GMT EIGHT - Research

Shanxi: AI applications catalyze the overlay of supply and demand trends towards improvement, the media industry's fundamentals are expected to marginally improve.

Shanxi released a research report stating that throughout the year, AI remained a catalyst for the growth of the media sector in 2024. Looking ahead to 2025, the emergence of high-quality AI applications domestically and internationally may continue to enhance the growth and valuation of the media industry. At the same time, the gaming and film industries are expected to benefit from the start of a new gaming cycle, improved supply of quality content, and industry innovation empowered by AI. Key points from Shanxi are as follows: - Performance fluctuated throughout the year, with stable revenue growth in the industry. - In 2024, the media index rose by a cumulative 2.23%, ranking 19th out of 31 primary sub-industries according to the Shenwan index. - In the media sub-sectors, advertising and publishing saw increases of 7.42% and 6.68% respectively, leading the growth. From Q1 to Q3 of 2024, the media industry achieved revenue of 366.21 billion yuan, up 0.82% year-on-year, with net profit attributable to the parent company reaching 23.3 billion yuan, down 32.28% year-on-year. Within the sub-sectors, advertising and gaming sectors showed impressive revenue performance, with growth rates of 8.4% and 5.1% respectively. - Big AI models are in fierce competition, and the application side of AI is expected to accelerate its implementation. - Since the emergence of ChatGPT in 2022, the trend of big models has been growing rapidly. In 2023, the domestic big models experienced explosive growth, rapidly iterating their capabilities and expanding their modes. In 2024, the inference and understanding capabilities of big models made a leap forward, and began exploring applications in specific fields. With the rapid development of generative AI, the gradual improvement of AI infrastructure, and the continuous advancement of deep learning technology, the application scenarios of generative AI are gradually increasing, potentially helping industries achieve digital and intelligent transformation. According to iResearch Consulting, China's generative artificial intelligence industry is expected to surpass the trillion-dollar mark by 2030. Domestic AI application traffic continues to grow, with ByteDance's Douyin performing notably well. - The film industry faced pressure in 2024, with attention on the 2025 Spring Festival and AI+film applications. - In 2024, due to the shortage of quality content supply, domestic film market box office revenue decreased by 22.34% year-on-year. Looking ahead to 2025, with a sufficient number of registered films serving as reserves and a booming number of newly registered films, the content supply side of the film market is expected to improve significantly in 2025. Additionally, the release of high-quality films during the Spring Festival season is expected to boost film box office revenue and restore market confidence. AI-based video technology continues to improve, potentially delivering more precise, efficient, and diverse video content. - The domestic game market continued its growth trend, with the start of a new product cycle driving performance growth. - In 2024, China's game market revenue was 325.783 billion yuan, a year-on-year increase of 7.53%. CMGE's revenue increased by 5.01% year-on-year, while revenue from PC games increased by 2.56% year-on-year. Revenue from the overseas market in 2024 was 18.557 billion US dollars, a year-on-year increase of 13.39%. In the medium to long term, AI empowering the gaming industry will bring about innovation in gameplay and efficiency in production. In 2025, the gaming market is expected to benefit from the steady start of a new gaming product cycle and the continuous improvement in the competitiveness of overseas products, driving steady revenue growth in the gaming industry. - Investment recommendation: Focus on large models, AllinAI to develop new growth opportunities such as Kunlun Tech (300418.SZ), Shanghai Film (601595.SH) which continues to expand its IP business, and Hangzhou Electronic Soul Network Technology (603258.SH) which benefits from the start of the new gaming cycle. - Risk warning: Policy risks, macroeconomic downturn risks, product launches falling short of expectations, intensifying competition, etc.

27 min ago

Ping An Securities: Implementation of Regulations on Small Loan Company Management, Strict Supervision Trend Continues

Ping An Securities released a research report stating that with the implementation of refined supervision, top institutions may benefit more. The introduction of the "Measures" is conducive to improving the risk control system of small loan companies, guiding the industry to enhance risk management and compliance operating levels, and better serving the development of the real economy with the positioning of "small and dispersed". Looking ahead, top institutions with more sophisticated risk control systems and a more stable customer base may benefit more. Event: Recently, the China Banking and Insurance Regulatory Commission issued the "Interim Measures for the Supervision and Management of Small Loan Companies" (hereinafter referred to as the "Measures"). Key viewpoints of Ping An Securities are as follows: Strict business scope, clear operating and regulatory principles The "Measures" stipulate that the business scope of small loan companies is limited to: (1) issuing small loans; (2) accepting and discounting commercial drafts; (3) other businesses stipulated by laws, regulations, and approved by the China Banking and Insurance Regulatory Commission, while strictly prohibiting illegal "channel" businesses such as renting out licenses. From a regulatory perspective, it is stipulated that the provincial-level local financial management institutions are responsible for supervising and managing local small loan companies and handling risks. The establishment of small loan companies must be approved by the provincial-level local financial management institutions. In terms of operating areas, small loan companies are not allowed to operate across provinces, autonomous regions, or municipalities directly under the central government, and the operating areas of online small loan companies are separately stipulated. Clarifying the single loan limit, emphasizing the characteristics of small and dispersed The "Measures" further clarify the loan limits, with changes compared to the "Interim Measures for the Management of Online Small Loan Business (Draft for Solicitation of Comments)" from 2020. For example, online small loan companies are now required not to exceed RMB 200,000 for loans used for consumption, or not to exceed 1/3 of the borrower's average annual income over the past three years, with the lower amount being the maximum loan amount, changed from the previous RMB 300,000 limit. For loans used for business operations, the limit has changed from RMB 1 million to not exceeding RMB 10 million for the balance of loans to legal entities or other organizations and their affiliates. In terms of loan concentration, the "Measures" require small loan companies not to exceed 10% of the net assets at the end of the previous year for all loans to the same borrower and not to exceed 15% for all loans to the same borrower and its affiliates, emphasizing the characteristics of diversification. For joint loan funding models, the "Measures" require a minimum contribution of 30% for joint loans issued with commercial banks. Refining financing requirements, clarifying loan classification From the perspective of financing requirements, the "Measures" strictly regulate the "1+4" leverage ratio indicator. On one hand, the balance of funds raised by small loan companies through non-standardized forms such as bank loans and shareholder loans must not exceed 1 times their net assets at the end of the previous year. On the other hand, the balance of funds raised by small loan companies through standardized forms such as issuing bonds and asset securitization products must not exceed 4 times their net assets at the end of the previous year. Institutions with ample paid-in capital are expected to maintain competitiveness in the future. From a risk perspective, the "Measures" for the first time divide loans overdue for more than 90 days into non-performing loans. They also stipulate that all lending funds must enter dedicated lending accounts, and all loan disbursements and interest repayments must go through these accounts. Strict loan classification and fund flow management requirements are conducive to the healthy development of the industry. Risk reminders: (1) Policy advancement is below expectations; (2) Macroeconomic downturn exceeds expectations; (3) Increased competition dragging down corporate profits.

