Investment Rating - Investment recommendation: Outperform the market (maintained) [7] Core Viewpoints - Recent fiscal policies are expected to stimulate demand in the large chemical industry, leading to a recovery in industry valuation and fundamentals [11][34] - The petrochemical sector's profitability and valuation are anticipated to rebound from the bottom as fiscal policies are implemented [34] Summary by Sections 1. Chemical Demand Affected by Fiscal Policies - Historical fiscal expansion policies have positively impacted chemical demand through both upstream and downstream channels [14] - Upstream transmission stimulates demand for chemical raw materials related to real estate and infrastructure, while downstream transmission boosts demand for consumer-related chemicals [14] 2. Fiscal Policies Expected to Further Boost Chemical Demand 2.1 Basic Chemicals: Demand Faces Support, Awaiting Policy Action - CPI and PPI are still at low levels, with basic chemical industry capital expenditure growth turning negative [18][25] - The real estate sector remains weak, but demand from home appliances and automobiles is relatively strong [20] - Economic recovery is expected to improve demand in the basic chemical sector as fiscal policies take effect [29] 2.2 Petrochemicals: Policy Implementation Expected to Boost Profitability and Valuation Recovery - The petrochemical sector's revenue decreased by 2.40% in 2023, but is projected to grow by 2.54% in the first half of 2024 [34] - The sector's net profit is expected to increase by 11.07% in 2024H1, indicating a gradual recovery [34] 3. Investment Recommendations: Focus on Cyclical Quality Assets 3.1 Cyclical Quality Assets - Recommended to focus on leading companies such as Wanhua Chemical, Hualu Hengsheng, and Juhua [44] 3.2 Assets Benefiting from Consumption Boost - Suggested to pay attention to leading companies in polyester filament and agricultural chemicals, as well as firms in the fertilizer sector [45] 3.3 Real Estate Cycle Assets - Recommended to focus on cyclical products related to real estate, such as MDI and soda ash, as well as companies with significant cost advantages [46]

Investment Rating - Investment recommendation: Outperform the market (maintained) [7] Core Viewpoints - Recent fiscal policies are expected to stimulate demand in the large chemical industry, leading to a recovery in industry valuation and fundamentals [11][34] - The chemical industry's demand is closely linked to the real estate and consumer sectors, with recent policies likely to improve the current demand slump [11][34] - The petrochemical sector is anticipated to see a rebound in profitability and valuation as fiscal policies are implemented [34] Summary by Sections 1. Chemical Demand Affected by Fiscal Policies - Historical fiscal expansion policies have positively impacted chemical demand through both upstream and downstream channels [14] - Upstream transmission stimulates demand for chemical raw materials related to real estate and infrastructure, while downstream transmission boosts demand for consumer-related chemicals [14] 2. Fiscal Policies Expected to Further Boost Chemical Demand 2.1 Basic Chemicals: Demand Support Awaiting Policy Action - CPI and PPI are still at low levels, with the chemical industry facing weak demand from real estate and other sectors [18][20] - The basic chemical sector's capital expenditure growth has turned negative, indicating reduced expansion intentions among companies [25][29] 2.2 Petrochemicals: Policy Implementation Expected to Boost Profitability and Valuation Recovery - The petrochemical sector's revenue for 2023 decreased by 2.40%, while the first half of 2024 showed a revenue increase of 2.54% and a net profit increase of 11.07% [34] - The sector is expected to benefit from policies aimed at stabilizing the real estate market, which will enhance demand for petrochemical products [34] 3. Investment Recommendations: Focus on Cyclical Quality Assets 3.1 Cyclical Quality Assets - Recommended to focus on leading companies such as Wanhua Chemical, Hualu Hengsheng, and Juhua [44] 3.2 Assets Benefiting from Consumer Stimulus - Suggested to pay attention to leading companies in polyester filament and agricultural chemicals, as well as firms in the fertilizer sector [45] 3.3 Real Estate Cycle Assets - Recommended to focus on cyclical products related to real estate, such as MDI, soda ash, and titanium dioxide [46]

