Group 1: Core Conclusions - The tax competition index and tax refund rate for listed companies in China are currently at a 20-year high, indicating the urgent need for a unified market in China[2] - The European Single Market Scoreboard system provides valuable insights for China's unified market construction, focusing on historical context and operational mechanisms[2] Group 2: European Single Market Scoreboard - The Scoreboard uses a "traffic light" system to evaluate member states' performance, categorizing them as "green" (above average), "yellow" (average), or "red" (below average)[3] - It consists of three dimensions: Enforcement tools, Business Framework Conditions, and Outcomes and Competitiveness, with multiple quantifiable sub-indicators under each dimension[3][13] Group 3: Advantages of the Scoreboard - The evaluation system is quantifiable, allowing for cross-regional and temporal comparisons, with regular publication of results[3][14] - The Scoreboard emphasizes support for small and medium-sized enterprises, which can be a reference for China's market development[3][14] Group 4: Operational Mechanisms - The Enforcement tools dimension includes six indicators to assess the correct implementation of EU market rules, such as transposition deficit and infringement proceedings[6][35] - The Business Framework Conditions dimension evaluates member states' performance in creating a conducive business environment, with six indicators including market supervision and access to public procurement[9][10] Group 5: Implications for China - The Scoreboard's comprehensive evaluation can guide China in establishing its own unified market framework, focusing on governance, performance, and competitiveness[3][14] - The emphasis on resolving cross-border disputes and sharing government information through systems like IMI, SOLVIT, and EURES can enhance China's market efficiency[3][14]

Investment Rating - The report maintains a "Strong Buy" rating for Yanjing Beer (000729) with a target price of 15.5 CNY [2][9]. Core Insights - Yanjing Beer reported a total revenue of 13.43 billion CNY for the first three quarters of 2025, representing a year-on-year increase of 4.6%. The net profit attributable to shareholders reached 1.77 billion CNY, up 37.4% year-on-year [2]. - The company's U8 product line continues to show strong growth, with sales volume for Q3 slightly increasing to 1.1435 million kiloliters, driven by improved market conditions in September [9]. - Cost optimization has led to a decrease in unit costs by 2.8% to 2,125 CNY per kiloliter, contributing to a gross margin increase of 2.2 percentage points to 50.2% [9]. - The report highlights that the company is on track to meet its annual sales target of 900,000 tons for the U8 product, with a year-on-year growth of approximately 30% as of September [9]. Financial Performance Summary - For 2024A, total revenue is projected at 14.667 billion CNY, with a growth rate of 3.2%. The net profit is expected to be 1.056 billion CNY, reflecting a significant growth rate of 63.7% [5]. - The earnings per share (EPS) forecast for 2025E is 0.55 CNY, with a price-to-earnings (P/E) ratio of 23 [5][9]. - The company maintains a healthy balance sheet with a debt-to-asset ratio of 32.55% and a net asset value per share of 5.62 CNY [6].

Investment Rating - The report maintains a "Recommended" rating for the company, with a target price of 54.6 yuan for 2026 [2][6]. Core Insights - The company is expected to achieve a net profit attributable to shareholders of 156.785 billion to 177.689 billion yuan for the first three quarters of 2025, representing a year-on-year growth of 50% to 70% [2][6]. - The third quarter of 2025 is projected to yield a net profit of 115.854 billion to 136.758 billion yuan, indicating a quarterly growth rate of 75% to 106% [6]. - The significant growth in profits is primarily driven by increased equity investments, with the company actively seizing market opportunities [6]. Financial Performance Summary - **Revenue Forecasts**: - 2024: 528.567 billion yuan - 2025E: 597.961 billion yuan - 2026E: 538.228 billion yuan - 2027E: 581.141 billion yuan - **Net Profit Forecasts**: - 2024: 106.935 billion yuan - 2025E: 176.476 billion yuan - 2026E: 114.417 billion yuan - 2027E: 137.478 billion yuan - **Earnings Per Share (EPS)**: - 2024: 3.78 yuan - 2025E: 6.24 yuan - 2026E: 4.05 yuan - 2027E: 4.86 yuan - **Price-to-Earnings Ratio (P/E)**: - 2025E: 6.8 [2][6][7]. Investment Strategy - The company has increased its allocation to equity assets, with stocks rising by 1.12 percentage points to 8.7% and funds increasing by 0.28 percentage points to 4.92%, making a total equity asset allocation of 13.62% [6]. - The report highlights the company's strategy of flexible asset allocation to capture structural market opportunities, with total investment assets reaching 7.13 trillion yuan as of mid-2025, a 7.8% increase from the previous year [6][7].

