Industry Investment Rating - The report rates the pharmaceutical industry as "Leading" as of October 31, 2025 [1] Core Insights - The report highlights that the significant price reductions from the 11th batch of centralized procurement may have limited impact on the overall performance of the sector. However, catalysts in Q4 are expected to improve investor sentiment [4] - The report indicates that the pharmaceutical sector has experienced a notable price correction, but the fundamentals remain strong, with an anticipated stabilization in investment sentiment due to upcoming catalysts such as academic conferences and favorable policies [4] Summary by Relevant Sections Market Performance - The Hang Seng Index rose by 2.2% during the week of October 22-29, 2025, while the Hang Seng Healthcare Index fell by 0.9%, ranking 12th among 12 industry indices [4][10] - Sub-sectors showed varied performance, with CXO up by 4.6% and biopharmaceuticals down by 2.3% [4][10] Institutional Holdings - As of October 28, 2025, the proportion of domestic institutional holdings in the pharmaceutical sector decreased slightly to 21.9%, while foreign holdings remained stable [36][39] - Domestic investors have increased their positions in medical device companies and "AI + healthcare" concepts, while foreign investors have focused on long-term potential innovative drug companies [39] Procurement Insights - The 11th batch of centralized procurement included 55 drug products, with a selection rate of 57%. The report notes that the impact on the overall revenue of selected companies is expected to be limited [8][9] - Companies such as Kelun Pharmaceutical and China National Pharmaceutical have multiple products selected, but the overall contribution to revenue is anticipated to be small [8][9] Valuation Overview - The report provides a valuation summary for various companies, with target prices and earnings per share estimates for FY25E and FY26E, indicating a generally positive outlook for selected companies in the innovative drug sector [3] Investment Recommendations - The report recommends focusing on innovative drugs and CXO companies, highlighting specific firms such as Sanofi and WuXi AppTec as having strong short-term catalysts and undervalued growth potential [4]

Investment Rating - The report maintains a "Buy" rating for Longyuan Power (916 HK) with a target price of HKD 8.23, based on a valuation of 9 times the projected earnings for 2026 [1][6]. Core Insights - Longyuan Power's net profit for the first three quarters of the year decreased by 19.8% year-on-year to RMB 4.613 billion, primarily due to a high base from the previous year and increased depreciation costs in wind power [1][2]. - The company exceeded its expectations with a subsidy recovery amount of RMB 9.25 billion, an increase of RMB 5.8 billion year-on-year, leading to a 53% rise in operating cash flow to RMB 15.8 billion [1]. - The company aims to maintain its annual new installed capacity target of 5 GW, with a total new installed capacity of 2.27 GW achieved in the first three quarters [1][3]. Summary by Sections Financial Performance - For the first nine months of 2025, revenue increased by 3.7% to RMB 22.221 billion, while net profit fell by 19.8% to RMB 4.613 billion [2]. - Operating expenses rose by 9.7% to RMB 13.960 billion, impacting operating profit, which decreased by 5.2% to RMB 9.089 billion [2]. Operational Data - The total power generation for the first three quarters reached 56.547 billion kWh, with wind and solar generation increasing by 5.3% and 77.9% year-on-year, respectively [1][3]. - The average electricity prices for wind and solar were RMB 0.423 and RMB 0.269 per kWh, reflecting a decline of 4% and 3% year-on-year [1]. Future Outlook - The adjustment of the VAT refund policy for renewable energy is expected to impact profitability, particularly for onshore wind power, starting from November 2025 [1]. - Longyuan Power has initiated internal assessments and project adjustments to mitigate the impact of these policy changes [1].

Group 1: Macroeconomic Insights - The "15th Five-Year Plan" emphasizes the coexistence of strategic opportunities and challenges, highlighting the complexity of the external environment compared to the "14th Five-Year Plan" [5] - The goals of the new plan have expanded from six to seven areas, with a focus on "high-quality development" and "significantly improving the level of technological self-reliance" [5] - The plan aims to enhance domestic consumption and emphasizes the importance of technological innovation for economic growth [5] Group 2: Global Economic Trends - The Federal Reserve's recent decision to cut interest rates by 25 basis points reflects a preventive approach amid uncertainties in the labor market due to the government shutdown [6] - Despite the absence of critical employment data, the Fed's decision indicates a proactive stance against potential economic downturns [6] - The U.S. stock market continues to reach historical highs, suggesting a sustained period of financial easing [6] Group 3: Company-Specific Performance - Gotion High-Tech reported a significant increase in revenue and profit for Q3 2025, with revenue of RMB 10.11 billion and a net profit of RMB 2.17 billion, marking a year-on-year growth of 20.7% and 1434% respectively [11] - The company maintains its annual shipment target of 100 GWh, with a strong performance driven by high demand for its products [11] - Midea Group's Q3 performance exceeded expectations, with revenue and net profit growing by 10.1% and 9.0% respectively, supported by a recovery in overseas markets [14] Group 4: Industry Outlook - The global energy storage market is expected to grow significantly, with a projected annual growth rate of 40-50% through 2026 [16] - The demand for high-energy-density products is anticipated to drive improvements in profit margins for companies in the energy sector [12] - The clean energy sector is showing strong performance, with a 52% increase in revenue for clean energy products, indicating a positive trend for future growth [17]

