【Abstract】Lan Fo'an, Minister of Finance: There is still a large room for the central government to increase the deficit; Lan Fo'an: It is planned to increase the debt limit of a larger scale at one time to replace the stock of implicit debts of local governments; Liao Min, Vice Minister of Finance: Special bonds will be used to acquire stock commercial housing; State Administration of Financial Regulation: is taking the lead in drafting local financial supervision and administration regulations; Seven departments jointly issued opinions on promoting the high-quality development of the futures market; CPI rose 0.4% year-on-year in September, and is expected to rebound moderately in the fourth quarter; China Association of Automobile Manufacturers: Sales of new energy vehicles in September increased by 42.3% year-on-year; A number of banks have issued announcements that the interest rate of the existing housing loan will be adjusted from the 25th.

Hot spotlight

1. Minister of Finance Lan Fo'an: There is still a lot of room for the central government to raise the deficit

Finance Minister Lan Foan said at a press conference of the State Council Information Office on October 12 that counter-cyclical adjustment is by no means limited to four points, and other policy tools are being studied, and the central government still has a large room for deficit improvement.

2. Lan Fo'an: It is planned to increase the debt limit of a larger scale at one time to replace the stock of implicit debts of local governments

Minister of Finance Lan Foan said at a press conference on October 12 that it is planned to increase the debt limit on a large scale at one time, replace the stock of implicit debts of local governments, and increase efforts to support local governments to resolve debt risks.

3. Lan Fo'an: Issuing special treasury bonds to support large state-owned commercial banks to replenish capital

On October 12, Minister of Finance Lan Foan said at a press conference of the State Council Information Office that since the beginning of this year, the financial sector has adhered to a proactive fiscal policy to moderately strengthen and improve quality and efficiency. China's fiscal resilience is sufficient, and through comprehensive measures, it can achieve a balance of revenues and expenditures and meet the annual budget target. The Ministry of Finance will issue special treasury bonds to support large state-owned commercial banks in replenishing their capital.

4. Lan Fo'an: It is planned to launch a number of measures to deepen the reform of the fiscal and taxation system that are mature and accessible this year and next year

Lan Foan, Minister of Finance, said on October 12 that he would step up the introduction of the implementation plan for deepening the reform of the fiscal and taxation system, adhere to the problem-oriented and goal-oriented, focus on accelerating the reform and promoting the scientific management and organic combination of finance, and actively respond to the concerns of the society and the grassroots. An implementation plan for deepening the reform of the fiscal and taxation system has been initially formed as a general roadmap for future reform. We will step up efforts to promote the implementation of reform measures, and plan to launch a number of reform measures that are mature and accessible this year and next, especially some basic systems related to top-level design, such as improving the budget system and improving the fiscal transfer payment system.

5. Liao Min, Vice Minister of Finance: Special bonds will be used to acquire the stock of commercial housing

On October 12, Liao Min, Vice Minister of Finance, said at a press conference of the State Council Information Office that in the next step, the Ministry of Finance will actively study and introduce incremental measures conducive to the steady development of real estate to support the acquisition of stock housing. Increase the supply of affordable housing. Considering that there are currently relatively many homes built for sale. There are two main support measures: one is to make good use of special bonds to purchase the stock of commercial housing and use it as affordable housing in various places. The other is to continue to make good use of the subsidy funds for affordable housing projects.

6. Liao Min, Vice Minister of Finance: Special bonds are allowed to be used for land reserves, and areas that are really in need can be used for new land reserve projects

On October 12, Liao Min, Vice Minister of Finance, said at a press conference of the State Council Information Office that the Ministry of Finance and relevant departments are working in the same direction to focus on promoting the balance of supply and demand in the real estate market. In the next step, the Ministry of Finance will actively study and introduce incremental measures conducive to the steady development of real estate, allowing special bonds to be used for land reserves, mainly considering that there is a relatively large amount of idle and undeveloped land in various places, and areas that are really needed can be used for new land reserve projects.

