Investment Rating - The report initiates coverage on Longbai Group with an **Overweight** rating and a target price of **20.28 CNY** for 2025, based on a 12x P/E multiple [2][4] Core Views - Longbai Group is the **world's largest titanium dioxide (TiO2) producer** with an annual capacity of 1.51 million tons, holding a **17% global market share** in 2023 [1] - The company has demonstrated strong **endogenous and exogenous growth** through acquisitions and technological advancements, particularly in **chloride process TiO2** and **sulfur-chlorine coupling technology**, which have given it a cost advantage [1][22] - Despite **anti-dumping measures** in overseas markets, China's TiO2 export growth trend remains intact, with **export CAGR of 15%** over the past eight years, accounting for nearly **40% of total production** [1][56] - Leading companies like Longbai are expected to **seize overseas opportunities**, with potential for higher returns and stable profits from overseas investments, similar to the tire industry's experience [1][110] Financial Projections - Revenue is projected to grow from **26.765 billion CNY in 2023** to **34.34 billion CNY in 2026**, with a **CAGR of 10.5%** [3] - Net profit attributable to shareholders is expected to increase from **3.226 billion CNY in 2023** to **4.633 billion CNY in 2026**, with a **CAGR of 15%** [3] - EPS is forecasted to rise from **1.35 CNY in 2023** to **1.94 CNY in 2026** [3] Industry Analysis - **Anti-dumping measures** in key markets like the EU, India, and Brazil have reshaped global trade flows but have not significantly impacted China's TiO2 export growth [56][61] - The **EU's anti-dumping tariffs** range from **11.4% to 32.3%**, but China's TiO2 exports to the EU have shown resilience, with **exports rebounding in August 2024** after a temporary dip in July [61][74] - **Global TiO2 demand** is expected to grow in line with **global GDP**, with **Asia-Pacific and Africa** being key growth regions due to infrastructure and real estate development [55][93] Company's Competitive Advantages - Longbai has **vertically integrated its supply chain**, with **40% self-sufficiency in titanium concentrate** and plans to increase this to **70% by the end of the 14th Five-Year Plan** [22][35] - The company has **pioneered sulfur-chlorine coupling technology**, reducing costs for chloride process TiO2 production by **1,169 CNY per ton** [40][41] - Longbai's **chloride process TiO2 capacity** is **660,000 tons/year**, making it the **third-largest globally** and the **largest in China**, with a **63% share of domestic chloride process production** in 2023 [32][35] Overseas Expansion Opportunities - **Anti-dumping measures** are seen as a catalyst for **overseas expansion**, with Longbai well-positioned to establish overseas plants and capture higher-margin markets [110][111] - The **EU's rising TiO2 prices** (from **3,040 USD/ton in July 2024** to **3,210 USD/ton in September 2024**) create opportunities for **global trade flow adjustments** and higher returns for exporters [95][96] - **Southeast Asia** and **Turkey** are emerging as key markets for TiO2 exports, with **Vietnam** and **India** showing significant growth in demand [103][104]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 149.00 / CNY 134.69 [4][3] Core Insights - The company reported Q3 revenue of CNY 26.2 billion, a year-over-year decrease of 3.9% but a quarter-over-quarter increase of 2.8%, primarily driven by increased mobile game net revenue [2] - Q3 gross margin was 62.9%, reflecting a year-over-year increase of 0.7 percentage points, mainly due to the growth in gross margin from cloud music [2] - The company anticipates a recovery in game revenue in Q4, driven by the return of Blizzard games, with expected revenue of CNY 21.7 billion, representing a year-over-year increase of 4% and a quarter-over-quarter increase of 4% [2][3] Financial Summary - Q3 net profit attributable to shareholders was CNY 6.54 billion, down 16.6% year-over-year and 3.3% quarter-over-quarter [2] - The company expects net profit for 2024 to be CNY 28.7 billion, with projections of CNY 32.5 billion and CNY 34.9 billion for 2025 and 2026, respectively [3] - The report highlights a total revenue forecast of CNY 106.3 