Global Macro - The Federal Reserve lowered interest rates by 25 basis points to a range of 3.75%-4.00% during the October FOMC meeting, reflecting a preventive approach amid uncertainties due to the U.S. government shutdown and missing key labor market data [1][2] - The decision to cut rates was influenced by the ongoing strength of the U.S. stock market and loose financial conditions, indicating a proactive measure against potential employment downturn risks [1][2] - Internal divisions within the Federal Reserve are growing, with some members advocating for more aggressive cuts while others suggest a pause, indicating a cautious stance on future rate adjustments [2][3] Market Conditions - The Fed announced it will stop balance sheet reduction starting December 1, as signs of tightening liquidity in the U.S. money market have emerged, including a decrease in overnight reverse repo balances and shrinking bank reserves [3][4] - The Fed's balance sheet has contracted by $2.2 trillion since June 2022, reducing its GDP ratio from a peak of 35% to approximately 21%, making the timing for halting balance sheet reduction appropriate [3][4] - Market expectations for a rate cut in December have decreased significantly from 82.4% to 63.8% following the October meeting, highlighting increased uncertainty regarding short-term policy direction [3][4] Economic Outlook - The U.S. dollar index has shown signs of a rebound, and with the stock market at historical highs, market volatility risks are expected to increase, potentially impacting metal prices and emerging market risk assets [4]

Investment Rating - The report maintains a "Buy" rating for Guoxuan High-Tech (002074 CH) with a target price of RMB 54.84, indicating a potential upside of 19.2% from the current closing price of RMB 46.00 [1][4][11]. Core Insights - The company has shown a significant increase in revenue driven by a high growth in battery shipments, maintaining its annual target of 100 GWh. In Q3 2025, the company reported revenue of RMB 10.11 billion, a year-on-year increase of 20.7% [2][3]. - The gross profit margin improved by 2.8 percentage points to 17.6% in Q3 2025, attributed to product mix enhancement and increased capacity utilization [6][7]. - The company is expected to benefit from its collaboration with Volkswagen starting in 2026, which is anticipated to contribute additional revenue [6][7]. Financial Overview - Revenue projections for Guoxuan High-Tech are as follows: RMB 31,605 million in 2023, RMB 35,392 million in 2024, RMB 45,742 million in 2025, RMB 54,864 million in 2026, and RMB 63,060 million in 2027, reflecting a compound annual growth rate (CAGR) of 29.2% from 2024 to 2025 [3][12]. - Net profit is projected to reach RMB 3,588 million in 2025, with a significant year-on-year growth of 197.3% [3][12]. - The company’s earnings per share (EPS) is expected to be RMB 2.02 in 2025, with a substantial increase compared to previous years [3][12]. Market Position and Strategy - Guoxuan High-Tech's global power lithium battery installation volume increased by 71.8% year-on-year from January to August 2025, with a market share increase of 0.7 percentage points [2][6]. - The company is advancing its product iterations, with the third-generation battery cells already designated for multiple vehicle models, and expects the proportion of high-energy density battery shipments to rise from 20% in the first three quarters to 30% for the entire year [6][7]. - The establishment of overseas production facilities is progressing, with the Vietnam plant already operational and additional plants in Morocco and Slovakia expected to commence production between late 2026 and 2027 [6][7].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 8.40, reflecting a 7.8% potential upside from the current price of HKD 7.79 [10]. Core Insights - The company's revenue for the first three quarters of 2025 increased by 7.7% year-on-year to RMB 19.35 billion, while net profit rose by 12.9% to RMB 770 million, driven by strong performance in clean energy products [1]. - The clean energy segment saw a remarkable revenue growth of 19% year-on-year, contributing RMB 15 billion, with a significant 52% increase in offshore clean energy revenue [1]. - The chemical and liquid food segments experienced a decline in revenue, with the chemical segment's revenue dropping by 48% year-on-year in Q3, primarily due to trade uncertainties [1]. - New orders in the clean energy sector have shown improvement, with a 10.9% year-on-year increase in backlog orders, largely driven by a 23.6% growth in clean energy orders [1][2]. - The report suggests that the company's profit structure is expected to stabilize further by 2026, despite ongoing challenges in the chemical and liquid food segments [1]. Summary by Sections Revenue and Profit Performance - For the first three quarters of 2025, the company reported a revenue of RMB 19.35 billion, a 7.7% increase year-on-year, and a net profit of RMB 770 million, up 12.9% [1]. - The clean energy business contributed significantly, with a revenue increase of 19% to RMB 15 billion, and a quarterly revenue growth of 14.6% in Q3 [1]. Segment Analysis - The chemical segment's revenue in Q3 fell by 48% year-on-year, while the liquid food segment's revenue decreased by 14% year-on-year, indicating a reduced impact on overall company performance [1]. - The combined revenue share of the chemical and liquid food segments has decreased to 23%, reflecting a diminishing influence on the company's overall earnings [1]. Order and Backlog Trends - The total new orders signed in the first three quarters decreased by 5% year-on-year to RMB 19.6 billion, showing significant improvement compared to a 35% decline in the first half of the year [1][2]. - The backlog of orders increased by 10.9% year-on-year to RMB 30.76 billion, with clean energy orders making up approximately 73% of the backlog [1][2].

