Core Insights - The report emphasizes the positive outlook for domestic demand, which is expected to drive the development of new productive forces, as highlighted by the national financial work conference held on December 27-28, 2025 [5][13] - The aerospace sector continues to show high prosperity, with the China Aerospace Science and Technology Corporation achieving a record 73 space launch missions in 2025 [5][14] - The report recommends focusing on companies that align with the "S-curve" evolution, emphasizing supply chain reform, maintenance volume, and trends towards automation and intelligence [5][15] Industry Overview - The defense and aerospace industry is experiencing a significant increase in investment, with a focus on new productive forces and comprehensive human development [5][13] - The report notes the successful IPO acceptance of Blue Arrow Aerospace, which aims to raise 7.5 billion CNY, indicating strong market interest in commercial aerospace ventures [5][14] - The report identifies three key cycles within the industry: the evolution of the "S-curve," expansion of the "S-curve," and a new cycle focusing on emerging industries such as commercial aerospace, AI, and quantum computing [5][15] Company Recommendations - Recommended companies include: - **Aero Engine Corporation of China** (航发动力): Benefiting from high-end aviation equipment production and potential for domestic engine replacement in the civil aviation market [5][21] - **AVIC Xi'an Aircraft Industry Group** (中航西飞): A major manufacturer of military and civil aircraft, expected to benefit from modernization and military trade opportunities [5][22] - **China Power** (中国动力): Positioned to benefit from the recovery of the shipbuilding industry and the transition to dual-fuel engines [5][26] - **Aero Engine Control** (航发控制): Engaged in the production of control systems for military and civil aviation engines, with a strong competitive position [5][21] - **Ziguang Guowei** (紫光国微): Focused on the semiconductor industry with a strong emphasis on domestic market growth and AI integration [5][18] Financial Analysis - The report provides detailed financial metrics for key companies, including expected earnings per share (EPS), price-to-earnings (PE) ratios, and return on equity (ROE) for 2025 and 2026 [6] - For example, **航发动力** is projected to have an EPS of 0.34 CNY in 2026 with a PE ratio of 117.74 [6] - **中航重机** is expected to achieve a net profit of 11.21 billion CNY in 2025, with a dynamic PE ratio of approximately 28X [5][24] Market Performance - The report notes that the China Securities Military Industry Index has shown a weekly increase of 2.90%, outperforming major indices such as the Shanghai Composite and Shenzhen Component [5][34] - Year-to-date, the military industry index has increased by 42.34%, indicating strong market performance relative to other sectors [5][34]

Core Insights - The report highlights a significant rebound in pork prices before the New Year, with the average price of lean pigs reaching 12.39 CNY/kg, a 7.6% increase from the previous week, although it remains 19.7% lower year-on-year [5][13][23] - The implementation of a safeguard policy for beef import quotas is expected to alleviate domestic supply pressures, with a total import quota of 2.688 million tons for 2026, which is 93.5% of the total imports in 2024 [14] - The report recommends focusing on leading companies with cost advantages in the livestock sector, particularly Wens Foodstuff and Muyuan Foods, while also highlighting potential turnaround candidates like Zhengbang Technology [5][13] Livestock Farming - The report notes that the pork market is under pressure due to significant losses in the industry, but the reduction in production capacity is expected to accelerate, leading to a more stable price environment in the first half of 2026 [5][13] - For poultry, the average price of white feather chickens is reported at 3.78 CNY/lb, down 3.1% week-on-week, while yellow feather chicken prices have shown slight increases, benefiting companies like Lihua and Wens [5][13][32] Dairy Industry - The current price of fresh milk in major production areas is 3.03 CNY/kg, stable week-on-week but down 3.2% year-on-year, indicating a balance in supply and demand as inventory levels decrease [14] - The safeguard measures on beef imports are anticipated to support domestic beef prices, which are expected to rise, enhancing the performance of companies like Yurun and Modern Farming [14] Feed and Animal Health - The report indicates a rebound in aquaculture prices due to holiday demand, with significant increases in white shrimp prices leading up to the New Year [15] - The feed industry is facing intense competition, but leading companies are expected to gain market share due to their cost advantages, especially in international markets [15] Agricultural Sector Performance - The agricultural sector outperformed the market by 0.7 percentage points, with livestock farming and feed sectors showing the highest gains of 1.4% and 0.5%, respectively [21] - The report tracks various agricultural product prices, noting fluctuations in corn and soybean meal prices, with corn prices rising by 0.6% to 2352 CNY/ton [23][46]

