One, how to judge investment opportunities in 2025? Xie Zhiyu (CICC Global Fund): With the shift in domestic macro policy expressions at the end of September, the liquidity and risk preference of the stock market have improved significantly. In the fourth quarter, as macro counter-cyclical regulatory policies and subsidies for consumer goods trade-ins are gradually introduced, the fundamentals of related domestic demand industries first stabilized after the decline. On the other hand, export trade policies face uncertainty, and companies in the export chain are expected to be under pressure. In terms of technological innovation, the application of AI is driving the expectation of prosperity in the technology industry, with industries such as electronics and computers with wide applications of AI leading in overall growth in the fourth quarter. Liu Yanchun (Invesco Great Wall Fund): The time and extent of this round of economic adjustment have exceeded expectations. The risks and structural problems accumulated during China's rapid economic growth in the past mainly manifest in the rapid increase in debt, especially hidden debt, and the issue of high real estate prices. China has resolutely burst the real estate bubble through financial means, and has also required local governments to promptly resolve hidden debts and promote the transformation of financing platforms. Fiscal expenditure is showing strong pro-cyclical properties, with more emphasis on technology and other important security sectors structurally, while subsidies in the consumption sector have increased but still have room for further strengthening. If the Trump administration significantly increases tariffs on Chinese products in 2025, China's export prospects will also face significant uncertainty, requiring continuous macro policy efforts to promote the recovery of domestic investment and consumption in order to achieve high-quality economic transformation. Developing new productive forces and promoting economic structural transformation and upgrading are the long-term directions we must adhere to, which are not contradictory to short-term demand-stimulating policies. Accelerating demand expansion, promoting income growth, and asset appreciation are necessary to address the current debt risks, promote stable economic transformation, and achieve high-quality growth. At present, policies have emphasized stability of growth and employment. We also expect deeper reforms, redesigning the distribution of financial and administrative powers between the central and local governments to fully mobilize the enthusiasm of local governments and various enterprises. We believe that the Chinese economy will definitely emerge from the trough in 2025, and the journey of revaluation of value in the equity market will also be fully opened. Xiao Nan (E Fund): The core contradiction in the current market lies in the space and pace of further boosting the real economy, but we must make a relatively balanced allocation at this stage to avoid significant losses from overly forward judgment in the short term. On one hand, we are waiting for the stabilization and recovery of the economic fundamentals through the allocation of consumer, engineering machinery, and resource products, while on the other hand, we balance short-term uncertainty through the allocation of high-dividend and high-prosperity sub-industries. Currently, Hong Kong stocks with resource products, consumer goods, and growth stocks are relatively cheap, so we have further increased holdings in these companies to further strengthen the balance of our portfolio. However, in any case, the bottom-up logic of our stock selection still lies in continuously focusing on the profit quality and sustainability of companies, paying special attention to the inherent competitive advantages of companies, and whether companies can obtain excess returns in the accumulation of advantages. Zhu Shaoxing (Rich Country Fund): A series of macro policies in the fourth quarter have conveyed a clear turning message. Market confidence has seen a significant recovery in the short term from a very low base. These policies will play a positive role and will need to go through a long period of time. We maintain enough patience in this regard. However, with a long-term perspective, we believe that positive factors will eventually play a role. The overall valuation of the A-share market, after rapid repair, remains attractive in the long cycle and equity assets are currently in a good risk-return range. Looking at a longer time frame, we believe that the heavy challenges faced now will eventually find a way out. It is appropriate for investors to choose the expected level of return corresponding to market volatility. Qiao Qian (CICC Global Fund): We still believe that acquiring long-term returns requires attention to both fundamentals and valuations. After the market has experienced rapid gains, we will focus more on the ability of companies to match fundamentals after the macro background correction and the range of possible fluctuations in the mid- to long-term cycle and make more active evaluations and adjustments. Chen Hao (E Fund): Looking to 2025, the market still faces uncertainties such as the degree of domestic economic recovery, the pace of overseas interest rate cuts, trade and geopolitical frictions, and the process of industrial development. However, we see many positive factors accumulating as well: (1) The policy side is continuously strengthening its protection of the capital market and placing more emphasis on the construction of the investment function of the capital market; (2) Risks of downswings in some industries are gradually dissipating, with high-quality enterprises having already passed the turning point of the business cycle; (3) Market participants' understanding of capital allocation and shareholder returns are deepening; (4) External pressure from high-interest rate environments has partly eased. We believe that the above positive changes will help gradually reverse the negative trend in China's asset side and the pessimistic expectations on the denominator side. Yang Ruiwen (Invesco Great Wall Fund): To this day, the market is still filled with various doubts, and market confidence remains relatively fragile. In fact, this is not an unfamiliar scenario. I vividly remember that when the four trillion stimulus package was introduced in 2008, there were also voices claiming that it was not forceful enough, but the fact was there for all to see. The supply-side reform in 2016 also encountered doubts, and before I made large-scale investments in coal stocks at the end of June 2016, I also had some communication with the market. At that time, skepticism and bearishness were prevalent, but the fundamentals of the industry had actually undergone significant changes, while most people were still stuck in their past perceptions. Over the years, the positive impact of the supply-side reform on coal stock profits is evident, which is also a significant reason why coal stocks have continually outperformed the market in recent years. Similarly, the initial skepticism towards the monetization of housing reforms initiated in 2014-2015 was eventually proven wrong. I was also initially a skeptic and even held a skeptical attitude until 2017, but the spectacular rally in the real estate sector brought about many ten-baggers. One thing to believe is that the bottom of the market is full of