Investment Rating - The report maintains a "Buy" rating for the company, with a market price of HKD 21.42 and a sector rating of "Outperform" [1][3]. Core Insights - The company's core OTA (Online Travel Agency) business shows steady growth, with a revenue of RMB 4.669 billion in Q2 2025, representing a year-on-year increase of 10.0%. The adjusted net profit reached RMB 775 million, up 18.0% year-on-year. The report emphasizes the company's significant long-term competitive advantages [3][5][8]. Summary by Sections Financial Performance - In Q2 2025, the company achieved a revenue of RMB 4.669 billion, with an adjusted EBITDA of RMB 1.185 billion, reflecting a year-on-year growth of 29.7%. The adjusted net profit was RMB 775 million, up 18.0% year-on-year. The core OTA business generated revenue of RMB 4.01 billion, a 13.7% increase year-on-year [3][8]. - The company's gross margin stood at 65.0%, an increase of 0.4 percentage points year-on-year. Cost optimization led to improved profit margins, with the OTA operating profit margin at 26.7%, up 2.4 percentage points year-on-year [8]. Business Segments - Revenue from the accommodation, transportation ticketing, vacation, and other segments in Q2 2025 was RMB 1.37 billion, RMB 1.88 billion, RMB 660 million, and RMB 760 million, respectively. The transportation segment saw a nearly 30% year-on-year increase in international ticket volume [8]. Market Outlook - The domestic travel market remains robust, with cross-border travel continuing to grow. The company is well-positioned to benefit from the industry's growth in lower-tier markets and is actively expanding its business [5][8]. - The report projects the company's net profit for 2025-2027 to be RMB 2.707 billion, RMB 3.369 billion, and RMB 4.082 billion, with corresponding P/E ratios of 17.0, 13.7, and 11.3 times [5][7].

Investment Rating - The report initiates coverage with an "Accumulate" rating for the company [1][5]. Core Views - China Southern Airlines has the largest fleet size in the country and leads in passenger capacity among domestic airlines. The growth rate of China's civil aviation fleet is showing a "step-down" trend, while the ongoing recovery in the tourism market is expected to boost air travel demand. The average price of aviation kerosene has decreased compared to the same period last year, which is beneficial for enhancing the company's profitability [1][5][8]. Company Overview - China Southern Airlines is the leading air transport service provider in China, with a well-established fleet and a focus on building dual hubs in Guangzhou and Beijing. The company has maintained the highest passenger transport volume among domestic airlines for 44 consecutive years. The airline operates a diverse fleet, including Boeing and Airbus models, and has a significant market share in terms of flight frequency and route network [16][24][25]. Financial Data - The company's total revenue for 2024 reached approximately 174.22 billion RMB, marking a 8.94% year-on-year increase, and is the highest in nearly a decade. The company has experienced continuous losses for four years since the pandemic, but the financial performance is showing signs of recovery, with a significant increase in revenue in 2023 [39][41][43]. Industry Overview - The aviation industry in China has seen a 172.8% growth in passenger transport over the past 15 years, with a gradual marketization of air ticket pricing. The three major airlines (Air China, China Eastern Airlines, and China Southern Airlines) account for over 62.64% of the total transport turnover in the market. The domestic passenger transport volume is expected to reach 730 million in 2024, a year-on-year increase of 17.86% [47][48][49].

