Investment Rating - The report maintains a positive outlook on the textile and apparel industry, focusing on domestic demand recovery and outdoor winter sports demand stimulation [1][3]. Core Insights - The report emphasizes the recovery of domestic consumption as a key investment theme, with a focus on leading manufacturers and the outdoor winter sports sector benefiting from policy support [3][4]. - The textile manufacturing sector is highlighted for its growth potential, with a recommendation to focus on leading companies that can leverage supply chain advantages and innovation [4][18]. Summary by Sections 1. 2024 Review: Manufacturing Recovery, Consumption at the Bottom - The textile and apparel sector has shown a 3.1% absolute return from January 1 to December 12, 2024, with a PE (TTM) ratio at a historical low of 19.9 times, indicating attractive valuation levels [3][8][11]. 2. Apparel and Home Textiles: Strong Outlook for Consumption Recovery - The report identifies three main themes for 2025: - Surge in outdoor winter sports demand, with a target market size of 1.5 trillion yuan by 2030, supported by government policies [3][29]. - Improved expectations for home textiles and children's clothing due to policy incentives, including subsidies of 15-20% [3][4]. - Focus on men's and women's apparel as economic recovery is expected to drive demand [4][28]. 3. Textile Manufacturing: Industry Prosperity and Focus on Leading Growth - The report suggests that the textile manufacturing sector is experiencing a recovery, with a focus on leading companies that can capitalize on supply chain expansion and innovation [4][18]. - Recommendations include companies like Nike, Huayi, and Shenzhou International, which are positioned to benefit from the recovery in orders and profitability [4][18]. 4. Fund Holdings: Decrease in A-share Textile Fund Holdings - As of Q3 2024, the report notes a decrease in the market value of textile fund holdings, with significant increases in holdings for companies like Anta Sports and Li Ning [14][18]. 5. Performance Tracking: High Elasticity in Textile Manufacturing - The textile manufacturing sector is noted for its high elasticity in performance, while the apparel sector continues to show signs of weak recovery [15][18]. 6. Export Trends: Steady Growth in Textile Exports - China's textile exports reached $273.06 billion from January to November 2024, with a year-on-year growth of 2.0%, indicating a stable export environment [18][19]. 7. Domestic Demand Trends: Recovery in Q4 - The report highlights a rebound in domestic demand, particularly in October, driven by seasonal factors and policy support, with a notable increase in retail sales for apparel [20][21].

Investment Rating - The report gives an "Accumulate" rating for the company, marking its first coverage [5][12]. Core Views - The company has a strong performance certainty due to its "package + equipment + catalyst" integrated business model, which enhances predictability in short-term earnings [5]. - The company is a rare domestic player in PO/SM technology, with a strong performance outlook, benefiting from the domestic supply-demand balance in the epoxy propane market [6]. - The company is positioned to grow internationally in the styrene market, having established a presence in regions like Russia and the Middle East [7]. - The company possesses a complete process chain for butyl anhydride, which is rare, and is expanding into biodegradable plastics [8]. - The earnings forecast for the company from 2024 to 2026 shows a steady increase in net profit, with a target market value indicating a potential upside [12]. Summary by Sections 1. Integrated Business Model - The company has developed a comprehensive product matrix that includes technology packages, equipment, and catalysts, enhancing its service offerings in the petrochemical sector [26]. 2. PO/SM Technology - The company is the only domestic vendor transferring PO/SM technology, with a significant market share in epoxy propane production [28]. - The domestic supply-demand balance for epoxy propane is expected to remain tight, with a projected supply gap of 230,000 tons by 2028 [6]. 3. Styrene Market Position - The company has established a strong domestic market position in styrene and is actively seeking growth opportunities abroad, particularly in fast-growing regions [7]. 4. Butyl Anhydride Process - The company has a complete process chain for butyl anhydride, which is rare in the industry, and is planning to enter the biodegradable plastics market [8]. 5. Earnings Forecast and Valuation - The company is expected to achieve net profits of 118 million, 124 million, and 185 million yuan from 2024 to 2026, with corresponding PE ratios indicating a favorable valuation [12].