7. State Administration of Financial Supervision: It is taking the lead in drafting local financial supervision and management regulations

Zhang Qijun, a first-level inspector of the Inclusive Finance Department of the State Administration of Financial Regulation, said at the 2024 Tianjin Fifth Avenue Financial Forum on October 13 that at present, the State Administration of Financial Supervision is focusing on promoting three key tasks. The first is to focus on making up for the shortcomings of the system. "We are taking the lead in drafting local financial supervision and management regulations, and actively soliciting the opinions of relevant departments to promote the introduction of higher-level laws as soon as possible." Zhang Qijun said that at the same time, combined with the characteristics and development laws of the leasing industry, optimize and improve the regulatory supporting policies, and further promote the standardized and orderly development of financial leasing companies. The second is to guide the industry to actively serve the national development strategy. The third is to continue to optimize the development environment of the industry.

8. Seven departments jointly issued opinions on promoting the high-quality development of the futures market

On October 11, the General Office of the State Council forwarded the "Opinions on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Futures Market" issued by seven departments, including the China Securities Regulatory Commission and the National Development and Reform Commission. This comprehensive document specifically for the futures market systematically and comprehensively deploys policies and measures in eight aspects to promote the construction of a comprehensive and three-dimensional futures market development and regulatory layout. The Futures Supervision Department of the China Securities Regulatory Commission said that the "Opinions" are based on the actual situation of the futures market, in accordance with the three stages of 2029, 2035 and to the middle of this century, and designed a reasonable and progressive development goal.

9. The four departments issued the "Opinions on Giving Play to the Role of Green Finance to Serve the Construction of a Beautiful China".

The People's Bank of China and other four departments issued the "Opinions on Giving Play to the Role of Green Finance to Serve the Construction of a Beautiful China". The "Opinions" make it clear that focusing on the actual needs of the construction of a beautiful China, we will make overall plans for a number of landmark major engineering projects and increase docking financing support. In accordance with the requirements of coordinated promotion of carbon reduction, pollution reduction, green expansion, and growth, we will build a Beautiful China construction project library around key areas such as the construction of the Beautiful China Pilot Zone, the green and low-carbon development of key industries, the in-depth promotion of pollution prevention and control, and ecological protection and restoration, so as to effectively improve the accuracy of financial support.

CPI rose 0.4% year-on-year in October and September, and a moderate recovery is expected in the fourth quarter

On October 13, the national consumer price index (CPI) released by the National Bureau of Statistics in September rose by 0.4% year-on-year, down 0.2 percentage points from the previous month, and was flat month-on-month, while the national producer price (PPI) fell by 2.8% year-on-year, an increase of 1.0 percentage points from the previous month, but the month-on-month decline narrowed. Huang Runan, co-chief macro analyst of Guotai Junan Securities, said that in late September, boosted by a package of incremental policies, a number of price indicators have shown signs of stabilization. The monitoring of the market prices of 50 important means of production in 9 categories in the national circulation field shows that in late September, compared with mid-September, the prices of 26 products increased, 21 decreased, 3 remained flat, the number of increases increased by 8, the number of declines decreased by 9, and the number of flats increased by 1. The domestic black chain has stabilized and rebounded. This trend is expected to continue in October. Huang Runan believes that in the next stage, the global interest rate cut wave and the expected soft landing of the United States economy will heat up, coupled with the combined domestic policy and low base effect, it is expected that the price level will rise moderately in the fourth quarter.

11. China Association of Automobile Manufacturers: The sales volume of new energy vehicles in September was 1.287 million, a year-on-year increase of 42.3

According to data from the China Association of Automobile Manufacturers, the production and sales of new energy vehicles in September 2024 will be 1.307 million and 1.287 million units, respectively, an increase of 48.8% and 42.3% year-on-year, respectively, and new energy vehicle sales will account for 45.8% of the total new vehicle sales. From January to September, the production and sales of new energy vehicles were 8.316 million and 8.32 million respectively, an increase of 31.7% and 32.5% year-on-year, respectively, and new sales of new energy vehicles accounted for 38.6% of the total new car sales.

