Macro Insights - Japan's government has introduced a supplementary budget of 21.3 trillion yen, nearly 3% of GDP, as a significant economic policy under the new administration, aiming to boost economic growth in the short term [2] - However, the lack of monetary policy normalization support for this fiscal stimulus may increase the risk of inflation detachment and raise the risk premium in the bond market [2] Market Strategy - The Hong Kong stock market is entering a favorable positioning phase, with recent adjustments providing value opportunities, particularly in consumer services, construction, textiles, and home appliances [3][5] - The report suggests focusing on sectors that have been undervalued or "wrongly killed," such as electronics, pharmaceuticals, and automotive, as they may present greater recovery potential [3] - The technology sector in Hong Kong has seen significant corrections, but there remains potential for revaluation as liquidity conditions improve [3] Fixed Income Analysis - The fixed income market is currently experiencing a "pressure test," with global assets showing risk-off characteristics, and A-shares under pressure [8] - The report indicates that the bond market is in a "timely counterattack" window, but the upside may be limited, suggesting a cautious approach to trading opportunities [8] - Investors are advised to focus on low-priced bonds and quality new issues while reducing exposure to high-priced, overvalued securities [8] Oil and Gas Sector - OPEC+ has raised its production targets for December, but the overall supply-demand balance remains loose, with WTI and Brent crude prices declining by 3.2% and 2.6% respectively since the end of October [9] - The report anticipates that oil prices may remain in a downward range due to the supply-demand imbalance, projecting average Brent prices of $68 and $62 for 2025 and 2026 respectively [9] Utilities and Environmental Sector - The expansion of the carbon market is expected to enhance carbon reduction value, with the new plan covering an additional 30 billion tons of emissions, increasing the coverage to approximately 60% [10] - The report highlights the potential benefits for green electricity and environmental sectors due to the rigid demand for carbon reduction, recommending companies involved in carbon-related services [10] Company-Specific Insights - Miniso's Q3 revenue increased by 28.2% to 5.8 billion yuan, driven by effective large store strategies and improved operational efficiency, with a net profit of 770 million yuan [13] - Google is positioned to regain AI leadership with advancements in its AI ecosystem, including the development of competitive AI chips and applications in various sectors [14] - The report notes that the pharmaceutical company Stone Pharmaceutical has returned to revenue growth in Q3, with a focus on new product launches and collaborations enhancing its market position [15]

Core Insights - Recent market adjustments are influenced by debates surrounding AI narratives, tightening liquidity, and geopolitical disturbances, suggesting that the current market correction has begun to establish a sense of space [2][3] - The market valuation is approaching a "reasonable" central level, and if there is an overshoot, it may present opportunities to increase positions, focusing on mid-term themes and emphasizing safety margins [2][4] Market Adjustment Factors - The market correction is attributed to multiple factors: skepticism about sustained capital expenditure in AI, tightening liquidity expectations, and increased geopolitical tensions leading to a risk-off sentiment [3] - Historical data indicates that corrections caused by liquidity shocks often have a high probability of short-term rebounds [3] A-Share Market Valuation - Based on macro variables, the model predicts that the "reasonable" forward PE TTM central level for the Shanghai Composite Index is approximately 13.6x, indicating that the current correction has established a sense of space [4] Liquidity Improvement Signals - Positive signals for domestic liquidity include a potential reduction in leverage in financing funds, a rebound in private equity fund registration data, and a decrease in investor sentiment indicators [5] - The expectation for a rate cut by the Federal Reserve has risen to over 70%, which may improve overseas liquidity conditions [5] Investment Focus Areas - Emphasis on safety margins in investment strategies, focusing on sectors with low valuation and improving fundamentals, such as domestic consumption, domestic computing power, and innovative pharmaceuticals [6] - High-dividend assets are highlighted as having investment value in a low-risk appetite environment, with recommendations to focus on cyclical dividends and potential dividends in sectors like coal, chemicals, and food processing [6]