Investment Rating - The transportation industry is rated as "Outperform" [2] Core Insights - The opening of the first low-altitude cargo route between Wuhan and Ezhou, along with high passenger traffic at Shanghai ports during the summer season, indicates growth in logistics and transportation [2][3] - Oil shipping rates remain low and fluctuating, while shipping rates for routes to Europe and the US continue to decline [3][16] - Joby Aviation successfully completed the world's first manned eVTOL flight between airports, showcasing advancements in aviation technology [3][17] - National railway coal shipments reached 1.02 billion tons in the first half of 2025, reflecting strong demand in the transportation sector [3][27] Industry Dynamics Shipping and Logistics - Oil shipping rates are experiencing low-level fluctuations, with the China Import Crude Oil Composite Index at 1064.60 points, up 0.7% from the previous week [15] - The shipping market is showing signs of weakness, with rates for routes to Europe and the US declining by 7.2% and 3.5% respectively [16] - The first low-altitude cargo flight between Ezhou and Wuhan was completed, marking a significant development in regional logistics [25][26] Passenger Transport - Shanghai's passenger traffic has remained high, averaging 129,000 daily entries and exits, a year-on-year increase of over 14% [18] - The peak day recorded 157,000 passengers, indicating a strong recovery in air travel [18] Freight and Rail Transport - In the first half of 2025, national railways transported 1.98 billion tons of goods, with coal shipments accounting for 1.02 billion tons [27] - The average daily loading of coal cars was 182,400, reflecting a 3.0% year-on-year increase [27] High-frequency Data Tracking - Air cargo prices have shown a slight decline, with the Shanghai outbound air freight price index at 4455.00 points, down 4.1% year-on-year [28] - The domestic air cargo flight volume increased by 7.61% year-on-year in July 2025, while international flights rose by 23.31% [37] Investment Recommendations - Focus on the equipment and manufacturing export chain, recommending companies such as COSCO Shipping, China Merchants Energy Shipping, and Huamao Logistics [5] - Consider opportunities in low-altitude economy investments, particularly in companies like CITIC Offshore Helicopter [5] - Explore investment opportunities in the road and rail sectors, with recommendations for Gansu Expressway, Beijing-Shanghai High-Speed Railway, and others [5] - Pay attention to the express delivery sector, recommending companies like SF Express, Jitu Express, and Yunda [5]

Core Insights - The overall activity level of the A-share merger and acquisition market in China has slightly decreased, characterized by high frequency, diverse participants, and broad sectors [1] - A total of 80 merger and acquisition events were disclosed during the period, with a total transaction amount of 601.88 billion RMB, showing a significant increase in both the number and value of major M&A events compared to the previous period [2] - The real estate management and development, other metals and mining, semiconductor products, electronic equipment, instruments and components, electrical equipment, and automotive parts sectors are particularly active in M&A activities [2][3] - Private enterprises and local state-owned enterprises are actively engaging in horizontal integration and strategic cooperation, indicating diverse motivations for mergers and acquisitions [1][2] - The M&A market is expected to further release integration and value reconstruction potential, supported by regulatory policy optimization, economic recovery, policy encouragement, and capital market reforms [1] M&A Market Overview - The number of major M&A events in the A-share market increased by 60% compared to the previous period, with a total disclosed transaction amount of 601.88 billion RMB, representing a 187.97% increase [2] - Key sectors for M&A activities include real estate management and development, other metals and mining, semiconductor products, electronic equipment, instruments and components, electrical equipment, and automotive parts [2] - The market is entering a new phase characterized by "efficiency improvement + structural optimization," driven by policy and proactive corporate adjustments [2] Listed Companies' M&A Plans - A total of 44 listed companies announced or planned M&A activities, with an average stock price fluctuation of 7.53% over two weeks [2] - 22 companies made significant progress after announcing M&A plans, with an average stock price fluctuation of 3.76% [2] - The number of major restructuring events increased by 60% compared to the previous period, with research enthusiasm rising by 11.54% [2] Companies with Significant Progress - Companies such as Yunnan Cheng Investment and AnYuan Coal Industry have made notable advancements in their M&A plans, with various strategic objectives including asset adjustments and diversification [10][11] - The progress of these companies reflects a broader trend of active restructuring and strategic realignment within the A-share market [10][11] Market Sentiment and Performance - The restructuring index showed a fluctuation of 5.10% over the two-week period, indicating a positive sentiment in the M&A market [12] - The average price-to-earnings (PE) ratios and market values of companies involved in M&A activities vary significantly, reflecting diverse market conditions and investor sentiments [7][8]