billion for 2024, with a year-over-year growth of 2.77% [3] Revenue Breakdown - Total revenue from games and related value-added services in Q3 was CNY 20.86 billion, a year-over-year decrease of 4.2% but a quarter-over-quarter increase of 4.0% [2] - Mobile game revenue was CNY 14.3 billion, down 9.7% year-over-year and 2.9% quarter-over-quarter, while PC game revenue increased significantly by 29.0% year-over-year and 30.0% quarter-over-quarter to CNY 5.9 billion [2] - Cloud music revenue in Q3 was CNY 2.0 billion, reflecting a year-over-year increase of 1.3% [2] Future Growth Drivers - Upcoming mobile games such as "Seven Days World" and "Yanyun Sixteen Sounds" are expected to drive future growth [3] - The return of Blizzard's "Hearthstone" is anticipated to significantly boost mobile game revenue, with expected daily active users (DAU) increasing by 150% compared to before the game's closure [2]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [5] Core Views - Tencent's Q3 2024 revenue reached RMB 167.19 billion, representing a year-over-year increase of 8% and a quarter-over-quarter increase of 4%. The gross margin was 53%, up 4 percentage points year-over-year but down 0.2 percentage points quarter-over-quarter [2] - The net profit attributable to shareholders (IFRS) for Q3 2024 was RMB 53.23 billion, a significant year-over-year increase of 47% and a quarter-over-quarter increase of 12%. The non-IFRS net profit was RMB 59.81 billion, up 33% year-over-year and 4% quarter-over-quarter [2] - The report anticipates continued growth in gaming revenue, driven by a low base in Q4 2023 and the longer revenue recognition cycle for overseas income. The gaming revenue is expected to maintain its growth momentum into Q1 2025 [2][3] Summary by Sections Financial Performance - Q3 2024 value-added services revenue was RMB 82.70 billion, up 9% year-over-year and 5% quarter-over-quarter. International gaming revenue was RMB 14.5 billion, also up 9% year-over-year, while domestic gaming revenue was RMB 37.3 billion, up 14% year-over-year [2] - Social network revenue grew by 4% to RMB 30.9 billion, supported by mobile game virtual item sales and music subscription revenue, although partially offset by declines in music and game live streaming services [2] - Q3 2024 advertising revenue was RMB 30 billion, a 17% year-over-year increase, driven by strong demand for advertising inventory from video accounts, mini-programs, and WeChat search [2] Future Projections - The report projects IFRS net profits for 2024, 2025, and 2026 to be RMB 195.13 billion, RMB 224.53 billion, and RMB 249.81 billion respectively, with non-IFRS net profits expected to be RMB 228.64 billion, RMB 261.49 billion, and RMB 291.44 billion [3] - The target price is set at HKD 528.62, with a current share price of HKD 404.2 [5]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 149.00 / CNY 134.69 [4][3] Core Views - The company's revenue for Q3 2024 was CNY 26.2 billion, showing a year-over-year decrease of 3.9% but a quarter-over-quarter increase of 2.8%, primarily driven by increased mobile game net income [2] - The gross margin for Q3 was 62.9%, reflecting a year-over-year increase of 0.7 percentage points, mainly due to the growth in gross margin from cloud music [2] - The company expects significant revenue growth in Q4 2024, driven by the return of Blizzard games, with projected revenue reaching CNY 21.7 billion, a year-over-year increase of 4% and a quarter-over-quarter increase of 4% [2][3] Financial Summary - Q3 2024 total revenue from games and related value-added services was CNY 20.86 billion, down 4.2% year-over-year but up 4.0% quarter-over-quarter [2] - Mobile game revenue was CNY 14.3 billion, down 9.7% year-over-year and down 2.9% quarter-over-quarter, while PC game revenue was CNY 5.9 billion, up 29.0% year-over-year and up 30.0% quarter-over-quarter [2] - The company forecasts net profit attributable to shareholders for 2024-2026 to be CNY 28.7 billion, CNY 32.5 billion, and CNY 34.9 billion respectively [3] Revenue Breakdown - Q3 2024 cloud music revenue was CNY 2.0 billion, up 1.3% year-over-year, primarily due to increased subscription revenue [2] - Q3 2024 Youdao revenue was CNY 1.57 billion, up 2.3% year-over-year and up 19.0% quarter-over-quarter, driven by growth in online marketing services and smart devices [2]

