Investment Rating - The report indicates a positive outlook for the Southeast Asia consumption sector, with consumption generally outperforming the index [1]. Core Insights - The Southeast Asian economies are showing signs of recovery, with Vietnam leading with a GDP growth of 8.23% year-on-year in Q3 2025, supported by strong manufacturing and services sectors [3][12]. - Inflation remains moderate across the region, with varying trends; Indonesia's CPI rose to 2.65%, while Thailand experienced a decline of 0.72% [4][22]. - Consumer confidence is improving in major economies, with Indonesia's consumer confidence index at 114.96, reflecting optimism about employment and income prospects [15]. Economic Data Summary - **GDP Growth**: In Q3 2025, Vietnam's GDP grew by 8.23%, Malaysia's by 5.2%, and Singapore's by 2.9%, indicating a robust economic recovery across the region [3][6][26]. - **CPI Trends**: Indonesia's CPI increased by 2.65%, Thailand's decreased by 0.72%, and Singapore's rose by 0.7%, showing a mixed inflationary landscape [4][22][27]. - **Consumer Confidence**: Indonesia's consumer confidence index rose to 114.96, while Thailand's index was at 49.4, indicating cautious optimism [15][23]. Consumption Sector Summary - **Retail Performance**: Indonesia's essential and discretionary consumption sectors rose by 14.9% and 15.7%, respectively, outperforming the index [5]. - **Food and Beverage Sales**: Indonesia's food and beverage retail sales index grew by 7.3%, reflecting strong consumer demand [17]. - **Market Trends**: The retail index in Malaysia and Thailand showed positive growth, with Malaysia's essential and discretionary consumption increasing by 5.1% and 6.1% [9][10]. Valuation Summary - **Market Valuation**: As of September 2025, Malaysia's essential and discretionary consumption valuations were at historical percentiles of 77% and 100%, respectively, indicating a positive valuation trend [5].

Investment Rating - The report assigns an "Outperform" rating to China Tourism Group Duty Free, indicating an expected relative return exceeding 10% over the next 12-18 months [20][21]. Core Insights - The company reported a marginal improvement in Q3 2025 results, with revenue of RMB 11.71 billion, a year-on-year decline of 0.4%, and a net profit of RMB 452 million, down 28.9% year-on-year [1][7]. - Hainan's offshore duty-free sales showed signs of recovery, with September sales reaching RMB 1.73 billion, marking a 3.4% year-on-year increase, the first positive growth in nearly 18 months [2][8]. - The company has implemented its first interim dividend, distributing RMB 2.5 per 10 shares, totaling RMB 517 million, which is 16.95% of the net profit for the first three quarters [4][11]. Summary by Sections Financial Performance - For Q3 2025, the company achieved a gross profit margin of 32.0%, which remained stable year-on-year, while the net profit margin was 3.86%, down 1.55 percentage points year-on-year [2][9]. - The total revenue for the first three quarters was RMB 39.86 billion, reflecting a 7.3% year-on-year decline, with a net profit of RMB 3.052 billion, down 22.1% year-on-year [1][7]. Market Developments - The company is expanding its operations with new downtown duty-free stores in Shenzhen, Guangzhou, and Chengdu, adopting a dual-track operation model that integrates local culture [3][10]. - Recent policy adjustments in Hainan's offshore duty-free shopping are expected to enhance consumer experience and boost sales, with the number of duty-free shopping categories increasing from 45 to 47 [5]. Strategic Initiatives - The company is focusing on enhancing the integration of duty-free shopping with cultural tourism, creating a composite model that includes experience and social interaction [3][10]. - Ongoing projects, such as the third phase of Sanya International Duty-Free City, are progressing steadily, contributing to the company's long-term growth strategy [3][10].

Investment Rating - The report indicates a positive outlook for the gaming industry in Macau, expecting high single-digit growth in gaming gross revenue (GGR) for 2025 [14][15]. Core Insights - In October 2025, Macau's GGR reached MOP 24.086 billion, marking a year-on-year increase of 15.9% and a month-on-month increase of 31.7%, recovering to 91.1% of the 2019 level [14][15]. - The average daily GGR in October was MOP 777 million, up 27.4% from September's MOP 610 million, representing the highest level since the pandemic [14][15]. - The resilience of the industry was attributed to the peak Golden Week, NBA events, and concerts, despite the impact of a typhoon [14][15]. - Cumulative GGR for the first ten months of 2025 reached MOP 205.427 billion, reflecting an 8.0% year-on-year growth and 83.3% of the 2019 level [14][15]. - Upcoming events in November, including the National Games and various concerts, are expected to further boost tourist arrivals and GGR [14][15]. Summary by Sections Monthly GGR and Year-on-Year Growth - October's GGR growth was nearly 16% year-on-year, with a significant recovery trend observed [14][15]. - The daily average GGR for October was the highest post-pandemic, indicating strong market recovery [14][15]. Visitor Statistics - In September 2025, the number of inbound visitors to Macau was 2.78 million, a 9.8% increase year-on-year, fully recovering to 100.4% of the 2019 level [15]. - Cumulative inbound visitors for the first nine months of 2025 reached 29.67 million, up 14.5% year-on-year [15]. Hotel Occupancy Rates - The hotel occupancy rate in Macau for September 2025 was 84.6%, showing a slight decline year-on-year but stable compared to 2019 levels [16]. - The average hotel occupancy rate for the first nine months of 2025 was 89.3%, reflecting a 3.8 percentage point increase year-on-year [16].

