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(Source: Huajin Securities Research).

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Electronics team: Huajin Securities-Electronics-Industry Express-Consumer Electronics-End-side AI is surging, and glasses terminals are one of the best landing scenarios

　　02

Media team: Huajin Securities-Media-Industry Express-"Marvel Brawl" broke the record, focusing on high-quality IP resonance empowerment

　　03

Chemical team: Huajin Securities-Chemical-Industry Express-SAF-SAF has broad prospects, and policy-driven development opportunities

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Macro & Finance & Real Estate Team: Huajin Securities - Macro - Why U.S. Core Inflation Can't Fall - U.S. CPI Commentary (2024.11).

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Media Team: Huajin Securities-Media-Industry Express: The introduction of policies to stimulate the development of enterprises is expected to promote industrial growth

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Media Team: Huajin Securities-Media-Industry Express: Gemini 2.0 was released, and multimodal + AI Agent continued to iterate

　　04

IPO Team: Huajin Securities-IPO-IPO Special Coverage Report (Air China Cargo)-2024 No. 91 - Total No. 518

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Huajin Securities-Electronics-Industry Express-Consumer Electronics-End-side AI is surging, and glasses terminals are one of the best landing scenarios

The perfect AI assistant, the ultimate digital social. "On-device AI" refers to the ability of AI to process data directly on mobile devices, without connecting to a server or cloud, and to complete complex reasoning and decision-making locally on the user's device. While device AI not only puts forward higher requirements for hardware, but also poses new challenges to its computing power, energy efficiency, and software and hardware collaboration. Compared with traditional devices such as mobile phones and computers, the glasses are one of the best landing scenarios for AI for the following reasons: (1) Portability: The glasses are light and portable, and can interact with AI anytime and anywhere, without being limited by time and space. (2) Human body fit: Glasses are highly compatible with the human body, which can provide a more natural and comfortable interactive experience. (3) Scalability: Glasses can integrate cameras, microphones, speakers and other sensors to meet multi-dimensional needs such as vision, hearing, speaking, and perception. Through the deep integration of multi-modal large models, AI glasses can not only achieve natural and smooth AI voice interaction, but also use the camera on the glasses to allow AI to perceive the surrounding environment through vision, and conduct AI chat Q&A, object recognition, and photo answering based on the real world. Glasses can see what the user is looking at and listen to what the user is hearing, so they can be the perfect AI assistant because they know what the user is doing. The prospect of glasses terminals as digital social tools: (1) Seamless social experience: Smart glasses can allow users to have social interactions, such as video calls, send messages, etc., without interrupting current activities. This seamless social experience can bring people closer together. (2) Shared perspectives and experiences: Through the cameras and AR technology of smart glasses, users can share their perspectives and experiences with others, increasing the realism and interest of social interactions. For example, while traveling, users can share what they see and hear in real time with friends from afar. (3) Virtual gatherings and events: In the future, smart glasses may become an essential tool for participating in virtual gatherings, concerts and other activities, and users can participate in various social activities at home.

The

combination of audio/camera/AR display elements builds three categories of domestic glasses terminals. From the user's point of view, the basic functions of domestic AI glasses roughly include voice recognition, audio and video playback and recording, and AI calls (such as voice interaction, translation, query weather and traffic information, etc.), and manufacturers mainly focus on the combination of "audio", "camera" and "AR display" in functional design, which determine the price range of the product, usually between 500 yuan and 5,000 yuan, the richer the function, the higher the price. (1) Audio glasses (listening to songs + calling): take the audio function as the core, omit the camera and other visual interaction functions. These glasses support basic audio functions such as voice calls and listening to music, and representative products include Jiehuan AI audio glasses launched by Honeycomb Technology, a Xiaomi ecological chain company, and Huawei's smart glasses. Manufacturers only need to add components such as microphone arrays, headphones, batteries, and processors to the frame, and the function of these glasses mainly relies on speech recognition and TTS (text-to-speech) technology, without the need for image processing modules, and is cheap. (2) Video glasses (photo + video): On the basis of the audio function, the camera module and some AI functions are added, and on the basis of the photo and video recording functions, it brings users a basic AI experience, such as Ray-Ban Meta. Compared with audio glasses, the addition of camera modules is not a huge increase in technical difficulty of such glasses, but it is now the most mainstream and best-selling category. (3) AR+AI glasses (audio + video + AR+AI): On the basis of audio and camera, AR experience is added, such as Rokid Glasses released by Rokid, which not only supports audio/video functions, but also realizes relatively complex functions such as real-time translation and navigation through camera and AR technology. In addition, there are Xiaodu AI glasses launched by Baidu, as well as Xingji Meizu's StarV Air2 AR smart glasses and other products. These glasses require the introduction of optical modules into the hardware to support AR displays, which not only requires a higher level of hardware integration, but also faces challenges in power consumption and heat dissipation.

