Investment Rating - The report maintains a "Buy" rating for the company [5] Core Insights - The company's Q3 2025 revenue reached 28.36 billion yuan, a year-on-year increase of 8.2%, which was below Bloomberg consensus expectations of 2.96%, primarily due to product launch timing and revenue recognition delays [1] - Deferred revenue surged to 19.47 billion yuan in Q3 2025, a year-on-year increase of 25.3%, significantly exceeding consensus expectations by 41%, indicating strong player willingness to pay during new game launches [1] - The company is focused on long-term investment strategies and shareholder value, with a strong cash flow performance and a cash reserve of 153.2 billion yuan [3] Revenue and Profit Forecast - The company forecasts revenues of 114.5 billion yuan, 123.6 billion yuan, and 132.2 billion yuan for 2025, 2026, and 2027 respectively, with Non-GAAP net profit estimates of 39 billion yuan, 41.4 billion yuan, and 44.5 billion yuan for the same years [4][9]

Quantitative Models and Construction Methods 1. Model Name: PB-ROE-50 - **Model Construction Idea**: This model aims to combine the Price-to-Book (PB) ratio and Return on Equity (ROE) to create a portfolio of 50 stocks[23] - **Model Construction Process**: The model selects stocks based on their PB and ROE values, aiming to balance valuation and profitability. The portfolio is rebalanced periodically to maintain the desired characteristics[23] - **Model Evaluation**: The model's performance is tracked across different stock pools, showing its effectiveness in various market conditions[23] - **Model Test Results**: - **CSI 500**: Weekly excess return -1.30%, YTD excess return 1.58%, weekly absolute return -7.01%, YTD absolute return 20.95%[24] - **CSI 800**: Weekly excess return -2.09%, YTD excess return 13.40%, weekly absolute return -6.31%, YTD absolute return 30.05%[24] - **All Market**: Weekly excess return -1.46%, YTD excess return 16.48%, weekly absolute return -6.44%, YTD absolute return 36.70%[24] 2. Model Name: Institutional Research Portfolio - **Model Construction Idea**: This model tracks the stock selection strategies of public and private institutional research[25] - **Model Construction Process**: The model is constructed based on the stock picks of institutional investors, adjusting the portfolio based on their research and investment decisions[25] - **Model Evaluation**: The model's performance is evaluated by comparing its returns to the CSI 800 index[25] - **Model Test Results**: - **Public Research Stock Selection**: Weekly excess return -1.91%, YTD excess return 12.42%, weekly absolute return -6.14%, YTD absolute return 28.92%[26] - **Private Research Tracking**: Weekly excess return -3.65%, YTD excess return 12.06%, weekly absolute return -7.80%, YTD absolute return 28.51%[26] 3. Model Name: Block Trade Portfolio - **Model Construction Idea**: This model leverages the information from block trades, focusing on stocks with high transaction amounts and low volatility[29] - **Model Construction Process**: The portfolio is constructed based on the "high transaction, low volatility" principle, with monthly rebalancing[29] - **Model Evaluation**: The model's performance is tracked relative to the CSI All Share Index[29] - **Model Test Results**: - **Weekly excess return**: -2.84%[30] - **YTD excess return**: 35.29%[30] - **Weekly absolute return**: -7.75%[30] - **YTD absolute return**: 58.77%[30] 4. Model Name: Private Placement Portfolio - **Model Construction Idea**: This model analyzes the event effects of private placements to identify investment opportunities[35] - **Model Construction Process**: The portfolio is constructed around the announcement dates of private placements, considering factors like market capitalization and rebalancing cycles[35] - **Model Evaluation**: The model's performance is evaluated relative to the CSI All Share Index[35] - **Model Test Results**: - **Weekly excess return**: -1.42%[36] - **YTD excess return**: -3.89%[36] - **Weekly absolute return**: -6.40%[36] - **YTD absolute return**: 12.80%[36] Quantitative Factors and Construction Methods 1. Factor Name: Intraday Volatility and Trading Volume Correlation - **Factor Construction Idea**: This factor measures the correlation between intraday volatility and trading volume[12] - **Factor Construction Process**: The factor is calculated by