Investment Rating - The investment rating for Geely Automobile is "Buy" (maintained) [7] Core Views - Geely Automobile reported a total vehicle sales of 202,000 units in September 2024, representing a year-on-year increase of 21.0% and a month-on-month increase of 11.4% [11] - The cumulative sales for the first nine months of 2024 reached 1.49 million units, up 32.1% year-on-year [11] - The launch of the Galaxy E5 has significantly boosted sales, with the new energy vehicle sales reaching a historical high [11] - The company is expected to maintain a high growth trajectory due to the launch of new products and increased subsidies for trade-in policies [11] Summary by Sections Sales Performance - In September 2024, Geely brand sales were 155,000 units, up 16.4% year-on-year and 10.0% month-on-month [11] - The Galaxy series sold 29,000 units, a year-on-year increase of 122.1% [11] - Cumulative sales for the Geely brand in the first nine months of 2024 were 1.151 million units, up 26.6% year-on-year [11] New Energy Vehicles - In September 2024, new energy vehicle sales totaled 91,000 units, a year-on-year increase of 75.8% [11] - The penetration rate for new energy vehicles reached 45.1%, up 14.1 percentage points year-on-year [11] Export Strategy - In September 2024, the company exported 39,000 vehicles, a year-on-year increase of 51.2% [11] - Cumulative exports for the first nine months of 2024 reached 314,000 units, up 68.4% year-on-year [11] Financial Projections - Revenue projections for 2024-2026 are 229.8 billion, 272.9 billion, and 318.5 billion yuan, with year-on-year growth rates of 28.2%, 18.8%, and 16.7% respectively [12] - Net profit projections for the same period are 7.64 billion, 11.61 billion, and 14.08 billion yuan, with growth rates of 44.0%, 51.9%, and 21.3% respectively [12]

Investment Rating - The report maintains a "Buy" rating for XPeng Inc (09868) [5] Core Views - XPeng's delivery capability is steadily improving, with September 2024 deliveries reaching a new high of 21,352 units, a 39% YoY increase and a 52% MoM increase [2][7] - The MONA M03 model, launched on August 28, 2024, exceeded expectations with over 30,000 pre-orders within 48 hours and quickly became the best-selling A-class pure electric sedan after its official launch in September [2][7] - XPeng's intelligent driving technology is progressing, with plans to achieve door-to-door autonomous driving by the end of 2024 and approach L3 autonomy by the second half of 2025 [7] - The XNGP urban autonomous driving system achieved an 83% monthly active user penetration rate in September 2024 [7] - The AI Tianji XOS 5.3.0 system was fully rolled out on September 25, 2024, bringing 32 feature updates and 38 performance upgrades [7] Financial Projections - Expected sales for 2024/2025/2026 are 180,000/450,000/670,000 units, with corresponding revenues of 43.6/79.3/104.6 billion yuan [8] - Net profit is projected to improve significantly, with estimates of -5.05/-0.5/2.3 billion yuan for 2024/2025/2026 [8] - Revenue growth rates are forecasted at 42%/82%/32% for 2024/2025/2026 [8] - The company is expected to achieve positive EBITDA of 1.9064 billion yuan in 2026, compared to -5.1072 billion yuan in 2024 [9] Market Performance - Current stock price is 55.00 HKD with a market capitalization of 104.45514 billion HKD [5] - The stock has a 52-week range of 74.30 to 25.50 HKD [5] - The company has a book value per share of 20.51 yuan and a debt-to-asset ratio of 56.04% [5] Industry Context - XPeng operates in the automotive/passenger vehicle sector [5] - The company's AI-driven strategy and new model launches are expected to drive a turnaround in financial performance [8] - Collaboration with Volkswagen could further expand XPeng's revenue and technical capabilities [8]

Investment Rating - The report maintains a "Buy" rating for Li Auto-W (02015) [5] Core Views - Li Auto achieved record monthly deliveries of 53,709 vehicles in September 2024, a 48.9% YoY increase [2][7] - Q3 2024 cumulative deliveries reached 153,000 vehicles, a 45.4% YoY increase, hitting the upper end of sales expectations [2][7] - Market share in the premium NEV segment (above RMB 200,000) exceeded 17% and is expected to continue in Q4 2024 [2][7] - The company's product strength is improving, with stable order growth for the L series and MEGA models [2][7] - Li Auto's intelligent driving capabilities are advancing, with city NOA mileage penetration exceeding 50% among test users [7] - The company's ecosystem is expanding rapidly, with 479 retail centers, 436 service centers, and 894 supercharging stations as of September 2024 [7] Financial Projections - Revenue is projected to grow from RMB 147.3 billion in 2024 to RMB 280.0 billion in 2026, with a 3-year CAGR of 40.6% [7] - Net profit is expected to increase from RMB 8.53 billion in 2024 to RMB 23.72 billion in 2026 [7] - EPS is forecasted to grow from RMB 4.02 in 2024 to RMB 11.18 in 2026 [7] - The company's ROE is projected to improve from 12.4% in 2024 to 22.3% in 2026 [10] Operational Highlights - Li Auto's retail network covers 145 cities with 479 retail centers as of September 2024 [7] - The company has deployed 4,286 charging piles across 894 supercharging stations [7] - OTA 6.2 version enhanced Pro version's highway NOA capability and Max version's parking and AEB functions [7] Industry Position - Li Auto maintains a leading position in the premium NEV market with over 17% market share in the RMB 200,000+ segment [7] - The company's intelligent driving capabilities are considered advanced, with significant improvements in AEB and AES functions [7]

