Report Title - "Technology in the Big Era - 3Q25 Fund Position Analysis" [2] Report Core Viewpoints - Market performance rebounded in Q3, leading to a turning point in fund issuance. The net value of active funds generally recovered, driving the recovery of fund issuance. Historically, when the proportion of active funds with a net value >1 rises above 80%, fund issuance is expected to accelerate, boosting the performance of heavily - held stocks by funds [3]. - The equity position of active funds reached a historical high. In 3Q25, the stock - holding ratio of active equity - biased funds increased by 1.4 pct to 85.6%, and the equity and convertible bond positions of "fixed - income +" funds changed by +2.5 pct and - 1.0 pct to 10% and 7% respectively [3]. - Funds increased their allocation to technology and cyclical sectors while reducing their allocation to consumption, manufacturing, and high - dividend sectors. In terms of overweight ratios, active funds significantly increased their positions in communication and electronics in the TMT sector, as well as non - ferrous metals and petroleum and petrochemicals in the cyclical sector. They reduced their positions in home appliances and food and beverage in the consumption sector, as well as military and automotive in the manufacturing sector, and banks and transportation in the high - dividend sector [3]. - The TMT position ratio reached a historical high, facing downward pressure. In Q3, the concentration of the top 20 heavily - held A - share stocks by funds increased to 33%, the highest since Q3 2022. Historically, the position ratio of around 30% has been a critical point for active fund clustering. In this technological wave, the TMT position ratio has reached 40%. After the breakdown of previous clustering, the position ratio generally declined to below 20% [4]. - Active funds have strong pricing power in the TMT sector. In terms of the position as a proportion of the industry's free - float market capitalization, active funds currently have relatively higher pricing power in the TMT sector than passive funds and foreign capital, and also have a slight advantage in the manufacturing (machinery and military) sector [4]. - Regarding the adjustment of five types of industry funds: TMT funds increased their positions in CPO and PCB while reducing semiconductor and computer software; consumer funds increased their positions in e - commerce and hotels while reducing chemicals and white goods; new energy funds increased their positions in small metals while reducing vehicle manufacturing and electrical equipment; pharmaceutical funds increased their positions in biopharmaceuticals while reducing chemical drugs; cyclical funds increased their positions in small metals and precious metals while reducing industrial metals and rubber [4]. - Funds continued to increase their positions in Hong Kong - listed internet, semiconductor, and non - banking sectors. Internet platforms such as Alibaba and Tencent, which benefit from the AI wave, semiconductor companies like SMIC and Huahong, and insurance companies in the non - banking sector, which benefit from the improvement of asset quality in a bull market, all received increased allocations from funds [4]. - A selected portfolio of heavily - held stocks by funds was screened for stocks with a CAGR of profit expectations >30% and a profit forecast upward revision of more than 5% since October, which are expected to benefit from the incremental liquidity brought by the recovery of fund issuance [5]. Report Industry Investment Rating - Not provided in the report Summary by Directory Public Offering - Market performance in Q3 was strong, and the net value of active funds generally recovered, driving the recovery of fund issuance. Historically, when the proportion of active funds with a net value >1 rises above 80%, fund issuance is expected to accelerate, boosting the performance of heavily - held stocks by funds [6]. Equity Allocation - In 3Q25, due to the technology and manufacturing market, the equity position of active funds reached a historical high, and "fixed - income +" funds also increased their equity allocation. The stock - holding ratio of active equity - biased funds increased by 1.4 pct to 85.6%, and the equity and convertible bond positions of "fixed - income +" funds changed by +2.5 pct and - 1.0 pct to 10% and 7% respectively [11]. Industry Allocation - In terms of overweight ratios, in Q3, active funds significantly increased their positions in communication (+3.5 pct), electronics (+2.4 pct) in the TMT sector, and non - ferrous metals (+0.6 pct) and petroleum and petrochemicals (+0.5 pct) in the cyclical sector. They reduced their positions in home appliances (-1.6 pct), food and beverage (-1.2 pct) in the consumption sector, as well as automotive (-1.1 pct), military (-1.0 pct) in the manufacturing sector, and banks (-0.5 pct), utilities (-0.4 pct), and transportation (-0.4 pct) in the high - dividend sector [13]. - In terms of sub - sectors, hardware such as CPO and PCB were the main sectors for increased positions. The sectors for reduced positions were mainly the weak - performing consumption, innovative drugs, and urban and rural commercial banks [16]. - In Q3, there was a consensus between north - bound funds and active funds in increasing allocations to technology and cyclical sectors such as electronics, media, non - ferrous metals, and petrochemicals. North - bound funds also significantly increased their positions in new energy. In terms of reduced positions, both significantly reduced their allocations to consumption sectors such as food and beverage and home appliances, as well as high - dividend - related banks, utilities, and transportation [18]. Concentration of Heavily - Held Stocks - In Q3, the concentration of the top 20 heavily - held A - share stocks by funds increased to 33%, the highest since Q3 2022, corresponding to the style where small - cap stocks outperformed large - cap stocks [21]. Sector Concentration - Since 2009, the position ratio of around 30% has been a critical point for previous rounds of active fund clustering. In this technological wave, the TMT position ratio has reached 40%. After the breakdown of previous clustering, except for the relatively slow decline in the position ratio of pharmaceuticals + food and beverage from 2020 in the following three years, the position ratio generally declined to below 20% [25]. Relative Pricing Power - In terms of the position as a proportion of the industry's free - float market capitalization, active funds currently have relatively higher pricing power in the TMT sector than passive funds and foreign capital, and also have a slight advantage in the manufacturing (machinery and military) sector [27]. Industry Funds - TMT funds increased their positions in CPO and PCB while reducing semiconductor and computer software; consumer funds increased their positions in e - commerce and hotels while reducing chemicals and white goods; new energy funds increased their positions in small metals while reducing vehicle manufacturing and electrical equipment; pharmaceutical funds increased their positions in biopharmaceuticals while reducing chemical drugs; cyclical funds increased their positions in small metals and precious metals while reducing industrial metals and rubber [30]. Heavily - Held Stocks - AI hardware - related companies such as Industrial and Commercial Bank of China, Cambricon, Dongshan Precision, and Tianfu Communication entered the top 20 heavily - held stocks by funds, while financial and consumer stocks such as China Merchants Bank, Wuliangye, Haid Group, and Gree Electric Appliance exited the top 20 [33]. A - Share Individual Stock Allocation - Funds increased their positions in stocks such as Tonglian Precision and Xiangyou Pump. The median excess return of the top 20 stocks with increased fund pricing power in Q3 2025 relative to the CSI 300 was 61%, but most of them underperformed in Q4. The median excess return of the top 20 stocks with reduced positions by funds in Q3 was relatively low, only 7% [36][40]. Hong Kong Stock Allocation - In 3Q25, funds continued to increase their positions in Hong Kong - listed internet, semiconductor, and non - banking sectors. Internet platforms such as Alibaba and Tencent, semiconductor companies like SMIC and Huahong, and insurance companies in the non - banking sector all received increased allocations [41]. Selected Portfolio of Heavily - Held Stocks by Funds - Stocks were screened from heavily - held stocks by funds with a CAGR of profit expectations >30% and a profit forecast upward revision of more than 5% since October, which are expected to benefit from the incremental liquidity brought by the recovery of fund issuance [5].

