Investment Rating - The report maintains an "Outperform" rating for the social services industry [1]. Core Insights - The social services sector experienced a decline of 7.52% in the last two trading weeks, ranking 26th among 31 industries in the Shenwan classification, underperforming the CSI 300 index by 1.72 percentage points [1][27]. - Recent policy changes, including the expansion of visa-free travel and an increase in statutory holidays for 2025, are expected to boost inbound tourism and domestic travel [1][55]. Market Review & Industry Dynamics - The Shanghai Composite Index fell by 5.36%, while the CSI 300 dropped by 5.81% during the same period [1][27]. - The sub-sectors within social services, including professional services, education, tourism, and hospitality, all reported declines, with tourism retail experiencing the largest drop at 11.08% [1][32]. - The number of domestic flights executed from November 11 to November 17 was 99,297, slightly down by 0.04% from the previous week, but still at 99.25% of the levels seen in 2019 [1]. Key News - The visa-free policy will expand to include nine countries starting November 30, 2024, which is anticipated to significantly enhance inbound tourism [1][41]. - The addition of two statutory holidays in 2025 is expected to stimulate travel demand, particularly benefiting the tourism sector [1][41]. Investment Recommendations - The report suggests focusing on companies with strong growth prospects in the travel and related industries, such as Huangshan Tourism, Lijiang Co., Songcheng Performance, and others [1][55]. - It also highlights the potential benefits for hotel brands like Junting Hotel and Jinjiang Hotel due to the recovery of business travel and increased market share post-pandemic [1][55].

Investment Rating - The report rates the computer industry as "Outperforming the Market," indicating that the industry index is expected to perform better than the benchmark index over the next 6-12 months [8]. Core Insights - The report highlights that cooling challenges have become a significant issue for AI computing power, with liquid cooling technology poised to benefit from this trend. Recent media reports indicate that NVIDIA's Blackwell chip server design faced overheating issues, but these have been resolved, alleviating concerns about supply delays [1][2]. - The demand for AI computing power is projected to continue growing, with substantial market opportunities for liquid cooling and other new technologies. The AI server market in China is expected to reach $13.4 billion, $30.7 billion, and $56.1 billion from 2023 to 2025, reflecting year-on-year growth rates of 101%, 128%, and 83% respectively [1]. - The liquid cooling industry is anticipated to transition from a technology reserve phase to a full-scale promotion phase, driven by the increasing demand for AI computing power in data centers. Companies like Vertiv have raised their long-term revenue growth targets, indicating a positive outlook for the liquid cooling market [1]. Summary by Sections Section: Cooling Challenges - The report discusses the overheating issues faced by NVIDIA's Blackwell chip, which utilizes a 4nm process and has a performance of 20 PetaFLOPS. The need for new cooling solutions has become evident as existing systems cannot handle the heat generated by high-load operations [1]. Section: Market Growth - AI computing power is expected to require a 1 million-fold increase over the next decade, significantly surpassing the 100-fold growth predicted by Moore's Law. This growth is expected to drive demand for liquid cooling products in data centers [1]. Section: Industry Transition - The report notes that the liquid cooling industry is moving towards widespread adoption, with traditional air cooling methods becoming inadequate for high-performance chips like the Blackwell GPU. Companies in the domestic liquid cooling supply chain are positioned to benefit from this transition [1].

Investment Rating - The report rates the transportation industry as "Outperform" [3] Core Insights - Concerns over tariffs have led to a significant increase in cargo volumes at U.S. ports, with new orders for oil tankers also rising recently. In October, China's total import and export value reached 37,007 billion yuan, a year-on-year increase of 4.6% [26][27] - The International Air Transport Association (IATA) predicts that domestic air passenger traffic in China will grow at an average annual rate of 5.7% over the next 20 years, which is higher than the global average of 3.8% [29][30] - China's express delivery volume has surpassed 150 billion packages for the first time, with an average of over 5,400 packages generated per second [37][38] Industry Dynamics Shipping and Ports - The Drewry World Container Index (WCI) reported a 1% decrease week-on-week, currently at approximately $3,413 per FEU, which is 67% lower than the peak in September 2021 [26] - The SCFI index reported at 2,160.08 points, with a week-on-week decrease of 4.08% but a year-on-year increase of 116.03% [54] Air Logistics - Air freight prices are on an upward trend, with the Shanghai outbound air freight price index at 5,339 points, a year-on-year increase of 4.0% [42] - In October, domestic cargo flights increased by 16.04% year-on-year, while international flights saw a 40.40% increase [49] Express Logistics - The express delivery industry in China has achieved a historic milestone, with annual business volume exceeding 150 billion packages, marking a significant growth in the sector [37] - The rise of drone delivery services is becoming a new trend in the low-altitude economy, significantly improving delivery efficiency [38] Investment Recommendations - Focus on the equipment and manufacturing export chain, recommending companies such as COSCO Shipping Energy, China Merchants Energy Shipping, and Huamao Logistics [28] - Pay attention to the low-altitude economy investment opportunities, particularly in companies like CITIC Offshore Helicopter [28] - Consider investment opportunities in the cruise and ferry sectors, recommending Bohai Ferry and Haixia Stock [28] - Explore e-commerce and express delivery investment opportunities, recommending Jitu Express and Yunda Holdings [28] - Look into the aviation sector, recommending China National Aviation Holdings, China Southern Airlines, Spring Airlines, and Huaxia Airlines [28]