Investment advice: The growing demand for smart wearables, as well as the rise of generative AI models, are pushing AI audio glasses to a wider market. In the short term, in the context of the blurred user portrait of AR glasses, smart audio glasses are expected to open up a new audio track by replacing the function of headphones, using glasses (corrected vision/decoration) as the carrier, and AI to improve the experience and selling points. It is recommended to pay attention to manufacturers that have entered the product supply chain or have relevant technical reserves. For example, optics: crystal optoelectronics, Goertek, OFILM, Weir shares; Assembly: Goertek, Emdoor Information, Tianjian, Longcheer Technology, Jiahe Intelligence, etc.; Storage: GigaDevice; Cameras: Weir shares, Sunny optical technology, etc.; SoC: Hengxuan Technology, Rockchip, Zhongke Lanxun, Torch Core Technology, etc.; Structural parts: Jemet, Changying Precision; Screens: BOE-A, HCC, JBD (not listed); Terminal factories: Rokid (unlisted), Thunderbird Innovation (unlisted), Xreal (unlisted), Yingmu (unlisted).

Risk warning: the risk that the technology evolution track and industrial ecology have not yet been finalized; Lack of sensitivity to the industrialization process of forward-looking key technologies; the risk that the construction of the content ecosystem is less than expected; Downstream demand is less than expected risk.

>>The above content is excerpted from the research report "Huajin Securities-Electronics-Industry Express-Consumer Electronics-End-side AI is surging, one of the best landing scenarios for glasses terminals" released by Huajin Securities on December 11, 2024 (Analysts: Sun Yuanfeng, Wang Haiwei; Practice number: S0910522120001, S0910523020005), please refer to the full report for specific analysis content (including risk warning, etc.).

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Huajin Securities-Media-Industry Express-"Marvel Battle" broke the record, focusing on high-quality IP resonance empowerment

EVENT: THE SUPERHERO PVP TEAM SHOOTER "MARVEL BATTLE", WHICH WAS OFFICIALLY LAUNCHED ON DECEMBER 6 AND AUTHORIZED BY MARVEL IP AND DEVELOPED BY NETEASE, WAS RANKED AMONG THE TOP 2 OF STEAM'S WORLD'S HOTTEST GAMES AND THE TOP 1 OF STEAM'S GLOBAL BEST-SELLING LIST WITHIN 5 HOURS OF SERVICE, WITH MORE THAN 440,000 ONLINE USERS IN 24 HOURS AND 10 MILLION PLAYERS WITHIN 3 DAYS OF SERVICE. On December 11, the 2024 China E-sports Industry Annual Conference was held in Beijing, during which the "2024 E-sports Annual Report" was released, and the data showed that the e-sports industry showed a positive development trend. The "high-quality IP + game" resonance model may empower the development of the game industry in the long term.

"Marvel Brawl" is unprecedentedly popular, and the leading manufacturers have injected new IP vitality into the game. According to SteamDB data, since the official launch of "Marvel Brawl" on December 6, the number of online users reached 444,000 in less than 3 hours after the service was launched, and it was ranked in the TOP2 of the world's hottest games on STEAM and the TOP1 of the global best-selling list of STEAM within 5 hours of the service. The number of players exceeded 10 million within 3 days of the launch; The number of online players in a single day peaked at 480,000 on Sunday, December 8, and there are still 440,000 players online as of December 11. According to SteamDB statistics, the peak number of concurrent online users on Steam exceeded 39 million on the evening of December 8, setting a new record of 39205447 people. The achievements of "Marvel Brawl" may set a benchmark for the market, and the open world fun competition + high-quality IP may give birth to new topics.

"Adapting measures to local conditions" is both internal and external, and the IP effect is remarkable. Marvel IP has a wide audience around the world, and "Marvel Brawl" has further exerted the IP effect, setting a series of impressive results and maintaining high popularity to this day. The hottest game on the overseas live streaming platform Twitch is also "Marvel Brawl", with 239,000 viewers surpassing the 182,000 of GTA5 and the 147,000 of CS:GO. Based on the model of "Overwatch 2", the global launch has brought unprecedented popularity to "Marvel Brawl", and its novel model is expected to give full play to the value of high-quality IP, provide guidance and reference for the development of the industry, and empower the development of the game industry in the long run.

The annual meeting of the e-sports industry was held, and the data showed the vitality of China's e-sports. According to the "2024 E-sports Annual Report", the actual sales revenue of China's e-sports industry in 2024 will be 27.568 billion yuan, an increase of 4.62% compared with the actual sales revenue of 26.350 billion yuan in 2023. In 2024, a total of 124 e-sports events will be held, and 58% of the events will be held offline. Tang Jiajun, Deputy Secretary-General of the China Audio-video and Digital Publishing Association, Secretary-General of the Game Working Committee, and Chairman of the E-sports Working Committee, believes that China's e-sports industry is showing a positive development trend, and the development of the industry has further recovered.

