Investment Rating - The report provides an investment rating for Southeast Asia discretionary and staples, specifically highlighting Malaysia as a relatively developed economy with a strong retail market led by modern channels [1]. Core Insights - Malaysia is the fourth largest consumer market in ASEAN, with total consumer spending reaching approximately 239.2 billion USD in 2023, reflecting a compound annual growth rate (CAGR) of 4.4% from 2015 to 2023 [21][22]. - The retail market in Malaysia is dominated by modern channels, which account for about 73% of the market share, with e-commerce growing rapidly at a CAGR of approximately 16% from 2018 to 2023 [36][39]. Economic Overview - Malaysia's GDP in 2023 is approximately 399.5 billion USD, contributing 11% to the total ASEAN GDP, with a projected growth rate of 4.4% for 2024-2025 [5][6]. - The service sector is the largest contributor to GDP, accounting for about 57% in 2023, while the manufacturing sector contributes around 36% [7][16]. Consumer Behavior - The average disposable income in Malaysia is approximately 6,822 USD, with consumer spending exceeding disposable income by 105%, the highest among major ASEAN countries [29][30]. - The population is characterized by a high urbanization rate of 79% and a median age of 32.8 years, contributing to a favorable consumer demographic [31][34]. Retail Channels - The retail market size in Malaysia is estimated at 56.1 billion USD in 2023, with traditional, modern, e-commerce, and other channels comprising approximately 6%, 73%, 11%, and 10% respectively [36][38]. - Convenience stores and e-commerce are the fastest-growing retail channels, with convenience stores expected to grow at a CAGR of about 10% from 2023 to 2028 [39][54]. Import and Export Dynamics - Malaysia maintains a trade surplus, with exports totaling approximately 320.5 billion USD and imports at 272.5 billion USD in 2023, resulting in a trade surplus of 48 billion USD [5][6]. - The country is a significant exporter of palm oil and other agricultural products, while it imports grains and livestock products [5][6].

Group 1: Economic Impact of Fiscal Policy - The effect of Japan's fiscal expansion in the 1990s on corporate profits weakened over time due to a declining capacity cycle and limited inventory cycle elasticity, with a trend reversal after 2012[2] - In China, fiscal expansion from 2013 to 2014 saw weak recovery in corporate inventory and profits, while a capacity cycle upturn post-2016 improved both inventory and profit recovery elasticity[2] - Currently, the A-share market is at the bottom of the capacity and inventory cycles, with projected non-financial net profit growth of 20% and 10% for 2025 under strong and weak fiscal scenarios, respectively[2] Group 2: Historical Lessons from Japan - Japan's corporate inventory cycle weakened during the long capacity de-leveraging phase post-1990s, with limited amplitude and duration of inventory recovery[3] - After 2012, strong stimulus policies led to a sustained expansion phase for Japanese corporations, improving both inventory cycle amplitude and duration[3] - The relationship between capacity cycles and corporate profitability is significant; a downtrend in capacity correlates with declining revenue and profit growth, while an uptrend supports sustained improvements[4] Group 3: Predictions for A-Share Market - If fiscal policies are effectively strengthened, A-share profit growth could significantly improve, similar to the 2016 scenario where non-financial revenue growth increased by approximately 14 percentage points[5] - In a limited fiscal scenario, A-share profit recovery would be weak, with revenue growth only increasing by about 2 percentage points in 2013[5] - Based on historical models, projected revenue and net profit growth for A-shares in 2025 could range from 5% to 10% and 10% to 20%, respectively, compared to 2024[5]

