Investment Rating - The report suggests a positive outlook for the technology sector, particularly focusing on AI-related investments, recommending attention to key players like TSMC and NVIDIA [1][5]. Core Insights - The report emphasizes that generative AI is driving significant growth in the technology sector, with expectations for continued momentum into 2025. AI server demand is projected to grow rapidly, and the penetration of AI in consumer electronics is expected to enhance overall market demand [1][5]. - The semiconductor industry is highlighted as a major beneficiary of AI, with projected growth rates of 16% in 2024 and 12% in 2025. The report identifies TSMC and Huahong Semiconductor as attractive investment opportunities within the semiconductor space [1][5]. - The report also notes that the valuation of technology hardware is reasonable, suggesting an increase in positions within the sector due to the potential for upward movement in valuations [1][5]. Summary by Sections Generative AI and Technology Growth - Generative AI is initiating a super growth cycle in the technology sector, with significant market potential anticipated [5]. - The global AI market is expected to grow substantially, with a projected compound annual growth rate (CAGR) of 40% from 2024 to 2030, potentially reaching nearly $1 trillion by 2030 [9][55]. AI Server and Chip Demand - AI server shipments are forecasted to increase from 1.18 million units in 2023 to 2.14 million units by 2025, with penetration rates rising from 8.8% to 15% during the same period [7][9]. - The demand for AI chips is expected to accelerate, driven by the growth of AI servers and the need for enhanced computational power in consumer devices [21][22]. Semiconductor Industry Outlook - The semiconductor industry is projected to maintain growth, with AI being a significant driver of demand. The report anticipates a continued upward trend in the wafer foundry sector, particularly for major players [1][5]. - The report highlights the attractiveness of companies like Huahong Semiconductor and Nexperia, which are expected to benefit from the growth in automotive electronics and AI server-related power devices [1][5]. Consumer Electronics and AI Integration - The penetration of AI in smartphones is expected to reach 18% in 2024 and 29% in 2025, supporting growth in the smartphone supply chain [1][5]. - Companies like Xiaomi and BYD Electronics are identified as beneficiaries of the growth in consumer electronics driven by AI integration [1][5]. Valuation and Investment Strategy - Current valuations in the A-share electronics and semiconductor sectors are noted to be at historical high percentiles, suggesting potential for upward movement [1][5]. - The report recommends increasing positions in technology hardware due to the anticipated recovery in industry fundamentals and reasonable valuations [1][5].

Core Insights - The report emphasizes that the Central Economic Work Conference has released positive policy signals, prioritizing domestic demand expansion as a key focus for the upcoming year [4] - It highlights two main investment themes for the year: boosting consumption to expand domestic demand and leveraging artificial intelligence and new productive forces [5] Group 1: Policy Focus - The report indicates that policy stimulus will continue, with a focus on increasing the deficit ratio, issuing long-term special bonds, and implementing moderately loose monetary policies, including potential interest rate cuts [4] - The meeting stressed the importance of stabilizing the real estate and stock markets, which will help enhance consumer spending capacity and willingness [4] Group 2: Investment Themes - The first investment theme is to significantly boost consumption to expand domestic demand, with specific actions such as implementing special measures to stimulate consumption and enhancing support for new projects [5] - The second theme focuses on "Artificial Intelligence+" and the development of new productive forces, emphasizing the need for technological innovation to address challenges such as the diminishing demographic dividend and insufficient investment demand [5] Group 3: Market Outlook and Strategy - The report anticipates a structural market trend leading up to the National People's Congress, with more detailed policies being implemented [6] - It suggests a balanced investment strategy, recommending high-beta sectors like non-bank financials, consumer discretionary, and real estate during positive market sentiment, while defensive sectors like telecommunications should be favored during downturns [6]

Economic Outlook - The Central Economic Work Conference held on December 11-12, 2023, emphasized the need for continued economic stimulus and prioritizing domestic demand expansion for 2025[1] - The economic growth target for 2025 is likely to be set at 5% to demonstrate a commitment to stable growth[1] - The meeting highlighted the challenges faced by the economy, including insufficient domestic demand and pressures on employment and income growth[1] Fiscal Policy - The conference reiterated the implementation of a more proactive fiscal policy, with plans to increase the deficit ratio and the issuance of special bonds[1] - The projected budget deficit ratio for next year is maintained at 3.5%-4.0%, with an expected new special bond issuance of 4.2-4.5 trillion yuan[1] - An additional 8,000 billion yuan in special bonds is anticipated to support the acquisition of existing land and properties from real estate companies[1] Monetary Policy - The monetary policy stance has shifted to "moderately loose," with expectations for interest rate cuts and reserve requirement ratio reductions exceeding previous forecasts of 20-30 basis points and 50-100 basis points, respectively[2] - The central bank is expected to utilize structural tools to support key industries, particularly through a special relending program for acquiring existing land, with an initial scale of around 300 billion yuan[2] Real Estate Policy - The meeting emphasized the need to stabilize the real estate market, with ongoing efforts to promote sales and support the renovation of urban villages and dilapidated housing[3] - The government plans to facilitate the disposal of existing properties and land, with a focus on utilizing special bonds and relending to support these initiatives[3] Domestic Demand and Consumption - Expanding domestic demand is identified as a top priority for the coming year, with specific actions to boost consumption, including a special action plan for consumption[4] - Measures to increase disposable income for low- and middle-income groups are expected, including raising basic pensions and healthcare subsidies[4]

