Investment Rating - The report suggests a positive outlook for the aviation industry, highlighting potential recovery in demand and operational strategies of airlines [4]. Core Insights - The report reflects on previous misjudgments regarding the recovery of aviation demand post-pandemic, emphasizing the need to adjust expectations based on economic conditions and oil prices [4]. - It anticipates that changes in economic expectations will significantly influence the aviation sector's fundamentals in 2025, with potential recovery in business travel and personal spending on tourism [4]. - The report identifies key beneficiaries in the aviation sector, including major airlines such as Air China, China Southern Airlines, China Eastern Airlines, Spring Airlines, and others [4]. Summary by Sections 1. Review and Reflection - The report reviews past errors in assessing the recovery of aviation demand, particularly underestimating the pace and duration of recovery post-pandemic [4][6]. - It notes that consumer confidence has remained low, impacting both domestic and international travel demand recovery [18][19]. 2. Macroeconomic Summary - The overall economic growth center is currently below 2019 levels, with GDP for 2024 projected at 13,490.84 billion yuan, reflecting a 4.2% year-on-year growth [35]. - The manufacturing and non-manufacturing sectors are expected to face price and volume declines in 2024, although there are signs of recovery in orders post-important meetings in September [35][38]. 3. Current Strategies of Airlines - Airlines are adjusting their fleet growth plans, with major airlines like Air China and China Southern Airlines continuing to fall short of initial fleet expansion targets for 2024 [78]. - The report indicates that airlines are adopting a conservative approach to capacity deployment, particularly in the domestic market, to maintain passenger load factors [102][106]. 4. Future Outlook - The report emphasizes that the economic outlook will be a primary driver of aviation demand in 2025, with potential policy changes expected to boost business and leisure travel [4]. - It highlights that airlines may continue to adjust their aircraft acquisition plans in response to ongoing economic conditions, which could enhance supply-side dynamics in the industry [4].

Investment Rating - The industry rating is "Recommended" [5] Core Views - The report highlights that the construction materials industry is gradually reaching a bottom, with a focus on consumer building materials that exhibit strong alpha attributes, such as Sanke Tree, Rabbit Baby, and Weixing New Materials [1] - The indoor renovation market is entering a phase of renewal, with increased demand for high-end design, benefiting companies like Zhengzhong Design and Matrix Shares [1] - The establishment of a low-altitude economic development department and the inclusion of low-altitude economy in special bond investment scope are expected to accelerate the development of the low-altitude economy, with recommendations for companies like Huasheng Group and Design Institute [1] - The report anticipates a new "Belt and Road" summit in 2025, which may catalyze the sector, recommending companies such as China State Construction and China Metallurgical Group [1] Summary by Sections New Housing Market - In the third week of January, new housing transactions in 30 major cities showed a decline, with a total transaction area of 1.8042 million square meters, down 3% year-on-year and 7% month-on-month [2][22] - In contrast, the second-hand housing market remains robust, with a transaction area of 2.0760 million square meters, up 58% year-on-year [2][22] Cement Market - The national average cement price is 410.5 yuan/ton, a slight decrease of 0.1% week-on-week, with regional price fluctuations observed [3][25] - Cement demand is expected to decline significantly as the Spring Festival approaches, with a reported drop in output rates by approximately 6 percentage points [3][25] Glass Market - The average price of float glass increased to 1384.34 yuan/ton, marking a week-on-week rise of 0.69% [3][52] - The photovoltaic glass market is experiencing general stagnation, with weak terminal demand and a cautious purchasing atmosphere [3][57] Investment Recommendations - The report recommends focusing on seven specific directions for investment, including consumer building materials, high-end design, low-altitude economy, and resilient city initiatives [8] - Companies with strong alpha attributes and those positioned for recovery, such as Sanke Tree and Weixing New Materials, are highlighted as potential beneficiaries [8] - The report emphasizes the importance of government policies aimed at boosting consumption and infrastructure development, which are expected to benefit various segments within the construction materials industry [8]

