Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The report highlights that Q3 revenue was 167.19 billion (YoY +8.1%, QoQ +3.8%), slightly below consensus expectations [2] - Gross profit reached 88.83 billion (YoY +16.1%, QoQ +3.4%), also slightly below consensus [2] - Net profit was 53.23 billion (YoY +47.1%, QoQ +11.8%), exceeding consensus by 17.4% [2] - The report emphasizes stable growth in domestic long-term games and incremental growth from overseas games, with domestic game revenue at 37.3 billion (YoY +14%) driven by titles like "Valorant" and "Honor of Kings" [2] - Marketing business revenue was 30 billion (YoY +16.6%), surpassing consensus expectations [2] Summary by Sections Financial Performance - Q3 revenue was 167.19 billion, slightly missing consensus by 0.4% [2] - Gross profit was 88.83 billion, missing consensus by 0.8% [2] - Net profit was 53.23 billion, beating consensus by 17.4% [2] - The company expects net profits (Non-IFRS) for 2024/25/26 to be 220.80 billion, 238.91 billion, and 260.27 billion respectively [2] Business Segments - Value-added services (VAS) showed a gross margin of 57.5%, exceeding Bloomberg consensus of 56.7% due to growth in gaming revenue [2] - Marketing business gross margin was 53%, below Bloomberg consensus of 56% [2] - Financial technology revenue was 53.1 billion (YoY +2%), slightly below consensus of 54.06 billion [2] Future Outlook - The report anticipates continued growth in gaming and advertising, maintaining a "Buy" rating based on the company's long-term competitive advantages [2]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The gaming business has exceeded expectations, with a focus on new game launches at the end of the year [2] - The company achieved revenue of 26.21 billion yuan in Q3 2024, a year-over-year decrease of 3.9% but a quarter-over-quarter increase of 2.8% [2] - The gaming and related value-added services outperformed expectations with 20.9 billion yuan compared to the 20.7 billion yuan consensus [2] - The company’s long-term games continue to perform well, with significant contributions from titles like "Identity V" and "Naraka: Bladepoint" [2] - New games expected to launch in December, including Marvel IP licensed titles, are anticipated to drive revenue growth [2] Financial Performance Summary - Q3 2024 gross profit was 16.48 billion yuan, with a gross margin of 62.9%, showing a year-over-year decrease of 2.9% [2] - Adjusted net profit for Q3 2024 was 7.5 billion yuan, a year-over-year decrease of 13.3% [2] - The company forecasts adjusted net profits for CY 2024/25/26 to be 31.82 billion, 34.94 billion, and 38.32 billion yuan respectively [2][4] - The company’s revenue growth rates are projected at 2.2% for 2024, 7.1% for 2025, and 6.0% for 2026 [4][8] Key Financial Indicators - The company’s operating income for 2023 is projected at 103.47 billion yuan, with a year-over-year growth of 7.2% [4] - The return on equity (ROE) is expected to decline from 25% in 2023 to 21% by 2026 [4] - The price-to-earnings (P/E) ratio is projected to decrease from 16.1 in 2023 to 10.5 by 2026 [4][8]

Investment Rating - Industry Rating: Overweight [2] Core Views - The report highlights the acceleration of AI product iterations both domestically and internationally, emphasizing the potential of AI technology providers that can reduce workforce redundancies [2][4] - The report notes that the AI industry has seen significant growth, with Baidu's Wenxin model achieving a daily call volume exceeding 1.5 billion, a 7.5-fold increase from earlier this year [4] - The report suggests that sectors such as e-commerce, digital marketing, and finance are leveraging AI for labor substitution and cost-effective promotion, indicating ongoing development opportunities for related technology providers [4] Summary by Sections 1. Weekly Market Review - From November 11 to November 15, 2024, the Shanghai Composite Index decreased by 3.52%, the ChiNext Index by 3.36%, and the CSI 300 Index by 3.29% [3][31] - The media index increased by 1.27%, while the Hang Seng Technology Index fell by 7.29% [3][31] 2. AI+ Sector Overseas AI - Google announced the launch of a standalone Gemini app for iPhone users, expected to enhance AI functionalities [5][51] - Apple released Final Cut Pro 11 and other updates, introducing significant new features [5][51] Domestic AI - Tencent launched version 2.0 of its Yuanbao app, featuring an upgraded interface and new AI application sections [8][52] - Alibaba introduced the conversational AI search engine Accio overseas, which has shown a 20%-30% increase in conversion rates during trials [8][52] - ByteDance unveiled the SeedEdit image editing model, which is currently in testing [8][52] 3. AI Hardware - Baidu launched the Xiaodu AI glasses, claiming it to be the world's first native AI glasses equipped with a Chinese large model [9][53] 4. Overseas Technology - CINNO Research reported that the domestic XR market saw a total sales volume of 108,000 units in Q3 2024, a 35% decline from the previous quarter [10] 5. Gaming - Tencent reported Q3 revenue of 167.193 billion yuan, an 8% year-on-year increase, with a gross profit of 88.828 billion yuan, up 16% [12]

