Investment Rating - The report maintains a rating of "Outperform" for the industry [73]. Core Views - The 2025 annual electricity transaction volume and price in Jiangsu province are expected to decline by 9% year-on-year, indicating intense competition among market participants [40][41]. - Jiangsu province has initiated a competitive allocation for 7.65GW of offshore wind projects, which is anticipated to contribute to the increase in offshore wind capacity in the region [45]. - In November, the output from hydropower and wind power decreased year-on-year, while the overall electricity consumption growth rate has slowed down [49]. Summary by Sections Industry Dynamics - The total electricity generation in November was 7,495 billion kWh, showing a year-on-year growth of 0.9%, which is a decline compared to previous months [27][49]. - Hydropower generation decreased by 1.9% year-on-year, while thermal power generation increased by 1.4% [27][49]. Company Announcements - Longyuan Power issued a mid-term note with a total amount of 2 billion yuan and a coupon rate of 1.85% [1]. - Zhaoxin Co. is engaging in a financing lease with a maximum amount of 50 million yuan for a term of 120 months [2]. - The company Tianfu Energy has projects that are expected to reduce revenue by approximately 78.61 million yuan due to changes in subsidy eligibility [2]. Investment Recommendations - The report suggests focusing on companies in the hydropower sector such as Changjiang Power and Qianyuan Power, while being cautious with companies like Guotou Power and Huaneng Hydropower [53]. - In the thermal power sector, it recommends attention to Sheneng Co. and Funeng Co., while being cautious with Huadian International and Jiangsu Guoxin [53]. - For nuclear power, China Nuclear Power is recommended, while China General Nuclear Power is advised with caution [53].

Investment Rating - The report maintains an "Outperform" rating for the home appliance industry [3]. Core Insights - The introduction of the "gift-giving" feature by WeChat Mini Store simplifies the gifting process, potentially creating new opportunities in social e-commerce. This feature eliminates the need to ask for the recipient's address or preferred style, significantly reducing the complexity of the gifting process. The timing of the feature's gray testing aligns with the upcoming Spring Festival, which could leverage WeChat's extensive social resources to drive growth in social e-commerce, marking a transformation following community and live-streaming e-commerce [1][39]. - Companies with products that have strong gifting attributes are expected to benefit from this trend, with recommendations to focus on Feike Electric, Beike, Bear Electric, Edifier, XGIMI Technology, and Beiding Co. [39]. Summary by Sections Weekly Investment View - The home appliance sector experienced a weekly decline of 0.7%, with specific segments showing varied performance: white goods +0.0%, black goods +0.1%, small appliances -3.7%, and kitchen appliances -5.2%. In terms of raw material prices, LME copper and aluminum decreased by 2.18% and 3.29% respectively compared to the previous week [10][64]. Policy Support and Market Recovery - The report suggests that domestic demand is expected to recover due to policy support. Key areas to watch include: 1. Major appliances benefiting from trade-in programs, with a focus on Midea Group, Haier Smart Home, Gree Electric, Hisense Home Appliances, TCL Electronics, and Hisense Visual [11]. 2. The pet industry, seen as resilient during economic downturns, with recommendations for Guibao Pet, Zhongchong Co., and Petty Co. [11]. 3. Small appliances and branded apparel, which have been significantly impacted by weak consumer demand, are expected to see a rebound next year, with a focus on leading small appliance brands like Bear Electric, Feike Electric, Supor, and Xinbao [11]. 4. The electric two-wheeler market is anticipated to improve, with recommendations for leading companies like Yadi Holdings, Aima Technology, and Ninebot [11]. Global Manufacturing and Export Opportunities - The report highlights the ongoing theme of international expansion, suggesting that: 1. Leading brands in cleaning appliances are expected to benefit from global product strength and increasing penetration rates, with a focus on Stone Technology and Ecovacs [42]. 2. Major appliance leaders are pushing brand transformations and gaining market share globally, with recommendations for Haier Smart Home, Midea Group, Hisense Home Appliances, TCL Electronics, and Hisense Visual [42]. 3. Motorcycle brands are still in the early stages of international expansion, with significant growth potential, recommending Chuanfeng Power, Qianjiang Motorcycle, and Longxin General [42]. 4. Tool categories are expected to benefit from potential recovery in the real estate sector, with recommendations for Juxing Technology, Techtronic Industries, and Ousheng Electric [42]. Market Trends and Data - The report includes various market data and trends, indicating that the textile and apparel sector also faced a decline of 3.17% this week, with specific segments showing different performance metrics [24].