Inflation Data - The core CPI inflation rate in the US for November rose slightly by 0.03 percentage points to 0.31%, aligning with market expectations[1] - The overall CPI growth rate increased by 0.07 percentage points to 0.31%, also meeting expectations[1] - Year-on-year, the overall CPI rose by 0.1 percentage points to 2.7%, while the core CPI remained unchanged at 3.3%[1] Employment Data - The US non-farm payrolls for November added 227,000 jobs, which is in line with market expectations but primarily reflects recovery from previous disruptions[3] - The unemployment rate increased from 4.145% in October to 4.246% in November[3] - Average hourly earnings growth slowed to 0.37% month-on-month, down from 0.43% in October, although year-on-year growth remained at 4.0%[3] Federal Reserve Outlook - Based on the November employment and inflation data, the expectation is for a 25 basis point rate cut in December[3] - The Fed is likely to focus more on the rising unemployment rate than on persistent inflation, particularly with the decline in key inflation metrics like owners' equivalent rent[3] - There is a forecast for up to five additional rate cuts in the next year, each by 25 basis points, potentially stabilizing the policy rate at 3%[3]

浦银国际研究 浦银国际 主题研究 新能源汽车行业 2025 年展望 主题研究 | 新能源汽车行业 新能源汽车行业 2025 年展望：绿能 浪潮、出海领航、智驾未来 预计 2025 年中国新能源乘用车销量达 1,578 万辆，对应渗透率 53.7%， 维持加速上扬趋势：我们预计 2025 年中国新能源车乘用车销量将从 2024 年的 1,234 万辆成长到 1,578 万辆，同比增长 28%。虽然 2025 年 增速或不及 2024 年的 37%，但是销量相比 2024 年预计增长 344 万辆。 我们预计 2025 年的渗透率将达到 53.7%，增长 8.7 个百分点。渗透率加 速上扬是我们几年以来对于新能源车行业的基本判断。在此基础上，我 们预期蔚来、小鹏、理想、零跑这四家新势力 2025 年的新能源车销量 将分别达到 40.2 万、40.0 万、70.0 万、49.0 万辆（图表 87），同比均将 大幅成长，份额也会有所提升。零跑汽车和小鹏汽车是我们在新能源汽 车行业的首选，主要考虑到这两家车企受益于新车销量和海外增长的确 定性较高。而蔚来汽车、理想汽车也有望享受新车型带来的增量。我们 重申上述四家新能源 ...

Investment Rating - The report maintains an optimistic outlook on the pharmaceutical sector for 2025, particularly favoring innovative drugs and high-value consumables [6][56][77]. Core Views - The pharmaceutical sector has shown signs of recovery in the second half of 2024, despite a decline in the MSCI China Pharmaceutical Index and the Hang Seng Biotechnology Index [6][63]. - The report emphasizes the importance of government policies supporting innovative drugs and devices, which are expected to enhance the sector's fundamentals in 2025 [56][57][86]. - The report highlights the anticipated approval of several significant innovative drugs, including ADCs and GLP-1 drugs, which are expected to drive growth in the sector [123][129][134]. Summary by Sections 2024 Review - The MSCI China Pharmaceutical Index and the Hang Seng Biotechnology Index fell by 16% and 10% respectively, underperforming the broader MSCI China Index, which rose by 16% [6][63]. - The best-performing segments were pharmaceutical distribution and innovative drugs, with year-to-date increases of 14.4% and 13.6% respectively [6][63]. 2025 Pharmaceutical Sector Outlook - The report expresses a more optimistic view for 2025, driven by the gradual easing of anti-corruption impacts, clear policy support for innovative drugs, and the expected approval of several key innovative drugs [56][57][86]. - Specific recommendations include focusing on companies with strong R&D capabilities and significant commercialization potential, such as Kelun-Botai and Kangnuo [56][57][142]. Innovative Drugs - The report reiterates a positive outlook for the innovative drug sector, citing strong government support and the anticipated approval of multiple innovative drugs [56][57][76]. - Key companies to watch include Kelun-Botai, Kangnuo, and others with promising pipelines [56][57][142]. Medical Devices - The report is cautiously optimistic about the medical device sector, particularly high-value consumables, which are expected to recover in 2025 due to low performance in 2024 [58][149]. - Recommended companies include Guichuang Tongqiao and Mindray Medical [58][149]. CXO - The CXO sector is expected to benefit from a recovery in overseas financing and an increase in new orders, with companies like WuXi AppTec and Kanglong Chemical highlighted as potential beneficiaries [60][176][179]. Pharmaceutical Distribution & Traditional Chinese Medicine - The report emphasizes the attractiveness of dividend yields in the pharmaceutical distribution and traditional Chinese medicine sectors, with companies like China National Pharmaceutical Group and Shanghai Pharmaceuticals recommended [190][193]. Medical Services - The report highlights the supportive policies for assisted reproduction, suggesting that companies like Jinxin Reproductive Medicine may benefit significantly [218][227]. Conclusion - Overall, the report presents a favorable outlook for the pharmaceutical sector in 2025, driven by supportive policies, anticipated drug approvals, and recovery in various sub-sectors [56][57][86].