Investment Focus - The report emphasizes that market volatility is expected to persist until the outcomes of China-U.S. negotiations become clear, suggesting investors should buy on dips. However, a rally occurred before the leaders' meeting, leading to profit-taking adjustments afterward. The pullback is viewed as a technical correction with limited downside, representing a staged opportunity for accumulation during weakness [1][8]. Market Trends - Recent closures of private funds managed by prominent asset managers indicate that bubbles have formed in certain popular sectors, making it difficult to find stocks with long-term return potential. This suggests a need for time to digest previous gains before new investment opportunities arise. The report highlights that more certain allocation opportunities are found in large-cap blue-chip stocks that have lagged in performance [2][9]. Policy and Regulatory Environment - The upcoming Five-Year Plan emphasizes the development of a stronger financial system and the role of capital markets in supporting technological innovation. Key policy priorities include enhancing direct financing, expanding market structures, and increasing support for technology-driven companies in IPOs and M&A. Additionally, new guidelines for public mutual fund performance benchmarks aim to standardize practices and improve investor protection [3][10]. Capital Rotation and Trading Activity - A shift in capital has been observed, with small- and mid-cap stocks outperforming large caps due to corrections in technology leaders and high-dividend blue chips. Trading volumes in A-shares and Hong Kong equities have rebounded, indicating a shift in market focus towards policy expectations. Notably, A-share turnover increased from RMB 1.8 trillion to RMB 2.3 trillion, while Hong Kong turnover rose to HKD 280 billion [4][11]. Sector Analysis - The manufacturing PMI for October fell to 49, indicating weakening production and export demand. As the economy softens, the market is expected to focus on policy signals from the December economic meeting, particularly regarding demand-side stimulus. The report continues to favor large-cap blue chips, especially those benefiting from domestic demand policies. Within the financial sector, insurance stocks have performed well, while brokerages are suggested for attention due to their earnings leverage [5][13]. Technology Sector Insights - The report notes that the recent correction in the technology sector may provide a second entry window for investors, particularly in Hong Kong tech stocks. If the weakness continues, it is recommended to focus on subsectors with smaller prior rebounds that align with the upcoming Five-Year Plan, such as domestic computing infrastructure, to capture tactical recovery opportunities [15].

Investment Rating - The report maintains an "Outperform" rating for Haier Smart Home with a target price of RMB 36.16, based on a current price of RMB 26.81 [2][15]. Core Insights - Haier Smart Home has demonstrated outstanding performance with a revenue of RMB 234.05 billion for Q3 2025, reflecting a year-on-year growth of 9.98%, and a net profit of RMB 17.37 billion, up 14.68% year-on-year [4][10]. - The company's gross profit margin reached 27.2%, a slight increase of 0.1 percentage points year-on-year, indicating improved profitability driven by a high-end brand strategy [11]. - Domestic revenue growth for the first three quarters of 2025 was 9.5%, with Q3 showing a growth rate of 10.8%. The air conditioning segment saw revenue growth exceeding 30% in Q3 [12][13]. - Internationally, Haier's overseas revenue grew by 10.5% in the first three quarters, with a quarterly growth of 8.3% in Q3, supported by a localized operation strategy [13][14]. Financial Performance Summary - Revenue projections for Haier Smart Home are as follows: RMB 303.47 billion for 2025, RMB 314.74 billion for 2026, and RMB 331.79 billion for 2027, with respective growth rates of 6%, 4%, and 5% [3][9]. - Net profit estimates are RMB 21.18 billion for 2025, RMB 23.81 billion for 2026, and RMB 26.71 billion for 2027, maintaining a growth rate of approximately 12% annually [3][9]. - The diluted EPS is projected to be RMB 2.26 for 2025, RMB 2.54 for 2026, and RMB 2.85 for 2027, with a P/E ratio decreasing from 15 in 2025 to 10 in 2027 [3][9].