Industry Investment Rating - The industry maintains a "Stronger than the Market" rating [47] Core Views - The automotive industry is experiencing significant growth in new energy vehicle (NEV) sales, with NEV penetration rates reaching 45.6% in November [70] - The industry is benefiting from government policies such as "large-scale equipment updates and consumer goods replacement," which have driven sales of vehicles, home appliances, and other consumer goods [21] - The sector is also seeing rapid development in the electric vehicle (EV) ecosystem, particularly in battery swapping technology led by CATL [27][28] Market Performance - From December 16 to December 20, 2024, the automotive sector underperformed the CSI 300 index by 0.9 percentage points, with a decline of 1% compared to the CSI 300's 0.1% drop [40] - Year-to-date, the automotive sector has risen by 18%, ranking 7th among the 31 Shenwan sectors [40] Key Data Highlights Sales Data - In November, total vehicle sales reached 3.316 million units, up 11.7% year-over-year (YoY) and 8.6% month-over-month (MoM) [69] - NEV sales in November were 1.512 million units, a 47.4% YoY increase, with a market penetration rate of 45.6% [70] - From December 1-15, passenger vehicle retail sales were 1.083 million units, up 34% YoY and 14% MoM, while NEV retail sales were 536,000 units, up 71% YoY and 6% MoM [87] Inventory and Export - The dealer inventory coefficient in November was 1.11, below the warning line, indicating improved inventory management [69] - Vehicle exports in November were 490,000 units, down 9.5% MoM but up 1.6% YoY [69] Industry News - CATL launched its "Chocolate Battery Swap" ecosystem, aiming to build 1,000 self-operated swap stations by 2025 and expand to 30,000 stations through partnerships [28] - NIO unveiled its third brand, Firefly, targeting the high-end smart compact car market, with the first model set to launch in April 2025 [31] - Avita Technology completed its Series C funding round, raising over 11 billion yuan, with investments from Changan Automobile and other strategic investors [18] Key New Vehicle Launches - NIO ET9, a premium electric sedan, was launched with a starting price of 788,000 yuan, featuring advanced technologies such as a 900V high-voltage architecture and a 100 kWh battery pack [50][39] - Other notable launches include the iCAR V23, Fengyun A8L, and Mercedes-Benz GLC PHEV, catering to various segments from compact SUVs to luxury vehicles [60] Valuation and Sector Performance - The automotive sector's PE-TTM is 25.77x, at the 61.33% historical percentile, while the PB ratio is 2.43x, at the 67.65% historical percentile [86] - Sub-sectors such as passenger vehicles and commercial vehicles are trading at higher valuations compared to historical levels [86]

