本文档仅供上海信鱼私募基金管理有限公司18860455898研究使用，请勿外传 ab 8 January 2025 Global Research China Insurance Sector 2025 outlook: weathering the challenges VNB growth to moderate; P&C underwriting profit to recover Following a surprisingly strong 2024 (listed insurers' VNB: +32%, UBS-e), we expect VNB growth to moderate in 2025. For Q1, we expect jumpstart sales performance to diverge across insurers. For the rest of year, while life insurance sales would continue to benefit from the savings glut, we see multiple challenges t ...

Summary of China Agriculture and Dairy Sector Conference Call Industry Overview - **Industry Focus**: China Agriculture and Dairy Sector - **Date**: January 6, 2025 Key Points Pet Food Segment - **Growth Rate**: The pet food market grew by 8.5% YoY in 2024, indicating strong resilience despite economic slowdown [3][20] - **Market Size**: The total pet industry reached Rmb 300 billion in 2024, with pet food accounting for over 50% of total spending [3][23] - **Demographic Trends**: Changes such as an aging population and declining birth rates are expected to increase pet ownership [3][39] - **Brand Performance**: Domestic brands are outperforming foreign brands, with rising consumer confidence in local products [3][40] Dairy Segment - **Raw Milk Prices**: A more balanced supply-demand scenario is anticipated in H225 due to a contraction in cow herds and depressed prices [2][5] - **Sales Decline**: Retail value of drinking milk products fell by 2% in 2024, with fresh milk experiencing a 7% decline [62][65] - **Capacity Contraction**: Sow capacity has contracted over 4% since Q124, with many upstream farming groups facing cash flow issues [5][71] Hog Segment - **Price Forecast**: Hog prices are expected to decline by 11% to Rmb 15/kg in 2025, driven by supply recovery and weakening demand [4][83] - **Production Trends**: The number of reproductive sows has started to rebound, indicating improved productivity [94][96] - **Profitability Concerns**: Breeding profits are projected to decrease, with average profits per head expected to drop from Rmb 200-250 to Rmb 150 in future cycles [139] Seed Segment - **Oversupply Issues**: There is an oversupply of hybrid corn seeds, with an inventory-to-sales ratio of 75% in 2024 [147] - **GMO Promotion**: The penetration rate of genetically modified organisms (GMO) is expected to rise from 2% in 2024 to 10% in 2025 [4][154] Stock Recommendations - **Top Picks**: - **Pet Food**: Gambol and China Pet Foods are favored due to robust sales growth [6] - **Dairy**: Mengniu and Yili are recommended based on expected earnings improvement [6] - **Bearish Outlook**: Muyuan and Wens are viewed negatively due to anticipated hog price downcycle [6] Additional Insights - **Consumer Behavior**: Over 90% of pet owners consider their pets as family members or friends, indicating a strong emotional bond [30] - **Market Dynamics**: The pet food exports to the US grew by 25% YoY in early 2024, reflecting a recovery in overseas demand [56] This summary encapsulates the critical insights from the conference call, highlighting the current trends and future outlooks within the agriculture and dairy sectors in China.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **oil and gas industry**, specifically analyzing the **Brent crude oil market** and **non-OPEC supply dynamics** for 2025 and beyond [6][28][39]. Core Insights and Arguments - **Oil Market Surplus**: A surplus of approximately **0.7 million barrels per day (mb/d)** is expected in 2025, which will likely keep Brent prices around **$70 per barrel** [6][72]. - **Oil Demand Growth**: Projected oil demand growth for 2025 is around **1.0 mb/d**, which is at the lower end of the consensus range. Factors affecting this include below-trend global GDP growth, slowing population growth, and pressure on demand from China [6][12]. - **Non-OPEC Supply Increase**: Non-OPEC supply is expected to re-accelerate to **1.4 mb/d** in 2025, up from **0.9 mb/d** in 2024, driven by new projects in various countries [6][28]. - **OPEC Production Growth**: OPEC production is anticipated to grow by only **0.3 mb/d** in 2025, which includes **0.1 mb/d** from natural gas liquids (NGLs) and condensate [6][72]. - **Market Risks**: Key uncertainties include potential extensions of OPEC cuts, possible lower production from Iran, and risks to demand from tariffs [6][72]. Demand Dynamics - **Global Seaborne Energy Imports**: Growth in global seaborne energy imports halted in 2024, with a notable decline in crude import demand in Europe [7]. - **China's