Investment Rating - The industry investment rating is "Outperform the Market," indicating that the industry index is expected to perform better than the benchmark index over the next 6-12 months [9]. Core Insights - The Ministry of Industry and Information Technology (MIIT) released revised "Photovoltaic Manufacturing Industry Standard Conditions (2024)," which strengthens energy and water consumption indicators across various segments, likely promoting continuous supply-side optimization [2][3]. - The China Photovoltaic Industry Association (CPIA) reported that the cost of photovoltaic components has stabilized, with the minimum price rising to 0.69 yuan/W, reflecting a commitment to reduce internal competition and potentially enhance industry profitability [2][3]. - The industry is gradually establishing a bottom, with expectations of limited production in silicon wafers and price increases in photovoltaic cells and components, suggesting a potential phase of price hikes in the photovoltaic supply chain [2][3]. Summary by Sections Regulatory Changes - The MIIT's revised standards include stricter energy consumption limits for new and expanded projects, with electricity consumption reduced to less than 40 kWh/kg and comprehensive electricity consumption to less than 53 kWh/kg [2]. - New requirements for silicon wafers and batteries encourage the use of recycled water, with specific water consumption limits set for new projects [2]. Supply-Side Optimization - The increase in production thresholds is expected to benefit leading companies with lower energy consumption, while high-energy-consuming enterprises may face challenges in expanding production [2][3]. - The CPIA's analysis indicates that the cost of components has remained stable, with a slight increase in minimum pricing, which may help improve overall industry margins [2][3]. Market Outlook - The report suggests that the photovoltaic industry is moving towards a more sustainable competitive environment, with production restrictions likely to enhance pricing power and profitability across the supply chain [2][3]. - Recommended companies include JA Solar Technology, JinkoSolar, LONGi Green Energy, Trina Solar, and Junda Co., with additional attention suggested for Shuangliang Eco-Energy, Tongwei Co., GCL-Poly Energy, and Daqo New Energy [3].

Core Insights - The report emphasizes a positive outlook for the stock market, suggesting a preference for equities over commodities, bonds, and cash in the asset allocation hierarchy [2][5] - The macroeconomic environment is expected to stabilize, with a focus on fiscal and monetary policy adjustments to support growth in 2025 [5][7] Economic Data - In October, national public budget revenue increased by 5.5% year-on-year, while expenditure rose by 10.4% year-on-year [3] - The report highlights ongoing government efforts to promote the healthy development of the platform economy and stabilize foreign trade growth [3] Market Performance - The A-share market experienced adjustments influenced by external factors, with the CSI 300 index declining by 2.6% [4] - Key commodities such as coking coal and iron ore saw price increases of 2.68% and 3.75%, respectively, during the same period [4] Asset Allocation Recommendations - The recommended order for asset allocation is stocks > commodities > bonds > cash, reflecting a strategic approach to navigating the current economic landscape [5] - The report anticipates that fixed asset investment will remain a crucial driver for stable growth in 2025, supported by local government debt issuance [5] Market Trends - The report notes a short-term market pressure but maintains a medium-term upward trend, driven by improving domestic demand indicators and government policy support [7][8] - The report indicates a shift in market sentiment, with defensive sectors like utilities and basic chemicals showing relative resilience amid broader market declines [8]

