Investment Rating - The report assigns a "Buy" rating to the company, with an initial coverage date of January 15, 2025 [1][5]. Core Insights - The company, Quzhi Group, is recognized as a leader in AIoT interactive marketing, experiencing rapid growth in its business performance. The AI interactive marketing solutions offered by the company have been successfully commercialized, and the company is expected to maintain high growth rates as it expands both domestically and internationally [3][8]. Summary by Sections Company Overview - Quzhi Group is a leading provider of AIoT interactive terminal network marketing services in China, utilizing self-developed multi-sensory AI interactive terminals to connect consumers with fast-moving consumer goods (FMCG) brands [16][17]. Financial Performance - The company reported significant revenue growth, with sales revenue projected to increase from RMB 554 million in 2022 to RMB 2,283 million by 2026, reflecting a compound annual growth rate (CAGR) of approximately 30.29% [7][23]. - Adjusted net profit is expected to rise from RMB 78 million in 2022 to RMB 386 million in 2026, indicating a strong growth trajectory [7][47]. Business Segments - The company's main business segments include marketing services and product sales, with marketing services accounting for over 70% of total revenue. Marketing services revenue saw a nearly 100% increase in 2023 [23][26]. - The marketing services are divided into standardized and value-added services, with the latter showing substantial growth due to increased interactivity and consumer engagement [18][29]. Market Potential - The AIoT marketing sector is projected to grow at a CAGR of 30.1% from 2022 to 2027, providing significant opportunities for the company as it expands its market presence [8][66]. - The company is also initiating a global strategy to enter the Middle Eastern market, where the AI marketing sector is expected to grow at a CAGR of 27.3% from 2023 to 2030 [8][66]. Valuation - The report employs the PEG valuation method, with the company's PEG ratio for 2026 estimated at 1.75, which is lower than the average PEG ratio of comparable companies at 1.97 [5][7].

Core Insights - The report highlights a positive trend in China's export performance for 2024, with a year-on-year growth of 5.9% in dollar terms and 7.1% in RMB terms, indicating a continuation of positive growth momentum [4][5] - The trade surplus for 2024 reached 992.16 billion USD, with a notable increase in December's exports, which grew by 10.7% year-on-year, supported by "export grabbing" strategies [4][5] - Key trading partners such as ASEAN, the EU, and the US contributed positively to the export growth, with the US showing a significant improvement in export contributions [5][6] Market Performance - The Shanghai Composite Index closed at 3240.94, reflecting a 2.54% increase, while the Shenzhen Component Index rose by 3.77% to 10165.17 [2] - The ChiNext Index, representing growth enterprises, saw a notable increase of 4.71%, closing at 2075.76 [2] Industry Performance - The computer sector led the industry performance with a 6.14% increase, followed by media and machinery equipment sectors, which rose by 5.72% and 5.68% respectively [3] - The automotive industry also showed resilience with a 4.97% increase, indicating strong demand and export performance in the automotive supply chain [6]

Investment Rating - The report rates the transportation industry as "Outperform the Market" [1] Core Insights - The global new ship order volume reached a 17-year high in 2024, with 2,390 vessels totaling 170 million deadweight tons, and Chinese shipyards accounted for 70% of the global market share [2][14] - The Civil Aviation Administration of China announced that the entire industry turned profitable in 2024, with a reduction in losses by 20.6 billion yuan year-on-year [16] - Jitu Express reported a daily average of over 80 million packages globally, with China's express delivery volume surpassing 170 billion packages in 2024, reflecting a 21% year-on-year growth [19][21] Summary by Sections 1. Industry Hot Events - CMA CGM announced a peak season surcharge for certain routes, effective January 15, 2025, with fees of $1,500 per TEU for specific cargo [2][13] - Hong Kong Airlines will resume long-haul routes to Australia and Canada, marking its return to the international market [16][17] - Jitu Express achieved a total package volume of 73.9 billion in Q4 2024, a 32.5% increase year-on-year [19] 2. High-Frequency Dynamic Data Tracking - Air cargo prices showed a downward trend from mid-December 2024 to late December 2024 [22] - The shipping price index decreased as of January 10, 2025, while dry bulk freight rates increased [29] - In November 2024, express delivery volume increased by 26.15% year-on-year, with revenue rising by 15.18% [39] 3. Investment Recommendations - Focus on the equipment and manufacturing export chain, recommending companies like COSCO Shipping, China Merchants Energy Shipping, and Huamao Logistics [4] - Attention to low-altitude economy investment opportunities, recommending CITIC Offshore Helicopter [4] - Investment opportunities in the cruise and ferry sectors, recommending Bohai Ferry and Straits Shares [4] - E-commerce express delivery investment opportunities, recommending Jitu Express and Yunda [4] - Investment opportunities in the aviation sector, recommending China National Aviation, Southern Airlines, Spring Airlines, and others [4]