Investment Rating - The report maintains an "Outperform" rating for the non-ferrous metals sector [6][10]. Core Insights - The report highlights favorable policies and the peak season for the industry, suggesting investment opportunities in the non-ferrous metals sector [6]. - The copper segment is expected to benefit from sustained macroeconomic positive sentiment, with copper prices continuing to rise [6]. - The aluminum segment is anticipated to see improved demand for construction aluminum due to real estate policy catalysts, providing upward price elasticity [6]. - The tin market is projected to maintain a tight supply-demand balance, with traditional peak seasons continuing to deplete inventories [6]. - The molybdenum market is expected to experience an expanding supply-demand gap, leading to a potential price surge [6]. - The tungsten market is likely to see continued upward price movement due to tight supply conditions [6]. Summary by Relevant Sections Copper - Domestic macroeconomic positive sentiment is driving copper prices upward, with LME/SHFE copper prices as of September 27, 2024, at $9,995/ton and ¥78,600/ton, reflecting year-on-year increases of 23.78% and 17.00% respectively [6]. - Supply disruptions and declining resource grades are expected to constrain long-term supply, potentially catalyzing a new price upcycle [6]. Aluminum - The demand for electrolytic aluminum is growing rapidly, but supply is also increasing, narrowing the demand gap [6]. - As of September 27, 2024, SHFE aluminum prices were ¥20,400/ton, up 4.98% year-on-year, while alumina averaged ¥4,082/ton, up 38.51% [6]. - The report suggests monitoring stocks that may benefit from rising aluminum prices and falling alumina prices [6]. Tin - Global tin supply is projected to be 377,000 tons in 2024, with demand at 379,000 tons, indicating a slight supply deficit [6]. - As of September 27, 2024, LME/SHFE tin prices were $32,400/ton and ¥257,400/ton, with year-on-year increases of 26.22% and 16.94% respectively [6]. Molybdenum - The report forecasts a growing supply-demand gap for molybdenum, with global demand expected to reach 299,000 tons by 2026 [6]. - As of September 27, 2024, the price for 45% molybdenum concentrate was ¥3,695/ton, down 3.65% year-on-year [6]. - The traditional peak demand season is expected to provide upward price elasticity for molybdenum [6]. Tungsten - The total mining quota for tungsten in 2024 is set at 114,000 tons, with limited growth expected due to various supply constraints [6]. - As of September 27, 2024, the average market price for black tungsten and APT was ¥137,000/ton and ¥203,000/ton, reflecting year-on-year increases of 13.2% and 12.2% respectively [6].

Investment Rating - The report assigns a "Buy" rating for Hainan Airlines Holdings [3][8]. Core Views - The company is positioned as the fourth largest airline group in China, having successfully undergone bankruptcy restructuring in 2021 and attracting strategic investors. Under new management, the company has shown significant operational improvements in 2023, being the first among major airlines to return to profitability. The company is at the beginning of a turnaround phase, with potential for market revaluation [4][6]. Summary by Sections Company Overview - Hainan Airlines Holdings is the largest private airline in China and has a market share of 8.1% in the summer schedule of 2024. The company has a fleet size of 345 aircraft, representing about 8.0% of the industry, with a notable 20.6% of wide-body aircraft [4][12]. Operational Efficiency - The company has improved operational efficiency, with passenger volume reaching 46.246 million in the first eight months of 2024, a year-on-year increase of 12.78%. The passenger load factor in August reached 87.9%, exceeding pre-pandemic levels [4][28]. Financial Forecasts - Projected total revenue for 2024-2026 is expected to be 674.9 billion, 785.5 billion, and 889.4 billion yuan, with year-on-year growth rates of 15.09%, 16.38%, and 13.22% respectively. Net profit attributable to shareholders is forecasted to be 11.1 billion, 33.5 billion, and 48.1 billion yuan, with growth rates of 255.5%, 203.4%, and 43.55% respectively [4][8]. Strategic Positioning - The company benefits from a rich resource base and a strong operational network, with a significant presence in key markets. It operates nearly 1,800 routes, covering all provinces and major cities in China, as well as international destinations [4][24]. Management and Governance - Following the restructuring, the company is now under the control of Liaoning Fangda Group, which emphasizes operational efficiency and aims to leverage the company's historical strengths for future growth [4][17]. Market Outlook - The company is expected to benefit from the recovery of the aviation industry and the strategic advantages of being part of a larger group with diverse aviation-related businesses, enhancing its competitive edge [4][9].