correlating the intraday price volatility with the trading volume over a specified period[12] - **Factor Evaluation**: The factor shows positive returns in the CSI 300 stock pool[12] - **Factor Test Results**: - **Weekly return**: 1.23%[13] - **Monthly return**: 3.14%[13] - **Annual return**: -2.31%[13] - **10-year return**: 22.87%[13] 2. Factor Name: ROE Stability - **Factor Construction Idea**: This factor measures the stability of a company's Return on Equity over time[12] - **Factor Construction Process**: The factor is calculated by assessing the variance in ROE over a specified period[12] - **Factor Evaluation**: The factor shows positive returns in the CSI 300 stock pool[12] - **Factor Test Results**: - **Weekly return**: 1.14%[13] - **Monthly return**: 1.82%[13] - **Annual return**: 0.95%[13] - **10-year return**: 3.68%[13] 3. Factor Name: Downside Volatility Proportion - **Factor Construction Idea**: This factor measures the proportion of downside volatility in the total volatility of a stock[12] - **Factor Construction Process**: The factor is calculated by dividing the downside volatility by the total volatility over a specified period[12] - **Factor Evaluation**: The factor shows positive returns in the CSI 300 stock pool[12] - **Factor Test Results**: - **Weekly return**: 1.13%[13] - **Monthly return**: 2.09%[13] - **Annual return**: -6.82%[13] - **10-year return**: 30.09%[13] 4. Factor Name: Single Quarter Total Asset Gross Profit Margin - **Factor Construction Idea**: This factor measures the gross profit margin of a company's total assets for a single quarter[14] - **Factor Construction Process**: The factor is calculated by dividing the gross profit by the total assets for a single quarter[14] - **Factor Evaluation**: The factor shows positive returns in the CSI 500 stock pool[14] - **Factor Test Results**: - **Weekly return**: 1.82%[15] - **Monthly return**: -0.84%[15] - **Annual return**: 6.56%[15] - **10-year return**: 82.05%[15] 5. Factor Name: Net Profit Margin TTM - **Factor Construction Idea**: This factor measures the trailing twelve months (TTM) net profit margin of a company[16] - **Factor Construction Process**: The factor is calculated by dividing the net profit by the total revenue for the trailing twelve months[16] - **Factor Evaluation**: The factor shows positive returns in the Liquidity 1500 stock pool[16] - **Factor Test Results**: - **Weekly return**: 1.82%[17] - **Monthly return**: -0.58%[17] - **Annual return**: 1.94%[17] - **10-year return**: -17.46%[17] Factor Backtest Results CSI 300 Stock Pool - **Intraday Volatility and Trading Volume Correlation**: Weekly return 1.23%, monthly return 3.14%, annual return -2.31%, 10-year return 22.87%[13] - **ROE Stability**: Weekly return 1.14%, monthly return 1.82%, annual return 0.95%, 10-year return 3.68%[13] - **Downside Volatility Proportion**: Weekly return 1.13%, monthly return 2.09%, annual return -6.82%, 10-year return 30.09%[13] CSI 500 Stock Pool - **Single Quarter Total Asset Gross Profit Margin**: Weekly return 1.82%, monthly return -0.84%, annual return 6.56%, 10-year return 82.05%[15] Liquidity 1500 Stock Pool - **Net Profit Margin TTM**: Weekly return 1.82%, monthly return -0.58%, annual return 1.94%, 10-year return -17.46%[17]

Investment Rating - The report maintains an "Accumulate" rating for the company [4] Core Views - The company has demonstrated steady growth in both revenue and profit, with a revenue of 2.37 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 16.5%, and a net profit of 320 million yuan, up 12.6% year-on-year [1] - The hydraulic components business has shown remarkable performance, with a revenue of 990 million yuan in the first half of 2025, marking a 51.8% year-on-year increase [2] - The commencement of the Yarlung Tsangpo River downstream hydropower project is expected to further boost demand for the company's products, particularly in rock breaking and excavation operations [3] Summary by Sections Financial Performance - For Q3 2025, the company achieved a revenue of 810 million yuan, a 23.6% increase year-on-year, and a net profit of 110 million yuan, up 29.7% year-on-year [1] - The gross margin for Q3 2025 was 30.6%, down 1.3 percentage points year-on-year, while the net margin was 14.1%, up 1.2 percentage points year-on-year [1] Business Segments - The hydraulic components segment is a