Investment Rating - Investment recommendation: Outperform the market (maintained) [6] Core Insights - In September, passenger car sales reached 2.525 million units, a year-on-year increase of 1.5% and a month-on-month increase of 15.8%. Cumulative sales from January to September 2024 reached 18.679 million units, a year-on-year growth of 3.0% [6][3] - The high growth in sales is attributed to strong exports and the implementation of vehicle replacement policies, including the "old-for-new" subsidy program, which has seen applications reach 1.258 million by October 4, 2024 [3][6] - The penetration rate of new energy vehicles (NEVs) continues to rise, with September NEV sales at approximately 1.235 million units, a year-on-year increase of 43.8% and a month-on-month increase of 17.1% [6][3] - The market share of domestic brands has increased, with September sales of domestic passenger cars at 1.709 million units, a year-on-year increase of 21.9% and a market share of 67.7% [6][3] - Exports of domestic passenger cars in September reached 457,000 units, a year-on-year increase of 20.0% [6][3] Summary by Sections Sales Data - September passenger car sales: 2.525 million units, YoY +1.5%, MoM +15.8% [6] - Cumulative sales (Jan-Sep 2024): 18.679 million units, YoY +3.0% [6] Policy Impact - "Old-for-new" subsidy applications: 1.258 million as of October 4, 2024, with daily applications exceeding 10,000 since late July [6][3] New Energy Vehicles - September NEV sales: approximately 1.235 million units, YoY +43.8%, MoM +17.1% [6] - NEV penetration rate: 48.9%, YoY +14.4 percentage points [6] Domestic Brands - September domestic brand sales: 1.709 million units, YoY +21.9%, market share 67.7% [6] - Cumulative sales (Jan-Sep 2024): 11.919 million units, YoY +20.5% [6] Export Performance - September domestic passenger car exports: 457,000 units, YoY +20.0% [6]

Investment Rating - The investment rating for the automotive industry is "Outperform the Market" (maintained) [6][9]. Core Insights - In September, the passenger car sales reached 2.525 million units, showing a year-on-year increase of 1.5% and a month-on-month increase of 15.8%. Cumulatively, from January to September 2024, the total passenger car sales reached 18.679 million units, representing a year-on-year growth of 3.0% [3][6]. - The application volume for the "old-for-new" subsidy reached 1.258 million by October 4, 2024, with an average daily increase of over 10,000 applications since the subsidy amount was increased at the end of July [3][6]. - The penetration rate of new energy vehicles (NEVs) reached 48.9% in September, with NEV sales of approximately 1.235 million units, reflecting a year-on-year increase of 43.8% [6]. Summary by Sections Sales Performance - September passenger car sales were 2.525 million units, up 1.5% year-on-year and 15.8% month-on-month. The cumulative sales from January to September 2024 were 18.679 million units, a 3.0% increase year-on-year [3][6]. Policy Impact - The "old-for-new" subsidy application volume has been growing rapidly, with 1.258 million applications by early October, driven by government policies to boost demand [3][6]. New Energy Vehicles - NEV sales in September were approximately 1.235 million units, with a penetration rate of 48.9%, marking a year-on-year increase of 14.4 percentage points [6]. Brand Performance - Sales of domestic brands reached 1.709 million units in September, a year-on-year increase of 21.9%, capturing a market share of 67.7% [6]. Export Growth - Domestic passenger car exports in September were 457,000 units, a year-on-year increase of 20.0% [6].

Group 1: Fiscal Policy Outlook - The meeting on October 12 emphasized the need to strengthen counter-cyclical fiscal policy and promote high-quality economic development, reflecting a highly positive attitude from the Ministry of Finance[2] - Key leaders, including one Minister and three Vice Ministers, attended the meeting, indicating the importance placed on current economic and market expectations[4] - Incremental fiscal support policies are expected to be introduced, with some already in the decision-making process, signaling a proactive approach to fiscal policy[4] Group 2: Implementation and Monitoring - The effectiveness of fiscal policy on the economic fundamentals depends not only on the total amount and structural direction of the policies but also on their implementation, including coordination and incentives[4] - Future monitoring of the implementation of fiscal policies is crucial, as the complexity of fiscal policy involves coordination among multiple departments and local governments[4] - Risks include significant economic changes, policy effects falling short of expectations, and delays in policy implementation[6]