Investment Rating - Industry Rating: Recommended [3] Core Insights - The recent escalation of US semiconductor bans primarily targets the AI sector in China, with new regulations implemented by the BIS on January 13 and 15, 2025, including global licensing requirements for advanced computing integrated circuits and restrictions on closed-source AI model parameters [1][2][18] - The bans are expected to have a short-term negative impact on domestic AI computing power and large model development, but in the medium to long term, they will strengthen the logic of domestic substitution, accelerating the domestic replacement in the AI computing chip industry [2][30] - The AI terminal market is witnessing a surge in new products and applications, with various manufacturers actively participating in the development of AI smart terminals across multiple sectors, including smart home, smart driving, AI toys, and robotics [5][15][35] Summary by Sections Section 1: Semiconductor Ban and AI Development - The US government has intensified semiconductor and AI bans, focusing on restricting the development of China's AI industry, with specific measures targeting advanced chips and AI model parameters [1][2][18] - The latest regulations expand the scope of restrictions on Chinese companies' overseas wafer fabrication and impose stricter due diligence requirements on chip manufacturers [1][2][20] Section 2: AI Terminal Market Trends - AI smart terminals, which integrate AI technology to perform complex tasks and provide intelligent services, are gaining traction, with numerous manufacturers launching new products [5][15][35] - The applications of AI in smart terminals are expanding, enhancing user experience and operational efficiency in various domains, including smart homes and wearable devices [5][15][41] Section 3: Investment Recommendations - Beneficiaries of the current market dynamics include companies involved in large model inference, AI glasses, AI headphones, AI toys, AI system-on-chip (SoC), and AI storage solutions [6][17][30]

Investment Rating - Industry Rating: Recommended [4] Core Insights - The report highlights a decline in the US core CPI and weak retail data, leading to increased expectations for interest rate cuts by the Federal Reserve in 2025, with potential for an earlier first cut [3][36] - Gold is viewed as a hedge against rising inflation in 2025, with a long-term upward trend expected in gold prices [6][17] - The report indicates that basic metals, including copper and aluminum, have seen price increases due to favorable macroeconomic conditions and anticipated Fed rate cuts [6][38] Summary by Sections Precious Metals - COMEX gold rose by 0.83% to $2,740.0 per ounce, while COMEX silver fell by 0.81% to $31.05 per ounce [25] - The gold-silver ratio increased by 1.66% to 88.26, indicating a stronger gold market relative to silver [26] - The report notes that the market is cautious ahead of the Trump administration's policies, which may impact inflation and commodity prices [6][17] Base Metals - In the LME market, copper increased by 1.19% to $9,181.50 per ton, aluminum rose by 4.36% to $2,680.5 per ton, and zinc increased by 2.86% to $2,944.5 per ton [41] - SHFE copper prices rose by 1.69% to ¥76,540.0 per ton, while aluminum increased by 1.61% to ¥20,470.0 per ton [7] - The report anticipates a rebound in copper prices in the first half of 2025 due to increased investment in infrastructure and renewable energy [10][18] Small Metals - Magnesium prices remained stable at ¥17,860 per ton, with steady production levels reported [15] - Molybdenum and vanadium prices showed stability, with ongoing demand from steel manufacturers [16] - The report indicates that the market for small metals is influenced by seasonal demand fluctuations as the Chinese New Year approaches [13]

