Investment Rating - The report maintains a "Buy" rating for Horizon Robotics, with a 12-month price target of HK$7.90, indicating an upside potential of 15.8% from the current price of HK$6.82 [12][8]. Core Insights - Horizon Robotics is set to begin mass production of its J6P platform, which has a computing power of 560 TOPS, in the third quarter of 2025, alongside the delivery of its SuperDrive autonomous driving solution [1][2]. - The company has expanded its partnerships to over 20 brand clients for the Journey 6 platform verification, up from 10 clients when the J6 platform was initially announced in April 2024 [1]. - The earnings forecast for Horizon Robotics has been revised upwards for 2025-2030, primarily due to higher revenues and a lower operating expense ratio, driven by the high-end J6P and SuperDrive solutions [3]. Summary by Sections Production and Product Offerings - The J6P platform is expected to enhance the product mix towards high-end solutions, with mass production of the J6M (128 TOPS) already starting on BYD car models from February 2025 [1]. - The SuperDrive solution demonstrated capabilities in complex driving conditions, including urban, highway, and parking scenarios, showcasing features like obstacle avoidance and dynamic speed control [2]. Financial Projections - Revenue estimates for Horizon Robotics have been revised, with projections for 2025 increasing to Rmb4.09 billion, reflecting a 3% increase from previous estimates [8]. - The net loss for 2025-2026 has been adjusted to Rmb1.7 billion and Rmb142 million, respectively, showing an improvement from earlier forecasts [3]. - The gross margin is expected to decline slightly over the forecast period, with adjustments of 0.3 to 0.8 percentage points from 2025 to 2030 due to changes in product mix [3]. Valuation Metrics - The target price of HK$7.90 is based on an 18.3x EV/EBITDA multiple for 2028E, reflecting the company's long-term growth potential [8][9]. - The report anticipates strong revenue growth of 77% and 60% year-over-year in 2027 and 2028, respectively, indicating robust market demand for autonomous driving technologies [9].

Investment Rating - The report indicates a cautious optimism regarding the stabilization of the Chinese real estate sector, suggesting that recent policy easing measures have shown some effectiveness in improving home sales and stabilizing prices [2][3][15]. Core Insights - Since the policy pivot in September 2024, the Chinese real estate sector has begun to show signs of recovery, particularly in major cities, with improved home sales and stabilization of secondary home prices [2][5][15]. - Structural differences within the real estate market are expected to persist, with home sales in large cities outperforming those in smaller cities, and secondary home sales performing better than new home sales [2][18][23]. - The stabilization of home prices, especially in top-tier cities, is viewed as crucial for policymakers to stem the property downturn, with expectations for further easing measures to support this goal [31][32]. Summary by Sections Recent Developments - The report highlights that home sales have improved sequentially in recent months, particularly in large cities, while construction-related activities continue to weaken [5][15][21]. - The ongoing housing easing cycle is noted to be more significant than previous cycles, with measures such as lowering downpayment ratios and mortgage rates [4][20]. Market Dynamics - The report emphasizes that secondary home transactions accounted for 44% of nationwide home sales in 2024, a significant increase from 19% in 2021, indicating a shift in buyer preferences [29]. - The report also notes that new housing starts have contracted significantly, indicating ongoing challenges in the construction sector [21][22]. Preconditions for Stabilization - For sustainable stabilization of the property sector, the report identifies the need for a significant reduction in housing inventory, higher rental yields, and improved financing conditions for the property sector [32][34]. - The report suggests that further policy support will be necessary to address the ongoing challenges faced by property developers and to stimulate demand in the housing market [35][36].