Investment Rating - Maintains an "Outperform" rating with a target price of $7.20 per share [1] Core Views - The company's Q3 revenue and gross profit margin exceeded market expectations, with Q4 expected to achieve GAAP profitability [1] - The company aims to ship over 1 million LiDAR units in 2025, driven by strong demand in the ADAS market [1][9] - The company's ADAS LiDAR maintains a leading market share in the front-load passenger vehicle market, with the more cost-effective ATX series set for mass production next year [1] Financial Performance - Q3 revenue reached RMB 539 million, a 27% YoY and 32% QoQ increase, significantly exceeding management guidance [1] - Gross profit margin reached 47.7%, surpassing market expectations due to cost optimization, economies of scale, and additional NRE service contributions [1] - GAAP net loss narrowed to RMB 70 million in Q3, with Q4 expected to achieve a GAAP net profit of $20 million [1] - Q3 LiDAR shipments reached 134,000 units, a 183% YoY increase, with ADAS LiDAR accounting for 97% of total shipments [1] Market Expansion - The company has secured design cooperation agreements with 5 global leading OEMs, including 4 joint venture automakers [1] - A new development and verification project was signed with a top 3 Japanese automaker in Q3, further demonstrating the company's product competitiveness [1] Valuation and Forecast - The target price of $7.20 is based on a 2.0x PS multiple for 2025, considering the company's historical average PS of 2.3x [1] - Revenue forecasts for 2024-2026 are RMB 2.071 billion, RMB 3.267 billion, and RMB 4.257 billion, respectively, with growth rates of 10%, 58%, and 30% [1][6] - Net profit is expected to turn positive in 2025, reaching RMB 69 million, and further increasing to RMB 302 million in 2026 [6]

Investment Rating - The report indicates a positive outlook for the aviation sector, suggesting a focus on Spring Airlines, Hainan Airlines Holding, and Juneyao Airlines as key investment opportunities [5][6][61]. Core Insights - The transportation index decreased by 1.1% from November 18 to November 22, 2024, outperforming the Shanghai Composite Index, which fell by 1.9% during the same period [3][33]. - The aviation sector showed a significant increase of 3.9%, while express delivery faced a decline of 5.6% [3][33]. - The report highlights the recovery of international flight demand and the expected rise in airline profits in 2024, driven by strong travel demand during peak seasons [5][59]. Weekly Market Review - The transportation index experienced a decline of 1.1%, with various subsectors showing mixed performance: air transport (+3.9%), warehousing (+2.9%), public transport (+1.0%), while road freight and shipping saw declines of -2.5% and -2.7% respectively [3][33]. - The report emphasizes the importance of monitoring oil transport prices and national road freight traffic as key indicators for the sector [3][58]. Shipping Data Observation - As of November 22, 2024, the SCFI index was at 2160.08, down 4.1% from the previous week, while the BDI index fell by 13.9% to 1537 [4][40]. - The report notes a significant increase in the BCTI index by 31.4%, indicating a tightening supply-demand situation in oil shipping [4][41]. Recent Highlights - The Pudong Airport terminal is designed to accommodate 50 million passengers annually, marking a significant infrastructure development in the aviation sector [4][49]. - Liaoning Port's container sea-rail transport has seen a growth of over 17% in dispatch volume from January to October 2024, reflecting a positive trend in logistics [4][51]. - Jilin Province is developing a comprehensive cold chain logistics network, which is expected to enhance the efficiency of express delivery services [4][52]. Investment Strategy - The report suggests a focus on the aviation sector due to the expected recovery in international travel and stable growth in domestic demand, with specific recommendations for Spring Airlines, Hainan Airlines Holding, and Juneyao Airlines [5][59][61]. - In the express delivery sector, the report indicates a decline in average selling prices for major companies, suggesting a cautious approach [5][60].

Core Viewpoints - The establishment of the National Energy Council (NEC) aims to coordinate policies and increase U.S. energy production, with a focus on reducing bureaucratic hurdles and enhancing private sector investment [1][2][3] - The NEC will unify and coordinate energy strategies across federal departments, potentially diminishing the regulatory powers of the Federal Energy Regulatory Commission (FERC) [3][5] - The Trump administration plans to expand coal, oil, natural gas, and nuclear energy production while reducing support for wind and solar energy [2][3][5] Summary by Sections Event - Trump pledged to create the NEC to enhance energy policy coordination and increase U.S. energy output, led by Secretary of the Interior Doug Burgum [1][5] Commentary - The NEC will represent federal agencies involved in energy regulation, aiming to streamline processes and focus on innovation [2][5] - Doug Burgum's dual role may improve policy implementation efficiency, aligning with the administration's energy goals [2][3] - The NEC's formation reflects dissatisfaction with existing bureaucratic processes and aims to accelerate the development of nuclear and natural gas energy [3][5] Investment Advice - Recommended companies to focus on include Vistra, Talen Energy, GE Vernova, Mitsubishi Heavy Industry, Cummins, CAT, and Quanta, which are involved in AI industrial equipment, services, and energy consumption [4][5]