52 min ago

Cinda: Siasun Robot & Automation is expected to build a second growth curve. Focus on the consumer electronics enterprise Siasun Robot & Automation "ChatGPT" opportunity.

Cinda released a research report stating that the AI industry is currently undergoing a deep transformation of existing human industries. By 2025, AI cloud and edge computing will converge, with humanoid Siasun Robot & Automation being an important track within the AI edge computing space, offering vast commercialization opportunities. Many companies in the consumer electronics industry have deep technical expertise and rich engineering experience, and have good cooperation relationships with leading Siasun Robot & Automation companies both domestically and internationally. Some high-quality companies are expected to take advantage of this opportunity to build their second development curve. It is recommended to pay attention to high-quality companies in the current electronics industry. Cinda's main points are as follows: The development of humanoid Siasun Robot & Automation is rapid, and commercialization may not be far off. Humanoid Siasun Robot & Automation refers to robots that resemble the shape and size of humans, can mimic human movements, expressions, interactions, and actions, and to some extent possess cognitive and decision-making intelligence. Built on various disciplines, humanoid Siasun Robot & Automation is a symbol of a country's industrial civilization level. From the perspective of the industry chain, the Siasun Robot & Automation industry chain is complex, involving many links and companies. The industry components involved in the Siasun Robot & Automation industry are complex, with upstream raw materials and core components including sensors, motors, reducers, batteries, servo mechanisms, controllers, EMS, CPUs, GPUs, etc.; midstream mainly involves research and development, production, and system integration, including parts assembly, finished product assembly, calibration, testing in the production process of Siasun Robot & Automation, software system development and integration, providing integrated products and services to customers, etc.; downstream applications are used in various industries. Currently, due to the increasing intelligence of global industrial production and the improvement of household consumption levels, the smart Siasun Robot & Automation industry is growing rapidly. According to UBTECH ROBOTICS' prospectus, the CAGR of personal/home smart service Siasun Robot & Automation is expected to reach 14.3% from 2022 to 2028, while professional smart service Siasun Robot & Automation is expected to reach 19.1% from 2022 to 2028, with a comprehensive CAGR of 17.8%. Humanoid Siasun Robot & Automation represents intelligent Siasun Robot & Automation, and the path to commercialization may not be far off. In 2024, UBTECH ROBOTICS officially released the new generation industrial humanoid Siasun Robot & Automation Walker S1, which has entered training at car factories such as BYD Company Limited, becoming the world's first industrial scenario solution where humanoid Siasun Robot & Automation and unmanned logistics vehicles cooperate. In addition, companies such as Tesla, Figure, Ubtech, and Boston Dynamics have made significant progress in industrialization. Leading manufacturers compete, related products iterate rapidly. Figure Siasun Robot & Automation has a clear strategy and development path. According to information on FIGURE's official website, the future opportunity of humanoid Siasun Robot & Automation mainly lies in three areas: physical labor, currently accounting for 50% of the global GDP, consumer home use, with approximately 700 million elderly people requiring home care, and space exploration. The future of humanoid Siasun Robot & Automation is full of imagination, but making robots smarter is necessary. FIGURE is building a data alliance to support humanoid Siasun Robot & Automation, with important partners including OpenAI, Microsoft, Nvidia, and others. UBTECH ROBOTICS was established in March 2012 and is one of the leaders in humanoid Siasun Robot & Automation. UBTECH ROBOTICS was the first to achieve the practical application of humanoid Siasun Robot & Automation and is the only company in the world to have announced collaborations with multiple car manufacturers. The industrial humanoid Siasun Robot & Automation Walker S series is also the most widely used humanoid Siasun Robot & Automation in car factories globally. Ubtech also released a humanoid Siasun Robot & Automation with significant advantages in motion ability and joint freedom. Currently, there are many styles of humanoid Siasun Robot & Automation released globally, each with its own unique characteristics. Ubtech's Unitree H1 is approximately 180cm tall and weighs about 47kg. Equipped with sensors such as 3D laser radar and depth cameras, it also has strong motion capabilities. Unitree H1-2 has 27 degrees of freedom and has good commercial prospects. AI is driving industry development, and the "ChatGPT moment" of Siasun Robot & Automation technology is expected to arrive soon.As one of the global leaders in AI, NVIDIA has also launched related products, including powerful toolsets such as Omniverse and Cosmos. NVIDIA Omniverse is an API, SDK, and service platform that allows developers to integrate OpenUSD, NVIDIA RTX rendering technology, and generative physical AI into existing software tools and simulation workflows for industrial and Siasun Robot&Automation use cases.NVIDIA Omniverse provides powerful support for the research and application of humanoid Siasun Robot&Automation, driving progress in many areas such as synthetic data generation, autonomous vehicle simulation, product configurators, reinforcement learning, virtual facility integration, and more as disclosed on the official website. NVIDIA announced the launch of NVIDIACosmos at CES2025. NVIDIA Cosmos is a platform that includes advanced generative world base models, sophisticated tokenizers, and accelerated data processing and management pipelines for developers of autonomous vehicles (AV) and Siasun Robot&Automation. "The 'ChatGPT moment' for Siasun Robot&Automation technology is coming soon. Like large language models, the world base model is the foundation for advancing Siasun Robot&Automation and AV development, but not all developers have the expertise and resources to train their own, said NVIDIA founder and CEO Huang Renxun. "We created Cosmos to democratize physical AI and make universal Siasun Robot&Automation technology accessible to every developer." Currently, leading Siasun Robot&Automation and automotive companies, including 1X, Agile Robots, Agility, Figure AI, Foretellix, Fourier, Galbot, Hillbot, IntBot, NeuraRobotics, Skild AI, Virtual Incision, Waabi, and XPENG, as well as ridesharing giant Uber, are among the first companies to adopt Cosmos. Risk factors: macroeconomic downturn risk; downstream demand lower than expected risk; escalating US-China trade tensions risk; risks of new technologies and products not progressing as expected.