Investment Rating - The report maintains a strong rating for the pharmaceutical and biotechnology sector, indicating a positive outlook for investment opportunities in this industry [26]. Core Insights - The report highlights the significant growth potential in the stem cell market, with an estimated market size of approximately 26.5 billion yuan in 2024, driven by advancements in stem cell collection, preparation, and storage [11]. - The FDA's recent approval of the first mesenchymal stem cell (MSC) therapy marks a pivotal moment for the industry, suggesting a growing acceptance and potential for stem cell treatments in addressing unmet clinical needs [28]. - The report emphasizes the importance of innovation, recovery, and policy support as key drivers for the pharmaceutical sector, suggesting that companies focusing on innovative drugs and medical devices are likely to outperform [29]. Summary by Sections 1.1 Pharmaceutical Mid-term Investment Strategy - The report suggests gradually increasing allocations in the pharmaceutical sector, anticipating excess returns post semi-annual reports [50]. - Key policies impacting the sector include the comprehensive promotion of DRG/DIP, which will lead medical institutions to prioritize cost-effectiveness [50]. 1.2 Weekly Performance of Recommended Portfolio - The report provides insights into the performance of recommended stocks, indicating that the weekly portfolio outperformed the pharmaceutical index by 1.7 percentage points [17]. - The monthly performance showed a slight underperformance against the pharmaceutical index by 0.5 percentage points [18]. 2 Stem Cell Drug Focus - The stem cell industry is segmented into upstream (reagents, biomedical materials, and equipment), midstream (transportation, collection, storage, and drug development), and downstream (clinical treatment and consumer applications) [10]. - The report notes that while no stem cell drugs have been approved in China yet, the number of related drug development projects is increasing, with 45 IND applications accepted in 2023 [14][21]. 2.1 FDA Approval and Domestic Developments - The FDA's approval of Ryoncil for treating steroid-refractory acute graft-versus-host disease (aGVHD) is a significant milestone, with expectations for similar approvals in China [28]. - The report mentions that the first domestic stem cell drug application for aGVHD has been accepted, indicating a promising future for stem cell therapies in China [59]. 3 Market Review and Trends - The report reviews the recent performance of the pharmaceutical sector, noting a decline in the index and suggesting that the sector is not currently a market leader [33]. - It highlights the potential for recovery in the medical device sector, driven by improved bidding conditions and consumer spending [34]. 4 Recommended Stocks - The report recommends focusing on companies with strong innovation capabilities and those positioned to benefit from policy changes, including Huahai Pharmaceutical, Kunming Pharmaceutical, and Zhongyuan United [35].

Investment Rating - The report maintains an "Outperform" rating for the light industry sector [10]. Core Insights - The furniture retail sales in November showed a year-on-year increase of 10.5%, driven by national subsidies and a recovery in the real estate sector, indicating a continuous improvement in home demand [1][49]. - The cultural paper industry is expected to see a recovery in profitability, with leading companies announcing price increases for January and February 2025 [3][62]. - The report highlights the positive performance of exports in insulated cups and pet food, with significant growth in U.S. home sales, suggesting potential investment opportunities in related sectors [11]. Summary by Sections Furniture Industry - In November, furniture retail sales increased by 10.5% year-on-year, with a month-on-month growth of 3.1 percentage points [1]. - The construction area in November decreased by 40.1% year-on-year, while residential sales area increased by 4.2% year-on-year, indicating a recovery trend in the housing market [2]. - Companies like Mousse Holdings are expanding their overseas production and sales channels, enhancing their market presence in Southeast Asia [2]. Paper and Packaging - As of December 20, 2024, prices for various paper products showed slight increases, with white card paper at 4,240 RMB/ton (+10 RMB/ton) and corrugated paper at 2,918.13 RMB/ton (+41.88 RMB/ton) [3][56]. - The report suggests focusing on companies with integrated supply chains and diverse paper products, such as Sun Paper and Huawang Technology, which are expected to benefit from improved domestic demand [3]. Textile and Apparel - The textile and apparel sector experienced a year-on-year decline of 4.5% in retail sales for November, but cumulative sales from January to November showed a slight increase of 0.4% [7]. - The report anticipates a gradual recovery in consumer demand for branded apparel and home textiles due to government subsidy policies [7]. Export Trends - Exports of insulated cups and pet food showed strong performance in November, with year-on-year increases of 12% and 16%, respectively [11]. - The U.S. housing market is showing signs of recovery, with a notable increase in home sales, which may positively impact related export businesses [11].

Economic Data - In November, the industrial added value of large-scale industries grew by 5.4% year-on-year, a slight increase of 0.1 percentage points from the previous month[10] - Retail sales maintained growth, with a slight slowdown in commodity retail but an acceleration in catering revenue[10] - Fixed asset investment growth slightly declined year-on-year, while manufacturing investment continued to maintain high growth[10] Monetary Policy - The Federal Reserve lowered the federal funds rate by 25 basis points to a range of 4.25%-4.5%, aligning with market expectations[2] - The latest dot plot from the December FOMC indicates a reduction in the expected rate cut space for 2025 from 100 basis points to 50 basis points due to increased inflation expectations[2] - The Bank of Japan maintained its benchmark interest rate at 0.25%, marking the third consecutive pause in rate hikes, amid rising inflation and economic recovery[11] Market Outlook - Despite short-term market volatility and a significant drop in U.S. stocks, a long-term positive outlook for U.S. stocks and bonds remains[2] - Real estate sales showed improvement, with year-on-year sales turning positive for the first time in over a year, and a narrowing decline in housing prices[10]

