Macro - Overseas Macro In-Depth Report: Europe's "Awakening" from the Perspective of German Fiscal Expansion

In March 2025, Germany and the European Union launched a new round of fiscal plans almost simultaneously, which is seen as an "awakening" of Europe's fiscal coordination. Germany's constitutional amendment to break through the "debt brake" mechanism is expected to shift the fiscal stance from austerity to expansion, and boost real economic growth by 1-2 percentage points in the long run. The EU's "Rearm Europe" plan is another key attempt by the EU to deepen fiscal sharing, not only by suspending the red lines of the Convention again, but also by using EU budget guarantees to help member states finance ("credit sharing"), and by trying to borrow together again in the future ("debt sharing"). Although it remains to be seen how the European fiscal plan will be implemented and its impact, it will be enough to trigger investors to reassess the fiscal and economic prospects of Germany and the EU, and to embrace the investment opportunities in euro assets against the backdrop of the reversal of "American exceptionalism".

Banking Industry Dynamics Tracking Report - Summary of 2024 Annual Reports of Listed Banks: Revenue Decline Convergence, Dividends Stabilize Focus on Dividend Allocation Value

On the one hand, we continue to suggest that the dividend value of the sector is attractive, and the current average dividend yield of the sector is 4.3% based on the 23-year dividend amount, which is still at a historical high level relative to the risk-free rate measured by the 10-year Treasury yield, and continues to widen, and the allocation value of quasi-fixed income continues. At the same time, we focus on regional banks with excellent growth and benefit from policy effectiveness, and the recovery of regional economies may enhance the upward resilience of profitability. Finally, it is worth looking forward to the catalysis of the expected improvement for joint-stock banks, focusing on the policy support and recovery from the real estate and consumer sectors. At present, the static PB of the plate is only 0.65 times, and the corresponding implied defect rate is more than 15%, and the margin of safety is sufficient. In terms of individual stocks, we recommend: 1) regional banks with stable fundamentals that benefit from the expected repair of policies, and pay attention to the allocation opportunities under the expectation of the reversal of the dilemma of stock banks; 2) The allocation value of high-dividend individuals is still prominent.

Power equipment and new energy industry dynamic tracking report: January to February inverter export data monthly report: Asian and African markets performed well

The

export value of inverters from January to February increased slightly year-on-year. According to the data of the General Administration of Customs, from January to February 2025, China's inverter exports totaled 7.7 billion yuan, a slight increase of 6.5% year-on-year. From January to February 2025, from the perspective of domestic inverter export regions, Asia, Europe, and Latin America are the top three markets for China's export inverters, accounting for 38%/32%/13% of the export value respectively. From January to February, China's inverter exports to Asia/Europe/Latin America were 29/25/1 billion yuan, a year-on-year increase of +31%/-11%/-3% respectively. Asia replaced Europe as the largest market for China's inverter exports from January to February, with a year-on-year increase in export value; Europe and Latin America are the second and third largest markets respectively, and the scale of demand has decreased year-on-year.

Macro-domestic macro review: the new round of supply-side reform ideas are gradually clear: comment on the "Opinions on Improving the Price Governance Mechanism".

On April 2, 2025, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the Opinions on Improving the Price Governance Mechanism. In this regard, we have the following understanding: "price stabilization" is the focus of the macro policy in 2025, the price mechanism reform has a similar rhyme with 2015, the same attention to the price mechanism reform, the same by the Party Central Committee and the State Council jointly issued a high-standard, the background is also relatively similar: China's economy is facing the problem of insufficient utilization of production capacity, prices have downward pressure, especially the macro policy focuses on promoting the "supply-side structural reform", in order to break the "low price" and activate the endogenous power of the economy. Since 2024, various documents and measures have been introduced one after another, and the idea of this round of supply-side structural reform has gradually become clear: standardize and withdraw from subsidy behavior, give full play to the role of market price adjustment mechanism and self-discipline mechanism of industry associations, and at the same time strengthen "energy consumption control" guided by high-quality and green development, and force backward production capacity to withdraw as soon as possible. We believe that the reform of the price mechanism is an important part of the new round of supply-side structural reform, and the implementation of various measures will help promote healthy competition on the supply side.

02. Company Interpretation

Vanke A (000002.SZ) Annual Report Comments: Shareholders actively supported in an all-round way and took multiple measures to ensure stability

In 2024, the company will achieve operating income of 343.18 billion yuan, a year-on-year decrease of 26.3%, and net profit attributable to the parent company of -49.48 billion yuan, a year-on-year decrease of 506.8%. The performance loss was mainly due to: 1) the settlement scale and gross profit margin of the development business decreased significantly, and the gross profit margin of the development business fell to 9.5% for the whole year, resulting in a year-on-year decrease of 5.1 percentage points in the consolidated gross profit margin to 10.2%; 2) Newly added provision for credit impairment and inventory decline, with a provision of RMB8.14 billion for inventory decline for some projects (including RMB1.08 billion for non-consolidated items) and RMB26.4 billion for credit impairment during the year; 3) Losses in some non-core financial investments; 4) In order to recover funds faster, the Company took more resolute action on asset transactions and equity disposals, and some transaction prices were lower than book value.