1 h ago

CICC: Internet AI Layout Starts Catch-up Mode, Focuses on Agent in Key Application Directions.

CICC released a research report stating that the large AI models have already learned enough from existing data, and the remaining new training data may be insufficient, leading to a slowdown in pre-training of AI large models. As training methodologies become more mature, the gap in computational power narrows, and talent mobility increases, leading companies with strong financial resources and capabilities are expected to narrow the gap with leaders and even lead them. Looking ahead to 2025, AI-related companies are expected to focus on Agent as the key application direction. Key points from CICC: Slowdown in pre-training of AI large models Pre-training is the process through which large models learn general features and acquire the basis of intelligence. However, since the second half of 2024, there have been signs of a slowdown in pre-training of large models, mainly because these models have already learned enough from existing data, and the remaining new training data may be insufficient. The highly anticipated release of OpenAI's next-generation flagship model, GPT-5, has been postponed, reportedly due to lower-than-expected training effectiveness, high training costs, and lack of significant capability improvement. Competition in large AI models may gradually favor followers instead of leaders If the development speed of industry leaders slows down, followers may benefit. In the wave of large AI models, companies such as OpenAI, Claude, etc., are considered industry leaders, while Alphabet, Meta, Amazon, etc., are often considered followers. In China, companies like Moon's Dark Side, Minimax, etc., are considered industry leaders, with leaders seen as followers. In the comparison between the development of AI in China and the United States, American AI companies are seen as model leaders, while Chinese companies are seen as followers. Agent leading AI application directions, strong competition among Chinese internet companies Currently, AI application directions include dialogue systems, programming assistants, office efficiency tools, education, entertainment, empowering traditional businesses, etc. Looking ahead to 2025, AI-related companies will focus on Agent as the key application direction, such as Apple's Apple Intelligence assistant, Alphabet's Gemini 2.0 Project Astra, Salesforce's AgentForce for enterprise users, etc. The success of the supply-side dividend depends on whether the product can meet user needs, control costs, and sustain a business model. Compared to being more chasing in terms of models, Chinese internet companies are more competitive in AI application directions compared to their American counterparts. Risks: Risks of AI productization and commercialization falling short of expectations; external environmental risks.

2 h ago

Sinolink: Explosives industry prosperity is picking up, optimistic about the growth of explosives demand in Xinjiang and Tibet.

Sinolink released a research report stating that the prosperity of the civil explosives industry is picking up, and the decline in raw material prices is supporting the continuous improvement of industry profitability. The high prosperity of the civil explosives market in Xinjiang and Tibet continues. In the future, the pattern of regional demand differentiation in the domestic civil explosives industry will continue. It is recommended to pay attention to targets with integrated service capabilities and explosive production capacity in high-growth areas of civil explosives demand such as Xinjiang and Tibet. Event: On January 20th, China Explosives Association released the operating data of the civil explosives industry in December 2024: in December, production enterprises completed a total production value of 4.159 billion yuan, an increase of 5.13% year-on-year; completed a total sales value of 4.187 billion yuan, an increase of 4.19% year-on-year; achieved a total tax income of 1.167 billion yuan, an increase of 55.74% year-on-year; realized a total profit of 882 million yuan, an increase of 69.36% year-on-year. In December, the industrial explosive production and sales volume of production enterprises were 436,400 tons and 438,000 tons respectively, an increase of 8.11% and 5.65% year-on-year; among them, the on-site mixed explosive production volume was 157,600 tons, an increase of 12.57% year-on-year. The industrial detonator production and sales volume of production enterprises were both 68 million pieces, a decrease of 3.48% and 3.11% year-on-year respectively. Sinolink's main points are as follows: The industry's prosperity is rebounding, and the decline in raw material prices is supporting the continuous improvement of industry profitability From the demand side, the downstream of civil explosives is mainly concentrated in the field of coal, metal, and non-metal mining. According to data from the National Bureau of Statistics, the domestic raw coal output in January-December 2024 was approximately 4.759 billion tons, an increase of 1.3% year-on-year, with the output in December approximately 439 million tons, an increase of 4.2% year-on-year; the fixed asset investment completion amount of non-ferrous metal ore mining and dressing industry accumulated by December increased by 26.70%. Against this background, the industry's operating indicators in December showed a trend of recovery, especially the year-on-year high increase in blasting service revenue. According to data from the China Explosives Association, from January to December, production enterprises completed a total production value of 41.695 billion yuan, a decrease of 4.50% year-on-year, of which the total production value completed in December was 4.159 billion yuan, an increase of 5.13% year-on-year; from January to December, the total blasting service revenue realized was 35.311 billion yuan, an increase of 4.26% year-on-year, of which the blasting service revenue realized in December was 4.812 billion yuan, an increase of 42.04% year-on-year. Ammonium nitrate, the main raw material for industrial explosives, showed a continuous downward trend in prices in 2024. According to data from the China Explosives Association, the average price of ammonium nitrate (powder form) in January 2024 was about 2822 yuan/ton, which decreased to 2384 yuan/ton by December, with a cumulative decrease of approximately 15.52% for the whole year. In this context, although the total production value of the industry's production enterprises came under pressure in 2024, the profitability improved year-on-year. From January to December, production enterprises cumulatively achieved a total profit of 9.639 billion yuan, an increase of 13.04% year-on-year, of which the total profit in December was 882 million yuan, an increase of 69.36% year-on-year. Regional demand differentiation is evident, and the high prosperity of the civil explosives market in Xinjiang and Tibet continues According to data from the China Explosives Association, in 2024, regions with civil explosives production and sales values exceeding 3 billion yuan include Xinjiang, Inner Mongolia, Sichuan, and Shanxi, but only Xinjiang's civil explosives industry maintained a year-on-year growth rate of over 20% in production and sales value. The other three provinces experienced varying degrees of decline. Additionally, according to data from the China Explosives Association, from January to December 2024, the net increase in profits of civil explosives production enterprises was 1.1 billion yuan, with a net increase of 660 million yuan in the Xinjiang region and 450 million yuan in other regions. Furthermore, the demand growth rate of the civil explosives market in Tibet is significant. In 2024, the production and sales value reached 432 million and 434 million yuan respectively, with year-on-year growth rates of 35.96% and 38.37% respectively. Xinjiang: Coal mining supports the continuous growth of civil explosives demand According to data from the National Bureau of Statistics, in 2024, Xinjiang's raw coal output was approximately 541 million tons, an increase of 17.5% year-on-year. Meanwhile, according to data from the Xinjiang Coal Trading Center, the railway transport volume of Xinjiang coal steadily increased in 2024, with an external railway transport volume of 90.6 million tons from January to December, an increase of 50.2% year-on-year. Under the promotion of relevant policies such as the "Fourteenth Five-Year Plan for National Economic and Social Development and the Long-term Goals for 2035 of the Xinjiang Uygur Autonomous Region" and the "Implementation Plan for Accelerating the Construction of Large Coal Supply Guarantee Bases in Xinjiang to Serve National Energy Security", Xinjiang's coal production is expected to maintain growth, thereby driving the demand for civil explosives. Tibet: According to reports from CCTV News in December 2024, the approval of the Yarlung Zangbo River downstream hydropower project has been obtained, and the advancement of large-scale infrastructure projects is expected to drive the upward demand for civil explosives in the Tibet region. Risk warning: downstream demand falls short of expectations; significant fluctuations in raw material prices; risks of changes in industry policies.