doubts, and the top of the market is full of consensus. We should not abandon independent thinking due to widespread doubts, and we should also believe that policymakers' responses to the situation are dynamic and flexible. From doubt to consensus, this process will create many investment opportunities. Li Xiaoxing (Yinhua Fund): Looking ahead to 2025, the market's focus is on considering a comprehensive mix of internal dynamics, external shocks, and policy responses to see if nominal growth can returnRise. We believe that under a series of policy combinations, the benefits will gradually accumulate and the expectation of economic recovery will gradually rise. With the improvement in fundamentals expected to warm up, coupled with further compression of bond market yields, we judge that the equity market may receive more favor from funds in 2025.Dong Li (CICC Global Fund): The December Economic Work Conference provided instructions on the economic priorities for 2025. The overall tone continued the relaxed tone from the September conference, with an emphasis on boosting domestic demand as the primary policy goal. In the real estate sector, the focus remained on stabilizing prices after the previous decline. For the first time in over a decade, the monetary policy mentioned a "moderately loose" approach. The fiscal policy emphasized a more proactive stance and an increase in the fiscal deficit ratio. We expect that in 2025, domestic macroeconomic policies will be more proactive and targeted to address weak domestic demand and the potential impact of Trump's new tariff policies on exports. With strong macroeconomic policy support, we believe that the trend of stable economic growth in the domestic economy will continue. In the capital markets, risk appetite in late September led to a significant increase in indices, with the fourth quarter showing a volatile pattern. As related policies are implemented, certain sectors have shown good performance. Currently, overall market valuations are at medium levels. As a significant part of residents' wealth, the policy places more emphasis on shareholder returns, leading us to remain positive about the market's future development. Zhang Feng (East Securities Asset Management): Looking ahead to 2025, both domestic and foreign demand judgments require observation after key moments. Domestically, ongoing observation of economic data improvements and policy effectiveness is necessary, while internationally, the evolution of trade issues after the U.S. president-elect assumes office needs to be watched. Maintaining a neutral and objective stance, holding companies with high confidence in alpha logic and cautiously observing the above issues is recommended. In the long term, there has been no significant change in demand judgment. Many industries have gone through stages of inventory clearance, capacity reduction, and structural optimization over a long period. Despite short-term logic not showing significant demand improvement, the clearing of the supply end has improved the potential return on assets for some industries. Combining policy directions such as replacement of old with new and supply-side production constraints, seeking structural opportunities actively is advised. Particularly, excellent companies with strong competitive positions that have been under pressure due to weak external demand in the past are worth focusing on. These companies may show a trend of increasing net asset returns. Looking at long-term factors like population and debt, which change slowly and irreversibly, it is necessary to look ahead and focus more on industries and companies aligned with long-term trends such as technological innovation and international expansion. Luo Shuai (Nanfang Fund): Looking forward to next year, despite the impact of tariff barriers, the support of domestic economic policies can fully offset and digest external pressures. Structural policies that promote internal demand and consumption will not only support economic growth at a high level but also promote the upgrade and transformation of domestic industries. Furthermore, many enterprises have established a global industrial layout, with some achieving local production of industrial chains. In the case of increased tariffs, they may seize more market share. Ren Xiangdong (CICC Global Fund): Looking into the future, we believe that despite handling fluctuations, A-shares are likely to achieve positive investment returns in 2025. Amid international turmoil and pressure of domestic growth momentum switching, the Chinese economy has faced certain difficulties in the past two years. However, we remain optimistic about the Chinese economy in the medium to long term. Pressuring factors like the real estate industry and economic suppression are weakening, while the momentum for industrial upgrading in China remains strong. With the dual roles of nature and policy, the supply side of China's manufacturing industry is expected to gradually clear. Although the market has rebounded, the valuations of most companies are still low. Trends in industries such as AI and intelligent automobiles are clear. These factors are important conditions for A-shares to achieve positive returns. 2. How do you view AI investment opportunities? Li Xiaoxing (Yinhua Fund): The investment narrative of the AI industry has transitioned from the grand story of 0 to 1 in the initial stage to a focus on industry progress and performance realization. Overseas supply chain performance has led in the computing power end, and domestic computing power will benefit from localization in the long term. We are interested in the investment opportunities brought by AI implementation on the terminal side; as computing costs gradually decrease, we focus on progress in application-based industries. Yang Ruiwen (Invesco Great Wall Fund): In the AI field that supports the grand narrative of the United States, our progress is evident. Recently, the appearance of the quad-legged robot from Unitree and the open-source MoE model DeepSeek-V3 has shaken the entire AI community. For the past decade, our circle of friends has been amazed by Boston Dynamics, but suddenly, the quad-legged robot from Unitree is a more powerful existence, and at a much cheaper cost. A similar miracle has also occurred in the large model field, as DeepSeek has introduced a low-cost open-source model that has reduced training costs by more than 10 times. It is suddenly realized that our computational lags can be compensated by improving training efficiency and lowering training costs, with the added benefit of the rapid catch-up speed of our models. Google's former CEO Eric Schmidt claimed a year ago that the U.S. had surpassed China in AI, but in recent interviews, he has completely reversed his statement, saying that China's AI is very close to the U.S. Open AI GPT5.0 keeps getting postponed, and if its final release only shows incremental progress rather than a breakthrough, it will be a matter of time before Chinese companies catch up. With such rapid computational deflation, when technological development outpaces computational deflation, the advantage of U.S. AI companies will continue to strengthen. However, if technological development lags behind computational deflation, the advantage of U.S. AI companies will weaken. AI breakthroughs have not been as fast as initially expected, while computational power is still rapidly deflating. The gap between our AI and the