Investment Rating - The report gives a "Buy" rating for the company with a target price of 36.41 CNY per share [5][11] Core Views - The company is a rising player in the industrial control field with strong product capabilities in system integration and industry customization [2] - Overseas business expansion is progressing smoothly and the company is a pioneer in the robotics sector which will benefit in the long term [2][11] - The company is expected to achieve net profits of 2.5/3.1/3.8 billion CNY in 2024-2026, with year-on-year growth of 30%/23%/26% [11] Financial Data and Valuation - Revenue is forecasted to grow from 1.64 billion CNY in 2024 to 2.46 billion CNY in 2026, with a CAGR of 23.6% [11] - Net profit is expected to increase from 248 million CNY in 2024 to 383 million CNY in 2026 [1] - EPS is projected to rise from 1.17 CNY in 2024 to 1.81 CNY in 2026 [1] - P/E ratio is estimated to decrease from 25.2 in 2024 to 16.3 in 2026 [1] Industry Landscape - The industrial automation market is divided into discrete and process automation, with different characteristics and drivers [46] - The inverter market is seeing a trend of domestic substitution, with foreign brands' advantages diminishing [55] - The servo system market is expected to recover steadily, driven by increasing precision and stability requirements in high-end manufacturing [2] - The PLC market is dominated by foreign brands in medium and large segments, while domestic brands are gaining share in the small PLC market [80] Competitive Advantages - The company has a rich product matrix and provides customized system integration solutions [87] - It adopts a differentiated strategy in inverters, with continuous upgrades of core products [90] - The company has a complete industrial control product system, including inverters, servo systems, and control systems [88] - It has made breakthroughs in high-voltage inverter technology, expanding its presence in project-based markets [92] Key Variables - Inverters: Domestic substitution and overseas expansion are expected to drive growth, with revenue forecasted to reach 13.9 billion CNY by 2026 [8] - Servo systems: Domestic substitution is progressing faster, with revenue expected to grow to 9.5 billion CNY by 2026 [8]

Group 1 - The overall liquidity in the stock market significantly improved in September, with a total fundraising amount of 7 billion yuan in the primary market, a month-on-month decrease of 37.5% [14] - In September, the net reduction of important shareholders in the secondary market was 2 billion yuan, a decrease of 8.1 billion yuan compared to the previous month [18] - The average daily trading volume in the two markets reached 796.9 billion yuan in September, an increase of 33.4% compared to the previous month [24] Group 2 - The amount of stock repurchased by listed companies in September was 51.1 billion yuan, reflecting a month-on-month increase of 9% [21] - The issuance scale of equity funds in September was 23 billion yuan, a significant increase of 12.5 billion yuan compared to the previous month [29] - The stock investment ratio of open-end funds rose to 68.27% by the end of September, up from 64.82% at the end of August [31] Group 3 - The financing and margin trading balance in the A-share market slightly increased to 1,395.6 billion yuan, up by 2.7 billion yuan from the end of the previous month [33] - The liquidity environment for A-shares is expected to improve further due to favorable domestic policies and a more accommodative global liquidity environment following the Federal Reserve's interest rate cut [35]

Overall Situation - The total issuance scale of funds in September 2024 saw a significant increase, with 871 billion units issued, up by 345 billion units from the previous month. However, compared to the same period last year, the issuance scale decreased by 200 billion units. A total of 86 new products were launched, an increase of 8 from the previous month but a decrease of 42 year-on-year [13][14]. - Bond funds continued to dominate the market, accounting for 567 billion units or 65.1% of the total issuance, although this represents a 10.0 percentage point decrease from the previous month. Equity funds accounted for 31.8% of the total, an increase of 12.2 percentage points [14][18]. Active Equity Funds - The issuance scale of active equity funds in September 2024 was 25 billion units, reflecting a significant decline. The number of new active equity funds issued was 21, a decrease of 5 from the previous month. The majority of these were mixed equity funds, which accounted for 99.2% of the total issuance [18][19]. Passive Equity Funds - The issuance scale of passive equity funds surged to 251 billion units in September, an increase of 198 billion units from the previous month. This marks the highest level in nearly two years. A total of 36 new passive equity funds were launched, an increase of 14 from the previous month [23][24]. - Among the newly issued passive equity funds, 33 were passive index funds, indicating a preference for strategies that track market indices rather than actively managed funds [24][25]. Bond Funds - The issuance scale of bond funds rose to 567 billion units in September, an increase of 172 billion units. However, this remains at a relatively low level compared to historical data. A total of 22 new bond funds were issued, a decrease of 3 from the previous month [27][28]. - Long-term pure bond funds dominated the new issuances, with 8 funds totaling 324 billion units, accounting for 57.1% of the bond fund issuance [28][30]. QDII Funds - QDII funds continued to see no new issuances, remaining at zero units in September, which is the lowest level in nearly two years. This trend reflects significant fluctuations in the issuance scale over the past two years [31][32]. FOF Funds - FOF funds experienced a slight recovery in issuance, totaling 9 billion units in September, an increase of 2 billion units from the previous month. A total of 4 new FOF funds were launched, also an increase of 2 from the previous month [34].