2 h ago

Sinolink: Sensors are the core components of the perceptual layer of humanoid robots from Siasun Robot&Automation. We have high expectations for the development of vision, force sensing, and tactile sensing in these robots.

Sinolink released a research report stating that sensors are the bridge between Siasun Robot&Automation and external perception, and they are optimistic about visual, tactile, and force sensing directions. The intelligent enhancement of Siasun Robot&Automation lies in the improvement of its perception capabilities, and sensors are the core components of the perception level. It is expected that with the gradual implementation of humanoid Siasun Robot&Automation industries, the demand for sensors will increase, benefiting related industries in the supply chain. Sinolink's main points are as follows: Sensors are the bridge between Siasun Robot&Automation and external perception, and they are optimistic about visual, tactile, and force sensing. The intelligent enhancement of Siasun Robot&Automation lies in the improvement of its perception capabilities, and sensors are the core components of the perception level. The main perception dimensions of humanoid Siasun Robot&Automation come from force sensing, inertial sensing, tactile sensing, visual sensing, and speed/location sensing. Combined with product barriers, industry landscape, and industry advancement analysis, visual, tactile, and force sensing are three sub-directions worth paying attention to in the future of humanoid Siasun Robot&Automation sensors. Visual - The "eyes" of the machine, both hardware and software are barriers, and there is differentiated competition among domestic manufacturers in the visual field. 3D vision sensors have multiple advantages such as high accuracy, large amount of information, and high integration, making them suitable for complex and precise recognition, and more likely to become the mainstream solution for future humanoid Siasun Robot&Automation. 1) Industry development is still in its early stages: Currently, mainstream Siasun Robot&Automation manufacturers have different visual solutions, and are still in the early stages, such as Boston Dynamics Atlas, Tesla Optimus, Xiaomi CyberOne, and UBTECH ROBOTICS Walkers X, which have chosen four different solutions including TOF depth cameras, multiple cameras, depth vision modules, and multiple visual sensors, and industry solutions have not yet formed a unified standard. 2) Barriers: 3D vision sensors have high requirements for both software and hardware. The core indicators of 3D vision sensors are depth resolution, accuracy, etc., and achieving high-performance 3D vision sensors requires high requirements for chip design, software algorithm development, and hardware. 3) Landscape: Leading overseas companies such as Apple and Microsoft are technologically advanced and have strong algorithm advantages in the field of 3D vision sensors; some domestic manufacturers have achieved differentiated competition through conquering chips, key components, etc., and in some technical indicators (such as resolution, accuracy, power consumption, etc.) have surpassed leading overseas companies, and are likely to enter the industry chain of humanoid Siasun Robot&Automation in the future. Force Sensing - High barriers, high value, the core of flexible operations for Siasun Robot&Automation It is expected that six-axis force-torque sensors will be needed at the wrists and ankles of humanoid Siasun Robot&Automation, and other joints are expected to use joint torque sensors. 1) Industry progress: Looking at the technical route of Tesla's AI Day, the terminal actuators require higher precision, and it is expected to use six-axis force-torque sensors; other joints have relatively simple perception, and a single-axis force-torque sensor is expected to meet the requirements; 2) High barriers: The more dimensions of force-torque sensors, the higher the production barriers, with the barriers of six-axis force-torque sensors lying in the quality of the core material strain gauges, production processes, testing equipment, etc.; 3) High value: Due to the high labor and material costs of six-axis force-torque sensors, the value per product is high, according to the ATI website, the price of the company's six-axis force-torque sensors is between $4,000 and $8,000; 4) Landscape: Overseas manufacturers have excellent performance and strong first-mover advantages. The leading overseas company in six-axis force-torque sensors is ATI, which is technologically advanced, while most domestic manufacturers have not yet achieved significant revenue, and some domestic manufacturers have made smooth progress in the multi-dimensional force-torque sensor field, with potential to enter the industry chain of humanoid Siasun Robot&Automation in the future. Tactile Sensing - The "skin" of the machine, enabling fine interaction Electronic skin is the key technology for achieving fine interaction in tactile sensing in humanoid Siasun Robot&Automation, and the solution combining visual and tactile indicators is superior and likely to become the mainstream solution in the future. 1) Industry progress: In December 23, Tesla's Optimus Gen2 achieved the action of grabbing an egg, and the domestic manufacturer Palisini's new generation of dexterous hands has nearly a thousand tactile sensors, greatly improving operational precision; From a technological standpoint, Palisini's tactile solution combined with visual indicators is superior and lower in cost, and is likely to become the mainstream solution for tactile sensing in the future. 2) Barriers: The barriers of electronic skin mainly lie in materials and algorithms; electronic skin manufacturing requires sensitive materials, which are difficult to produce and have high production costs; from a software perspective, algorithms are crucial to the accuracy of sensor results, with the software and hardware being equally important. 3) Landscape: Currently, industry-leading manufacturers are mainly foreign brands, with some domestic manufacturers being relatively technologically advanced. Investment recommendations Optimistic about the gradual implementation of humanoid Siasun Robot&Automation industries leading to an increase in sensor demand, benefiting related industries in the supply chain. Risks: Commercial implementation of humanoid Siasun Robot&Automation falls short of expectations, and changes occur in Siasun Robot&Automation sensor technology routes.

