Investment Rating - The report assigns an "Overweight" rating to the non-bank financial sector, indicating a positive outlook for long-term investment in Hong Kong stocks [1]. Core Insights - The report highlights a valuation correction in the Hong Kong stock market, with expectations for continued improvement in the numerator, suggesting a favorable long-term allocation value [1]. - The report notes significant improvements in trading activity and liquidity in the Hong Kong market, with a monthly average daily turnover (ADT) of HKD 2,550 billion in October 2024, representing a month-on-month increase of 51% [1][9]. - The report emphasizes the importance of the interconnection mechanism established between mainland China and Hong Kong, which has seen substantial growth in cross-border trading and capital flows [1]. Summary by Sections Market Overview - In October 2024, the Hong Kong stock market experienced a notable increase in trading volume, with a northbound ADT of RMB 2,701 billion (up 108% month-on-month) and a southbound ADT of HKD 1,015 billion (up 64% month-on-month) [1][12]. - The report mentions that the number of new IPOs in October 2024 was eight, raising a total of HKD 131.5 billion, which is a decrease of 51% month-on-month [1][19]. Valuation Metrics - The Hang Seng Index's current price-to-earnings (PE) ratio is reported at 8.83x, which is in the 14.78% percentile over the past ten years, indicating a low valuation compared to historical levels [1][4]. - The risk premium for the Hang Seng Index is noted to be in the 39.35% percentile over the past decade, suggesting a favorable risk-return profile for investors [1][4]. Investment Recommendations - The report recommends buying shares of Hong Kong Exchanges and Clearing, China Aircraft Leasing, and AIA Group, citing their high sensitivity to earnings rates and strong performance potential [1].

Investment Rating - The report maintains a "Buy" rating for Alibaba, indicating a strong expectation for the company's performance relative to the market [3][12]. Core Insights - Alibaba reported a revenue of RMB 236.5 billion for Q2 FY25, reflecting a year-on-year growth of 5%. Adjusted EBITA decreased by 5% to RMB 40.6 billion, while non-GAAP net profit fell by 9% to RMB 36.5 billion, aligning with market expectations [3][6]. - The growth in Taotian's GMV is driven by increased purchase frequency and strategic investments in pricing, services, and membership benefits, leading to a significant rise in high-value user subscriptions [3][7]. - The international business segment showed robust growth, with revenue from the international digital commerce group increasing by 29% year-on-year to RMB 31.7 billion, and international retail commerce growing by 35% to RMB 25.6 billion [3][10]. - The Cloud Intelligence segment continues to accelerate, with revenue growth of 7% year-on-year to RMB 29.6 billion, and AI-related product revenue achieving triple-digit growth for five consecutive quarters [3][10]. - Share buybacks are ongoing, with Alibaba repurchasing 414 million shares for a total of USD 4.1 billion in Q3 FY24, enhancing shareholder returns [3][11]. Financial Data and Profit Forecast - For FY25E, Alibaba's revenue is projected to reach RMB 1,001.2 billion, with a year-on-year growth rate of 6.4%. Non-GAAP net profit is expected to be RMB 151.3 billion, reflecting a decline of 4.5% compared to the previous year [4][16]. - The adjusted EBITA for FY25E is forecasted at RMB 161.9 billion, with a steady increase in operating efficiency anticipated in the coming years [4][16].

Investment Rating - The report maintains a "Buy" rating for Bilibili (09626) [6][8]. Core Views - Bilibili achieved a revenue of 7.3 billion CNY in Q3 2024, representing a year-on-year growth of 26%, driven primarily by gaming and advertising businesses. The adjusted net profit was 240 million CNY, marking the first profitable quarter with a profit margin of 3.2% [6]. - The company announced a share repurchase plan, intending to buy back up to 200 million USD worth of shares over the next two years [7]. - User metrics reached new highs, with a Monthly Active User (MAU) count of 348 million, a year-on-year increase of 2%, and a Daily Active User (DAU) count of 107 million, a year-on-year increase of 4% [7]. - The report highlights the strong performance of the game "Three Kingdoms: Strategizing the World," which contributed significantly to gaming revenue, achieving 1.8 billion CNY in Q3, a year-on-year increase of 84% [10]. - Advertising revenue also saw substantial growth, reaching 2.1 billion CNY in Q3, a historical high with a year-on-year increase of 28% [10]. Financial Summary - Revenue projections for Bilibili are as follows: - 2022: 21,899 million CNY - 2023: 22,528 million CNY - 2024E: 26,738 million CNY - 2025E: 30,657 million CNY - 2026E: 33,038 million CNY [5][14]. - The adjusted net profit forecast for 2024 has been revised to -87 million CNY, while projections for 2025 and 2026 have been increased to 1.71 billion CNY and 3.088 billion CNY, respectively [8]. - The report indicates a significant improvement in gross margin, which reached 35% in Q3, reflecting a year-on-year increase of 10 percentage points [11].