Group 1: Monetary Policy Decisions - The Federal Reserve lowered the interest rate by 25 basis points to a target range of 3.75%-4%[4] - The Fed will stop balance sheet reduction on December 1, gradually replacing MBS with short-term Treasury bonds[4] - There is internal disagreement within the Fed regarding rate cuts, with one member advocating for a 50 basis point cut[4] Group 2: Economic Indicators - Employment risks are rising, with the unemployment rate increasing to 4.3% in August, the highest since late 2021[8] - Inflation remains elevated, with the core CPI falling by 0.1 percentage points to 3% in September[8] - Economic growth is described as expanding at a moderate pace, a revision from previous assessments of slowing growth[13] Group 3: Market Reactions and Expectations - Market expectations for a December rate cut have dropped significantly from over 90% to below 60%[14] - The lack of recent economic data due to government shutdowns is causing uncertainty in Fed decision-making[14] - The stock market indices fell, while bond yields rose and the dollar index increased following the Fed's announcements[14] Group 4: Risks and Outlook - Risks include potential unexpected increases in inflation and tighter monetary policy from the Fed[14] - The overall economic outlook suggests a continued weakening in the labor market and consumer spending due to tariffs and economic uncertainty[13]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Insights - The company reported a significant increase in revenue and net profit for Q3 2025, with revenue reaching 1.483 billion yuan (up 28.3% year-on-year) and net profit of 140 million yuan (up 285.4%) [7] - The beauty segment showed rapid revenue growth, with the personal care segment generating 606 million yuan (up 13.8%), and the beauty segment achieving 354 million yuan (up 272.3%) [7] - The company is focusing on four strategic adjustments to enhance profitability and is optimistic about the improvement in operational quality leading to better performance [7] Financial Performance Summary - For 2023A, the company reported revenue of 6,598 million yuan, with a revenue growth rate of -7.2% [6] - The forecast for 2025E indicates revenue of 6,276 million yuan, with a projected net profit of 407 million yuan and an EPS of 0.60 yuan [6][8] - The company's gross margin for Q3 2025 was 61.5%, reflecting a 7.0 percentage point increase [7] Strategic Focus - The company is enhancing its core products and expanding its online channel presence, launching key products such as Bai Cao Ji Xian Cao Oil and Meijiajing Propolis Repair Cream [7] - The dual-channel strategy of "online + offline" is being leveraged to drive growth, supported by brand marketing and influencer investments [7] Earnings Forecast - The company is expected to achieve net profits of 4.07 billion yuan, 4.81 billion yuan, and 5.98 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding PE ratios of 42.1, 35.6, and 28.6 [7]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company has accelerated the expansion of high-end production capacity, anticipating a significant performance boost once capacity constraints are alleviated [1] - The company reported a revenue of 13.51 billion yuan for the first three quarters of 2025, representing a year-on-year growth of 49.96%, and a net profit attributable to shareholders of 2.72 billion yuan, up 47.03% year-on-year [8] - The demand for AI is robust, driving continuous high growth in performance, with the company benefiting from structural demand for printed circuit boards in high-performance computing and AI applications [8] - The company is expected to achieve revenues of 18.23 billion yuan, 23.88 billion yuan, and 32.70 billion yuan for 2025, 2026, and 2027 respectively, with net profits of 3.90 billion yuan, 5.17 billion yuan, and 7.24 billion yuan for the same years [8] Financial Performance - The company achieved a revenue of 50.19 billion yuan in Q3 2025, a year-on-year increase of 39.92% and a quarter-on-quarter increase of 12.62% [8] - The gross margin for Q3 2025 was 35.84%, reflecting a year-on-year increase of 0.9 percentage points but a quarter-on-quarter decline of 1.47 percentage points due to increased stock incentive costs and other factors [8] - The company has maintained high levels of capital expenditure, with cash payments for fixed assets and other long-term assets amounting to approximately 1.39 billion yuan in the first half of 2025 and 715 million yuan in Q3 2025 [8] Earnings Forecast - The company is projected to achieve a revenue growth rate of 36.6% in 2025, followed by 31.0% in 2026 and 36.9% in 2027 [7] - The expected earnings per share (EPS) for 2025 is 2.03 yuan, with a price-to-earnings (PE) ratio of 39.5 [7] - The return on equity (ROE) is forecasted to increase to 27.0% in 2025 and further to 32.6% by 2027 [7]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company has shown significant improvement in the operational efficiency of its main business, the cableway operations, while actively expanding into new business areas to seek additional growth [8] - The key project, Qiandao Lake Muxin Valley, is