证券研究报告 建议择机入场 2025 年 11 月 23 日│中国内地 量化投资周报 本周观点：建议择机入场 上周，受全球流动性压力、美联储降息预期反复以及 AI 叙事松动多重因素 影响，全球风险偏好下降——VIX 指数攀升至近三个月高位，各类风险资产 均承压，其中比特币、微盘股等对流动性和风偏更敏感的资产领跌。我们的 模型认为 A 股经过上周的调整，整体上消化了过高的估值，观点由防御转 为看平。叠加周五美联储释放了略积极的降息信号，Nowcasting 模型预测 11 月 CPI 或将继续上行至 3.7%-3.8%，但核心 CPI 预计保持平稳，或有利 于市场风偏的恢复。建议择机入场，优选低位防御板块，本周行业轮动模型 加大了对低位消费板块的押注，风格上仍看好红利。 A 股大盘择时模型：上周回调消化了高估值压力，可择机入场 我们以万得全 A 指数作为 A 股大盘代理，从估值、情绪、资金、技术四个 维度对 A 股大盘进行整体方向性判断。今年以来，模型多空择时的扣费后 收益 43.84%，同期 A 股大盘涨跌幅为 20.09%，超额收益为 23.76%；上周 模型超额收益为 10.41%。上周，受全球流动性压力 ...

Group 1: Central Bank Policy Rates and Market Rates - The relationship between central bank policy rates and market rates focuses on two dimensions: OMO leading to funding rates and short-term government bond rates, and OMO influencing funding rates, short-term rates, and ten-year government bond yields. Since May, the DR001 funding rate has returned to fluctuate near the policy rate, indicating a stable funding environment ahead [1][17][19] - The MLF policy rate's role has been gradually diminished, with OMO rate plus an average of 70 basis points becoming the new anchor for ten-year government bond yields. Currently, the spread between ten-year government bonds and OMO is stable at around 40 basis points, which is slightly low compared to historical levels [1][19][20] Group 2: Commercial Banks' Asset and Liability Rates - The efficiency of the transmission of policy rates to deposit and loan rates has varied, leading to a continuous compression of banks' net interest margins. The central bank is enhancing the linkage between asset and liability rates to stabilize bank margins, with expectations that the pressure on net interest margins will ease in the future [2][20][26] - The decline in deposit rates has been slower compared to loan rates, with the average loan rate dropping by 2.38 percentage points since August 2019, while the average deposit rate has only decreased by 0.25 percentage points for demand deposits [2][20][21] Group 3: Relationships Among Different Asset Yields - There exists a relative relationship among various asset yields, such as deposit rates, loan rates, bond yields, and stock dividend yields. The average personal housing loan interest rate is currently around 3.1%, while the adjusted yield on 30-year government bonds is higher by approximately 20 basis points, indicating a favorable comparison for bonds over loans [3][28][29] - The downward adjustment of loan rates may face constraints due to the existing yield relationships, as the loan rates have remained relatively stable despite reductions in LPR and deposit rates [3][29] Group 4: Term and Risk Rate Relationships - The current level of term spreads is low, with expectations that the spreads will widen due to regulatory attitudes, stable funding conditions, and nominal GDP recovery. The credit spreads for short-term bonds are at historical lows, while mid to long-term bonds show slightly better value but with higher volatility [4][41][42] - The pricing of different risk rates is fundamentally a matter of credit spreads, which are influenced by liquidity premiums and credit risk premiums. The current credit spreads for various ratings are at low levels, indicating potential opportunities for investment [4][44][45] Group 5: Implications for Monetary Policy and Market Dynamics - The central bank's focus on maintaining reasonable interest rate relationships is crucial for macroeconomic balance and resource allocation. The recent emphasis on these relationships may lead to a more systematic and refined approach to monitoring and managing market rates [10][59] - The dynamics of the bond market are currently influenced by concerns over potential fund redemptions and the impact of new public offering regulations, which may limit the market's ability to respond positively to favorable economic indicators [9][60][61]