12. A number of banks issued announcements that the interest rate of the stock mortgage will be adjusted from the 25th

On October 12, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and other banks successively issued announcements that from October 25, the interest rates of existing personal housing loans will be adjusted in batches. Except for the case where the loan is in Beijing, Shanghai, Shenzhen and other regions and is a second home loan, the interest rate of other eligible housing loans will be adjusted to the loan market prime rate LPR-30BP. A number of banks have made it clear that the adjustment of the interest rate of the existing housing loan will be adjusted in batches by the bank, and customers do not need to apply. If the interest rate of the borrower's existing mortgage is already lower than the loan prime rate LPR-30BP, it will not be adjusted. For fixed-rate existing housing loans, it is necessary to convert to a floating interest rate of the loan prime rate LPR plus or minus points, and then the bank will directly adjust it.

Thematic opportunities

1. A number of landmark major projects for the construction of a beautiful China are expected to be launched

Recently, the People's Bank of China, the Ministry of Ecology and Environment and other four departments jointly issued the "Opinions on Giving Play to the Role of Green Finance to Serve the Construction of a Beautiful China", which put forward 19 key measures from the aspects of increasing support in key areas, improving the professional service capacity of green finance, enriching green financial products and services, and strengthening implementation guarantees. Focusing on the actual needs of the construction of Beautiful China, we will make overall plans for a number of landmark major engineering projects, and increase docking and financing support. Zheshang Securities believes that the monetary and financial side will cut interest rates and reserve requirements, and the financial side will issue and use ultra-long-term special treasury bonds and local government special bonds. The worst point for the environmental protection industry has passed by improving the financing capacity of local policies to replenish fiscal funds, promote new environmental protection projects, and solve the historical accounts receivable problem. The environmental sector is expected to benefit from the recovery of economic expectations, the improvement of fiscal conditions and the rebound in valuations.

2. The Ministry of Finance's support for local governments to resolve debt risks is the largest in recent years

On October 12, Minister of Finance Lan Foan said that in order to alleviate the pressure on local governments, in addition to continuing to arrange a certain scale of bonds in the new special bond limit every year to support the resolution of existing government investment project debts, it is planned to increase the debt limit of a larger scale at one time, replace the stock of local government implicit debts, and increase efforts to support local governments to resolve debt risks. This will be the most powerful measure to support debt in recent years. Guosheng Securities believes that the scale of this round of debt swap is expected to be close to 2015-2018, and the specific scale needs to be closely watched at the meeting of the Standing Committee of the National People's Congress at the end of the month. Huajin Securities believes that the policy statement of this conference is positive, which is expected to dispel investors' concerns about policy force and weak economic fundamentals. With the acceleration of debt expansion, some AMCs and local urban investment companies with large market capitalization and low valuations may benefit.

3. The driverless taxi industry will run faster and faster when the space for full commercialization is opened

At Tesla's "Robotaxi Day" event, Musk released the CyberCab, a driverless taxi with no steering wheel and no pedals, and brought 50 driverless cars to the scene. In Musk's eyes, the CyberCab vehicle is expected to cost less than $30,000 to manufacture, and in the future, the cost of traveling a driverless cab will drop from $1 per mile to $0.28 per mile as it scales out. The reduction of costs will make it possible for a new business model, that is, the owner buys a car with unmanned driving ability, and when the car is not needed, the car takes the initiative to go out and "take orders" to make money. At present, in the driverless taxi track, China and United States are ahead of the rest of the world in terms of technology level and commercial landing. The accelerated implementation of Tesla's CyberCab will also have an impact on China's driverless taxi industry chain.

Company News

1. CICC: It was filed by the China Securities Regulatory Commission (CSRC) on suspicion of failing to be diligent and conscientious in sponsoring the initial public offering of shares

CICC (601995) announced on the evening of October 11 that the company received the "Notice of Case Filing" from the China Securities Regulatory Commission, and the China Securities Regulatory Commission decided to file a case against the company because the company was suspected of failing to be diligent and conscientious in the sponsorship business of Silxin's initial public offering of shares. The company will actively cooperate with the relevant work of the China Securities Regulatory Commission and fulfill its information disclosure obligations in strict accordance with regulatory requirements. At present, the company's business situation is normal.

