Investment Rating - The report maintains an "Overweight" rating for both the pharmaceutical manufacturing and pharmaceutical services sectors [2][3]. Core Viewpoints - The pharmaceutical sector is experiencing a mild recovery in the third and fourth quarters of 2024, supported by favorable policies for innovation and a solid fundamental backdrop [2][3]. - The pharmaceutical index has declined by 30% compared to three years ago, with a 7.18% drop from January to September 2024, underperforming the Shanghai Composite Index by 19 percentage points [3][6]. - Recent market movements are driven by systemic factors rather than significant changes within the pharmaceutical industry itself [3][6]. - The latest valuation for the pharmaceutical sector is projected at a PE ratio of 23.8x for 2024, up from 21.1x at the beginning of the year, but still within a historically reasonable range [3][6]. Summary by Sections Investment Recommendations - Focus on innovation and improvement as the main investment strategy [5][6]. - Recommended stocks include: - Innovative policy-supported companies: Heng Rui Medicine, BeiGene, Kangfang Biotech, Innovent Biologics, and Kelun-Biotech [7]. - Recovery in hospital drugs and devices: Mindray Medical, New Industry, Enhua Pharmaceutical, and East China Pharmaceutical [7]. - Stable consumer cyclical: Yunnan Baiyao [7]. Industry Prosperity Trends - The pharmaceutical sector's revenue growth is expected to be low in the first half of 2024 due to high base effects from the pandemic, centralized procurement, and industry restructuring [9][11]. - The overall revenue growth for the pharmaceutical sector is anticipated to improve gradually throughout 2024, with a recovery in various segments such as innovative drugs and hospital prescription drugs [14][16]. Market Dynamics - Recent supportive economic policies have led to a significant increase in the pharmaceutical index, which rose by 11.15% in the last week of September, following broader market trends [6][21]. - The market is expected to clarify previous misinterpretations regarding the healthcare fund's income and expenditure data, which have been affected by changes in reporting standards [21][22]. Data Insights - The report highlights the importance of understanding the cyclical nature of healthcare fund surpluses and the impact of policy changes on the pharmaceutical market [24][26]. - The anticipated changes in centralized procurement and innovation policies are expected to shape the market landscape in the coming quarters [19][20].

Investment Rating - The report rates the media industry as "Overweight" [3][4]. Core Insights - The National Day box office for 2024 has seen a decline compared to 2023, with total box office revenue reaching 1.86 billion yuan, a year-on-year decrease of 16.8%. The number of moviegoers was 46.11 million, down 13.5%, and the average ticket price was 40.4 yuan, down 3.8% [4][11][19]. - The ByteDance social app Lemon 8 has topped the iOS lifestyle app chart in the US, indicating strong market performance and potential benefits for related marketing companies [4][5][21]. Summary by Sections National Day Box Office Performance - The 2024 National Day box office reached 1.86 billion yuan, a decline of 16.8% year-on-year. The number of viewers was 46.11 million, down 13.5%, and the average ticket price was 40.4 yuan, down 3.8% [11][12][19]. - The top five films during this period had relatively low box office figures, with the highest being "The Volunteer Army: Battle of Life and Death" at 750 million yuan [11][17]. Upcoming Film Releases - A rich supply of imported films is expected to boost the market, with titles like the entire "Harry Potter" series and new releases such as "Joker 2" and "Venom: The Last Dance" scheduled for release between October 11 and November 29 [4][19]. Media Industry Performance - The media sector index rose by 11.18% last week, ranking 7th among 31 industries, underperforming compared to the ChiNext index which rose by 15.36% [10]. - Recommended stocks for investment include companies like Wanda Film, Shanghai Film, Bona Film, and others, which are expected to benefit from the recovering film market [4][10][19]. ByteDance's Lemon 8 App - Lemon 8 has successfully entered the US market, ranking first in the iOS lifestyle app category, which may benefit marketing companies closely associated with ByteDance [5][21].