Group 1: Stable Cash Flow Assets - Pharmaceutical commerce has a cash flow ratio of 55% in Q2 2025, indicating a stable cash flow generation capacity since 2021[11] - The hotel and catering industry shows a cash flow ratio of 49% in Q2 2025, with an average cash flow ratio of 50% from 2016 to 2024[18] - General retail has a cash flow ratio of 49% in Q2 2025, supported by reduced capital expenditures and inventory depletion[25] - Telecom operators maintain a cash flow ratio of 39% in Q2 2025, benefiting from stable demand and high user retention[32] Group 2: Improving Cash Flow Assets - The trade sector exhibits a cash flow ratio of 63% in Q2 2025, significantly improved due to reduced capital expenditures and inventory shrinkage[41] - The potential shareholder return rate for the trade sector is 7.1%, while the actual return is only 1.9%, indicating substantial room for dividend release[44] Group 3: Assets Under Pressure - The tourism and scenic area sector has a cash flow ratio of 21% in Q2 2025, with profitability still below pre-pandemic levels[51] - Professional services show a cash flow ratio of 13% in Q2 2025, with a significant decline in profitability due to weak demand[55] - Medical services have a cash flow ratio of 25% in Q2 2025, with profitability under pressure and limited dividend release potential[61] - The education sector has a cash flow ratio of 52% in Q2 2025, but profitability remains constrained post-regulatory changes[67] Group 4: High Expenditure Assets - The automotive services and IT services sectors are still in a high expenditure phase, with capital expenditures exceeding 1.5 in Q2 2025, indicating a new cycle of high spending driven by technological advancements[3]

Group 1: Historical Context - There have been five notable periods of divergence between export price growth and PPI, with four historical cycles analyzed[5] - In three of the four historical cycles, export prices converged downwards towards PPI, while only in the first cycle did PPI align upwards with export prices[5][15] - The first cycle (March 2006 - July 2006) was characterized by strong external demand, unlike the subsequent cycles where global export growth declined[20] Group 2: Current Economic Indicators - Current external demand shows improvement, with global goods export growth entering an upward trend since mid-2023[20] - China's export growth has stabilized in the current cycle, resembling the first cycle, while previous cycles experienced declining export growth[21][22] - The RMB has depreciated against the USD, but the extent of depreciation is smaller compared to cycles 2-4, with a recent trend of appreciation since July[25] Group 3: Supply and Demand Dynamics - Domestic supply-demand dynamics are crucial for PPI, with current indicators showing a supply-demand gap similar to cycles 2-4, indicating weaker demand compared to cycle 1[34][40] - The manufacturing PMI and new orders-production index differences suggest a more pronounced supply-demand imbalance in the current cycle[34][35] Group 4: Unique Factors in Current Cycle - Tariff impacts have led to significant structural adjustments in China's export regions and product types, with a notable decline in exports to low-price regions, particularly the U.S.[43][46] - The share of high-priced goods in China's exports has increased, with the share of equipment manufacturing products rising to 59.2% in the first eight months of 2025, the second highest since 2001[50][56]