Investment Rating - The report indicates a positive outlook for the storage chip industry, suggesting a recovery phase starting in 2024 and continuing into 2025, with a recommendation to focus on AI-related terminals and semiconductor cycle recovery opportunities [10][33]. Core Insights - The global storage chip market is currently at the bottom of its cycle in 2023, but is expected to see a significant rebound in 2024 due to supply reductions and increased AI demand. The recovery is anticipated to be faster than previous cycles [3][10]. - The demand for storage applications in smartphones, PCs, and servers is showing signs of moderate recovery, with AI continuing to be a major driving force [10][14]. - The report highlights that the smartphone market is expected to experience a mild recovery post-2025, with global smartphone shipments projected to grow at a rate of 1.7% to 2.5% from 2025 to 2028 [19]. - Server shipments are forecasted to recover in 2024, driven primarily by AI, with an estimated 12.1% of server shipments being AI servers [20]. - The PC market has shown growth for four consecutive quarters, with a projected increase in demand due to the upcoming end of Windows 10 support in 2025 [20][22]. Summary by Sections 1. Terminal Demand Recovery and AI as a Driving Force - The storage chip industry is expected to remain in an upward cycle through 2025, with a moderate recovery trend as AI demand's marginal effects diminish [14]. - The three main applications for DRAM and NAND are smartphones, PCs, and servers, collectively accounting for over 80% of the market [15]. 2. Investment Recommendations - Focus on the computing power supply chain, as the demand for HBM is expected to grow alongside AI applications [33]. - Attention should be given to edge AI storage-related companies, as new AI hardware products are being launched, which may boost consumer electronics sales [34]. - The semiconductor economic cycle is anticipated to rebound in 2024, with a recommendation to focus on domestic IC manufacturing chains [35].

Investment Rating - The report maintains a strong outperform rating for the military industry [1]. Core Insights - The current military "bull market" can be referenced against the period from late April to early August 2022, where the military sector benefited from a significant valuation increase due to rising market risk appetite [7][14]. - The military sector is expected to exhibit multiple attributes such as self-reliance, overcoming challenges, and new productive forces, aligning with national strategic support directions [7]. - The report highlights that military stocks have shown substantial rebounds, with top-performing stocks experiencing significant increases in their share prices during the recent market recovery [15]. Summary by Sections Section 1: Military Investment Strategy - The military sector is positioned as a high-growth area, ranking third among primary industries during the rapid market rebound from April to August 2022, with a rebound rate of 39.7% [7]. - The report emphasizes the importance of identifying stocks with low valuations and significant prior declines, suggesting that these stocks may present attractive investment opportunities [17]. Section 2: Latest Perspectives on Low-altitude Economy - The report discusses the recent policy direction from the 20th Central Committee, which emphasizes the development of general aviation and the low-altitude economy as part of modern infrastructure construction [25]. - Local governments have actively implemented plans to develop low-altitude operations, with initiatives such as the establishment of low-altitude operation companies and the opening of commercial flight routes [27]. - The report anticipates that upcoming policies and infrastructure developments will support the steady growth of the low-altitude economy, with significant events like the Zhuhai Airshow showcasing advancements in this sector [29].

Investment Rating - The report maintains an "Outperform" rating for the media sector [6][32]. Core Insights - Since late September, government policies are expected to accelerate economic recovery and improve market sentiment. The media sector's index, valuation, and holding ratios are at near 10-year lows, indicating significant upside potential. Key areas of focus include: 1) Dual recovery in performance and valuation for the gaming sector; 2) Anticipated rebound in the film and cinema sector by 2025; 3) Investment opportunities arising from emerging technologies and industry trends [3][32]. Summary by Sections Media Sector Overview - As of October 11, the media (Shenwan) index closed at 558 points, which is 25% below the past 10-year index price of 612 points, indicating a phase of low valuation. The media sector's TTM price-to-earnings (P/E) ratio is approximately 23.3X, slightly below the 25% percentile of the past 10 years (about 23.7X) [7][11]. Gaming Sector - The gaming sector's index closed at 1921 points as of October 11, remaining below the 25% percentile of the past 10 years (2037 points). The TTM P/E ratio for the gaming sector is around 26.0X, slightly below the 50% percentile (26.8X). Expected average P/E ratios for 2024E and 2025E are 16.8X and 13.8X, respectively, both below historical averages [11][32]. Film and Cinema Sector - The film and cinema index closed at 977 points as of October 11, below the 25% percentile of the past 10 years (1160 points). The TTM P/E ratio is approximately 52.2X, higher than the 50% percentile (41.9X) but slightly below the 75% percentile (54.5X). The holding ratio for the film sector is about 0.126%, also at a near 10-year low [17][19]. Advertising and Marketing Sector - The advertising and marketing index closed at 2058 points as of October 11, below the 25% percentile (2306 points). The TTM P/E ratio is approximately 27.9X, slightly above the 25% percentile (23.3X) but below the 50% percentile (29.9X). The holding ratio is about 0.278%, at a near 10-year low [20][22]. Digital Media Sector - The digital media index closed at 1582 points as of October 11, below the 25% percentile (1677 points). The TTM P/E ratio is around 25.5X, below the 25% percentile (42.8X). The holding ratio is approximately 0.006%, also at a near 10-year low [23][24]. Publishing Sector - The publishing index closed at 1542 points as of October 11, slightly above the 25% percentile (1330 points) but below the 50% percentile (1567 points). The TTM P/E ratio is about 13.6X, slightly above the 25% percentile (13.0X) but below the 50% percentile (15.2X). The holding ratio is approximately 0.054%, at a near 10-year low [27][28]. Investment Opportunities - The report suggests focusing on the gaming sector for dual recovery in performance and valuation, with new product cycles expected to begin in late 2024. The film sector is anticipated to rebound in 2025, driven by several high-profile releases. Additionally, emerging technologies, particularly in AI and IP derivatives, present new investment opportunities [32][32].