Investment Rating - The report maintains a positive outlook on the construction and decoration industry, rating it as "Overweight" [1]. Core Insights - The report highlights that a moderately loose monetary policy is expected to release liquidity, and government investment is likely to recover [1]. - The construction decoration index decreased by 0.98%, underperforming the market, ranking 25th among 31 sectors [4][6]. - Key macroeconomic changes include the Central Economic Work Conference emphasizing the need to boost consumption and improve investment efficiency, alongside a more proactive fiscal policy [18]. Summary by Sections 1. Market Performance - The construction industry experienced a weekly decline of 0.98%, outperforming the ChiNext index but underperforming other major indices [4][6]. - The best-performing sub-industries for the week were ecological landscaping (+3.06%), design consulting (+2.56%), and decorative curtain walls (+2.16%) [6][9]. 2. Major Changes in the Industry - The Central Political Bureau meeting indicated a need for more proactive fiscal policies and a moderately loose monetary policy to stimulate domestic demand [18]. - The Central Economic Work Conference called for increased government investment to effectively drive social investment and promote urban renewal [18]. 3. Key Company Developments - China Metallurgical Group reported new contracts worth CNY 1,048.11 billion from January to November 2024, a year-on-year decrease of 12.1%, with overseas contracts increasing by 99.0% [20][22]. - China Power Construction won significant projects totaling CNY 138.72 billion, representing 2.28% of its 2023 revenue [20][22]. - China Communications Construction's subsidiary won a major project worth CNY 155.06 billion [22]. 4. Investment Analysis - The report suggests that infrastructure investment is expected to recover moderately in 2025, highlighting the investment value in cyclical sectors and undervalued state-owned enterprises [1][20]. - Specific recommendations include focusing on companies in the coal chemical sector like Donghua Technology and China Chemical, as well as steel structure firms such as Honglu Steel Structure [1][20].

Investment Rating - The report maintains a positive outlook on the oil and petrochemical industry, with a recommendation to focus on high-quality refining companies and polyester sector players [3][24]. Core Insights - The EIA has slightly lowered its oil price forecast for 2024 to an average of $80 per barrel and $74 for 2025, while also adjusting natural gas prices to $2.20 and $3.00 per million British thermal units for the same years [3][6]. - Global oil demand is expected to grow, with IEA forecasting an increase of 840,000 barrels per day in 2024 and 1.1 million barrels per day in 2025, while OPEC predicts growth of 1.61 million and 1.45 million barrels per day for the same years [3][8]. - The supply side is expected to be dominated by non-OPEC countries, with EIA projecting that nearly 90% of the oil supply growth will come from these nations [3][14]. Summary by Sections Upstream Sector - Brent crude oil prices rose to $74.49 per barrel, a 4.74% increase week-on-week, while NYMEX prices increased by 6.09% to $71.29 per barrel [3][28]. - U.S. commercial crude oil inventories decreased to 422 million barrels, down 1.425 million barrels from the previous week, indicating a supply tightness [3][32]. Refining Sector - The Singapore refining margin decreased to $9.83 per barrel, while the U.S. gasoline-WTI spread fell to $12.55 per barrel, below the historical average [3][24]. - The report anticipates improved refining profitability as oil prices adjust, with a gradual recovery expected as economic conditions improve [3][24]. Polyester Sector - PTA prices have been declining, with the average price in East China at 4,677.80 RMB per ton, down 1.14% week-on-week [3][24]. - The polyester industry is showing signs of improvement, particularly in demand, as the market enters a seasonal peak [3][24]. Investment Recommendations - The report suggests focusing on major refining companies such as Hengli Petrochemical, Rongsheng Petrochemical, and Oriental Energy, as well as polyester companies like Tongkun Co. [3][24]. - It also highlights the potential for growth in the ethylene sector, particularly for companies involved in ethane-based production [3][24].

