Investment Rating - The industry investment rating is maintained as "Recommended" [1] Core Viewpoints - The steel price is currently at a low point, awaiting macroeconomic drivers, with a focus on the valuation recovery opportunities in steel stocks [2][3] - Seasonal demand for steel is showing significant weakness, with weekly average sales volume for construction materials at over 80,000 tons, indicating a market adjustment phase [3] - The Ministry of Finance has emphasized a more proactive fiscal policy for 2025, which may provide short-term support for commodity prices, although the market remains cautious until the effectiveness of these policies is observed [3][4] Summary by Sections 1. Market Performance Review - The steel sector has decreased by 2.6%, underperforming the Shanghai Composite Index by 0.82 percentage points [10][16] 2. Fundamental Tracking 2.1 Overall Steel Price Decline - National steel prices have shown an overall decline, with rebar prices in Beijing, Shanghai, and Guangzhou averaging 3,222, 3,330, and 3,550 CNY/ton respectively, reflecting weekly changes of -68, -58, and -53 CNY/ton [17] - The Platts price index has also decreased, with iron ore inventories rising [18] 2.2 Weak Demand and Supply - The national average daily sales volume of construction steel is 85,200 tons, down by 1.9 tons week-on-week [5] - The operating rate of blast furnaces is at 77.18%, a decrease of 0.92 percentage points week-on-week, with total weekly output of major steel products at 8.084 million tons, down by 212,000 tons [5][44] 3. Industry Dynamics 3.1 Key Industry News - The Jiangsu Province has officially issued a list of 500 major projects for 2025, with a total planned investment exceeding 11.8 billion CNY [52] - The Henan Provincial Government has released policies to promote economic recovery in the first quarter of 2025 [52] 3.2 Major Company Announcements - Jiuli Special Materials has signed an engineering construction contract with its controlling shareholder, with an expected transaction amount of 20 million CNY [52]

Investment Rating - The industry investment rating is "Recommended" (maintained) [1] Core Viewpoints - The report highlights a continued recovery trend in new home sales as of December, indicating a stabilization in the real estate market [2] - The Central Political Bureau meeting has reinforced support for the real estate market, including measures to lower reserve requirements and interest rates, optimize existing projects, and adjust housing purchase policies [3][39] - The report recommends focusing on real estate and property management sectors, specifically suggesting companies like China Overseas Development, Longfor Group, and Poly Property [3][40] Market Overview - The report notes that the Hang Seng Real Estate Index decreased by 3.1% this week, while the Hang Seng Index fell by 3.5% [7] - Key companies in the Hong Kong local stock market showed mixed performance, with Hang Lung Properties and Cheung Kong Holdings both increasing by 0.3% [4][5] Company Performance - Notable performers in the real estate sector included Gemdale Corporation, which increased by 1.9%, while China Overseas Development and Jianfa International saw declines of 2.9% and 3.3%, respectively [8][9] - In the property management sector, Country Garden Services rose by 0.4%, while Wanwu Cloud and Jianfa Property experienced slight declines [11][12] Stock Connect Holdings - The report indicates an increase in Stock Connect holdings for Poly Property, Longfor Group, and China Overseas Development by 0.37, 0.34, and 0.21 percentage points, respectively [15] - The report also notes that Vanke Enterprises, Poly Property, and Sunac China have Stock Connect holdings of 49.2%, 48.5%, and 35.3% [15] Short Selling Activity - The report identifies Jianfa International, Yuexiu Property, and Longfor Group as the top three companies for short selling activity, with respective rates of 32.6%, 26.8%, and 26.1% [21][22] - For the Hong Kong local stocks, the top short selling companies were Kowloon Warehouse Group, Hysan Development, and New World Development, with rates of 38.2%, 36.7%, and 27.4% [24][25] Policy Support - The report emphasizes unprecedented policy support for the real estate sector, including a combination of measures aimed at stabilizing the market and promoting healthy development [39][40] - The Central Economic Work Conference reiterated the importance of stabilizing the real estate market and preventing risks in key areas [39]