Investment Rating - The report assigns an "Outperform" rating to the company with a target price of RMB 63.54, based on a 2024 PE valuation of 20 times [5][20] Core Views - The company achieved revenue of RMB 1.85 billion in the first three quarters of 2024, a YoY increase of 27.13%, and net profit attributable to shareholders of RMB 431 million, a YoY increase of 33.56% [2][17] - Overseas business growth remains strong, with the top 10 customers being from the USA, and 70% being retailers. Except for one, all top 10 customers increased purchases by 4.33% to 316.62% [4][19] - The company plans to establish nearly or over 500 MOTO Gallery stores by Q1 2025 to enhance MotoMotion's brand influence and boost sales [4][19] Financial Performance - In 2024Q3, the company achieved revenue of RMB 642 million, up 26.12% YoY, and net profit attributable to shareholders of RMB 146 million, up 19.89% YoY [2][17] - The company's net profit margin and gross profit margin in the first three quarters of 2024 were 23.30% and 33.72%, up 1.13 and 1.68 percentage points YoY, respectively [3][18] - The company's sales, G&A, R&D, and finance expense ratios in the first three quarters of 2024 were 2.98%, 3.43%, 4.92%, and -2.63%, respectively [3][18] Business Segments - Smart electric sofas, as the core business, are expected to grow by 36.5%, 30.0%, and 23.6% YoY in 2024-2026, respectively [8] - Smart electric beds and accessories, as supplementary businesses, are expected to grow by 2.0%, 1.0%, and 0.0% YoY in 2024-2026, respectively [8] Industry Comparison - The company's 2024E PE ratio of 16.90 is lower than the average PE ratio of 17.0 for comparable companies in the industry [9] - Comparable companies include Qisheng Technology (603610.SH) with a 2024E PE of 18.8 and Henglin Co., Ltd. (603661.SH) with a 2024E PE of 9.4 [9]

[Table_Title] 研究报告 Research Report 芮雯 Raven Rui 闻宏伟 Hongwei Wen Qiao Xu 季屏子 Pingzi Ji raven.w.rui@htisec.com hongwei.wen@htisec.com qiao.xu@htisec.com pz.ji@htisec.com 27 Nov 2024 日本可选消费必需消费 Japan Discretionary Staples HTI 日本消费行业 10 月跟踪报告：零售增速放缓，食品饮料需求改善 Retail growth slowed down, demand for food and beverages improved [Table_summary] (Please see APPENDIX 1 for English summary) 宏观：Q3 私人消费超预期，10 月消费者信心指数下降。三季度 GDP 同比增长 0.3%，环比增长 0.2%，私人消费环 比增长 0.9%。10 月日本消费者信心指数下跌至 36.2，创 5 个月以来新低。9 月实际工资同比下降 0.4%，连续第二 个月下降。 ...

Investment Rating - The report does not explicitly state an investment rating for the machine tool industry, but it suggests a positive outlook for recovery based on various factors [10]. Core Insights - The machine tool industry is experiencing growth in production and exports, with a notable increase in metal cutting machine tool production in October 2024, which reached 59,600 units, up 7.1% year-on-year [2][39]. - The report highlights a decline in machine tool imports, which amounted to 469 million USD in October 2024, down 11.14% year-on-year, while exports increased to 1 billion USD, up 12.52% year-on-year [2][39]. - Japan's machine tool orders show mixed results, with domestic orders falling by 1.0% year-on-year to 33.3 billion JPY, while foreign orders rose by 13.6% year-on-year to 89.1 billion JPY [3][40]. - The report emphasizes the potential for recovery in the machine tool industry due to central government support for equipment updates and the demand for new machine tools [10][44]. Summary by Sections Machine Tool Industry Data - In October 2024, metal cutting machine tool production increased by 7.1% year-on-year, with cumulative production from January to October reaching 579,000 units, up 7.4% year-on-year [2][39]. - Machine tool imports decreased by 11.14% year-on-year, while exports increased by 12.52% year-on-year [2][39]. Japan's Machine Tool Orders - Domestic orders in Japan fell by 1.0% year-on-year, while foreign orders increased by 13.6% year-on-year [3][40]. - Orders from China rose significantly by 48.7% year-on-year, while orders from Europe and the USA declined [3][40]. Economic Analysis of Key Markets - In China, new metal processing machine tool orders grew by 2.3% year-on-year, while orders on hand fell by 1.0% year-on-year [4][41]. - In the USA, total orders for September 2024 reached 450.6 million USD, with a year-on-year growth of 14.6% [4][42]. - Italy's machine tool order index fell by 17.3% year-on-year, indicating challenges in the domestic market [5][43]. Tool Import and Export Analysis - From January to September 2024, tool exports reached 18.987 billion RMB, up 11.64% year-on-year, while imports were 6.358 billion RMB, down 1.88% year-on-year [6][43]. Recommendations - The report suggests focusing on domestic machine tool export opportunities and mid-to-high-end models in emerging fields such as robotics and 3C applications [10][44].

