Investment Rating - The report maintains an "Overweight" rating for the food and beverage industry [2][17]. Core Viewpoints - The food and beverage sector is expected to gradually improve due to strong recovery in travel during the National Day holiday and supportive policies [3][6]. - The report emphasizes the importance of focusing on undervalued growth stocks, particularly in categories like liquor, snacks, and the restaurant supply chain [17]. Summary by Sections National Day Travel Recovery - Daily travel data during the first four days of the National Day holiday reached new highs, indicating a strong recovery in service consumption [6][7]. - The average daily passenger volume for railways and civil aviation increased by 27.4% and 22.9% respectively compared to the same period in 2019, setting a new record for major holidays in 2024 [6][7]. Liquor Sector - The liquor market is experiencing a weak recovery, with expectations of continued underperformance during the National Day holiday [9][11]. - The report notes that the price of premium liquor, such as Moutai, has seen a slight increase, with market sentiment improving but still facing challenges [9][11]. Consumer Goods - The consumer goods sector is showing signs of recovery, with a focus on snacks and the restaurant supply chain as key growth areas [14][16]. - The report highlights that the snack segment is expected to perform well due to ongoing channel expansion and cost reductions [14][16]. Investment Recommendations - The report recommends increasing positions in undervalued growth stocks, particularly in the liquor sector (e.g., Wuliangye, Luzhou Laojiao) and snacks (e.g., Three Squirrels, Qiaqia Food) [17][20]. - It also suggests increasing positions in the restaurant supply chain, with companies like Anjuke Food and Haitian Flavor Industry being highlighted [17][20].

Investment Rating - The report maintains an "Overweight" rating for the lithium and cobalt industry [4][10]. Core Insights - The report indicates that the lithium market is experiencing a rebound due to favorable policies and increased market sentiment, with lithium prices expected to fluctuate within a high range over the next month [11]. - The cobalt segment is facing stable prices but with sluggish terminal demand, leading to a cautious outlook for cobalt salts [10][11]. Summary by Sections 1. Cycle Assessment - The lithium sector is seeing slight inventory replenishment and improved market transactions, with the Wuxi 2411 contract price rising by 5.92% to 80,500 CNY/ton and the Guangxi 2411 contract increasing by 5.91% to 79,800 CNY/ton [10]. - Lithium concentrate prices have increased to 769 USD/ton, up by 22 USD/ton week-on-week, reflecting a significant improvement in market inquiries and transactions [10][11]. 2. Company and Industry Dynamics - The report highlights that companies like Yongxing Materials, Ganfeng Lithium, Tianqi Lithium, and others are recommended for overweight positions due to their potential benefits from the current market conditions [10]. - Cobalt companies are extending their reach into the electric new energy manufacturing sector, creating a cost advantage through integrated operations [10]. 3. Key Data - The report notes a 2.49% week-on-week decrease in domestic lithium carbonate production and a 1.65% decrease in inventory, indicating a continued destocking process [11]. - The average price of battery-grade lithium carbonate rose by 1.95% to a range of 74,800-76,500 CNY/ton, while battery-grade lithium hydroxide saw a slight decline of 0.87% [11]. 4. Monthly Production of New Energy Materials - The report mentions that the production of lithium iron phosphate increased by 9% month-on-month and 62% year-on-year, while ternary materials saw a 3% increase month-on-month and an 8% increase year-on-year [11][13].

Investment Rating - The report maintains an "Overweight" rating for the environmental sector, consistent with the previous rating [4]. Core Insights - The introduction of significant policies is favorable for environmental dividend assets, with a trend of decreasing financing costs benefiting companies in this sector [6][7]. - The report highlights new investment opportunities driven by new urbanization and the expansion of the carbon market [4][6]. - The report emphasizes the potential for increased cash dividends in the water and solid waste sectors due to improved cash flow and favorable pricing policies [7]. Summary by Sections Weekly Investment Viewpoint - The report notes a downward trend in financing costs, which will benefit environmental dividend companies through reduced financial expenses and enhanced valuations [6]. - The establishment of market support tools is expected to guide leading dividend companies to increase their dividend intentions [6][7]. - Recommendations include companies such as China Everbright International, Sanfeng Environment, Green Power, and Hanlan Environment in the solid waste sector, and Beijing Enterprises Water Group and Yuehai Investment in the water sector [7]. Environmental Sector Weekly Performance - From September 23 to September 27, 2024, the environmental, gas, water, and power sectors saw increases of 12.65%, 9.40%, 11.96%, and 7.78% respectively [3][9]. - The top five performing stocks in the environmental sector during this period were Haixin Energy Technology (+69.23%), New Power (+53.48%), and others [3][9]. Carbon Neutrality Tracking - The national carbon market saw a transaction volume of 313.72 million tons, a 241% increase from the previous week, with an average transaction price of 99.23 yuan/ton [11]. - Local exchanges also experienced significant growth, with a 295% increase in transaction volume [11]. Important Events in the Environmental Sector - The report mentions the issuance of guidelines for carbon emission measurement capabilities, which will impact high-emission industries such as power generation and steel [12][13]. - Key announcements from companies like Qianjiang Water and Chongqing Water regarding stock issuance approvals are highlighted [14][15]. Recommendations and Earnings Forecasts - The report provides earnings forecasts for recommended companies, indicating a positive outlook for their performance [8]. - The report suggests that the water price policy improvements will lead to a favorable pricing cycle for water companies [7].