Investment Rating - The industry investment rating is maintained as "Recommended" [1] Core Viewpoints - The annual report forecasts will enter a period of intensive disclosure, suggesting a strategy of accumulating positions on dips [3][7] - Domestic demand for computing power is expected to remain robust, driven by rapid iterations in the AI industry, with significant capital expenditures planned by major companies [5][7] - The CES 2025 event highlighted the accelerated evolution of the AI industry, showcasing a strong presence of Chinese companies and a focus on AI technologies [9][27] Summary by Sections Industry Weekly Viewpoints - The annual report forecasts are set to be disclosed intensively, with expectations for better digestion of earnings forecasts. The current risk appetite has decreased due to macroeconomic factors, but the significant adjustment in the computer sector suggests a continued strategy of accumulating positions on dips, focusing on leading companies in upward-trending sectors [7] - The demand for domestic computing power is anticipated to remain high, with major companies like Microsoft planning to invest $80 billion in AI data centers in FY2025, while domestic giants like ByteDance and Alibaba are expected to maintain high capital expenditures for AI infrastructure [5][7] CES 2025 Highlights - The CES 2025 event concluded with over 1,500 Chinese companies participating, marking a historic high and showcasing the competitiveness of domestic tech firms. AI was the central theme, with various AI ecosystem products, including robots and AI glasses, being prominently featured [9][27] - The event demonstrated a significant integration of AI technologies across various sectors, indicating a trend towards deeper collaboration between AI models and hardware products [22][27] Investment Recommendations and Target Companies - Suggested focus areas include: 1. Domestic companies: Kingsoft Office, Haiguang Information, China Software, and others [8] 2. High cost-performance companies: Huihan Co., Hand Information, Newland, and others [8] 3. Securities IT firms: Hengsheng Electronics, Top Software, and others [8] - The integration of AI models with robotics, smart vehicles, and smart hardware is expected to drive demand for AI computing power and models [27]

Investment Rating - The report maintains a "Recommended" investment rating for the coal industry [1]. Core Insights - Coal prices have stabilized and are showing signs of recovery, prompting attention to undervalued assets in the sector [1]. Weekly Data Tracking - **Thermal Coal**: Prices have slightly increased, with inventory continuing to decline. As of January 10, the Qinhuangdao thermal coal price was 777 CNY/ton, up 2 CNY/ton week-on-week. The long-term contract price for January 2025 was 693 CNY/ton, down 0.4% month-on-month and 2.4% year-on-year [15]. - **Coking Coal and Coke**: Prices for both coking coal and coke have decreased, with the cost differential for coke increasing [32]. - **Downstream Changes**: Steel prices are fluctuating at low levels, and pig iron production continues to decline [34]. - **Futures Market**: Coking coal futures have been on a downward trend, with narrowing price differentials [38]. - **Transportation**: Both sea and land freight rates have been decreasing, with a year-on-year increase in the transportation volume on the Daqin line in December 2024 [40]. Weekly Market Review - From January 6 to January 10, 2025, the coal sector experienced a decline, with the coal index down 5.15% and thermal coal down 5.85% [43]. Weekly Perspective - The report provides a detailed analysis of various coal companies, highlighting their stock performance and earnings projections. For instance, China Shenhua Energy is rated "Increase" with a closing price of 39.18 CNY, down 6.87% for the week, and projected EPS for 2024 is 2.93 CNY [46].

Investment Rating - The industry investment rating is "Recommended" (maintained) [1] Core Insights - The report highlights the explosive growth of AI applications, particularly in the sector of AI toys, which are expected to see significant market penetration and consumer adoption [4][7] - Wi-Fi MCU is identified as a key hardware investment opportunity due to its integration with AI toys, which are projected to have a substantial market size and demand [20][22] Summary by Sections AI Toy Market - AI toys are primarily targeted at children and individuals seeking emotional companionship, focusing on entertainment and emotional interaction rather than task completion [7] - The current models in the market, such as Doubao and MiniMax, have shown sufficient performance to meet consumer needs [7] - The global toy market is estimated to reach 750 billion yuan, with AI toys expected to capture a market size of 150 billion yuan by 2028, representing a 20% penetration rate [22] Hardware and Technology - Wi-Fi MCU is expected to benefit from the growing demand for AI toys, with each AI toy typically requiring one Wi-Fi chip/module [22] - The report indicates that the hardware requirements for AI toys are less stringent compared to other AI devices, allowing for easier market entry [10] - Companies like FoloToy and Haivivi are leading the development of AI toys, with various product offerings that integrate advanced AI capabilities [13][14] Subscription Models - The pricing model for AI toys is primarily subscription-based, with examples including FoloToy's annual fee of 99 yuan and BubblePal's monthly fee of 9.9 yuan [18] - As the supply of AI toys increases, there is potential for subscription fees to decrease or be eliminated [18]

