Investment Rating - The industry investment rating is "Overweight" [3] Core Viewpoints - The Chinese aviation industry has a strong long-term logic, with expectations for an upward shift in profit margins as supply and demand recover. The current market expectations are still low, suggesting a good opportunity for reverse positioning during the off-season [3][9] - The industry has shown continuous profitability in Q3 for two consecutive years, exceeding 2019 levels, indicating a positive trend in recovery [3][39] - The report suggests that major airlines have performed better than expected, with significant cost improvements and a recovery in fleet turnover and passenger load factors anticipated for 2025 [3][4] Summary by Sections Section 1: Industry Overview - The Chinese aviation industry is expected to exceed profit expectations as supply and demand recover, with a focus on market-driven pricing and a slowdown in fleet growth [3][9] - The report recommends increasing holdings in major airlines such as Air China, Juneyao Airlines, China Southern Airlines, Spring Airlines, and China Eastern Airlines [3][9] Section 2: Q3 Performance - The estimated profit for the entire industry in Q3 2024 is expected to decline by approximately 20% year-on-year, while A-share airlines' net profit is projected to decrease by 14%, still surpassing Q3 2019 figures [3][39] - Revenue for Q3 2024 is expected to grow by 5% year-on-year, reflecting sustained demand in the aviation sector [3][48] Section 3: Cost Analysis - Fuel costs have slightly decreased in Q3, with expectations for further improvement in Q4. Non-fuel costs are also expected to improve due to fleet turnover and the recovery of international flights [3][40] Section 4: Future Outlook - The report anticipates that the recovery trend in supply and demand for the aviation industry will continue into the next year, with international flights increasing to absorb domestic capacity [3][27] - The upcoming winter season is expected to see domestic airlines increase international flights, further alleviating domestic overcapacity [3][27] Section 5: Investment Strategy - The report emphasizes the importance of reverse positioning during the off-season, as current market expectations and valuations are relatively low. It suggests that the decline in oil prices could enhance profit margins during peak seasons [3][35]

Investment Rating - The industry investment rating is "Overweight" [7][8]. Core Viewpoints - The life insurance premium growth has shown a temporary decline in the first ten months of 2024, attributed to product switching and strategic shifts towards preparing for the 2025 business kickoff [5][6]. - The property insurance sector has seen marginal improvement in premium growth, with both auto and non-auto insurance segments recovering [6]. - The report maintains a positive outlook for the annual New Business Value (NBV) growth and profitability improvement [6]. Summary by Sections Life Insurance - From January to October, cumulative life insurance premiums for listed companies continued to grow, with China Ping An at 9.0%, PICC Life at 5.6%, China Life at 4.9%, China Pacific Life at 2.4%, and New China Life at 1.8% [6]. - In October, the monthly growth rates for life insurance premiums declined, with PICC Life at 2.3%, New China Life at -0.2%, China Ping An at -1.9%, China Life at -2.6%, and PICC Life at -2.8% [6]. - The decline is expected due to the switching of old and new products and a focus on achieving performance targets for 2024 while preparing for the 2025 business kickoff [6]. Property Insurance - Cumulative property insurance premiums for listed companies showed steady growth, with ZhongAn Online at 13.0%, China Pacific Property at 7.4%, Ping An Property at 6.5%, and PICC Property at 4.8% [6]. - In October, the monthly growth rates for property insurance premiums were led by ZhongAn Online at 36.1%, followed by Ping An Property at 12.2%, PICC Property at 7.8%, and China Pacific Property at 3.9% [6]. - The growth in PICC Property's auto insurance premiums was 6.4%, driven by increased new car sales due to enhanced subsidy policies [6]. New Business Value (NBV) - The report anticipates continued growth in NBV for 2024, supported by prior concentrated sales of savings insurance and improvements in new business value rates due to pricing adjustments and product structure optimization [6]. - The report emphasizes the importance of asset-liability matching in a declining interest rate environment, predicting that companies focusing on this will have stronger profitability and dividend certainty [6]. Investment Recommendations - The report suggests maintaining an "Overweight" rating for the industry, with specific recommendations to increase holdings in China Life and New China Life for their greater investment flexibility, and to hold China Pacific for stable dividends [6].