Investment suggestion: High-quality IP+ games are expected to continue to inject vitality into the game industry, and pay attention to the impact of high-quality IP on e-sports and games going overseas. It is recommended to pay attention to: Tencent Holdings, NetEase-S, IGG, Kaiying Network, Giant Network, Gigabit, Youzu Network, Shunwang Technology, Century Huatong, Shanghai Film, Alpha Entertainment, China Literature Group, Yao Ji Technology, Huayi Brothers, Jebsen Co., Ltd., Yuanlong Yatu, Tom Cat, Kuaishou-W, etc.

Risk warning: policy uncertainty, the persistence of new travel enthusiasm is less than expected, and the risk of macro environment fluctuations.

>>The above content is excerpted from the research report "Huajin Securities-Media-Industry Express-"Marvel Battle" Breaks Records, Focusing on High-quality IP Resonance Empowerment (Analyst: Ni Shuang; Practice number: S0910523020003), please refer to the full report for specific analysis content (including risk warning, etc.).

Chemical team

　　03

Huajin Securities-Chemical-Industry Express-SAF-SAF has broad prospects, and policy-driven development opportunities

Investment Essentials

SAF is an important means of carbon reduction in the aviation industry, and it has broad prospects: the aviation industry is the most difficult and slowest sector to reduce emissions in the transportation sector, accounting for 12% of global carbon emissions from the transportation sector and 2% of total carbon dioxide emissions. The global aviation industry has set an aggressive goal of achieving net-zero emissions by 2050, and the application of sustainable aviation fuel (SAF) is recognized as the main technical roadmap for net-zero emissions. SAF is a liquid fuel used in commercial aviation and refers to aviation fuel made from renewable resources or waste that is certified for safety and sustainability. Compared with traditional jet fuel (jet fuel), SAF can reduce carbon dioxide emissions by 50%~90% in the whole life cycle, and is the main technical route to achieve net zero emissions in the international aviation industry before 2050. According to the International Air Transport Association (IATA), global SAF consumption reached 45-500,000 tonnes in 2023, twice as much as in 2022, but accounted for only 0.1% of total jet fuel consumption, and global SAF production will triple to 1.9 billion litres (1.5 million tonnes) in 2024, but still only 0.53% of jet fuel demand in 2024. Global SAF demand is expected to reach 6.3 million tonnes in 2025 and 18.35 million tonnes in 2030, and 358 million tonnes by 2050, accounting for more than 65% of the aviation industry's emissions reduction. China is the world's second largest consumer of jet fuel, with domestic jet fuel consumption of 36.84 million tonnes per year before the pandemic (2019). The development of the domestic civil aviation industry is still in the growth period, and it is expected that the domestic aviation fuel consumption will reach about 5000, 7000 and 80 million tons in 2025, 2030 and 2035 respectively, and the resulting contradiction between development and emission reduction is more prominent. Like the relatively mature markets in Europe and the United States, as well as other emerging markets, China's aviation industry needs to meet the challenge of reducing carbon emissions while maintaining business growth, and there is a huge demand for SAF.

Policy-driven industry development, the market is expected to be fully opened in 2025: Europe and the United States have formulated national or regional SAF application targets and aviation carbon emission reduction targets, and the policies are relatively perfect, making them the main production and consumption areas of SAF in the world. The EU provides financial support to manufacturers who produce and use SAF, with an estimated total of 1.6 billion euros in subsidies for manufacturers. According to the ReFuelEU Aviation regulation issued in October 2023, the EU will make it mandatory to add SAF to jet fuel at EU airports from January 1, 2025, and the new track of bio-jet fuel is expected to be fully opened, with an addition ratio of 2% in 2025, 6% in 2030, 20% in 2035, 34% in 2040, 42% in 2045, and 70% in 2050. In addition, the regulation encourages the use of advanced SAF feedstocks and restricts sources of high indirect land-use change (ILUC) feedstocks, SAF produced from agricultural or forestry residues, algae, biowaste, waste cooking oil or certain animal fats is a green fuel, and SAF produced from feed and food crop feedstocks, including palm and soybean feedstocks, is prohibited. In 2021, the United States released the "U.S. Aviation Industry Climate Action Plan", which determined the long-term goal of carbon neutrality in the U.S. aviation industry by 2050, and issued policies to support carbon emission reduction, proposing to achieve 9 million tons of SAF production in the United States by 2030, more than 100 million tons of SAF production by 2050, and 100% SAF filling of aviation fuel; Requiring environmental rights and interests arising from the sale of SAF by jet fuel suppliers in the United States to be marketable; Provide financial support for SAF production, application and R&D. China's SAF is still in its infancy, but it is accelerating. In 2021, the "Action Plan for Carbon Peaking Before 2030" was released, which included the aviation industry in the list of key carbon emission industries in the carbon market, and vigorously promoted the development of alternative fuels such as SAF. In 2022, the "14th Five-Year Plan" for the green development of civil aviation proposes to strive for SAF consumption to reach 50,000 tons during the "14th Five-Year Plan" period and 20,000 tons in 2025, compared with China's aviation fuel consumption of about 30 million tons/year, this goal is slightly conservative, but the direction of SAF development has been clear; In July 2023, the Airworthiness Certification Department of the Civil Aviation Administration of China (CAAC) released the "Aviation Alternative Fuel Sustainability Requirements (Draft for Comments)"; In July 2024, the Sustainable Aviation Fuel Development Research Center of the Second Civil Aviation Institute was officially inaugurated. On September 18, 2024, the National Development and Reform Commission (NDRC) and the Civil Aviation Administration of China (CAAC) launched a pilot program for the use of sustainable aviation fuel (SAF) in Beijing, and from September 19, 2024, 12 flights of Air China, China Eastern Airlines and China Southern Airlines from Beijing Daxing, Chengdu Shuangliu, Zhengzhou Xinzheng and Ningbo Lishe airports will be officially refueled.