Core Concept: Certainty Growth - The report introduces the concept of "certainty growth," which refers to companies that can maintain solid growth even under the most pessimistic performance expectations, indicating high confidence and certainty in future performance [2] - Certainty growth companies are expected to benefit from policy effects and economic recovery, with their growth attributes allowing them to fully capitalize on development dividends [2] - These companies are also seen as having strong defensive capabilities in the face of overseas disturbances and risk aversion [2] - The report identifies certainty growth companies primarily in industries such as electronics, pharmaceuticals, power equipment, defense, and machinery, which are aligned with strategic emerging industries and the cultivation of new productive forces [2][36] New Productive Forces: Low-Altitude Economy and Autonomous Control - The low-altitude economy is highlighted as a trillion-dollar industry with broad application scenarios and high technological content, expected to exceed 1 trillion RMB by 2026 [98][127] - Autonomous control is emphasized as a critical area, particularly in semiconductors and IT infrastructure, driven by external sanctions and the need for domestic substitution [108][116] - The report notes that the low-altitude economy is transitioning from policy-driven to practical implementation, with local governments actively participating in its development [101][133] AI and Computing Infrastructure - AI is driving significant capital expenditure from major global and domestic companies, with a focus on computing infrastructure to meet the growing demand for AI capabilities [7][91] - The report predicts that global AI PC shipments will exceed 100 million units by 2025, accounting for 40% of total PC shipments, with a CAGR of 44% from 2024 to 2028 [7] - Communication equipment, including optical modules, servers, and switches, is expected to benefit from the AI-driven demand for computing infrastructure [90][153] Wind Power Industry - The global wind power market is projected to grow by 125% from 2024 to 2035, with China's wind power industry benefiting from cost competitiveness and export opportunities [13][16] - China's wind power exports are concentrated in "Belt and Road" regions, with significant potential for expansion into Europe and other high-margin markets [19][67] - Domestic wind power demand is supported by large-scale base construction, with offshore wind power expected to enter a new growth cycle [40][82] Semiconductor and IT Infrastructure - The report highlights the ongoing challenges in the semiconductor industry due to US sanctions, with a focus on AI-related chips and advanced manufacturing equipment [112][140] - Domestic substitution in semiconductors is progressing, with notable advancements in etching, cleaning, and thinning equipment, as well as the rise of domestic chip manufacturers [116][140] - The IT infrastructure sector is entering a phase of "real replacement and real use," with significant market potential driven by the need for secure and autonomous systems [143][145] Low-Altitude Economy - The low-altitude economy is seen as a new growth engine, with local governments establishing industrial funds and investment companies to drive regional economic growth [103][133] - The report introduces the concept of "low-altitude fiscal policy," which could provide a sustainable revenue source for local governments by leveraging low-altitude airspace resources [135] - Low-altitude economic industrial parks and experimental zones are emerging, with key enterprises driving the development of the industry [133][134]

Investment Rating - The report assigns a "Buy" rating for the industry, indicating a projected increase in stock prices relative to market benchmarks over the next 6 months [25]. Core Insights - Micron Technology has shown a strong year-on-year revenue growth of 84.1%, achieving $8.71 billion in FY25Q1, but has provided a weaker revenue guidance for the next quarter, estimating between $7.7 billion and $8.1 billion, which is significantly below market expectations [3][6]. - The HBM (High Bandwidth Memory) market is expected to grow from $16 billion in 2024 to over $100 billion by 2030, highlighting Micron's strategic advantage in this segment [3][6]. - ByteDance's advancements in AI, particularly with its Doubao model, are expected to drive significant demand for computing power, with projections indicating a daily token consumption of over 4 trillion by 2027 [8][10]. Summary by Sections Market Performance - The Nasdaq Composite Index fell by 1.78% and the Philadelphia Semiconductor Index dropped by 3.59% during the week [2]. - Micron's stock experienced a significant decline of over 17% in after-hours trading following its earnings report [3][5]. Company Performance - Micron's revenue from its computing and networking segment reached $4.4 billion, a record high, driven by demand for cloud server DRAM and HBM products [6]. - The mobile business segment saw a revenue decline of 19% due to inventory destocking by mobile customers [6]. Industry Trends - The report emphasizes the importance of the computing hardware supply chain, particularly in light of ByteDance's increased investment in AI, which is projected to reach $80 billion in 2024 and $160 billion in 2025 [10]. - Key companies to watch in the supply chain include those involved in optical modules, copper connections, switches, and server components [10].