key growth driver, with significant revenue growth, while the breaker hammer business saw a decline of 17.4% year-on-year [2] - Other products, including hard alloy tools and industrial robots, experienced a revenue decline of 34.3% [2] Market Outlook - The recovery of the engineering machinery industry is anticipated to drive demand for hydraulic components and accessories, positioning the company favorably as a leader in the hydraulic hammer and components market [2] - The ongoing construction of large-scale hydropower projects is expected to enhance the demand for the company's specialized products [3] Earnings Forecast - The company’s projected net profits for 2025, 2026, and 2027 are 419 million yuan, 506 million yuan, and 608 million yuan, respectively, with corresponding EPS of 0.50 yuan, 0.61 yuan, and 0.73 yuan [4][5]

Group 1: Long-term Bull Market Foundation - The current bull market has lasted over a year, with the index performance approaching a structural bull market, indicating significant room for growth compared to previous comprehensive bull markets [15] - The improvement in liquidity is a key factor for the current bull market, but historical trends show that long-term bull markets are often supported by improved fundamental expectations [19][28] - The relationship between market performance and fundamentals becomes more stable over longer time periods, emphasizing the importance of fundamental factors for sustained market performance [19] Group 2: Earnings Stability and Structural Highlights - In 2026, price changes are expected to become a major driver of earnings, with A-share earnings projected to gradually recover, reaching a growth rate of approximately 10% [2][82] - The recovery in prices is anticipated to be driven by policies aimed at stabilizing prices and demand, which will alleviate downward pressure on prices in various industries [69] - The structural highlights in earnings are expected to come from sectors like AI and semiconductors, which are likely to continue their performance validation [82] Group 3: Focus on Resident Funds and the "14th Five-Year Plan" - Resident funds are the most significant source of capital for the A-share market, with a notable trend of "deposit migration" expected to continue, driven by higher relative returns in the capital market [89][90] - High-risk preference funds have been the main incremental source of capital in the current bull market, similar to trends observed in 2015 [90] - Middle-risk preference funds are anticipated to become a major incremental source in the next phase, particularly as the "money-making effect" of public funds becomes more evident [106][111] Group 4: Industry Main Lines and Potential Switches - The TMT and advanced manufacturing sectors are expected to remain the main lines of the bull market in 2026, with significant growth potential as they enter the second phase of the bull market [5][91] - There may be potential sectoral switches, particularly towards cyclical and financial sectors, as market conditions evolve [5][109] - The focus on technology growth, consumption, and resource sectors is expected to present thematic investment opportunities [5][110]

Employment Data - In September 2025, the U.S. added 119,000 non-farm jobs, exceeding the market expectation of 50,000 jobs and revising the previous value from 22,000 to -4,000 jobs[1][16] - The unemployment rate in September 2025 was 4.4%, slightly above the expected 4.3% and the previous value of 4.3%[15][35] - Average hourly earnings increased by 3.8% year-on-year, surpassing the expected 3.7% and the previous value of 3.7%[15][39] Sector Performance - The service sector added 87,000 jobs in September, up from the previous value of 50,000 jobs, while the goods-producing sector saw an increase of 10,000 jobs, recovering from a previous loss of 32,000 jobs[2][27] - Retail and leisure/hospitality sectors showed significant job recovery, with retail adding 14,000 jobs and leisure/hospitality adding 47,000 jobs in September, both higher than previous values[3][27] Federal Reserve Outlook - The strong non-farm data may lead the Federal Reserve to delay interest rate cuts, with a 39.1% probability of a rate cut in December 2025 according to CME Fedwatch[5][23] - The delay in the release of employment data for October and November adds uncertainty, making a December rate cut less likely[5][23] Labor Market Dynamics - The labor force participation rate increased to 62.4% in September, up from 62.3% in August, indicating a rise in employment willingness among younger demographics[4][33] - The number of unemployed individuals increased by 219,000 in September, contributing to the rise in the unemployment rate[4][35] Wage Trends - The month-on-month increase in average hourly earnings was 0.2%, lower than the previous month's increase of 0.3%[39][40] - The year-on-year wage growth reflects ongoing inflationary pressures, complicating the Federal Reserve's decision-making regarding interest rates[22][39]