HEFA is the main route, and China has the advantage of UCO raw materials: SAF faces fewer obstacles in terms of infrastructure and technology in its promotion and application, and it is easy to apply and promote it in the existing aviation system. SAF is highly available, has a wide range of feedstock sources and diversified production processes, and can be directly blended with conventional jet fuel without the need for jet fuel system modifications. At present, HEFA is the only mature route to commercialization, alcohol spray (ATJ) and Fischer-Tropsch method (FT) are in the demonstration project stage, and electroporation (PtL) is still in the R&D and trial stage. At the same time, HEFA is considered to be the most dominant process route until 2030, and IATA expects that about 85% of SAF projects will be manufactured using this process. In the long run, when the market demand for SAF exceeds the potential supply of HEFA, new technologies such as alcohol spraying and Fischer-Tropsch will enter the commercialization stage as a supplement, but HEFA is still optimal in terms of application maturity and product economy, and will serve as the long-term basic production capacity of SAF. HEFA refers to the processing and refining of animal and vegetable oils, waste oils or fats into SAF by using hydrogen (hydrogenation), which generally includes processes such as hydrodeoxygenation, isomerization, cracking and fractionation. The HEFA process has certain advantages in raw material collection and technology, and the raw materials come from a wide range of sources, from kitchen waste oil, vegetable oil to animal fat, and even algae, which can become the raw materials of HEFA, and the industrial chain is perfect; The production process mainly comes from relatively mature petroleum refining technology. China is the world's leading producer of used cooking oil (UCO) and has established a wide range of collection channels, which makes it a strategic opportunity for the HEFA process. At present, China's potential reserves of waste table oil exceed 12 million tons, which can support nearly 10 million tons of SAF supply according to the SAF production rate of 75%. At present, China's UCO is mainly used for exports, and in 2023, China's UCO output will exceed 3 million tons, of which 2.06 million tons will be used for export, accounting for 68%, and from January to June 2024, China will export a total of 1.4097 million tons of UCO, a year-on-year increase of 67%, and the economic benefits of UCO in high-value scenarios such as SAF have not been realized. With the promotion of the national strategy of "developing new quality productivity according to local conditions" and the active layout of domestic SAF industry pioneers, China is expected to become a major supplier of SAF in the world. On November 15, the Ministry of Finance and the State Administration of Taxation issued the "Announcement on Adjusting the Export Tax Rebate Policy", canceling the export tax rebate for chemically modified animal, vegetable or microbial oils, fats and other products, which is conducive to domestic biodiesel and SAF production enterprises to obtain raw materials and enhance the competitiveness of the project.

Domestic SAF commercialization started, and enterprises accelerated their layout: Neste occupies half of the world, and foreign giants such as Honeywell have achieved great breakthroughs in SAF technology. Finland's Neste, the world's largest producer of renewable diesel and sustainable aviation fuel (SAF) from waste and residues, currently has a production capacity of 1 million tonnes per year and produces 100,000 tonnes per year, nearly half of its global production in 2022, and with the expansion of the Singapore refinery and additional investment in the Rotterdam refinery, Neste will be able to produce about 1.5 million tonnes of SAF per year by 2023. Honeywell, Synthetic Oil Company of the United States, and Neste Petroleum have successfully developed the technology of making SAF from waste oil, and completed the technology demonstration and promotion. The commercialization of SAF in domestic enterprises is still in its infancy, and the production method is HEFA process using waste oil as raw material, which is mostly used for export. Companies that produce biodiesel (especially hydrocarbon-based biodiesel, HVO) generally have the ability to switch to SAF, and many companies are accelerating their deployment. Zhenhai Refining & Chemical: In May 2022, China's first 100,000 tons/year bio-jet fuel industrial unit underwent the first batch of large-scale trial production in Zhenhai Refining & Chemical, and obtained the first global RSB biomass SAF certification in Asia, and in September of the same year, China's first batch of large-scale production of bio-jet fuel obtained the airworthiness certificate. Elcometer Environmental Protection: The 100,000-ton HEFA plant built in Zhangjiagang has been completed, mainly for the international market, and more than 2,000 tons of SAF will be exported to Europe through PetroChina International (London) Company in 2022, and the domestic airworthiness certification is currently in the process of being certified. Junheng Bio: In January 2024, SAF passed the airworthiness certification of the Civil Aviation Administration of China, and it is expected to produce 137,000 tons of SAF annually in 2024 and 400,000 tons of SAF in 2025. Jiaao Environmental Protection (Rights Protection): The 500,000-ton biofuel production capacity of Lianyungang Jiaao, a holding subsidiary, has been successfully put into operation recently, and has previously obtained strategic investment from BP, and the airworthiness certification work is being actively promoted. Haixin Energy: In November 2024, it obtained the HEFA-SPK airworthiness certification from the Civil Aviation Administration, and its Shandong Sanju currently has a production capacity of 50,000 tons of bio-jet fuel, and the products are mainly purchased by China Aviation Fuel, which is blended with No. 3 jet fuel or Jet A-1 after procurement.