Investment Rating - The report rates the chemical industry as "Outperform" [1] Core Views - The report highlights the recent increase in international oil prices and the decline in prices of natural rubber and polymer MDI [1] - It suggests focusing on high-performing sectors such as refrigerants and vitamins, as well as undervalued leading companies in the macroeconomic recovery context [1][18] - The report emphasizes the importance of high-quality development and shareholder returns, recommending investments in major energy state-owned enterprises and related oil service companies [1][18] Summary by Sections Industry Dynamics - During the week of November 18-24, 2024, among 101 tracked chemical products, 28 saw price increases, 44 experienced declines, and 29 remained stable [1][18] - The average price of WTI crude oil rose to $71.23 per barrel, marking a weekly increase of 6.38% [1] - The report notes geopolitical tensions affecting oil prices and anticipates continued fluctuations in the market [1][18] Investment Recommendations - As of November 24, 2024, the SW basic chemical sector's P/E ratio (TTM excluding negative values) stands at 21.63, within the historical 65.59% percentile [1][18] - The report recommends focusing on sectors with high growth potential, such as refrigerants and vitamins, and suggests monitoring leading companies in the light hydrocracking sub-industry [1][18] - Long-term investment themes include the sustained high demand in the oil and gas extraction sector and the anticipated recovery in the semiconductor industry [1][18] Key Companies to Watch - Recommended companies include China Petroleum, China National Offshore Oil Corporation, and Wanhua Chemical [1][18] - The report identifies "Anji Technology" and "Wanhua Chemical" as key stocks for November [3][4]

Economic Overview - In October, national general public budget revenue increased by 5.5% year-on-year, while expenditure rose by 10.4%[1] - The State Council is focusing on promoting the healthy development of the platform economy and stabilizing foreign trade growth through various policy measures[1] Asset Performance - The CSI 300 index fell by 2.6% this week, influenced by overseas factors, while the CSI 300 stock index futures dropped by 2.9%[2] - Coking coal futures increased by 2.68%, and iron ore main contracts rose by 3.75% this week[2] - The yield on ten-year government bonds decreased by 1 basis point to 2.08%[2] Asset Allocation Recommendations - The recommended order for major asset allocation is: Stocks > Commodities > Bonds > Currency[3] - The political bureau meeting in December is expected to introduce targeted policies based on economic data from September and October, focusing on fiscal and monetary policy adjustments[3] - The Ministry of Finance has allocated a local government debt limit of 6 trillion yuan, with some provinces already starting issuance[3] Risk Factors - Global inflation is declining slowly, and there is uncertainty regarding the speed of economic downturns in Europe and the U.S.[3] Market Insights - The A-share market is experiencing adjustments, with small-cap stocks seeing a more significant decline compared to large-cap stocks[2] - The average annualized yield of money market funds is fluctuating around 2%, with the yield of Yu'ebao decreasing by 2 basis points to 1.31%[2]

Core Viewpoints - The market is expected to experience a short-term pressure due to a faster decline in expectations compared to the rise in policies and fundamentals, but the logic of a gradual upward trend remains intact [2][3] - The market is entering a phase of anticipation for macro policies in 2025, with a focus on economic work meetings as the year-end approaches [3][21] Market Overview - Recent data on real estate transactions, second-hand housing prices, and excavator sales indicate a point-wise recovery in domestic demand [3][21] - The market saw a mixed performance with cyclical and dividend sectors alternating in dominance, while external factors led to a market pullback on Friday [3][21] - The trend of active versus passive fund performance highlights the difficulty in obtaining quality alpha, with passive funds currently outperforming due to lower fees and higher positions [27][29] Industry Insights - The AI application sector is showing promising results, with companies like AppLovin reporting strong third-quarter performance, indicating a rapid commercialization of AI products [3][30] - The consumer electronics industry is experiencing a slow recovery, but the introduction of AI-driven products like AI glasses and headphones is expected to catalyze growth [30][31] Fund Flow and Sector Performance - The week saw a notable shift in fund flows, with defensive sectors like utilities, non-ferrous metals, and basic chemicals showing relative resilience amid profit-taking in consumer sectors [25][39] - The coal, banking, and light manufacturing sectors saw significant net inflows, while consumer services and food and beverage sectors faced notable pressure [39] Conclusion - The overall market sentiment remains cautiously optimistic, with expectations of continued upward movement despite short-term fluctuations, driven by macroeconomic policy anticipation and sector-specific developments [3][21][30]