Investment Rating - The report maintains a "Buy" rating for NVIDIA, indicating expected investment returns exceeding the market benchmark by more than 15% over the next 6-12 months [6]. Core Insights - NVIDIA's FY26Q3 revenue reached $57.006 billion, exceeding market expectations and showing a year-over-year growth of 62% and a quarter-over-quarter growth of 22% [1][2]. - The company expects FY26Q4 revenue guidance of $65 billion, which is higher than the Bloomberg consensus estimate of $62.133 billion [1]. - Strong demand for AI and data center products, particularly from the Blackwell and Rubin platforms, is driving revenue growth [2][4]. Summary by Sections Financial Performance - FY26Q3 revenue was $57.006 billion, with a Non-GAAP gross margin of 73.6% and a Non-GAAP net profit of $31.767 billion, resulting in a Non-GAAP EPS of $1.30 [1]. - The data center business generated $51.215 billion in revenue, up 66% year-over-year and 25% quarter-over-quarter [2]. - The gaming segment reported $4.265 billion in revenue, a 30% increase year-over-year [3]. Business Segments - Data Center: Contributed significantly to revenue, with expectations of continued capital expenditure growth from major cloud service providers [2]. - Gaming: Revenue growth driven by strong demand for Blackwell architecture chips [3]. - Professional Visualization: Revenue of $760 million, up 56% year-over-year, attributed to new product sales [3]. - Automotive: Revenue reached $592 million, a 32% increase year-over-year, supported by the adoption of the autonomous driving platform [3]. Profitability Forecast and Valuation - The report forecasts NVIDIA's GAAP net profit for FY2026 at $113.88 billion, with upward revisions for FY2027 and FY2028 net profits to $170.236 billion and $209.333 billion, respectively [4][5]. - The current stock price of $186.52 corresponds to projected P/E ratios of 40x for FY2026, 27x for FY2027, and 22x for FY2028 [4].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 84.3 HKD, while the current price is 63.5 HKD [4]. Core Insights - The company's total revenue for Q3 2025 reached 356 billion RMB, a year-on-year increase of 14.2%, slightly exceeding the consensus expectation of 353 billion RMB. The core business revenue grew by 19.2% year-on-year [1][2]. - The gross profit margin was reported at 54.7%, which is below the expected 55.2% due to a 24% increase in revenue-sharing costs. However, it improved by 0.4 percentage points compared to Q3 2024 [1]. - Operating profit increased by 69.9% year-on-year to 53 billion RMB, while adjusted net profit rose by 26.3% to 49.9 billion RMB, surpassing the consensus estimate of 48.3 billion RMB [1][3]. Revenue Breakdown - Online marketing services revenue for Q3 2025 was 201 billion RMB, up 14% year-on-year, exceeding the consensus of 198.7 billion RMB. The introduction of AI-driven models contributed approximately 4-5% incremental revenue [2]. - Other services, including e-commerce, generated 59 billion RMB in revenue, a 41.3% increase year-on-year, also surpassing expectations [2]. - E-commerce GMV reached 3,850 billion RMB, reflecting a 15.2% year-on-year growth, aligning closely with the consensus of 3,839 billion RMB [2]. - Live streaming revenue was 95.7 billion RMB, a modest 2.5% increase year-on-year, falling short of the expected 97.9 billion RMB [2]. Profitability Forecast and Valuation - The company is expected to benefit from optimized advertising and enhanced AI capabilities, with adjusted net profit forecasts for 2025-2027 slightly raised to 207.0 billion, 244.2 billion, and 277.7 billion RMB respectively [3]. - The projected revenue growth rates for the upcoming years are 20.5% for 2023, 11.8% for 2024, and 12.1% for 2025 [3][7].