2 h ago

CITIC SEC: It is expected that the consumption volume of Spring Festival travel will increase significantly in 2025, with high certainty. There is still a price gap, but it is showing signs of narrowing.

Recently, CITIC SEC released a performance outlook for the social service industry in the fourth quarter of 2024 and a forecast for Spring Festival travel in 2025. The research report states that the consumer travel service industry in 2024 is one of the most prosperous sectors in the consumer industry dominated by domestic demand. With the alleviation of base pressure in the fourth quarter of 2024, the year-on-year growth rate of the industry improved as expected, but to a lesser extent than anticipated. From a performance outlook perspective, long-distance travel scenarios such as Online Travel Agencies (OTA) and hotels slightly exceeded expectations, leisure scenarios such as scenic spots and gambling were relatively stable, and the catering and duty-free industries with high operating leverage showed signs of recovery but still faced pressure. For the 2025 Spring Festival, an increase in travel consumption is highly likely, although there is still a price gap which is narrowing. According to the Ministry of Transport and Flight Manager, railway and civil aviation passenger traffic during the Spring Festival is expected to increase by 5.5% and 10.9% respectively, reaching historical highs and laying the foundation for a prosperous Spring Festival travel season. Overview of the performance outlook for the fourth quarter of 2024: With the alleviation of base pressure in the fourth quarter of 2024, the year-on-year growth of companies related to the service industry improved as expected but to a lesser extent than anticipated, as consumer demand continues to be affected by weak macroeconomic expectations. 1) Long-distance travel remains prosperous, with a 10% increase in domestic air passenger traffic in the fourth quarter of 2024, and a 52.7% increase in international and regional passenger traffic, recovering to 93.5% of 2019 levels. Correspondingly, OTA and hotel bookings are showing resilience, with OTA ticket and hotel bookings increasing slightly compared to the third quarter of 2024, while Revenue Per Available Room (RevPAR) in the hotel industry narrowed to 4.9% year-on-year, laying a slightly stronger foundation for revenue and performance of related companies compared to market expectations. 2) Demand for leisure scenarios is stable, with natural scenic spots outperforming leisure spots. In the fourth quarter of 2024, the Gross Gaming Revenue (GGR) of casinos increased by 6% and had recovered to 80% of 2019 levels, performing well and meeting market expectations. 3) The catering and duty-free industries, which are heavily influenced by macroeconomic expectations and have high operating leverage, showed signs of improvement in the fourth quarter of 2024 compared to the third quarter, but the extent of improvement was less than market expectations, leading to continued pressure on industry performance. 4) Additionally, the human resources sector dominated by business travel demand showed a trend of slight recovery, with the trend of flexible labor and business outsourcing remaining steady. Overall, the demand for travel services remained high, with industries that faced significant base pressures in the past steadily recovering, albeit not sharply, leading to a trend of increasing quantity and lowering prices with supply and demand rebalancing, resulting in differentiated performances among industries and companies. Outlook for the 2025 Spring Festival travel season: High certainty of increased quantity, although price gaps remain but are narrowing. The Ministry of Transport predicts that during the 2025 Spring Festival travel season, the total number of inter-regional travelers is expected to reach around 9 billion, a year-on-year increase of approximately 7%. Both railway and civil aviation passenger traffic are expected to reach historical highs, with year-on-year growth rates of over 5.5% for railways and over 10.9% for civil aviation. Flight managers forecast a 10.9% increase in civil aviation passenger traffic during the Spring Festival, with the average economy class ticket price for domestic flights remaining relatively stable compared to the previous year. The steady growth of travel during the high base of the Spring Festival period lays a good foundation for the flow of customers in the service industry, with OTA platforms expected to maintain a 10-30% growth in bookings, the hotel industry showing mid-single-digit growth in overnight stays but a slight decrease in prices, and overall visitor flows at scenic spots expected to achieve single-digit growth. In the first quarter of 2025, the Gross Gaming Revenue in Macau is expected to increase slightly year-on-year, catering customer flows are expected to remain warm with a slight increase in average spending per customer year-on-year. Looking ahead to the full year of 2025, considering the expected recovery in demand under policy guidance and the positive impact of improvements in supply-side in the industry. OTA: Increased onlineization rate, leading growth in OTA industry, as upstream supply growth slows down and subsidies from various OTAs gradually return to normal, narrowing the gap in hotel night growth. According to Flight Manager data, the total number of civil aviation passengers in the fourth quarter of 2024 was 176 million, an increase of 13.4% compared to 2023, and an increase of 8.4% compared to 2019; domestic passenger traffic was 157 million, an increase of 10% compared to 2023, and an increase of 10.6% compared to 2019, while international/regional passenger traffic was 17.6 million, an increase of 52.7% compared to 2023, and a decrease of 6.5% compared to 2019. The competitive landscape for OTAs has stabilized, with the slowdown in supply growth expected to impact the monetization rate slightly lower than the third quarter but higher than the same period last year. Flight Manager predicts a 10.9% year-on-year increase in civil aviation passenger traffic during the Spring Festival, while CADAS forecasts an increase of around 8.9% in domestic and 34.7% in international/regional airline passenger throughput during the Spring Festival, with Ctrip's order growth rate expected to be similar to that of the aviation market (approximately 10% for domestic and over 30% for international, with Tongcheng's growth rate being twice that of the industry at around 20%). Scenic spots: Natural scenic spots outperform leisure spots in the fourth quarter of 2024, with a stable performance expected during the Spring Festival. The fourth quarter is traditionally a low season for scenic spots, and in the fourth quarter of 2024, with relatively clear weather and moderate temperatures, the overall operation of the scenic spots sector was stable, although there was noticeable differentiation among different spots. The growth in visitor traffic continues to be a highlight for the top natural scenic spots, with visitor traffic at attractions such as Huangshan and Changbai Mountain Tourism increasing by 24% and 27% respectively year-on-year in the fourth quarter. However, leisure and vacation spots are still affected by the consumption environment, with visitor traffic at attractions such as Tianmu Lake Tourism in Jiangsu and Wuzhen and Gubei Water Town under China Cyts Tours Holding all declining year-on-year, showing weaker performance compared to top natural scenic spots. Visitor traffic at the scenic spots exceeded expectations during the two post-epidemic Spring Festival holidays, and we anticipate that the performance of scenic spots during the 2025 Spring Festival holiday will be generally stable, with the sector as a whole expected to achieve single-digit visitor traffic growth above a relatively high base, making it advisable to focus on related stocks with high growth potential and solid fundamentals in the first quarter of 2025. Hotels: Improvement in supply and demand balance, with a narrowing decline in RevPAR. In the fourth quarter of 2024, due to the slowdown in supply growth and the lowering of price bases, the year-on-year decline in Revenue Per Available Room (RevPAR) narrowed. According to data from Hotel HouseIn 2024, the average RevPAR of hotels in Q1-Q4 decreased by 7.3%, 11.0%, 9.8%, and 4.9% respectively compared to the same period last year. As of the end of December, the number of hotels increased by 2.6% year-on-year, the number of rooms increased by 6.9% year-on-year, and the average