Investment Rating - The report maintains a positive outlook on the home furnishing industry, indicating a potential recovery in valuations due to supportive policies and improving market conditions [2][9][18]. Core Insights - The home furnishing sector benefits from dual advantages of consumer demand and real estate policies, with ongoing optimization of the old-for-new subsidy policy expected to boost demand and enhance market share for leading companies [2][9][10]. - Consumer spending is anticipated to gradually recover, with a focus on high-quality companies, recommending stocks such as Baiya Co., Morning Glory Co., and Bull Group [2][19]. - The packaging sector is positively impacted by subsidies for consumer electronics packaging, particularly benefiting mid-to-high-end packaging companies like Yutong Technology [2][24]. - The paper industry is experiencing supply-demand improvements due to production cuts by major players, leading to price stabilization and potential long-term optimization of the industry structure [2][26][30]. Summary by Sections Home Furnishing - The home furnishing industry is expected to see valuation recovery supported by government policies aimed at stabilizing the real estate market and boosting consumer demand [2][9][18]. - The old-for-new subsidy policy has shown significant effects, with substantial sales driven by the program, indicating a strong recovery in consumer engagement [10][11][12]. - Recent data shows a notable increase in sales and transactions in the home furnishing sector, with a year-on-year growth of 1.9% in furniture retail sales from January to October [10][11]. Consumer Sector - Consumer spending is projected to improve, with a focus on companies that can leverage supply chain advantages and diverse channel strategies, recommending stocks like Baiya Co. and Morning Glory Co. [2][19][20]. - The report highlights the importance of product innovation and market expansion for sustained growth in the consumer sector [19][20]. Packaging Sector - The introduction of subsidies for consumer electronics packaging is expected to significantly stimulate demand, particularly for mid-to-high-end packaging firms like Yutong Technology [2][24][25]. - The report notes that the expansion of subsidy programs will likely enhance consumer demand for high-quality electronic products [24][25]. Paper Industry - The paper industry is witnessing a positive shift due to production cuts by major companies, which is expected to lead to improved supply-demand dynamics and price stabilization [2][26][30]. - The report indicates that the recent production cuts by Chenming Paper have resulted in a significant reduction in output, which is likely to support price increases in the near future [26][29][30].

Investment Rating - The report maintains a positive outlook on the non-bank financial industry, particularly highlighting the potential for valuation shifts in certain stocks [1]. Core Insights - The report emphasizes the comprehensive promotion of the personal pension system, which is expected to enhance the long-term growth trend of the industry. It notes that as of March 2023, the total contribution amount reached 18.2 billion yuan, with over 70 million participants, accounting for 5.0% of the total population [1][27]. - The report identifies key investment opportunities in the brokerage sector, driven by anticipated reforms in capital markets and a shift towards a more accommodative monetary policy, which is expected to boost brokerage performance in 2024 and 2025 [1][40]. - The report also highlights the importance of mergers and acquisitions within the brokerage industry, citing recent government initiatives to support such activities [1][35]. Summary by Sections Market Review - The Shanghai Composite Index closed at 3,933.18 with a weekly change of -1.01%, while the non-bank index closed at 1,939.62 with a change of -2.29%. The brokerage, insurance, and diversified financial sectors reported changes of -2.14%, -2.65%, and -2.21% respectively [1][16]. Non-Banking Industry News - The report discusses the implementation of the personal pension system nationwide starting December 15, 2024, which includes significant policy optimizations aimed at enhancing participation and product offerings [1][27]. - It also mentions the central government's focus on stabilizing the real estate and stock markets, which is expected to positively impact the capital market's activity [1][40]. Investment Analysis - The report suggests focusing on two main lines of investment: leading institutions benefiting from capital market reforms, such as CITIC Securities and Huatai Securities, and brokerage firms involved in mergers and acquisitions, such as Guotai Junan and Zheshang Securities [1][40]. - It also recommends monitoring financial information service companies like Dongfang Caifu, which are expected to benefit from market recovery [1][40]. Key Data Tracking - As of December 13, 2024, the 10-year government bond yield was 1.78%, reflecting a decrease of 13.97 basis points. The report notes that the average daily stock trading volume for the week was 19,332.28 billion yuan, indicating increased market activity [1][21][25].