Group 1: Manufacturing Trends - The manufacturing PMI in China has stabilized around 49.7, while the US PMI hovers around 48.0, indicating a lack of significant cyclical peaks or troughs, reflecting a "weak resilience" state[9] - China's real estate sector is undergoing adjustments, with targeted fiscal policies supporting demand, leading to a balanced demand environment[9] - Global supply chain diversification is enhancing export resilience, preventing typical inventory destocking in manufacturing[9] Group 2: Economic Indicators - The expected GDP growth for January is projected at 4.66% (actual) and 3.86% (nominal), compared to December's 4.18% and 3.79%[4] - The PPI is anticipated to continue rising due to low base effects, while CPI is expected to decline due to high base effects[4] - The M1 growth rate may slow down due to high base effects and reduced fiscal net spending[4] Group 3: Market Performance - The Hang Seng Index, Hang Seng Tech, and Nasdaq Golden Dragon Index saw single-day gains of 2.76%, 4.00%, and 4.38% respectively on the first trading day of the year[4] - The average daily trading volume in A-shares increased to 21,000 million yuan, up 8.30% week-on-week[19] - The gold ETF in China experienced a net outflow of 3.205 billion yuan, while the SPDR global gold ETF saw a net outflow of 6 tons[36]

Core Insights - The report highlights that the public fund fee reform has concluded, and insurance companies are expected to perform well, indicating potential investment opportunities in the spring market [1][6]. Group 1: Industry Performance - As of December 31, 2025, the Shanghai Composite Index closed at 3968.84 points, up 0.13%, while the Shenzhen Component Index fell by 0.58% [11]. - The average daily trading volume in the Shanghai and Shenzhen markets reached 2.13 trillion yuan, an increase of 8.30% week-on-week [6]. Group 2: Insurance Sector - Insurance companies are anticipated to maintain high growth in performance, with short-term results expected to exceed expectations and long-term interest rate spreads likely to improve [17]. - The Ministry of Finance released a draft revision of the accounting standards, enhancing the clarity of profit sources for insurance companies and improving comparability across industries [17]. - Key stocks to watch in the insurance sector include China Ping An, China Life, and New China Life, among others [17]. Group 3: Securities Sector - The public fund fee reform is expected to save investors approximately 51 billion yuan annually, with a fee reduction of about 20% [18]. - The reform includes differentiated redemption fee structures aimed at promoting long-term investment and reducing short-term trading behaviors [19]. - The introduction of new REITs regulations is expected to enhance the market's quality and expand opportunities for securities firms [24][28]. Group 4: Valuation and Financial Analysis - China Ping An (601318.SH) has a target price of 85.17 yuan, with an estimated EPS of 8.91 yuan for 2025, reflecting a PE ratio of 7.68 [7]. - New China Life (601336.SH) has a target price of 94.21 yuan, with an estimated EPS of 14.04 yuan for 2025, indicating a PE ratio of 4.96 [7]. - The report suggests that the valuation metrics for various companies in the sector indicate potential upside, with several stocks rated as "Buy" [7].

