Group 1: Economic Policy and Strategy - The Central Economic Work Conference emphasizes expanding domestic demand as a priority for economic policy[4] - The government plans to increase the deficit ratio and the issuance scale of special bonds, alongside implementing a moderately loose monetary policy[4] - Key industries targeted for policy support include real estate, consumption, infrastructure, technology, and fertility[4] Group 2: Investment Focus - The first investment focus is on boosting consumption to expand domestic demand, with initiatives to support new consumption policies and urban renewal projects[5] - The second investment focus is on "Artificial Intelligence+" and new productive forces, aiming to enhance technological innovation and industry upgrades[5] - Recommended sectors for investment include the new energy vehicle supply chain, smart home industry, hospitality, and modern services like healthcare and finance[5] Group 3: Market Outlook and Strategy - The market is expected to enter a policy implementation phase leading up to the next Two Sessions, with structural market trends anticipated[6] - A-shares are predicted to perform more steadily compared to overseas Chinese stocks, driven by profit growth and market sentiment[6] - Investment strategies should balance risk, favoring high-beta sectors during positive market sentiment and defensive sectors during downturns[6]

Investment Rating - The report initiates coverage on Aikang Medical (1789 HK) with a "Buy" rating and a target price of HKD 6 8 [1][2] Core Views - Aikang Medical is positioned as a leading domestic orthopedic joint company with strong performance in the national joint procurement program The company is expected to see accelerated revenue growth in 2025 as the impact of industry anti-corruption measures subsides and joint procurement risks are cleared [1] - The company is a pioneer in applying metal 3D printing to orthopedic implants and is leveraging technologies such as 3D printing ICOS and surgical robots to build a digital orthopedic platform which will help expand its presence in the mid-to-high-end market [1] - The orthopedic industry is under short-term pressure due to anti-corruption measures but will benefit in the long term from a large patient base increasing surgical penetration rates and domestic substitution [1] - Aikang Medical's core products have cleared procurement risks and the company is expected to see improved earnings visibility in 2025 with revenue growth potentially accelerating on a lower base in 2024 [1] Financial Projections - Revenue is projected to grow at a CAGR of 22% from 2023 to 2026E with 2024E and 2025E revenue expected to reach RMB 1 305 million and RMB 1 625 million respectively [3] - Net profit attributable to shareholders is forecasted to grow at a CAGR of 22 9% from 2023 to 2026E with 2024E and 2025E net profit expected to reach RMB 261 million and RMB 324 million respectively [3] - The company's PE ratio is expected to decline from 30 8x in 2023 to 17 5x in 2025E reflecting improved earnings growth [3] Industry Overview - The orthopedic industry continues to face short-term pressure from anti-corruption measures but is expected to recover in 2025 with revenue growth driven by a large patient base increasing surgical penetration rates and domestic substitution [16] - The industry saw a 3% YoY increase in revenue and a 1% YoY increase in net profit in 9M24 with signs of recovery in 1Q/2Q/3Q24 showing revenue growth of -9% +3% and +17% respectively [1] - Domestic substitution is expected to accelerate as foreign brands focus more on top-tier hospitals and reduce overall investment in China [1] Company-Specific Analysis - Aikang Medical's hip and knee joint products which contributed 85% of revenue in 1H24 performed well in the national joint procurement program with most products achieving price increases in the procurement [1] - The company is a leader in 3D printing technology for orthopedic implants and has developed the ICOS platform which offers customized solutions for patients and surgeons [2] - Aikang Medical has a dual-brand strategy in overseas markets with Aikang and JRI which provides a full product line advantage and potential for scale making international markets a key growth driver [2] Valuation and Target Price - The target price of HKD 6 8 is based on a 22x 2025E PE multiple in line with the company's historical average over the past three years [2] - The target price implies a 27% upside from the current price of HKD 5 4 [4]