Investment Rating - The report rates the chemical industry as "Outperforming the Market" [1] Core Views - The report highlights the recent price movements in lithium carbonate, international oil prices, and organic silicon prices, with a focus on the implications of these changes for various sub-industries [1][7] - Key areas of focus for August include mid-year report trends, the impact of "anti-involution" on supply in related sub-industries, the importance of self-sufficiency in electronic materials companies, and stable dividend policies in energy companies [1][8] Industry Dynamics - In the week of August 11-17, 2025, among 100 tracked chemical products, 28 saw price increases, 42 saw declines, and 30 remained stable. Overall, 57% of products had a month-on-month average price increase, while 37% saw a decrease [2][7] - The average price of lithium carbonate increased by 17.48% compared to the previous week, reaching 84,000 CNY/ton, marking a cumulative increase of 41.18% since June 20 [2][7] - International oil prices fell, with WTI crude oil futures closing at 62.80 USD/barrel (down 1.69%) and Brent crude at 65.85 USD/barrel (down 1.11%) [2][7] - Organic silicon prices decreased by 8.00% to an average of 11,500 CNY/ton, attributed to weak terminal demand and the conclusion of pre-sale orders [2][7] Investment Recommendations - The report suggests focusing on mid-year report trends, the effects of "anti-involution" on supply, the significance of self-sufficiency in electronic materials, and the stability of dividend policies in energy companies [1][8] - Long-term investment themes include the sustained high prices of crude oil, the ongoing recovery of the oil service industry, and the rapid development of downstream industries, particularly in new materials [8] - Recommended stocks include China Petroleum, China National Offshore Oil Corporation, China Petrochemical Corporation, and several technology and chemical companies [8][9]

Investment Ratings - Kuaishou Technology: HOLD, Target Price (TP) raised to HK$76.00 [5][7] - Bilibili Inc: BUY, TP set at US$28.00 / HK$219.00 [9][10] - ZTO Express: BUY, TP set at US$21.00 [13][14] - AAC Technologies: BUY, TP raised to HK$62.90 [16][17] - China Communications Services: BUY, TP raised to HK$5.15 [19][20] - BOC Aviation: BUY, TP raised to HK$83.90 [22][23] - MINISO Group: BUY, TP set at US$24.80 / HK$48.40 [24][25] Core Insights - Kuaishou Technology reported a 13% YoY topline growth and a historical high adjusted net profit of RMB5.6 billion, exceeding consensus estimates [5][6] - Bilibili Inc achieved a 20% YoY topline growth in 2Q25, with adjusted operating profit surpassing consensus by 16% [9][12] - ZTO Express experienced an 11% YoY growth in core express delivery revenue, although it missed consensus by 1% [13][15] - AAC Technologies reported an 18% YoY revenue increase, with a significant 62% surge in net income, despite some misses on expectations [16][18] - China Communications Services saw a 3.4% YoY revenue increase, with non-telco and international sales growing by 12.6% YoY [19][21] - BOC Aviation's total revenue increased by 5.8% YoY, with a 20% YoY rise in core net profit [22][23] - MINISO Group's revenue grew by 23% YoY, reflecting positive developments in various markets [24][26] Summary by Company Kuaishou Technology - 2Q25 topline growth of 13% YoY and adjusted net profit of RMB5.6 billion, beating consensus by 2% and 11% respectively [5][6] - AI strategies are enhancing monetization and efficiency, despite potential challenges in 2H25 [6][7] Bilibili Inc - 2Q25 revenue growth of 20% YoY met consensus, with adjusted operating profit exceeding expectations [9][12] - Anticipated sustainable profitability growth driven by diversified revenue streams [9][10] ZTO Express - Core express delivery revenue grew 11% YoY, but missed consensus by 1% [13][15] - Adjusted FY2025 parcel volume guidance reflects industry challenges [14] AAC Technologies - Revenue increased 18% YoY to RMB13 billion, with net income surging 62% [16][18] - Management's optimistic outlook for 2H25 suggests potential margin recovery [17] China Communications Services - 1H25 net profit increased by 0.2% YoY, with total revenue up 3.4% YoY [19][21] - Growth in non-telco and international sales indicates strong demand for digital infrastructure [20] BOC Aviation - Total revenue and other income rose 5.8% YoY, with core net profit increasing by 20% [22][23] - Attractive dividend yield and solid business model support investment thesis [22] MINISO Group - 2Q25 revenue growth of 23% YoY, exceeding guidance [24][26] - Positive developments in IP strategy and customer engagement [25]