Investment Rating - The industry investment rating is "Overweight" [2] Core Views - The report highlights that the price of white feather chicken seedlings remains high, while domestic pet brands performed well during the Double Eleven shopping festival [2] - The report indicates a slowdown in the replenishment enthusiasm for pigs, with a 14.6% month-on-month increase in the output of listed pig companies [2][5] - The report predicts that pig prices will receive strong support in 2025, with a projected average decrease of 4.5% in the breeding sow inventory compared to 2023 [5] Summary by Sections 1. Weekly Market Review - The agricultural sector fell by 6.06% this week, underperforming the CSI 300 index by 2.77 percentage points [25][26] - The agricultural sector's absolute PE and PB are 30.41 times and 2.54 times, respectively, which are significantly lower than historical averages [36][38] 2. Industry Weekly Data 2.1 Primary Agricultural Products - Corn spot price is 2208.04 CNY/ton, down 1.12% week-on-week, and soybean spot price is 4012.11 CNY/ton, up 0.43% week-on-week [44] 2.2 Livestock - The average weight of pigs sold nationwide is 126.46 kg, up 0.56 kg week-on-week [2] - The price of pigs is currently 16.03 CNY/kg, down 4.3% week-on-week [2] 2.3 Poultry - The price of white feather chicken seedlings is 56.03 CNY/set, down 1.3% week-on-week, but up 15.2% year-on-year [5] - The price of yellow feather chicken has shown slight fluctuations, with the average price of black chicken at 23 CNY/kg [5] 3. Market Dynamics - The report notes that the sales of pig vaccines have increased, with the growth rates for various vaccines ranging from 8.3% to 83.3% [5] - The report emphasizes the strong performance of domestic pet food brands during the Double Eleven shopping festival, with significant year-on-year growth in sales [5]

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Investment Rating - The industry investment rating is "Buy" [2] Core Views - The report focuses on British American Tobacco's (BAT) strategy to promote its high-end Glo series and accelerate its transition to a smoke-free future. The new tobacco audience is expanding, driven by health trends and product transformation. The number of vaping e-cigarette users is expected to reach 101 million by 2030 [2][26] - The report highlights that the nicotine product revenue is projected to grow at a CAGR of 4.6% from 2024 to 2035, surpassing the previous growth rate of 3.8% from 2017 to 2023 [2][26] - BAT plans to launch the Glo Hilo, a high-end heated tobacco device, by the end of 2024, with further market expansion expected in 2025 [2][34] Summary by Sections Weekly Focus - The report discusses BAT's high-end Glo series and its strategy for a smoke-free future, emphasizing the growth of new tobacco consumers, particularly among younger demographics in Europe [2][26] Weekly Market Review - From November 11 to November 15, 2024, the Shanghai Composite Index fell by 3.52%, with the light industry manufacturing sector down 3.68% and textile and apparel down 3.38% [2][38] Key Data Tracking Home Furnishing - The report notes a significant decline in real estate transactions, with a 28.31% decrease in the transaction area of commercial housing in major cities [5] - Furniture sales in October 2024 reached 15.2 billion yuan, a year-on-year increase of 7.4% [5] Packaging and Paper - The report tracks prices of various paper products, noting fluctuations in prices for wood pulp and recycled paper [5] Textile and Apparel - Cotton prices in China are reported at 15,368 yuan per ton, with retail sales of clothing and textiles in October 2024 amounting to 134.7 billion yuan, reflecting an 8% year-on-year increase [6][8] Industry News - The report indicates that BAT's revenue from non-combustible products has reached 18% of total revenue, with a higher percentage of 27% when excluding traditional combustible tobacco products in the U.S. [2][32]

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Investment Rating - The report assigns a "Buy" rating to the company [2]. Core Views - The company focuses on semiconductor display as its main business while expanding into semiconductor photovoltaic and materials to create a second growth curve [2]. - The panel industry is experiencing a recovery in demand, with expectations for continued improvement in the future [2]. - The company is enhancing its capacity and transitioning from large-size to full-size production, solidifying its leading position in the industry [2]. Summary by Sections 1. Strong Performance in Main Panel Business - The company is a leading player in the global panel industry, focusing on semiconductor display and photovoltaic materials [22]. - The acquisition of LGD's G8.5 line is expected to strengthen the company's position in the large-size LCD market [22]. - The semiconductor display business is expanding its capacity and optimizing its product structure, with significant growth in both large and small-size panels [30]. 2. Supply and Demand Improvement - The industry is seeing increased concentration, with domestic manufacturers driving a recovery in panel prices [58]. - The company's market share in large-size panels is expected to increase due to strategic acquisitions and capacity expansions [58]. - The demand for large-size TV panels is rebounding, contributing to significant revenue growth for the company [58]. 3. Financial Performance and Projections - The company anticipates net profits of 27 billion, 63 billion, and 95 billion yuan for 2024, 2025, and 2026, respectively, with corresponding EPS of 0.14, 0.33, and 0.51 yuan [4]. - The gross profit margin is projected to improve from 12.1% in 2024 to 17.1% in 2026, indicating enhanced profitability [4]. - The company's cash flow has significantly improved, with a year-on-year increase of 37.38% in 2023 and 21.28% in the first half of 2024 [53].

Market Commentary - On November 14, the market experienced a significant decline, with the Shanghai Composite Index dropping by 1.73% and the ChiNext Index falling by 3.40%. The total trading volume for the A-shares fell below 2 trillion for the first time recently, reaching 1.87 trillion [1] - The decline in the market was attributed to a cooling of investor sentiment and a delayed reaction to previously overlooked events. The strong performance of the ChiNext and other previously strong sectors reversed, with growth technology sectors leading the declines [1][4] - The market is expected to enter a short period of calm, awaiting a resurgence in macro policy expectations. This follows a week of intense events that had previously driven up investor sentiment and trading activity [1][4] Investment Themes - The first investment theme focuses on consumer goods with potential policy support and recovery logic, including sectors like automotive, home appliances, pharmaceuticals, and agriculture. These sectors have shown significant lag in the current market rally [4] - The second theme revolves around technology sectors that have shown better-than-expected performance in Q3 and have multiple catalysts, including electronics, communications, and military technology. Although these sectors may face short-term adjustment pressure, they remain a primary opportunity in the medium term [4]