Investment suggestion: The policy stimulates the demand of SAF and upstream UCO, and it is recommended to pay attention to Jiaao Environmental Protection (603822.SH), Haixin Energy (300072.SZ), Excellence New Energy (688196.SH), Donghua Energy (002221.SZ), Peng Harrier Environmental Protection (300664.SZ), Luculent Environment (301305.SZ), and Shangao Environmental Energy (000803.SZ).

Risk Warning: Risk of policy changes; the risk of substitution of new technologies; Downstream applications are less than expected; the risk of intensified competition in the industry; raw material supply and price volatility risk; The project is not progressing as expected

>>The above content is excerpted from the research report "Huajin Securities-Chemical-Industry Express-SAF-SAF has broad prospects, policy-driven development opportunities" released by Huajin Securities on December 12, 2024 (Analyst: Luo Hongyong; Practice number: S0910523100001), please refer to the full report for specific analysis content (including risk warning, etc.).

Today's highlights

Macro & Finance & Real Estate Team

　　01

Huajin Securities-Macro-Why U.S. Core Inflation Can't Fall--U.S. CPI Commentary (2024.11).

Investment Essentials

Against the backdrop of a high base, the core CPI in the United States remained at a high of 3.3% year-on-year for the fourth consecutive month in November, and the need for the Fed to cut interest rates at its last meeting of the year weakened again. According to the data released by the U.S. Bureau of Labor Statistics on December 11 local time, the U.S. CPI in November (seasonally adjusted, the same below) rebounded by 0.1 percentage points year-on-year to 2.7%, and the core CPI remained flat at a high of 3.3% year-on-year for the fourth consecutive month, with a month-on-month increase of 0.31%, which was greater than the previous month. Among them, the rebound of the overall CPI also reflects the stabilizing effect of the expansion of food growth and the rebound of energy. The fact that the core CPI remains high year-on-year despite a high base supports the two logics of the penetration of energy prices into consumer durables and the re-strengthening of the wage inflation spiral. With more of a sustainable strengthening factor in the core inflation structure, the need for a rate cut at the Fed's December FOMC meeting has been weakened again. The U.S. dollar index rose before and after the release of the data.

The strength in core inflation this month was mainly due to two factors: the recovery in consumer durables prices driven by the stabilization of global crude oil and energy prices, and the steady and high growth rate of wages-driven non-rent services and non-durable core goods. Combined with Trump's policy propositions such as tariff increases, domestic tax cuts, and border control, as well as the possibility of monetary easing lagging to drive rents up again, the decline in core inflation in the United States is expected to narrow in the early part of next year, and the center may return to near the current high after May, and the Fed is expected to cut interest rates only twice in 2025 and concentrate on the first half of the year. The core CPI in the United States rose by 0.31% month-on-month in November, returning to the highest increase in nearly eight months, and the monthly structure was two strong and one weak: 1) Consumer durables rose by 0.18% month-on-month, the third consecutive month of month-on-month growth and the increase was 0.09 percentage points higher than that in October. 2) The high and flat wage growth rate in November drove the prices of non-rent services and core non-durable goods with high correlation with wages to rise by 0.28% and 0.46% month-on-month, respectively, the latter improved sharply by 0.46 percentage points from October and returned to the high level of nearly a year and a half. 3) Rent rose 0.31% month-on-month in November, down 0.05 percentage points slightly from October, which was a weak factor in the month, but the U.S. rent stably lagged behind the performance of housing prices for several quarters, and housing prices were basically synchronized with the monetary policy cycle. With the tax cuts advocated by Trump, who will re-assume the presidency early next year, the aggressive tariff proposal may materially raise the prices of durable goods, the border control policy may reduce the unemployment rate, increase wage growth and strengthen the wage inflation spiral, and the high base effect will fade after May next year, we expect that the US core inflation may return to around the current level in the second half of 2025, thus compressing the Fed's potential interest rate cut space to 25BP each twice, and concentrate on the first half of the year.