Investment Rating - The report rates the real estate industry as "Outperforming the Market" [1] Core Views - The real estate sector experienced a significant decline in both new and second-hand home transactions in July, with the year-on-year decline expanding [1][20] - The land market shows a trend of "quality over quantity," with a notable increase in premium rates in first-tier cities, reaching a six-year high [1][19] - The report emphasizes the importance of "high-quality urban renewal" as a key task for the industry, with supportive policies expected to accelerate [1][4] Summary by Sections New Home Transactions - In July, new home transaction area in 40 cities was 8.662 million square meters, down 27.7% month-on-month and 17.2% year-on-year, with the year-on-year decline expanding by 5.7 percentage points compared to June [13][16] - First-tier cities saw a significant drop, with Beijing down 33% month-on-month and 24% year-on-year, while Shenzhen experienced a staggering 51% year-on-year decline [14][15] - Second-tier cities also faced declines, with a 27.3% month-on-month drop and a 13.9% year-on-year drop [14][15] Second-Hand Home Transactions - Second-hand home transaction area in July was 7.902 million square meters, down 2.5% month-on-month and 14.9% year-on-year, with the year-on-year decline expanding by 11.5 percentage points [20][22] - First-tier cities saw a year-on-year decline in transaction volume, with Beijing down 17% and Shenzhen up 5% [21][22] Inventory and Absorption - As of the end of July, new home inventory in 12 tracked cities increased by 0.1% month-on-month but decreased by 15.9% year-on-year, with an overall absorption period of 17.4 months [20][22] Land Market - The land market showed a decrease in transaction volume, with a national average land premium rate of 5.7%, up 0.5 percentage points month-on-month [19][22] - First-tier cities experienced a significant increase in land premium rates, reaching a six-year high, with notable transactions in Shanghai and Shenzhen [19][22] Real Estate Companies - In July, the top 100 real estate companies saw a 25.1% year-on-year decline in total sales, while the equity sales saw a smaller decline of 25.2% [20][22] - The land acquisition amount for the top 100 companies decreased by 17.3% year-on-year, but the acquisition intensity increased to 44% [20][22] Policy Developments - The report highlights the central government's focus on "high-quality urban renewal," which is expected to drive policy support for the real estate sector [20][22] - Recent policy adjustments in cities like Beijing aim to optimize purchase restrictions and housing fund policies, which are expected to stimulate market activity [20][22]

Investment Rating - The report maintains an "Outperform" rating for the social services industry, expecting it to perform better than the benchmark index in the next 6-12 months [2][52]. Core Insights - The social services sector saw a 0.30% increase in the two weeks from August 4 to August 15, 2025, ranking 30th among 31 industries in the Shenwan classification. This performance lagged behind the CSI 300 index by 3.34 percentage points [2][13]. - Recent consumption policies, including interest subsidies, are anticipated to boost consumer confidence and spending, particularly in the travel and related sectors [5][30]. - The retail sales growth rate slowed to 3.7% year-on-year in July, indicating a need for improved consumer confidence [5][30]. Summary by Sections Market Review & Industry Dynamics - The social services sector's performance was below the overall market, with the CSI 300 index rising 3.64% during the same period [2][13]. - The sector's subcategories showed mixed results, with hotel and restaurant services increasing by 2.70%, while education and tourism sectors declined by 1.23% and 1.28%, respectively [17][20]. - The overall price-to-earnings (P/E) ratio for the social services industry was 34.73, significantly higher than the CSI 300's 12.71, indicating a premium valuation [21]. Investment Recommendations - The report suggests focusing on companies with strong growth potential in the travel chain and related industries, such as Tongcheng Travel, Huangshan Tourism, and Lijiang Co., among others [5][45]. - It also highlights opportunities in the hotel sector, particularly brands like Junting Hotel and Jinjiang Hotel, which are expected to benefit from the recovery in business travel [5][45]. - The report emphasizes the potential for growth in the cross-border travel market, recommending attention to companies like China Duty Free and Wangfujing [5][45]. Industry News & Company Announcements - The opening of Guangzhou's first city duty-free store on August 26 is expected to enhance consumer shopping experiences and stimulate local consumption [30]. - Data from Qunar indicates a significant increase in hotel bookings from smaller cities, reflecting a shift in consumer behavior towards higher-quality travel experiences [31]. - The report notes that the civil aviation sector achieved record passenger transport volumes in July, indicating a robust recovery in travel demand [33].