Investment Rating - The report maintains a "Buy" rating for Tencent Holdings [5] Core Views - Tencent's Q3 2024 revenue reached RMB 167.19 billion, representing a year-over-year increase of 8% and a quarter-over-quarter increase of 4%. The gross margin was 53%, up 4 percentage points year-over-year but down 0.2 percentage points quarter-over-quarter [2][3] - The net profit attributable to shareholders (IFRS) for Q3 2024 was RMB 53.23 billion, a significant year-over-year increase of 47% and a quarter-over-quarter increase of 12%. The non-IFRS net profit was RMB 59.81 billion, up 33% year-over-year and 4% quarter-over-quarter [2][3] - The report anticipates continued growth in gaming revenue, driven by a low base in Q4 2023 and the expected performance of new game versions in early 2025 [2][3] Summary by Sections Revenue Breakdown - Value-added services revenue for Q3 2024 was RMB 82.70 billion, up 9% year-over-year and 5% quarter-over-quarter. International gaming revenue was RMB 14.5 billion, also up 9% year-over-year, while domestic gaming revenue was RMB 37.3 billion, up 14% year-over-year [2] - Social network revenue grew by 4% to RMB 30.9 billion, supported by mobile game virtual item sales and music subscription revenue, although offset by declines in music and game live streaming services [2] Advertising and Financial Services - Online advertising revenue for Q3 2024 was RMB 30.0 billion, a 17% increase year-over-year, driven by strong demand for advertising inventory from video accounts, mini-programs, and WeChat search [2] - Financial technology and enterprise services revenue was RMB 53.09 billion, up 2% year-over-year and 5% quarter-over-quarter, with growth in wealth management services offset by a decline in payment services due to weak consumer spending [2] Profit Forecast and Valuation - The report projects IFRS net profit for 2024-2026 to be RMB 195.13 billion, RMB 224.53 billion, and RMB 249.81 billion respectively, with non-IFRS net profit expected to be RMB 228.64 billion, RMB 261.49 billion, and RMB 291.44 billion [3] - A sum-of-the-parts (SOTP) valuation method is used, resulting in a target price of HKD 528.62, maintaining the "Buy" rating [3]

Quantitative Models and Factor Construction Quantitative Models and Construction Methods - **Model Name**: DFQ Machine Learning Industry Rotation Model - **Construction Idea**: Combines industry factors derived from machine learning-based stock selection factors (e.g., VAE, XGB, GP) to perform industry rotation[1][7][193] - **Construction Process**: 1. Train stock selection factors using machine learning models (e.g., VAE, XGB) without industry-neutralization[30][43] 2. Aggregate stock selection factors into industry factors by market-cap weighting[43] 3. Combine VAE, XGB, and GP industry factors equally to construct the DFQ Machine Learning Industry Rotation Model[165][193] - **Evaluation**: Demonstrates strong performance with a synergistic "1+1>2" effect, achieving high annualized excess returns and low drawdowns[165][194] - **Model Name**: DFQ Genetic Programming Industry Factor Mining System - **Construction Idea**: Utilizes genetic programming to mine industry factors with high adaptability and low correlation[51][193] - **Construction Process**: 1. Define fitness criteria as the minimum monthly excess return of top 5 industries across 20 paths[78] 2. Use rolling 10-year training windows and re-train annually[69][193] 3. Employ 145 features and 140 operators, including custom time-series and cross-sectional operators[74][76] 4. Optimize genetic programming with 7 key improvements, such as enhancing initial population quality and avoiding formula bloat[52][57][61] - **Evaluation**: Produces highly effective single factors with 60% showing positive out-of-sample monthly excess returns[194] Model Backtesting Results - **DFQ Machine Learning Industry Rotation Model**: - Annualized excess return: 18.42% - Maximum drawdown: -7.76% - Monthly win rate: 66.67% - Sharpe ratio of excess return: 1.77[165][167] - **DFQ Genetic Programming Industry Factor Mining System (Dynamic XGB Weighted)**: - Annualized excess return: 11.10% - Maximum drawdown: -10.28% - Monthly win rate: 61.40% - Sharpe ratio of excess return: 1.16[128][194] Quantitative Factors and Construction Methods - **Factor Name**: VAE Industry Factor - **Construction Idea**: Derived from a Variational Autoencoder (VAE) model trained for stock selection[30][43] - **Construction Process**: 1. Train VAE model on stock data without industry-neutralization[30] 2. Aggregate stock-level factor values into industry-level factors using market-cap weighting[43] - **Evaluation**: Strong performance with annualized excess returns exceeding 10% for top 5 industries[43][165] - **Factor Name**: XGB Industry Factor - **Construction Idea**: Derived from an XGBoost model trained for stock selection[30][43] - **Construction Process**: 1. Train XGB model on stock data without industry-neutralization[30] 2. Aggregate stock-level factor values into industry-level factors using market-cap weighting[43] - **Evaluation**: Consistently high IC and RANKIC values, with annualized excess returns exceeding 10% for top 5 industries[43][165] - **Factor Name**: GP Industry Factor - **Construction Idea**: Mined using genetic programming to optimize fitness and reduce correlation[51][193] - **Construction Process**: 1. Define fitness as the minimum monthly excess return of top 5 industries across 20 paths[78] 2. Use rolling 10-year training windows and re-train annually[69][193] 3. Optimize genetic programming with 7 key improvements, such as enhancing initial population quality and avoiding formula bloat[52][57][61] - **Evaluation**: Demonstrates low correlation with other factors and strong out-of-sample performance when dynamically weighted[164][194] Factor Backtesting Results - **VAE Industry Factor**: - Annualized excess return: 10.01% - Maximum drawdown: -10.09% - Monthly win rate: 57.89% - Sharpe ratio of excess return: 1.03[165][166] - **XGB Industry Factor**: - Annualized excess return: 10.82% - Maximum drawdown: -10.61% - Monthly win rate: 59.65% - Sharpe ratio of excess return: 1.02[165][166] - **GP Industry Factor (Dynamic XGB Weighted)**: - Annualized excess return: 11.10% - Maximum drawdown: -10.28% - Monthly win rate: 61.40% - Sharpe ratio of excess return: 1.16[128][194] Composite Factor Backtesting Results - **VAE + XGB + GP (DFQ Machine Learning Industry Rotation Model)**: - Annualized excess return: 18.42% - Maximum drawdown: -7.76% - Monthly win rate: 66.67% - Sharpe ratio of excess return: 1.77[165][167]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 236.13 yuan [2][5][8]. Core Insights - The company achieved a revenue of 1.011 billion yuan in Q3 2024, representing a year-on-year increase of approximately 45%, while the net profit attributable to the parent company was 142 million yuan, a slight decrease of 3% [1]. - For the first three quarters of 2024, the company reported a revenue of 2.28 billion yuan, a year-on-year growth of 34%, with net profit attributable to the parent company remaining stable at 271 million yuan [1]. - The company has significantly increased its inventory to 7.08 billion yuan by the end of September 2024, a 55% increase from the beginning of the year, primarily due to increased shipments, which saw a year-on-year growth of over 160% [1]. - The PECVD products continue to enhance the company's core competitiveness, with a full range of PECVD dielectric film materials now covered and widely applied in domestic integrated circuit manufacturing lines [1]. - The company has made breakthroughs in client validation of new products and processes, with mass production scale continuously expanding due to sustained high-intensity R&D investment [1]. - The company is actively expanding into the high-end semiconductor equipment sector with the introduction of hybrid bonding equipment, which has already received customer orders [1]. Financial Forecast and Investment Recommendations - The company is projected to achieve net profits attributable to the parent company of 537 million, 914 million, and 1.291 billion yuan for the years 2024, 2025, and 2026, respectively [2][8]. - The original profit forecasts for 2024 and 2025 were adjusted downwards due to higher costs associated with new products and processes, leading to a revised target price of 236.13 yuan based on DCF valuation [2][8].