Investment Rating - The report maintains an "Overweight" rating for the agricultural sector, consistent with the previous rating [7][58]. Core Insights - The report highlights the increasing promotion of biotechnology in seed production, emphasizing the importance of food security and self-sufficiency in grain production [9]. - The pet economy shows robust growth, particularly with domestic brands gaining market share during the Double 11 shopping festival, indicating a positive outlook for local brands [10]. - The pig farming sector is expected to see demand recovery due to a forecasted cold wave, which is anticipated to stabilize prices after recent declines [11]. Summary by Sections Seed Industry - The report notes that the promotion of biotechnology in seed production is intensifying, with a focus on self-sufficiency in grain production. Predictions indicate a reduction in corn imports from the U.S. due to potential tariffs, with expected imports of 23-24 million tons for the 2023-24 period, decreasing to 13 million tons for 24-25 [9]. Pet Industry - The pet sector's performance during the Double 11 sales event reached a total sales volume of 5.9 billion yuan, marking a 23% year-on-year increase. Domestic brands dominated the sales rankings on major platforms, suggesting a strong growth trajectory for local companies [10]. Pig Farming - The report discusses the current high temperatures affecting pig prices, which have dropped to 16 yuan/kg. However, a cold wave expected to start on November 18 is likely to boost demand and stabilize prices as the market enters a peak demand season [11]. Key Investment Recommendations - Recommended stocks in the poultry sector include: - Shengnong Development - Yisheng Shares - Lihua Shares - Xiangjia Shares - Recommended stocks in the pig farming sector include: - Muyuan Foods - Wens Foodstuff Group - Tiankang Biological - Shennong Group - Recommended stocks in the seed industry include: - Dabeinong Technology - Longping High-Tech - Recommended stocks in the pet sector include: - Guobao Pet - Zhongchong Shares - Petty Shares - Ruipubio [11].

Investment Rating - The report maintains an "Overweight" rating for the overseas technology sector, consistent with the previous rating [7]. Core Insights - The AI sector is gaining momentum, with OpenAI planning to launch the AI tool "Operator" in early 2025 and Google set to release the "Jarvis Assistant" by the end of the year. Significant investments are flowing into AI foundational models, although commercialization remains a challenge [8][14]. - NVIDIA and SoftBank are collaborating to build advanced AI infrastructure in Japan, which will include the largest AI factory in the country. This partnership aims to enhance Japan's AI industry, supported by a government investment plan of at least 10 trillion yen by the fiscal year 2030 [15][16]. - NVIDIA is also considering diversifying its supply chain, potentially partnering with Rapidus, a Japanese company focused on advanced semiconductor manufacturing [16]. Summary by Sections Weekly Market Review - During the period from November 10 to November 16, 2024, the Hang Seng Index fell by 6.28%, the Hang Seng Tech Index dropped by 7.29%, the Dow Jones Industrial Average decreased by 1.24%, and the Nasdaq Index declined by 3.15%. Overall, both Hong Kong and US stocks experienced a downward trend [17][19]. Weekly AI Industry News - Tencent reported a Q3 revenue of 167.2 billion yuan, an 8% year-on-year increase, with a net profit of 53.2 billion yuan, up 47%. The growth in the enterprise services sector was driven by cloud services and technology service fees [29]. - TSMC and GlobalFoundries have completed negotiations regarding the US CHIPS Act, which aims to strengthen domestic semiconductor manufacturing and reduce reliance on external supply chains [29]. - The EU fined Meta 798 million euros for antitrust violations related to its online advertising services [31]. - Google launched the AI voice assistant Gemini Live for iOS, allowing users to interact with AI in a more natural manner [32].