Investment Rating - The report maintains an "Outperform" rating for the electric equipment and new energy industry [1]. Core Insights - The photovoltaic module shortage has led to price increases, while the energy storage sector is initiating a "reverse involution" [1]. - In the new energy vehicle sector, the China Association of Automobile Manufacturers reported sales of 1.262 million units in July, a year-on-year increase of 27.4%, accounting for 48.7% of total new car sales for the month [1][25]. - The price of lithium carbonate has recently risen significantly, which is expected to restore profitability in related sectors, with a focus on battery and cathode material segments [1]. - Solid-state batteries have made progress in both new energy vehicles and energy storage applications, with a clear trend towards industrialization [1]. - The central economic work conference has emphasized the need to regulate "involutionary" competition and promote product quality in the photovoltaic sector [1]. - The hydrogen energy sector is being driven by continuous policy support, with pilot projects being launched in the energy sector [1]. Industry Dynamics - The electric equipment and new energy sector saw a weekly increase of 5.84%, outperforming the Shanghai Composite Index [10]. - The lithium battery index rose by 6.56%, while the wind power sector increased by 6.32% [13]. - The report highlights that the price of photovoltaic components has reached 0.7 yuan/W, with shortages primarily in the 710W large-format components [25]. - The energy storage market is witnessing significant project orders, such as a 2.8GWh independent energy storage project signed by Nandu Power [25]. - The report notes that the price of silicon materials remains stable, with mainstream prices for dense materials around 42-47 yuan/kg [15]. Company Dynamics - Ganfeng Lithium is collaborating with LAR to develop a lithium salt lake project with an annual production capacity of 150,000 tons of LCE lithium products [26]. - Keda Li reported a net profit of 769 million yuan for the first half of 2025, a year-on-year increase of 18.72% [26]. - Nandu Power reported a net loss of 232 million yuan for the first half of 2025, a year-on-year decline of 225.48% [26]. - Jinlang Technology reported a net profit of 602 million yuan for the first half of 2025, a year-on-year increase of 70.96% [26].

Investment Rating - The report assigns a "BUY" rating to China Resources Beer with a target price of HK$33.50 [7][10][12] Core Insights - In 1H25, China Resources Beer reported total revenue of RMB23,942 million, reflecting a year-on-year increase of 0.8%, which aligns with expectations. Normalized EBIT and shareholders' profit rose to RMB7,078 million and RMB5,789 million, marking increases of 11.2% and 23.0% year-on-year, respectively, both exceeding expectations [8][11] - Beer sales increased by 2.6% year-on-year to RMB23,161 million, with an average selling price (ASP) increase of 0.4% and volume growth of 2.2%. The gross profit margin (GPM) improved by 2.5 percentage points to 48.3%, driven by stabilized ASP due to premiumization and lower raw material prices, which saw an average unit cost decrease of 4.1% year-on-year [9][11] - Baijiu sales, however, declined by 34% year-on-year to RMB781 million, falling short of expectations. Despite the GPM remaining unchanged year-on-year, EBIT turned negative at RMB152 million, compared to a profit of RMB48 million in 1H24, reflecting the impact of anti-extravagance policies starting from 2Q25 in China [9][11] Summary by Sections Financial Performance - Total revenue for 1H25 was RMB23,942 million, up 0.8% YoY [8] - Normalized EBIT and shareholders' profit were RMB7,078 million and RMB5,789 million, up 11.2% and 23.0% YoY, respectively [8] - Beer sales increased 2.6% YoY to RMB23,161 million, with ASP up 0.4% and volume up 2.2% [9] Margin Analysis - GPM improved by 2.5 percentage points to 48.3% due to premiumization and lower raw material costs [9] - Baijiu sales dropped 34% YoY to RMB781 million, with EBIT turning negative at RMB152 million [9] Valuation and Forecast - The target price is set at HK$33.50 based on a 17.0x average P/E for 2025-26 [10][12] - Bottom-line forecasts for 2025-27 have been revised up by 12%, 3%, and 2% respectively [10][12]