1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Views of the Report - The GDP growth target of "5%" for the whole year is expected to be achieved. In the fourth quarter, "broad credit" will actively contribute, and investment may offset the slowdown in exports. With the injection of 500 billion yuan in policy - based financial instruments in late September and the allocation of 500 billion yuan in remaining quotas by the central government to local areas, investment is expected to recover [4]. - For the bond market, in the fourth quarter, with the implementation of "broad credit" and upcoming Sino - US negotiations, the internal economic momentum may improve marginally compared to the third quarter. The bond market may fluctuate in a narrow range on a new platform due to the intertwining of bullish and bearish factors [4]. 3. Summary by Relevant Catalogs 3.1 Third - Quarter Economic Data Overview: Investment Declines, Consumption Slows, and Exports Shine - **Overall Situation**: The cumulative growth rate of constant - price GDP in the first three quarters is 5.2%. The economy only needs to grow by more than 4.5% in the fourth quarter to achieve the annual target. In terms of rhythm, the GDP in the third quarter increased by 1.1% quarter - on - quarter, higher than that in the second quarter but lower than the same period in 2023 - 2024. In terms of price, the GDP deflator in the third quarter decreased by 1.0% year - on - year, higher than that in the second quarter, and the drag on nominal growth is narrowing [4][8]. - **Structural Features**: Investment weakening is prominent, and consumption also slows down, while exports rise against the trend, becoming a strong support for economic growth. In the third quarter, fixed - asset investment decreased by about 6.5% year - on - year, social retail sales increased by 3.4%, and exports increased by 6.6% [4][9]. - **Fourth - Quarter Outlook**: Consumption base increase may suppress readings, and exports may face marginal weakening pressure. However, with the injection of policy - based financial instruments and the allocation of remaining quotas, investment is expected to repair and offset the decline in exports to some extent [4][11]. 3.2 September Data Interpretation: Production Returns to Strength 3.2.1 Infrastructure: Policy Effects Begin to Appear, and Traditional Infrastructure Improves Marginally - From January to September, the cumulative year - on - year growth rate of infrastructure investment (excluding electricity) is +1.1%, and the full - scale infrastructure investment is +3.3%. In September, the year - on - year growth rate of infrastructure investment excluding electricity is - 4.6%, and the full - scale infrastructure is - 8.0%. In late September, the first batch of new policy - based financial instrument funds was injected, and high - frequency indicators improved, indicating an upward trend in infrastructure investment in October [1][20]. 3.2.2 Real Estate: Investment Decline Widens, and Sales Remain Stable - From January to September, the cumulative year - on - year growth rate of real estate investment is - 13.9%, and the single - month year - on - year is - 21.3%, a further decline of 1.8 percentage points. The year - on - year decline in residential sales area in September is - 11.4%, an expansion of 1.7 percentage points from the previous month. The "Golden September" market is weaker than last year, and the high - base effect may be more significant in the fourth quarter [1][24]. 3.2.3 Manufacturing Investment: Decline Continues to Widen - In September, manufacturing investment decreased by 1.9% year - on - year, with the decline expanding by 0.6 percentage points. From January to September, the cumulative year - on - year growth rate is +4.0%. The domestic price environment has not recovered, and corporate profit expectations need to be strengthened [2][25]. 3.2.4 Consumption: Weak Month - on - Month Growth and High Base Drag Down Social Retail Sales - In September, social retail sales increased by 3.0% year - on - year, a further decline of 0.4 percentage points from the previous month. The month - on - month growth rate after seasonal adjustment turned negative to - 0.18%. Due to the high - base effect of state - subsidized categories last year, the retail growth rate of related categories decreased in September this year, while communication equipment and furniture retail had relatively high growth rates [2][29]. 3.2.5 Industry: Export Pull and Peak Production Season Drive Industrial Growth to Return to Strength - In September, the industrial growth rate increased by 6.5% year - on - year, 1.3 percentage points higher than in August. The month - on - month growth rate after seasonal adjustment is +0.64%. Exports exceeded expectations in September, and the year - on - year growth rate of export delivery value increased to +3.8%, which promoted manufacturing production [2][34].

Investment Rating - The report maintains a "Buy" rating for high dividend and stable performance assets in the transportation sector, indicating that it is an opportune time for allocation in transportation dividend assets [2]. Core Insights - The transportation sector has shown strong performance in October 2025, outperforming the CSI 300 index, with highways and ports leading the gains [5][11]. - The low interest rate environment continues to support the sector, with stable government bond yields [21]. - The report highlights the potential for high dividend yields in A/H shares, with specific recommendations for companies like Sichuan Chengyu and Wutong Expressway [5][18]. Monthly Market Performance - In October 2025, the transportation sector rose by 1.46%, outperforming the CSI 300 index by 4.18 percentage points, ranking 5th among 31 sectors [10]. - The performance of dividend assets (highways, railways, ports) was particularly strong, with highways up 4.48%, railways up 0.33%, and ports up 3.05% from October 1 to October 17 [11][14]. Industry Data - Highway passenger volume in August 2025 was 950 million, down 5.1% year-on-year, while freight volume increased by 3.9% [29]. - Railway passenger volume in September 2025 was 341 million, a slight decrease of 0.2% year-on-year, but cumulative volume for the year increased by 6% [40]. - Port cargo throughput for the first eight months of 2025 reached 1.2 billion tons, up 4.4% year-on-year, with container throughput also showing strong growth [49][51]. Investment Recommendations - The report suggests focusing on high dividend yield stocks in the transportation sector, particularly in highways and ports, with specific companies highlighted for their strong performance and dividend potential [5][18]. - Key recommendations include Sichuan Chengyu (6.3% dividend yield), China Merchants Port (5.9%), and Anhui Wantong Expressway (5.2%) [20].