currently under construction and is expected to become a new performance growth point in the future [8] - The company is projected to achieve revenues of 6.58 billion, 7.24 billion, and 7.92 billion yuan for the years 2025 to 2027, with year-on-year growth rates of -5%, +10.0%, and +9.5% respectively [8] Financial Performance Summary - For the third quarter of 2025, the company reported revenues of 211 million yuan, a year-on-year decrease of 12.82%, and a net profit attributable to shareholders of 71 million yuan, down 10.67% year-on-year [8] - The gross margin for Q3 2025 was 63.86%, a decrease of 1.54 percentage points year-on-year, while the net profit margin was 33.50%, an increase of 0.8 percentage points year-on-year [8] - The company’s revenue for the first three quarters of 2025 was 503 million yuan, down 9.07% year-on-year, with a net profit of 138 million yuan, down 11.07% year-on-year [8] Earnings Forecast - The company’s projected earnings for 2025 include revenues of 658 million yuan, a decrease of 5.0% year-on-year, and a net profit of 160 million yuan, an increase of 12.4% year-on-year [7] - The earnings per share (EPS) is expected to be 0.90 yuan in 2025, with a price-to-earnings (PE) ratio of 16.8 [7] - The return on equity (ROE) is projected to be 10.8% in 2025, increasing to 12.4% by 2027 [7] Market Performance - The company’s stock price closed at 15.15 yuan as of October 28, 2025 [2] - Over the past 12 months, the company’s stock has experienced a performance decline of 9%, compared to the Shanghai and Shenzhen 300 index [4]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company reported a revenue of 1.941 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 14.63%. The net profit attributable to shareholders was 153 million yuan, up 5.14% year-on-year [7] - New orders maintained high growth, with a total of 1.02 billion yuan in new contracts signed in the first three quarters, a year-on-year increase of 135.83%. The company has sufficient backlog orders to support stable operations [7] - The company's profitability has declined, with a decrease in operating cash flow compared to the previous year. The gross profit margin for the first three quarters was 17.77%, down 1.98 percentage points year-on-year [7] Financial Performance Summary - Revenue Forecast: - 2023A: 2,657 million yuan - 2024A: 2,554 million yuan - 2025E: 2,762 million yuan - 2026E: 3,228 million yuan - 2027E: 3,764 million yuan - Net Profit Forecast: - 2023A: 282 million yuan - 2024A: 263 million yuan - 2025E: 302 million yuan - 2026E: 394 million yuan - 2027E: 504 million yuan - EPS Forecast: - 2023A: 0.43 yuan - 2024A: 0.40 yuan - 2025E: 0.47 yuan - 2026E: 0.61 yuan - 2027E: 0.78 yuan [6][8] Investment Recommendations - The company is expected to achieve net profits of 302 million yuan, 394 million yuan, and 504 million yuan for the years 2025 to 2027, corresponding to PE ratios of 17.9, 13.8, and 10.7 respectively. The recommendation remains "Accumulate" [7]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company reported a 33.4% year-on-year increase in revenue for the first nine months of 2025, reaching 20.47 billion yuan, with a net profit of 650 million yuan, up 16.7% year-on-year [7] - In Q3 2025, the company achieved revenue of 5.22 billion yuan, a year-on-year increase of 19.9%, and a net profit of 190 million yuan, up 21.9% year-on-year [7] - The sales gross margin in Q3 was 9.2%, an increase of 0.48 percentage points year-on-year and 3.39 percentage points quarter-on-quarter [7] - The company is actively exploring new business models with a dual-line approach of "large stores + small stores," focusing on cultural consumption [7] - The company is expected to achieve revenues of 27.18 billion yuan, 31.34 billion yuan, and 34.20 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 860 million yuan, 910 million yuan, and 1.01 billion yuan [7] Financial Performance Summary - Revenue projections for the company are as follows: 16.55 billion yuan in 2023, 20.23 billion yuan in 2024, 27.18 billion yuan in 2025, 31.34 billion yuan in 2026, and 34.20 billion yuan in 2027 [6][8] - The net profit is projected to be 707 million yuan in 2023, 719 million yuan in 2024, 863 million yuan in 2025, 913 million yuan in 2026, and 1.01 billion yuan in 2027 [6][8] - The earnings per share (EPS) are expected to be 0.91 yuan in 2023, 0.92 yuan in 2024, 1.11 yuan in 2025, 1.17 yuan in 2026, and 1.30 yuan in 2027 [6][8] - The price-to-earnings (PE) ratio is projected to be 16.4 in 2023, 12.3 in 2024, 12.9 in 2025, 12.2 in 2026, and 11.0 in 2027 [6][8] - The return on equity (ROE) is expected to be 18.7% in 2023, 18.1% in 2024, 20.2% in 2025, 20.4% in 2026, and 21.5% in 2027 [6][8]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company is leveraging AI technology to enhance operational efficiency and reduce costs in cross-border e-commerce, transitioning from point cost control to systematic efficiency improvement [9] - A partnership with Huawei Cloud has been established to develop an AI video generation model, which aims to create tailored models for the cross-border e-commerce sector [9] - The