Investment Rating - The report rates the AI industry as "Overweight," indicating a positive outlook for the sector's performance compared to the overall market [1]. Core Insights - The report highlights three key expectations regarding the AI sector: 1) Significant advancements in AI agent technology, with major players continuing to drive innovation 2) Current AI agent products are limited by data security and hardware performance, indicating they have not yet reached their final form 3) Future developments in B2B products and multimodal applications are anticipated to bring substantial changes [1][4][18]. Summary by Sections Market Perception and Technological Advancements - The market perceives AI as a short-term trend, but the report argues that there are substantial advancements in reasoning technology, with large models evolving from simple dialogue capabilities to complex task planning [4][6]. - Key advancements include task planning, memory capabilities, and tool usage, which are essential for AI agents to perform complex tasks [4][6]. Current Limitations of AI Agents - The report notes that current AI agent products are not user-friendly due to limitations in model capabilities, data security, and mobile performance, suggesting that they are far from their ultimate potential [4][7]. - The existing implementation path for AI agents involves reading UI elements, which slows down interaction and limits the agent's ability to learn from user history [9][11]. Future Developments and Market Opportunities - The report anticipates significant changes in B2B products and multimodal applications, with companies like ServiceNow and Atlassian enhancing their AI functionalities [18][19]. - Major companies are launching new AI agents, with Microsoft introducing ten new agents for its Dynamics 365 applications, which are expected to enhance productivity significantly [19][20]. Key Companies and Valuations - The report identifies several key companies in the AI sector, including: 1) Fanwei Network and Dingjie Zhizhi for B-end applications 2) Wanjing Technology and Hongsoft Technology for multimodal applications 3) iFLYTEK for AI education 4) Kingsoft Office and Foxit Software for AI office solutions 5) Xinzhi Software for AI finance 6) Rundar Medical for AI healthcare [21][22]. - Valuation data for these companies is provided, indicating their market capitalization and projected earnings [22].

Investment Rating - The report maintains a positive outlook on the non-bank financial industry, particularly focusing on personal pension systems and their development [1]. Core Insights - The report highlights a series of supportive policies aimed at enhancing the personal pension system, including the promotion of commercial insurance annuities and the expansion of enterprise annuity coverage [1][13]. - As of November 13, 2023, the total payment amount in personal pension accounts reached 18.2 billion, with over 60 million accounts opened, representing 4.26% of the total population [1][13]. - The scale of personal pension pilot products reached 218 billion, with 810 product offerings, indicating significant growth in the sector [1][17]. Summary by Sections 1. Policy Developments - The report discusses multiple policy initiatives aimed at strengthening the personal pension framework, including the promotion of a multi-tiered pension system and the enhancement of commercial insurance roles [1][13]. - Key policies include the Ministry of Human Resources and Social Security's push for universal insurance participation and the State Council's emphasis on developing third-pillar pension insurance [1][13]. 2. Channel Development - As of November 13, 2023, 23 banks have been included in the personal pension institution list, with 17 banks fully opening transactions for four types of personal pension products [2][36]. - The number of personal pension insurance products sold by banks reached 89, reflecting a significant increase in the distribution of these products [2][36]. 3. Business Structure - The report notes the continuous expansion of participating institutions and product offerings in the personal pension sector [3][40]. - Personal pension financial products have seen a total of 102 billion in scale, with 26 products available as of November 13, 2023 [3][40]. - The personal pension fund products reached a scale of 73 billion, with 200 products available, indicating a robust market presence [3][40]. - Personal pension insurance products have expanded to 119 offerings from 25 participating insurance companies, with accumulated pension reserves exceeding 10.6 billion [3][40]. 4. Product Performance - The annualized return for personal pension financial products ranges from -0.06% to 7.73%, with an average return of 3.69% [40][42]. - The report highlights that 80.8% of personal pension financial products have an annualized return above 3% [40][42].