Due to the narrow fiscal space of major non-US developed economies, the dilemma of weakening domestic demand is difficult to reverse in the short term, and the European and British central banks may seek to cut interest rates more sharply under the indiscriminate threat of Trump's tariff stick, and the dollar index is expected to fluctuate slightly in the first half of 2025 and then rise again to a high of about 110 in the second half of the year. If China and the United States implement more stringent tariff measures against China in the second half of next year, the pressure on RMB depreciation in the second half of next year may increase significantly, so it is expected that China's interest rate cut operation in 2025 may be concentrated in the first half of the year, and the annual RRR reduction to replace MLF will be increased, and the forecast of the annual fluctuation range of RMB exchange rate against the US dollar will remain unchanged at 7.2-7.6. It is expected that the European and British central banks will cut interest rates by 100bp from December to the end of 2025, so the dollar index is expected to fluctuate first and then rush in 2025. In terms of China's monetary policy operation, the forecast of a 50BP RRR cut in December remains unchanged, and it is expected that the annual RRR cut of 100-150BP in 2025 will replace MLF with greater efforts, combined with the aggressive tariff proposition of the new US government, it is expected that the RMB will decline slightly to 7.2-7.6 relative to the US dollar exchange rate pivot hedging.

Risk warning: The Fed's interest rate cut is smaller than expected, which will increase the risk of passive depreciation pressure on the RMB.

>>The above content is excerpted from the research report "Huajin Securities-Macro-Why U.S. Core Inflation Can't Fall - U.S. CPI Commentary (2024.11)" (Analyst: Qin Tai; Practice number: S0910523080002), please refer to the full report for specific analysis content (including risk warning, etc.).

Media team

　　02

Huajin Securities-Media-Industry Express: The introduction of policies to encourage the development of enterprises is expected to promote industrial growth

Investment Essentials

Event: On December 11, the Ministry of Finance, the State Administration of Taxation and the Propaganda Department of the Central Committee issued the Announcement on the Tax Policy for the Transformation of For-profit Cultural Institutions into Enterprises in the Reform of the Cultural System. It is mentioned that for-profit cultural institutions can enjoy preferential tax policies during the transitional period when they are transformed into enterprises.

Policies continue to deepen to promote industrial development. In 2018, the General Office of the State Council issued the Notice on Printing and Distributing the Two Provisions on the Transformation of For-profit Cultural Institutions into Enterprises and Further Support for the Development of Cultural Enterprises in the Reform of the Cultural System, in which enterprises that have completed the transformation before December 31, 2018 can continue to be exempted from enterprise income tax for five years from January 1, 2019 (until December 31, 2023). Specifically, the preferential policies are: if a for-profit cultural institution is transformed into an enterprise before December 31, 2022, it will be exempted from enterprise income tax from the date of registration of the transformation to December 31, 2027. For the tax that has been reduced or exempted in accordance with the provisions of this announcement, if it has been collected in the treasury before the issuance of this announcement, the tax payable in the subsequent tax period can be deducted or refunded. Among them, "for-profit cultural institutions" refer to public institutions engaged in press and publication, radio, film and television, and culture and art. This year, the Third Plenary Session of the 20th Central Committee of the Communist Party of China adopted the Decision of the Central Committee of the Communist Party of China on Further Deepening Reform and Promoting Chinese-style Modernization, focusing on the construction of a socialist cultural power. Multiple departments have issued a series of policies: 1. The integration of culture and tourism, the General Office of the State Council has successively issued the "Several Measures on Unleashing the Potential of Tourism Consumption to Promote the High-quality Development of Tourism" and "Opinions on Promoting the High-quality Development of Service Consumption"; 2. Improve quality and efficiency: The National Development and Reform Commission, the Ministry of Culture and Tourism and other 6 departments issued the "Implementation Plan for Promoting Equipment Renewal in the Field of Culture and Tourism"; 3. Forward-looking planning, the Ministry of Industry and Information Technology, the Ministry of Education and other 5 departments jointly issued the "Three-Year Action Plan for the Innovation and Development of the Metaverse Industry (2023-2025)", and 7 departments including the Ministry of Industry and Information Technology and the Ministry of Science and Technology jointly issued the "Implementation Opinions on Promoting the Innovation and Development of Future Industries".

Cultural enterprises show a strong growth trend. The proportion of core areas of culture has increased, and the growth rate of cultural service industry has been obvious. According to the National Bureau of Statistics, in the second half of 2023, enterprises above designated size in cultural and related industries achieved operating income of 7,015.8 billion yuan, a year-on-year increase of 7.6%. Among them, cultural entertainment and leisure services, cultural investment and operation, and news and information services achieved rapid growth, with year-on-year growth rates of 43.5%, 30.4% and 19.8% respectively. In the first half of 2024, the operating income of enterprises above designated size in cultural and related industries reached 6,496.1 billion yuan, a year-on-year increase of 7.5%. Among them, the fields of content creation and production, creative design services, and news and information services achieved rapid growth, with year-on-year growth rates of 14.0%, 11.7%, and 11.5% respectively. The total profits and total assets of cultural enterprises above designated size have increased steadily. In the second half of 2023, the total profit of cultural enterprises above designated size will be 678.1 billion yuan, with a profit margin of 9.7%; The total assets were 19,620 billion yuan, and the asset turnover rate was 0.36. In the first half of 2024, the total profit of cultural enterprises above designated size will be 525 billion yuan, a year-on-year increase of 8.9%.

