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Industrial: What are the industries currently performing well at low levels?

Industrial4 (1) In the AI industry chain, priority should be given to the upstream hardware with performance certainty The overcrowding in most directions of the AI industry chain has been greatly alleviated, but in the more performance-focused April, it is still important to find directions with strong internal performance certainty and cost-effectiveness. The AI sector itself is a huge industry chain covering upstream computing power hardware, midstream software services, and downstream applications. After the previous adjustment, the overcrowding in most directions has been reduced to a low level. In April, which is more focused on performance, it is worth actively paying attention to and laying out directions that are relatively low and supported by performance. Considering the changes in profit expectations since the beginning of the year, the directions in the AI industry chain that are expected to improve performance are mainly concentrated in the upstream hardware sector, while some sub-segments of the midstream and downstream software applications sectors are also expected to improve, including: Upstream computing power hardware: optical modules, PCBs, liquid-cooled servers, GPUs, fiber optic cables. Midstream and downstream software applications: financial technology, drones (low-altitude), autonomous driving. From the perspective of the matching of stock price and performance, most industries have not seen a significant cumulative increase since the beginning of the year, and some have been at the forefront of the improvement in profit expectations, and are expected to benefit from the improvement in performance certainty. (2) Focus on the cyclically favorable directions with low positions and leading improvement in profit expectations By screening the changes in profit expectations of various industries since the beginning of the year, the directions with potential for performance improvement are mainly concentrated in some consumer, financial, infrastructure, and export chains, including: Home appliances (white goods, kitchen appliances), automobiles, consumer electronics, benefiting from the policy of replacing old with new and expanding consumer subsidies; Banks and insurance companies benefiting from the "good start" effect at the beginning of the year; Infrastructure chains (cement, etc.) benefiting from fiscal efforts and debt-to-equity swaps; Seasoning products benefiting from the peak season effect of the Spring Festival; Export chains (motorcycles, white goods, etc.) benefiting from "grabbing exports"; In addition, there are securities firms (increased market trading activity) and precious metals (rising gold prices). From the perspective of the matching of stock price and performance, select the low-position high-performance directions, mainly including consumer goods (white goods, seasonings, professional chains), financial services (securities, state-owned banks, insurance), infrastructure and real estate chains (cement, real estate services), TMT (digital media, advertising, communication equipment), etc. Risk Warning Fluctuations in economic data, policy easing lower than expected, Federal Reserve interest rate cuts not meeting expectations, etc.
01/04/2025

Soochow: Under the iteration of new cars and advanced intelligent driving, car companies will experience differentiation in their operations by 2024.

Soochow released a research report stating that under the rapid growth of high-end intelligent driving, the penetration rate of electric vehicle models is continuously increasing. The bank predicts that the sales of electric vehicles in China will increase by 25% by the year 2025, reaching 16 million units. In addition, global energy storage demand is expected to grow by 35-40%, overall lithium battery demand by nearly 30%, and is expected to maintain around 20% by 2026. Profitability in various links is gradually improving, with leading companies valued at only 15-18 times. Soochow recommends stable leaders in the battery and structural components sectors and sees potential in profitable material leaders. It also notes that lithium carbonate prices have bottomed out and is optimistic about leaders with high-quality resources. Soochow's main points are as follows: Sales: In 2024, Tesla's sales remain stable, while new forces generally see high growth, with Xiaopeng, Lixiang, and Xiaomi showing strong growth momentum. In 2024, Tesla's sales were 1.79 million units, a slight decrease of 2% year-on-year. In 2025, the company aims for a 20% to 30% increase in sales with the introduction of the new MY refreshed version and low-priced models. Xiaopeng has shown strong sales momentum, with sales of 92,000 units in Q4, a quarter-on-quarter increase of 52%/97%. In Q1 of 2025, sales remained stable, with plans to introduce new models each quarter and increase the range of models, with a target of doubling annual sales to 380,000 units. Lixiang achieved 294,000 units in 2024, a year-on-year increase of 104%, and plans to launch 3 models in the 10-15,000 price range in 2025, targeting 500,000 units, a 70% increase year-on-year. Xiaomi achieved 137,000 units in 2024 and plans to launch its first SUV in 2025, with a target of 350,000 units for the year. Li Xiang achieved sales of 500,000 units in 2024, a 33% increase, with growth expected to slow down. In the second half of 2025, new models, the pure electric I8 and I6, will be introduced, with a target of 700,000 units, a 40% increase year-on-year. Jinko Group will release 5 new models in 2025, with a target of 710,000 units, a 220% increase year-on-year. Increased competition puts pressure on the average selling price of car companies, but Xiaopeng, Lixiang, Xiaomi, and Jinko benefit from economies of scale, with significant improvement in profitability. In 2024, increased competition led to price reductions and increased sales of economic models, resulting in a 5-15% decrease in the average selling price of car companies. However, Xiaopeng, Lixiang, and Xiaomi benefited from economies of scale, with significant improvements in profitability in Q4, with gross profit margins in double digits. In Q4, Xiaopeng's overall business gross profit margin was 14.4%, with a loss of 14,500 yuan per vehicle, a significant reduction in losses. Lixiang had a gross profit margin of 13% in Q4 and achieved profitability in the first quarter; Xiaomi had a gross profit margin of 20% in Q4. However, Tesla and Li Xiang saw declines in per vehicle profits in 2024. Intelligence and globalization are the two main strategies for automotive companies in 2025. In terms of intelligent driving, Tesla aims to enter Europe and China with FSD by 2025. New forces in 2024 mainly focused on end-to-end competition and NOA in mapless cities, while in 2025, the focus will shift to equal rights in intelligent driving and the penetration of intelligent driving. Xiaopeng's MOAN03max version will bring high-end intelligent driving to the 150,000 price range and will be able to use city NOA. Lixiang's B10 will be equipped with LiDAR and will be able to use high-speed NOA from April, with the goal of using city NOA by the end of the year, with prices falling to 10-12,000. In terms of globalization, on the one hand, efforts will be made to accelerate the construction of overseas sales networks and brand promotion. Xiaopeng aims to double overseas sales to 40,000 units by 2025, while Jinko Group aims to have exports account for 10% of sales. On the other hand, new forces will accelerate the intelligent overseas layout, including data collection, testing, etc. Risk warnings: Price competition exceeds market expectations; unstable raw material prices affecting profit margins; slowdown in investment growth.
01/04/2025

Haitong: Heavy truck sales in February increased compared to the previous month, kicking off the new year with a strong start.