Investment Rating - The report indicates a strong focus on AI as the dominant investment priority, suggesting a positive outlook for companies involved in AI applications rather than just infrastructure [2][6]. Core Insights - The report highlights that the investment opportunities in AI are shifting towards application winners, emphasizing that the infrastructure race is over and the focus is now on utility [2]. - It notes significant advancements in Chinese technology and innovation, including achievements in satellite communication, high-speed trains, and lithium reserves, which may present investment opportunities [3][8]. - The performance of Chinese tech stocks, particularly in AI and robotics, has outpaced their US counterparts, indicating a potential shift in investment focus towards China [5][6]. Summary by Sections Market Insights - The report discusses the resilience of the market amidst various geopolitical tensions and the better-than-expected Q4 results, indicating a robust investment environment [2]. AI and Technology - AI remains a key investment theme, with a shift towards application-focused companies as the market matures [2][6]. - Chinese companies are making significant strides in technology, with notable innovations that could impact global markets [3][8]. Performance Metrics - The HSTECH index has risen by 18% year-to-date, while the GS basket of China Tech AI beneficiaries has increased by 23%, and the China Robotics stocks have surged by 39% [5]. - In contrast, the US Robotics basket has only seen a 3% increase, highlighting the relative strength of Chinese tech stocks [5]. Investment Themes - The report suggests that the aperture of investment opportunities should be broader than just the Mag-7 and US tech, especially as AI adoption grows through 2025 [6]. - It also points out favorable positioning for investors looking to engage with Chinese markets, with technical indicators suggesting potential outperformance [7].

Investment Rating - The report maintains a "Buy" rating for several companies within the consumer cyclicals sector, including Dollar General Corp, Lowe's Companies Inc, Target Corp, and others, indicating a positive outlook for these stocks in 2025 [39][161]. Core Insights - The consumer outlook for 2025 is robust, with discretionary stocks expected to outperform defensive stocks due to a strong consumer backdrop and a normalization of spending patterns [1][2]. - Discretionary cash inflow is forecasted to grow by 4.9% in 2025, up from 4.2% in 2024, supported by easing interest rates and moderating essential expenditure growth [2][102]. - Key themes for 2025 include continued market share gains for established winners, innovation driving growth, and a potential return of inflation impacting both revenues and costs [3][10]. Consumer Spending Backdrop in 2025 - The report projects a 4.8% growth in disposable personal income (DPI) for 2025, slightly down from 5.4% in 2024, reflecting a deceleration in consumer spending growth [99][135]. - Essential expenditure growth is expected to moderate to 2.3% in 2025 from 3.6% in 2024, benefiting from lower energy costs and decelerating healthcare spending [101][102]. - The discretionary cash inflow is anticipated to increase, driven by a healthier savings rate and improved consumer confidence, despite a slight decrease in the overall savings rate [102][111]. Company-Specific Insights - Companies identified as well-positioned for growth in 2025 include those with strong market share and innovative product offerings, such as Walmart, Target, and Dick's Sporting Goods [9][17]. - The report highlights the potential for multiple expansions for companies like DKS and TGT, driven by alternative revenue streams and improved profitability in e-commerce [11][16]. - The athletic sector is expected to remain robust, with companies like Nike and Lululemon showing strong demand, although competitive pressures may impact performance [69][70]. Market Trends and Consumer Behavior - The report notes a bifurcation in performance across the apparel sector, with market share gains critical for driving growth amid a deflationary environment [65][66]. - Consumer sentiment is trending higher, which may positively influence spending behavior, particularly among higher-income households [147][149]. - The impact of GLP-1 weight loss drugs on the restaurant industry is being closely monitored, as they may affect consumer dining habits and overall industry traffic [93][95].