Investment suggestion: Policies continue to help the development of enterprises, and the scale continues to grow to build an ecosystem. It is recommended to pay attention to: Wanxin Media, Shandong Publishing, Zhongyuan Media, Changjiang Media, Southern Media (rights protection), Chinese Media, Xinhua Wenxuan, Zhejiang Media (rights protection), Haikan shares, etc.

Risk warning: relevant policy uncertainty, industry development is less than expected, industry competition intensifies, etc.

>>The above content is excerpted from the research report "Huajin Securities-Media-Industry Express: Politics" released by Huajin Securities on December 11, 2024 (Analyst: Ni Shuang; Practice number: S0910523020003), please refer to the full report for specific analysis content (including risk warning, etc.).

　　03

Huajin Securities-Media-Industry Express: Gemini 2.0 is released, and multimodal + AI agent continues to iterate

Event: On December 12, Beijing time, Google released its most powerful AI model to date, Gemini 2.0, with new features including multimodal output of native image generation and audio output, and support for native invocation of Google search, maps, Lens and other tools, aiming at multimodal + AI Agent. The AI general model of the leading company has been updated and iterated to continue to build a strong foundation for the AI agent ecosystem and empower and lead the development of the industry.

Google has released a series of new products based on Gemini 2.0 Flash to enrich the AI agent ecosystem. The first new model released by Google this time is an experimental version of Gemini 2.0 Flash, which is 100% faster than Gemini 1.5 Pro. Based on Gemini 2.0 Flash, Google has launched a series of new AI Agent products, including Project Astra, a general-purpose AI assistant prototype that caused a sensation in the industry in May this year, Project Mariner, which can complete multi-step complex tasks in Google Chrome as an experimental extension, Jules, an experimental AI programming agent, and a game agent. Project Astra, powered by Gemini 2.0, implements agent capabilities, including but not limited to: a 10-minute video memory limit, which can record more conversations and users' personal preferences to better provide personalized services; Multilingual and mixed-language conversations, improved comprehension of accents and unfamiliar words; By using the built-in agent framework of Gemini 2.0, you can make instant calls to the necessary tools. Conversation experience improvements. Experimental feature: Project Mariner achieved 83.5% of the best working results as a single agent setup; AI Programming Agent Jules integrates directly with GitHub, aiming to build AI Agents that are helpful in all areas, including programming; The Game Agent, on the other hand, helps users navigate the virtual world of a video game, reasoning about the game based solely on on-screen movements, and suggesting what to do next in real-time conversations. Google said that the new model is designed for the AI Agent era, focusing on multimodality + AI Agent. In addition, Google will begin testing Gemini 2.0 in the search AI overview this week, and Gemini 2.0 Flash is expected to be generally available in January 2025, with more model sizes to come. At the same time, Gemini 2.0 will be extended to more Google products early next year. The head model continues to iterate, or continues to extend the possible boundaries of AI agents, providing methodological guidance for the industry and enabling productivity improvement in the long term.

Gemini 2.0 Flash may mark a significant iteration of the generic model. Judging by the name, the Gemini 2.0 Flash is likely to be the smallest cup in the new series, but the performance has surpassed the previous generation Gemini 1.5 Pro, and the speed has increased by 100%. According to Imarena.ai evaluation, its performance has surpassed OpenAI's o1-preview and o1-mini, second only to GPT-4o (2024-11-20). The strong performance of the lightweight version (small cup) may indicate that the subsequent version will increase the volume, and the progress and iteration of subsequent products in the Gemini 2.0 era may attract great attention from the industry.

Investment advice: Google's new product marks Gemini's official entry into the 2.0 era, and the head model may welcome a blockbuster iterative upgrade, and the layout of AI Agent may continue to provide guidance for the industry and empower the development of the AI Agent ecosystem in the long run. It is recommended to pay attention to: Tencent Holdings, NetEase-S, Insai Group, BlueFocus, Reading Group, Tom Cat, Kunlun Wanwei (Rights Protection), Kaiying Network, Meitu, Tianyu Digital, Gravity Media, Chinese Online, Jebsen Shares, Huace Film and Television, Fengyuzhu, Visual China, Kuaishou-W, Wondershare Technology, etc.

Risk warning: policy uncertainty, the development of AI technology is less than expected, and the potential risks of AI copyright licensing.

