Investment Rating - The report indicates a downward risk to the forecasted economic growth of 4.8% for 2024, with a potential decrease of 10-20 basis points [1][3]. Core Insights - The Chinese economy is expected to slow down due to the "3D" challenges: debt, demographic structure, and decoupling [1][3]. - Despite policy easing, the real estate market remains sluggish, with significant declines in both new and second-hand home sales, particularly in major cities where second-hand home prices have dropped by approximately 23% [1][4]. - The Third Plenary Session proposed several key policies aimed at promoting high-quality growth, including enhancing systems for technological innovation, developing the digital economy, upgrading the service sector, and modernizing infrastructure [1][5][6]. - Fiscal reforms are being implemented to increase the central government's fiscal power and spending responsibilities, as well as to optimize tax distribution between central and local governments [1][7]. - Land reform initiatives focus on orderly marketization of rural collective operating construction land and optimizing the distribution mechanism of land appreciation income [1][7]. - Social welfare reforms aim to provide basic public services to migrant workers based on their place of residence rather than their birthplace, and to improve the nationwide social insurance service system [1][8]. Summary by Sections Economic Outlook - The economic outlook for 2024/25 indicates a slowdown in growth primarily due to the "3D" challenges, with a projected GDP growth of 4.8% and a GDP deflator index expected to decline by -0.3% [1][3]. Real Estate Market - The real estate market continues to be low despite policy easing, with significant declines in housing sales across multiple cities, particularly a 23% drop in second-hand home prices in six major cities [1][4]. Policy Initiatives - The Third Plenary Session introduced important policy measures to promote high-quality growth, including enhancing systems for technological innovation and ensuring supply chain resilience [1][5][6]. - Fiscal reforms aim to increase the central government's fiscal authority and improve tax distribution mechanisms [1][7]. Land and Social Welfare Reforms - Land reform efforts focus on the marketization of rural land and optimizing land appreciation income distribution [1][7]. - Social welfare reforms are designed to provide equitable public services to migrant workers and enhance the social insurance system [1][8].

Financial Data and Key Metrics Changes - Recent economic data has fallen below expectations, prompting the decision-makers to consider increasing policy support, although these adjustments will remain within the established framework [2][3][26] - The current monetary policy environment in China is cautious, with the People's Bank of China recently lowering the 7-day reverse repo rate to 1.7%, indicating limited room for significant rate cuts in the near future [4][11] Business Line Data and Key Metrics Changes - The focus of the recent policy discussions has been on enhancing supply chain self-sufficiency and promoting technological innovation, particularly in sensitive industries [26][31] - The government has emphasized the need for flexible use of long-term bonds to support consumption upgrades and manufacturing equipment renewal, reflecting a shift in fiscal policy to adapt to current economic conditions [4][12] Market Data and Key Metrics Changes - The overall sentiment among global investors towards the Chinese market has shown some recovery, but there are concerns that negative shifts in sentiment could lead to reduced asset allocation towards China [13][14] - The anticipated impact of the U.S. elections on the Chinese stock market is significant, with discussions around tariffs and exchange rates affecting trade and GDP growth [12][16] Company Strategy and Development Direction - The strategic direction post the Third Plenary Session emphasizes supply-side reforms, focusing on self-sufficiency in industrial chains and technological advancements [26][31] - The government aims to enhance social security systems and reform the fiscal system to alleviate local government financial pressures and address real estate market challenges [6][7][26] Management's Comments on Operating Environment and Future Outlook - Management has acknowledged the downward pressure on economic data and indicated that while some policy adjustments are being made, they will not deviate significantly from the previously set frameworks [3][11] - The expectation is that more substantial macroeconomic policies will be introduced if deflation persists, with a focus on boosting consumption and social security to achieve re-inflation [11][34] Other Important Information - The Third Plenary Session has proposed significant reforms in social security, particularly for migrant workers and new urban residents, aiming for equal access to welfare benefits [6][8] - The fiscal policy is adapting to current economic conditions, with an emphasis on optimizing resource allocation and improving execution efficiency without increasing the overall fiscal deficit [4][7] Q&A Session Summary Question: What are the core contents of the Third Plenary Session and its impact on the market? - The core content focuses on establishing new productive forces, particularly achieving supply chain self-sufficiency and promoting technological innovation, with limited immediate market impact expected [3] Question: How has the recent economic data influenced policy responses? - The recent economic data has prompted decision-makers to consider policy adjustments, including a slight interest rate cut and more flexible use of long-term bonds to support consumption and equipment upgrades [3][4] Question: What are the implications of the current monetary policy environment? - The monetary policy remains cautious, with limited room for significant rate cuts due to the need to maintain exchange rate stability and prevent banking sector risks [4][11] Question: What are the new directions for fiscal policy following the Third Plenary Session? - The fiscal policy is shifting to support consumption upgrades and manufacturing renewal, with an emphasis on flexible use of government bonds to stimulate economic growth [4][12]