Investment Rating - The report maintains a positive outlook on the cosmetics and medical beauty sector, indicating a "Buy" recommendation due to favorable market conditions and policy support [3][5]. Core Insights - The cosmetics and medical beauty sector has outperformed the market, with the Shenwan Beauty Care Index increasing by 2.5% from December 6 to December 13, 2024, surpassing the Shenwan A Index by 2.7 percentage points [3][10]. - The central government's focus on boosting consumption and expanding domestic demand is expected to benefit the beauty care sector significantly, with brands like Marubi and Shanghai Jahwa seeing nearly 10% growth in stock prices [3][16]. - The report anticipates a recovery in consumer demand in 2025, driven by improved economic expectations and the rise of domestic brands, which will enhance the competitive landscape [3][17]. Summary by Sections Industry Performance - The beauty care sector has shown strong performance, with the Shenwan Cosmetics Index growing by 1.9% and the Shenwan Personal Care Index increasing by 7.5% during the same period [10][12]. - The report highlights that the beauty care sector is closely correlated with macroeconomic expectations, with a notable rebound observed since September 2024 [3][16]. Investment Strategy - The investment strategy for 2025 emphasizes the importance of domestic brands, affordable pricing, and niche markets as key growth drivers [3][17]. - The report identifies four critical elements for the cosmetics sector: domestic brands, affordability, segmentation, and brand matrix, which are expected to support performance in 2025 [3][17]. - In the medical beauty segment, companies are expected to benefit from rising household incomes and a shift towards more affordable and specialized products [3][18]. Key News and Developments - A new company, Shanghai Shumei Household Cleaning Products, has been established by Shumei's subsidiary, indicating a strategic expansion into the household cleaning sector [4][29]. - The report notes a continued decline in imported cosmetics, with a 11.5% drop in quantity and a 9% decrease in value from January to November 2024 compared to the previous year [4][30]. - The report also highlights the increasing export of cosmetics, with a 35.1% year-on-year growth in volume and a 23.3% increase in value in October 2024 [4][30]. Recommendations - For cosmetics, the report recommends brands with comprehensive product matrices and strong performance in live e-commerce, such as Proya, Shumei, and Marubi [5][19]. - In the medical beauty sector, the report suggests focusing on companies with strong R&D capabilities and broad product pipelines, recommending Aimeike as a key player [5][22]. - The e-commerce segment is also highlighted, with recommendations to monitor companies like Nanji E-commerce and Ruoyu Chen [5][23].

Investment Rating - The industry investment rating is "Overweight" indicating a positive outlook for the pharmaceutical and biotechnology sector [1]. Core Insights - The report emphasizes the importance of supporting commercial health insurance development to enhance the accessibility and reimbursement of innovative drugs. It highlights the need for a multi-faceted payment mechanism for innovative drugs and the establishment of a category for Class B drugs [1][1]. - The report notes that the National Medical Security Work Conference has set a goal to strengthen strategic purchasing of medical insurance, which will empower innovation in the pharmaceutical industry [1][1]. - The report identifies potential investment opportunities in innovative drug companies and medical device firms that are likely to benefit from the development of commercial health insurance [1][1]. Summary by Sections Industry Overview - The report discusses the recent National Medical Security Work Conference held on December 14, 2024, which outlined the goals for medical insurance reform in 2025, focusing on the inclusion of more innovative drugs in the medical insurance catalog [1]. - It mentions that 24 innovative drugs, including CAR-T and several PD-1/PD-L1 monoclonal antibodies, have not yet been included in the national medical insurance catalog, indicating a gap in reimbursement for these products [1]. Investment Analysis - The report suggests that the development of commercial health insurance will address payment issues for innovative drugs post-launch, improve their accessibility, and enhance their return on investment [1]. - It also highlights that the establishment of a Class B drug catalog could lead to tiered payment systems based on innovation levels, thus supporting diverse consumer needs [1]. - Recommended investment targets include innovative drug companies such as Kintor Pharmaceutical, CanSino Biologics, and innovative device companies like Aibo Medical and Xinmai Medical [1].