Demand Decline**: China's oil demand has decreased year-on-year for the past seven months, which is significant as China has historically accounted for half of global oil demand growth [15]. - **Refined Products Demand**: Demand for refined products is expected to grow by approximately **600 kb/d** year-on-year in 2025, but the market is currently trading in a weak seasonal period [12][14]. Non-OPEC Supply Insights - **Supply Growth Stagnation**: Non-OPEC supply has experienced stagnation over the last 12 months after a significant acceleration post-2022 price spikes [21][22]. - **Production Forecasts**: For 2025, consensus estimates suggest non-OPEC crude and condensate supply will re-accelerate to about **1.2 mb/d** [28][36]. - **Investment Trends**: Capital expenditures (capex) in the oil sector have recovered to over **$500 billion**, with attractive internal rates of return (IRRs) projected for upcoming projects [39][42]. OPEC Supply Dynamics - **Production Cuts**: OPEC has significantly lowered its future production plans, with output expected to grow again from April 2025 onwards [47][54]. - **Adherence to Quotas**: Various OPEC countries are showing differing levels of adherence to their production quotas, impacting overall supply [48][51]. Additional Important Insights - **Break-even Prices**: The median break-even oil price in US shale remains below **$50 per barrel**, indicating a wide distribution of costs among producers [45]. - **Market Balance**: The total oil liquids balance indicates a **0.7 mb/d surplus** in 2025, with potential for further tightening if OPEC+ cuts are extended [72]. This summary encapsulates the critical insights and projections regarding the oil market, demand dynamics, and supply forecasts, providing a comprehensive overview of the current state and future expectations within the industry.

Summary of Key Points from the Conference Call Industry Overview - The focus of the conference call is on the **China government bonds (CGBs)** and the broader **fixed income market** in China for 2025 Core Insights and Arguments - **Performance of CGBs**: CGBs delivered nearly **2% returns** in December, surprising many investors who were underweight in CGBs by an average of **3 percentage points** at the end of November [2][7] - **PBoC's Role**: The People's Bank of China (PBoC) has been a significant buyer of CGBs, purchasing **RMB1 trillion** from August to December, absorbing **40%** of net CGB supply during this period [3][4] - **Future Purchases**: The PBoC is expected to purchase a minimum of **RMB200 billion** of CGBs monthly in 2025, potentially increasing to **RMB300-400 billion** per month [4] - **Ownership Structure Changes**: The ownership structure of CGBs and local government bonds (LGBs) has shifted significantly due to the PBoC's quantitative easing, with the 'Others' category rising rapidly [5] - **Credit Impulse and Bond Yields**: A continued decline in credit impulse and the PBoC's bond buying are seen as key drivers for lower bond yields in China [7] - **Investor Demand**: Insurance companies' demand for bonds remains steady, while asset management companies have increased their bond purchases due to poor equity market performance [8] Important but Overlooked Content - **CGB Supply Expectations**: CGB supply is expected to rise by **RMB2 trillion** to **RMB6.5 trillion** in 2025, driven by an increase in the fiscal deficit target from **3% to 4%** of GDP [14][18] - **Impact of Larger Issuance**: Despite larger bond issuance, it has not negatively impacted bond prices, indicating that supply is not a significant determinant of bond yields [13] - **Seasonal Trends**: Historically, December has been the best month for CGBs, with expectations for a rally in March as policy anticipation builds for the National People's Congress [20] - **Potential Catalysts for Change**: Factors that could alter the outlook for lower rates include improvements in wage expectations and potential equity market stabilization measures by the PBoC [21] Forecasts and Trading Ideas - **Revised Yield Forecasts**: The forecast for the 10Y CGB yield has been revised down from **1.80% to 1.20%** for year-end 2025, with a trading range of **1.20-1.60%** anticipated [10][11] - **Trade Recommendations**: The recommendation to buy 10Y CGBs remains, with a target yield of **1.40%** [7][23] This summary encapsulates the key points discussed in the conference call regarding the outlook for China's fixed income market and the role of the PBoC in shaping bond yields and investor behavior.