company anticipates revenue growth from 98.8 billion RMB in 2025 to 115.5 billion RMB in 2027, with net profit expected to rise from 1.0 billion RMB to 3.1 billion RMB during the same period [9] Financial Performance Summary - Revenue projections are as follows: 6,518 million RMB in 2023, 9,022 million RMB in 2024, 9,875 million RMB in 2025, 10,674 million RMB in 2026, and 11,545 million RMB in 2027, with growth rates of 47.6%, 38.4%, 9.4%, 8.1%, and 8.2% respectively [7][10] - Net profit is forecasted to decline from 332 million RMB in 2023 to 101 million RMB in 2025, before recovering to 205 million RMB in 2026 and 305 million RMB in 2027, reflecting growth rates of 53.1%, -48.8%, -40.9%, 103.7%, and 48.8% respectively [7][10] - Earnings per share (EPS) are projected to decrease from 0.88 RMB in 2023 to 0.25 RMB in 2025, then increase to 0.51 RMB in 2026 and 0.75 RMB in 2027 [7][10] Operational Efficiency - The company has a workforce of 281 technical personnel, accounting for 8.08% of total employees, focusing on enhancing digital and information management across operations [9] - AI applications are expected to improve information transmission efficiency and reduce operational and management costs, aiding in market trend analysis and inventory management [9]

Core Insights - The report emphasizes the importance of "debt conversion strategies" for convertible bond issuers, particularly those with strong intentions to convert bonds into equity to alleviate financial pressures [4][18][25] - The success rate of these strategies is influenced by the timing of market conditions, the issuer's intent, and their ability to execute the conversion [4][29][30] - The report identifies three phases of participation in convertible bond strategies: pre-launch, during the launch, and post-launch, each with distinct characteristics and risk profiles [4][35][36] Section Summaries What is Debt Conversion Strategy? - Debt conversion refers to the proactive measures taken by issuers of convertible bonds to encourage conversion into equity, particularly for bonds priced below the strong redemption line [4][18] - The average remaining maturity of convertible bonds that have been redeemed through strong redemption since 2018 is 3.13 years, indicating an aging market [18][25] How to Play Debt Conversion Strategy? - The report outlines that the success of debt conversion strategies can be quantified as a product of the timing of conversion, the issuer's intent, and their capability to execute [29][30] - It suggests that investors should consider participating in the pre-launch and launch phases of convertible bonds to maximize potential returns [38] Characteristics of Convertible Bond Delisting - The report notes that a significant majority (87.80%) of convertible bonds that have been delisted since 2018 did so through conversion to equity, with strong redemption being the primary method [10][11] - It highlights that the reliance on redemption proposals has increased in recent years due to the aging of the convertible bond market [10][14] Industry Analysis - The report indicates that certain industries, such as banking and food and beverage, have not proposed redemption adjustments, reflecting their financial stability and lower pressure to convert [14][15] - It also discusses the varying success rates of debt conversion strategies across different sectors, emphasizing the need for tailored approaches based on industry characteristics [14][32]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company reported a revenue of 6.319 billion yuan for the first three quarters of 2025, a decrease of 2.25% year-on-year, while the net profit attributable to shareholders increased by 30.44% to 629 million yuan [9] - In Q3 2025, the revenue was 2.684 billion yuan, showing a year-on-year increase of 5.03%, and the net profit attributable to shareholders reached 361 million yuan, up 51.67% year-on-year [9] - The company is focusing on optimizing product strategies and improving operational efficiency to counteract pressures in the real estate market [9] - The forecast for net profit attributable to shareholders for 2025-2027 is 742 million, 793 million, and 906 million yuan, respectively, with corresponding EPS of 0.89, 0.96, and 1.09 yuan [9] Financial Performance - The company's revenue for 2023 is projected at 9.063 billion yuan, with a growth rate of 1.63%, while the net profit is expected to be 689 million yuan, reflecting a significant increase of 54.66% [8] - The projected revenue for 2024 is 9.189 billion yuan, with a slight growth rate of 1.39%, and a net profit of 585 million yuan, indicating a decrease of 15.11% [8] - For 2025, the expected revenue is 9.019 billion yuan, a decline of 1.85%, but the net profit is forecasted to increase by 26.86% to 742 million yuan [8] Market Comparison - The company's stock price closed at 12.28 yuan, with a total share capital of 830 million shares and a circulating share capital of 736 million shares [2] - The company has shown a market performance of -21% over the last 12 months, compared to the Shanghai Composite Index and the home improvement materials sector [4]