Investment Rating - The report rates the industry as "Overweight" indicating a positive outlook for the sector [6][53]. Core Insights - The 2024 Double Eleven event showed significant growth, with total sales reaching 1,441.8 billion yuan, a year-on-year increase of 26.6% [3][10]. - Major platforms like Douyin, Pinduoduo, Kuaishou, Taobao, and JD.com experienced year-on-year sales growth of 18.8%, 15.8%, 11.3%, 10.2%, and 7.0% respectively during the Double Eleven period [3][10]. - The event's duration was extended, with platforms focusing on user experience and promotional strategies to enhance consumer engagement [4][16]. Summary by Sections Overall Overview - The 2024 Double Eleven event outperformed last year, driven by national policy support and enhanced promotional efforts from platforms [10][16]. - The average start time for the event was about 10 days earlier than in 2023, with a duration nearing one month, leading to a more sustained user engagement [4][16]. Platform Highlights - Taobao focused on expanding its core user base, achieving over 1.5 billion orders during the event, with a 50% increase in order numbers year-on-year [5][40]. - JD.com maintained its growth advantage in electronics, with market shares of nearly 44% in home appliances and 56.2% in 3C products [5][46]. - Content e-commerce platforms like Kuaishou and Douyin saw significant growth, with Kuaishou's first-day GMV reaching a historical peak, up 94% year-on-year [5][48]. Category Performance - Major categories such as beauty, apparel, digital 3C, home appliances, and maternal and infant products all saw substantial growth, with sales increases of 15.4%, 16.2%, 21.8%, 18.6%, and 21.8% respectively [21][22]. - Home appliances led category growth, with a sales share of 16.3%, marking a 0.7 percentage point increase from the previous year [21][22]. Investment Analysis - The report suggests that the extended promotional period and strong consumer policies have effectively boosted consumer spending, reversing the low growth trend observed in 2023 [6][53]. - Recommended companies for investment include Alibaba, Meituan, JD.com, and Pinduoduo, reflecting a strong outlook for these platforms [6][53].

Investment Rating - The report maintains an "Overweight" rating for the defense and military industry, indicating a positive outlook compared to the overall market performance [34]. Core Insights - The recent market adjustment has led to a significant decline in the defense and military sector, with the Shenwan Defense and Military Index dropping by 8.79%, underperforming compared to major indices [4][5]. - Despite short-term volatility, the long-term demand for military orders remains strong, supported by external trade factors and a recovering supply chain [4][9]. - The report highlights the acceleration of domestic reusable launch vehicle technology, which is expected to reduce costs and expedite satellite constellation deployment [4][9]. - The report suggests increasing focus on two categories of core stocks: elastic varieties (consumable weapons and military electronics) and value varieties (main manufacturers with stable growth) [4][9]. Summary by Sections Market Review - The Shenwan Defense and Military Index fell by 8.79%, while the CSI Military Leaders Index decreased by 9.72%, indicating a significant underperformance relative to the broader market indices [4][5]. - The report identifies the top five performing stocks in the sector, including Aerospace Engineering (up 14.79%) and Zhenxin Technology (up 7.32%), while the worst performers included Morningstar Aviation (down 19.95%) and AVIC Shenyang Aircraft (down 17.39%) [4][8]. Valuation Changes - The current PE-TTM for the defense sector is 70.42, placing it in the upper range historically, indicating a relatively high valuation compared to past performance [9]. Foreign Investment Trends - As of August 16, foreign ownership in the military sector remains stable at 2.56%, with a long-term upward trend observed in foreign investment [17][20]. Key Valuation Changes - The report provides a detailed valuation table for key stocks in the defense sector, highlighting their market capitalization and projected earnings [23].

Investment Rating - The report rates the aviation industry as "Positive" due to the recovery in international flights and growth in domestic passenger traffic [2][3]. Core Insights - In October, domestic airlines saw a year-on-year increase in capacity and passenger volume, with a total of approximately 64.56 million passengers, representing a 15.2% increase compared to 2023 and a 13.3% increase compared to 2019 [3]. - The average aircraft utilization rate for civil aviation was 7.9 hours per day, indicating potential for further improvement [3]. - Major airlines reported double-digit growth in passenger transport volume compared to 2023, with China National Airlines (+18%), Eastern Airlines (+15%), Southern Airlines (+11%), Spring Airlines (+15%), and Juneyao Airlines (+13%) [3]. Summary by Sections Domestic Market - Domestic airlines have slowed capacity growth, but passenger turnover has increased year-on-year. ASK (Available Seat Kilometers) growth for major airlines compared to 2023 includes: China National Airlines (+3%), Eastern Airlines (-1%), Southern Airlines (0%), Spring Airlines (+5%), and Juneyao Airlines (+1%) [3][6]. - RPK (Revenue Passenger Kilometers) growth for major airlines compared to 2023 includes: China National Airlines (+11%), Eastern Airlines (+9%), Southern Airlines (+7%), Spring Airlines (+6%), and Juneyao Airlines (+4%) [3][6]. International Market - International flights have further recovered, with Spring Airlines and Juneyao Airlines leading in year-on-year growth in capacity and volume. ASK growth compared to 2019 includes: China National Airlines (-4%), Eastern Airlines (-2%), Southern Airlines (-10%), Spring Airlines (-24%), and Juneyao Airlines (+114%) [3][6]. - RPK growth compared to 2023 shows significant increases, with Spring Airlines (+135%) and Juneyao Airlines (+158%) leading [3][6]. Regional Market - China National Airlines leads in regional market capacity growth compared to 2023, while Spring Airlines and Juneyao Airlines have reduced regional capacity. ASK growth compared to 2019 includes: China National Airlines (+5%), Eastern Airlines (+10%), Southern Airlines (-14%), Spring Airlines (-79%), and Juneyao Airlines (-3%) [3][6]. Investment Recommendations - The report suggests a positive outlook for the aviation sector, with stable domestic demand and ongoing recovery in international demand. Recommended stocks include Juneyao Airlines, Spring Airlines, Huaxia Airlines, China National Airlines, Southern Airlines, and Eastern Airlines [3][6].