Group 1: Profit Trends - In October, the year-on-year decline in industrial enterprise profits narrowed to 10.0%, an improvement from the previous month's decline of 3.5%[10] - Cumulative profit growth for industrial enterprises from January to October was -4.3%, indicating a continued overall decline[10] - The profit margin for October rose to 5.44%, although it remains one of the lowest values in recent years[11] Group 2: Influencing Factors - The improvement in profit margins is attributed to a combination of lower costs and a decrease in unit expenses, despite a slight increase in unit costs[11] - The industrial added value grew by 5.3% year-on-year in October, reflecting a marginal decline of 0.1 percentage points from the previous month[11] - The Producer Price Index (PPI) showed a year-on-year decline of 2.9%, continuing to exert pressure on profits for the third consecutive month[11] Group 3: Sector Performance - Upstream industries, particularly steel and construction materials, saw significant profit recovery due to favorable policies and demand recovery in infrastructure and real estate[14] - The profit share of upstream industries increased from 24.0% to 30.5%, while midstream and downstream sectors saw declines in profit shares[13] - Most sectors experienced a rebound in profit growth, with notable improvements in steel, construction materials, and domestic consumption sectors benefiting from consumption promotion policies[14] Group 4: Inventory and Sales Dynamics - Industrial finished goods inventory growth decreased to 3.9%, marking the third consecutive month of inventory reduction[20] - Cumulative revenue growth for industrial enterprises from January to October was 1.9%, with October showing a positive growth of 0.2% year-on-year[20] - The current trend of passive inventory reduction may indicate an improvement in economic conditions if sustained[20]

Group 1: Market Opportunities - The midstream market and mid-range price segments in Indonesia present significant growth opportunities, with a relatively weak manufacturing sector compared to upstream resources and downstream consumption markets [3][7][9] - Indonesia's abundant upstream resources include being the world's largest producer of nickel and the third-largest producer of rice, contributing to a GDP composition where agriculture and mining account for 23% [3][4][5] - The consumer market in Indonesia is substantial, with a total consumption of USD 723.7 billion in 2023, making it the largest in ASEAN, and a compound annual growth rate (CAGR) of 5.1% from 2015 to 2023 [5][7] Group 2: Consumer Demographics - Indonesia's population reached 278 million in 2023, with a median age of 30.9 years, indicating a young demographic that supports consumption growth [7][8] - The middle class is expanding rapidly, with the number of individuals earning over USD 10,000 annually increasing significantly since 2018, creating opportunities for mid-range brands [21][22] Group 3: Retail Channels - The retail market in Indonesia is the largest in ASEAN, with a balanced distribution among traditional, modern, and e-commerce channels, projected to grow at a CAGR of over 11% from 2023 to 2028 [24][25] - Traditional channels remain crucial for market penetration, with local shops and convenience stores like Alfamart and Indomaret dominating the landscape [28][29] Group 4: Localization and Market Entry - Companies entering the Indonesian market must prioritize localization, adapting products, channels, and branding to local preferences and regulations, as success rates are low for those replicating domestic strategies [34][35] - Understanding local religious practices and compliance with regulations, such as halal certification, is essential for market acceptance [35][36] Group 5: Infrastructure and Logistics - Indonesia's infrastructure presents both challenges and opportunities, with significant government investment aimed at improving logistics and connectivity across its vast archipelago [9][10][37] - The logistics performance index (LPI) for Indonesia is the lowest among major ASEAN countries, indicating a need for improvement in logistics efficiency [39]