Core Views - The report highlights a focus on macroeconomic indicators, specifically the December CPI and PPI growth rates, which align with market expectations. The CPI growth rate showed a slight decline compared to November, primarily due to food prices, while service prices experienced a minor increase [2][5][6] - The report maintains a forecast that both CPI and PPI growth rates will continue to rise in 2025, with CPI expected to increase to 0.9% year-on-year, and PPI projected to decline by 0.6% year-on-year, with a potential recovery in the fourth quarter of 2025 [5][8] Stock Recommendations - The report lists a selection of stocks recommended for January, including Yunda Holdings (002120.SZ), China Petroleum (601857.SH), and CATL (300750.SZ) among others, indicating a strategic focus on these companies for potential investment opportunities [1] Market Indices - The report provides closing prices and percentage changes for major market indices, with the Shanghai Composite Index closing at 3160.76, down 0.25%, and the Shenzhen Component Index remaining unchanged at 9796.18 [3] Industry Performance - The report details the performance of various industries, noting that the non-ferrous metals sector saw a rise of 1.81%, while the household appliances sector declined by 2.45%. Other notable performances include real estate up by 1.12% and banking down by 1.16% [4]

Investment Rating - The report maintains a positive outlook on the real estate sector, indicating a "stronger than market" rating for the industry [1]. Core Views - The report highlights that the decline in new home prices in 70 cities is slowing down, with first-tier new home prices stabilizing [1]. - It emphasizes the government's commitment to stabilizing the real estate market through tax adjustments and policy support, which is expected to gradually release demand in 2025 [1][2]. - The report notes that the real estate sector is entering a phase of recovery, driven by supportive policies and improving market conditions [1][2]. Summary by Sections 1. Key City New Home Market, Second-hand Home Market, and Inventory Tracking - New home transaction area decreased by 38.6% month-on-month, while year-on-year growth was 5.8% [7]. - Second-hand home transaction area turned positive month-on-month, with a year-on-year increase of 19.7% [7]. - New home inventory area increased month-on-month, with a decrease in the year-on-year growth rate [7][16]. 2. Land Market Tracking - The total area of land transactions in 100 cities was 1,784 million square meters, down 65.9% month-on-month but up 57.9% year-on-year [13]. - The total land transaction price was 87.61 billion yuan, down 21.8% month-on-month and 30.0% year-on-year [13]. - The average floor price of land increased by 111.2% month-on-month and 120.4% year-on-year [13]. 3. Policy Overview - The report outlines various local government measures aimed at promoting the real estate market, including prioritizing quality land supply and encouraging home purchase subsidies [7][8]. - It mentions the Ministry of Housing's focus on enhancing the quality of affordable housing and urban village renovation projects [7]. 4. Sector Performance Review - The absolute return of the real estate sector was -2.7%, an increase of 4.9 percentage points from the previous week [14]. - The relative return was -1.6%, up 0.9 percentage points from the previous week [14]. - The sector's PE ratio was 19.85X, a decrease of 0.46X from the previous week [14]. 5. Investment Recommendations - The report suggests focusing on three main lines: 1. Stocks expected to improve post-policy easing, such as JinDi Group and Longfor Group [7]. 2. Stocks with strong core city layouts and targeted policy support, including Greentown China and China Resources Land [7]. 3. Local state-owned enterprises benefiting from government debt relief and land acquisition, such as Yuexiu Property and China City Investment [7].

Group 1 - The report highlights that the strong US dollar is currently restraining risk assets, and future market stabilization may be driven by large-cap companies in weak sectors [2][12][28] - The report indicates that the market is experiencing a narrowing focus on large-cap core companies in strong sectors, particularly in home appliances, banking, and electronics, while small-cap stocks in weak sectors show lower allocation interest [25][27][28] - The report suggests that the upcoming policies aimed at boosting consumption, particularly in the home appliance, automotive, and home decoration sectors, are expected to stimulate demand and drive performance in related industries [2][25] Group 2 - The report discusses the potential for the humanoid robot market, with Tesla's Optimus expected to enter a phase of accelerated penetration starting in 2025, drawing parallels to the development path of electric vehicles [30][31] - The report notes that major cloud service providers like Microsoft and Amazon are expected to continue high capital expenditures in data centers, which will benefit the AI computing industry chain [34][36] - The report emphasizes that the robotics sector is entering an initial stage of investment prosperity, with significant opportunities anticipated for companies involved in the supply chain of humanoid robots [30][31][36]