Macro Research - The "14th Five-Year Plan" emphasizes a strategic upgrade in high-level opening-up, transitioning from factor-driven to rule-based openness, enhancing China's voice and rule-making power in global economic governance [1] - Key focus areas during the "14th Five-Year" period include steady progress in RMB internationalization, diverse regional opening layouts, increased openness in the service sector, deepening institutional opening, and differentiated cooperation in multilateral trade [1] Company Research Zhejiang Dingli (603338.SH) - Zhejiang Dingli achieved operating revenue of 6.67 billion yuan in Q1-Q3 2025, a year-on-year increase of 8.8%, and a net profit attributable to shareholders of 1.59 billion yuan, up 9.2% year-on-year [2] - The company maintains profit forecasts for 2025-2027 at 2.07 billion, 2.41 billion, and 2.75 billion yuan, with corresponding EPS of 4.08, 4.75, and 5.44 yuan [2] - The high-altitude machinery market has significant growth potential, with a recovery in overseas shipments expected to boost profit margins [2] Xunwei Communication (300136.SZ) - Xunwei Communication has entered the North American AI hardware supply chain, maintaining a leading position in commercial satellites [3] - The company is optimistic about its competitive edge in mature businesses and the growth potential in satellite communication, AI hardware, LCP, BTB, and automotive connectivity [3] - Current market valuation corresponds to PE ratios of 38X, 34X, and 30X for 2025-2027, maintaining a "buy" rating [3] Baidu Group-SW (9888.HK) - Baidu's AI ecosystem value is expected to be re-evaluated, with AI native advertising enhancing traditional search ad monetization [4] - The company has a healthy net cash flow, and its "Luo Bo Kuaipao" business model has been validated with accelerating order growth [4] - Profit forecasts for 2025-2027 are set at 18.2 billion, 20.5 billion, and 23 billion yuan, with current PE ratios of 15x, 14x, and 12x [4] Xiaomi Group (1810.HK) - Xiaomi's automotive business achieved its first quarterly profit, but the mobile and automotive gross margins may face pressure due to rising upstream costs and intensified market competition [5] - The company maintains a Non-IFRS net profit forecast of 42.6 billion yuan for 2025, while lowering 2026-2027 forecasts to 43.8 billion and 51 billion yuan [5] - Xiaomi's long-term growth logic is supported by its multi-device strategy in the AI era, high-end positioning, and overseas expansion [5]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a favorable outlook for investment over the next 6-12 months [5]. Core Insights - The company is expanding into new business areas such as AI terminal hardware, commercial satellites, data centers, and robotics, which opens up significant growth potential [1][2]. - The company has successfully entered the North American AI hardware supply chain, providing comprehensive solutions for smart terminal products [2]. - The growth in AI technology is driving demand for the company's core products, including antennas and wireless charging modules [3]. - The company has adjusted its profit forecasts for 2025 and 2026, predicting a decline in net profit due to reduced government subsidies, but expects a recovery in 2027 [4]. Summary by Sections Financial Performance - For Q1-Q3 2025, the company reported revenue of 2.759 billion yuan, a year-on-year increase of 4.20%, and a net profit of 325 million yuan, a decrease of 1.77% [1]. - The gross margin for Q1-Q3 2025 was 21.53%, up 0.73 percentage points year-on-year, with Q3 showing a gross margin of 25.45%, an increase of 1.69 percentage points [1]. Revenue and Profit Forecast - The revenue forecast for 2025 is set at 9.618 billion yuan, with a growth rate of 10.00%, while the net profit is projected at 778 million yuan, reflecting a year-on-year decline of 11% [4]. - The company anticipates a net profit of 998 million yuan in 2027, corresponding to a price-to-earnings (P/E) ratio of 30X [4]. Product Development and Market Position - The company is focusing on high-strength R&D investments in core materials such as polymer, magnetic, ceramic, and thermal materials [3]. - It is actively developing various types of antennas and enhancing its capabilities in wireless charging technologies [3]. Market Dynamics - The global consumer electronics market is recovering, which supports the company's existing business while it explores new opportunities in AI and automotive sectors [1][2].

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company has shown steady revenue growth, with a 2025Q1-Q3 revenue of 6.67 billion yuan, up 8.8% year-on-year, and a net profit of 1.59 billion yuan, up 9.2% year-on-year [1] - The company is actively expanding its product offerings with differentiated products, including unmanned aerial work platforms and various specialized robots, which helps to mitigate risks associated with reliance on a single industry [3] - The company has successfully increased its overseas revenue by 21.3% year-on-year in 2025H1, despite challenges in the domestic high machine export market [2] Summary by Sections Financial Performance - For 2025Q3, the company reported a revenue of 2.34 billion yuan, a 2.8% increase year-on-year, but a net profit decline of 14.7% [1] - The gross margin for 2025Q3 was 36.1%, down 1.5 percentage points year-on-year but up 4.1 percentage points quarter-on-quarter [1] Product Development - The company has launched a series of differentiated products aimed at new application scenarios, including robots for ship painting and rust removal, tunnel drilling, and glass suction vehicles [3] Market Expansion - The company is focusing on expanding into non-trade friction overseas markets, with a positive outlook for continued growth in overseas revenue due to increased efforts in market development [2] Earnings Forecast - The projected net profits for 2025, 2026, and 2027 are 2.068 billion yuan, 2.407 billion yuan, and 2.753 billion yuan, respectively, with corresponding EPS of 4.08 yuan, 4.75 yuan, and 5.44 yuan [4][5]