Morgan Stanley July 21, 2024 08:56 PM GMT Investor Presentation | Asia Pacific Third Plenum: Fiscal, Social Welfare, Tech Related Reports: Plenum Press Conference: Fiscal, Social Welfare, Opening (July 19th, 2024) Growth and Inflation Will Miss Beijing's Target (July 15th, 2024) ope you have enjoyed our research over appreciate your support. Request your For important disclosures, refer to the Disclosure Section, located at the end of this report. Morgan Stanley | ReseaRch UPDATE Supply-Centric Policy Frame ...

Financial Data and Key Metrics Changes - The communique emphasizes the need to achieve this year's economic and social development goals, focusing on domestic demand and new productive forces [18][36] - The risk of undershooting this year's growth target has increased, particularly in response to weaker-than-expected Q2 GDP reports [22][34] Business Line Data and Key Metrics Changes - The reform agenda includes promoting high-quality development, focusing on new-quality productive forces and enhancing the resilience of industrial and supply chains [36][33] - The emphasis on integrating the real economy with the digital economy is highlighted as a key area for development [36] Market Data and Key Metrics Changes - The communique reiterates the importance of risk prevention in real estate, local government debt, and small financial institutions [18][22] - The need for a balanced strategy to promote manufacturing and service upgrades is mentioned, although details are lacking [36][18] Company Strategy and Development Direction and Industry Competition - The reform agenda aims to establish a high-level socialist market economy, ensuring fair competition among all types of ownership economies [36][33] - The focus on green development and measures to address global climate change is part of the modernization strategy [36][33] Management's Comments on Operating Environment and Future Outlook - Management emphasizes the importance of macro policies to support economic growth and social welfare, particularly in light of recent economic challenges [18][22] - The upcoming Politburo meeting is expected to provide further policy guidance for the second half of the year [22][34] Other Important Information - The communique outlines a comprehensive reform agenda, including fiscal reform, rural land reform, and urban-rural integration [36][33] - The interim target is set for 2029, coinciding with the 80th anniversary of the People's Republic of China, to complete the reforms outlined in the Decision [36][33] Q&A Session All Questions and Answers Question: What are the key tasks for risk prevention? - The three key tasks reiterated are focused on real estate, local government debt, and small financial institutions [18][22] Question: How will the government support economic growth? - The government plans to boost domestic demand and promote new-quality productive forces as part of its economic strategy [18][36]

Summary of Morgan Stanley's Q2 2024 Earnings Call Company Overview - The call is regarding Morgan Stanley's second quarter 2024 earnings results [1] Core Points and Arguments - The presentation includes forward-looking statements that are subject to risks and uncertainties [1] - Financial results and earnings release are available on the company's website [1] Important but Possibly Overlooked Content - The call is being recorded, indicating the importance of the information shared [1]