Investment Rating - The report rates the pharmaceutical and biotechnology industry as "Outperforming the Market" [1][44]. Core Insights - The integration of "medical insurance + commercial insurance" is expected to alleviate the financial pressure on healthcare payments, with data sharing between these two systems providing a foundation for one-stop settlement solutions [2][31]. - The pharmaceutical and biotechnology sector has shown resilience, with the Shenwan Pharmaceutical and Biotechnology Index declining by 2.36% from November 18 to November 22, 2024, outperforming the CSI 300 Index by 0.24 percentage points during the same period [1][20]. - The current price-to-earnings ratio (TTM) for the Shenwan Pharmaceutical and Biotechnology sector is 26.79, indicating a significant recovery from the lows observed in July-August 2024 [1][26]. Summary by Sections Industry Performance - The Shenwan Pharmaceutical and Biotechnology Index experienced a decline of 2.36% from November 18 to November 22, 2024, while the CSI 300 Index fell by 2.60%, resulting in a relative outperformance of 0.24 percentage points [20]. - All sub-sectors within the pharmaceutical and biotechnology industry saw declines, but the chemical pharmaceuticals, medical commerce, medical devices, and biological products sub-sectors outperformed the CSI 300 Index [22]. Investment Opportunities - The report highlights promising investment opportunities in innovative medical devices and pharmaceuticals, recommending companies such as Baijun Medical, Sanyou Medical, and Heng Rui Medicine, which are entering rapid sales growth phases [3]. - It also suggests monitoring companies in the traditional Chinese medicine sector, raw materials, CXO services, medical services, vaccines, and retail pharmacies for potential growth [3]. Data Sharing and Insurance Integration - The establishment of a national medical insurance platform aims to address issues such as information asymmetry and high verification costs in the commercial health insurance sector, facilitating the integration of medical and commercial insurance [32][33]. - The report draws parallels with the mature commercial insurance market in the United States, where employer-sponsored insurance plays a crucial role, covering approximately 68.7% of the population as of 2022 [34].

Investment Rating - The report maintains an "Outperform" rating for the power equipment and new energy industry [1]. Core Insights - The tightening of new capacity policies in the photovoltaic sector is expected to optimize supply-side dynamics, with a notable increase in component price expectations, benefiting leading manufacturers [1]. - The wind power sector is anticipated to see steady progress in domestic bidding and construction, with improved profitability in the machinery and component segments due to favorable demand [1]. - The electric vehicle market has shown strong sales performance, with expectations for continued growth in 2025, driving demand across the industry chain [1]. - The report highlights the acceleration of solid-state battery industrialization, suggesting that companies involved in relevant battery, material, and equipment sectors may benefit [1]. - The ongoing push for power system reform in China is expected to accelerate the construction of ultra-high voltage and main grid projects, maintaining high demand for related equipment [1]. - The hydrogen energy sector is also highlighted, with recommendations to focus on companies with cost and technological advantages in electrolyzer production and hydrogen infrastructure [1]. Summary by Sections Photovoltaic Sector - The Ministry of Industry and Information Technology has tightened energy consumption and water usage standards for new and expanded silicon material and cell production [1]. - In October 2024, newly installed photovoltaic capacity reached 20.42 GW, a year-on-year increase of 50% [34]. Wind Power Sector - New wind power installations in October 2024 totaled 9.50 GW, representing a year-on-year growth of 148% [34]. - The report suggests prioritizing investments in machinery and casting segments that are expected to benefit from offshore wind projects [1]. Electric Vehicle Market - The report notes that the EU is nearing a resolution to eliminate tariffs on electric vehicles from China, which could further stimulate the market [1][33]. - The overall sales growth in the electric vehicle sector is expected to continue into 2025, enhancing demand across the supply chain [1]. Battery Technology - The report emphasizes the rapid development of solid-state battery production, with companies involved in this technology likely to see benefits [1]. - The establishment of a new GWh-level solid-state battery production line in Wuhu, Anhui, is noted as a significant industry development [34]. Power Equipment - The National Energy Administration has issued 1.232 billion green certificates in October 2024, with wind power accounting for 43.01% of the total [34]. - The report recommends focusing on companies benefiting from the high demand for ultra-high voltage projects and those with international expansion strategies [1]. Hydrogen Energy - The report suggests monitoring companies with competitive advantages in electrolyzer production and those involved in hydrogen storage and refueling infrastructure [1].