Core Viewpoints - Overall, downstream consumption shows differentiation, while the midstream manufacturing sector is recovering, and upstream industries are experiencing a rebound [1] Upstream Industry - The upstream industry is seeing a recovery in sentiment, with steel and building materials prices rebounding in September. The price of thermal coal has slightly increased, and the prices of copper and aluminum futures have expanded their month-on-month growth. The lithium carbonate price is expected to escape its current below-cost operation, and the rare earth price index has risen for the second consecutive month [1][9] - In September, chemical product prices generally declined, indicating a downturn in the industry. WTI crude oil prices have decreased for the second month, and inventories also fell in September [1][9] Midstream Industry - The midstream manufacturing sector is showing signs of recovery, with high growth in the production and installation of power batteries in August. Global and Asian semiconductor sales have slightly increased, and excavator sales continue to grow significantly. However, the shipping index shows a mixed trend, and the sales of heavy trucks have seen an expanded year-on-year decline [1][9] Downstream Industry - Downstream consumption is experiencing differentiation, with a slight decline in retail sales growth in August, while online retail sales of physical goods have increased year-on-year. In the home appliance sector, retail sales growth has slightly accelerated. In the food sector, the prices of two tracked dairy products fell in September, and fresh milk prices have reached a low point [1][9] - In the agricultural sector, meat prices are showing mixed trends, and due to a significant drop in international grain prices last month, a correction has occurred this month. In the automotive sector, both passenger and commercial vehicle sales continue to shrink, but the sales growth of new energy vehicles has accelerated year-on-year. In the consumer electronics sector, smartphone shipments maintained high year-on-year growth [1][9]

Group 1 - The report highlights strong economic data from the US, with ISM manufacturing and non-manufacturing PMIs indicating steady growth, and September non-farm payrolls significantly exceeding market expectations [1][9] - The unemployment rate in the US decreased to 4.1%, below expectations, while average hourly earnings increased by 4% year-on-year, marking the highest growth since March [1][9] - The report notes that geopolitical tensions in the Middle East have led to rising oil prices, which could pose inflationary risks, prompting a more cautious approach from the Federal Reserve regarding future interest rate cuts [1][9] Group 2 - The report tracks global major asset performance, with the Shenzhen Component Index showing the highest increase at +10.67%, followed by the Hang Seng Index at +10.20% and NYMEX light crude oil at +8.46% [2][28] - Conversely, the report indicates that the French CAC40 index experienced the largest decline at -3.21%, along with the Korean Composite Index at -3.02% and the Nikkei 225 at -3.00% [2][28] - The report emphasizes the mixed performance of global equity markets, with significant gains in some indices while others faced notable declines [28][32]

华福证券 投资要点： 假期国内观察：出行热情高，9 月 PMI 修复显著 假期出游人流量旺盛，首日电影票房取得突破。国庆假期出行旺 盛，但从机票表现窥见或依然延续"量涨价跌"的趋势，电影票房在 首日取得突破，但整体表现略为平淡。国庆节前出台的一揽子政策或 对居民出游起到提振作用，期待居民消费的持续修复。今年国庆假期 出行人数火热，且民航、铁路同期增长明显，或反映出居民出行半径 的扩大。结合携程集团《2024 国庆旅游预测报告》，国庆期间超六成 游客选择长途旅游。机票价格下降超 20%，相关小众旅游订单同比增 长超 20%，体现出旅游的性价比。电影市场在首日取得突破，但整体 表现相较于去年略显平淡，首日全国电影票房总额接近 5 亿元，目前 国庆档电影票房破 18 亿。 9 月 PMI 数据较为积极。制造业分项数据体现出供需两端的改善， 生产指数提升明显，新订单指数回升对冲新出口订单指数下降，或体 现出内需强于外需，释放出内需回暖的积极信号。建筑业 PMI 微改善， 服务业 PMI 小幅回落，伴随着后续各类稳增长政策发力，景气度均有 望回暖。 房地产增量政策落地，多地调整购房政策。9 月 29 日央行发布公 告善 ...