Investment Rating - The report maintains an "overweight" rating for the global AI computing chip industry, with specific buy ratings for AMD and MediaTek, and a sell rating for Intel [15][20]. Core Insights - The global AI industry is experiencing explosive growth, with the generative AI market expected to reach nearly $1 trillion by 2030, driven by a compound annual growth rate (CAGR) of 40% from 2024 to 2030 [15][52]. - AI computing chips are essential for the development of AI models, benefiting significantly from the industry's high growth [15][20]. - The report emphasizes the importance of AI computing chips in both cloud and edge applications, highlighting the increasing demand for these chips across various sectors, including smartphones and electric vehicles [17][20]. Summary by Sections Global AI Computing Chip Industry Investment Highlights - The AI industry is in a rapid growth phase, with significant capital expenditure from cloud service providers on AI computing chips [20]. - The demand for AI computing chips is expected to grow as AI models penetrate consumer devices, enhancing user experience [20][28]. Overview of the Global AI Industry: Explosive Growth - The generative AI market has seen a sixfold increase from 2020 to 2023, with substantial growth expected to continue [52]. - The report notes that the AI industry is still in its early stages, with ongoing advancements in AI model performance and capabilities [21][23]. AI Computing Chip Development Trends - GPUs are identified as the most critical computing foundation for generative AI, with CPUs and SoCs also benefiting from increased demand [20]. - The report highlights the rapid expansion of AI computing chip production capacity, leading to a more balanced supply-demand dynamic [20]. Review and Outlook for US Tech Stocks - The report suggests that the current economic environment, including a potential interest rate decrease, could support the valuation of growth tech stocks [20]. - The Nasdaq and M7 indices are expected to show long-term growth potential driven by fundamental factors [20]. Company-Specific Coverage - AMD is positioned to benefit from multiple AI computing chip layouts, receiving a buy rating with a target price of $168.7 [11]. - MediaTek is also rated as a buy, with a target price of NT$1,468.5, benefiting from AI penetration in consumer electronics [13]. - Intel, while benefiting from AI demand, is rated as a sell due to delayed financial performance, with a target price of $20.4 [15].

Investment Rating - The report maintains a "Buy" rating for Mobileye (MBLY.US) with a target price of $16.2, indicating a potential upside of 19% [2][6]. Core Insights - Mobileye's Q3 revenue was $486 million, a year-over-year decline of 8% but a quarter-over-quarter increase of 11%, outperforming consensus estimates [2][11]. - The company expects continued strong cash flow and has confidence in its technological capabilities, particularly in AI and related technologies, despite lowering earnings forecasts for 2024-2026 [2][3]. - The report highlights the normalization of inventory levels among downstream Tier 1 and OEM customers, with EyeQ chip shipments expected to recover significantly by 2025 [3][4]. Financial Performance Summary - Q3 2024 revenue: $486 million, down 8% YoY, up 11% QoQ [11]. - Q3 2024 adjusted gross margin: 68.1%, down from 69.1% YoY [11]. - Full-year 2024 revenue guidance: $1.62 to $1.66 billion [3]. - Adjusted net profit for 2024 is projected at $199 million, a significant decrease from previous estimates [12]. Revenue and Profit Forecasts - Revenue forecasts for 2024E: $1.635 billion, with a year-over-year decline of 21% [5][12]. - Adjusted net profit forecasts for 2025E: $364 million, reflecting an 83% increase from 2024E [5][12]. - The report anticipates a recovery in revenue growth rates, with 2025E expected to grow by 18% and 2026E by 23% [5][12]. Valuation Metrics - The report employs a DCF valuation method, maintaining a target price of $16.2, corresponding to a 2025E adjusted P/E ratio of 35.9x [4][15]. - The WACC is estimated at 8.0%, with a perpetual growth rate of 3% [4][13]. Market Expectations - The report outlines optimistic and pessimistic scenarios for Mobileye's stock price, with a bullish target of $18.8 and a bearish target of $11.7, reflecting varying expectations for revenue growth and market conditions [18].

Investment Rating - The report suggests a positive outlook for the tourism industry, indicating a resilient market with a recommendation to focus on OTA and domestic hotel sectors [2]. Core Insights - The tourism market is experiencing steady growth, with domestic travel reaching 765 million trips during the National Day holiday, a year-on-year increase of 5.9% and a 10.2% increase compared to 2019 [1]. - Total domestic tourist spending during the holiday was approximately 700.82 billion yuan, reflecting a year-on-year growth of 6.3% and a 7.9% increase compared to 2019 [1]. - The report highlights a trend of increasing travel demand despite a decrease in average spending per person, attributed to lower prices for flights and accommodations [1]. - International travel is also recovering, with outbound travel bookings nearly doubling year-on-year, particularly from lower-tier cities [1][2]. Summary by Sections Domestic Travel Trends - Domestic travel during the National Day holiday saw 765 million trips, with a 5.9% increase year-on-year and a 10.2% increase compared to 2019 [1]. - Average spending per person was approximately 916 yuan, nearly flat year-on-year, recovering to 98% of 2019 levels [1]. - The decline in travel costs, with flight prices down 15.1% and hotel prices down 6%, has contributed to the increase in travel demand [1]. International Travel Trends - Outbound travel has shown strong growth, with bookings increasing by nearly 100% year-on-year [1]. - The majority of outbound travel destinations are concentrated in East Asia and Southeast Asia [1]. - Residents from lower-tier cities are increasingly participating in international travel, with a threefold increase in orders from these areas during the holiday [1]. Market Outlook - The report indicates that the tourism market will continue to show resilience, with a trend of rising travel demand and falling prices likely to benefit OTA and domestic hotel sectors [2]. - The focus on lower-tier cities and the potential for international business expansion are highlighted as key areas for growth [2].