Haitong released a research report stating that in February, domestic heavy truck sales reached 81,000 units, a 36% year-on-year increase and a 13% increase from the previous month. The cumulative sales of domestic heavy trucks in January and February reached 154,000 units, a 2% year-on-year decrease. After the Spring Festival in February, which is the first month after the Chinese New Year, various industries gradually resumed work, leading to an increase in demand for goods transportation from the low point in January. As a result, the demand for new vehicles and sales increased month-on-month. In February, the sales of domestically produced natural gas heavy trucks reached 17,000 units, a 73% year-on-year increase and a 72% increase from the previous month. The cumulative sales of domestically produced natural gas heavy trucks in January and February reached 26,000 units, a 9% year-on-year increase. Haitong's main points are as follows: Overall: The sales of heavy trucks in February reached 81,000 units, a 36% year-on-year increase. The cumulative sales of domestic heavy trucks in January and February reached 154,000 units, a 2% year-on-year decrease. Heavy truck structure: The proportion of engineering vehicles increased while the proportion of tractors decreased. In February 2025, the sales structure of semi-trailer tractors/cargo trucks/incomplete vehicles accounted for 51.0%/25.5%/23.6% of the total heavy truck sales, compared to 51.9%/25.3%/22.7% in 2024. The proportion of engineering incomplete vehicles increased in February 2025 compared to the full year of 2024, while the proportion of tractor sales decreased. Semi-trailer tractors: Sales reached 43,000 units in February, a 45% year-on-year increase. The cumulative sales in January and February reached 78,000 units, a 4% year-on-year increase. Heavy cargo trucks: Sales reached 20,000 units in February, a 6% year-on-year increase. The cumulative sales in January and February reached 39,000 units, a 9% year-on-year decrease. Heavy incomplete vehicles: Sales reached 19,000 units in February, a 63% year-on-year increase. The cumulative sales in January and February reached 36,000 units, a 5% year-on-year decrease. Exports: The trends of various heavy truck exports in February showed differentiation. The export of tractors reached 10,000 units in February, the same as the previous year but a 6% increase from the previous month. The cumulative export in January and February reached 19,000 units, a 14% year-on-year decrease. The export of heavy incomplete vehicles reached 5,000 units in February, a 24% year-on-year increase but a 29% decrease from the previous month. The cumulative export in January and February reached 12,000 units, a 13% year-on-year increase. Natural gas heavy trucks: Sales reached 17,000 units in February, a 73% year-on-year increase. The cumulative sales in January and February reached 26,000 units, a 9% year-on-year increase. Natural gas heavy truck structure: Semi-trailer tractors dominate. In January and February 2025, the sales structure of semi-trailer tractors/cargo trucks/incomplete vehicles accounted for 96.6%/2.3%/1.1% of the total heavy truck sales, compared to 97.0%/1.8%/1.2% in 2024. Natural gas semi-trailer tractors: Sales reached 16,000 units in February, a 69% year-on-year increase. The cumulative sales in January and February reached 25,000 units, a 7% year-on-year increase. Natural gas penetration rate: The penetration rate in February reached 13%. The penetration rate of natural gas heavy trucks in February was 20%, while for semi-trailer tractors it was 37%. According to the calculation of the full-life cycle cost of heavy trucks, for tractor trucks with an average annual mileage of over 150,000 kilometers, using natural gas is more economical most of the time. With the promotion of large-scale equipment renewal policies, the penetration rate of natural gas heavy trucks, as lower-cost equipment, is expected to further increase. New energy heavy trucks: Sales reached 10,000 units in February, with a 12% penetration rate. The cumulative sales in January and February reached 20,000 units, a 551% year-on-year increase. Competitive landscape of heavy trucks: In February, Sinotruk Jinan Truck had the highest sales. The top ten heavy truck manufacturers in cumulative sales in February were Sinotruk Jinan Truck, FAW Group, Shaanxi Heavy Truck, Dongfeng Motor, Beiqi Foton Motor, Xugong Automobile, Anhui Jianghuai Automobile Group Corp., Ltd, Hualing Automobile, Chery Automobile, and Beiben Heavy Truck. The cumulative market share of the top five manufacturers in 2025 reached 91%. Competitive landscape of semi-trailer tractors: In February, Sinotruk Jinan Truck had the highest sales. The top ten manufacturers in cumulative sales of semi-trailer tractors in February were Sinotruk Jinan Truck, FAW Group, Shaanxi Heavy Truck, Dongfeng Motor, Beiqi Foton Motor, Xugong Automobile, Beiqi Heavy Truck, Hualing Automobile, Anhui Jianghuai Automobile Group Corp., Ltd, and Beiben Heavy Truck. The cumulative market share of the top five manufacturers in 2025 reached 91%. It is expected that heavy truck sales will reach 1.026 million units in 2025, a 13% year-on-year increase. With economic recovery and the introduction of the "old-for-new" policy for heavy trucks in 2025Domestic heavy truck sales are expected to gradually increase, with sales expected to reach 1.026 million units in 2025, a year-on-year increase of 13%. In recent years, domestically produced new energy heavy truck technology has gradually matured, with costs rapidly decreasing. It is expected that the domestic penetration rate of new energy vehicles will have a significant increase, with the penetration rate expected to reach 15% in 2025.Investment recommendation: There is still growth space in the heavy truck industry, which is reflected in the recovery of the domestic economy and the continuous growth of exports. In addition, with the development of natural gas heavy trucks, the industry threshold is expected to drive the profitability of leading companies. Targets: Recommended: Weichai Power (000338.SZ), Sinotruk Jinan Truck (000951.SZ), CIMC Vehicles (301039.SZ), Beiqi Foton Motor (600166.SH); Suggested to pay attention to: FAW Jiefang Group (000800.SZ). Risk warning: Economic growth may not meet expectations; Significant increase in raw material prices.
01/04/2025

Huachuang Securities: The first performance report of the transformation of dividend insurance. The decrease in life insurance in January and February narrowed compared to the previous month.