daily demand for hotel room nights increased by approximately 4% year-on-year. The difference in supply and demand growth rates led to a 5% year-on-year decrease in the average ADR for the whole year. Considering the high price base during the 2024 Spring Festival, we expect the growth rate of hotel room nights demand in 2025 to be in the mid to low single digits, slightly lower than the growth rate of travelers (about 7% increase in inter-regional personnel flow during the 2025 Spring Festival travel rush) and supply growth rate (around 7%). We predict that the average RevPAR of hotels during the Spring Festival holiday in 2025 will decrease by a mid-single digit percentage.Gambling: The peak season of the Spring Festival is approaching, and short-term preference for top operators with operational efficiency advantages. According to CRRCITICS-CLSA, there is a high correlation between Macau GGR and income expectations of urban residents and relatively high-income groups in first-tier cities. Therefore, from a forward-looking perspective, we believe that GGR is a leading indicator of economic recovery and domestic demand warming. The current valuation of the Macau gambling industry is still low, and we believe that the industry (especially large leading companies) has strong cyclical attributes. In comparison with other sectors in the leisure industry, the data realization is relatively stable, and we are optimistic that the Macau gambling industry is expected to thrive in 2025 against the backdrop of improving consumer sentiment and the recovery of the tourism industry. Due to seasonal effects, we expect industry GGR to decrease slightly year-on-year in January, increase slightly year-on-year in February, and slightly increase in 2025Q1 compared to the same period in 2024. Looking at 24Q4, despite some disruption in December due to high-level activities such as the celebrations of the 25th anniversary of Macau's return, the industry GGR in 24Q4 increased by 6% to 57.4 billion Macau dollars, reaching 80% of the same period in 2019, demonstrating good performance. We believe that the current industry reinvestment ratio is still high, and a significant decrease in reinvestment is expected to take 1-2 quarters. Operators are tending to invest in renovation and improving property quality through Capex input. We believe that a more orderly competitive environment will help in a moderate increase in EBITDA profit margins. Duty-free: Negative operating leverage effects persist, focusing on the progress of downtown store openings. According to Haikou Customs, tax-free sales in Hainan's outlying islands in 24Q4 decreased by 21.4% year-on-year (down 29.3% for the whole year), with shopping trips down by 19.4% (down 15.9% for the whole year) and per capita consumption down by 2.6% (down 15.9% for the whole year). We analyze that this is mainly due to the weakening of consumer demand under the macroeconomic backdrop, intensified competition from taxed channels lowering conversions, and the continued diversion of high-quality customer traffic due to the continuous growth of outbound tourism. In 24Q4, there was an increase in discount promotions, narrowing the decline in sales compared to the previous quarter. Leading companies in 24Q4 saw a year-on-year decline in revenue/net profit of 19%/77%, with a significant decline in operating negative leverage. We believe that the turning point of duty-free business still awaits a warming consumption environment, but in 2025, as the base pressure eases, tax-free sales are expected to gradually improve year-on-year. In the short term, following the safety incident in Thailand, there may be a partial return of outbound tourists from Southeast Asia to Hainan. The new policy for downtown duty-free shops has been implemented, and companies benefit from first-mover advantage in layout. We recommend continuing to track the progress of new downtown duty-free store openings. Catering: Overall competition stabilizing, prices stabilizing, traffic bottoming out, expected to demonstrate elasticity under policy stimuli. Due to the low base, the growth rate of catering sales has increased since October 2024, from around 3% before to around 4% now, while the number of catering outlets on the supply side is still decreasing. Looking at listed companies, price pressures have eased, traffic performance has stabilized, and the overall same-store sales decline in 24Q4 is expected to stabilize, while HAIDILAO shows a decline under a high base, but relatively stable performance compared between the first and second halves of the year. Leading companies in specific segments are the first to adjust prices, which we believe to some extent reflects the overall stabilization of competition. The marginal impact of low-price strategies on stimulating traffic is weakening, and the possibility of further intensifying price wars is low. According to our in-depth report on the catering industry chain released on January 17, under the direction of boosting domestic demand, we recommend allocating the catering chain to capture resilience in various scenarios. Currently, the overall performance of key catering companies is at a neutral level, considering policy incentives, there is room for performance improvement in optimistic scenarios, reaching 6% to 60%. The average dynamic P/E ratio for catering companies in 2025 is 20 times, and the elasticity of valuation is likely to be manifested whether it is due to policy confrontation or the expected turning point in the industry's own recovery, with the sustainability of valuation performance depending mainly on the degree of data realization. Human Resources: Weak recovery in recruitment demand in 2024, focus on bottom-up allocation opportunities. According to Datayes, the number of new job postings in 2024 increased by about 5% compared to the previous year, and the number of new recruiting companies increased by about 6%, showing a weak recovery overall. We expect high-end recruitment and human resources management businesses to still be under pressure in 24Q4, while the trend of flexible employment and business outsourcing is expected to continue, with double-digit revenue growth expected in the sector. Looking ahead to 2025, the growth certainty of outsourcing businesses remains high, and with the expected economic recovery, there is potential for upward recovery elasticity in cyclical businesses such as high-end recruitment and human resources management. If demand from mid-level customers picks up, there is also room for improvement in the gross profit margin of outsourcing businesses. Currently, the country places a high emphasis on employment, and we recommend continuing to track the progress and effectiveness of subsequent employment-related policy implementation in the human resources sector. The human resources sector is currently in the historical valuation bottom range, so we suggest focusing on bottom-up allocation opportunities. Risk factors: Economic slowdown surpassing expectations, consumer downgrading trends surpassing expectations; risks of unexpected changes in domestic and overseas travel policies; risks of unexpected changes in visa application policies for outbound travel; delays in the recovery of cross-border aviation capacity; increased market competition, etc. Investment strategy: Looking ahead to 2025, considering the expected recovery in demand under policy transmission and the positive promotion of industry supply improvements. From the perspective of leisure and business travel, the continuation of leisure prosperity is a high probability event, and any adjustments in holiday policies may further stimulate leisure demand release. We recommend selecting quality stocks as basic portfolio configurations. Business travel demand has a stronger beta elasticity compared to the macroeconomic cycle. closely monitor the pace of policy implementation to corporate profit improvement, with a more aggressive allocation approach. 1) First, we recommend the OTA sector and local life, which has high demand resilience, online rate improvement, and business expansion as multiple drivers, and the industry has a dual nature of leisure and business travel. 2) Next, we recommend the human resources and hotel sectors dominated by business demand, which are expected to demonstrate the greatest cyclical resilience. 3) Furthermore, we recommend high-quality stocks in the catering, gambling, and scenic spots dominated by leisure attributes and operational leverage. 4) Continuing to monitor the recovery of data in the duty-free industry.