2. SDIC Power: Invest 962 million pounds to build the Yingqijiao project

SDIC Power (600886) announced on the evening of October 11 that the company, through its United Kingdom wholly-owned subsidiaries Redstone Energy and Ireland Power Company (hereinafter referred to as "ESB"), established a joint venture company in November 2020 to hold 50% of the shares of Inch Cape Offshore Limited (hereinafter referred to as "ICOL Company"). ICOL will be the main company responsible for the development and subsequent construction of the Enchiko Project. The Inch Point project is located in the North Sea region of Scotland, about 15 kilometers from the coast of Angus in eastern Scotland, with a planned installed capacity of 1,080MW and plans to install 72 15MW wind turbines. The total dynamic investment of the Enchiko project is 4.166 billion pounds (including transmission projects), and Redstone Energy is expected to contribute no more than 962 million pounds according to its shareholding ratio.

3. Hongbo shares: the major contract of the wholly-owned subsidiary was terminated

Hongbo Co., Ltd. (002229) announced on the evening of October 11 that on July 27, 2023, the company's wholly-owned subsidiary, InBev Digital, signed the "Purchase and Sales Contract" with Unisplendour Xiaotong, and InBev Digital purchased some of the equipment required by the AI Innovation Empowerment Center from Unisplendour, with a total contract amount of 494 million yuan. Due to changes in the macro environment, the original contract could no longer be performed, and the company decided to terminate the original contract to Unisplendour Xiaotong. The equipment to be purchased by the company involved in the original contract is computing power servers and supporting equipment, and the company has purchased from a third party and has received relevant equipment for replacement, and the termination of the original contract will not affect the normal development of the company's related business; The company has paid a small amount of advance payment in the original contract, and part of it has been used to offset the purchase price of other equipment and received the goods, and the company believes that the termination of the original contract will not have a material adverse impact on the company's financial position.

4. Shanying International: SVP intends to make an offer to acquire Nordic Paper, a subsidiary of the company

Shanying International (600567) announced on the evening of October 13 that Strategic Value Partners, LLC (hereinafter referred to as "SVP"), through its subsidiary, intends to issue a public cash offer to shareholders of Nordic Paper Holding AB (publ) (hereinafter referred to as "Nordic Paper") to acquire its entire equity at a cash offer of 50 Sweden kroner per share. Nordic Paper currently has a total share capital of 66,908,800 shares, and the total consideration for the offer is approximately 3.345 billion Sweden kronor (approximately RMB 2.277 billion at the exchange rate on October 10). The company indirectly holds 32,220,300 shares of Nordic Paper through SUTRIV Holding AB, accounting for 48.16% of the total share capital of Nordic Paper. SUTRIV Holding AB has undertaken to accept the offer of the shares for a total consideration of approximately 1.611 billion Sweden kronor (approximately RMB1.097 billion). Shanying International said that the company intends to further optimize the allocation of resources and focus on the development of the core industrial chain by reducing the proportion of its business in Europe. The sale of shares does not mean that the company's pace of expanding overseas markets has stopped.

5. Zhongfu Industry: It is planned to acquire 24% of the shares of Zhongfu Aluminum held by the controlling shareholder for 1.254 billion yuan

Zhongfu Industrial (600595) announced on the evening of October 11 that the company intends to acquire 24% of the shares of Henan Zhongfu Aluminum Co., Ltd. (hereinafter referred to as "Zhongfu Aluminum") held by the controlling shareholder Henan Yulian Energy Group Co., Ltd. (hereinafter referred to as "Yulian Group") with its own funds, with a purchase price of 1.254 billion yuan. After the completion of the acquisition, the company will hold 100% of the equity of Zhongfu Aluminum, which can further enhance the company's electrolytic aluminum and "green hydropower aluminum" equity production capacity, which is conducive to enhancing the company's profitability and sustainable development ability.

6. Guangzhi Technology: It is planned to purchase 100% of the shares of Pioneer Electrical Technology of PVD sputtering target company

Guangzhi Technology (300489) disclosed a major asset restructuring plan on the evening of October 13, the company intends to purchase 100% of the shares of Pioneer Electronic Technology Co., Ltd. (hereinafter referred to as "Leadtek") held by all 55 shareholders of Pioneer Electronic Technology Co., Ltd. (hereinafter referred to as "Leadtek") by issuing shares and paying cash, and at the same time intends to issue shares to no more than 35 specific investors to raise matching funds. The transaction price for LEAD's 100% stake has not yet been determined. LEAD is committed to the R&D, production and sales of advanced PVD sputtering targets and evaporation materials, as well as the recycling, purification, preparation and sales of high-purity dispersed metals and compounds, which are mainly used in downstream markets including display panels, advanced photovoltaics, semiconductors and new solid-state fuel cells. Through this reorganization, the main business of LEAD will effectively enrich the company's business chain and expand the company's main business scope. Before this transaction, the controlling shareholder of the company was Yuebang Investment, and the actual controller was Zhu Shihui. After the completion of the transaction, the controlling shareholder of the company is expected to be changed to Pilot Rare Materials, and the actual controller is still Zhu Shihui. The company's shares will resume trading from the opening of the market on October 14.