Huachuang Securities released a research report stating that the New Year in 2025 faces multiple challenges, with the transformation of products towards variable income products such as dividend insurance as the representative, and the scheduled interest rate decreasing compared to the same period last year. At the same time, the agency channel is gradually implementing the convergence of reporting and banking. In the short term, overall sales performance appears flat, but there is differentiation within the industry, with some insurance companies adopting differential pricing strategies to balance volume and price growth. Regarding property insurance, the median prosperity remains the same, with the core focus still on the variables of insurance for new energy vehicles and changes in COR. It is expected that the construction of a top risk reduction service system can improve the ability to respond to major disasters, promoting stable profitability. The main views of Huachuang Securities are as follows: Industry Overview: Premiums have slightly decreased, and the growth rate of life insurance is affected by factors such as transformation In January-February 2025, the insurance industry achieved original premium income of 1.5154 trillion yuan, a year-on-year decrease of 1.2%. Among them, the total premium of life insurance (including health insurance and accident insurance of property insurance companies) was 1.2716 trillion yuan, a year-on-year decrease of 2.2%; and the premium of property insurance was 243.8 billion yuan, a year-on-year increase of 4.4%. Premium growth is under pressure, mainly in life insurance, with a premium of 102.09 billion yuan in January-February, a cumulative year-on-year decrease of 3.5%; health insurance and accident insurance both achieved growth, with health insurance at 234.6 billion yuan (up 3.6% year-on-year) and accident insurance at 16.1 billion yuan (up 5.2% year-on-year). In terms of claims, the cumulative claims expenditure in January-February was 599.8 billion yuan, accounting for 40% of the original premium income. The claims ratio of property insurance was 55%, and that of life insurance was 37%. Life Insurance Companies: The decline in life insurance narrowed compared to the previous month, health insurance achieved growth In January-February 2025, life insurance companies achieved original premium income of 1.1951 trillion yuan, a year-on-year decrease of 2.6%. Among them, life insurance decreased by 3.5% year-on-year, while health insurance increased by 3% year-on-year. Accident insurance decreased by 1.4% year-on-year. Life insurance premium decreased year-on-year, mainly due to factors such as the first year of transformation to dividend insurance, a decrease in scheduled interest rates, and the convergence of individual insurance channels. On a month-on-month basis, under the pressure of the base, the decline in the premium of life insurance in January-February narrowed compared to January, which may reflect the gradual adjustment of sales. The new premium of universal insurance and the independent account of investment-linked insurance both decreased year-on-year, with cumulative premiums in January-February down by 6.4% and 4.8% year-on-year, respectively. Property Insurance Companies: Stable growth in car insurance, non-car insurance growth mainly from health insurance In January-February 2025, property insurance companies achieved original premium income of 320.3 billion yuan, a year-on-year increase of 4.7%. Among them, car insurance accounted for 45%, health insurance 21%, liability insurance 8%, agricultural insurance 7%, and accident insurance 3%. Car insurance achieved stable growth, with cumulative premiums of 143.1 billion yuan in January-February, a year-on-year increase of 4.4%. The total sales of automobiles in January-February was 455 billion yuan, a year-on-year increase of 13.2%; among them, the sales of new energy vehicles was 184 billion yuan, a year-on-year increase of 52.2%, maintaining high growth and continuously contributing to the increase in the field of car insurance. The cumulative premium of non-car insurance increased by 5% year-on-year, with growth mainly coming from accident insurance and health insurance, up 11% and 5.1% year-on-year, respectively; in addition, agricultural insurance increased by 4.4% year-on-year, and liability insurance increased by 4.1% year-on-year. Asset changes As of the end of February 2025, the total assets of the insurance industry reached 36.88 trillion yuan, an increase of 2.7% from the end of the previous year, mainly from the increase in new premiums and the appreciation of equity investments. Among them, life insurance companies had 32.42 trillion yuan, an increase of 2.8% from the end of the previous year; property insurance companies had 2.99 trillion yuan, an increase of 3.2% from the end of the previous year; reinsurance companies had 815.4 billion yuan, a decrease of 1.5% from the end of the previous year; and insurance asset management was 130.6 billion yuan, an increase of 2.3% from the end of the previous year. As of the end of February 2025, the net assets of the insurance industry reached 3.35 trillion yuan, an increase of 0.7% from the end of the previous year. Risk warning: Regulatory changes, increased natural disasters, continued decline in long-term interest rates, and volatility in the equity market.
01/04/2025

Shanxi: The Myanmar earthquake has had an impact on the production of silicon wafers, causing a sustained structural increase in prices in the downstream of the industry chain.