U.S. may not be widening but rather rapidly narrowing. Luo Shuai (Nanfang Fund): In terms of hardware, artificial intelligence has added more functionality to electronic products, leading to the emergence of new products and potentially boosting the consumer electronics sector. Regarding software applications, while focusing on innovative applications, existing Internet companies, due to their large amount of data and computing power, and stable user base, are likely to revitalize in the process of AI transformation. Artificial intelligence will be a significant factor for a considerable period of time.The most important technology trend will bring significant changes to various industries. Our country is at the forefront in terms of talent reserves and current level of models internationally. At the same time, we have a huge domestic application market, and are expected to form a positive cycle of "application-data-algorithm iteration", continuously improving the production efficiency of various industries.Qin Yi (Hongde Fund): In the future, the technology sector will revolve around the three main lines of "domestication of AI computing power (such as semiconductor chips/manufacturing/equipment)", "innovation of AI edge hardware (such as chains/AI glasses)", and "landing of AI applications". Among them, the communications and electronics sectors have already shown good stock price performance in the past two years. In 2025, at some point, there is a high probability that computers and media will also experience a rapid increase in investment opportunities. The electronics sector belongs to a sector with fundamental support, performance realization, and acceptable valuation, and will continue to attach great importance to this sector in the future. Mo Haibo (Wanjia Fund): In 2024, the global AI industry is showing a rapid development trend, with the model's capabilities constantly increasing. Both independent AI apps and system-level experiences have made significant progress, driving rapid growth in the number and duration of AI users. The industry is gradually seeing the benefits of AI investment in terms of input and output, leading to a more firm investment in AI, with continuous increase in capital expenditure. Recently, Microsoft has increased its AI-related investment for the 2025 fiscal year to $80 billion, and it is estimated that the overall AI capital expenditure growth rate of major overseas internet companies in 2025 will exceed 50%. Overseas AI development is ahead of China, with China lagging behind overseas in computing power infrastructure by about a year. Under the leadership of ByteDance, domestic companies are expected to significantly increase their AI investment in 2025, with the overall growth rate expected to be higher than overseas. Therefore, 2025 will be a big year for domestic computing power infrastructure. Therefore, we are optimistic about NV chain and domestic computing power targets, with a core focus on computing chips, optical modules, and AI applications. Dong Jizhou (Taixin Fund): It is a consensus that AI is reshaping the entire social structure. In my personal understanding, there are three aspects: 1. LLM has entered the era of "model fairness". The leading advantage of OPENAI models is gradually diminishing, and models on the training side have reached a bottleneck in their ability to rely on stacked computational cards and training data. High-quality models with small parameter quantities can now replace large parameter models in usage scenarios. At the same time, the cost of calling models with the same parameters has significantly decreased, and the hardware foundation for application scenarios is already in place. 2. In the high-speed computing field, the importance of "storage power" and "transmission power" is significantly increasing. 3. In the field of model applications, as a tool for empowering productivity, AI applications have entered the commercialization stage in various fields, such as data services, AI integration into enterprise data flows (CRM/ERP), and many industry-specific applications. In terms of hardware innovation, "cloud, edge, and end" will become the organic whole of AI hardware landing, and AI access at the end will become a trend, such as AI smartphones, AI PCs, AI headsets, and AI glasses. Jin Zicai (Caitong Fund): We continue to have strong confidence in overseas computing power sectors. We believe that the A-share market may still be undervaluing the entire overseas computing power sector. The overseas computing power sector benefits from AI capital expenditure drives and the huge space for future potential application drives. We remain positive. The clear difference between us and the market is that we are quite optimistic about the long-term market space and performance sustainability of the entire computing power sector, but we remain cautiously optimistic about the landing pace of AI at the end. In addition, we consider China's computing power in 2024 to be comparable to overseas computing power at the beginning of last year. China's arms race in AI capital expenditure has just begun, and it is expected to replicate the growth trajectory of overseas computing power from last year. We will prioritize selecting companies that benefit most significantly. Feng Ludan (Zhongou Fund): Artificial intelligence is reshaping the core elements of productivity, which is human cognitive labor. Previous technological revolutions mainly liberated and enhanced human physical labor, but AI is the first technology in history that can make decisions on its own, not just simple automation. This represents the first large-scale substitution and enhancement of human cognitive labor, and its potential lies not only in replacing human labor, but also in unleashing human creativity and increasing overall social production efficiency. The biggest change in the AI industry in the fourth quarter of 2024 is that market attention is shifting slowly from AI infrastructure to AI new hardware and AI applications. We divide AI investments into four stages: the first stage is the construction of AI infrastructure, mainly used to build training centers for large-scale AI clusters. The second and third stages are AI new hardware and AI applications. When models gradually mature and become available, AI transitions from the laboratory to commercial scenarios. In the fourth stage, AI technology is fully integrated and ubiquitous, like water and electricity everywhere. We are currently in the middle to late stages of the first stage, where representative GPU chips are the main battlefield. In the future, we expect more investment opportunities to emerge in AI new hardware and AI application sectors. Another main line we continue to pay attention to is the progress of domestic AI. We are pleased to see the rapid rise of domestic AI, with significant progress in base model capabilities and application landings. Platform-type enterprises are also actively deploying AI applications, seeking new breakthroughs. III. How to look at technology investment opportunities? Liu Huiying (Nuorani Fund): In the fourth quarter of 2024, the Philadelphia Semiconductor Index performed flat, but the A-share semiconductor sector performed well. Looking at the sector structure, the previously emphasized "breakthrough in advanced chip processes is the pivotal point for the long-term development of the entire Chinese chip industry" has been reflected in the stock