Investment Rating - The report maintains a "Buy" rating for Midea Group (000333 CH) with a target price of RMB 96.20, indicating a potential upside of 27.8% from the current closing price of RMB 75.30 [1][9]. Core Insights - Midea Group's quarterly performance exceeded expectations, with a year-on-year revenue growth of 10.1% and a net profit growth of 9.0% in Q3 2025, driven by a recovery in overseas orders and strong performance in the To B business [3][4]. - The company is expected to continue facing challenges in the domestic market due to high base effects, but overseas markets and B-end business are anticipated to support steady growth [3][4]. - The report highlights the resilience of Midea's To C business and strong performance in overseas markets, with a notable recovery in revenue growth in Q3 2025 [3][4]. Financial Overview - Revenue projections for Midea Group are as follows: RMB 373,709 million in 2023, RMB 409,084 million in 2024, RMB 455,904 million in 2025E, RMB 485,204 million in 2026E, and RMB 515,032 million in 2027E, reflecting a compound annual growth rate (CAGR) of approximately 8.1% to 11.4% [2][10]. - Net profit is projected to grow from RMB 33,745 million in 2023 to RMB 52,177 million in 2027, with a net profit margin of around 9.0% to 10.1% over the forecast period [2][10]. - The report indicates a slight adjustment in earnings forecasts for 2025, with revenue and net profit estimates slightly increased compared to previous forecasts [4][5]. Business Segment Performance - The To B business segment showed robust growth, with an estimated revenue growth exceeding 15% in Q3 2025, driven by sectors such as new energy and industrial technology [3][4]. - The overseas market demonstrated strong performance, with revenue growth rebounding to double digits in Q3 2025, supported by a recovery in external demand [3][4]. - Midea's OBM strategy has been effective, with a year-on-year revenue growth of over 20% in its proprietary brands during the first three quarters of 2025 [3][4].

Investment Rating - The report assigns a "Buy" rating for the company, indicating an expectation of total returns exceeding the relevant industry over the next 12 months [2][9]. Core Insights - The company's performance has exceeded expectations due to improved gross margins, with significant growth in demand for energy storage and AIDC (Automated Identification and Data Capture) supporting future growth [2][6]. - The gross margin reached a new high of 35.9% in Q3, with a year-on-year increase of 6.4 percentage points [6]. - The company has seen explosive growth in energy storage system revenue, which increased by 105% year-on-year, with overseas shipments rising from 63% to 83% of total shipments [6]. - The report anticipates continued high demand for energy storage, with global installations expected to grow at a rate of 40-50% through 2026 [6]. - The company has raised its earnings forecasts for 2025-2027 by 14%, 34%, and 54% respectively, with a compound annual growth rate of 29% expected from 2024 to 2027 [6]. Financial Overview - Revenue projections for the company are as follows: - 2023: 72,251 million RMB - 2024: 77,857 million RMB - 2025E: 97,343 million RMB - 2026E: 115,674 million RMB - 2027E: 138,847 million RMB - Net profit projections are: - 2023: 9,440 million RMB - 2024: 11,036 million RMB - 2025E: 16,572 million RMB - 2026E: 19,735 million RMB - 2027E: 23,526 million RMB [5][11]. - The company’s market capitalization is approximately 300.51 billion RMB, with a year-to-date stock price increase of 159.37% [4][11]. Price Target - The target price for the company's stock has been raised to 220.00 RMB from a previous target of 119.00 RMB, reflecting a potential upside of 14.9% [1][6].