Investment Rating - The report maintains a positive outlook on the pharmaceutical industry, rating it as "Overweight" [1]. Core Insights - The pharmaceutical sector experienced a decline of 0.9% this week, with the Shenwan Pharmaceutical and Biological Index ranking 24th among 31 Shenwan first-level sub-industries [4][6]. - The overall valuation of the pharmaceutical sector is at 28.5 times PE (2024E), ranking 9th among 31 Shenwan first-level industries [6][10]. - Key events include the central economic work conference emphasizing the need to increase urban and rural medical insurance subsidies and the exploration of a category C drug list [12][13]. - The 10th batch of national drug procurement results was announced, with 62 drugs successfully procured, marking a record high in the number of selected products [14]. - Shanghai has established a 10 billion yuan biopharmaceutical industry merger fund to promote innovation and restructuring in the sector [17]. Summary by Sections Market Performance - The Shenwan Pharmaceutical and Biological Index fell by 0.9%, while the Shanghai Composite Index decreased by 0.4% [4]. - The performance of various sub-sectors includes: raw materials (-1.0%), chemical preparations (-1.4%), traditional Chinese medicine (+0.6%), blood products (-0.7%), vaccines (-3.4%), and medical devices (-1.6%) [6][7]. Key Events - The central economic work conference held on December 11-12 focused on increasing basic pensions and medical insurance subsidies [12]. - The national medical insurance work conference on December 14 aimed to strengthen strategic purchasing and explore a category C drug list [13]. - The 10th batch of national drug procurement was conducted on December 12, with a record number of products selected [14]. - Shanghai's government announced a 100 billion yuan fund to support mergers and acquisitions in the biopharmaceutical industry [17]. Investment Recommendations - The report suggests focusing on CXO companies such as WuXi AppTec, Kanglong Chemical, and Kelun Pharmaceutical due to the blockage of the U.S. Biosecurity Act from being included in the NDAA [1]. - It also recommends paying attention to innovative drug companies like Hengrui Medicine, BeiGene, and Betta Pharmaceuticals in light of the exploration of a category C drug list [1].

Investment Rating - The report maintains a "Positive" outlook on the social services industry, highlighting the potential for growth driven by government policies aimed at boosting domestic demand [2]. Core Insights - The Central Political Bureau's meeting on December 9 emphasized the need to stimulate consumption and improve investment efficiency, signaling strong government support for domestic demand expansion [26][28]. - The "first store economy" is emerging as a trend, focusing on emotional consumption and innovative retail experiences, which is expected to invigorate traditional retail and urban economies [4][29]. - The tourism market is showing signs of recovery, with significant increases in travel demand for the upcoming New Year and Spring Festival holidays, indicating a rebound in consumer spending [31][33]. Summary by Sections Government Policy and Economic Outlook - The Central Political Bureau's meeting indicated a shift towards more proactive fiscal and monetary policies, with expectations of increased government leverage and liquidity measures to stimulate domestic demand [3][28]. - The emphasis on stabilizing the real estate and stock markets reflects the government's intent to enhance social expectations and consumer confidence [26]. Consumer Trends and Market Dynamics - The "first store economy" is characterized by new products and unique retail experiences, moving away from traditional cost-cutting strategies to meet emotional and social consumer needs [4][29]. - The upcoming holiday seasons are expected to drive significant growth in tourism, with domestic flight bookings for the New Year showing a 14% year-on-year increase and international bookings up by 58% [33][35]. Investment Recommendations - The report suggests focusing on specific sectors and companies that are likely to benefit from the anticipated increase in consumer spending, including: 1. Scenic spots: Changbai Mountain, Jiuhua Tourism, Emei Mountain, and others [4][66]. 2. Travel agencies: Lingnan Holdings, Zhongxin Tourism [4][66]. 3. Hotels: Jinjiang Hotels, Shoulu Hotels, Huazhu Group [4][66]. 4. Restaurants: Quanjude, Tongqinglou, Guangzhou Restaurant [4][66]. 5. Duty-free: China Duty Free Group, Wangfujing [4][66].