Investment Rating - The report maintains a "Positive" outlook on the public utility and environmental sectors, particularly focusing on electricity and natural gas industries [3]. Core Insights - The report highlights significant growth in wind power generation, with a year-on-year increase of 34% in October, while hydropower continues to show negative growth [3][8]. - Global natural gas prices are experiencing seasonal increases, with notable price hikes in the US and Europe due to rising demand as the heating season begins [16][20]. Summary by Sections 1. Electricity - In the first ten months of 2024, the total industrial electricity generation reached 78,027 billion kWh, a 5.2% increase year-on-year, with October's generation at 7,310 billion kWh, up 2.1% year-on-year [3][8]. - Hydropower generation saw a decline of 14.9% year-on-year, while wind power generation contributed significantly with an increase of 203 billion kWh, accounting for 135% of the total generation increase [9][10]. - Recommendations include focusing on companies like China Yangtze Power and Guodian Power for hydropower, and China Nuclear Power for nuclear energy due to the acceleration in approvals for new units [14]. 2. Natural Gas - As of November 15, 2024, the Henry Hub spot price was $1.65/mmBtu, reflecting a weekly increase of 36.14%, while European gas prices also surged due to increased demand and supply constraints [16][20]. - The report suggests that the heating season's onset has led to a rise in domestic and LNG export demand in the US, contributing to price rebounds [16][20]. - Recommended companies include China Gas and Kunlun Energy, which are expected to benefit from improved profitability due to cost reductions and favorable pricing policies [34][36]. 3. Environmental Sector - The report anticipates benefits from debt reduction and policy facilitation in the environmental sector, recommending companies like Hongcheng Environment and Yongxing Co. for their stable performance and high dividend yields [3][14]. - It also highlights opportunities in water and solid waste management sectors, suggesting companies like Wuhan Holdings and Chuangye Environmental for potential investments [14].

Industry Investment Rating - The report maintains a positive outlook on the pet food industry, citing strong growth and market consolidation among leading brands [1][4] Core Viewpoints - The 2024 Double 11 shopping festival saw a significant increase in e-commerce platform sales, with pet food sales growing by 23% YoY [4][7] - Taobao Tmall's pet category sales grew by over 50%, with pet food sales increasing by more than 40% [8][9] - JD.com's pet business saw a 37% YoY increase in million-unit products and a 56% YoY increase in stores with doubled sales [15][18] - Domestic brands are performing well, with Maofudi being the only brand to rank in the top 2 across four categories on JD.com [18] Key Company Performance Guaibao Pet - Guaibao Pet achieved over 6.7 billion RMB in GMV during Double 11, a 65% YoY increase, with its brand Fuliangate surpassing 200 million RMB in sales, a 190% YoY growth [25][26] - Maofudi maintained its leading position with a 7.1% online market share from January to October 2024 [25] Zhongchong Co Ltd - Zhongchong's leading brand saw a 100%+ YoY growth during Double 11, with JD.com sales up 150% and Tmall sales up 100% [29] - The brand's baked pet food sales exceeded 500,000 bags, ranking in the top three in the industry [29] Petty Co Ltd - Jueyan brand maintained its leading position in the dog snacks category, achieving 42.5 million RMB in sales during Double 11, a 70% YoY increase [31] - Key products such as chicken and duck breast jerky and dog snack cans performed exceptionally well, ranking first and second on Tmall and JD.com respectively [31]