Investment Rating - The investment rating for the company is Neutral, with a target price of RMB 58.00, indicating a potential downside of 2.0% from the current closing price of RMB 59.20 [1][12]. Core Insights - The company's overseas high-margin business revenue has shown strong growth, leading to a significant recovery in performance. In Q3, the company reported revenues of RMB 2.11 billion and a net profit of RMB 0.98 billion, representing year-on-year growth of 17% and 201%, respectively [2][6]. - The gross margin improved to 26.2%, up by 2.8 and 5.9 percentage points year-on-year and quarter-on-quarter, primarily due to increased demand for household storage in regions like Australia, which boosted high-margin overseas inverter and battery business revenues [2][6]. - The company has adjusted its earnings forecasts for 2026 and 2027 upwards by 3% and 4%, respectively, due to unexpected global storage demand, while maintaining revenue forecasts [6]. Financial Overview - Revenue projections for the company are as follows: RMB 7,353 million in 2023, RMB 6,738 million in 2024, RMB 8,022 million in 2025E, RMB 8,945 million in 2026E, and RMB 10,508 million in 2027E, with a notable year-on-year growth of 56.1% in 2023 followed by a decline of 8.4% in 2024 [5][14]. - The net profit is expected to recover from a loss of RMB 62 million in 2024 to RMB 170 million in 2025E, and further to RMB 469 million in 2026E, reaching RMB 820 million in 2027E [5][14]. - The company’s market capitalization is approximately RMB 14.31 billion, with a year-to-date stock price change of 44.74% [4]. Market Dynamics - Exports of inverters to Europe have seen a short-term decline, while exports to Australia have surged by 249% year-on-year, driven by household storage subsidies [6]. - The company’s contract liabilities decreased by 6% year-on-year and 33% quarter-on-quarter, indicating potential challenges in short-term growth despite a positive long-term outlook [6].

Group 1: 恒瑞医药 - The company reported a revenue of 7.43 billion yuan in Q3 2025, representing a year-on-year growth of 12.7%. The contribution of innovative drug revenue exceeded 55% in the first three quarters of 2025 [1][2] - Management expenses increased significantly, leading to a slight decline in net profit margin by 0.5 percentage points to 17.5%. The company recorded an unrealized foreign exchange loss of 150 million yuan related to the depreciation of the US dollar [1] - Operating cash flow increased significantly by 209.8% year-on-year to 4.81 billion yuan, aided by upfront payments from major transactions with GSK and Braveheart. Contract liabilities surged from 161 million yuan in Q2 2025 to 3.97 billion yuan [1] Group 2: 安踏 - The company experienced weak revenue performance in Q3 2025, prompting management to lower the full-year guidance. Anta/FILA and other brands recorded low single-digit year-on-year revenue growth [3][4] - Management has adjusted the growth guidance for the main brand to low single-digit growth, while maintaining the guidance for FILA and other brands at mid-single-digit and over 40% growth, respectively [3] - Future revenue forecasts have been slightly reduced by 1-3%, and net profit forecasts have been lowered by 5-10% based on more conservative profit margin estimates [3] Group 3: 钧达股份 - The company reported a loss of 155 million yuan in Q3 2025, remaining stable compared to the previous quarter. The rise in upstream silicon wafer prices and silver prices has increased non-silicon costs [8] - The Indian Ministry of Commerce announced a final anti-dumping tax recommendation of 23% on imported battery cells from China, which may impact the company's exports [8] - The target price has been adjusted down to 46.34 yuan, corresponding to a 13.3 times 2026 price-to-earnings ratio, while maintaining a buy rating due to attractive valuation after the stock price correction [8] Group 4: 福莱特玻璃 - The company reported Q3 2025 revenue of 4.73 billion yuan and profit of 376 million yuan, with a quarter-on-quarter increase of 29% and 143%, respectively. This was driven by significant inventory accumulation by component customers anticipating a rebound in photovoltaic glass prices [9] - However, industry inventory days have rapidly rebounded since October, leading to expectations of a price decline for glass starting in November [9] - The target price has been raised to 12.05 HKD, but the rating has been downgraded to neutral due to limited attractiveness after recent stock price rebounds [9]