Group 1: Liquidity and Fund Flow - The net inflow of industry ETFs reached 17.04 billion, marking a three-year high[8] - Southbound funds have accumulated a net inflow of over 560 billion in the past five months[2] - The net inflow of leveraged funds turned negative, with a net outflow of 14 billion last week[14] Group 2: Market Trends and Investor Sentiment - The Shanghai Composite Index opened down 2.5% on October 13 due to escalating US-China trade tensions, leading to a surge in A-share search interest[2] - Retail investor net inflow reached 191.15 billion, an increase of 108.94 billion from the previous value, placing it in the 92.9 percentile over the past five years[2] - The public fund issuance increased significantly, with 5.65 billion shares newly issued last week, compared to 0.85 billion previously[10] Group 3: Trading Activity and Sector Performance - The trading heat for the machinery sector rose by 28 percentage points to 50%, while the healthcare sector dropped by 22 percentage points to 43%[7] - The net inflow in the non-ferrous metals sector was 6.09 billion, while the electronics sector saw a net outflow of 7.19 billion[23] - The overall net inflow of stock ETFs was 26.08 billion, with thematic ETFs contributing 24.55 billion[24]

Group 1: Inbound Consumption Growth - Inbound consumption is expected to grow by over 40% this year, contributing approximately 0.2 percentage points to the annual retail sales growth[1] - By 2024, inbound tourists are projected to reach 132 million, with total spending of $94.2 billion, recovering to 97.2% and 93.5% of 2019 levels respectively[1] - The average spending per inbound tourist in 2024 is estimated at $714, slightly below the 2019 figure of $742[1] Group 2: Policy Support and Impact - The expansion of visa-free access has increased the number of countries with unilateral visa exemptions to 47, leading to a 52.1% increase in visa-free inbound tourists[3] - The optimization of tax refund policies has resulted in a 97.5% increase in sales of tax-refunded goods, with the number of beneficiaries rising 2.5 times[3] - The expected increase in inbound consumption this year is estimated at around 263.8 billion RMB, which is about 0.2 percentage points of the total retail sales[4] Group 3: Future Projections - In 2025, inbound tourist numbers and total spending are likely to see double-digit growth, surpassing 2019 levels[2] - The inbound consumption's share of GDP is projected to be around 0.5% in 2024, compared to 1% to 3% in major global economies, indicating significant growth potential[4]