Summary of the Coal Industry Update Industry Overview - The report focuses on the **China Coal Industry** and provides insights into the thermal and coking coal markets in the Asia Pacific region [1][7]. Key Points and Arguments Price Movements - **Thermal Coal Prices**: - QHD 5500 thermal coal price decreased by **0.3% week-over-week (WoW)** to **Rmb 707/ton** as of January 3, 2025 [2][8]. - CCI 5500 increased by **0.7% WoW** to **Rmb 770/ton** [2][8]. - BSPI remained flat at **Rmb 703/ton** [2][8]. - Seaborne thermal coal price (NEWC) fell by **3.1% WoW** to **US$ 124/ton** [2][8]. Inventory Levels - **Coal Inventory**: - QHD port inventory decreased by **1.8% WoW** to **6.45 million tons (mt)** [3][8]. - Bohai Rim ports' inventory dropped by **5.2% WoW** to **25.1 mt** [3][8]. - Major Independent Power Producers (IPPs) coal inventory increased to **15.8 days**, up from **15.6 days** the previous week [3][8]. Production Insights - **November Coal Production**: - Set a new record at **428 million tons (mnt)**, representing a **3.4% year-over-year (YoY)** increase and a **3.9% month-over-month (MoM)** increase [4][8]. - Power generation demand was mild, increasing by only **2.5% YoY** to **750 billion kWh** in November [4][8]. Coking Coal Prices - **Coking Coal Prices**: - Liulin No. 4 mine-mouth price decreased by **2.9% WoW** to **Rmb 680/ton**, while the Free on Rail (FOR) price remained flat at **Rmb 1,410/ton** [3][8]. - Queensland (QLD) coking coal price increased by **0.5% WoW** to **US$ 206/ton** [3][8]. Market Outlook - The report indicates a cautious outlook for the coal industry, emphasizing the central government's commitment to treating coal as a strategic reserve, which may allow for further production increases in the future [4][7]. Additional Important Information - The report includes various data points and charts illustrating coal prices, inventory levels, and production trends, which provide a comprehensive view of the current state of the coal market in China [5][6][8]. - The report also highlights the potential impact of weather conditions on coal demand and production, particularly during the heating season [1][7]. This summary encapsulates the critical insights from the coal industry update, focusing on price movements, inventory levels, production records, and market outlook.

ab 6 January 2025 Global Research China Industrials Going global: 'China+1' investment plan tracker (2024) UBS's quarterly tracker gauging 'China+1' progress under going global Our China 'going global' tracker follows the country's progress under the China+1 strategy on a quarterly basis (from Q124). In Q424, the overseas investment intentions for LatAm and ASEAN changed—investment plans in ASEAN increased notably in Q424 while investment interest in LatAm continued to decline YoY. We continue to expect goi ...