Investment Rating - The report maintains an "Overweight" rating for the coal industry, consistent with the previous rating [2] Core Viewpoints - The report suggests that a series of policy measures are expected to reverse market expectations for the economy in 2025, emphasizing the need for the coal sector to "grasp cyclical elasticity" and not overlook the core of dividends [2][3] - The report highlights that the price elasticity of coking coal is greater than that of thermal coal in a potentially improving economic cycle, and that long-term funds entering the market should not ignore high dividend yields [3][8] Summary by Sections Investment Recommendations - The report recommends focusing on the coking coal sector, suggesting leading companies such as Huabei Mining, Pingmei Shenma, Lu'an Environmental Energy, Shougang Resources, Hengyuan Coal Power, and Shanxi Coking Coal [10] - It also suggests that Yanzhou Coal Mining and Shanmei International will benefit from economic stabilization, along with Xinji Energy, which integrates coal and electricity [10] - The report continues to recommend dividend-focused companies like China Shenhua, Shaanxi Coal and Chemical Industry, and China Coal Energy [10] Policy Measures Impact - On September 24, the central bank announced a comprehensive easing policy, including a 50 basis point reduction in the reserve requirement ratio, which is expected to release approximately 1 trillion yuan in long-term funds [14][16] - The Politburo meeting on September 26 discussed economic issues, indicating a strong commitment to addressing current economic challenges and stabilizing growth expectations [14][18] Coking Coal Elasticity - The report notes that after three months of declines, coking coal stocks have largely reflected market pessimism, with prices dropping from 2,770 yuan/ton at the beginning of the year to a low of 1,680 yuan/ton by the end of August, a decline of over 1,000 yuan/ton [3][21] - It is observed that the bottom for downstream steel demand has become clearer, with signs of recovery in iron production and profitability [21] Dividend Core - The report emphasizes that with the recent interest rate cuts and easing monetary policy, high dividend stocks are becoming increasingly attractive, particularly those with yields above 5% such as China Shenhua and Shaanxi Coal [9][25] - The central bank's introduction of stock repurchase and loan policies is expected to encourage companies to increase their dividend payouts [25][27]

Investment Rating - The report maintains an "Overweight" rating for the coal industry, indicating a positive outlook for investment in this sector [2][4]. Core Insights - The report suggests that India's coal gap may be larger than market expectations, leading to intensified competition with China in the international coal market, which could affect China's import ceiling and international prices for key coal types [3][4]. - The report emphasizes that with the certainty of increasing demand in India, international prices for high-calorific thermal coal and quality coking coal are likely to trend upwards [4][7]. Summary by Sections 1. Investment Overview - The coal industry is facing a lack of significant domestic supply elasticity, while overseas supply remains opaque, with many critical points overlooked by the market. The report aims to provide a clearer view of the current state and future prospects of overseas coal, particularly focusing on the Indian market [7]. 2. Modi's Re-election and Continuation of "Make in India" Strategy - Modi's re-election in June 2024 is expected to sustain the "Make in India" strategy, which has been pivotal in boosting the economy since 2014. This strategy aims to create a high-efficiency business environment and achieve rapid economic growth [11][12]. - India's GDP growth has been robust, with a CAGR of 7.17% from 2013 to 2023, and is projected to continue at rates above the global average [12][14]. 3. Indian Coal Industry: Supply and Demand Dynamics - The coal sector is crucial in India's energy structure, with coal accounting for over 75% of electricity generation. The report notes a significant supply-demand imbalance due to rapid economic growth and climate factors [19][20]. - The report highlights that India's coal demand is projected to reach 1.45 billion tons by FY30, with a CAGR of around 5%, although this growth rate is lower than GDP growth [31][32]. 4. Overlooked Aspects of India's Coal Gap - The report argues that the market has underestimated India's coal demand, particularly in light of extreme weather conditions and the rising energy needs of the manufacturing sector [31][36]. - Historical data shows that actual coal demand has consistently exceeded government forecasts since 2020, primarily due to underestimations in electricity coal demand [32][34]. 5. Recommendations for Companies - The report continues to recommend leading dividend-paying companies such as China Shenhua, Shaanxi Coal and Chemical Industry, and China Coal Energy, as well as high-quality coking coal enterprises like Huabei Mining and Pingmei Shenma Energy [4][8].