Investment Rating - The report maintains a "Positive" outlook for the real estate industry in China [4]. Core Insights - The real estate sector underperformed compared to the Shanghai and Shenzhen 300 Index, with a relative return of -5.6% [1][17]. - New housing sales in 44 major cities increased by 3.2% compared to the previous week, while second-hand housing sales decreased by 9.4% [2][20]. - Recent government policies include a reduction in contract tax for properties under 140 square meters and a decrease in the lower limit for land value-added tax by 0.5 percentage points [20][24]. Summary by Sections Market Review - The real estate index closed at 2340.04, with a weekly decline of 8.9%, while the Shanghai and Shenzhen 300 Index rose by 3.3% [1][17]. - The land market saw increased activity, with 58 plots sold across 36 major cities, generating land transfer fees of 43.564 billion yuan, an increase of 16.97 billion yuan from the previous week [2][40]. Policy Developments - The Ministry of Natural Resources stated that land recovered using local government bonds should not be used for real estate development in the same year [20][21]. - New tax policies were introduced, including a 1% contract tax for smaller properties and a reduction in land value-added tax [20][24]. Sales Data - New home sales in 44 major cities reached 22,800 units, while second-hand home sales totaled 22,000 units [2][20]. - Inventory levels decreased, with 18 major cities holding 666,000 units, down by 157,000 units from the previous week [2][33]. Company Announcements - Companies such as Vanke A and China Fortune Land Development released announcements regarding shareholder meetings and guarantees [2][56]. - The report highlights significant announcements from various companies, including financial guarantees and updates on quarterly reports [2][56]. Investment Recommendations - Since September 24, a series of supportive policies have been introduced to stabilize the real estate market, focusing on improving residents' cash flow and adjusting demand-side policies [3][64]. - The report emphasizes the importance of monitoring the sustainability of these policy effects moving forward [3][64].

Investment Rating - The report maintains a "Positive" rating for the real estate industry in China [4]. Core Insights - The real estate sector underperformed compared to the Shanghai and Shenzhen 300 Index, with a relative return of -5.6% [1][17]. - New housing sales in 44 major cities increased by 3.2% compared to the previous week, while second-hand housing sales decreased by 9.4% [2][20]. - Recent government policies include a reduction in contract tax for properties under 140 square meters and a decrease in the lower limit for land value-added tax by 0.5 percentage points [20][24]. Summary by Sections Market Review - The real estate index closed at 2340.04, with a weekly decline of 8.9%, while the Shanghai and Shenzhen 300 Index rose by 3.3% [1][17]. - The land market saw increased activity, with land transfer fees reaching 43.564 billion yuan, an increase of 16.97 billion yuan from the previous week [2][40]. Policy Developments - The Ministry of Natural Resources has stipulated that land recovered using local government special bonds cannot be used for real estate development in the same year [20][21]. - New tax policies were introduced, including a 1% contract tax for smaller properties and a reduction in land value-added tax [20][24]. Sales and Inventory Data - As of week 46, inventory in 18 major cities decreased to 666,000 units, down by 157,000 units from the previous week, with a sales-to-inventory ratio of 15.1 months [2][33]. - New home sales in major cities were reported at 22,800 units, while second-hand home sales were at 22,000 units [2][20]. Company Announcements - Companies such as Vanke A and China Fortune Land Development have made announcements regarding shareholder meetings and guarantees [2][56]. - The report highlights significant movements in stock performance, with companies like Shiyong Zhaoye and ST Zhongdi showing notable increases [19]. Investment Recommendations - Since September 24, a series of policies have been introduced to stabilize the real estate market, focusing on improving residents' cash flow and adjusting demand-side policies [3][64]. - The report emphasizes the importance of monitoring the sustainability of these policy effects moving forward [3][64].