Report Industry Investment Rating No information provided regarding the report industry investment rating. Core Viewpoints of the Report - The current round of Sino-US trade conflict heated up in October, but high tariffs may not last long. The market is relatively stable in sentiment, and the callback disturbance is limited. [3][6] - The demand - side support for convertible bonds remains. ETF funds in the convertible bond market are stronger than in April, catalyzing relatively firm valuations. [3][8] - There are structural differentiations in the convertible bond market. High - parity convertible bond valuations are compressed, and the market preference has shifted to the financial sector. [3] - Attention should be paid to the structural opportunities of convertible bonds, especially high - parity equity - biased varieties with large pullbacks and medium - and low - rated varieties that have corrected this time. [3] Summary According to the Directory I. Tariffs Rise Again, but Disturbance May Be Controllable - The Sino - US trade conflict heated up in October with frictions in multiple aspects. High tariffs may not last long and are mainly for bargaining chips. The market is relatively stable with over 90% probability that tariffs won't be implemented on November 1st and about 80% probability of a tariff agreement before November 10th. [3][6] - Market expectations are stable, and the callback disturbance is limited. The market performance after the restart of tariff disturbances was better than in April, and the VIX index was lower. [3][8] - The demand - side support for convertible bonds remains. The combined share of relevant ETFs increased by 41.49% compared to April 7th, catalyzing relatively firm valuations. [3][8] - There are structural differentiations in the convertible bond market. High - parity convertible bond valuations are compressed, and the market preference has shifted to the financial sector. Bank convertible bond prices rose by 1.6% from October 9th to October 17th, outperforming the convertible bond index by 3.9pct. [3][12] - Attention should be paid to the structural opportunities of convertible bonds. The median convertible bond price is around 130 yuan, and the 100 - yuan premium rate fluctuates at 30%. There may be opportunities in high - parity equity - biased varieties and medium - and low - rated varieties. [3][13] II. Market Review: Weekly Callback of Convertible Bonds, Slight Compression of Valuations (1) Weekly Market Quotes: Convertible Bond Market Callback, Weak Performance in Each Sector - Last week, major stock indexes performed weakly. The Shanghai Composite Index fell 1.47%, the Shenzhen Component Index fell 4.99%, the ChiNext Index fell 5.71%, the SSE 50 Index fell 0.24%, the CSI 1000 Index fell 4.62%, and the CSI Convertible Bond Index fell 2.35%. [15] - There are 418 issued and unexpired convertible bonds with a balance of 5752.81 billion yuan. Yingliu Convertible Bonds will be listed on October 22nd. [15] - In the equity market, most industries performed weakly last week. Only the banking, food and beverage, and transportation industries rose. In the convertible bond market, most also declined, with only environmental protection and banking rising. [17] (2) Valuation Performance: High - Rating and Large - Scale Convertible Bond Premium Rates Compressed More - The weighted average closing price of convertible bonds was 129.46 yuan, a 2.30% decline from the previous Friday. The closing prices of equity - biased, debt - biased, and balanced convertible bonds all decreased. The proportion of the 110 - 120 (including 120) price range increased significantly. [22] - The median price was 129.36 yuan, a 2.27% decline from the previous Friday. The 100 - yuan par - value fitted conversion premium rate was 29.74%, a 0.62pct decline from the previous Friday. [22] - High - rating and large - scale convertible bond premium rates compressed more. The AAA rating declined 1.93pct, and the premium rate of convertible bonds over 5 billion yuan declined 1.76pct. The 120 - 130 (including 130) yuan par - value range declined 5.85pct. [22] III. Terms and Supply: 5 Convertible Bonds Announced Early Redemption, Total Pending Issuance Scale About 8.9 Billion (1) Terms: 5 Convertible Bonds Announced Early Redemption Last Week, No Convertible Bond Board Proposed Downward Revision - As of October 17th, Hengbang, Sheng 24, Chenfeng, Changji, and Nuitai Convertible Bonds announced early redemption; Mengsheng, Tairui, Xinzhi, Huicheng, and Yanpai Convertible Bonds announced no early redemption; Shenma, Tongcheng, Fuchun, Youfa, Zhonghuan Zhuan 2, and Youcai Convertible Bonds announced that they were expected to meet the early redemption conditions. [1][43] - As of October 17th, no convertible bond announced a downward - revision proposal last week. Zhengchuan Convertible Bonds announced the downward - revision result. Nine convertible bonds announced no downward revision, and seven were expected to trigger downward revision. [1][43] (2) Primary Market: Yingliu Convertible Bonds to Be Listed Soon, Total Pending Issuance Scale About 8.9 Billion - Last week, Jinlang Zhuan 02 and Funeng Convertible Bonds were issued, with a total scale of 5.479 billion yuan. Yingliu Convertible Bonds will be listed this week, with a scale of 1.5 billion yuan. [1][46] - Last week, 3 companies had new board proposals, 1 company passed the shareholders' meeting, no company passed the CSRC review committee, and 2 companies got CSRC approval, compared with +3, +1, - 1, +2 respectively compared to the same period last year. [1][47] - As of October 17th, 3 listed companies got convertible bond issuance approvals with a proposed issuance scale of 2.322 billion yuan. Six companies passed the CSRC review committee with a total scale of 3.983 billion yuan. Three new board proposals last week included Zhongqi Co., Ltd., Mankun Technology, and Huatong Cable, with a total scale of 2.599 billion yuan. [2][53]