Investment Rating - The report rates the military industry as "Overweight" [7] Core Viewpoints - The military sector has experienced a pullback, with the defense industry index dropping by 9.36%, underperforming the market by 5.84 percentage points [8][18] - By 2043, China's civil aviation fleet is expected to exceed 10,000 aircraft, indicating significant growth potential in the aviation sector [8] - The 15th China International Aviation and Aerospace Exhibition showcased various new military equipment, highlighting advancements in China's defense capabilities [14][29] - The report emphasizes the long-term positive trend for the military industry due to increasing geopolitical tensions and the need for enhanced national defense [15] Summary by Sections 1. Core Viewpoints - The 15th Zhuhai Airshow opened, featuring the successful F-35 takeoff test by Japan's Kaga [14] - The airshow attracted over 1,000 exhibitors from 47 countries, with a notable increase in international participation [14] - The report suggests focusing on aerospace equipment construction and satellite internet as key investment areas [14] 2. Market Review - The military defense index fell by 9.36%, ranking last among sectors [18][19] - The report notes that the defense information technology sector performed relatively well during this period [23] 3. Major News in the Military Industry - The 15th Zhuhai Airshow highlighted China's advancements in military technology, including the debut of the J-35A stealth fighter and the Hongqi-19 missile system [29][30] - The report discusses the significance of the airshow in showcasing China's military capabilities and fostering international cooperation in aerospace [29][30] 4. Important Company Announcements - The report lists key companies in the military sector, including AVIC Shenyang Aircraft Corporation and AVIC Xi'an Aircraft Industry Group, as potential investment targets [15][16]

Industry Investment Rating - The report assigns an **Overweight** rating to the textile and apparel industry [1] Core Views - Recent government subsidies for home textiles have expanded from Shanghai to nationwide, potentially boosting consumer confidence [4] - The subsidy policy is expected to drive a consumption boom in the home textile sector [2] - Leading home textile brands with strong cash flows and low capital expenditure needs are likely to maintain high dividend payouts [5] Subsidy Policy Details Online Subsidies - **Phase 1 (Double 11 period)**: Subsidies of 15% were available on Taobao for products like bedding sets, down quilts, silk quilts, and pillows, but limited to Shanghai [5] - **Phase 2 (Post-Double 11)**: Taobao subsidies expanded to cover all mainland China, while JD.com introduced a nationwide subsidy of 20% across all categories [5] Offline Subsidies - **Shanghai**: Home textile products were included in the city's consumption subsidy policy in late October, offering a 15% subsidy with a maximum of CNY 2000 per transaction [5] - **Xiamen**: Bedding products were added to the subsidy list with a 20% subsidy and a maximum of CNY 2000 per transaction [5] Company Participation - Leading brands like **Luolai**, **Mercury**, and **Fuanna** have actively participated in both online and offline subsidy activities [5] - **Luolai**: 40% of revenue comes from East China, with 38% from online sales [9] - **Mercury**: 57% of revenue comes from online sales, with 17% from East China (excluding online) [9] - **Fuanna**: 26% of revenue comes from East China, with 40% from online sales [9] Valuation and Recommendations - **Luolai**: 2024E PE of 16x, 2025E PE of 13x, 2026E PE of 12x [9] - **Fuanna**: 2024E PE of 12x, 2025E PE of 11x, 2026E PE of 11x [9] - **Mercury**: 2024E PE of 10x, 2025E PE of 9x, 2026E PE of 8x [9] - The report recommends **Luolai** and **Fuanna**, with **Mercury** as a beneficiary [5] Market Impact - The subsidy policy is expected to boost terminal sales for home textile brands, particularly benefiting leading brands with strong brand power and product quality [5]