Industry or Company Involved - **China's Economy** Key Points and Arguments 1. **China's Economic Outlook in 2025 hinges on two factors: external tariffs and domestic stimulus**. The US tariffs are expected to phase in from 25Q2 and increase by 15% in a staged manner, impacting China's exports and GDP. Domestic policy is expected to become more expansionary, but not a decisive shift from the current real-growth-targeting and reactive easing mode. 2. **Tariff Risks**: The baseline assumption is a 15% annualized increase in tariffs, similar to the 2018-19 trade dispute. The US has indicated a desire to strengthen oversight on tariff evasion, but implementation may be challenging due to China's dominant role in global manufacturing. 3. **Trade Diversion**: The US has indicated a desire to strengthen oversight on tariff evasion, and we do anticipate meaningful measures to close such "loopholes" through third countries and a crackdown on de minimis shipments. Implementation, however, may prove challenging, given China's dominant role in global manufacturing. 4. **Impact of Tariffs**: A 15% tariff hike with partial diversion will slow China's exports by -6.0% and China's GDP by –1.0% ceteris paribus. 5. **RMB Depreciation**: The RMB depreciation pressure is real under tariff threats. Amid trade dispute 1.0, USDCNY responded to almost every announcement of tariffs and deals. Based on this sensitivity, USDCNY could reach 7.7-8.0 under 60% tariffs, and in the escalating stage, the markets could price in extreme scenarios. 6. **Confidence Problem**: Two years after reopening, social confidence is still weak. The confidence issue appears broad-based and entrenched now. Weak sentiment would continue to weigh on the economy in 2025. 7. **Deflation Challenge**: China's longest streak of deflation drags on. The GDP deflator should remain negative in 24Q4E, the seventh consecutive negative reading. This is unprecedented for China, with a similar episode only in 1998-99. 8. **Policies**: China should and probably will navigate the turbulence with policy stimulus. The support would step up to offset potential tariff shocks, but not to reflate the economy. 9. **Monetary Easing**: Rate and RRR cuts will likely continue. The monetary policy stance is now officially stated as "moderately loose" by the Politburo and the CEWC. 10. **Fiscal Policy**: We expect overall government deficit to increase ~RMB2.5tr to RMB11.5trn for 2025. The central government could take up all the increase. 11. **Targeted Consumer Support**: Targeted consumer support would likely top policymakers' priority list for 2025. Following the recent pay hikes for civil servants, more mini measures could come through. 12. **GDP Growth**: We maintain our forecast that GDP growth could retreat to 4.2%YoY in 2025E after hitting 5.0% in 2024E. 13. **Inflation**: China may not find an easy way out of deflation in 2025E. We forecast CPI to average 0.6%YoY and PPI to decline -1.9%YoY in 2025E – no reflation. 14. **Consumption**: Retail sales could grow only 3.5%YoY in 2024E, setting the stage for rebound. Indeed, household savings rate stood at 38.0% in 24Q1-3, still notably higher than the pre-Covid 36.2%. 15. **Investment**: Property investment could record a fourth high single-digit or double-digit contraction in 2025. Policymakers are aiming for "stopping the decline of the sector and foster a stabilization," yet we think it is more about home prices and sales, instead of investment. 16. **Trade**: Exports look set to decline from the all-time high amid tariff uncertainties. Headline exports likely grew 5.4%YoY in 2024 with the momentum for volume even stronger. 17. **Key Risks**: The shock could be more significant especially in the case of a 60% universal tariff on China. Our current expectations are at best an educated guess, and we see risks largely balanced around this base case.

Summary of PDD Holdings Inc. Conference Call Company and Industry Overview - **Company**: PDD Holdings Inc (Ticker: PDD.O) - **Industry**: China Internet and Other Services - **Market Cap**: US$125,021 million - **Current Stock Price**: US$96.82 (as of January 3, 2025) - **Price Target**: US$150.00, indicating a potential upside of 55% [13][17] Key Takeaways - **Temu's Expansion**: - Temu entered one new country, Sri Lanka, in December 2024 under the fully entrusted model [16] - Total number of countries entered under the fully entrusted model reached 25 [16] - Monthly downloads for Temu decreased by 4% month-over-month to 40 million, with regional contributions of 6% from the US, 24% from Europe, and 28% from Latin America [16] - **User Metrics**: - Global accumulated downloads reached 884 million, a 5% increase month-over-month, with 23% from the