Investment Rating - The report suggests a focus on AI terminals and the semiconductor cycle recovery opportunities [10][33]. Core Insights - The global storage chip industry is experiencing cyclical fluctuations, typically on a four-year cycle. The market is at the bottom of the cycle in 2023, with a significant recovery expected in 2024 due to supply reductions and increased AI demand. The recovery in this cycle is anticipated to be faster than previous cycles [3][10]. - By 2025, the storage chip industry is expected to remain in an upward cycle, although the marginal effects of AI demand may weaken, leading to a moderate recovery trend [10][14]. Summary by Sections 1. Terminal Demand Recovery and AI as a Key Driver - The storage chip market is projected to recover significantly in 2024, benefiting from supply cuts and rising AI demand. The recovery is expected to be quicker than in previous cycles [10][14]. - The three main applications for storage chips—mobile phones, PCs, and servers—are showing signs of moderate recovery [10][14]. 2. Investment Recommendations - Focus on the computing power supply chain, as the demand for HBM (High Bandwidth Memory) is expected to grow alongside AI applications [33]. - The introduction of AI hardware products, such as AI PCs and AI smartphones, is anticipated to boost consumer electronics sales, suggesting a focus on the AI hardware and storage supply chain [34]. - The semiconductor economic cycle is expected to rebound in 2024, with recommendations to pay attention to domestic IC manufacturing chains [35]. 3. Price Trends - DRAM and NAND prices are experiencing short-term pressure but are expected to have long-term growth potential. Current market conditions show a slight decline in spot prices, while contract prices remain relatively high [24][28]. - The average contract price for traditional DRAM is expected to rise by 8%-13% in Q3 2024, with a narrowing increase of 3%-8% in Q4 2024 [28][29].

Investment Rating - The report maintains a strong outperform rating for the military industry [1]. Core Insights - The current military "bull market" can be referenced against the period from late April to early August 2022, where the military sector benefited from a significant valuation increase due to rising market risk appetite [7][14]. - The military sector is expected to exhibit multiple attributes such as self-reliance, reversal from difficulties, and new productive forces, aligning with national strategic support directions, making it worthy of attention [7]. - The report highlights that military stocks have shown significant rebounds, with top-performing stocks experiencing substantial increases in their share prices during the referenced period [15]. Summary by Sections Section 1: Military Investment Strategy - The military sector ranked third among primary industries during the rapid rebound from April 26 to August 10, 2022, with a rebound rate of 39.7% [7]. - The report emphasizes that the military sector is positioned as a high-growth area, benefiting from a broad market rally and strategic government support [7]. Section 2: Latest Perspectives on Low-altitude Economy - The report discusses the recent policy direction from the Third Plenary Session of the 20th Central Committee, which emphasizes the development of low-altitude economy as part of modern infrastructure construction [25]. - It notes that low-altitude economy encompasses traditional general aviation and integrates drone-supported services, representing a new economic form with significant productive force characteristics [25]. - Local governments are actively implementing plans to develop low-altitude infrastructure, with initiatives such as the establishment of low-altitude operation companies and the opening of commercial flight routes [27].