Investment Rating - The investment rating for the real estate industry is "Outperform the Market" (maintained) [7]. Core Insights - On September 29, the central bank implemented a series of policies including lowering existing mortgage rates, reducing the minimum down payment for second homes, and increasing the proportion of central bank funding support for affordable housing loans. This is expected to improve market expectations and stabilize the market [4][7]. - The adjustment of the pricing mechanism for commercial personal housing loans allows for changes in mortgage rates based on the Loan Prime Rate (LPR) and removes the one-year minimum repricing cycle limit. This is anticipated to lead to a batch adjustment of existing mortgage rates by October 31, 2024 [4][7]. - Major cities like Shanghai, Shenzhen, and Guangzhou have quickly responded with policy adjustments, including the cancellation of purchase restrictions in Guangzhou and the reduction of down payment ratios in Shanghai and Shenzhen [4][7]. Summary by Sections Policy Changes - The central bank's new policies include: 1. Further improvement of the pricing mechanism for commercial personal housing loans. 2. Reduction of the minimum down payment for second homes to 15%. 3. Increasing the proportion of central bank funding for affordable housing loans from 60% to 100%. 4. Extension of financial policies until the end of 2026 [4][7]. Market Impact - The rapid implementation of these policies is expected to boost market confidence and stabilize the real estate market. The anticipated adjustments in mortgage rates and down payment requirements are likely to positively impact the supply-demand structure in the real estate market [4][7]. City-Specific Adjustments - Shanghai's new policies include: 1. Cancellation of the distinction between ordinary and non-ordinary housing. 2. Reduction of the minimum down payment for first homes to 15% and for second homes to 25%. 3. Adjustment of the exemption period for personal housing value-added tax to 2 years [4][8]. - Guangzhou has fully canceled all purchase restrictions, while Shenzhen has also made significant adjustments to its real estate policies [4][8].

Investment Rating - The investment rating for the real estate sector is "Outperform the Market" (maintained) [7]. Core Insights - On September 29, the central bank implemented a series of policies including lowering existing mortgage rates, reducing the minimum down payment for second homes, and increasing the proportion of re-loans for affordable housing [7][4]. - The rapid response from various departments and local governments to these policies is expected to improve market expectations and stabilize the market [7][4]. Summary by Sections Policy Adjustments - The central bank's adjustments include allowing changes to mortgage rates based on LPR and removing the one-year minimum repricing cycle for mortgages [7]. - The minimum down payment for second homes has been reduced to 15%, and the re-loan proportion for affordable housing has been increased from 60% to 100% [7][4]. Market Impact - The combination of policies is anticipated to positively affect the supply-demand structure in the real estate market, promoting stabilization [7]. - Major cities like Shanghai, Guangzhou, and Shenzhen have also made significant policy adjustments, including the cancellation of purchase restrictions in Guangzhou and the reduction of down payment ratios in Shanghai and Shenzhen [7][4]. Investment Recommendations - The report suggests focusing on key first-tier and core second-tier cities, emphasizing products that cater to improvement needs and companies with sustainable land acquisition capabilities [7]. - It also highlights the potential benefits for real estate mergers and acquisitions due to the favorable policies being implemented [7].

Investment Rating - The investment recommendation for the petrochemical industry is "Outperform the Market" (maintained) [7] Core Insights - Recent policies from the Central Political Bureau are expected to stimulate demand in the real estate and consumer sectors, which may lead to a recovery in the petrochemical and basic chemical industries [11][14] - Historical analysis of the petrochemical sector over the past 25 years indicates that during cyclical bottoms, valuations have adjusted significantly, and the recovery period tends to be longer compared to other industries. Following these bottoms, the sector often benefits from both economic cycles and policy support, suggesting a potential for substantial rebounds [11][24] Summary by Sections 1. Historical Review of the Petrochemical Sector - The report reviews four cyclical bottoms in the petrochemical sector over the last 25 years, noting that during these periods, the sector's PE ratios adjusted significantly, with the current cycle showing a PE of 14 for petrochemicals and 20 for basic chemicals [11][24] - The recent policies aimed at stabilizing the real estate market and boosting consumer spending are expected to improve demand for petrochemical products, which are closely linked to the real estate sector [14][35] 2. Policy Impact on Chemical Demand - The report highlights that the basic chemical sector is currently under pressure, with a revenue of 20,685 billion yuan in 2023, a 17% decrease from 2010 levels. The net profit for the sector was 1,086 billion yuan, remaining stable compared to 2010 and 2011 [31] - The petrochemical sector is experiencing a bottoming out in demand for olefins, with expectations that supportive policies for real estate will lead to a recovery in demand for related chemical products [36] 3. Investment Recommendations - The report suggests focusing on high-quality cyclical assets and leading companies such as Wanhua Chemical, Hualu Hengsheng, and Juhua Co. It also recommends monitoring sectors related to real estate, such as MDI, soda ash, and titanium dioxide, as well as consumer-driven companies like Tongkun Co. and Xin Fengming [42]