Shanxi released a research report stating that a 7.9 magnitude earthquake occurred in Myanmar, with strong tremors felt in Yunnan. From various sources, it can be seen that this earthquake has had a significant impact on the western production areas of photovoltaic silicon rods, affecting regions such as Yinchuan and parts of Inner Mongolia. The impact on more distant areas is mainly due to power outages, which are expected to be restored in the short term. However, the impact on Yunnan and Yibin areas is heavier, with some manufacturers experiencing situations such as melting pots, exploding rods, and exploding furnaces, which may have a long-term impact on future operations. National Energy Administration: in February, CECEP Solar Energy issued 13.27 million green certificates for power generation: On March 28, the National Energy Administration released data on the issuance and trading of national renewable energy green power certificates in February 2025. The data shows that in February, the National Energy Administration issued 256.37 million green certificates, including 98.34 million for wind power, 43.97 million for CECEP Solar Energy, and 15.91 million for biomass power generation. There were 28.4 million green certificate transactions in February, including 14.12 million for wind power, 13.27 million for CECEP Solar Energy, and 290,000 for biomass power generation. IRENA: In 2024, global CECEP Solar Energy photovoltaic installed capacity will increase by 451.9GW: According to the latest data released by the International Renewable Energy Agency (IRENA) on renewable energy capacity statistics for 2025, global renewable energy capacity will increase by 585GW in 2024, reaching a total of 4,448GW, marking a historical high annual growth rate of 15.1%. The global renewable energy installed capacity in 2023 was 3,863GW. Tongwei Co., Ltd: Subsidiary Yongxiang Stock introduces 10 billion in strategic investment: On March 29, Tongwei Co., Ltd. announced that Yongxiang Stock intends to introduce strategic investors and implement capital increase and share expansion. This time, before the capital increase and share expansion, the valuation of Yongxiang Stock equity is 27 billion yuan, with a total of no more than 10 billion yuan to be introduced to Yongxiang Stock by strategic investors. It is expected that the proportion of equity held by Yongxiang Stock after the capital increase will not exceed 27.03%, and the capital increase will mainly be used to repay financial institution debts and supplement working capital for Yongxiang Stock. Price Tracking Polysilicon prices: According to Infolink data, the average price of compact material this week is 40.0 yuan/kg, the same as last week; the average price of granular silicon is 38.0 yuan/kg, the same as last week. This week, there were 5 transactions with N-type polysilicon enterprises, and some polysilicon enterprises began to sign contracts for next month, but the transaction volume was low. According to feedback from enterprises, the overall transaction volume in March was lower than expected, and downstream enterprises had a strong desire to reduce inventory. Overall, the silicon material industry inventory continues to show a downward trend, but structurally, the downstream silicon wafer end has a significant decrease in raw material inventory, while polysilicon enterprises' inventory has increased. The supply of silicon materials in March was basically stable, and it is expected that the supply will increase in April, with the expectation that prices will mainly remain stable in the short term. Silicon wafer prices: According to InfoLink data, this week the average price of 150um 182mm monocrystalline silicon wafers is 1.15 yuan/piece, the same as last week; the average price of 130um 183mm N-type silicon wafers is 1.2 yuan/piece, the same as last week; the average price of 130um 182*210mm silicon wafers is 1.45 yuan/piece, an increase of 3.6% from last week. With the approaching of the 430 and 531 node rush, battery and component companies have increased procurement, driving a short-term concentrated release of silicon wafer demand. On March 28, a 7.9-magnitude earthquake occurred in Myanmar, with strong tremors in Yunnan. According to SMM, some manufacturers even experienced situations such as melting pots, exploding rods, and exploding furnaces, creating a certain impact on production capacity, and the price is expected to continue to rise in the short term. Battery cell prices: According to InfoLink data, this week the average price of M10 solar cells (conversion efficiency 23.1%) is 0.31 yuan/W, the same as last week; the average price of TOPCon solar cells is 0.305 yuan/W (conversion efficiency 25.0%+), an increase of 1.7% from last week; the price of 182*210mm N-type solar cells is 0.34 yuan/W (conversion efficiency 25.0%+), an increase of 3.0% from last week. Catalyzed by the terminal market, there has been a temporary shortage of inventory in the battery cell link. In March and April, production scheduling for battery companies continued to increase, and the increase in April may mainly come from integrated manufacturers. Due to the difficulty of supporting battery cell production expansion with upstream silicon wafer supply capacity, it is expected that the price of high-efficiency battery cells will continue to trend upwards in the short term. Module prices: According to InfoLink data, this week the average price of 182mm bifacial PERC modules is 0.65 yuan/W, the same as last week; the price of 182mm TOPCon double-glass modules is 0.74 yuan/W, an increase of 1.4% from last week. Influenced by the continuous fermentation of downstream installation rush, the bidding prices and actual supply prices of modules have risen, with the price of distributed projects rising faster than centralized projects. In the short term, the contradiction between supply and demand in the terminal market is prominent, and prices are expected to continue to rise. Glass prices: According to Baichuan Yingfu data, this week the price of 3.2mm coated photovoltaic glass is 22.0 yuan/square meter, the same as last week; the price of 2.0mm coated photovoltaic glass is 14.0 yuan/square meter, the same as last week. Target Recommendations Key recommendations: BC new technology direction: Shanghai Aiko Solar Energy (600732.SH), LONGi Green Energy Technology (601012.SH). Supply-side improvement direction: Flat Glass Group (601865.SH); Overseas layout direction: Hengdian Group DMEGC Magnetics (002056.SZ), Sungrow Power Supply (300274.SZ), CSI Solar Co., Ltd. (688472.SH), Ningbo Deye Technology (605117.SH). Suggested to pay attention to: XINYI SOLAR (00968), GCL TECH (03800), Tongwei Co., Ltd (600438.SH), Xinjiang Daqo New Energy (688303.SH), TCL Zhonghuan Renewable Energy Technology (002129.SZ), XINTE ENERGY (01799), Wuhan DR Laser Technology Corp., (300776.SZ), Hangzhou First Applied Material (603806.SH), Shanghai Hiuv New Materials Co., Ltd (688680.SH), JA Solar Technology (002459.SZ), Trina Solar Co., Ltd. (688599.SH), Jinko Solar (688223.SH), Arctech Solar Holding (688408.SH), Suzhou Maxwell Technologies (300751.SZ), Zhejiang Jingsheng Mechanical & Electrical (300316.SZ), Shenzhen S.C New Energy Technology Corporation (300724.SZ), Wuxi Autowell Technology Co., Ltd. (688516.SH), Changzhou Shichuang Energy (688429.SH), J.S. Corrugating Machinery (000821.SZ), Shanghai Ailu Package Co., Ltd. (301062.SZ), Suzhou YourBest New-type Materials (301266.SZ), Jiangsu Kuangshun Photosensitivity New-Material Stock (300537.SZ).Risk warning Risk of lower-than-expected new installed capacity of photovoltaic; price fluctuation risk in the industry chain; policy risks in overseas regions, etc.
01/04/2025

Wanlian Securities: Zhipu releases AI Agent AutoGLM for reflection, entering the year of "open source" for Zhipu