Investment Rating - The report assigns an "Accumulate" rating for the company for the first time [1]. Core Insights - The company has a strong foundation in liquid crystal materials and is expanding into semiconductor materials, particularly focusing on KrF photoresist resin [2][6]. - The company has successfully broken the overseas monopoly and achieved mass production of KrF photoresist resin, with a significant market opportunity projected for the future [3][45]. - The liquid crystal segment remains a stable revenue source, while the semiconductor materials segment is expected to drive future growth [4][19]. Summary by Sections Company Overview - Established in 2004, the company has developed a comprehensive production capability for liquid crystal materials and is now venturing into semiconductor materials [6][19]. - The company has formed strategic partnerships with major clients, including BOE Technology Group, enhancing its market position [19][31]. Financial Performance - Projected total revenue for 2023 is 799 million yuan, with a decline of 14.4% year-on-year, followed by a recovery in 2024 with an estimated revenue of 719 million yuan [3]. - The net profit attributable to shareholders is expected to decrease to 107 million yuan in 2023, with a significant recovery anticipated in 2024 [3]. Liquid Crystal Materials - The liquid crystal materials market is expected to maintain stability, with the company being one of the three domestic manufacturers benefiting from the increasing localization rate [20][25]. - The company has a long-standing relationship with BOE, which has been a significant contributor to its revenue, accounting for over 90% of total sales [19][31]. Semiconductor Materials - The company is a pioneer in the domestic mass production of KrF photoresist resin, which is crucial for semiconductor manufacturing [3][35]. - The global market for KrF photoresist is projected to grow from 767 million USD in 2023 to 1.288 billion USD by 2030, indicating a robust growth opportunity for the company [3][45]. Production Capacity and Projects - The company is actively expanding its production capacity, with significant investments in new projects aimed at enhancing its output of both liquid crystal and semiconductor materials [10][9]. - The Zhejiang production base is expected to achieve large-scale production of photoresist resin by 2025, contributing to the company's growth trajectory [3][10].

Investment Rating - The report maintains a "Recommended" rating for the social services industry [2] Core Insights - The report anticipates a significant reversal in the market, expressing optimism for leading consumer companies, particularly in light of recent policy changes aimed at boosting domestic demand and economic growth [3] - The report highlights a focus on leading companies in the hospitality sector, such as Jin Jiang Hotels and Huazhu, as well as opportunities in the education and travel sectors [3] - The beauty and personal care sectors are identified as cyclical favorites, with recommendations for companies like Aimeike and Jinbo Biological, while the cosmetics industry faces challenges with slowing growth [3] Industry Performance - The social services index has seen a decline of 10.00% year-to-date, underperforming the broader market [5] - The retail sector has shown resilience with a 9.59% increase year-to-date, while the beauty care index has dropped by 13.94% [5] Sub-Industry Dynamics Restaurant and Tourism - The aviation sector is projected to execute approximately 5.5 million passenger flights in 2024, a 10.5% increase year-on-year, with total passenger numbers expected to exceed 700 million [17] - The New Year's holiday saw 1.803 million people entering and exiting the country, marking a 13.7% increase from the previous year [17] Gold and Jewelry - Gold prices have surged nearly 30% in 2024, leading to promotional activities by major brands to stimulate demand [19] Retail - The report emphasizes the importance of expanding domestic demand as a key driver for economic growth, with recommendations for companies like Huazhi Wine and Chongqing Department Store [19] Beauty and Personal Care - The beauty sector is experiencing significant challenges, with over 40 companies filing for bankruptcy in 2024, indicating a tough market environment [23] - The report notes the emergence of new trends in cosmetic ingredients, particularly in exosomes, which are gaining traction in the market [23]

Investment Rating - The industry investment rating is "Recommended (Maintain)" [1] Core Insights - The supply and demand sides are showing significant improvement, with a turning point for advanced driving assistance systems (ADAS) expected soon [2] - The penetration rate of high-level autonomous driving is anticipated to increase rapidly, with projections indicating a rise from 6.9% in 2023 to 24.8% in 2025 for NOA (Navigation on Autopilot) [27] - The report highlights the importance of cost reduction in the supply chain, which is expected to lead to a decrease in the price range of supporting models and an increase in the penetration rate of high-level autonomous driving [7][10] Supply Side Summary - In 2024, the penetration rate for high-level autonomous driving is relatively low, with the price range for supporting models being high [7] - The BOM (Bill of Materials) for ADAS is projected to decrease by 3-5% in 2024, indicating a trend towards lower costs [10] - By 2025, low-cost solutions are expected to increase, with companies like BYD accelerating the implementation of intelligent driving technologies [11] Demand Side Summary - Tesla is leading the market with its One Model approach, enhancing the capabilities of autonomous driving models [14] - Regulatory advancements and marketing efforts are expected to boost demand for autonomous driving technologies [19] Outlook Summary - Both supply and demand sides are expected to improve significantly, with a rapid increase in the penetration rate of high-level autonomous driving [27] - The report forecasts substantial growth in the sales of NOA vehicles, with urban NOA vehicle sales projected to rise from 47,000 units in 2023 to 347,000 units in 2025 [30] Opportunities Summary - The report identifies opportunities for main manufacturers to build high-level autonomous driving technology barriers through data, computing power, and simulation systems [35] - The SoC (System on Chip) market is expected to see significant growth, with mid to high-level autonomous driving and mid-range computing chips anticipated to increase in volume [43] - The laser radar market is projected to grow rapidly, with shipments expected to exceed 3 million units by 2025 due to the introduction of low-cost products [62]