Investment Rating - The industry rating is "Recommended" [4] Core Views - The lithium carbonate prices in China have increased, with industrial-grade lithium carbonate averaging 74,500 CNY/ton, up 2.76% week-on-week, and battery-grade lithium carbonate averaging 77,000 CNY/ton, up 2.67% week-on-week [1][23] - Nickel prices have risen, with LME nickel closing at 15,840 USD/ton, up 2.86% week-on-week, while domestic nickel prices reached 128,400 CNY/ton, up 2.18% [3][29] - Cobalt prices are under pressure, with electrolytic cobalt at 164,500 CNY/ton, down 1.50% week-on-week [7][32] - Rare earth prices have shown strength, particularly praseodymium and neodymium, with prices increasing by 3.08% and 3.21% respectively [8][37] - Tin prices have decreased, with LME tin at 29,400 USD/ton, down 1.42% week-on-week, while domestic tin prices averaged 248,100 CNY/ton, down 1.41% [10][45] - Uranium supply remains tight, with global uranium prices reaching 60.22 USD/ton, near a 15-year high, driven by geopolitical factors and structural supply shortages [14][17] Summary by Sections Lithium Industry Update - Domestic lithium salt prices have increased, with a total inventory of 108,200 tons, down 443 tons from the previous week [1][23][24] - The production of lithium carbonate is expected to decline due to maintenance and holiday impacts, leading to a strong cost support for prices [1][24][28] - The price of lithium concentrate has been adjusted upwards, with SC6 pricing at 850 USD/ton, reflecting a tight supply situation [2][25] Nickel and Cobalt Industry Update - Nickel prices have increased, with a notable rise in LME nickel and domestic prices, while supply from Indonesia is expected to decrease due to quota cuts [3][29] - Cobalt prices are weak, with a decline in electrolytic cobalt and stable production levels, but demand is expected to decrease as the holiday approaches [7][32] Rare Earth Industry Update - Rare earth prices, particularly for praseodymium and neodymium, have increased, with stable supply but reduced demand as the holiday season approaches [8][37][44] Tin Industry Update - Tin prices have decreased, with ongoing supply tightness due to uncertainties in Myanmar's mining operations and reduced demand during the holiday season [10][45] Uranium Industry Update - The uranium market remains tight, with high prices driven by geopolitical tensions and supply shortages, particularly with the Inkai mine's uncertain production timeline [14][17]

Investment Rating - The industry investment rating is "Recommended" [2] Core Insights - The launch of the "Gift Giving" feature on WeChat represents a breakthrough in social e-commerce, integrating social interactions with e-commerce, and is expected to stimulate holiday consumption and drive the growth of the digital economy [2][3] - The feature provides small businesses with equal opportunities to promote their products through social networks, enhancing product quality and service levels within the WeChat e-commerce ecosystem [3] - Service providers can leverage the new feature to offer marketing, technical support, and customer relationship management services, thus improving operational efficiency and creating new business growth points [4] Summary by Sections Event Overview - On January 17, 2025, WeChat launched the "Gift Giving" feature to enhance user interaction and enrich the social experience, complementing the existing red envelope feature [1] Social E-commerce Breakthrough - The "Gift Giving" feature allows for natural promotion of gifts and products through user interactions, reducing the cold start costs for merchants and aligning with key consumption periods like the Spring Festival [2] Support for Merchant Growth - The feature enables small merchants to promote their products at lower costs, encouraging a focus on product quality and service integrity, which benefits the overall WeChat e-commerce ecosystem [3] Opportunities for Service Providers - The launch of the feature creates new business opportunities for service providers, allowing them to enhance merchant operations and contribute to the development of a more comprehensive WeChat e-commerce ecosystem [4] Investment Recommendations - Beneficiaries include WeChat e-commerce service providers such as Weimeng Group, Youzan Group, Guangyun Technology, Qingmu Technology, Yiwang Yichuang, and Kaichun Co., Ltd. [5]