Wanlian Securities released a research report stating that the AI Agent product AutoGLM, newly released by Zhp, is expected to drive technological progress in AI Agent products and further upgrade applications on the edge. Compared to other Agent products, AutoGLM has three major features: 1) the model is based on Zhp's Z1 reasoning model reinforcement learning training; 2) the model has GUI reading capabilities; 3) the model integrates Zhp's proprietary AutoGLM device operation capabilities. At the same time, Zhp plans to officially open source its core chain model and technology, which will help accelerate the overall ecological construction of the AI Agent industry and the application of AI. Wanlian Securities' main points are as follows: Event: On March 31, 2025, Zhp officially released AutoGLM Rumination at the Beijing Centergate Technologies Forum. According to reports, this is the first Agent that combines deep research and practical operational capabilities. Currently, AutoGLM Rumination is online on the Zhp Dialogue PC client, and users can experience its research and operational capabilities for free. The version released this time is a preview version, core support for research scenarios; rumination functions, which have been officially launched on the Zhp Dialogue webpage, PC side, and mobile app, are free and unlimited for everyone. This is also the first officially open Deep Research feature in China. AutoGLM Rumination drives the AI Agent into the "think and act" stage, with three key characteristics AutoGLM Rumination is an autonomous intelligent entity (AI Agent) that can explore open problems and perform operations based on results. It not only has deep research capabilities, but also practical operational capabilities, achieving the goal of "thinking and acting at the same time." AutoGLM Rumination integrates three major capabilities: 1) Deep thinking: simulating human reasoning and decision-making processes when faced with complex problems; 2) Perceiving the world: being able to acquire and understand environmental information like humans; 3) Tool usage: being able to call and operate tools like humans to complete complex tasks. Compared to other Agent products, AutoGLM Rumination has three main features: 1) the model is based on Zhp's Z1 reasoning model reinforced learning training, similar to Open AI's Deep Research training process based on the o3 model, the model can autonomously plan and make dynamic decisions based on different task goals, continuously adjust plans based on feedback without the need for pre-designed workflows; 2) the model has GUI reading capabilities, not only relying on API calls, but also being able to open and browse web pages like humans, browsing dozens of web pages for up to tens of minutes to find the information you need; 3) the model integrates Zhp's proprietary AutoGLM device operation capabilities, such as being able to send emails based on the results after completing a report. Zhp continues to lead innovation exploration in the AI Agent industry and is about to usher in the "open source year" of Zhp. In the past research and exploration of AI Agents, Zhp has always been at the forefront, continuously releasing innovative products. From the previous releases of Zhp Dialogue and GLMs, to the world's first device control AI Agent AutoGLM launched in October 2024, to the three products based on AutoGLM upgraded for the web, mobile (Android), and PC sides at the Agent OpenDay at the end of November 2024: AutoGLM Web, AutoGLM (Android), and GLM-PC, Zhp has been leading the innovation exploration of AI Agents. The release of AutoGLM Rumination reflects Zhp' core understanding of AI Agents as "not only able to think, but also able to take active actions" and promotes AI Agents from mere thinkers to intelligent performers who can deliver results. The technical evolution path of AutoGLM Rumination includes: GLM-4 base model GLM-Z1 reasoning model GLM-Z1-Rumination rumination model AutoGLM model. Among them, the GLM-Z1-Rumination model breaks through the limitations of traditional AI relying solely on internal knowledge reasoning and innovatively combines real-time online search, dynamic tool calls, deep analysis, and self-validation to form a complete autonomous research process; the AutoGLM series models have also made important progress, being selected in the Stanford Model Center's "AI Index 2024" intelligent agent benchmark evaluation AgentBench, achieving SOTA results in five testing environments. Zhp plans to officially open source the core chain model and technology on April 14 to promote industry ecological development. Risk factors US-China technology friction; domestic AI large model competitiveness lower than expected; AI Agent application landing lower than expected; AI industry technological development and computational power demand lower than expected.
01/04/2025

Zhongjin: The AI toy industry is gradually transitioning towards becoming "emotion service terminals".

CICC released a research report stating that AI toys, with "human-machine empathy" and "IP ecosystem matrix" as the core, achieve "AI companionship" in offline scenarios, creating a new paradigm of "immersive companionship". Currently, many domestic and foreign companies have entered the field, and the frequency of AI toys appearing at various technology and consumer exhibitions (such as CES 2025/MWC and AWE) is gradually increasing. With the empowerment of AI+IP, the AI toy industry is gradually transforming into an "emotional service terminal". Recommended targets in the IP field include ALI PICTURES (01060) (Aliyu IP commercialization full-chain platform advantage), CHINA LIT (00772) (rich online literature resources, IP copyright operation and development), Shanghai Film (601595.SH) (updates on Shanghai IP and collaborative companies), POP MART (09992), etc. CICC's main points are as follows: Frequent launch of AI toy products in the competition track, enhancement of AI capabilities to meet demand, technological iteration to enhance "intelligence" CICC believes that the core reason for the increasing popularity of the AI toy competition track is: 1) the rise of demand-side "lonely economy" (children's companionship, elderly care, young singles, etc.), with high acceptance of technology by 80/90s parents in children's scenarios, willing to pay a premium for educational/companion products, while also experiencing "AI anxiety", AI toys correspondingly meet the demand and alleviate the "anxiety". 2) On the supply side, the improvement of AI technology capabilities supports a stronger and smoother interactive experience, and the level of toy responsiveness increases. As of now, many companies in China have entered the AI toy competition track, including unlisted startups (Leapfrog Innovation, FoloToy) and some listed companies (Alpha Group, Zhejiang Jinke Tom Culture Industry, Shifeng Cultural Development), etc. Core competitiveness: interactive technology, IP attributes, and business positioning 1) At the technical level, emphasis is placed on optimizing the interactive experience (response speed, appropriateness of tone), accuracy of model calls (meeting demands in different scenarios), and cost control capabilities. 2) In terms of image, emphasis is placed on adapting IP images or native images to different audiences, on one hand, leveraging the inherent trust endorsement of IP to improve user acquisition efficiency and reduce acceptance thresholds; on the other hand, further deepening the emotional companionship, enhancing the emotional value of products, and increasing user stickiness. 3) In terms of business positioning, clear positioning of target audiences, deep exploration of vertical markets. Future space and challenges: Market growth depends on population penetration and expansion, still need to pay attention to children's privacy, usage safety, and other risks CICC believes that in terms of market growth, the core focus is on: 1) penetration and coverage of children, first supporting the coverage of existing population, and then further considering issues such as birth rate; 2) expanding the population for market expansion, including young people, silver-haired populations (for anti-aging transformation), etc. It also points out the need to pay attention to the risks it may face, including but not limited to: 1) risks of minors using toys due to lack of self-control and judgment; 2) risks of social interaction deficiencies due to excessive reliance on toys; 3) children's information privacy and security, etc. From a challenge perspective, it mainly focuses on: 1) whether technology can further upgrade and integrate to enhance interaction fluency, emotional response accuracy, etc.; 2) looking further into the future, whether the track will be replaced by larger-capacity whole-house smart homes, general household Siasun Robot&Automation, etc. Risk factors Risks of children's information security and privacy, risks of minors using products, ethical and responsibility definition issues, AI technology iteration falling short of expectations, increased competition, new product development falling short of expectations.
01/04/2025