- The report introduces three quantitative models: Commodity Term Structure, Commodity Time-Series Momentum, and Commodity Cross-Sectional Inventory. These models are combined into a Composite Commodity Strategy using equal weighting of the three sub-strategies[25][26][28] - **Commodity Term Structure Model**: This model is constructed based on the roll yield factor to capture the contango and backwardation states of commodities. It dynamically goes long on commodities with high roll yields and short on those with low roll yields[26][30][33] - **Commodity Time-Series Momentum Model**: This model uses multiple technical indicators to capture medium- and long-term trends in domestic commodities. It dynamically goes long on assets with upward trends and short on assets with downward trends[26][35][36] - **Commodity Cross-Sectional Inventory Model**: This model is based on the inventory factor to reflect changes in the domestic commodity fundamentals. It dynamically goes long on assets with declining inventory and short on assets with increasing inventory[26][40][43] - **Evaluation of Models**: The Commodity Term Structure Model is noted for its strong performance, achieving a new high in net value during backtesting. The Time-Series Momentum Model has shown weaker performance recently, while the Cross-Sectional Inventory Model has demonstrated moderate gains[25][35][40] - **Backtesting Results**: - Commodity Term Structure Model: Two-week return of 2.31%, year-to-date return of 7.46%[30][33][34] - Commodity Time-Series Momentum Model: Two-week return of -0.38%, year-to-date return of -3.19%[35][36][39] - Commodity Cross-Sectional Inventory Model: Two-week return of 0.98%, year-to-date return of 5.43%[40][43][44]

Investment Rating - The report maintains a "Buy" rating for JOYY Inc. with a target price of $84.20 [6][11]. Core Insights - JOYY's Q3 revenue reached $540 million, slightly exceeding the expected $532 million, with a year-over-year decline of 3.3%. The adjusted net profit attributable to shareholders was $72 million, also above the consensus estimate of $70 million [1][6]. - The acceleration in BIGO's advertising revenue is a key driver for the company's performance, with a significant year-over-year growth of 33.1% in Q3 [2][3]. - The company is focusing on optimizing its advertising algorithms and expanding its client base, which is expected to further enhance advertising revenue growth in the future [1][2]. Revenue and Profitability - For 2025-2027, the projected revenues are $2.11 billion, $2.29 billion, and $2.42 billion, respectively, reflecting slight upward adjustments from previous forecasts [5][11]. - The adjusted net profit estimates for the same period are $275 million, $277 million, and $303 million, indicating a stable profit margin [5][11]. - The advertising business is anticipated to become a significant growth driver, with expectations of continued expansion in the coming years [11][12]. Segment Performance - The BIGO segment generated $470 million in revenue for Q3, with a notable recovery in advertising revenue, which grew by approximately 50% year-over-year [2][3]. - The live streaming business showed signs of recovery, achieving a 3.5% quarter-over-quarter growth, although it still faced a year-over-year decline of 12% [3][4]. - The "All other" segment reported revenues of $68 million, with a year-over-year increase of 9%, and is expected to narrow its operating loss significantly [4][11]. Valuation - The report adjusts the valuation method to a sum-of-the-parts (SOTP) approach, estimating a total market value of $4.5 billion for JOYY, corresponding to a target price of $84.20 per share [11][13]. - The valuation multiples for the BIGO live streaming and advertising businesses are set at 12.4x PE and 3.1x PS, respectively, aligning with comparable companies [13][14].

Investment Rating - The report maintains an investment rating of "Buy" for the company with a target price of HKD 12.75 [7]. Core Views - The company achieved a revenue of RMB 19.89 billion for the first three quarters of 2025, representing a year-over-year decline of 12.3%, but a growth of 3.4% year-over-year in Q3 [1]. - The net profit attributable to the parent company for the first three quarters was RMB 3.51 billion, down 7.1% year-over-year, with Q3 profit showing a significant increase of 27% year-over-year [1]. - The revenue growth in Q3 is attributed to the narrowing decline in the prescription drug business and the gradual dissipation of the impact from centralized procurement [1][2]. - The company is optimistic about the continued market expansion of new products such as Omaguzumab and Mingfule under the backdrop of ongoing market development [1][2]. Summary by Sections Revenue and Profitability - The company reported a revenue of RMB 19.89 billion for 1-3Q25, with Q3 revenue showing a 3.4% year-over-year increase and a 5.7% quarter-over-quarter increase [1]. - The net profit for 1-3Q25 was RMB 3.51 billion, with Q3 profit at RMB 960 million, indicating a strong recovery in profitability [1]. Product Pipeline and Business Development - The report highlights the potential of the EGFR ADC pipeline, with ongoing clinical trials both domestically and internationally, indicating strong competitive advantages [3]. - The company confirmed BD revenue of RMB 1.54 billion in 1-3Q25, with expectations for continued BD opportunities in 2026 [4]. Future Outlook - The company anticipates a return to positive growth in prescription drug revenue by 2026, driven by new product launches and the absence of major products in the latest round of centralized procurement [2]. - The projected net profits for 2025-2027 are RMB 4.55 billion, RMB 4.63 billion, and RMB 5.03 billion respectively, with corresponding EPS estimates of RMB 0.40, RMB 0.40, and RMB 0.44 [5][10].