Investment Rating - The report does not explicitly provide an investment rating for the industry or sectors discussed Core Insights - The upcoming US election is a focal point for economic policy implications, with contrasting views from candidates on tariffs, taxes, and regulation [1][6][7] - Despite significant differences in proposed economic policies, the report suggests that asset impacts may be modest if major policy tail risks are avoided, with a friendly macro outlook being a more significant driver of markets [1][8] - The report emphasizes the importance of owning protection around the election due to macro risks [1][8] Summary by Sections US Economic Outlook - The odds of a US recession have been lowered by 5 percentage points to 15% following a stronger-than-expected employment report [4] - The Federal Reserve is expected to implement consecutive 25 basis point rate cuts, reaching a terminal rate of 3.25-3.5% by June 2025 [4] - Job growth is estimated at 196,000, exceeding the breakeven rate of 150-180,000 [4] Trade and Tax Policy - The report discusses the potential impacts of tariffs, particularly on China, estimating that targeted tariffs would have small global inflation impacts but more significant growth impacts [8][9] - The analysis indicates that a shift in corporate tax policies could catalyze changes in the performance of high versus low tax stocks, with historical data suggesting that concrete legislative steps are necessary for meaningful stock price adjustments [8][9] Sector Impacts - The report highlights potential sector impacts from the election outcomes, with financials likely to be sensitive to changes in corporate tax rates and regulatory frameworks [96] - The clean energy sector may face shifts depending on the future of the Inflation Reduction Act, with potential tariff increases benefiting domestic manufacturers [97][98] Asset Market Implications - The report anticipates only modest asset market impacts in central cases, with larger moves likely in tail scenarios related to trade and fiscal policy shifts [66][68] - The analysis suggests that the election outcome could lead to rotations within the equity market, influenced by changes in tax and regulatory policies [66][68] Global Economic Considerations - The report discusses the potential global impacts of US election outcomes, particularly on China and the Euro area, with higher tariffs likely to increase trade policy uncertainty and weigh on growth [43][44] - It notes that a Trump presidency could lead to significant tariff increases, while a Harris presidency may maintain the status quo [43][44]

Industry Overview - The China Games & Entertainment offshore coverage is expected to report earnings starting from mid-November, with divergent performance anticipated across key players [1] - The report highlights the importance of ARPU strategies for music and long-form video streaming players, with Tencent Music and iQiyi focusing on Super VIP and family pack offerings respectively [1] - Advertising growth for Kuaishou and Bilibili is expected to outperform peers during the Singles' Day festival season [1] Company Performance and Outlook Bilibili - Bilibili is expected to achieve 27% YoY sales growth in 3Q24, driven by 88% YoY growth in game revenue and 27% YoY growth in advertising revenue [4] - The company is expected to post a non-GAAP operating profit of RMB 208 million in 3Q24, with continued margin improvement anticipated in the coming quarters [4] - Key focus areas include the performance of the Sanguo NSLG game, advertising outlook during Singles' Day, and margin guidance for 4Q24 and 2025 [4] NetEase (NTES) - NetEase is expected to report a 6% YoY decline in game sales for 3Q24, with a non-GAAP operating profit of RMB 7.8 billion, down 7% YoY [3] - The company's performance is impacted by a lack of new game contributions and an unfavorable revenue mix, with management updates on new game pipelines being a key focus [3] - Key upcoming events include the launch of Marvel Rivals and Where Wind Meets in late 2024 and early 2025 [3] Kuaishou - Kuaishou is expected to achieve 11% YoY sales growth in 3Q24, with advertising revenue growing 19% YoY [4] - The company is expected to maintain mid-teen GMV growth in 3Q/4Q24, with a focus on advertising strength and margin expansion into 2025 [4] Tencent Music (TME) - Tencent Music is expected to report 20% YoY growth in music revenue for 3Q24, with net adds of 1.6 million and a non-GAAP operating profit of RMB 2 billion, up 48% YoY [5] - The company's ARPU strategy, particularly the SuperVIP offering, is a key focus, with potential for margin expansion in the music business [6] iQiyi - iQiyi is expected to report a 10% YoY decline in sales for 3Q24, with subscription sales down 13% YoY [6] - The company's 4Q subscription revenue and margin outlook are expected to be conservative, with a focus on ARPU growth and content cost trends [6] Financial Estimates and Valuation - NetEase's 2024-26E revenue forecasts have been trimmed by 1.0%-2.3%, reflecting weaker-than-expected monetization of newly released titles [12] - Bilibili's 2024E revenue is expected to grow 20% YoY, with mobile