trend for the industry [1] - The semiconductor index has seen a rise of 7.48% this week, with the semiconductor transaction volume accounting for 6.4% of the total A-share market, reflecting a growing interest in the sector [24] Summary by Sections Digital Chips - The digital chip sector has experienced varied stock price movements, with notable gains in companies like Loxin Technology (+23%) and Ruixin Micro (+21%) [1] - OpenAI's release of an SDK for microcontrollers is expected to enhance the integration of AI capabilities in projects using Loxin chips [1] Simulation - The simulation sector has shown significant differences in stock performance, with companies like Fuman Micro (+17.1%) performing well, while others like Naxin Micro (-9.4%) faced declines [3] Packaging and Testing - The packaging and testing sector has seen a notable increase of 4.03%, with companies like Yongxi Electronics (+18.04%) leading the gains [4] Equipment - The equipment sector has rebounded, with companies like Jingzhida (+14.83%) showing strong performance, primarily due to the removal of sanctions on key players [11] Storage - The storage sector has seen all stocks rise, with Zhaoyi Innovation increasing by 21.7%, driven by strong demand in the data center segment [32] Manufacturing - The wafer foundry sector has shown a significant increase of 4.52%, with companies like SMIC rising by 13.6% [33] Focused Companies - The report highlights key companies to watch, including Cambricon, SMIC, Naxin Micro, Longxin Zhongke, Huafeng Measurement, and Loxin Technology [12]

Investment Rating - The report maintains an "Outperform" rating for the power equipment and new energy sector, indicating a positive outlook compared to the broader market [2]. Core Insights - The report highlights that the domestic photovoltaic (PV) installed capacity is expected to exceed 250GW in 2024, with a cumulative year-on-year increase of 25.9% as of November 2023. The report emphasizes the strong performance of the PV sector, driven by year-end project rushes [3][29]. - The offshore wind power sector is gaining momentum, with Jiangsu and Liaoning provinces initiating competitive bidding for offshore wind projects, indicating a high level of market activity and investment opportunities [41][42]. - The hydrogen energy sector is actively being promoted by the National Energy Administration, with significant developments such as the operation of the first 1.5MW hydrogen power station in China [5][80]. Summary by Sections 1. New Energy Vehicles and Lithium Battery Sector - The report discusses the launch of standardized battery swapping solutions by CATL and the introduction of NIO's flagship electric vehicle ET9, indicating advancements in the electric vehicle market [16][17]. 2. New Energy Generation Sector 2.1 Photovoltaic Sector - As of November 2023, the cumulative installed capacity of solar energy reached approximately 820GW, with a year-on-year growth of 46.7%. The report anticipates that the domestic PV installed capacity will exceed 250GW in 2024, maintaining a robust growth trajectory [30][29]. 2.2 Wind Power Sector - The report notes that Jiangsu has initiated a competitive bidding process for 7.65GW of offshore wind projects, with expectations for smooth project progression and significant contributions to future grid connections [41][42]. 3. Energy Storage Sector - The report highlights a significant increase in energy storage installations in the U.S., with a year-on-year growth of 80% in Q3 2023. It also mentions potential policy changes in India that could accelerate energy storage development [46][54]. 4. Power Equipment and Industrial Control Sector - The report indicates a substantial increase in grid investment, with November 2023 seeing a 51.54% month-on-month growth. The overall investment in power grid projects is expected to exceed 600 billion yuan in 2024 [61][62]. 5. Hydrogen Energy Sector - The report outlines the proactive measures taken by the National Energy Administration to advance the hydrogen energy sector, including the operation of a 1.5MW hydrogen power station and plans for significant hydrogen production capacity by 2027 [75][80].

Investment Rating - The industry rating is "Outperform the Market" [10] Core Insights - The automotive industry is experiencing strong retail and wholesale growth, with retail sales of passenger cars reaching 1.083 million units in the first half of December, a year-on-year increase of 34% [1] - The report highlights the increasing focus on robotics within the automotive sector, with companies like BYD and NIO actively expanding their robotics capabilities [3][5] - The report anticipates a continued rise in market share for domestic brands, particularly in the luxury segment, driven by policy support and product innovation [21] Summary by Sections Industry Changes - As of December 19, nearly 2.7 million vehicles have been scrapped, and over 3.1 million vehicles have been replaced nationwide [1] - NIO launched its ET9 model and introduced a new brand, "Firefly" [1] - CATL is expanding its battery swap network with the launch of the "Chocolate" battery swap ecosystem [1] Market Performance - The automotive index saw a decline of 1% this week, ranking 8th out of 31 sectors [31] - The Wind Robotics Index decreased by 2.62%, ranking 191st out of 308 [2] Investment Recommendations - Recommended stocks include major players in the automotive sector such as BYD, Geely, and Li Auto, which are expected to benefit from strong fundamentals and market positioning [21][32] - Focus on companies with robotics integration, such as Siasun Robot & Automation and other domestic robotics firms [4][32] Future Outlook - The report suggests that the automotive sector will continue to grow, particularly with the anticipated rollout of new policies and products in 2024 [21] - The integration of advanced driving technologies and robotics is expected to create new investment opportunities within the automotive supply chain [32][33]