prices, with excellent performance in the various "bottleneck" links of the domestic chip localization chain. In addition to the demand for localization, the industrial wave of artificial intelligence has brought new demand to Chinese chips, and the long-term upward trend of Chinese chips is irreversible. The technology industry, due to its unique attributes compared to traditional industries, requires a group of "patient capital" to understand the nature of its industrial development. The rise of US Nasdaq technology stocks is supported by a group of "patient long money" that supports the US technology industry. Because they have made industrial trend investment "systematic" and "scientific", they have cultivated global technology giants with market values reaching tens of trillions of dollars. The semiconductor field, due to its "large market, strong importance" attributes, is the battleground for technological competition among various countries. Looking ahead, we have strong confidence that Chinese technology will definitely break through the US blockade, and in this process, the growth of Chinese semiconductors will maintain a relatively high growth rate in the medium to long term. When Chinese technology companies fully break through US.After the sanctions, China's overall semiconductor industry will enter a period of rapid development lasting decades, similar to the NASDAQ in the US stock market, reshaping the global technology industry profit distribution chain. In this process, China's technology sector will produce a group of globally competitive technology giants. This fund is committed to selecting and accompanying these companies as they grow into global technology leaders.Investors should pay attention to both the quality and stability of the companies to ensure the safety and long-term returns of their investments.Yes, in this process, it is important to identify truly certain sectors, rather than simply continuing the logic of high dividend sectors from the past two years. The risk of this sector is that, if the economy confirms recovery in the second half of 2025, this sector may face the possibility of declining investment value and continued outflow of funds.Zhao Feng (Ruiyuan Fund): The yield of national bonds in the fourth quarter has significantly decreased, reflecting both the expectation of loose policy on liquidity and the overall decline in investment returns in the current economic stage. Bonds were strong and stocks were weak throughout the year 2024. The ten-year bond yield decreased by nearly 100 basis points over the year, closing at less than 1.6% on January 3, 2025. With the central bank expected to further loosen liquidity in the future, there is still room for downward movement in short- to medium-term national bond yields. The significant drop in fixed-income asset yields has led to a severe shortage of assets in financial markets, or more accurately, a scarcity of high-yield assets. For many financial institutions, matching asset-liability costs has become a daunting challenge, especially with long-term stable return assets appearing particularly scarce. This situation points to a clear investment opportunity, which is high-quality equity assets with long-term stable returns. Taking the telecommunications operator H shares held as an example, at the beginning of 2024, its dividend yield was about 8% (based on the pre-tax dividend yield for the expected profit in 2024). By the closing of January 3, 2025, based on the expected profit for that year, its pre-tax dividend yield could still reach around 7%, without taking into account its significant net cash assets on the balance sheet or its ability to increase dividend payout ratios. Even considering the impact of dividend taxes, its effective yield remains significantly higher than the ten-year bond yield, also providing a free potential inflation protection option. Of course, there are still some types of assets in the market that are more significantly affected by macroeconomic factors, with potential short-term dividend returns facing certain pressures. However, with a longer investment horizon and considering their stable business models, product penetration rates, and market share, it is still possible to anticipate long-term growth potential in income and profits, especially when combined with dividend returns, making long-term holding returns quite attractive. Luo Jiaming (Zhongou Fund): Due to the rapid decline in national bond yields, high-dividend assets are once again favored by allocation funds, especially index-weighted stocks dominated by banks. In the context of the past economic structural transformation, the valuation of such financial assets is indeed relatively low, and their dividend yields relative to risk-free rates still offer a good value proposition, with room for valuation recovery. As mentioned in our previous quarterly reports, dividend yield is one aspect to consider in equity investments, but not the only one. In a situation where overall market valuations are low, we prefer to allocate funds to high-quality companies with more growth potential. Fundamentally, assets that can generate long-term returns for shareholders must have the ability to generate more free cash flow over the long term, as reflected in financial indicators such as higher return on equity (ROE) or return on invested capital (ROIC). At the same time, we find that the dividend yields of some such high-quality companies may not be lower than the dividend yields of dividend stocks that have undergone significant valuation corrections in recent years. V. How to view investment opportunities in new energy? Li Xiaoxing (Yinhua Fund): From a fundamental perspective, the lithium battery and photovoltaic industries are currently operating at their bottom levels, still digesting excess capacity, with some segments showing signs of stabilization and rebound. Combined with industry self-discipline measures in certain supply-side segments, product prices are not expected to see a significant decline. The wind power industry has already passed the phase of price decline earlier, and accelerated demand may drive the profitability of the entire industry chain. From a stock price perspective, the new energy sector has rebounded in the fourth quarter and is currently at a relatively fair valuation level. We have a positive outlook on companies that continue to expand their cost and technology advantages in this round. Mo Haibo (Wanjia Fund): 1) Market value has already factored in most negative expectations. Over the past 2-3 years, most leading companies in the photovoltaic industry have experienced significant declines, with the market having already fully anticipated the industry's internal competition. 