Investment Rating - The report maintains an "Overweight" rating for the building materials sector, consistent with the previous rating [8]. Core Viewpoints - The report highlights a faster pace of policy support, with new tax policies actively boosting market sentiment, particularly benefiting the cement sector which has seen a significant drop in market value [8]. - Cement prices have continued to rise, with a 0.4% increase week-on-week, primarily driven by regions like Fujian and Shaanxi, where prices increased by 20-30 CNY/ton [9][45]. - The report anticipates a continued upward trend in cement prices, with some regions initiating new price hikes of 30-50 CNY/ton [9][45]. - The glass and fiberglass sectors are experiencing mixed trends, with glass prices stabilizing after previous increases, while fiberglass prices are under pressure [33][34]. Summary by Sections 1. Building Materials Investment Strategy - The report emphasizes the proactive nature of recent policies, transitioning from a focus on stabilization to active market stimulation, particularly in the consumer building materials sector [15]. - Key recommendations include companies with strong market positions and innovative business models, such as Oriental Yuhong and Beixin Building Materials [15]. 2. Cement Industry - National cement market prices have risen by 0.4% week-on-week, with specific regions like Fujian and Shaanxi seeing significant price increases [9][45]. - The report notes a decrease in cement shipment rates by approximately 1.5 percentage points due to declining demand in northern regions as temperatures drop [9][45]. - The report predicts a substantial improvement in profit levels for the cement sector in Q4 compared to the previous quarter and year [15]. 3. Glass Industry - The average price of domestic float glass is reported at 1453.79 CNY/ton, reflecting a week-on-week increase of 64.46 CNY/ton [33][100]. - The report indicates that while float glass prices are stabilizing, there are still fluctuations based on market conditions and regional supply [33][100]. - Recommendations for investment include leading companies like Fuyao Glass and Xinyi Glass, which are expected to benefit from strong dividend yields and market positions [33][100]. 4. Fiberglass Industry - Fiberglass prices are experiencing a downward trend, with electronic yarn prices remaining stable [34][124]. - The report highlights a general lack of demand in the fiberglass market, with many companies adopting flexible pricing strategies to manage inventory [34][124]. - Key recommendations include companies like China Jushi and Zhongcai Technology, which are expected to benefit from structural demand changes in the market [34][124].

Investment Rating - The report assigns an "Accumulate" rating for the electric two-wheeler industry, maintaining the previous rating of "Accumulate" [6]. Core Viewpoints - The new 3C certification standards for electric two-wheelers will be fully implemented starting November 1, 2024, leading to accelerated market differentiation, with leading brands expected to benefit significantly [7][18]. - The supply-side reform is accelerating as smaller brands struggle with certification, resulting in shortages at retail outlets and a shift towards leading brands like Aima Technology and Yadea Holdings, which have completed over 100 model certifications [11][18]. - The new national standards are anticipated to be officially released by the end of 2024, which will likely increase average selling prices (ASP) and market share concentration due to higher production costs and stricter quality control requirements [11][15]. - The "old-for-new" policy is expected to support lead-acid products, with subsidies ranging from 10% to 20% of the selling price, generally between 400 to 600 yuan, and additional incentives for recycling old lithium battery products [15][17]. Summary by Sections 1. Industry Update - The electric two-wheeler industry is undergoing significant changes with the implementation of new 3C certification standards, which are expected to enhance the supply structure and benefit leading manufacturers [11][12]. - The report highlights that leading brands have sufficient SKU reserves to meet the new certification requirements, while smaller brands face challenges [11][12]. 2. Investment Recommendations - The report recommends focusing on leading companies such as Aima Technology and Yadea Holdings, as they are likely to see improved sales performance due to the new certification standards and market dynamics [18]. - The expected increase in ASP due to new national standards and the shift towards OBM (Original Brand Manufacturer) models will further enhance the competitive landscape [15][18]. 3. Policy Implications - The "old-for-new" policy is gradually being rolled out across various regions, with significant subsidies aimed at encouraging consumers to upgrade to new electric two-wheelers [15][17]. - The report provides a detailed overview of subsidy programs in different regions, indicating a strong governmental push to support the transition to new standards [17].