Financial Data and Key Metrics Changes - The company has adopted a transparent "white-box" quantitative investment strategy, allowing for clear communication and strategy adjustments in response to market changes [12][19] - The ESG quantitative fund has outperformed the Wande Equity Mixed Fund Index by 65.9% since its inception in October 2022, achieving an excess return of 10.3% over the past year and 3.35% year-to-date [4][24] Business Line Data and Key Metrics Changes - The company manages multiple products, including the Morgan Stanley Shenzhen 300 Index Enhanced Fund, Morgan Stanley Multi-Factor Strategy, and Morgan Stanley ESG Quantitative Leading Fund, each with distinct strategies and focuses [4][12] - The Morgan Stanley Multi-Factor Strategy targets mid and small-cap stocks, while the Shenzhen 300 Index Enhanced Fund primarily tracks the Shenzhen 300 Index [4][12] Market Data and Key Metrics Changes - The ESG data platform is increasingly integrated into the investment framework, enhancing the ability to assess long-term sustainability and risk management [19][20] - The company emphasizes the importance of ESG information in investment decisions, viewing it as a critical factor for sustainable returns [19][21] Company Strategy and Development Direction - The company aims to build a long-term adaptive stock selection framework that integrates all effective information, focusing on both positive and negative alpha factors [28] - The strategy includes continuous iteration and optimization of the investment framework to adapt to market changes and improve model accuracy [18][28] Management's Comments on Operating Environment and Future Outlook - Management believes that traditional financial data alone cannot fully reflect a company's sustainable development potential, necessitating the integration of non-financial ESG information [9][20] - The company is committed to maintaining a low turnover rate in its portfolios to minimize risks associated with frequent trading [25][35] Other Important Information - The company has developed a proprietary API to enhance the execution of quantitative strategies, ensuring efficient and accurate strategy implementation [12][16] - The ESG quantitative leading product is designed to closely track the mixed equity fund index while minimizing tracking error, achieving an annualized tracking error of approximately 5% [22][24] Q&A Session Summary Question: Can you elaborate on the unique aspects of your quantitative investment strategy? - The company employs a statistical training method rather than machine learning, allowing for high computational speed and efficient data processing [7][12] Question: How does the ESG data platform integrate with the existing quantitative framework? - The ESG data platform is developed in-house, allowing for deeper insights into companies' governance and sustainability practices, which are critical for investment decisions [20][29] Question: What measures are taken to control turnover rates in the portfolio? - The company utilizes a fundamental optimal adjustment framework to maintain low turnover rates, ensuring that the base portfolio does not underperform due to frequent trading [25][35]

Summary of Conference Call Company or Industry Involved - The conference call pertains to Changjiang Securities Research Institute Core Points and Arguments - The conference call is exclusively for whitelist clients of Changjiang Securities Research Institute [1] - Any unauthorized publication, reproduction, or distribution of the conference content is prohibited without prior written consent from Changjiang Securities [1] - Changjiang Securities reserves the right to pursue legal action for any violations of the above terms [1] Other Important but Possibly Overlooked Content - The call emphasizes the legal responsibilities and consequences for individuals or organizations that fail to comply with the confidentiality requirements [1]

Summary of Morgan Stanley's Q2 2024 Earnings Call Company Overview - The call is regarding Morgan Stanley's second quarter 2024 earnings results [1] Core Points and Arguments - The presentation includes references to the earnings release and financial supplement, which are accessible on the company's website [1] - Forward-looking statements are made during the call, highlighting potential risks and uncertainties associated with future performance [1] Important but Possibly Overlooked Content - The call is recorded, indicating that the information shared may be used for future reference or analysis [1]