2) There have been positive changes in policies. Starting from the second half of 24, we gradually noticed some positive changes in the policy environment of the photovoltaic industry, with the Central Political Bureau mentioning preventing "internal competition" on 7/30, and a special symposium on preventing "internal competition" in the photovoltaic industry held on 10/14. Several departments have also enacted relevant policies. Overall, we feel that the photovoltaic industry is being supported by domestic policies, and once the policies start to stabilize the industry, the fundamentals are unlikely to deteriorate further. With orderly industry self-regulation and gradual price recovery along the industry chain, inventory levels in certain segments of the photovoltaic industry have already become relatively low. Expectations of seasonal demand recovery after the Spring Festival, combined with further tracking of self-regulatory policies and price changes, suggest that there is some room for price increases. Yang Yu (Huaxia Fund): Regarding lithium batteries, the off-season not being as weak has been validated, with the overall quarter-on-quarter decline expected to be better than in previous years for Q1 2025. Additionally, end-of-year price negotiations with key supply chain partners have been positive, with expected price increases for lithium iron, negative electrodes, 6F, and copper foil, indicating an improvement in profitability. In the medium term, on the demand side, global lithium battery demand is expected to remain strong in 2025, ushering in a year of strong demand. On the profitability side, two consecutive years of industry lows have put the profitability of the industry chain at extremely low levels, with some key players below the 10-year breakeven line and the industry facing widespread losses. The significant slowdown in capacity expansion and increasing capacity utilization rates will lead to improved profitability and bring profitability levels closer to rational levels. Currently, there is still significant room for repair in most segments, and it is worth looking forward to the further increase in industry capacity utilization rates from the second half of 2025 to 2026. Looking ahead, some key points to focus on in the lithium battery sector include: 1) Product upgrades: Lithium iron, fully charged products entering the energy density upgrade phase, clear trend toward high-voltage practices; fast charging differentials, non-public or clearance, new product premiums for battery terminals like Shenxin and large-capacity storage cells, benefiting from better control of costs, leading to higher profits per ton. 2) Elasticity of price increases: With expectations of a weak off-season, early expectations of price increases along the industry chain, attention to the landing of price increase expectations in certain segments, further repairing profitability, offering a cost-effective valuation. 3) Overseas supply chain: With the launch of European carbon and Tesla's new car cycles, marginal changes and continuous improvement in expectations, higher entry barriers and a more complex environment will make leading companies in the industry's overseas chain possess alpha. 4) New technologies: Solid-state batteries are currently in the early stages of choosing technological routes, with each major route having companies implementing them.Focus on the certainty of the materials and equipment market. Continue to be optimistic about leading companies in the lithium battery industry chain.At the current point in time, we are optimistic about the opportunity for a bottom reversal in the photovoltaic sector. In terms of photovoltaics, demand is meeting expectations, and the industry is gradually transitioning from "policy expectations" to "price expectations." On the demand side, global photovoltaic new installed capacity is expected to exceed 500GW in 2024, maintaining a high year-on-year growth rate. In China, new installed capacity from January to November was 206GW, a year-on-year increase of 26%. In overseas markets, cumulative component exports from January to November were 224GW, a year-on-year increase of 29%, with non-Euro-American overseas markets showing positive growth, with exports of 136GW from January to November, a year-on-year increase of 46%. In terms of policies, the industry's self-discipline framework is gradually being implemented, with details continuously being improved. Recently, we have observed signs of price increases in multiple aspects. From the perspective of profit pressure at various stages, market forces have already forced many production capacities to shut down, leading to a slight recovery in price profitability. With the implementation of follow-up self-discipline regulations, the industry chain prices may see positive feedback soon. In terms of wind power, the industry is expected to see a simultaneous increase in quantity and benefit over the next 25 years, and we continue to see investment opportunities in the wind power sector. In terms of offshore wind, the Q4 Jiangsu project has been launched, and the Jiangsu Phase II 7.65GW offshore wind project has begun the bidding process. The bid for the Guangdong Qingzhou 500KV submarine cable has been successful, and both Fanship I and Fanship II have completed wind turbine bidding and sea use changes, accelerating project initiation. Based on the progress of the projects, offshore wind capacity is expected to grow rapidly by 2025, with a vast potential reserve capacity. Meanwhile, various countries overseas are actively bidding for offshore wind sites, with major offshore wind projects and site bids moving forward continuously. Combined with the tight supply of submarine cables and pipe piles, there is potential for domestic companies to expand their offshore opportunities. In terms of onshore wind, there has been a surge in wind turbine bids this year, with wind turbine prices stabilizing. Additionally, domestic wind turbine exports have accelerated, with a surge in overseas orders expected by the end of the year, laying the foundation for significant growth in domestic wind turbines and components in the next 25 years. VI. How to view opportunities for consumer investments? Hu Xinwei (Huatai Fund): In the short term, with the relatively weak economic background, the growth of many consumer companies is slowing down or even fluctuating in terms of income and profits, leading to lower valuations in the market. However, many of these consumer companies have very stable balance sheets, strong cash generation capabilities, and strong dividend capabilities, with dividend willingness also increasing. From the perspective of dividend yield, the static dividend yield of many consumer companies can even rank among the top in the entire market. Therefore, we believe that if the macroeconomic situation does not deteriorate further, the value bottom for many companies is gradually becoming evident. At the same time, with the government's comprehensive efforts to boost the economy, we believe that the fundamentals of the Chinese economy and domestic consumption are expected to stabilize and rebound. Li Xiaoxing (Yinhua Fund): Consumer stocks are currently in a phase of expected improvement after a policy shift, with increasing confidence in the assessment of the bottom. At the same time, the outlook for 2025 is more optimistic. On the one hand, policies have been put forward to vigorously expand domestic demand, with a series of measures on the way. On the other hand, the high household savings rate and overall weak expectations and lack of confidence are still issues, but these are reflected in the valuations of consumer stocks. Core targets like liquor and home appliances have high certainty, valuation, and dividend yield. Improvements in offline retail, and the increase in market share of mid-to-high-end domestic brands are expected to perform well. In addition, the outflow of consumer goods in 2025 is still a long-term trend. Jiao Wei (Yinhua Fund): Concerns and considerations about new consumption and traditional consumption: Undoubtedly, under the new economic situation and social form, the traditional consumption