Investment Rating - The report maintains a "Buy" rating for JD Group-SW (9618) and raises the target price to 176 HKD from 166 HKD based on the SOTP valuation method [3][19] Core Views - JD Group's revenue growth has rebounded under the trade-in policy, with profits exceeding expectations [2][3] - JD Retail's revenue increased by 6.1% YoY in FY24Q3, driven by growth in active users and shopping frequency, particularly benefiting from the trade-in policy [3] - JD Logistics achieved a significant increase in operating profit margin to 4.7%, with operating profit reaching 2.09 billion RMB, far exceeding market expectations [3] - The company's gross margin improved to 17.3%, up 0.7 percentage points YoY, attributed to higher-margin general merchandise and reduced logistics costs [3] Financial Performance - JD Group's FY24Q3 revenue grew 5.1% YoY to 260.4 billion RMB, with merchandise and service revenues increasing by 5% and 6% respectively [3] - Non-GAAP net profit surged 29.3% YoY to 13.2 billion RMB, surpassing the expected 11.4 billion RMB [3] - JD Logistics' revenue rose 6.6% YoY to 44.4 billion RMB, with cost control measures leading to only a 2.2% YoY increase in costs [3] Business Segment Analysis - JD Retail's revenue reached 225 billion RMB in FY24Q3, with electronics and home appliance sales growing 3% YoY and daily necessities sales increasing 8% YoY [3] - JD Logistics' operating profit margin improved significantly, driven by effective cost management and low single-digit growth in labor costs [3] Valuation and Outlook - JD Group's valuation is supported by its strong supply chain capabilities, which provide efficiency advantages in inventory turnover, gross margin, and fulfillment costs [19] - The company is expected to benefit from the recovery in consumer spending, with platform ecosystem improvements and content ecosystem development driving future growth [21] - Revenue forecasts for FY2024E, FY2025E, and FY2026E are adjusted to 1,128.2 billion RMB, 1,183.2 billion RMB, and 1,243.0 billion RMB respectively, with adjusted net profits projected at 44.8 billion RMB, 48.0 billion RMB, and 51.7 billion RMB [3][21]

Investment Rating - The report maintains an **Overweight** rating for Takara Shuzo, reflecting its strong market position and growth potential in both domestic and international markets [6] Core Views - Takara Shuzo has successfully navigated Japan's evolving alcohol consumption trends by focusing on product innovation, market segmentation, and international expansion [7] - The company has built a diversified product portfolio across sake, shochu, and RTD (ready-to-drink) beverages, securing leading market shares in key categories [7] - International expansion, particularly in the US and China, has become a significant growth driver, contributing 45% of FY2024 revenue [7][14] Industry Overview Japanese Alcohol Consumption Trends - Japanese alcohol consumption peaked in the mid-1990s at 96 6 billion liters and has since entered a period of decline due to economic stagnation and demographic challenges [18] - The industry has undergone three distinct phases: volume-price growth (1970-1993), category differentiation (1993-1999), and the current era of market contraction (1999-present) [22] - Beer consumption peaked in 1994 at 70 6 billion liters, while shochu and RTD beverages have shown resilience, with RTD beverages surpassing beer as the largest category by 2022 [24][33] Key Drivers of Category Shifts - Tax policies and consumer preferences have significantly influenced category dynamics, with lower-tax products like RTD beverages gaining market share [36] - Health consciousness and changing consumer demographics have driven demand for lower-alcohol and flavored beverages [38] - The industry has seen increasing concentration, with the top 3 players controlling 80% of the beer market and 50% of the RTD market [33] Company Analysis Business Segments - Takara Shuzo operates through three main segments: domestic alcohol and food (35% of FY2024 revenue), international operations (45%), and biotechnology (12%) [41] - The domestic alcohol business generated ¥123 8 billion in FY2024, with RTD beverages becoming the largest category at 45% of alcohol sales [47] Shochu Business - Takara Shuzo dominates the shochu market with a 14% share, leveraging a diverse product portfolio of over 100 SKUs [53] - The company has successfully navigated three major shochu consumption waves: the white revolution (1970s), RTD innovation (1980s), and premiumization (2000s) [58][62] - Key products include the flagship "Takara Shochu" and premium offerings like "Gokujo" [55] Sake Business - Despite declining domestic sake consumption, Takara Shuzo has maintained market leadership through product innovation and international expansion [78] - The "Matsuzaka" brand has been particularly successful, becoming the top gift sake product in Japan [87] - International sales have grown significantly, with the US and China as key markets [82] International Expansion - Takara Shuzo's international business has grown rapidly, with revenue increasing from 37% in FY2023 to 45% in FY2024 [96] - The company has pursued a dual strategy of alcohol exports and local food distribution, acquiring several overseas distributors since 2010 [93] - Key markets include the US, China, and Europe, with the US operations contributing significantly to international revenue [93] Management Strategy - The company has maintained strong brand equity through cultural marketing and targeted advertising campaigns [102] - Takara Shuzo has invested consistently in marketing, with advertising expenses remaining stable at around 1 5% of revenue [108] - Sustainability initiatives and health-conscious product development have enhanced the company's ESG profile [109]