games and advertising revenue contributing significantly to the growth [20] - Kuaishou's 2024E revenue is expected to grow 12% YoY, with online marketing spend revenue growing 21% YoY [21] - Tencent Music's 2024E revenue estimates have been fine-tuned by -0.3~-0.8%, with a focus on moderating net adds and ARPU expansion [23] - iQiyi's 2024-26E revenue estimates have been lowered by -1%~0%, reflecting weaker-than-expected advertising recovery and slower subscription growth [29] Market Share and Competitive Landscape - Tencent Music maintains a dominant share in the domestic online music market, with a 73% subscription market share in 3Q24 [25] - iQiyi's market share in the long-form video (LFV) market improved slightly in 3Q24, reaching 32.9%, driven by the release of popular content [32] - The competitive landscape in the LFV market remains stable, with Tencent Video holding a 46% market share in 3Q24 [32] Key Events and Catalysts - Bilibili's Sanguo S4 season in November 2024 and Singles' Day commentary in late November are key events to watch [4] - NetEase's upcoming game launches, including Marvel Rivals and Where Wind Meets, are expected to drive incremental revenue in 2025 [12] - Tencent Music's focus on ARPU growth through SuperVIP offerings and promotional events will be a key driver of future performance [22]

Investment Rating - The report maintains a Buy rating on CICC-H, with a revised target price of HK$15.86, up from HK$15.71, reflecting an anticipated increase in earnings [1][18]. Core Insights - The brokerage industry is expected to see a gradual rise in average daily trading volume (ADTV) to Rmb 1.2 trillion by 2025, driven by policy support and increased ETF trading [1][2]. - The report projects a 1% increase in average revenue and an 8% increase in net profit for 2025, with a cautious approach to applying top-of-cycle valuations due to the brief recovery period of ADTV [1][2]. - The PBOC's swap facility may negatively impact brokers' long-term valuations by reducing return on equity (ROE) levels and increasing market risk [10][12]. Summary by Sections Part 1: Valuation Cycle - The current ADTV is Rmb 1.0 trillion, with a significant increase to Rmb 2.2 trillion following new government policies [1][2]. - Historical cycles in 2015 and 2020 had peak ADTVs of Rmb 1.1 trillion, with the current cycle lasting only three weeks compared to previous cycles lasting 9 to 15 months [1][2]. Part 2: PBOC Swap Line Implications - The PBOC's swap line could lower brokers' long-term ROE, especially if swap quotas increase, which would negatively affect capital returns [10][12]. - The report suggests that brokers' participation in the swap could heighten market risk and limit stable income sources, leading to lower valuation multiples [10][12]. Part 3: Model Revision and Target Price Change - Earnings forecasts for the three brokers have been revised, with an average revenue increase of 11% year-on-year for 2025, compared to a consensus of 11% [18]. - Target price adjustments reflect a 12% increase on average for both A and H shares, with target PEs adjusted to 9x for H-shares and 19x for A-shares [18].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies within it [34][35]. Core Insights - The penetration of new energy vehicles (NEVs) in the passenger vehicle market reached 53.9%, an increase of 4.1 percentage points from the previous week [6][27]. - Weekly insurance registrations for passenger vehicles were 499,000 units, reflecting a decrease of 16.1% week-over-week [6][27]. - Weekly insurance registrations for new energy vehicles were 269,000 units, down 9.1% from the previous week [6][27]. - The average dealer discount for NEVs was 7.28% as of October 22, compared to 7.17% on October 15 [22][23]. - The average discount for internal combustion engine (ICE) vehicles was 21.40% as of October 22, slightly down from 21.47% [23]. Summary by Sections Industry Overview - The NEV market is experiencing significant growth, with a 55% increase in volume for Tesla China, 23% for AITO, and 29% for Xiaomi week-over-week [8][9]. - BYD Group, Tesla China, and Li Auto are the top three brands in terms of market share, holding 35%, 5%, and 4% respectively [8][9]. Key Trends - The report highlights a total of 1.27 million applications for the trade-in subsidy program as of October 7, with an average of 4,000 new applications daily during the first week of October [11][12]. - The average daily orders for various NEV brands during the week of September 29 to October 6 were as follows: BYD (23,571 units), Li Auto (2,857 units), and others [17]. Pricing Dynamics - The average price cut for NEVs was 8% year-to-date, with 88 price cuts observed [19]. - The price of battery-grade lithium carbonate decreased by 3.0% week-over-week, currently at RMB 73,900 per ton [25]. Upcoming Events - Key events to watch include the official launch of ZEEKR Mix on October 23 and XPeng Tech Day on October 24 [15][16]. Market Share Changes - Tesla China, AITO, and Xiaomi gained market share by 2.0 percentage points, 0.8 percentage points, and 0.5 percentage points respectively, while BYD Group, Galaxy, and Nio lost market share [8][9].