upgrade represented by liquor is facing challenges of consumption stratification. During the era of rapid development in the past, when the entire society was willing to pay a premium for brands, the long-term high ROE of long-tail goods made liquor one of the best business models. But now, this model is facing an awkward situation where the moat is widening while the urban population is slowly decreasing. The biggest risk in the liquor industry is that when a slowdown is needed overall, participants are unwilling to hit the brakes and instead accelerate by stepping on the accelerator. If continuously increasing inventory for unattainable sales targets can solve the problems faced by the liquor industry, it is equivalent to believing that printing money can solve economic stagnation, just as absurd as believing that printing diplomas can solve mental disabilities. We are delighted to see that starting from the third quarter, liquor companies have collectively recognized the inventory problem and begun the difficult process of actively reducing it. After experiencing this process, companies that can rationally, calmly, and practically convert speed targets into dividends for investors will still have tremendous investment appeal. On the other hand, the transformation from consumption upgrade to consumption stratification has given birth to opportunities in a large number of segmented industries, such as fast-moving consumer goods, functional beverages, pet food, emotional consumption, etc., bringing space for small companies. Looking ahead, we believe that the current consumer stratification represents the long-term direction of society, that is, young people are demanding a redistribution of social resources. In this process of redistribution, investment targets that optimize governance structures to reward shareholders or seize the wave of emerging consumption among young people are likely to bring returns to investors. Jin Zicai (Caitong Fund): Bullish on companies in the consumer sector that have new business models and new product forms, especially the former. We believe that the main source of excess returns in the consumer sector in the future will come from innovation. Companies that adapt to the current macro environment and make certain changes are likely to benefit. We especially favor companies that tailor to current cost-effective consumer trends in new business formats for their growth potential in the future. VII. How to view investment opportunities in the pharmaceutical sector? Ge Lan (Zhongou Fund): Different sub-industries in the pharmaceutical industry are at different profit cycles, but overall stability is maintained. Some sub-industries, although still at low levels in terms of performance, have seen stabilization or recovery in leading indicators such as new orders. At the policy level, the National Medical Insurance Administration is exploring multiple payment mechanisms for innovative drugs, promoting the empowerment of commercial medical insurance. Potential commercial insurance increments will help expand the domestic medical market space and improve patient treatment experiences. At the same time, the National Medical Insurance Administration is also studying the formation of a Class C drug catalog to support timely inclusion of new and good drugs in the reimbursement scope. At the national level, initiatives such as centralized procurement and negotiations for innovative drugs continue to guide the industry toward "high innovation," "high clinical value," and "high cost-effectiveness" trends. The negotiation of national innovative drugs, centralized procurement of in-vitro diagnostic reagents by 2024, and the fifth batch of high-value consumables procurement all collectively reflect this trend.The framework is stable, and the price reduction basically meets expectations. The tenth batch of centralized procurement of generic drugs also reflects the national-level continuous and in-depth promotion of the idea of centralized procurement of generic drugs.n the aspect of operation, pharmaceutical companies have already adapted to the new compliance environment, and overall sales are stable; some high-difficulty generic drugs are expected to receive overseas approvals in the fourth quarter, bringing new revenue growth opportunities for related companies; innovative drug companies are still making progress in overseas authorization, with multiple breakthroughs in small molecule, ADC, multi-antibody, nucleic acid drugs, leading to blockbuster deals with prepayments exceeding $500 million and increasing collaborations with Newco. Despite facing financial pressures from demand-side in equipment and other areas, it is expected that procurement and bidding will improve in the fourth quarter compared to the third quarter. Based on long-term value investment principles and considering factors such as the company's profit cycle, historical valuation levels, and operational trends, we continue to focus on innovative drugs and their industry chain, OTC, consumer healthcare, and other sectors. Looking forward to the first quarter of 2025, we remain optimistic about innovative drugs and their industry chain. Overseas investment and financing are steadily recovering, domestic investment and financing are gradually bottoming out, and domestic companies are continuously gaining funds through external authorization and Newco, providing a foundation for future research and development investments. This is partly reflected in the stabilization or improvement of order growth in the innovative drug industry chain. Globally, the FDA has historically approved stem cell therapy for the first time, marking an important breakthrough in related drug fields; in addition, the discoverer of MicroRNA was awarded the Nobel Prize in Physiology or Medicine in 2024, creating anticipation for the future development space of small nucleic acid drugs. In the field of medical equipment, as replacement projects are gradually implemented and major economic policies are announced, the procurement of essential equipment is expected to recover to some extent, despite some delays, and company performance will gradually improve as bidding resumes. Li Xiaoxing (Yinhua Fund): The recent positive statements encouraging the development of commercial insurance in the pharmaceutical industry, as well as the gradual implementation of commercial insurance in various regions, indicate the possibility of "open-source". Zhao Bei (Industrial Bank Ruixing Fund): The pharmaceutical industry index saw a short-term sharp rebound after the macro policy expectations changed in late September, but it fluctuated down after peaking in the fourth quarter, underperforming the overall market. The third-quarter industry performance was lower than expected, and disruptions caused by collective procurement policies in the fourth quarter were important factors affecting stock prices and expectations. We believe that short-term uncertainties such as domestic medical insurance cost pressures and overseas tariff policies still exist, but due to the essential nature of the pharmaceutical industry, performance remains somewhat resilient. The valuation of the pharmaceutical industry has shrunk for four consecutive years, and negative expectations have been fully reflected. The valuations of some companies are at reasonable or even undervalued levels, and in the long-term, they may receive returns matched with performance growth. We