Sinovac Pharmaceutical(688136. SH) company's dynamic tracking report: the overseas business is expected to maintain high growth, and the value of the innovative drug platform is waiting to be revalued

The company's overseas business is expected to maintain rapid growth. According to the company's March 25 investor research minutes, as a company that has been deeply involved in internationalization for many years, the company has already laid out the global market and has accumulated rich experience in product introduction, registration and sales. In 2021, the company clearly formulated its overseas commercialization strategy, which laid a solid foundation for subsequent development. At present, the sales of albumin-paclitaxel products in the EU market are good, and at the same time, the registration of new products is also steadily advancing and being approved in many emerging markets, further consolidating the value of the company's overseas commercialization platform. Looking ahead, the company plans to continue to introduce new products and drive sales in 2025 based on its mature overseas commercialization platform, so as to achieve long-term business growth. It is expected that in the next 5-10 years, the company will continue to expand its international market territory, cover more regions and customer groups, and ensure the steady implementation of the overseas commercialization strategy. It is worth mentioning that according to the equity incentive plan launched by the company in 2024, by 2025, the growth target of export revenue is set to increase by 200%-400% compared with 2023. 

Kangchen Pharmaceutical(603590.HK) SH) Comments: KC1036 innovation value is expected to be revalued, and the provision for goodwill impairment is 25 years old

KC1036 is progressing smoothly for multiple indications, and the innovation echelon layout is reasonable. KC1036 achieves anti-tumor activity by inhibiting targets such as AXL and VEGFR2, and is a global Class 1 new drug with independent intellectual property rights. At present, KC1036 is being studied in clinical studies for multiple indications such as digestive system tumors and thymic carcinoma in adults, and nearly 300 subjects have been enrolled. Specifically, 1) the phase 3 clinical trial of monotherapy for advanced esophageal squamous cell carcinoma completed the first enrollment in February 2024 and is progressing smoothly; 2) first-line maintenance treatment with PD-1 for locally advanced or metastatic esophageal squamous cell carcinoma in the clinical course; 3) The phase 2 clinical trial of monotherapy for patients with advanced thymic tumors has completed the enrollment of subjects; 4) The first patient was enrolled in the phase 2 clinical trial of juvenile Ewing sarcoma. We believe that 2025 is expected to usher in the readout of phase 2 clinical data for advanced thymic tumors. In terms of other pipelines, KC1086 has entered the non-clinical evaluation stage and is expected to submit an IND application in 25 years; KC3001 bone metabolism project entered pharmacodynamic study; ZY5301, a class 1.2 new Chinese medicine drug, has completed phase 3 clinical trial and is expected to submit an NDA application in 25 years. The company's product echelon is reasonable.

Long Lang (301308. SZ) annual report comments: enterprise-level storage continues to increase, and storage prices rebound to promote performance improvement

In 2024, the company will achieve revenue of 17.464 billion yuan, an increase of 72.48% year-on-year, and a net profit attributable to the parent company of 499 million yuan, an increase of 160.24% year-on-year. In terms of expenses, due to the increase in sales scale, the continuous increase in R&D investment, and the impact of share-based payment expenses, the company's expenses for the period in 2024 increased by 64.4% year-on-year to 2.608 billion yuan. In terms of profit margin, the company's gross sales margin will reach 19.05% in 2024, an increase of 10.86pcts year-on-year, and the net profit margin on sales will increase by 11.16pcts year-on-year to 2.89%. On the whole, the company's operating performance will usher in a significant improvement in 2024, mainly due to the rapid growth of the company's mid-to-high-end, overseas and brand businesses in addition to the improvement of the storage industry environment in 2024.

Hang Seng Electronics Co., Ltd. (600570.HK) SH) annual report comments: The company maintained a high level of R&D investment and continued to deepen its strategic focus

On the revenue side, the company will achieve operating income of 6.581 billion yuan in 2024, a year-on-year decrease of 9.62% (vsYoY-4.12%, 24Q1-3), which is mainly affected by factors such as the negative growth of technology investment by some financial institution customers and the elongation of the procurement process. The company's revenue declined to varying degrees, with wealth technology service revenue (1.430 billion yuan, YoY-17.50%) as the main influencing factor for the decline in revenue, and operating and institutional technology services and asset management technology services achieving revenue of 1.289 billion yuan (YoY-10.24%) and 1.568 billion yuan (YoY-8.38%) respectively. In addition, the company's corporate finance, insurance core and financial infrastructure technology services/innovation business/risk and platform technology services/data services business revenue of 690 million yuan/515 million yuan/497 million yuan/354 million yuan respectively, a year-on-year decrease of 1.45%/7.34%/2.34%/8.13% respectively. Under the background of overall pressure on the revenue side, the company will achieve a net profit attributable to the parent company of 1.043 billion yuan in 2024, a year-on-year decrease of 26.75% (vsYoY-26.57%, 24Q1-3).

Chongqing Beer (600132. SH) annual report comments: short-term performance is under pressure, looking forward to follow-up improvement

In 24 years, the current beverage channel was under pressure, and the volume and price fell year-on-year. In 2024, the beer revenue will be 14.17 billion yuan, a year-on-year increase of -1.9%, of which the high-end/mainstream/economic revenue will be 85.9/52.4/330 million yuan, a year-on-year increase of -3%/-1%/+16% respectively; The revenue of beer in 4Q24 was 1.46 billion yuan, a year-on-year increase of -13.0%, of which the revenue of high-end/mainstream/economy was 9.7/4.8/0.20 billion yuan, a year-on-year increase of -15%/-10%/+31% respectively. In terms of volume and price split, the volume/price in 2024 will be -0.8%/-1.1% respectively, of which the high-end volume/price will be +1.4%/-4.3%, the main flow/price will be -3.8%/+2.9% respectively, and the economic volume/price will be +13.5%/+1.8% respectively. On the whole, affected by factors such as the consumption environment and extreme weather in the peak season, the company's catering/entertainment and other on-the-spot beverage channels are under pressure, resulting in a decline in sales volume and ton price in 2024.

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