Investment Rating - The report maintains an "Outperform" rating for Midea Group with a target price of RMB 92.32, based on a current price of RMB 76.40 [2][7]. Core Insights - Midea Group reported stable growth in total revenue and profit, with a notable performance in its ToB (business-to-business) segment [1][5]. - The company achieved a revenue of RMB 364.72 billion for Q3 2025, representing a year-on-year increase of 13.85%, and a net profit of RMB 37.88 billion, up 19.51% year-on-year [5][12]. - The gross profit margin for Q3 2025 was 26.7%, an increase of 0.3 percentage points, while the net profit margin was 10.6%, a slight decrease of 0.1 percentage points [6][13]. - Midea's diversified business model and efficient operations have allowed it to respond effectively to market changes, achieving solid growth in both ToC (business-to-consumer) and ToB segments [14]. Financial Performance Summary - For the fiscal year 2025, Midea's projected revenues are as follows: - 2025E: RMB 457.51 billion (up 12% from 2024) - 2026E: RMB 489.10 billion (up 7% from 2025) - 2027E: RMB 524.87 billion (up 7% from 2026) [4][11]. - Net profit projections are: - 2025E: RMB 44.36 billion (up 15% from 2024) - 2026E: RMB 48.28 billion (up 9% from 2025) - 2027E: RMB 53.47 billion (up 11% from 2026) [4][11]. - The diluted EPS (earnings per share) is expected to grow from RMB 5.02 in 2024 to RMB 6.96 in 2027 [4][11]. Valuation - Midea is focusing on direct-to-consumer (DTC) innovations to drive growth in its C-end business while maintaining strong performance in its B-end business through a customer value and efficiency strategy [15]. - The company is assigned a PE (price-to-earnings) ratio of 16x for 2025, supporting the target price of RMB 92.32 [7][15].

Investment Rating - The report suggests a cautious outlook on the Japanese consumer sector, highlighting a divergence between essential and discretionary spending, with a focus on companies with optimistic profit growth prospects [5]. Core Insights - Basic necessity demand remains sluggish, while experiential consumption gains momentum, indicating a shift in consumer preferences towards services like dining and entertainment [2][15]. - Inflationary pressures are impacting essential goods, with food and beverage prices rising significantly, while clothing retail is underperforming due to prolonged hot weather [2][15]. - The report notes a decrease in foot traffic in physical retail stores due to fewer holidays, affecting sales across various sectors [2][15]. - The duty-free business continues to decline, but there are signs of recovery in shopping demand as the yen depreciates [2][15]. Summary by Sections Macro Overview - The consumer confidence index in Japan rose to 35.3 in September, the highest since December 2024, indicating improving consumer sentiment [7]. - Real wages fell by 1.4% year-on-year in August, marking the eighth consecutive month of decline, while nominal wages increased by 1.5% [7][9]. - The core CPI in Japan increased by 2.9% year-on-year in September, driven primarily by rising food prices, particularly rice, which saw a nearly 100% increase [9][11]. Essential Consumption - Retail sales in the food and beverage sector decreased by 0.2% year-on-year in August, with major retailers like Aeon and 711 reporting modest same-store sales growth [16][19]. - Drugstore sales showed slight growth, but foot traffic declined, indicating a shift in consumer behavior [19][20]. - The beverage industry continues to struggle, with major brands like Suntory and Coca-Cola reporting stagnant sales [20][22]. Discretionary Consumption - The restaurant sector showed strong performance, with companies like Salia and McDonald's reporting significant same-store sales growth [4][28]. - Clothing sales were negatively impacted by warm weather, with Uniqlo experiencing a decline in foot traffic despite an increase in average transaction value [30][35]. - Department store sales increased by 1.4% year-on-year in September, supported by a recovery in domestic sales and inbound tourism [35][38]. Market Performance - The consumer sector's performance lagged behind the broader market, with essential goods showing mixed results and discretionary items performing better [5]. - The report highlights specific companies with positive profit outlooks, such as Salia and Asahi Group, which are expected to benefit from favorable market conditions [5].