are optimistic about investment opportunities in innovative, consumption upgrade, and internationalization direction that align with industry and policy trends. The overall innovative drug sector benefits from the rate-cut cycle of the Federal Reserve. We believe that the research and development capabilities of domestic innovative drug companies are rapidly aligning with global standards and gaining global advantages in some subfields, gaining recognition from overseas multinational pharmaceutical companies. The "license-out spree" in the industry over the past two years is a specific manifestation of this industrial trend. In the context of the "capital winter" and stricter regulations, the domestic innovative drug industry is also experiencing "supply-side reforms". This is favorable for leading innovative drug companies with advanced products, strong R&D execution, robust financial reserves, and strong sales realization capabilities, as the level of industry competition is expected to significantly decrease in the future. Therefore, we have increased our allocations to innovative drug companies with strong research and development capabilities and potential for internationalization. As for the innovative drug research and development outsourcing service (CXO) industry, with the end of the Federal Reserve's rate-hiking cycle, overseas investment and demand for innovative drug research and development are expected to gradually rebound. However, the potential sanctions risk faced by leading Chinese CXO companies has added uncertainty to the future development of the CXO sector. With the delay in the progress of the "Biosafety Act" in the fourth quarter of 2024, we have appropriately increased our allocations to the CXO sector. For CXO and upstream research companies mainly driven by domestic demand, although the domestic new drug research and development environment has not shown significant improvement, positive policy support from the government suggests a gradual stabilization and recovery in the future, so we have also increased some allocations to this sector. The traditional Chinese medicine industry continues to receive policy support, and favorable policies such as adjustments to the basic drug catalog are still pending. Although the industry showed clear differentiation in the third quarter, with some OTC companies experiencing performance fluctuations due to inventory reduction, the major holdings companies continue to maintain steady performance growth. We believe that the valuation of leading companies in the traditional Chinese medicine industry still has room for improvement compared to stable growth assets such as utilities and consumer goods. For traditional Chinese medicine companies that have improved management in recent years and can navigate through the pandemic cycle for long-term stable growth, there are still significant investment opportunities. Sun Wei (Huashang Fund): The pharmaceutical sector currently faces both opportunities and challenges. The challenges include significant pressure on medical insurance funds, continued policies of collective procurement and cost control, and ongoing anti-corruption actions in the medical field, which still affect medical equipment and some drugs. The uncertain overseas environment, especially the risks related to the US government's Biosafety Act and tariff policies towards Chinese pharmaceutical companies, require continuous observation of future developments. As a result, overall performance in the pharmaceutical sector is not very bright. The opportunities we currently see are mainly in innovative products, as the medical insurance policies are more friendly towards innovative drugs and devices, and companies with strong product capabilities will seek opportunities through overseas expansion. VIII. How do you view military industry investment opportunities? Li Xiaoxing (Yinhua Fund): The national defense and military industry outlook for 2025 will enter the final year of the "14th Five-Year Plan", and industry demand is expected to transition from weak recovery to strong recovery, with backlogged orders from the past two years expected to be released. We are optimistic about the industry chain, including long-chain main manufacturers, core supporting businesses of central SOEs, missile industry chains with full turnaround, as well as new directions such as commercial aerospace, low-altitude economy, and domestic large aircraft. He Chongkai (Yifangda Fund): In the fourth quarter of 2024, the performance of the military industry sector relatively outperformed the broad market index, with companies performing well also influenced by the overall market style in the fourth quarter. For example, companies related to themes like "stealth materials", "satellite internet", and "low-altitude economy" saw significant excess returns in their stock prices. According to our analysis and forecast of the major military companies, some relatively high-quality military companies are in a situation of declining orders and gross profit margin this year, which is the main factor affecting stock prices. However, the sector overall has not shown significant growth potential.Our research has also found many positive factors, such as the fact that many information indicates that the R&D projects in the defense industry are very heavy, which suggests that the defense industry may face a relatively positive and optimistic demand in 2025.In 2025, the last year of the "14th Five-Year Plan", demand for military equipment is expected to be relatively strong. At the same time, we believe that the impact of military personnel adjustments on equipment procurement is nearing an end, so we are optimistic about the industry's excess returns in 2025. Within the military industry sector, we are optimistic about (1) main factories benefiting from the deployment of core advanced equipment; (2) the aircraft and engine industry chain benefiting from military aircraft, C919, and the global civilian aircraft capacity transfer; (3) the military electronic sector benefiting from informatization and autonomous controllability requirements; (4) the advanced military materials sector represented by titanium alloys, carbon fibers, high-temperature alloys, and stealth materials; (5) the marine engine sector with a good landscape, high prosperity, and benefiting from technological upgrades brought about by carbon reduction. Hu Ze (Yongying Fund): Looking ahead to 2025, we believe it will be a year in which new quality productivity will take on the new momentum of economic growth. Many new technologies and new formats will gradually emerge, with the low-altitude economy being an important representative. Low-altitude airlines have already been established, and we expect relevant development policies to be gradually and orderly released. We believe there will still be many catalysts ahead. For example, infrastructure construction in pilot cities, nationwide low-altitude economic pilot documents, operation of demonstration projects, establishment of more industry funds, and so on. 9. How do you view investment opportunities in cyclical goods? Shi Cheng (Guotou UBS Fund): Upstream resource products, as well as chemical products with resource attributes, are likely to be at a long-term bottom in prices. By the end of 2024, the supply increase in all stages has basically ended, and supply will not be the main factor troubling most sectors of the new energy industry. From