Investment Rating - The report maintains an "Overweight" rating for both the airline and oil shipping sectors [1][2]. Core Insights - The report highlights that the demand for air travel remains resilient, with expectations for record passenger flow during the National Day holiday. The supply-demand balance is expected to continue recovering, aided by a decrease in oil prices [2][3]. - In the oil shipping sector, the report suggests a cautious approach to seasonal speculation, while positioning for a potential super bull market in oil shipping due to anticipated increases in crude oil production [3]. Summary by Sections Airline Sector - The report emphasizes that the supply-demand dynamics in the airline industry are gradually recovering, with passenger load factors remaining high. The forecast for 2023-2024 indicates a steady recovery in fleet turnover and passenger load factors, with profitability expected to improve as demand remains robust [3]. - The report projects that the international flight schedule will continue to drive supply-demand recovery, and a decrease in oil prices will enhance profitability during peak seasons. It recommends maintaining "Overweight" ratings for China National Aviation, Juneyao Airlines, China Southern Airlines, Spring Airlines, and China Eastern Airlines [3][12]. Oil Shipping Sector - The report advises a reduction in seasonal speculation and suggests positioning for a super bull market in oil shipping. It notes that shipping companies are showing a stronger willingness to maintain prices as the peak season approaches, with recent rates for Middle East to China VLCC (Very Large Crude Carrier) exceeding $37,000 per day [3][11]. - The report reiterates that increased crude oil production will benefit oil shipping demand, and a potential drop in oil prices could lead to higher-than-expected demand due to inventory replenishment. It maintains "Overweight" ratings for China Merchants Energy Shipping, COSCO Shipping Energy Transportation, China Merchants Industry Holdings, and China Ship Leasing [3][12].

Investment Rating - The report maintains an "Overweight" rating for the construction industry, consistent with the previous rating [2]. Core Insights - The construction industry is expected to benefit from ongoing fiscal and real estate policy support, with leading companies having a price-to-book (PB) ratio of less than 1 and a dividend yield greater than 2.25% showing significant upside potential of 19-105% [2][3]. - The report highlights that the fourth quarter is a peak season for construction, with government investment policies expected to accelerate [2][9]. - The report emphasizes the importance of selecting leading companies with strong industry trends and low earnings baselines for Q3 2023, particularly those with high dividend yields [3][12]. Summary by Sections Recent Key Reports - The report references several recent analyses, including historical reviews of construction market cycles and recommendations for stocks with favorable PB and dividend yield metrics [2][9][12]. Key Company Recommendations - Recommended companies include China State Construction, China Energy Engineering, and China Communications Construction, all of which exhibit strong order growth and favorable financial metrics [5][16]. - Specific metrics for recommended companies include: - China State Construction: PB 0.59, dividend yield 4.39% [6]. - China Energy Engineering: PB 0.98, dividend yield 1.08% [5]. - China Communications Construction: PB 0.57, dividend yield 3.03% [5]. Macro/Micro Data - The report notes significant increases in infrastructure investment, with water management investment up 33% and electricity engineering investment up 23.1% year-on-year [15][16]. - The report also highlights a narrowing decline in real estate investment, indicating a potential stabilization in the sector [15][16]. Future Price Space Calculation - The report provides a detailed analysis of potential price increases for leading companies, with examples showing significant upside based on historical PB ratios and market conditions [3][10]. - For instance, China Railway has a current PB of 0.57, with potential upside of 105% based on projected earnings growth and market conditions [3][10]. Dividend Yield and Earnings Growth - The report emphasizes the importance of high dividend yields and low PB ratios, recommending companies that meet these criteria for investment [4][12]. - Companies like Tunnel Engineering and Shanghai Construction are highlighted for their strong earnings growth despite recent challenges [4][16].