Industry Investment Rating - The report maintains an "Overweight" rating for the footwear manufacturing industry, specifically highlighting Huili Group as a key player with superior growth potential [2] Core Views - The footwear manufacturing industry is highly competitive, with Huili Group and Laiyi Group leading in performance in 2024 [2] - Short-term growth is driven by the recovery of downstream inventory, with leading manufacturers like Huili and Laiyi showing strong order recovery trends [3] - Long-term, Huili Group is expected to outperform due to its superior management capabilities and growth potential, despite competition from Laiyi [3] Footwear Manufacturing Industry Overview - The global footwear manufacturing industry is dominated by key players such as Yue Yuen, Huili Group, Fengtai Enterprise, and Laiyi Group [6] - From 2018 to 2023, Huili Group achieved a revenue CAGR of 10%, while Laiyi Group achieved a CAGR of 6% from 2019 to 2023 [3] - In 2024, Laiyi Group reported a 35% revenue growth from January to August, while Huili Group reported a 24.5% revenue growth in the first half of the year [3] Laiyi Group Analysis - Laiyi Group is a global footwear manufacturing newcomer, with strong partnerships with international brands such as Adidas, Converse, and Hoka [3] - Adidas accounts for nearly 60% of Laiyi's revenue, with the company producing popular shoe models like Adidas Samba and Hoka Bondi 7 [3] - Laiyi's production capacity is primarily located in Vietnam, China, Indonesia, and Myanmar, with a total capacity of 100 million pairs and sales of 70 million pairs in 2023 [3] Huili Group vs Laiyi Group - Short-term: Laiyi's revenue growth is leading the industry, driven by strong sales performance from Adidas and Hoka [3] - Long-term: Huili Group has more room for growth with existing clients like Nike and potential new clients such as Adidas, On, and Asics [3] - Huili Group demonstrates superior management capabilities, with higher profit margins and per capita output compared to Laiyi [32][34] Huili Group's Competitive Advantages - Huili Group's management capabilities are a key competitive advantage, reflected in its higher profit margins and per capita output [32][34] - Huili Group has significant growth potential with Nike, where it currently holds a single-digit market share, and is expanding its client base with brands like Adidas, On, and Asics [35][37] Investment Recommendation - The report recommends Huili Group for its strong management capabilities and growth potential, despite competition from Laiyi Group [38]

Investment Rating - The report maintains an "Overweight" rating for the overseas technology sector, consistent with the previous rating [2]. Core Insights - Meta has launched its first AR glasses, Orion, which is expected to reshape the AR landscape. Additionally, OpenAI has seen the departure of several key executives, which may accelerate technology dissemination [3][4]. - The Hang Seng Index surged by 13.00% and the Hang Seng Tech Index increased by 20.23% during the week of September 22-28, 2024, driven by favorable Chinese policies that restored investor confidence [9][14]. - Meta's new products include the Orion AR glasses, Meta Quest 3S headset, and the Llama 3.2 multimodal model, which can recognize images and understand text, showcasing significant advancements in technology [4][7][33]. - OpenAI's recent executive turnover, including the departure of CTO Mira Murati and other key figures, may facilitate faster technology spread, despite concerns over management stability [8][22]. - ByteDance has entered the AI video generation market with the launch of PixelDance and Seaweed models, which are designed to create high-quality dynamic videos with advanced interaction capabilities [4][27]. Summary by Sections Weekly Overview - The report highlights a significant increase in major indices, with the Hang Seng Index and Hang Seng Tech Index showing remarkable growth, indicating a positive market sentiment [9][14]. AI Industry News - Notable developments include Apple's former design chief collaborating with OpenAI on AI hardware, and OpenAI's successful fundraising round of $6.5 billion, raising its valuation to $150 billion [22][26]. - OpenAI is also considering a transition to a for-profit model, which could involve granting CEO Sam Altman equity in the company [30][35]. Important Meetings Preview - Upcoming significant events include Tesla's "Cybercab" unveiling on October 11 and the International Conference on Big Data, AI, and IoT Engineering on October 25 [36].