Core Viewpoints - The report emphasizes the expected increase in the penetration rate of nuclear power modules, which is anticipated to drive demand growth, with a continued focus on safety, recommending Libat for investment [1][9][14] - The domestic and overseas demand for cleanroom projects remains robust, despite recent stock price corrections, indicating a positive outlook for companies in this sector [1][9][32] Group 1: Nuclear Power Modules - Libat's Nantong base is highlighted for its strategic location, which enhances its transportation capabilities for large industrial modules, crucial for nuclear power construction [14][17] - The report notes that from 2022 to 2025, there has been a sustained approval pace for nuclear power projects in China, with a total of 41 units approved, including 28 units of the Hualong One design, which constitutes about 68% of the total [23][29] - The construction of the Ningde Nuclear Power Phase II project marks a significant milestone in modular construction technology, showcasing the shift towards integrated module design [29][30] Group 2: Cleanroom Sector - Companies such as Taiji Industrial, Bocheon, Yaxiang Integration, and Shensanda A have secured contracts for cleanroom projects, benefiting from increased capital expenditures in Southeast Asia and the U.S. [32][34] - The report highlights that Taiji Industrial has won multiple contracts for cleanroom projects with Longxin Technology, with project values reaching approximately 26.2 million, 50.5 million, and 6.7 million CNY [33][34] - The cleanroom sector is expected to see further order growth as Longxin Technology prepares for its IPO, which could lead to increased demand for related services [32][34] Group 3: Coal Chemical Projects - The report indicates that coal chemical projects are progressing steadily, with significant milestones achieved, such as the safety completion of the ethylene oxide reactor for a high-end chemical materials project in Shaanxi [38] - Steel prices for rebar and medium-thick plates have remained stable, with slight decreases noted, reflecting the current market conditions [38] Group 4: Financial Tracking - The report mentions that as of December 25, 2025, 18 regions have announced local bond issuance plans totaling 1.37 trillion CNY, indicating a significant increase in the issuance of special bonds compared to the previous year [5][6] - The financial landscape shows a notable increase in the issuance of new special bonds, while the net financing of urban investment bonds has decreased, reflecting changing funding dynamics in the industry [5][6]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation that the stock will outperform the market by more than 15% over the next 12 months [5]. Core Insights - The company has launched its first stock incentive plan since its listing, which reflects strong confidence in its medium to long-term development. The plan includes performance targets that are considered conservative, enhancing the credibility of the incentive and demonstrating the company's commitment to binding its core team [5]. - The company is expected to see a structural demand increase, particularly in the high-end electronic fabric sector, which could lead to further improvements in performance and valuation elasticity [5]. - The earnings forecast for the company indicates a rebound in net profit from 2.45 billion RMB in 2024 to 3.52 billion RMB in 2025, with a projected growth rate of 44% [2][5]. Financial Summary - **Revenue Forecast**: The company’s revenue is projected to grow from 14.88 billion RMB in 2023 to 22.35 billion RMB in 2027, with a compound annual growth rate (CAGR) of approximately 10.2% [2]. - **Net Profit**: The net profit is expected to recover from 2.45 billion RMB in 2024 to 5.03 billion RMB in 2027, reflecting a significant growth trajectory [2]. - **Earnings Per Share (EPS)**: EPS is forecasted to increase from 0.61 RMB in 2024 to 1.26 RMB in 2027 [2]. - **Valuation Metrics**: The report suggests a price-to-earnings (P/E) ratio of 19.4 for 2025, decreasing to 13.6 by 2027, indicating an improving valuation outlook [2][5]. Performance Metrics - **Return on Equity (ROE)**: The ROE is expected to improve from 8.1% in 2024 to 13.4% in 2027, reflecting enhanced profitability [2]. - **Debt Ratios**: The company’s debt-to-equity ratio is projected to decrease from 42.4% in 2023 to 30.9% in 2027, indicating improved financial stability [8]. - **Cash Flow**: Operating cash flow is expected to increase significantly, from 2.03 billion RMB in 2024 to 7.90 billion RMB in 2027, highlighting strong cash generation capabilities [6].