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Insights - The company's total revenue for Q3 2025 reached 21.4 billion RMB, a year-on-year increase of 3.4%, exceeding the consensus expectation of 1.4%, primarily driven by strong growth in the apparel category [1] - Non-GAAP net profit for Q3 2025 was 1.5 billion RMB, up 14.6% year-on-year, with a non-GAAP net profit margin of 7.0%, slightly better than the consensus expectation of 6.9% [1] - The company is expected to achieve positive year-on-year revenue growth in Q4 2025 and 2026 through differentiated supply and innovative marketing strategies [1][4] Revenue and User Metrics - The total GMV for Q3 2025 was 43.1 billion RMB, reflecting a year-on-year increase of 7.5% [2] - Product revenue accounted for 19.4 billion RMB (91% of total revenue), growing 2.3% year-on-year, surpassing the consensus expectation of 1.0% [2] - Active customers reached 40.1 million, a year-on-year increase of 1.5%, with the number of Super VIP (SVIP) users growing at a double-digit rate [2] Profitability and Cost Structure - The company's gross margin decreased by 1 percentage point to 23.0% year-on-year, below the consensus expectation of 23.5%, attributed to customer incentive measures [3] - Operating expense ratio increased by 0.3 percentage points to 18.5%, primarily due to a rise in return rates affecting fulfillment costs [3] - The management aims to achieve scale expansion through differentiated products and is deploying AI agents to enhance user experience and marketing efficiency [3] Future Guidance and Shareholder Returns - The company guides for Q4 2025 revenue growth to be flat to +5%, indicating a potential for positive year-on-year growth following Q3 2025 [4] - As of Q3 2025, the company has returned a total of 730 million USD (approximately 5.2 billion RMB) through dividends and buybacks in 2025, reaffirming that total shareholder returns will not be less than 75% of 2024's non-GAAP net profit [4] Earnings Forecast and Valuation - The report slightly adjusts the non-GAAP net profit forecasts for 2025/2026/2027 down by 1.8%/1.3%/1.0% to 8.6 billion RMB/9.1 billion RMB/9.3 billion RMB [5] - The valuation window is shifted to 2026, with a target PE of 9x for 2026 non-GAAP net profit, which is at a discount compared to the comparable company average of 14.3x due to lower revenue growth expectations [5][25] - The new target price is set at 22.69 USD, up from the previous 21.22 USD [5]