Industry Investment Rating - The industry is rated as "Recommended" [4] Core Views - Rio Tinto's 2024Q4 alumina production increased by 4% YoY to 1,992 thousand tons, while primary aluminum production decreased by 1% YoY to 837 thousand tons [1] - Mined copper production increased by 23% YoY to 179.8 thousand tons, and refined copper production increased by 42.27% YoY to 68.7 thousand tons [3] - Pilbara iron ore production in 2024Q4 was 86.5 million tons (Rio Tinto share: 73.6 million tons), a 1% YoY decrease but a 3% QoQ increase [6] - Diamond production at Diavik increased by 18% YoY and 43% QoQ to 775 thousand carats [7] - Rio Tinto completed the acquisition of Sumitomo Chemical's 20.64% stake in New Zealand Aluminium Smelters, now fully owning the Tiwai Point smelter [3] 2024Q4 Production Summary - Bauxite production: 15,412 thousand tons, up 2% YoY and 2% QoQ [1] - Alumina production: 1,992 thousand tons, up 4% YoY and 13% QoQ [2] - Primary aluminum production: 837 thousand tons, down 1% YoY but up 3% QoQ [2] - Mined copper production: 179.8 thousand tons, up 23% YoY and 19% QoQ [3] - Refined copper production: 68.7 thousand tons, up 42.27% YoY and 26.32% QoQ [3] - Pilbara iron ore production: 86.5 million tons, down 1% YoY but up 3% QoQ [6] - IOC pellet and concentrate production: 2.5 million tons, down 6% YoY but up 20% QoQ [6] - Borates production: 132 thousand tons, up 18% YoY and 5% QoQ [6] - Titanium dioxide slag production: 235 thousand tons, down 14% YoY and 11% QoQ [6] - Diamond production: 775 thousand carats, up 18% YoY and 43% QoQ [7] 2024 Full-Year Production Summary - Bauxite production: 58,653 thousand tons, up 7% YoY [8] - Alumina production: 7,303 thousand tons, down 3% YoY [9] - Primary aluminum production: 3,296 thousand tons, up 1% YoY [9] - Mined copper production: 697.1 thousand tons, up 11% YoY [9] - Refined copper production: 248.3 thousand tons, up 41.97% YoY [9] - Pilbara iron ore production: 328.6 million tons, down 1% YoY [10] - IOC pellet and concentrate production: 9.4 million tons, down 2% YoY [11] - Borates production: 504 thousand tons, up 2% YoY [12] - Titanium dioxide slag production: 990 thousand tons, down 11% YoY [12] - Diamond production: 2,759 thousand carats, down 17% YoY [12] 2025 Production Guidance - Pilbara iron ore shipments: 323 to 338 million tons [30] - Bauxite production: 57 to 59 million tons [30] - Alumina production: 7.4 to 7.8 million tons [30] - Primary aluminum production: 3.25 to 3.45 million tons [30] - Mined copper production: 780 to 850 thousand tons [30] - Refined copper production: 230 to 260 thousand tons [30] - Titanium dioxide slag production: 1.0 to 1.2 million tons [30] - IOC pellet and concentrate production: 9.7 to 11.4 million tons [30] - Borates production: ~0.5 million tons [30] Investment, Growth, and Development Projects - Exploration and evaluation expenditure in 2024: $935 million, with 36% allocated to copper, 25% to core exploration, and 23% to minerals (mainly lithium) [16] - Western Range iron ore project: Over 90% complete, with first ore expected in H1 2025 [17] - Oyu Tolgoi underground project: First ore delivered to surface in October 2024, with commissioning expected in Q2 2025 [18] - Simandou iron ore project: First production expected in 2025, with annual production to reach 60 million tons within 30 months [19] - AP60 aluminum expansion in Quebec: On track, with 96 new AP60 pots to be added by end-2026 [20] - Kennecott North Rim Skarn project: Production expected to start in mid-2025, with annual production of 250 thousand tons by 2033 [21] - Rincon lithium project: First lithium produced in November 2024, with full commissioning expected in Q1 2025 [23] - Acquisition of Arcadium Lithium: Expected to close by mid-2025, pending regulatory approvals [24]