Investment Rating - The report maintains an "Outperform" rating for the coal industry [2]. Core Views - The coal price has unexpectedly declined due to high temperatures and excessive imports leading to inventory accumulation, but there may be support near long-term contract price limits as marginal supply could shrink [1][4]. - The current macroeconomic environment is weak, but coal demand remains resilient due to continuous power generation growth, suggesting that coal prices may stabilize at high levels [1][4]. - The report emphasizes the importance of focusing on companies with strong resource endowments, high dividend yields, and potential for improved production and sales [1]. Summary by Sections 1. Market Overview - As of December 20, 2024, the Qinhuangdao 5500K thermal coal closing price is 767 CNY/ton, down 23 CNY/ton (-2.9%) week-on-week [1]. - The operating rate of coal mines in Shanxi, Shaanxi, and Inner Mongolia is 83.7%, a decrease of 0.8 percentage points week-on-week [1]. 2. Thermal Coal - The report notes a significant increase in daily coal consumption at power plants, with a slight decrease in inventories at power plants and ports [1]. - Methanol and urea operating rates have slightly decreased but remain at historically high levels, with methanol at 85.6% (-1.8% week-on-week) and urea at 80.2% (-2.2% week-on-week) [1]. 3. Coking Coal - The price of coking coal at the Jing Tang Port is 1610 CNY/ton, down 10 CNY/ton (-0.6%) [1]. - The report indicates that the current season is a low production period, with a slight decrease in iron output and a minor increase in coal and coke inventories at sample steel mills [1]. 4. Investment Recommendations - The report suggests focusing on companies with excellent resource endowments and stable operating performance, such as China Shenhua, Shaanxi Coal and Chemical Industry, and China Coal Energy [1]. - It also highlights companies benefiting from coal-electricity integration models, such as Xinji Energy and Shaanxi Energy, and those with production growth potential like Shanxi Coal International and Yanzhou Coal Mining [1].

Investment Rating - The report maintains an "Outperform" rating for the chemical industry [2] Core Insights - The chemical sector has shown varied performance across sub-industries, with rubber additives and organic silicon showing positive growth, while modified plastics and nylon have seen significant declines [8][11] - The report highlights the successful trial production of a new aramid material project in Zhejiang, which is expected to boost the local new materials industry [1] Summary by Sections 1.1 Overall Performance of the Chemical Sector - The Shanghai Composite Index fell by 0.7%, while the CITIC Basic Chemical Index dropped by 2.25% [7] 1.2 Individual Stock Performance - The top ten companies with the largest declines in the chemical sector include Zhongxin Fluorine Materials (-18.79%) and Hangzhou High-tech (-15.7%) [11] 1.3 Key Announcements in the Chemical Sector - Bluefeng Biochemical announced a capital increase for its subsidiary, which will reduce its ownership stake from 51% to 49.2449% [14] 2. Important Sub-industry Market Review Polyurethane - The price of polymer MDI in Shandong is reported at 18,300 RMB/ton, with a week-on-week increase of 0.55% [16] - The TDI price in South China remains stable at 13,000 RMB/ton, with an operating load of 94.43%, up 24.85 percentage points from the previous week [19] Chemical Fiber - The average price of polyester filament POY is 6,900 RMB/ton, with a week-on-week increase of 2.22% [21] Tires - The operating load for semi-steel tires is reported at 78.69%, slightly down from the previous week but up 6.11 percentage points year-on-year [24] Pesticides - The average price of glyphosate is 23,900 RMB/ton, with a week-on-week decrease of 0.01 million RMB/ton [25] Fertilizers - The price of urea is reported at 1,799.65 RMB/ton, with a week-on-week decrease of 2.23% [49]