Investment Rating - The investment rating for China Eastern Airlines is maintained at "Buy" [5] Core Views - The airline's fleet turnover and passenger load factor have largely recovered, with expectations for future earnings performance as the industry supply and demand continue to recover [3][4] - The company has abundant resources for its express routes and is strategically increasing international flights, particularly to Japan, Southeast Asia, Europe, and Australia [4] - The net profit forecast for 2024/25 has been adjusted down to 2 billion and 4.7 billion yuan respectively, with a new net profit forecast of 8.8 billion yuan for 2026 [4] Summary by Sections Industry Overview - The aviation supply and demand in China is recovering in 2023-2024, with distinct seasonal demand characteristics [4] - The company is actively increasing international flights and has achieved a leading recovery in international operations and fleet turnover [4] Financial Performance - In the first half of 2024, the net profit attributable to the parent company is expected to be -2.8 billion yuan, continuing to reduce losses year-on-year [4] - The company's fleet size has grown nearly 13% compared to 2019, with ASK (Available Seat Kilometers) increasing by 10% [4] - Passenger revenue has increased by 3% compared to 2019, while seat revenue has grown by 1% [4] Future Outlook - The summer travel demand in 2024 is expected to remain strong, with passenger traffic increasing nearly 18% compared to 2019 [4] - The company is focusing on restoring international routes during peak seasons, which is expected to drive overall ASK growth [4] - The airline's flexible revenue management is anticipated to accelerate turnover recovery, with future industry supply and demand recovery expected to drive profit recovery [4]

Investment Rating - The investment rating for China Southern Airlines is "Accumulate" [2][5]. Core Views - The report indicates that the supply and demand in the industry are expected to continue recovering, with the company poised to reduce losses in its main operations. The construction of the Beijing Daxing hub is anticipated to elevate the profit center [4][5]. - The company has significant profit elasticity and benefits from a potential decline in oil prices, which could enhance profitability during peak seasons [5]. Summary by Sections Financial Performance - The net profit for the first half of 2024 is projected at -1.23 billion RMB, with a significant impact from a nearly 1.4 billion RMB investment loss due to the capital increase in Sichuan Airlines. The main operations are expected to continue reducing losses year-on-year [5]. - The company’s fleet size increased by 6.7% compared to the same period in 2019, with an ASK growth of 6% [5]. - The passenger load factor improved by 6 percentage points year-on-year, surpassing 2019 levels, while seat revenue increased by 4% compared to 2019 [5]. Market Position and Strategy - The company is actively investing in international routes, capitalizing on cross-border e-commerce opportunities, leading to a 4.5 billion RMB increase in logistics profits to 1.7 billion RMB [5]. - The report highlights that if the average fuel procurement price decreases by 10%, the estimated annual net profit increases for China Southern Airlines and other airlines would be 4.2 billion RMB, 4.1 billion RMB, 3.5 billion RMB, 530 million RMB, and 470 million RMB respectively [5]. Long-term Development - The construction of the Beijing Daxing hub is a significant strategic move for China Southern Airlines, as it is the largest base airline at the airport. The company is expected to benefit from new slot allocation policies [5]. - The report anticipates that as supply and demand recover, the profitability of domestic routes will improve, and the long-term profitability of international routes is also expected to enhance [5].

Investment Rating - The report maintains an "Accumulate" rating for China National Aviation (China National Airlines) [2][7]. Core Views - The aviation demand shows resilience, and supply-demand dynamics are expected to continue recovering. The company is projected to see a significant increase in profitability as supply-demand conditions improve [6][7]. - The report anticipates a net profit of -2.8 billion RMB for the first half of 2024, indicating a continued reduction in losses compared to the previous year [7]. - The company is adjusting its net profit forecasts for 2024 and 2025 to 0.8 billion and 6.1 billion RMB respectively, while introducing a new forecast of 15 billion RMB for 2026 [7]. Financial Summary - Revenue is expected to rise from 52.9 billion RMB in 2022 to 141.1 billion RMB in 2023, reflecting a 167% increase. Projections for 2024, 2025, and 2026 are 169.9 billion, 182.5 billion, and 199.1 billion RMB respectively, with growth rates of 20%, 7%, and 9% [5]. - Gross profit is forecasted to improve from a loss of 29.9 billion RMB in 2022 to a profit of 7.1 billion RMB in 2023, with further increases to 10.8 billion, 19.8 billion, and 31.8 billion RMB in the following years [5]. - Net profit is projected to shift from a loss of 38.6 billion RMB in 2022 to a loss of 1.0 billion RMB in 2023, followed by profits of 0.8 billion, 6.1 billion, and 14.9 billion RMB in 2024, 2025, and 2026 respectively [5]. Market Position and Strategy - The company is focusing on optimizing its high-quality flight network, which is expected to enhance long-term value despite short-term pressures [7]. - The report highlights that the company’s fleet size has increased by 14% compared to 2019, with a 5% increase in available seat kilometers (ASK), although recovery in wide-body aircraft operations remains slow [7]. - The strategic acquisition of Shandong Airlines is expected to bolster the company’s market position, enhancing its operational capabilities and profitability potential [7].