Investment Rating - The report gives an "Overweight" rating for the internet industry, indicating a positive outlook for investment opportunities [1]. Core Insights - The report highlights the divergence between the Chinese and American internet sectors, which are evolving into two distinct parallel worlds due to geopolitical tensions, with ongoing fragmentation and localized friction [1][28]. - Investment opportunities in the Chinese internet sector are primarily driven by policy-induced valuation recovery, while the American internet sector relies more on AI-driven performance [22][28]. - The report emphasizes that AI remains a key investment focus for 2025, with expectations of a global explosion in AI applications, potentially leading to a bullish market in the U.S. [1][22]. Summary by Sections Current State of U.S.-China Internet - Year-to-date, the Chinese and U.S. internet indices have increased by 16% and 36%, respectively, with the Chinese sector showing greater volatility [8][14]. - The Chinese internet sector has seen a significant recovery due to government stimulus policies, with a notable 40% increase in stock prices over a two-week period in late September 2024 [8][14]. AI Strategic Direction - U.S. internet companies are investing more aggressively in AI, with a focus on infrastructure, while Chinese firms are more conservative, preferring to use cash for dividends and buybacks [35][42]. - In 2023, China's total AI market investment was only about 12% of that in the U.S. [35]. Globalization Layout - U.S. internet giants derive approximately 50% of their revenue from overseas, while Chinese companies are accelerating their international expansion, with overseas revenue generally below 20% [55][62]. - The report notes that geopolitical risks, particularly under the Trump 2.0 scenario, may complicate the international strategies of Chinese firms [62]. Short Video Market Dynamics - The short video boom in China has led to the emergence of major players like ByteDance, significantly impacting traditional internet giants [65]. - In the U.S., the short video market is still developing, with TikTok facing restrictions, while platforms like Instagram and YouTube are adapting to capture market share [65]. Major Sector Growth Comparisons - The global digital advertising market is projected to grow at a CAGR of 15.5%, reaching $1.1 trillion by 2030, with Google and Meta holding a combined 48% market share [69]. - The Chinese digital advertising market is expected to grow at a rate of 10% from 2023 to 2025, with Alibaba and ByteDance each capturing about 25% of the market [72]. E-commerce Sector Insights - The U.S. e-commerce market is projected to grow at a CAGR of 9% from 2024 to 2029, with Amazon leading at a 37.6% market share [75]. - In China, the online retail sales of physical goods reached 10.33 trillion yuan in the first ten months of 2024, growing by 8.3% year-on-year [79].