Macro Overview - In September, the US added 119,000 non-farm jobs, exceeding Bloomberg's consensus estimate of 51,000, while the unemployment rate rose by 0.1 percentage points to 4.4% [2] - Hourly wage growth slowed to 0.2% month-on-month, below the expected 0.3%, and weekly hours remained stable at 34.2 hours, meeting expectations [2] - The strong job growth alleviated concerns about recession or economic slowdown, leading to increased expectations for interest rate cuts by the Federal Reserve [2] Fixed Income - October tax revenues continued to show strong performance, while narrow spending cooled due to high base effects [3] - Land transfer income was weak, and quasi-fiscal projects have not yet formed financial expenditures, leading to a negative year-on-year change in government fund expenditures [3] - The necessity for fiscal stimulus remains, with attention on the pace of budgetary fund expenditures and local fiscal space [3] Utilities and Environmental Protection - The year 2025 marks the second year of the action plan to replace hidden debts, with 4 trillion yuan of the 6 trillion yuan special debt limit issued by the end of August 2025 [4] - Since Q3, the environmental sector has seen better-than-expected national subsidy repayments for waste incineration and biomass power generation [4] - Price adjustments for sewage and waste treatment fees are expected to enhance cost recovery for related companies [4] Transportation - In October, despite being the e-commerce peak season, retail sales growth slowed due to the reduction of "old-for-new" subsidies and high base effects from the previous year [5] - The industry saw a slowdown in package volume growth, with year-on-year growth rates of 12.7% in September and 7.9% in October [5] - The "anti-involution" pricing strategy is expected to continue, with moderate growth in package volume and improved profitability for leading companies like Zhongtong Express [5] Key Companies - NetEase reported Q3 revenue of 28.4 billion yuan, an 8% year-on-year increase, with deferred revenue exceeding expectations due to contributions from "Fantasy Westward Journey" [5] - Nvidia's Q3 results showed strong demand for AI-related products, with a significant order visibility and a rebuttal to AI bubble concerns [10] - iQIYI's Q3 revenue was 6.7 billion yuan, down 7.8% year-on-year, but management noted positive impacts from new regulations and improvements in membership services [13] E-commerce and Advertising - Kuaishou's Q3 revenue increased by 13% to 35.6 billion yuan, with a notable improvement in gross margin and adjusted net profit [14] - Youdao's Q3 revenue reached 1.63 billion yuan, growing 3.6% year-on-year, driven by accelerated growth in advertising business [6]

Investment Rating - The report maintains a "Buy" rating for the company, Lenovo, with a target price adjusted to HKD 14.00 from the previous HKD 16.00, reflecting a 12.5% decrease [5][7]. Core Insights - Lenovo reported a revenue of USD 20.45 billion for 2QFY26, representing a year-over-year increase of 14.6%, surpassing Bloomberg's consensus estimate by 1.7%. The Non-HKFRS net profit attributable to shareholders was USD 512 million, up 25.2% year-over-year, exceeding the company's prior guidance by approximately 19% [1][5]. - The company benefits from a strong position in the global PC market, holding the largest market share and demonstrating robust supply chain management capabilities, which enhances its resilience against industry cycles [1][2]. - The AI-related business has become a core growth driver, with its revenue contribution reaching 30% and a year-over-year increase of 13 percentage points [1][5]. Summary by Sections IDG (Intelligent Devices Group) - IDG's revenue increased by 11.8% year-over-year, with an operating profit margin of 60%. The global PC market share rose by 1.8 percentage points to 25.6%, marking a record high [2]. - Driven by mixed AI demand, PC revenue grew by 17% year-over-year, with AI PC penetration increasing by 16 percentage points to 33% of total shipments [2]. ISG (Infrastructure Solutions Group) - ISG's revenue grew by 23.7% year-over-year, primarily due to strong demand for cloud infrastructure and enterprise solutions. The AI server business recorded high double-digit revenue growth [3]. - The Neptune liquid cooling technology saw a revenue increase of 154% year-over-year, reinforcing the company's leadership in energy-efficient AI infrastructure [3]. SSG (Solutions and Services Group) - SSG achieved an 18.3% year-over-year revenue growth, maintaining double-digit growth for 18 consecutive quarters, with an operating profit margin exceeding 22% [4]. - The project and solution services, along with operational services, accounted for 60% of SSG's total revenue, indicating a stable growth trajectory [4]. Financial Projections - The report projects a slight decrease in Non-HKFRS net profit estimates for FY26, FY27, and FY28 by 1.8%, 1.7%, and 1.7% respectively, with expected profits of USD 1.66 billion, USD 1.85 billion, and USD 2.08 billion [5][10]. - The expected Non-HKFRS EPS for FY26, FY27, and FY28 is projected to be USD 0.12, USD 0.14, and USD 0.15 respectively, reflecting growth rates of 15.5%, 11.4%, and 12.4% [5][10].