Investment Rating - The industry is rated as "Strongly Outperforming the Market" [5][39]. Core Viewpoints - The real estate market is experiencing a decline in new home sales, with September 2024 new home transactions down 34% year-on-year and 6% month-on-month in 30 key cities. The cumulative transaction volume for the first three quarters of 2024 has also decreased by 34% year-on-year [2][3]. - Recent government policies, including interest rate cuts on existing mortgages and reduced down payment ratios for second homes, are expected to stabilize the market in the fourth quarter of 2024. The "Golden Week" has seen a significant increase in property viewings, indicating a potential recovery in buyer sentiment [2][3]. - The report suggests that the implementation of these policies will gradually alleviate pressure on the second-hand housing market and promote stability in both new and second-hand housing markets [3]. Summary by Sections Sales Review (9.29-10.5) - A total of 7,408 new homes were sold in 34 monitored cities, representing a 70.6% decrease from the previous week. Cumulatively, 647,000 homes have been sold in 2024, down 31.9% year-on-year [4][9]. - In first-tier cities, sales decreased by 64.5% week-on-week, with a total of 1979 units sold. Year-to-date sales in first-tier cities are down 27.3% [10]. Land Supply (9.23-9.29) - The planned land supply for residential land in 100 cities is 1,474 million square meters, with a cumulative supply of 22,555 million square meters in 2024, down 35.4% year-on-year. The supply-demand ratio stands at 1.45 [19][20]. - The average land price for residential land across 100 cities is 4,138 yuan per square meter, reflecting a 13% decrease month-on-month and a 21.8% decrease year-on-year [20][21]. Land Transactions (9.23-9.29) - The total area of residential land sold in 100 cities is 692 million square meters, with a cumulative total of 15,577 million square meters sold in 2024, down 28.5% year-on-year [26]. - The average transaction price for residential land is 5,500 yuan per square meter, with an overall premium rate of 4.0%. The average price for 2024 is 5,766 yuan per square meter, down 16.6% year-on-year [26][28].

Employment Data - In September, the U.S. non-farm employment increased by 254,000, significantly exceeding expectations of 150,000[17] - The unemployment rate fell from 4.2% in August to 4.1%, marking a decline for two consecutive months[17] - Private sector job growth was the main contributor, with service sector jobs rising from 109,000 to 202,000[17] Economic Indicators - The non-manufacturing PMI rose sharply from 51.5 to 54.9, the highest since March 2023, indicating a strengthening economy[30] - The labor force participation rate remained steady at 62.7%, while the job vacancy rate increased to 4.8% in August, reflecting a robust job market[22] Wage Growth - Private sector wages increased by 0.3% month-on-month in September, maintaining a year-on-year growth rate of 3.9%, slightly down from 4.0%[25] - Wage growth varies by industry, with wholesale and manufacturing sectors showing leading year-on-year increases[29] Market Reactions - Following the employment data release, market expectations for a 50 basis point rate cut this year were adjusted, leading to a rise in U.S. Treasury yields[32] - The S&P 500 forward PE ratio stood at 23.8, above the 10-year median of 18.9, indicating high valuations in the stock market[40] Risks - Potential risks include financial market disruptions, geopolitical tensions, and significant cooling in the job market[48]

Group 1: Market Performance - Chinese assets lead global equity markets with gains of 12.4% for the China concept stocks and 10.2% for the Hang Seng Index during the National Day holiday[2] - Brent crude oil prices increased by 9.2%, rising from $71.8 per barrel at the end of September to $78 per barrel by October 4[3] - Emerging markets, driven by China, outperformed developed markets, with a gain of 0.4% compared to a decline of 0.8% for developed markets[2] Group 2: Economic Indicators - The manufacturing PMI for September rose to 49.8%, an increase of 0.7 percentage points from August, indicating marginal recovery in manufacturing sentiment[11] - The composite PMI output index recorded 50.4%, up 0.3 percentage points from August, suggesting improved production and new orders[11] - The U.S. non-farm payrolls added 254,000 jobs in September, significantly exceeding expectations of 150,000, with the unemployment rate dropping to 4.1%[4] Group 3: Consumer Behavior and Real Estate - During the National Day holiday, inter-regional mobility increased by 4.6% compared to the same period in 2023, and by 24.0% compared to 2019[15] - Real estate transactions in 30 major cities saw a reduced decline of 9% year-on-year during the holiday, a significant improvement from a 34% decline in September[18] Group 4: Geopolitical Risks - Ongoing tensions in the Middle East, particularly between Israel and various groups, have raised concerns about potential attacks on Iranian oil facilities, contributing to rising oil prices[26] - Risks include geopolitical tensions, macroeconomic underperformance, and significant fluctuations in overseas markets[29]

Group 1 - The report highlights that since late September 2024, a series of significant economic and financial policies have been introduced in China, leading to a rapid recovery in stock market valuations [1][9][10] - The current stock market is considered to have a high investment value compared to the bond market, as the equity risk premium (ERP) is at 3.27%, which is in the 70th percentile since 2010 [1][16][18] - The report indicates that the majority of major indices have not yet returned to historical average valuation levels, suggesting further potential for recovery in the stock market [1][10][13] Group 2 - As of September 30, 2024, the price-to-earnings (P/E) ratio for the CSI 300 index is 13.3, which is at the 67th percentile historically, while the CSI 500 and CSI 2000 indices have P/E ratios of 24.9 and 38.4, respectively, indicating a 15% and 12% potential for recovery to historical averages [12][19] - The price-to-book (P/B) ratio for the CSI 300 index is 1.41, at the 32nd percentile historically, with a 7% recovery potential, while the CSI 500 and CSI 2000 indices have P/B ratios of 1.77 and 2.00, indicating recovery potentials of 27% and 20% [13][14] - Among the 108 sub-sectors in the A-share market, 10 sectors have P/E ratios below the market bottoms of previous years, primarily in the consumer sector, while 8 sectors with P/B ratios below historical lows are found in the cyclical, financial, and midstream sectors [21][23][24]