the demand side, there are both existing downstream sectors maintaining high growth rates and new emerging markets. We anticipate an investment node for resource products, but typically a price increase occurs during the industry peak season, so we may need to wait a while longer for the market conditions in 2025. Wu Qingyu (Xinda Australia Fund): With the shift in policy direction, the pessimistic outlook for procyclical varieties in domestic demand has been restored. However, it is necessary to understand clearly that the transmission of monetary and fiscal policies to the real fundamentals still has a time lag, and it is highly unlikely to see an immediate recovery in industrial enterprise profits and an immediate reversal of the supply-demand pattern in upstream industrial products. Moreover, in the past few years, there has been excessive capacity expansion pressure, and we expect the fundamentals of industrial products, especially the midstream processing sector, will still need time to bottom out until real demand improves. In summary, although there is strong certainty in the direction of the cycle, the path of development may not be smooth. Therefore, considering the strong certainty in the cyclical direction and the weaker fundamentals in the real aspect, we still favor resource and broad resource cyclical products in the current situation that have earnings support, reasonable valuations, and supply contraction, while paying attention to high-quality cyclical growth leaders with long-term cost advantages that can withstand cycles in related sub-industries. Li Xiaoxing (Yinhua Fund): We have different views on different sub-sectors of the cyclical sector and have reduced varieties that rely more on price elasticity in the sector. We will make further judgments based on the direction and pace of internal demand stimulation. We favor high dividend directions, especially some varieties with strong certainty in supply-side constraints. Due to adjustments in international oil price policies in the fourth quarter, oil prices have undergone a round of corrections, but we believe that this policy poses certain difficulties and lacks internal logic, so we are not pessimistic about oil prices and have increased positions in some oil and gas industry targets during downturns. Green energy stocks have seen a sufficient price correction due to unstable profit expectations, but the long-term inevitability and short-term urgency of their development are beyond doubt. If accompanied by appropriate support for a smooth transition, related targets have also entered a suitable allocation range. Hu Yibin (Huaan Fund): The irreversible changes brought about by the global clean energy revolution in upstream resource costs and supply patterns are expected to lead to positive changes in profitability and valuation in key resources for some downstream industries, including strategic emerging industries, particularly state-owned and central enterprises that play a leading role in the industry. Sun Xiao (Zhonggeng Fund): Resource companies represented by basic metals and precious metals are: 1) Medium-term supply constraints are rigid, with basic metals generally exhibiting characteristics of tight resource constraints, weak production capacity elasticity, and prices that are more likely to rise than fall, leading to continued upward pressure on price center. 2) The demand side faces short-term pressure, with price suppression caused by a strong US dollar, but with a relatively stable supply-demand pattern, changes in macroeconomic policies, and the rise of new and old demand, there is still hope for a resonance of domestic and foreign demand. 3) Some companies have high asset values and still have good expectations for volume growth, with leading companies or integrated companies having good growth, profitability, and dividend potential, with relatively low valuations and potentially high levels of potential return. 10. How do you view investment opportunities in Hong Kong stocks? Li Xiaoxing (Yinhua Fund): In the fourth quarter, due to temporary concerns of foreign investors about international relations, the stock prices of high-quality companies in the internet sector in Hong Kong have experienced a significant decline, and the valuations are now very attractive. Most internet companies have maintained high growth in performance over the past few years, mainly driven by rapid profit margin recovery, and we expect stable revenue growth as macro policies gradually take effect. With the commercialization of AI, we believe internet companies will be at the forefront of concentrated application landing, and we are optimistic about the gradual commercialization of AI applications. Sun Xiao (Zhonggeng Fund): Hong Kong stocks in the internet sector benefit from economic recovery and stabilizing consumption, continue to invest in new technologies such as AI, and possess both growth potential and sustainable returns. 1) A shift in policy-friendly environment benefits the recovery of internet companies. The shift in policy boosts the economy, providing a favorable environment for internet companies to develop and expand their businesses. E-commerce, advertising, local life services, and other fields are closely related to economic recovery, and policies such as trade-ins and subsidies stimulate demand recovery, which is structurally favorable for the performance growth of internet companies. 2) Platform companies have deep competition barriers, developing into "infrastructure" for people's daily lives, and are poised to capitalize on new technological opportunities. Leading companies are deeply rooted in their respective fields, with a wide user base and strong research and development capabilities, especially platform companies such as e-commerce and social networking companies that have strong network effects. Investing in cloud computing, big data, artificial intelligence and other technologies, they are poised to grasp digital transformation, open new product cycles, business models and application scenarios, and gain new growth momentum. 3) With great growth potential, sustainable shareholder returns. Internet leaders have shown strong performance in weak economic cycles, with strong profitability and dividend potential, and low valuations, indicating high potential returns.Profitability resilience, and the economic recovery phase is expected to quickly unleash growth potential; some companies have lower valuations, and focusing on diversification of shareholder returns such as dividends and buybacks has become the norm, with sustainability expected.Liu Yang (Guotou UBS Fund): Looking ahead, overseas factors will continue to disrupt the Hong Kong stock market, especially the direction of Sino-US relations. Although the market has already anticipated possible trade policies, the Hong Kong stock market has still experienced some adjustments with the results of the US election and cabinet appointments. In the long term, we believe it is more important to pay attention to China's own fundamentals and closely track whether more positive policies will be implemented. Although various support measures may take some time to take effect, we believe that the policy direction is now clearer, which should help improve economic prospects and consolidate investor confidence. This article is reprinted from the "Yaowanhou City" WeChat public account, author: Xingzheng Strategy Team; GMTEight Editor: Liu Jiayin.