7. Fiberhome Communication: It is planned to raise no more than 1.5 billion yuan from China Information Technology

Fiberhome Communications (600498) announced on the evening of October 11 that it plans to raise no more than 1.5 billion yuan from China Information Technology, which will be used to supplement liquidity after deducting relevant issuance costs. Prior to the issuance, Fiberhome Technology was the controlling shareholder of the company, and the State-owned Assets Supervision and Administration Commission of the State Council was the actual controller of the company. China Information Technology is funded and controlled by the State-owned Assets Supervision and Administration Commission of the State Council, and it holds 92.69% of the shares of Fiberhome Technology through its wholly-owned subsidiary, Wuhan Institute of Postal Sciences. The issuance will not lead to a change in the controlling shareholder and actual controller of the company, and will not lead to the company not having the listing conditions.

8. Xilinmen: It is planned to raise no more than 850 million yuan from the subsidiary of the controlling shareholder

Xilinmen (603008) disclosed on the evening of October 13 the plan to issue A-shares to specific objects in 2024, and intends to raise no more than 850 million yuan from Xinhong Investment for the Xilinmen Smart Home Industrial Park project (Phase II) and supplementary liquidity, with an issue price of 12.81 yuan per share. Xinhong Investment is a wholly-owned subsidiary of the company's controlling shareholder.

9. Borui Pharmaceutical: Phase II clinical trial of BGM0504 injection for weight loss indication achieved the expected goal

Borui Pharmaceutical (688166) announced on the evening of October 13 that the phase II clinical trial of BGM0504 injection independently developed by its wholly-owned subsidiary, Borui Xinchuang, for the treatment of non-diabetic overweight or obesity has reached the expected goal. This provides data support and reference for the follow-up clinical study of BGM0504 injection, but the final weight loss efficacy needs to be further confirmed by the follow-up phase III confirmatory clinical study in Chinese non-diabetic overweight or obese subjects with a large sample size.

10. Rockchip: Net profit in the first three quarters increased by 339.75%-365.62% year-on-year

Rockchip Micro (603893) released a performance forecast on the evening of October 11, and it is expected to achieve a net profit attributable to the owners of the parent company of 340 million yuan to 360 million yuan in the first three quarters of 2024, a year-on-year increase of 339.75% to 365.62%. In the first three quarters, the demand for AIoT product lines showed group growth. The company gives full play to the advantages of the "goose-shaped square" layout of AIoT chips, takes the RK3588 series as the flagship, forms a multi-level product portfolio to meet different needs in each product line, and gives full play to the advantages of NPU in the implementation of AI algorithms, so as to promote the continuous increase of market share in AIoT multi-product lines. At the same time, the company's new products RK3576, RK2118, RV1103B and other products have been quickly introduced to the top customers in the target fields, forming a new increment and will continue to release incremental value in the future.

11. VeriSilicon: The net profit in the third quarter was 111 million yuan, and the loss narrowed year-on-year

VeriSilicon (688521) announced on the evening of October 13 that it expects a net profit of 111 million yuan in the third quarter of 2024, a year-on-year decrease of 45.3825 million yuan. The company maintained the trend of operating improvement in the third quarter, and the operating income is expected to be 718 million yuan, an increase of 16.96% month-on-month and 23.6% year-on-year. The company expects that the new orders signed in the third quarter of 2024 will be 648 million yuan, and the orders in hand as of the end of the third quarter of 2024 will be 2.138 billion yuan, and the orders in hand have remained high for four consecutive quarters, of which the proportion of revenue is expected to be 78.26% within one year. The company's order situation is good, laying a solid foundation for future performance transformation.