Investment Rating - The report maintains a **Buy** rating for Innolight (300308 SZ) despite a 7% reduction in the 12-month target price to RMB 215 (from RMB 230) due to near-term supply constraints [1] Core Viewpoints - Innolight's 3Q24 net profit of RMB 1 39bn (+3% QoQ +104% YoY) missed Goldman Sachs estimates by 12% primarily due to FX losses of ~RMB 80mn and EML supply tightness which slowed shipment growth [1] - Demand for 800G and 1 6T transceivers remains strong with 3Q order growth outpacing shipment growth Management expects 800G demand to grow significantly into 2025 driven by cloud customers' AI inferencing on Ethernet networks while 400G demand is expected to phase out gradually in 2H25 [1][3][4] - 100G EML supply is expected to remain tight through 4Q24 but may improve in 1H25 due to supplier capacity expansion and Innolight's increased EML order placements [2] Financial Performance Summary - 3Q24 revenue was RMB 6 514bn (+115% YoY) with gross profit of RMB 2 191bn (+116% YoY) and gross margin of 33 6% (+0 1ppts YoY) [2] - Operating profit for 3Q24 was RMB 1 751bn (+143% YoY) while net income reached RMB 1 39bn (+104% YoY) [2] Estimate Revisions - Revenue estimates for 2024-26E were revised down by 4% due to FX changes and component constraints Net profit estimates were revised down by 6%-9% [6] - 2024E revenue is now projected at RMB 24 491bn (-4% vs previous estimate) with gross profit of RMB 8 221bn (-6 7%) and net income of RMB 5 222bn (-9%) [7] Industry and Competitive Position - Innolight is the largest optical transceiver supplier in China's datacom market with a leading position in global 800G/1 6T optical transceivers used in AI networking [8] - The company benefits from strong execution in capacity ramp and new product development maintaining tight supply relationships with global hyperscalers and networking/GPU vendors [8] Component Pricing and Margins - Potential price hikes from EML and DSP vendors are expected to have limited impact on Innolight's margins as pricing is still under negotiation and not all vendors are seeking price increases [5]

Investment Rating - The report maintains a Neutral rating on Tesla Inc (TSLA) with a 12-month price target of $250, representing a 17% upside from the current price of $213.65 [1][24] Core Views - Tesla is well-positioned for long-term growth due to its leadership in EVs, technical capabilities in AI, software, and hardware, and its ability to benefit from a full set of solutions including charging and storage [24] - Key debates include Tesla's ability to meet FSD performance and vehicle delivery growth targets for 2025, and the sustainability of margins [1][30] - The ramp in FSD is expected to take longer than Tesla's current targets, and auto fundamentals could remain volatile in the near-term with lower pricing/incentives as a headwind [24] Financial Performance - Tesla reported Q3 2024 revenue of $25.2 billion, 1% below the Street estimate, and non-GAAP diluted EPS of $0.72, $0.13 above the Street estimate [1] - Automotive non-GAAP gross margin (including SBC and excluding regulatory credits) was 17.1%, well above Goldman Sachs' estimate of 14.6% [1] - Energy segment gross margin was over 30%, stronger than the ~25% forecast [1] - Tesla expects vehicle deliveries to grow 20-30% in 2025 [1][30] Segment Performance - Automotive revenue was $20.016 billion, up 1% QoQ and 2% YoY, with regulatory credit sales of $739 million [23] - Energy Generation and Storage revenue was $2.376 billion, down 21% QoQ but up 52% YoY, with a record gross margin of over 30% [23] - Service and Other revenue was $2.790 billion, up 7% QoQ and 29% YoY, achieving a record gross profit in Q3 [23] Outlook and Guidance - Tesla reiterated expectations for vehicle volume growth in 2024 and deliveries to increase by 20-30% in 2025 [1][30] - FSD performance is expected to exceed human capability in Q2 2025, with miles between critical interventions up 100X with V12.5 compared to the start of the year [1][28] - Energy storage deployments are expected to more than double YoY in 2024 [30] Valuation and Estimates - The 12-month price target of $250 is based on 65X applied to Q5-Q8E EPS including SBC [36] - 2024/2025/2026 EPS estimates including SBC were raised to $2.03/$3.00/$4.25 from $1.80/$2.95/$4.20, driven primarily by higher gross margins and regulatory credit revenue [35]