Guosen: The express logistics industry has strong resilience, focusing on the stimulating effect of OPEC's expansion of production on oil transportation demand.

Guosen released a research report stating that the oil shipping industry is expected to see a rise in shipping rates due to factors such as the OPEC+ production cut compensation plan, and the future industry shipping rate center is expected to rise. Despite carriers raising prices, trade risks are increasing, and the industry supply pattern may deteriorate. In the aviation sector, supply and demand are optimizing, and domestic jet fuel prices are expected to rebound by 2025. In the express delivery industry, Shunfeng's performance is growing, and the overall competitive landscape is improving. There are advantages for high-quality leading companies in the logistics field, making them worthy of investment. Based on this, it is recommended to be optimistic about value stocks with stable operations and growth potential, and to consider investing in several transportation and logistics stocks such as S.F. Holding (002352.SZ), ZTO EXPRESS-W (02057), Spring Airlines(601021.SH). Key points from Guosen are as follows: Shipping This week, all oil shipping companies disclosed their 2024 annual reports, and the performance is generally in line with expectations. In terms of spot market conditions, oil shipping rates continue to maintain an upward trend, mainly due to the OPEC+ production cut compensation plan involving seven countries. This arrangement involves monthly production cuts ranging from 189,000 barrels per day to 435,000 barrels per day, and will continue until June 2026, opening up a phased increase in production, eliminating previous factors suppressing shipping rates. Despite charterers adjusting shipment schedules and exerting pressure on rates through private deals and public market leasing of older oil tankers, shipping rates continue to rise against the backdrop of the current shortage of new shipping capacity. The shipping rate from the Middle East to Ningbo was around $42,000 per day this week. Considering that new delivery capacity in 2025 accounts for only 0.5% of existing capacity, the bank believes that marginal changes on the demand side are expected to have a multiplier effect on shipping rates and continue to maintain the view that the industry shipping rate center will rise in 2025. It continues to recommend COSCO Shipping Energy Transportation, China Merchants Energy Shipping, and keeping an eye on Nanjing Tanker Corporation. In terms of container shipping, this week, due to the approach of the peak season for U.S. routes, carriers have raised prices for suspended sailings, resulting in a large increase in rates for U.S. routes without a clear improvement in cargo volume. However, given that the U.S. just announced auto tariffs last week, trade risks are actually escalating, and the economic outlook in Europe is still uncertain. It is advisable to observe the sustainability of price hikes. In the medium term, industry supply patterns may continue to worsen, and profits of container ship owners may come under pressure within the year. For investment targets, COSCO Shipping Holdings is expected to distribute a cash dividend of RMB 1.03 per share at the end of 2024 (inclusive of tax), and with cash dividends already distributed in the mid-year of 2024, it is estimated that the cash dividend for the year 2024 is around 50% of the net profit attributable to the shareholders of the listed company for the year 2024, providing support for the investment value of the company. It is recommended to wait for the industry fundamentals to bottom out. Aviation Last week, overall and domestic passenger flight volumes increased compared to the previous week, with overall/domestic passenger flight volumes up by +1.3% / +1.2% respectively. Overall/domestic passenger flight volumes are equivalent to 107.0% / 112.8% of the same period in 2019, and international passenger flight volumes increased by 2.0%, equivalent to 81.7% of the same period in 2019, with international oil prices significantly lower than the same period last year. Recently, the three major airlines released their 2024 annual reports, and due to macroeconomic growth pressure and weak consumption, Air China Limited, China Southern Airlines, and China Eastern Airlines Corporation saw significant year-on-year declines in ticket prices, resulting in losses of RMB 240 million, RMB 1.70 billion, and RMB 4.23 billion respectively for the year. Thanks to the optimization of supply and demand patterns, profits showed varying degrees of reduction in losses year-on-year. Looking ahead to 2025, the supply and demand pattern will continue to optimize, coupled with the industry regulators proposing at the national civil aviation work conference to "regulate the pricing behavior of key time slots and special situations in aviation transport, strengthen price fee supervision, and maintain order in the aviation transport market," the bank believes that domestic jet fuel prices in 2025 are expected to stabilize and rise. In terms of investment recommendations, the future civil aviation supply and demand gap will continue to narrow, airline profitability will continue to recover. Considering that the downward risks of the aviation sector fundamentals are controllable and the downside space for stock prices is limited, it continues to recommend Air China Limited, China Eastern Airlines, China Southern Airlines, and Spring Airlines. Express Delivery Recently, S.F. Holding released its 2024 annual report, with annual revenue of RMB 284.42 billion (up 10.1% year-on-year) and net profit attributable to the parent company of RMB 10.17 billion (up 23.5% year-on-year). The company's net profit margin for the whole year and the fourth quarter of 2024 were 3.58% and 3.29% respectively, up 0.45 percentage points and 0.39 percentage points year-on-year, mainly benefiting from: 1) the company divested the unprofitable FENetwork business in the second quarter of 2023, returning to focus on profitable high-end express delivery services; 2) at the same time, the company persisted in lean resource planning and cost control, implementing measures such as multi-network integration (with cost reductions exceeding RMB 600 million, RMB 800 million, RMB 1.1 billion, and RMB 1.3 billion from 2021 to 2024), operational model transformation, organizational structure innovation, and incentive mechanisms to reduce costs and increase efficiency; 3) the operation of express delivery and same-city businesses has gradually matured and entered the profitability stage, with the express delivery business achieving positive gross margins in 2024, and a substantial increase in net profit from same-city business. Currently, the join-in express delivery market is still in a stage of benign competition, and this year's industry price competition may experience fluctuations, but the long-term competitive landscape of the industry remains positive. It is recommended to closely monitor industry price changes and seize short-term investment opportunities. In terms of investment recommendations, considering that the valuation of leading express delivery companies is still relatively low, it is recommended to invest in S.F. Holding, a high-end express delivery service provider with strong pro-cyclical qualities and continuous cost optimization, as well as benefiting from consumption downgrading, such as ZTO Express and YTO Express.Xpress Group and STO Express Co., Ltd., with a focus on YUNDA Holding Group.Logistics The industry remains optimistic about the development opportunities of high-quality logistics leading companies: 1) The industry is bullish on Deppon Logistics from the bottom up. Due to weak macroeconomic growth and lower-than-expected business volume contribution from JD LOGISTICS, the company's revenue and profit growth performance for 2024 are under pressure. However, the industry believes that the company's operating low point has passed, with a significant seasonal stabilization and rebound in the fourth quarter. With the stabilization of the macroeconomic situation and the fast recovery of related business volume from JD LOGISTICS, the company is expected to achieve double-digit revenue and profit growth in 2025. Furthermore, as competition issues with JD LOGISTICS are resolved in the future, the company still has promising development space. Currently undervalued, it has investment value. 2) The industry also recommends Jiayou International Logistics from the bottom up. Jiayou International Logistics achieved a net profit attributable to the parent company of 1.089 billion yuan in the first three quarters, an increase of 44.23% year-on-year. Although the performance in the third quarter is average, the trend of high growth for the whole year is expected to continue, with employee stock ownership showcasing confidence. The net profit targets for 2024-2026 are 1.56 billion yuan, 2.10 billion yuan, and 2.63 billion yuan respectively, with year-on-year growth rates of 50%, 35%, and 25%. The industry believes that the company's asset layout model combining light and heavy assets, along with the business model of locking in logistics demand through trade and infrastructure, is replicable. The industry is optimistic about the company increasing performance growth points through regional expansion. 3) The industry also recommends Eastern Air Logistics from the bottom up. Recently, the U.S. President Trump decided to impose a cumulative 20% tariff on goods imported from China, and there is a possibility that the U.S. may cancel the "de minimis" tariff exemption for goods valued below $800. This new tariff policy may have a negative impact on China's international air freight volume, leading to pressure on freight rates. However, the industry believes that the overall impact is controllable because high-value-added goods in air transport demand are often relatively rigid. Furthermore, China's cost advantages are significant, and there is still room to pass on tax costs. Lastly, China is accelerating the development of new markets for foreign trade. Due to the uncertainties in the current China-US trade war, market expectations for the company's performance this year vary greatly. Nonetheless, the company's current stock price and valuation already reflect the uncertainty risk quite adequately. The industry believes that due to the continued prosperity of cross-border e-commerce and the relatively rigid demand for high-end goods transportation, China's international air freight rates are still expected to steadily increase this year, indicating that the company still has investment value. Risk warning: Macroeconomic recovery falls short of expectations, and there is a sharp fluctuation in oil prices and exchange rates.
01/04/2025