Investment Rating - The investment rating for the company is maintained at "Buy" [5] Core Views - The report indicates that the supply and demand in the industry are expected to continue recovering in the first half of 2024, with the company’s main business continuing to reduce losses, excluding the impact of capital increase. The profitability center is anticipated to rise with the recovery of supply and demand, alongside the construction of the Beijing Daxing hub. The report highlights that the airline has an option for benefits from falling oil prices [3][4]. Summary by Sections Financial Performance - The company is projected to have a net profit of -12.3 billion yuan in the first half of 2024, considering a nearly 14 billion yuan investment loss from the capital increase in China Southern Airlines. The main business is expected to continue reducing losses year-on-year [4]. - The company’s fleet size is expected to grow by 6.7% compared to the same period in 2019, with an ASK (Available Seat Kilometers) growth of 6% in the first half of 2024 [4]. - The company achieved a year-on-year increase of 6 percentage points in passenger load factor during the off-peak season, which is higher than in 2019 [4]. Profitability and Cost Management - The company is leveraging opportunities in cross-border e-commerce, with a more than 30% increase in international routes, leading to a year-on-year profit increase of 450 million yuan in Southern Airlines logistics, totaling 1.7 billion yuan [4]. - The report suggests that if the average fuel purchase price decreases by 10%, the estimated annual net profit increases for China Southern Airlines and other airlines would be 4.2 billion yuan, 4.1 billion yuan, 3.5 billion yuan, 530 million yuan, and 470 million yuan respectively [4]. Strategic Developments - The construction of the Beijing Daxing hub is a significant strategic initiative for the company, which is the largest base airline at the Beijing Daxing Airport. The company is expected to benefit from new slot allocation policies [4]. - The report anticipates that as the industry supply and demand recover, the profitability center for domestic routes will rise, and the long-term profitability of international routes is also expected to improve [4].

Investment Rating - The report maintains a "Buy" rating for China National Aviation (601111) [4] Core Views - The aviation demand shows resilience, and supply-demand recovery is expected to continue. The company is projected to reduce losses year-on-year in the first half of 2024, with a high-quality flight network anticipated to demonstrate an upward shift in profit center once supply-demand recovers [2][3]. Summary by Sections Investment Highlights - The report emphasizes the optimization of the high-quality flight network of China National Aviation, indicating that short-term pressures do not diminish its long-term value. The profit center is expected to exceed expectations once supply-demand recovers. The net profit forecasts for 2024 and 2025 have been adjusted down to 8 billion and 61 billion respectively, with a new forecast for 2026 set at 150 billion. The target price has been revised down to 13.52 yuan from 14.53 yuan, based on a 15x PE ratio for 2026 [3][4]. Financial Performance - In the first half of 2024, the company reported a net profit attributable to shareholders of -28 billion yuan, continuing to reduce losses year-on-year. The recovery in profitability is slower than the recovery in turnover due to factors such as pressure from wide-body aircraft and seasonal supply-demand challenges. The company is committed to a stable pricing strategy, although domestic passenger revenue remains nearly 6% lower than in 2019 due to business travel cost controls [3][10]. Market Outlook - The report suggests that the aviation sector has a long-term growth logic, as the Chinese aviation market is still in its early stages of development. The low frequency and low penetration characteristics indicate significant long-term potential. Additionally, international flight increases are expected to help absorb excess capacity, further driving supply-demand recovery [3][10]. Strategic Positioning - Under the "Super Carrier" strategy, the optimization of the flight network is expected to enhance long-term value. The company has acquired high-quality flight slots in key markets, which will support ongoing optimization of passenger sources. Future international flight increases and demand growth are anticipated to further drive supply-demand recovery and cost reductions [3][10].