Auto We think the gradual withdrawal of NEV subsidies has been anticipated by thesector, as it is in line with the government's intention to make sector development moremarket-oriented. We continue to recommend Geely Auto (175 HK) and Brilliance China(1114 HK). Total BMW sales in China picked up 14.2% YoY to 50412 units in Oct. Thenew 5 series is still going through a ramp-up in China. We suggest watching Yongda Auto(3669 HK) and Zhengtong Auto (1728 HK) given the large proportion of BMW models intheir car sales mix.    Tourism Haichang Ocean Park (2255 HK) recorded revenue growth of nearly 20% duringthis year’s National Day/Mid-Autumn Day holiday week, and Shanghai Haichang OceanPark is expected to open in Aug 2018.    Education Given a structural supply shortage of K12 education resources in China, wehighlight TAL Education (TAL US), New Oriental Education (EDU US) and WisdomEducation (6068 HK).    Juvenile products The two-child policy should boost demand in the juvenile productindustry. The acquisition of the branded non-durable maternity, baby and children (MBC)product businesses from Goodbaby China has increased Goodbaby International’s (1086HK) exposure to the fast-growing China market.    Home appliance Ongoing consumption upgrade and rising industry concentration willbenefit leading white goods manufacturers. During this year’s Singles’ Day onlineshopping spree, Haier posted strong sales performance in the home appliance category.    We continue to like Haier Electronics (1169 HK).    Key risks include an economic downturn, the different investment styles in the A-shareand HK markets, and volatility in the Rmb/HK$ exchange rate.

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