Investment Rating - The report initiates coverage on Aikang Medical (1789.HK) with a "Buy" rating and a target price of HKD 6.8, indicating a potential upside of 27% from the current price of HKD 5.4 [4][5]. Core Views - Aikang Medical, as a leading domestic orthopedic joint company, continues to demonstrate strong bidding performance in the ongoing national procurement of joint products, despite short-term industry disruptions due to anti-corruption measures. The company is expected to see improved visibility in revenue growth in 2025 as these risks clear [1][2]. - The long-term growth potential is supported by Aikang's focus on technological research and development, being the first in China to apply metal 3D printing in orthopedic implants. The company aims to leverage 3D printing, ICOS, and surgical robots to create a digital orthopedic platform, expanding its presence in the mid-to-high-end market [2][3]. Financial Forecasts and Valuation - Revenue is projected to grow from RMB 1,052 million in 2022 to RMB 1,990 million by 2026, with a compound annual growth rate (CAGR) of 22% from 2023 to 2026. The expected revenue growth rates for the years 2024, 2025, and 2026 are 19.3%, 24.5%, and 22.5%, respectively [3][14][97]. - The net profit is forecasted to increase from RMB 205 million in 2022 to RMB 399 million by 2026, with significant growth anticipated in 2025 [3][14][97]. - The report assigns a target price based on a price-to-earnings (PE) ratio of 22x for 2025E, aligning with the company's historical average [2][97]. Industry Overview - The orthopedic industry is currently facing short-term pressures due to anti-corruption measures, but it is expected to benefit in the long term from a large patient base, increasing surgical penetration rates, and domestic product substitution [1][16]. - The national procurement of orthopedic consumables has largely been implemented, with joint products being the first to undergo this process. The average price drop in the recent procurement round was around 6%, indicating a moderate impact on pricing [24][57]. - The domestic orthopedic implant market's localization rate is approximately 50%, with significant room for improvement as domestic brands gain market share through national procurement initiatives [27][29]. Product Development and Innovation - Aikang Medical has a comprehensive product layout in the joint category, having launched various generations of knee and hip joint replacement products since 2004. The company has also expanded its product line through strategic acquisitions, enhancing its technological capabilities and market reach [52][53]. - The introduction of the ICOS platform allows for customized orthopedic solutions, which is expected to drive sales in the mid-to-high-end market segment [62][64]. International Expansion - Aikang Medical employs a dual-brand strategy with Aikang and JRI in overseas markets, focusing on cost-effectiveness and stable product quality. The company aims to increase its overseas revenue contribution from 19% in 1H24 to over 30% in the medium to long term [93][94].

Group 1 - The consumer industry in China is experiencing a weak recovery trend in 2024, with consumer confidence remaining low due to a sluggish real estate market and unfavorable employment conditions [1][17][20] - The overall retail sales growth for social consumer goods in the first ten months of 2024 was only 3.5%, with essential consumption performing slightly better than discretionary consumption [20][25] - The report anticipates that expanding domestic demand will be the primary driver of economic growth in 2025, with the government expected to implement stronger policies to boost consumer confidence [2][17] Group 2 - The report identifies four key questions for stock selection in the consumer sector under the uncertainty brought by Trump's potential re-election, focusing on companies' ability to maintain strong overseas sales, cater to lower-tier market demands, benefit from domestic substitution trends, and demonstrate strong earnings growth certainty for 2025 [2] - Companies that can effectively innovate products and adapt marketing strategies to meet the needs of lower-tier market consumers are expected to capture greater market share [2][25] - The cosmetics industry is highlighted as particularly benefiting from domestic substitution trends, with local brands expected to gain market share due to better marketing capabilities and cost-effectiveness [2][25] Group 3 - The report notes that the consumer industry faces challenges such as declining sales volumes and average selling prices due to weakened consumer purchasing power [25][28] - Companies are responding to competitive pressures by increasing promotional efforts and introducing more low-priced products to attract cost-conscious consumers [31][32] - The dairy industry is specifically mentioned as experiencing overcapacity, leading to increased competition and pressure on profit margins [37][39]

Investment Rating - The report maintains a "Buy" rating for Meituan, with a target price raised to HKD 200, indicating a potential upside of 19% from the current price of HKD 168.7 [3][6][23]. Core Insights - Meituan's Q3 2024 revenue reached RMB 936 billion, a year-on-year increase of 22.4%, surpassing market expectations by 1.7%. Adjusted net profit was RMB 128 billion, up 124% year-on-year, exceeding market expectations by 10.1% [1][2]. - The company's local business revenue grew by 20.2% year-on-year to RMB 694 billion, with delivery, commission, and advertising revenues increasing by 21%, 24%, and 18% respectively [2][3]. - New business revenue increased by 28.9% year-on-year to RMB 242 billion, with operating losses narrowing by 79.9% to RMB 10 billion, indicating a path towards profitability [3][5]. Summary by Sections Financial Performance - Q3 2024 adjusted net profit margin was 13.7%, compared to 16.5% in Q2 2024 and 7.5% in Q3 2023. Gross margin improved by 4.0 percentage points to 39.3% due to enhanced retail efficiency [1][2]. - Year-to-date, the company has repurchased approximately 4.2% of its total shares [1]. Business Segments - The core local business showed robust growth, with operating profit rising 45% year-on-year to RMB 146 billion and operating profit margin improving by 3.5 percentage points to 21.0% [2][3]. - The flash purchase business experienced double-digit growth in both user numbers and transaction frequency, while the hotel and travel segment saw order volume increase by over 50% [2][3]. Future Outlook - The report anticipates that new businesses, excluding Meituan Preferred, will achieve profitability next year, driven by strong growth in supermarket and selection businesses [3]. - The adjusted net profit forecast for FY25E has been raised to RMB 560 billion, reflecting confidence in the recovery of consumer spending and ongoing efficiency improvements from cross-selling initiatives [3][5].