Economic Indicators - The core CPI inflation rate in the US for August rose to 0.28%, up from 0.17% in July, exceeding the market expectation of 0.2%[1] - Overall CPI growth increased by 0.04 percentage points to 0.19%, aligning with market expectations[1] - Year-on-year, the overall CPI decreased by 0.4 percentage points to 2.5%, while the core CPI remained unchanged at 3.2%[1] Housing and Services - Housing prices saw a month-on-month increase of 0.52%, the highest since February of this year[1] - The owner’s equivalent rent inflation rate rose to 0.50% in August, up from 0.36% in July, marking another peak since February[1] - The inflation rate for temporary lodging surged to 1.75% in August, up from 0.22% in July, driven by seasonal tourism[1] Employment Data - Non-farm payrolls added 142,000 jobs in August, a recovery from July but still below market expectations[2] - The unemployment rate slightly decreased by 0.1 percentage points to 4.2% in August, with temporary unemployment dropping from 1.062 million in July to 872,000[2] - The three-month moving average for new jobs fell to 116,000, the lowest since the second half of 2020[2] Federal Reserve Outlook - The report suggests a 25 basis point rate cut by the Federal Reserve in September, supported by the recent inflation and employment data[2] - The potential for a 50 basis point cut in future meetings remains if economic data indicates signs of recession[2] - The JOLT job openings to unemployment ratio fell to 1.07 in July, below the pre-pandemic average of 1.19, indicating a weakening labor market[2]

Investment Rating - The report maintains a "Hold" rating for the company with a target price of RMB 43.0, reflecting a potential upside of 5.7% from the current price of RMB 40.7 [3][6]. Core Insights - The company's revenue in Q2 2024 grew by 13.5% year-on-year, primarily driven by the contribution from the newly acquired brands Za and Bo Mei, which generated RMB 130 million. However, excluding this contribution, the comparable revenue growth was only 5.1%, indicating that the main brand, Winona, has yet to show significant improvement from its strategic adjustments [2][3]. - The integration of the new brands has enhanced the company's multi-brand matrix but has not yet led to a substantial increase in overall revenue, as the new brands only accounted for 7.4% of total revenue [2][3]. - The gross margin has declined due to the increased proportion of mass-market products, with the overall gross margin dropping by 2.8 percentage points to 72.6% in the first half of 2024 [2][3]. - Cost control measures have started to show results, with a decrease in sales and R&D expense ratios, which helped mitigate the impact of lower gross margins on operating profit margins [2][3]. Financial Forecast Adjustments - The revenue forecast for 2024 has been adjusted downwards to RMB 6,476 million, reflecting a 2.1% decrease from previous estimates. The forecasts for 2025 and 2026 have also been reduced by 5.1% and 7.1%, respectively [3][6]. - The gross profit forecast for 2024 is now RMB 4,605 million, down 2.7% from prior estimates, with gross margins expected to decline further in the second half of 2024 due to promotional activities during peak sales periods [3][6]. - The net profit forecast for 2024 has been revised down to RMB 910 million, representing a 7.9% decrease from previous estimates, with net profit margins expected to decline as well [3][6].

Investment Rating - The report maintains a "Hold" rating for the company and lowers the target price to RMB 48.9 [1][2]. Core Views - The company experienced a revenue decline of 18.1% in Q2 2024, with a significant drop in net profit attributable to shareholders by 56% year-on-year, indicating that a return to growth will take time [1]. - Adjustments in the functional skincare product line are ongoing, with a 30% year-on-year revenue decline in the first half of 2024. Despite some improvements in the brand structure, revenue for the leading brand, Runbaiyan, still fell by over 10% [1]. - The company anticipates a sequential growth in the second half of 2024 due to new product launches and increased marketing efforts for major sales events like Double Eleven [1]. - Revenue from raw materials and medical aesthetic products has supported overall revenue during the decline in functional skincare, with raw material revenue growing by 11% year-on-year in the first half of 2024 [1]. - The report projects a recovery in profit margins due to reduced promotional expenses and cost control measures, despite a temporary increase in sales and management expense ratios [1]. Financial Summary - The company's revenue is projected to decline from RMB 6,359 million in 2022 to RMB 5,880 million in 2024, with a year-on-year change of -3.2% [2][7]. - Net profit attributable to shareholders is expected to recover slightly from RMB 593 million in 2023 to RMB 597 million in 2024, reflecting a minimal year-on-year increase of 0.7% [2][7]. - The price-to-earnings (PE) ratio is projected to be 42.7x in 2024, decreasing to 30.3x in 2025 [2][7]. - The return on equity (ROE) is expected to decline from 8.7% in 2023 to 8.2% in 2024, before recovering to 10.7% in 2025 [2][7].