CMSC: Supply and demand for rare earths is looking up, Siasun Robot & Automation is generating new opportunities.

CMSC released a research report stating that the downstream demand for rare earth permanent magnet materials will continue to grow in 2024. The humanoid Siasun Robot&Automation market is particularly promising, entering the year of mass production and experiencing a rapid increase in demand, rapidly becoming an important application area for high-performance neodymium iron boron permanent magnet materials. The global total demand for high-performance neodymium iron boron is expected to reach 231,400 tons by 2027, with a CAGR of 20.2%, indicating a broad market outlook. According to calculations, the supply-demand gap for praseodymium-neodymium oxide will be 0.5%, -3.2%, -4.9% from 2025 to 2027, and the global praseodymium-neodymium oxide market supply-demand gap will expand year by year. Due to its superior performance, rare earth permanent magnets are widely used in new energy vehicles, wind power, consumer electronics, etc., and this year may be the year of mass production for humanoid Siasun Robot&Automation, opening up future application scenarios and imagination. CMSC's main points are as follows: The supply-demand of raw materials praseodymium-neodymium will tighten year by year, and the industry's upward cycle is expected to begin. Rare earth permanent magnet materials are alloys made of rare earths such as neodymium, samarium, etc., and iron, cobalt, etc. They are divided into neodymium iron boron (magnetic energy product 27-50MGOe, leading wind power and new energy vehicles) and samarium cobalt (mainly military) categories. Their core value lies in their excellent magnetic performance and stability, with downstream applications in consumer electronics and traditional industrial fields, as well as new energy vehicles and automotive components, energy-saving variable frequency air conditioning, wind power generation, energy-saving elevators, Siasun Robot&Automation, and intelligent manufacturing, etc. The growth rate of rare earth quotas has slowed down, and the supply of rare earth permanent magnets upstream has become more concentrated. In 2024, the downstream demand for rare earth permanent magnet materials will continue to grow. It is estimated that by 2027, the new demand in the fields of global new energy vehicles, variable frequency air conditioning, wind power generation, and energy-saving elevators will reach 69,500 tons (CAGR 24.5%), 31,600 tons (CAGR 16.5%), 20,700 tons (CAGR 13.7%), and 27,600 tons (CAGR 14.34%) respectively. The demand in the industrial motor field is expected to exceed 32,000 tons (CAGR 22.7%). The humanoid Siasun Robot&Automation market is particularly promising, entering the year of mass production and experiencing a rapid increase in demand, rapidly becoming an important application area for high-performance neodymium iron boron permanent magnet materials. If by 2027, the production of humanoid Siasun Robot&Automation will reach 500,000 units, the new demand for high-performance neodymium iron boron permanent magnet materials in this field will grow at a compound annual growth rate of up to 150%. Overall, the total global demand for high-performance neodymium iron boron is expected to reach 231,400 tons by 2027, with a CAGR of 20.2%, indicating a broad market outlook. According to CMSC's calculations, the supply-demand gap for praseodymium-neodymium oxide will be 0.5%, -3.2%, -4.9% from 2025 to 2027, and the global praseodymium-neodymium oxide market supply-demand gap will expand year by year. Investment advice: It is expected that the rare earth industry will be in a tight balance of supply and demand in 2025, and the supply-demand gap will widen year by year in 2026 and 2027, leading to a potential increase in rare earth prices and the beginning of an upward cycle for the industry. Given (1) the strong positive correlation between magnetic material company profits, stock prices, and rare earth prices; (2) the geopolitical risk / Trump trade highlighting the strategic value of rare earth / magnetic materials; (3) 2025 may be the year of mass production for Siasun Robot&Automation, significantly driving magnetic material demand. The rare earth magnetic material sector has certain investment value. Recommended stocks to watch: Jl Mag Rare-Earth (300748.SZ), Yantai Zhenghai Magnetic Material (300224.SZ), Ningbo Yunsheng (600366.SH), Beijing Zhong Ke San Huan High-Tech (000970.SZ), Chengdu Galaxy Magnets (300127.SZ), Zhejiang Zhongke Magnetic Industry (301141.SZ), Innuovo Technology (000795.SZ), Earth-Panda Advanced Magnetic Material (688077.SH), Advanced Technology & Materials (000969.SZ), etc. Risk warning: Fluctuations in rare earth prices, project progress falling short of expectations, demand falling short of expectations, macroeconomic risks, exchange rate fluctuations, etc.
01/04/2025