US, 27% from the EU, and 25% from Latin America [16] - Monthly Active Users (MAU) increased by 4% month-over-month to 352 million, with 15% from the US, 28% from Europe, and 28% from Latin America [16] - Daily Active Users (DAU) reached 35.4 million, a 2% increase month-over-month, with 19% from the US, 32% from Europe, and 25% from Latin America [16] Financial Performance - **Earnings Per Share (EPS)**: - 2023: Rmb 41.12 - 2024 Estimate: Rmb 71.77 - 2025 Estimate: Rmb 80.24 - 2026 Estimate: Rmb 90.23 [13] - **Revenue Projections**: - 2023: Rmb 247,639 million - 2024 Estimate: Rmb 392,164 million - 2025 Estimate: Rmb 464,624 million - 2026 Estimate: Rmb 515,585 million [13] - **Valuation Metrics**: - Price-to-Earnings (P/E) ratio projected to decrease from 25.3 in 2023 to 7.9 in 2026 [13] - Return on Equity (ROE) expected to decline from 51.0% in 2023 to 31.2% in 2026 [13] - Free Cash Flow yield ratio projected to increase from 5.4% in 2023 to 13.8% in 2026 [13] Risks and Opportunities - **Upside Risks**: - Faster-than-expected user growth driven by consumption trends - Improved unit economics for Temu - Reduced operational expenses due to less intense competition [19] - **Downside Risks**: - Increased competition impacting margin improvements - Potential drop in user engagement as subsidy levels normalize - Regulatory challenges affecting Temu's growth [19] Conclusion PDD Holdings Inc. is positioned for growth with its Temu platform expanding internationally. The financial outlook shows significant revenue growth and improving cash flow metrics, although risks from competition and regulatory environments remain. The stock is rated as "Overweight" with a strong price target indicating substantial upside potential [13][17].

Summary of the Conference Call on China Property & Property Management Industry Overview - **Industry**: China Property & Property Management - **Outlook for 2025**: Destocking to persist with five key themes identified for the year [2][9] Key Themes for 2025 1. **Existing Homes' Share Gains**: The trend of existing homes gaining market share from new homes is expected to continue, driven by buyer concerns over project quality and completion risks [2][19] 2. **Rising Importance of Rental Market**: The rental market is becoming increasingly significant, with a shift from buying to renting properties, impacting rental prices and government inventory buyback programs [2][24][26] 3. **Challenges for Luxury Malls**: Luxury malls are anticipated to face ongoing challenges due to a mismatch between supply and demand, with luxury retail sales declining by approximately 10% in 2024 [2][29][31] 4. **C-REITs as a Rising Asset Class**: The decline in interest rates is expected to benefit C-REITs, with a notable increase in their average unit price by 12% in 2024 [2][33][37] 5. **Diminishing Policy Impact**: The influence of government policies on the physical and stock markets is expected to decrease, with a focus shifting towards individual company fundamentals [2][3] Market Performance and Expectations - **2024 Performance**: MSCI China Real Estate declined by 11%, underperforming MSCI China by 26 percentage points [3][14] - **2025 Expectations**: Anticipated declines in the residential new home market with projected YoY declines of 10% in GFA sales and new starts, and a 10% decline in tier-1 cities' property prices [2][18] Stock Preferences - **Preferred Stocks**: BEKE and CR Land are favored due to their structural advantages in the current market environment [4] - **Cautious Stance**: A cautious outlook on developers and managers due to ongoing price and volume stabilization issues, with increased default risks highlighted [4] Valuation Metrics - **Current Valuation**: MSCI China Real Estate is trading at a forward PE of 8.4x and P/BV of 0.60x, compared to historical averages of 6.7x and 0.87x [5][9] Additional Insights - **Secondary Market Growth**: Secondary transactions increased to 47% of total transactions in 2024, up from 30% in 2022, indicating a shift in market dynamics [21] - **Rental Yield vs. Mortgage Rates**: Rental yields in tier-1 cities remain lower than mortgage rates, affecting investment decisions [25][26] - **Luxury Market Outlook**: Anticipated decline in domestic luxury spending by 8% YoY in 2025, with luxury brands expected to slow store expansions [30][31] Conclusion The conference call highlighted a challenging outlook for the China property market in 2025, with significant shifts towards existing home transactions and the rental market, alongside persistent challenges for luxury retail spaces. The anticipated decline in property prices and the evolving landscape of C-REITs present both risks and opportunities for investors in this sector.