Financial Data and Key Metrics Changes - The consensus expects 2Q EPS growth of 9% year-over-year and sales growth of 4% year-over-year [12][68] - Realized (LTM) EBIT margins are currently at 16.9% and projected to reach 17.5% for FY2024 and 18.5% for FY2025 [79][80] - Realized (LTM) net margins are at 12.4% today, with projections of 12.7% for FY2024 and 13.6% for FY2025 [79][80] Business Line Data and Key Metrics Changes - 2Q earnings growth is expected to be driven primarily by the "Magnificent Seven" companies, with a leveling out of earnings growth between these companies and the broader S&P 493 from 3Q24 to 1Q25 [12][26] - The consensus expects 4% sales growth in both 2Q and for 2024, with 2025 sales growth anticipated to increase [61][68] Market Data and Key Metrics Changes - The market is pricing in 11% EPS growth for 2024 and 14% for 2025, indicating a positive outlook despite historical averages suggesting a decline [68][79] - The breadth of earnings revisions for the S&P 500 is near neutral territory as companies focus on the second half of 2024 [48][60] Company Strategy and Development Direction - The company is expected to benefit from a market-implied September rate hike, with growth being prioritized over inflation concerns [12][26] - Operating leverage is projected to improve, with expectations of 7% in 2024 and 9% in 2025 [84] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer spending at the low/middle-end may face challenges in the second half of the year, while high-end consumer spending is expected to continue [13][26] - The operating leverage is expected to be 5% in 2Q, indicating a positive relationship between EPS growth and sales growth [84] Other Important Information - The earnings revision breadth has been generally negative over the past two weeks, particularly in sectors like Consumer Durables and Telecom [54][60] - The consensus expects 2Q to be materially better than 1Q, with a significant focus on the performance of the "Magnificent Seven" [68][72] Q&A Session Summary Question: Will companies benefit from a market-implied September hike? - Management indicated that the feasibility of 2H expectations is crucial, with growth being prioritized over inflation concerns [12][26] Question: How are consumer spending trends expected to evolve? - There are concerns about incremental cracks at low/middle-end consumers, while high-end consumer spending is anticipated to remain strong [13][26]

Financial Data and Key Indicators Changes - The second quarter GDP growth rate was only 4.7% year-on-year, lower than market expectations, indicating an increased risk of a second economic downturn [4][11][12] - The nominal GDP growth and corporate profit growth are strongly correlated, with corporate profits having been below expectations for 11 consecutive quarters [16][14] Business Line Data and Key Indicators Changes - The automotive industry is facing multiple challenges, including weakened domestic demand, export setbacks, and declining demand in the luxury car market [6][27] - Despite a 6% year-on-year increase in wholesale automotive volume in the first half of the year, the industry still faces significant pressure [27] Market Data and Key Indicators Changes - Consumer spending is being directly impacted by concerns over income and employment, leading to reduced expenditure [6][24] - Domestic travel willingness has decreased while overseas travel willingness has increased, reflecting seasonal factors and changes in consumer habits [23] Company Strategy and Development Direction and Industry Competition - The government is expected to focus on gradual reforms and enhance fiscal policy flexibility to address economic challenges [6][7] - The real estate market's regulation is seen as a crucial measure for stabilizing the economy, although adjustments will take time to manifest [7][9] Management's Comments on Operating Environment and Future Outlook - The current policy path may lead to deflationary pressures, affecting low-income groups and potentially causing social issues [5][12] - The overall consumption environment is expected to remain weak in the second half of the year, with only a slight recovery anticipated in the latter half of Q3 [24][25] Other Important Information - The upcoming Third Plenary Session is viewed as a key moment for boosting market confidence, with expectations for deepening reform and modernization [4][9] - Historical experiences suggest that if the current policy path is maintained, long-term deflationary pressures could arise, adversely affecting low-income groups [12][15] Q&A Session Summary Question: What are the main challenges currently facing the Chinese economy? - The Chinese economy is facing multiple challenges, including debt deflation, aging population, slowing corporate profit growth, and poor GDP performance [4][11] Question: How does the current policy path affect the economy? - The current policy path may lead to deflationary pressures, impacting low-income groups and causing social issues [5] Question: What is the current state of the consumer market and future trends? - Consumers are reducing spending due to concerns over income and employment, with expectations for continued weak consumption [6][24]