3 h ago

Zhongjin: In 2025, the focus of American investment in China will be on the structural opportunities brought by the rise of domestic products and the optimization of the market.

CICC released a research report stating that the overall demand in the US beauty and personal care industry is expected to be under pressure by 2024. With intensified brand competition and the slowing down of channel dividends, operating costs are rising, and gross sales differentials are declining, leading to further differentiation in the market. Looking ahead to 2025, the bank expects the demand side to benefit from factors such as the recovery of terminal consumer power, and all sub-sectors of the beauty and personal care industry are expected to see growth rebound on a low base, with cosmetics and personal care showing stronger resilience, and medical aesthetics having better elasticity. The concentration of top players on the supply side is increasing, and the rise of domestic brands is expected to continue. The bank recommends focusing on the structural opportunities brought about by the rise of domestic brands and the optimization of the market layout in the beauty and personal care industry in 2025. Key points from CICC: Cosmetics: The trend of intensified differentiation, increased concentration, and the rise of domestic brands is expected to continue. The overall cosmetics market shows strong resilience, and the bank expects it to stabilize and improve in 2025, driven by the recovery of domestic demand. In terms of market dynamics, increased industry competition and declining gross sales differentials will drive market share towards top brands. Foreign brands have seen a short-term comeback in market share since 3Q24, but some may struggle to maintain their position due to damaged pricing and brand strength, while leading domestic brands have rapidly improved their technological research and development capabilities, brand building, and channel operations. The bank is optimistic about the further increase in market share of domestic companies with outstanding brand and product advantages, leading in the development of emerging ingredients such as collagen. Medical aesthetics: The implementation of consumption promotion policies is expected to release demand elasticity, while the continuous enrichment of new materials on the supply side. The prosperity of the medical aesthetics industry is closely related to residents' income levels. The bank believes that the industry's demand recovery in 2025 will have considerable elasticity, and the introduction of new products on the supply side is likely to stimulate consumer demand. In terms of market dynamics, institutions are more willing to promote new products for profit, and the increase in licensing supply poses a higher challenge to the product positioning, brand marketing, channel empowerment, and control capabilities of pharmaceutical and medical device manufacturers. Companies with forward-looking pipeline layouts, leading certification capabilities, and excellent market promotion capabilities in the pharmaceutical and medical device sector are expected to outperform. Personal care: The increase in online penetration rates and the rise of self-indulgence demand bring opportunities for market restructuring. The bank expects that the self-indulgence trend in 2025 will continue to drive the product structure of the personal care sector towards more efficacy-oriented and high-end upgrades. At the same time, the increase in online penetration rates will help domestic brands expand their market share through content marketing. The bank is optimistic about the rising opportunities for domestic brands in niche segments such as infant and child care, feminine hygiene products, oral care, and household cleaning. Looking ahead to 2025, the bank is positive about the excess growth opportunities in high-quality niche segments of the beauty and personal care industry, as well as the continued rise of domestic companies. It recommends focusing on three main themes: 1) blue-chip companies with excellent quality and reasonable valuation returning to a growth trajectory; 2) high-growth targets with core products/brands still at the expansion stage; 3) opportunities for bottom reversal driven by internal management improvements, external expansion, and valuation recovery. Risk warning: Increased industry competition, industry regulatory policy risks, and fluctuations in raw material prices.