Sinolink: Policy reinforcement and urban agglomeration expansion, hydrogen vehicle demonstration aims to fill the gap.

Sinolink released a research report stating that the fuel cell vehicle demonstration city group has welcomed new members, with three cities joining the hydrogen vehicle demonstration city group. In late March, Shaanxi Lvliang, Henan Puyang, and Xinjiang Hami successively announced their intention to join the fuel cell vehicle demonstration city group. With the settlement point of the 14th Five-Year Plan approaching, policies are continuously being strengthened, highlighting opportunities for fuel cell component enterprises. According to the plan, there will be approximately 22,000 fuel cell vehicles in 2025. With the rapid construction of hydrogen energy demonstration projects opening up application scenarios and continuous subsidies being issued, enterprises in high-value links such as fuel cell systems (accounting for approximately 60% of vehicle costs), stacks (accounting for about 60% of system costs), and onboard hydrogen supply systems (accounting for about 20% of vehicle costs) are the first to seize opportunities. Sinolink's main points are as follows: Policy efforts and urban expansion are key drivers, with a surge in sales expected by the end of the year According to the "Mid-to-Long-Term Development Plan for Hydrogen Energy Industry (2021-2035)", the number of fuel cell vehicles by 2025 should not be less than 50,000, with a planned target of around 33,000 for demonstration city groups. As of February 2025, there are about 28,000 hydrogen vehicles, achieving only 55% of the planned target for 2025. The five major demonstration city groups have only promoted about 16,000 vehicles, with a completion rate of less than 50%. Shaanxi Lvliang, Henan Puyang, and Xinjiang Hami joining the fuel cell vehicle demonstration city group have sent a signal of policy continuity, coupled with the support of the five departments' "Notice on the Approval of Adjustment and Implementation Plans for the Demonstration Application of Fuel Cell Vehicles in City Groups". This undoubtedly injects confidence into the industry. Referring to the experience of filling 60% of the gaps in the last year of the "Ten Cities and Thousand Vehicles" program from 2009 to 2012, combined with the targets set by leading cities such as Beijing and Shanghai, the annual sales are expected to exceed 10,000 vehicles, with a fleet of 40,000 to 45,000 vehicles. Local fiscal policy instilling market confidence, speeding up hydrogen infrastructure construction and scenario closure Puyang is seeking 80 million yuan in central and provincial reward funds to leverage 200 million yuan in social capital investment, focusing on hydrogen refueling stations and hydrogen vehicle operations; Hami plans to develop green hydrogen projects based on abundant wind and solar resources, with the potential to reduce hydrogen production costs and form a closed loop in heavy-duty truck logistics scenarios; Lvliang, with hydrogen resources from coking by-products, will promote the large-scale substitution of coal transport scenarios with hydrogen-powered heavy-duty trucks. By combining local fiscal policies with resource endowments, the transition from "policy demonstration" to "economically driven" hydrogen energy will be accelerated, driving the speed of hydrogen energy infrastructure construction and scenario applications. The era of accelerated volume growth for fuel cell vehicles has arrived, with the industry showing commercial potential Policy guidelines and subsidies have already driven the demonstration of fuel cell vehicles, and a year-end surge can boost sales. The current coverage of hydrogen refueling stations (approximately 500) and the overall life cycle cost of hydrogen vehicles are still key constraints for future sustained volume growth. Achieving cost parity on a full life cycle basis and targeted subsidies will be the focus of the next stage. During the Two Sessions, the National Development and Reform Commission proposed to promote the establishment of a "carrier-level" national venture capital fund for investment in hydrogen energy storage and other fields, which, through the "capital + policy" dual-wheel drive, will facilitate the integrated development of the hydrogen production, storage, transportation, and application industry chain, and develop business models and form regional synergy effects. With the continuation of relevant subsidy policies, the construction of hydrogen fast corridors, the gradual expansion of infrastructure, and cost reduction of equipment, the promotion of fuel cell vehicles will continue to accelerate. Risk warning Policy implementation slower than expected, slower than expected construction of hydrogen refueling stations, and slower than expected reduction in the cost of hydrogen gas.
01/04/2025
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