Macro Economic Overview - The first expectation for January 2025 is that the Federal Reserve is unlikely to cut interest rates[1] - The macroeconomic outlook indicates significant uncertainty in the economic prospects of Europe and the US over the next year[3] Asset Performance - The Shanghai Composite Index fell by 1.13%, and the CSI 300 Index futures dropped by 0.99% this week[1] - Coking coal futures decreased by 5.34%, while iron ore main contracts fell by 1.89%[1] - The yield on ten-year government bonds rose by 3 basis points to 1.63%[1] Investment Strategy - Recommended asset allocation order: Stocks > Commodities > Bonds > Currency[1] - Stocks are currently overweight due to the focus on the implementation of incremental policies[3] - Bonds are underweight as the "stock-bond seesaw" may impact the bond market in the short term[3] Economic Indicators - In December 2024, the Consumer Price Index (CPI) increased by 0.1% year-on-year, while the Producer Price Index (PPI) decreased by 2.3%[4] - The US non-farm payrolls increased by 256,000 in December 2024, significantly exceeding the expected 160,000[5] Currency and Interest Rates - The seven-day annualized yield of Yu'ebao fell by 5 basis points to 1.22%[1] - The US dollar index rose by 0.68% to 109.66, reflecting a strong dollar trend[5] Risk Factors - Potential risks include a second wave of global inflation and a rapid decline in the European and American economies[5]

Inflation Overview - December CPI year-on-year growth was 0.1%, down from 0.2% in November, primarily due to weak food prices[2] - December PPI year-on-year decline was 2.3%, with a month-on-month decrease of 0.1%[12] CPI Analysis - December CPI month-on-month growth remained flat, with food prices decreasing by 0.6% and non-food prices increasing by 0.1%[3] - For 2024, the cumulative CPI growth was 0.2%, with food prices down 0.6% and service prices up 0.7%[6] PPI Insights - December PPI showed a slight increase compared to November, but the overall trend remains downward due to seasonal factors[17] - Key industries experiencing price declines include petroleum and coal processing (-8.7%) and chemical manufacturing (-4.8%) in December[13] Future Projections - CPI is expected to rise to 0.9% in 2025, with quarterly fluctuations, peaking at 1.3% in Q4[6] - PPI is projected to decline by 0.6% in 2025, with a potential recovery to 1.1% by Q4[17] Demand Factors - Insufficient domestic demand is identified as the main factor dragging down CPI growth, particularly in food prices[6] - The service price growth has shown a slight upward trend since Q4 2024, indicating potential recovery[6]

Export Performance - In 2024, China's total export value increased by 5.9% year-on-year, continuing positive growth, with a 0.5 percentage point acceleration compared to the previous 11 months[4] - December 2024 exports grew by 10.7% year-on-year, a significant increase of 4.0 percentage points from November 2024[4] - The trade surplus for December 2024 reached $104.84 billion, an increase of $7.4 billion from the previous month[4] Trade Partners Contribution - Major trade partners contributed positively to the export growth in December, with a total contribution of 6.5 percentage points, up by 2.0 percentage points from November[2] - The United States contributed 2.2 percentage points to the December export growth, an increase of 1.0 percentage point from November[2] - ASEAN remained China's largest trading partner, with exports to the region growing by 18.9% year-on-year in December[4] Import Trends - In 2024, imports increased by 1.1% year-on-year, with a slight decline of 0.1 percentage points compared to the previous 11 months[4] - December 2024 imports grew by 1.0% year-on-year, improving by 4.9 percentage points from the previous month[4] - The trade surplus for the entire year was $99.216 billion, indicating a strong export performance relative to imports[4] Industry Insights - The automotive supply chain and electromechanical products showed strong export performance, with automotive exports growing by 15.5% year-on-year[4] - High-tech products like integrated circuits and automatic data processing equipment saw export growth rates of 17.4% and 9.9%, respectively, both exceeding the overall export growth rate[4] - The "export rush" to the U.S. has been a significant support for the year-end export growth, reflecting high overseas procurement willingness among U.S. manufacturers[4]

Investment Rating - The industry investment rating is "Outperform" indicating that the industry index is expected to perform better than the benchmark index in the next 6-12 months [10]. Core Insights - AI programming tools have validated Product Market Fit (PMF), which indicates a high likelihood of commercialization. The rapid development of AI coding tools since 2021, including products from major companies, highlights the growing market [3][5]. - The AI coding tools can significantly reduce costs and improve efficiency, with potential user base expansion. According to McKinsey, the adoption of AI programming tools can lower software development costs by 30%-50% while increasing development speed [5]. - The growth potential of AI coding is substantial, with the global AI programming market projected to grow from $4.29 billion in 2023 to $24.46 billion by 2031, reflecting a CAGR of 24.3% [5]. Summary by Sections Investment Recommendations - The report suggests focusing on companies with relevant technologies, including Puyuan Information, Huasheng Tiancai, Ruantong Power, Jiuqi Software, and Zhejiang University Network New [3]. Market Trends - The AI programming market is experiencing rapid growth, with significant developments in low-code and no-code platforms. The Chinese AI code generation market is expected to grow from 6.5 billion RMB in 2023 to 33 billion RMB by 2028, with a CAGR of 38.4% [5].