Industry Investment Rating - The report maintains an **Overweight** rating for the investment banking and brokerage industry, consistent with the previous rating [2] Core Views - Recent policy measures have significantly boosted market confidence, leading to a surge in the brokerage sector with a 39% cumulative increase over 5 trading days as of September 30, outperforming the Wind All-A Index by 13% [4] - The bank-securities transfer index indicates accelerated capital inflows into the securities market, with daily indices for September 24-30 showing significant increases: 2.15, 1.40, 4.40, 7.04, and 16.71 respectively [4] - Long-term industry focus remains on supply-side reform, with recent policies emphasizing the need for high-quality investment banking services and accelerating the construction of top-tier investment banks [4] Sector Performance and Capital Inflows - The bank-securities transfer index for individual investors showed notable increases: 1.19, 1.87, 1.08, 5.20, and 16.92 from September 24-30 [4] - Weekly data for the past 5 weeks shows a significant uptrend: 0.32, -0.28, -0.34, 0.31, and 3.13 [4] - Monthly data for the past 5 months indicates a positive shift: -0.57, -0.13, -0.40, -0.05, and 1.51 [4] Recommended Companies - **Guide Financial (300803.SZ)**: Recommended with an Overweight rating, projected BVPS for 2024-2026: 5.20, 6.01, 7.37 [6] - **Tonghuashun (300033.SZ)**: Recommended with an Overweight rating, projected BVPS for 2024-2026: 12.71, 13.14, 13.62 [6] - **China Galaxy (601881.SH)**: Recommended with an Overweight rating, projected BVPS for 2024-2026: 9.76, 10.36, 11.02 [6] - **CICC (3908.HK)**: Recommended with an Overweight rating, projected BVPS for 2024-2026: 19.07, 20.02, 21.07 [6] - **CITIC Securities (600030.SH)**: Recommended with an Overweight rating, projected BVPS for 2024-2026: 19.03, 19.99, 21.01 [6]

Investment Rating - The investment rating for the automotive industry is "Overweight" [2][5] Core Viewpoints - The automotive sector is transitioning from a recovery driven by policy support in the low-to-mid-end market to a broader demand recovery leading to terminal price restoration and expectations of recovery in the mid-to-high-end market [3][5] - Short-term opportunities are identified in smart driving, the Tesla supply chain, and the high-end vehicle supply chain [5] - Key recommended stocks include Jianghuai Automobile, BYD, Changan Automobile, Great Wall Motors, and Li Auto for complete vehicles; for the smart technology sector, recommended stocks include Xingyu Co., Kobot, Desay SV, Huayang Technology, and Baolong Technology; for the high-growth new energy sector, recommended stocks include Top Group, Shuanghuan Transmission, Ruihu Mould, Wuxi Zhenhua, Huguang Co., Songyuan Co., Xinquan Co., Aikedi, and Yinlun Co. [5] Summary by Sections Market Recovery - The core logic of the passenger vehicle sector since late July has been a total recovery driven by trade-in and scrappage subsidies, with significant order recovery observed in the 100,000 to 150,000 price range [5] - Since late September, market expectations for economic recovery have improved, suggesting a transition from a policy-supported phase to a sustained mid-term recovery in passenger vehicle demand, which is expected to enhance the profitability of both complete vehicle and component manufacturers [5] Smart Driving and Tesla - Tesla announced a special event on October 10, which may introduce Robotaxi, and is accelerating the development of Full Self-Driving (FSD) technology [5] - The roadmap released by Tesla indicates plans to launch a fully autonomous driving system in China and Europe by Q1 2025, pending regulatory approval [5] Liquidity and Valuation Recovery - The easing of liquidity conditions is expected to lead to a valuation recovery for small and medium-sized component manufacturers, which previously faced performance uncertainty due to sales pressures and liquidity constraints [5]