Japan's Interest Rate Policy and Bond Market - Japan's slow rate cuts took 7.5 years to reach zero interest rates, starting from 6% in 1991 and reaching 0.5% by 1995[1] - During 1993-1994, 2-year JGB yields fell by 100bp to 1.75%, while 10-year JGB yields dropped by 60bp to 3.6%[3] - In 1995-1996, 2-year JGB yields fell by 63bp to 0.32%, while 10-year JGB yields only dropped by 16bp to 2.95%[4] - From 1996-1998, 10-year JGB yields fell by 180bp to 1.5%, while 2-year yields only dropped by 70bp[5] - In zero-rate environments, 10-year JGB yields averaged 1.3%, with quarterly lows of 0.6% and highs of 1.89%[7] U.S. Interest Rate Policy and Bond Market - The U.S. reached zero interest rates in just 15 months, starting from 4.5-4.75% in 2007 and reaching 0-0.25% by December 2008[9] - During 2008, 2-year U.S. Treasury yields fell from 3.05% to 0.65%, while 10-year yields dropped from 4.27% to 2.08%[11] - In the zero-rate period (2008-2015), 10-year U.S. Treasury yields averaged 2.6%, with lows of 1.43% and highs of 4.01%[12] Key Insights from Rate Cuts - Long-term yields may fall more than short-term yields during rate cut pauses, as seen in Japan's 180bp drop in 10-year yields vs. 70bp in 2-year yields[14] - After reaching zero rates, long-term yields may rebound, as seen in Japan's 53bp rise in 10-year yields and the U.S.'s 99bp rise in 10-year yields[15] - Inflation expectations heavily influence long-term yield pricing, with Japan's 10-year yields at 1.3% (-0.4% CPI) vs. the U.S.'s 2.6% (1.7% core CPI)[16]

Market Performance - A-shares rebounded significantly on January 14, with the Shanghai Composite Index rising 2.54%, the Shenzhen Component Index up 3.77%, and the ChiNext Index surging 4.71%[1] - The total trading volume of A-shares reached 1.37 trillion yuan, with over 5,300 stocks rising, indicating improved market sentiment[1] Market Trends - From December 31 to January 13, the Shanghai Composite Index fell 7.2%, the Shenzhen Component Index dropped 8.2%, and the ChiNext Index declined 10.1%[2] - Only the precious metals and industrial metals sectors rose during this period, while other sectors experienced widespread declines[2] External Factors - Global asset trends reflect concerns about re-inflation under "Trump 2.0" policies, with commodities like crude oil, precious metals, and industrial metals showing strong performance[3] - The US dollar index broke through 110, and the 10-year US Treasury yield returned to around 4.9%, putting pressure on risk assets and emerging markets[3] Policy Impact - The central bank stabilized the exchange rate through measures such as issuing offshore central bank bills and adjusting the macro-prudential parameter, with the RMB stabilizing around 7.35[4] - The CSRC outlined five key tasks for 2025, emphasizing market stability and strengthening regulatory mechanisms[4] Investment Strategy - The "New Quality Bull" theme, including AI+, humanoid robots, low-altitude economy, and domestic substitution, remains the main focus for spring market allocation[5] - Market liquidity improved, with trading volumes returning above 1 trillion yuan in recent sessions, and financing funds turning to net buying[5]

Investment Rating - The report maintains a "Buy" rating for Kelun-Biotech (6990 HK) with a target price of HKD 252 8, representing a potential upside of 48 8% from the latest closing price of HKD 169 9 [3][7] Core Views - Kelun-Biotech has entered a new commercialization phase with the approval of two key self-developed products: sac-TMT (Jiatailai®), the first domestically developed TROP2 ADC for TNBC, and KL-A167 (Ketailai®), a PD-L1 monoclonal antibody for nasopharyngeal carcinoma [1] - Sac-TMT has a strong competitive moat with multiple indications in breast and lung cancers, including approved use for TNBC and NDA submission for EGFRmt NSCLC, with 4 breakthrough therapy designations in China [2] - The company has a robust clinical pipeline with HER2 ADC A166 and cetuximab A140 under NDA review, and 5 other ADCs in Phase 1 trials, demonstrating its R&D platform strength [2][6] - A mature commercialization team of ~400 people has been established to support product launches [2] Financial Projections - Revenue is forecasted to grow from RMB 1 603 billion in 2024 to RMB 2 889 billion in 2026, representing a CAGR of 34 2% [7] - Gross margin is expected to improve significantly from 49 28% in 2023 to 92% in 2026 [9] - The company is projected to turn profitable in 2026 with net income of -RMB 121 41 million, improving from -RMB 574 13 million in 2023 [9] Valuation - The DCF valuation stands at RMB 49 12 billion, implying a target price of RMB 234 1 (HKD 252 8) [7] - The stock trades at -111 94x 2024E P/E and 19 26x 2024E P/B [9]