Investment Rating - The report maintains a "Buy" rating for the company, Baosheng (3813.HK), with a target price of HKD 0.73, indicating a potential upside of 15.9% from the current price of HKD 0.63 [2][4]. Core Insights - Despite a significant revenue decline of 9% in 1H24, Baosheng achieved a 10% year-on-year increase in net profit attributable to shareholders through cost reduction and efficiency improvements, showcasing strong operational management [2][9]. - The company’s ability to expand its operating profit margin amidst declining revenues reflects effective cost control and operational efficiency enhancements [2][9]. - The second half of 2024 will largely depend on revenue performance, but the benefits of cost-cutting measures are expected to continue [2][9]. Financial Performance Summary - **Revenue**: The company reported a revenue of RMB 18,514 million for 2024E, reflecting an 8% decline year-on-year [3][11]. - **Net Profit**: The net profit attributable to shareholders is projected to be RMB 516 million for 2024E, a 5% increase compared to the previous year [3][11]. - **Profit Margins**: The operating profit margin is expected to remain stable, with a slight increase anticipated in 2024 [2][9]. - **Earnings Per Share**: The diluted earnings per share is projected to be HKD 0.10 for 2024, with a dividend payout ratio close to 55%, leading to a dividend yield of 9.5% based on current stock price [2][9][10]. Operational Efficiency - The company has successfully reduced overall operating expenses by 9% year-on-year, attributed to the closure of inefficient stores and optimization of rental costs [2][9]. - The gross profit margin improved by 2.0 percentage points in 2Q24, driven by better retail discount management and a shift in channel structure due to a decline in wholesale revenue [2][9]. Market Outlook - The demand in the international brand retail market remains weak, and Baosheng is expected to focus on maintaining healthy inventory levels and improving retail discounts in the second half of 2024 [2][9]. - The company may increase the scale of its wholesale business to compensate for the decline in direct store sales, which could positively impact channel structure and gross margins [2][9].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 5.1, indicating a potential upside of 25% from the current price of HKD 4.1 [7][9][16]. Core Insights - The company is expected to benefit from the rising demand for smartphone camera modules and improvements in product structure, leading to increased average selling prices [7][16]. - The automotive camera module business is experiencing rapid growth, with significant potential for profitability improvement as the company engages with domestic and international automotive manufacturers [7][16]. - The report highlights that the fingerprint recognition segment is expected to significantly reduce losses, contributing positively to overall performance [7][16]. Financial Performance Summary - Revenue projections for the company are as follows: - 2022: RMB 13,759 million - 2023: RMB 12,531 million (down 9% YoY) - 2024E: RMB 16,197 million (up 29% YoY) - 2025E: RMB 18,545 million (up 14% YoY) - 2026E: RMB 21,929 million (up 18% YoY) [5][10][14]. - Net profit is projected to recover significantly: - 2022: RMB 171 million - 2023: RMB 82 million (down 52% YoY) - 2024E: RMB 274 million (up 234% YoY) - 2025E: RMB 385 million (up 41% YoY) - 2026E: RMB 513 million (up 33% YoY) [5][10][14]. - The gross margin is expected to improve from 3.9% in 2022 to 6.4% by 2026E, reflecting better product mix and cost management [5][10][14]. Segment Performance - The company’s camera module segment is projected to generate significant revenue, with expectations of 221 million units shipped in the first half of 2024, reflecting a 30% increase YoY [13]. - The average selling price for camera modules is anticipated to rise, contributing to revenue growth [13]. - The automotive camera module segment is expected to maintain high growth momentum, with approximately 200,000 units shipped in the first half of 2024 [7][13]. Valuation - The report employs a sum-of-the-parts valuation method, assigning target P/E ratios of 14.0x for smartphone camera modules, 18.0x for other camera modules, 8.0x for fingerprint recognition modules, and 10.0x for other businesses, leading to a target price of HKD 5.1 [7][16][17].