>>The above content is excerpted from the research report "Huajin Securities-Media-Industry Express: Gemini 2.0 Released, Multimodal + AI Agent" released by Huajin Securities on December 12, 2024 (Analyst: Ni Shuang; Practice number: S0910523020003), please refer to the full report for specific analysis content (including risk warning, etc.).

IPO & Automotive Team

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Huajin Securities-IPO-IPO Thematic Coverage Report (Air China Cargo)-2024 No. 91-Total No. 518

Next Monday (December 16), there will be an inquiry from a main board listed company "Air China Cargo".

Air China Cargo (001391): The company is an integrated air logistics service provider, and its main business can be divided into three major sectors: air cargo services, air cargo terminal services, and integrated logistics solutions. From 2021 to 2023, the company will achieve operating income of 24.305 billion yuan/23.076 billion yuan/14.919 billion yuan, and YOY will be 33.17%/-5.06%/-35.35% respectively; The net profit attributable to the parent company was 4.342 billion yuan/3.108 billion yuan/1.153 billion yuan, and the YOY was 32.01%/-28.42%/-62.89% respectively. In the latest reporting period, the company achieved operating income of 14.229 billion yuan from January to September 2024, a year-on-year increase of 44.81%, and net profit attributable to the parent company of 1.105 billion yuan, a year-on-year increase of 71.07%. According to the preliminary forecast of the company's management, the company expects that the operating income in 2024 will increase by 35.40% year-on-year, and the net profit attributable to the parent company will increase by 55.70% year-on-year.

Investment Highlights: 1. The company is the main operating body of passenger and cargo business under AVIC Group; Relying on the platform resources of AVIC Group, the company has become one of the major air logistics service providers in China, and has a leading advantage in cargo and mail transportation volume. AVIC Group is a large state-owned air transport group company directly under the central government, which indirectly holds 45% of the company's shares through China Aviation Capital and is the actual controller of the company. Relying on AVIC's platform resources, the company owns its own long-range wide-body freighter, and in 2022, it obtained the right to operate the cargo business of Air China's passenger aircraft through the exclusive operation model, becoming one of the major air logistics service providers in China, with strong leading advantages in terms of capacity scale, route network, and cargo and mail transportation volume. 1) In terms of air capacity, as of the date of issuance of the letter of intent, the company has 21 all-cargo aircraft, of which 17 are in operation, and Air China and its holding companies operate a total of 915 passenger aircraft; 2) In terms of route network, as of the end of June 2024, the company has 24 all-freighter routes, covering 21 cities in 8 countries and regions including Europe, North America and Asia-Pacific; According to the prospectus, in 2019, Air China had a market share of about 28% in North America and 45% in Europe. 3) In terms of cargo and mail transportation volume, from January to June 2024, the company's cargo and mail transportation volume reached 722,800 tons, accounting for 17.32% of China's air logistics market. 2. The company actively lays out cross-border e-commerce, cold chain logistics, high-end manufacturing and other market segments. Based on its own cargo aircraft and Air China's passenger aircraft cargo capacity resources, the company has actively deployed a number of logistics market segments: 1) In the field of cross-border e-commerce logistics, the company first set foot in 2007, and gradually expanded resource investment since 2018, and then established an independent business segment; According to the prospectus, the main product types of the company's cross-border e-commerce logistics services include cross-border e-commerce logistics products, half-distance products, charter flights, etc., and the specific services include pickup and transportation, domestic customs declaration, air transportation, overseas customs clearance, overseas distribution and other links, which are expected to benefit from the rapid development of the cross-border e-commerce industry at this stage; 2) In the field of high-end consumption, the company carries out full-process transportation and delivery services for high-quality consumer goods such as pharmaceuticals and fresh food ingredients; 3) In the field of industrial production, the company has established long-term and stable cooperative relations with many domestic and foreign electronic manufacturing leading enterprises such as Apple, Intel, Huawei, etc.

Comparison of listed companies in the same industry: the company focuses on the field of comprehensive aviation logistics services; According to the similarity of the main business, China Eastern Airlines Logistics and China Southern Airlines Logistics were selected as comparable listed companies of Air China Cargo. From the perspective of the above comparable companies, the average revenue of comparable companies in 2023 will be 18.613 billion yuan, the PE-TTM (arithmetic average) of comparable companies will be 9.07X, and the gross sales margin of comparable companies will be 21.54%; In comparison, the company's revenue scale and gross profit margin are not as good as the performance of comparable companies in the same industry.

Risk Warning: There is still a possibility that the company that has started the inquiry process may not be able to be listed due to special reasons, the company's content is mainly based on the content of the prospectus and other public information, there is a risk that the selection of listed companies in the same industry is not accurate enough, and there may be interpretation bias in the interception of content data. The specific risks of listed companies are shown in the main text.

>>The above content is excerpted from the research report "Huajin Securities-New Shares-New Shares Special Coverage Report (Air China Cargo)-2024 No. 91-Total No. 518" (Analyst: Li Hui; Practice number: S0910519100001), please refer to the full report for specific analysis content (including risk warning, etc.).

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