Investment Rating - The industry investment rating is "Overweight" for non-ferrous metals [2] Core Viewpoints - The unexpected improvement in US non-farm employment and unemployment data has heightened expectations for a soft landing in the economy, leading to a recalibration of interest rate cut expectations. This has implications for gold and silver prices, which may come under pressure. In China, significant supportive policies have been introduced, boosting market confidence, while seasonal demand continues to support industrial metal prices [4][5][8]. Summary by Sections 1. Economic Cycle Assessment - The US non-farm employment unexpectedly rose to 254,000 in September, with the unemployment rate dropping to 4.1%. This has increased optimism about the economy's resilience and soft landing prospects, while also raising concerns about re-inflation and adjusting market expectations for Federal Reserve rate cuts [5][8]. 2. Industry and Stock Performance - Domestic policies such as interest rate cuts and housing support measures are expected to enhance market confidence. However, the effectiveness of these policies on the real economy will take time to manifest. The traditional peak season is expected to support industrial metal prices through replenishment demand [5][8]. 3. Metal Prices and Inventory 3.1 Industrial Metals - Copper prices on the LME and SHFE were reported at $9,943.5 and ¥78,830 per ton, respectively. The SHFE aluminum price was ¥20,460 per ton, with a slight increase of 0.02% [19][20]. - Inventory levels for copper and aluminum have shown mixed trends, with SHFE copper inventory at 14.2 million tons, reflecting a 0.87% increase [20]. 3.2 Precious Metals - Gold prices on SHFE and COMEX were reported at ¥596.72 per gram and $2,673.20 per ounce, respectively, with a weekly decline of 0.49% for SHFE gold [22][23]. - Silver prices on SHFE and COMEX were reported at ¥7,793 per kilogram and $32.45 per ounce, respectively, with SHFE silver experiencing a 0.92% decline [22][23]. 4. Macro Data Tracking - The manufacturing PMI in China for September was reported at 49.80%, indicating a slight improvement, while the US manufacturing PMI was at 47.20% [29]. 5. Recommended Stocks - Recommended stocks include Zijin Mining and Luoyang Molybdenum, with beneficiaries including Western Mining, China Aluminum, Tianshan Aluminum, Shenhuo Co., Yun Aluminum, Shandong Gold, and Shanjin International [5][10].

Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry, indicating a recovery in confidence and a revaluation of core leading companies [2]. Core Insights - The report emphasizes the importance of investing in resilient companies with medium to long-term growth potential, categorizing them into cyclical leaders and segmented leaders, while also highlighting high-demand products that may exceed expectations [4][10]. - The basic chemical index saw a significant increase of +27.06% from September 23 to September 30, outperforming other sectors [7]. - The chemical price index rose by +1.41% as of September 30, with a mixed performance in price spreads among tracked chemical products [10]. Summary by Sections Market Performance - The Shanghai Composite Index increased by +21.37%, and the ChiNext Index rose by +42.12% during the same period [7]. - The top five price increases in chemical products included liquid chlorine (+28.38%) and NYMEX natural gas (+6.20%) [4]. Investment Recommendations - Recommended cyclical leaders include Wanhua Chemical, Hualu Hengsheng, Yangnong Chemical, Longbai Group, Yuanxing Energy, and Xingfa Group [10][12]. - Recommended segmented leaders include lubricant additive leader Ruifeng New Material, adsorption resin leader Blue Sky Technology, and new material leader Guoci Materials [10][12]. Key Company Tracking - Wanhua Chemical reported a slight increase in the price and spread of polymer MDI, with the price at 15,611 CNY/ton [14]. - Hualu Hengsheng's product prices, including octanol, showed a rebound, with the company nearing the completion of its second phase in Jingzhou [16]. - Juhua Co. achieved expected performance in Q2 2024, with a revenue of 12.08 billion CNY, reflecting a year-on-year growth of 19.65% [18]. Sub-industry Insights - The report highlights the new materials sector, recommending companies with strong growth potential and technological advantages, such as Blue Sky Technology and Ruifeng New Material [22].