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies involved in the four-legged robot market. Core Insights - The four-legged robot industry is experiencing significant growth, with Unitree leading the market with a 32.4% global market share, primarily in the consumer segment, which accounts for 84.5% of the market in 2024 [11][12]. - The report highlights the advantages of Unitree's robots, including high adaptability to complex terrains, a high degree of localization in core components, and a cost-effective product lineup compared to international competitors [4][9]. - The Chinese market for four-legged robots is projected to reach 660 million yuan in 2024, with a year-on-year growth of 40.43%, and is expected to grow to 6.5 billion yuan by 2030, indicating a compound annual growth rate (CAGR) of 50% [17][18]. Summary by Sections 1. Conclusion and Thoughts - Unitree's robots are characterized by a strong integration of self-developed hardware and open-source software, creating a robust ecosystem and cost advantages [8][10]. 2. Introduction to Unitree Robots - The report provides a comprehensive overview of the market size, comparisons, and training platforms for Unitree's robots, emphasizing their leading position in the global market [11][33]. 3. Structural Breakdown - The report details the components of Unitree robots, including the main control board, core board, wireless communication, laser radar, limbs, battery, and head, showcasing the technological advancements and design [9][37]. 4. Core Technologies and Competitive Moat - Unitree's robots feature advanced hardware configurations, including self-developed actuators and high-performance laser radar, with over 70% localization of core components [9][10]. 5. Industry Chain - The report outlines the industry chain, highlighting the competitive landscape and the role of various players in the four-legged robot market, with a focus on the advantages of Chinese manufacturers [11][12]. 6. Benefiting Stocks - The report does not specify individual stocks that may benefit from the growth of the four-legged robot industry, focusing instead on the overall market dynamics and Unitree's position within it [4][11].

Investment Rating - The report maintains an "Outperform" rating for Jiangsu King's Luck [2][9] Core Insights - The company reported a total revenue of RMB 8.88 billion for Q1 to Q3 2025, a decrease of 10.7% year-on-year, with a net profit attributable to shareholders of RMB 2.55 billion, down 17.4% year-on-year [3][11] - Q3 alone saw total operating revenue of RMB 1.93 billion, down 26.8% year-on-year, and a net profit of RMB 320 million, down 48.7% year-on-year [11][12] - The report indicates that the baijiu industry is currently in a bottoming phase, with profit compression from destocking being unavoidable, but the company's strong provincial market position is expected to support a rebound in performance [14] Financial Performance Summary - Revenue projections for 2025-2027 are estimated at RMB 10.28 billion, RMB 11.00 billion, and RMB 11.87 billion respectively, with net profits of RMB 2.69 billion, RMB 2.89 billion, and RMB 3.12 billion [6][14] - The diluted EPS for the same period is projected to be RMB 2.16, RMB 2.31, and RMB 2.50 [6][14] - The gross profit margin for Q3 2025 was reported at 75.0%, down 0.6 percentage points year-on-year, while the net profit margin decreased by 7.1 percentage points to 16.6% [13][12] Product and Market Analysis - In Q3 2025, revenue from high-end products (Special A+ tier) fell by 38.0%, while mid-tier products showed resilience with a decline of only 1.1% [4][12] - The company's revenue from provincial markets decreased by 29.8% year-on-year, while extra-provincial revenue declined by 13.8%, indicating better performance in extra-provincial markets [4][12] - Direct sales revenue grew by 47.6% year-on-year, contrasting with a 30.3% decline in wholesale agency revenue [4][12]

Investment Rating - The report maintains a cautious stance on the consumer sector, particularly essential consumer goods, due to ongoing economic pressures and declining consumer confidence [4][58]. Core Insights - Consumer confidence continues to decline, with the University of Michigan Consumer Sentiment Index dropping to 53.6 in October from 55.1 in September, marking the third consecutive month of decline [1][7]. - Inflation appears to be stabilizing, with the Consumer Price Index (CPI) showing a year-on-year increase of 3.0% in September, while core CPI also increased by 3.0% [9][12]. - The labor market shows signs of weakness, with ADP reporting a decrease of 32,000 jobs in September and job openings falling to 7.227 million [13][17]. - The essential consumer goods sector is experiencing mixed performance, with alcohol prices rebounding moderately while food and beverage inflation shows significant divergence across categories [24][28]. Summary by Sections Macroeconomic Overview - Consumer confidence is declining, with the confidence index at 53.6 in October, down from 55.1 in September [1][7]. - Inflation is stabilizing, with September CPI at 3.0% year-on-year and core CPI also at 3.0% [9][12]. - The labor market is weak, with a decrease of 32,000 jobs reported by ADP in September [13][17]. - Credit data shows a decrease in revolving credit by $5.958 billion in August, indicating cautious consumer borrowing [19]. Essential Consumer Goods - Alcohol prices have shown a moderate rebound, driven by strong recovery in spirits prices, while wine prices continue to decline [24][28]. - The food and beverage sector shows significant inflation divergence, with tobacco CPI above 5.0% and dairy CPI remaining weak [28][55]. Stock Market Performance - The discretionary consumer goods sector outperformed, closing up 5.8%, while essential consumer goods closed down 1.4% [57]. - Essential consumer goods ETF saw a net inflow of $670 million, reflecting rising investor confidence [57][35]. Investment Recommendations - The report advises maintaining caution in the consumer sector, focusing on essential consumer goods due to economic uncertainties and declining consumer confidence [4][58].