Investment Rating - The report gives the company a "Buy" rating with a target price of 30.0 yuan, based on a 2025 P/E ratio of 30x [2] Core Views - The public charging market has vast potential, with Teld (the company) maintaining a leading position. Public charging demand is expected to grow at a CAGR of 25% from 2023 to 2030, reaching 1702 billion kWh/year by 2030. Teld operates 595,000 public charging terminals as of June 2024, with a 26% market share in public charging terminals and 24% in charging volume [1] - Teld has built five charging networks (public, bus, logistics, residential, and industrial parks), leveraging massive user and data resources. The company is exploring value-added services like SaaS platforms, ecosystem partnerships, and energy services. With the maturation of virtual power plants and V2G technology, Teld is expected to further tap into the flexible regulation capabilities of EVs for grid interaction, expanding its profit potential [1] - The company's outdoor power equipment business is poised for steady growth, benefiting from domestic grid investment and overseas infrastructure development. Teld's products are used in over 50 countries, with its prefabricated substation solutions addressing overseas customers' project timelines [1] Financial Projections - Revenue is expected to grow from 16.39 billion yuan in 2024E to 22.53 billion yuan in 2026E, with a CAGR of 17% [4] - Net profit attributable to shareholders is projected to increase from 794 million yuan in 2024E to 1.35 billion yuan in 2026E, with a CAGR of 30% [4] - EPS is forecasted to rise from 0.75 yuan in 2024E to 1.28 yuan in 2026E [4] Charging Business - Teld is the leader in China's public charging market, operating 595,000 public charging terminals (including 356,000 DC terminals) as of June 2024, with a 26% market share. The company's charging volume reached 5.8 billion kWh in H1 2024, capturing 24% of the market [1] - The company has established five charging networks (public, bus, logistics, residential, and industrial parks), leveraging massive user and data resources. It is exploring value-added services like SaaS platforms, ecosystem partnerships, and energy services [1] - Teld's charging business achieved profitability for the first time in 2023, with a net profit of 170 million yuan. Revenue from the charging business reached 4.6 billion yuan in 2023, accounting for 42% of total revenue in H1 2024 [79] Power Equipment Business - Teld's power equipment business focuses on outdoor prefabricated substations and integrated services. The company has a leading market position in China's railway and power sectors, with products exported to over 50 countries [1] - Revenue from the power equipment business grew 13.37% YoY to 3.67 billion yuan in H1 2024, with net profit increasing 44.64% YoY to 213 million yuan [106] - The company has established long-term partnerships with major power generation groups, achieving significant market share in prefabricated substations and new energy transformers [108] Industry Trends - China's public charging demand is expected to grow at a CAGR of 25% from 2023 to 2030, reaching 1702 billion kWh/year by 2030 [1] - The charging infrastructure market is highly concentrated, with the top 3 operators (Teld, Star Charge, and Yunkuaichong) accounting for 53.5% of the market as of September 2024 [49] - Global grid investment is expected to reach $435 billion in 2024, driven by energy transition and infrastructure upgrades in both developed and developing countries [95]