Investment Rating - The report assigns an investment rating of "Outperform the Market" for the dairy industry [3][64]. Core Insights - The dairy industry is currently experiencing a phase of oversupply and weak demand, leading to a significant decline in raw milk prices, which fell from 4.38 yuan/kg in 2021 to 3.22 yuan/kg by July 2024, a decrease of 26.48% [5][33][54]. - The report anticipates that raw milk prices may stabilize by Q2 2025, contingent on successful capacity reduction through the culling of approximately 300,000 dairy cows and the effective management of powder milk inventories [5][57][64]. - The industry is characterized by a duopoly of leading companies, Yili and Mengniu, which together hold a market share of 56.1% as of 2023, with Yili at 30.2% and Mengniu at 25.9% [30][65]. Summary by Sections 1. Current Stage and Issues in the Dairy Industry - The dairy industry has evolved through five stages since 1980, currently entering a mature phase characterized by oversupply and declining demand [4][11]. - The average per capita dairy consumption in China dropped from 14.4 kg in 2022 to 12.4 kg in 2023, indicating a potential shift to a stagnant market [4][28]. 2. Key Characteristics of Raw Milk Production - Raw milk production is marked by a two-year lag in cow maturation, making investment predictions challenging [4][35]. - Feed costs constitute 60-70% of the total costs for leading dairy farms, with smaller farms facing greater cost pressures due to lack of scale [4][38]. 3. Three Cycles of Raw Milk Prices and Future Trends - The current cycle, starting from 2021, is distinguished by simultaneous pressure from both supply and demand, leading to unprecedented price declines [5][54]. - The report outlines that if the industry can effectively reduce cow numbers and manage powder milk inventories, raw milk prices may stabilize by mid-2025 [5][57]. 4. Investment Recommendations - The report recommends focusing on leading dairy companies with strong cost efficiency and flexibility, particularly Yili, Mengniu, and New Dairy [64][65]. - The anticipated stabilization of raw milk prices is expected to improve the financial performance of these companies by reducing asset impairment and enhancing sales recovery [64].

Investment Rating - The industry is rated as "Outperform" [6][10][11] Core Insights - The dairy industry is currently experiencing a downturn in raw milk prices, which are expected to stabilize by Q2 2025, leading to improvements in various aspects for dairy companies [10][11][12] - The industry has entered a mature phase characterized by a stable market structure dominated by leading companies like Yili and Mengniu, alongside strong regional players [11][12] - Demand has weakened since 2022, with a notable drop in per capita dairy consumption from 14.4 kg in 2021 to 12.4 kg in 2022, indicating a potential shift to a mature market phase [9][11][12] Summary by Sections Current Stage and Issues in the Dairy Industry - The dairy industry has evolved through five stages since 1980, with the current phase being one of maturity [9][16] - The market is primarily dominated by Yili and Mengniu, which together hold a 56.1% market share [9][11] - The industry faces challenges from oversupply and declining raw milk prices, which have fallen from a peak of 4.38 yuan/kg in 2021 to 3.22 yuan/kg by July 2024, a decrease of 26.48% [10][11][12] Characteristics of Raw Milk Production - Raw milk production is characterized by a two-year lead time for dairy cows to start producing milk, making investment predictions challenging [9][10] - Feed costs account for 60-70% of the total costs for leading dairy farms, with smaller farms facing greater pressure due to their inability to hedge against market fluctuations [9][10] - The profitability of dairy farms is directly influenced by raw milk prices, which serve as a key indicator of the supply-demand relationship [9][10] Three Phases of Raw Milk Cycle and Future Trends - The current raw milk cycle began in 2021, with expectations for prices to stabilize by Q2 2025 if the industry can successfully reduce excess capacity through the culling of dairy cows [10][11] - The report anticipates that if 300,000 dairy cows are culled this year, it will significantly alleviate the oversupply issue [10][11] - The report also notes that large-scale powder milk inventories will exert downward pressure on raw milk prices, with leading companies holding over 300,000 tons of powder milk as of mid-year [10][11] Investment Recommendations - The report recommends focusing on leading dairy companies with strong cost efficiency and those that are likely to benefit from overall industry improvements, specifically Yili, Mengniu, and New Dairy [10][11][12]