Investment Rating - The report maintains a "Recommended" rating for the pharmaceutical and biotechnology industry [1] Core Insights - The pharmaceutical and biotechnology sector is currently experiencing a downturn, with a 5.55% decline in the industry index compared to a 5.17% drop in the CSI 300 index during the week of December 30, 2024, to January 3, 2025 [3][5] - Recent government policies are expected to support high-quality development in the pharmaceutical industry, including increased support for drug and medical device innovation, improved review and approval processes, and enhanced regulatory compliance [3][15][19] - Despite concerns over policy impacts and market performance in 2024, the long-term growth logic of the pharmaceutical industry remains intact, with the sector currently at historical low valuations, presenting investment opportunities for 2025 [3][20][21] Summary by Sections 1. Weekly Pharmaceutical Sector Performance - The pharmaceutical sector underperformed the CSI 300 index, with a year-to-date decline of 15.70%, ranking 29th among 30 primary sub-industries [5][6] 2. Industry Events and Policy Overview - The State Council issued opinions to deepen drug and medical device regulatory reforms, emphasizing support for innovation and improving review efficiency [3][15][19] - The National Medical Insurance Bureau updated the drug list, adding 91 new drugs, enhancing coverage for cancer, chronic diseases, and rare diseases [14] 3. Industry Investment Strategy - The report suggests focusing on sectors with strong growth potential and sound industrial logic, particularly in innovative drugs and medical devices, as well as cyclical recovery in consumer healthcare [20][21] - Key investment themes include innovation and internationalization, with a focus on companies with robust growth prospects in the innovative drug sector [21][22] 4. Recommended Stocks - **Hengrui Medicine**: Expected to benefit from a new product cycle and international expansion, with projected revenues of 26.65 billion, 35.49 billion, and 42.40 billion CNY for 2024-2026 [30] - **Innovent Biologics**: Anticipated rapid growth due to successful clinical results and inclusion in the medical insurance directory, with projected revenues of 2.82 billion, 4.77 billion, and 6.63 billion CNY for 2024-2026 [31] - **WuXi AppTec**: A leading integrated service provider with strong growth in orders and revenue recovery, projected EPS of 3.36, 3.74, and 4.11 CNY for 2024-2026 [32] - **Aier Eye Hospital**: A leading player in the medical service sector, expected to benefit from demand recovery [35] - **Mindray Medical**: A leader in medical devices with strong R&D capabilities and reasonable valuations [35]

Investment Rating - The report maintains a "Recommended" rating for the home appliance industry [2] Core Viewpoints - The acceleration of the "old-for-new" policy in 2025 is expected to boost domestic demand for home appliances, with 27 provincial-level regions in China already implementing related work as of January 4, 2025 [2][15] - The continuation of the "old-for-new" policy is anticipated to enhance the valuation and fundamentals of the home appliance sector [15] Summary by Sections 1. Policy and Market Dynamics - The "old-for-new" subsidy program commenced on January 1, 2025, and will cover the entire year, with no policy gaps observed [3][15] - The subsidy will apply to eight categories of home appliances, with a subsidy rate of 15%-20% based on energy efficiency levels [4][15] 2. Price Tracking - Prices for copper, aluminum, hot-rolled sheets, and ABS have shown a slight decline, with copper averaging 73,725 CNY/ton (-0.81% MoM), aluminum at 19,800 CNY/ton (-0.04% MoM), ABS at 11,825 CNY/ton (-0.13% MoM), and hot-rolled sheets at 3,725 CNY/ton (-0.17% MoM) [5][18] - The exchange rate of the RMB has increased, with the USD/CNY average at 7.3370, up 0.45% week-on-week [21] 3. Investment Recommendations - The report suggests focusing on leading home appliance companies with strong financial capabilities and comprehensive channel coverage, particularly in the white goods sector, recommending Midea Group, Gree Electric, Haier Smart Home, and Hisense Home Appliances [6][26] - It also highlights the potential for growth in emerging markets and the resilience of home appliance exports, recommending Hisense Visual, TCL Electronics, Ecovacs, and Roborock for their export potential [6][26] - The kitchen appliance sector is expected to benefit from the "old-for-new" policy and favorable real estate policies, with recommendations for Boss Electric and Vatti [6][26]