3 h ago

Country's beer industry outlook for 2025: industry expects stable production, rising prices, decreasing costs, and increasing profit margins.

Recently, the Guotai Junan food and beverage team published a research report looking ahead to the beer industry market in 2025. The team stated that based on recent market research and Guotai Junan's calculations, they expect the beer industry sales volume in 2025 to be neutral in terms of prosperity, with the industry structure continuing to upgrade, costs continuing to decline, expenditure remaining stable, and the mid-term dividend payout ratio expected to increase. In terms of ton price, it is expected that in 2025, with the overall industry structure upgrading and the trend of shrinking volume in the low-end continuing, assuming the economic situation remains the same, the industry ton price is still expected to slightly increase, with the magnitude possibly narrower than in 2024. It is expected that the capital expenditure of various beer companies in 2025-26 may show a downward trend, with overall shareholder returns continuously strengthening. The expectation is for neutral sales volume prosperity, with the structure upgrade likely to continue. According to the research, Guotai Junan expects the industry sales volume in 2025 to slightly decrease to remain flat (the industry total is expected to decline by a low single digit in 2024). Guotai Junan predicts that in 2025, Tsingtao Brewery's sales volume target is relatively more positive, Yanjing's sales volume target is better than the industry average, Budweiser may face challenges in meeting its market share target, Reeb or will maintain the industry average, while China Resources Beer's target is relatively conservative. Costs are still in a downward cycle, with expenditure relatively stable. According to calculations, Guotai Junan predicts that raw material costs will still be in a downward cycle in 2025, with cost intensity possibly slightly narrower than in 2024. Guotai Junan predicts that barley prices will decrease year-on-year, glass bottles will remain stable with a slight decrease, paper boxes will remain stable, and aluminum cans will increase but with limited impact. In terms of competition, Guotai Junan predicts there may not be a vicious price war, and the trend of increasing industry profit levels will remain unchanged. In terms of expenditure, China Resources Beer may be the most cautious, Budweiser will remain stable, Qingdao Brewery, Yanjing, and others may focus on precise marketing in specific markets, improving cost-effectiveness. Guotai Junan believes that Yanjing is still in a period of supply-side improvement dividends, and Qingdao Brewery still has room for improvement in mid-term profit margins. The trend of increasing dividend payout ratio is starting, with shareholder returns continuously strengthening. According to discussions, Guotai Junan expects the overall dividend payout ratio level of the industry in 2025 to increase year-on-year. Guotai Junan predicts that Tsingtao Brewery and China Resources Beer are likely to continue to increase their dividend payouts in 2025-26, while Carlsberg and Budweiser may maintain their 2024 dividend levels in 2025, and Yanjing has room for improvement in mid-term dividend payout ratio. Risk warnings: cost fluctuations, extreme weather impacts, changes in consumer habits.

5 h ago

Guotai Junan: Maintain a "buy" rating on the public utility industry and seize the structural opportunities in specific sub-sectors.

Guotai Junan released a research report stating that it maintains a "buy" rating for the utility industry. The positioning of power under reform has changed, capturing the structural opportunities of niche sectors. (1) Thermal power: selected varieties with locational advantages and increasing dividend attractiveness. (2) Hydropower: large hydropower projects in high-quality basins. (3) Nuclear power: long-term implicit returns are worth paying attention to. (4) Wind and solar power: waiting for industry factors to improve under policy drive, selecting high-quality stocks with a high proportion of wind power. Event: The National Energy Administration and the National Bureau of Statistics released electricity generation data for January-December 2024: The national electricity consumption increased by 6.8% year-on-year in the first twelve months; the electricity generation of large-scale power plants increased by 4.6% year-on-year in the first twelve months. Main points of Guotai Junan: The growth rate of electricity consumption in 2024 slightly slowed down. In 2024, the electricity consumption of the whole society increased by 6.8% year-on-year, a decrease of 0.3 percentage points compared to January-November 2024. By industries, the year-on-year growth rates of electricity consumption in the primary/secondary/tertiary industries and residential sectors were +6.3%/+5.1%/+9.9%/+10.6%, a decrease of -0.5/-0.2/-0.5/-1.0 percentage points from January-November 2024. Looking at the data from December: 1) In December 2024, industrial value-added increased by 6.2% year-on-year, an increase of 0.8 percentage points from November; total retail sales of consumer goods increased by 3.7% year-on-year, an increase of 0.7 percentage points from November; 2) In December 2024, the national average temperature was -2.9C, a decrease of 0.1C year-on-year. Looking ahead to 2025, the expected year-on-year growth rate of electricity consumption is +5.5%. Hydropower has changed from a decrease to an increase, while thermal power growth has turned negative. In December 2024, the electricity generation of large-scale power plants increased by 0.6% year-on-year, a decrease of 0.3 percentage points from November. By power sources, in December 2024, hydropower and wind power changed from a decrease to an increase, thermal power growth turned negative, and nuclear power and photovoltaic power accelerated their growth. In December 2024, hydropower grew by 5.5% year-on-year, an increase of 7.4 percentage points from November. The bank speculates that this is related to improved water inflows (in December 2024, the average inflow of the Three Gorges Reservoir was 7019 cubic meters per second, an increase of 3.9% year-on-year, an increase of 24.8 percentage points from November). In December 2024, wind power grew by 6.6% year-on-year, an increase of 9.9 percentage points from November; photovoltaic power grew by 28.5% year-on-year, an increase of 18.2 percentage points from November. The bank speculates that this is related to the low base in the same period of the previous year (in December 2023, the hours of photovoltaic utilization were 68 hours, which was 13 hours lower than the average hours from 2019 to 2022). In December 2024, nuclear power grew by 11.4% year-on-year, an increase of 8.3 percentage points from November. In December 2024, thermal power decreased by 2.6% year-on-year, a decrease of 4.0 percentage points from November. The bank speculates that this is related to weak electricity demand and the strengthening of the clean energy displacement effect. Risk factors: Lower-than-expected electricity demand, wind and solar power integration issues exceeding expectations, coal prices exceeding expectations, market electricity prices lower than expected, etc.

5 h ago

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