- The report introduces a quantitative model based on Convolutional Neural Networks (CNN) to analyze price-volume data and predict future stock prices. The model maps learned features to industry theme indices, including chemical, non-bank financial, and satellite sectors[77][79][80] - The construction process involves standardizing price-volume data into graphical formats for each stock within a specific window period. These standardized charts are then used as input for the CNN model to identify patterns and predict future trends[77][78][79] - The model's evaluation highlights its ability to capture complex relationships in price-volume data and its application in thematic industry allocation. It emphasizes the importance of deep learning techniques in quantitative finance[77][80] - Backtesting results show the latest thematic allocations include indices such as CSI Subdivision Chemical Industry Theme Index, CSI Satellite Industry Index, CSI All Share Dividend Quality Index, and others, reflecting the model's predictions[79][80]

Core Insights - The report emphasizes the importance of stabilizing expectations in the real estate market, highlighting the need for proactive measures to shorten adjustment periods and smooth market fluctuations [5][14][17] - The article from "Qiushi" magazine outlines the critical role of real estate in the national economy and stresses the necessity of maintaining policy strength to align with market expectations [5][14][16] Section Summaries 1. Policy Environment During New Year - The article in "Qiushi" magazine discusses the current phase of the real estate market, indicating a shift from housing shortages to a balance in supply, with a focus on quality over quantity in housing demand [13][15] - It highlights the financial asset nature of real estate, emphasizing its significance in stabilizing the economy and the need for effective expectation management [14][15] 2. Transaction Performance: New and Second-Hand Housing - New housing transactions during the New Year period saw a significant decline, with a daily average of 15.66 million square meters sold across 32 cities, down 44.8% year-on-year [19][21] - In contrast, second-hand housing transactions showed relative stability, with an average of 2,676 units sold daily across 80 cities, a slight decrease of 1.1% year-on-year [26][28] 3. Market Trends and Insights - The real estate sector's performance was weak, with the SW real estate index down 0.7%, underperforming the CSI 300 index by 0.1 percentage points [5][19] - The report notes that the PB valuation for major developers is at 0.45x, indicating low market expectations for price recovery [5][19] 4. Company Valuation and Financial Analysis - The report provides a detailed valuation analysis of key companies in the real estate sector, indicating a "Buy" rating for several firms based on their projected earnings and valuation metrics [6][19] - Companies like Vanke A and China Overseas Development are highlighted for their potential upside based on current market conditions and valuations [6][19] 5. Future Outlook - The report suggests that despite current challenges, there remains significant potential for growth in housing services, second-hand transactions, and real estate asset management, with estimates indicating a need for 10 to 14.9 million new homes annually [16][18] - It emphasizes the importance of maintaining policy strength and aligning it with market expectations to foster recovery in the real estate sector [16][18]

Investment Rating - The industry investment rating is "Buy" [3] Core Insights - The report highlights that AI applications are expected to enter a new phase of intensive catalysis, with both industrial logic and catalysts presenting opportunities. Long-term prospects for domestic large models catching up with overseas counterparts and further application deployment are positive. The report recommends leading internet companies like Alibaba and Tencent, as well as niche application leaders such as Kuaishou and Meitu [7][10]. Summary by Sections Domestic AI Dynamics Tracking - The report tracks domestic AI large model product data, indicating that the web traffic for major AI models remains stable, with some fluctuations. For instance, Kimi had 7.99 million visits, down 7.83% week-on-week, while DeepSeek led with 66.33 million visits, down 5.06% [21][23]. - The report also notes that the average daily visit duration for Kimi is around 8 minutes, while other models like DeepSeek and Tongyi Qianwen are around 5 minutes [13]. Key Company Events - The report mentions that GLM-4.7 has topped the Artificial Analysis global open-source ranking, achieving a score of 68 in the Artificial Analysis Intelligence Index, making it the top model in both open-source and domestic categories [39][40]. Overseas AI Dynamics Tracking - In the overseas market, ChatGPT continues to lead in web traffic, while Claude's traffic has seen a decline. The report emphasizes the competitive landscape of AI models globally [41].

Investment Rating - The report assigns a "Buy" rating for the securities industry, indicating an expected stock performance that will exceed the market by more than 10% over the next 12 months [9]. Core Insights - The public fund sales fee reform has been smoothly implemented, with a focus on benefiting investors and addressing market concerns. The reform is expected to save approximately 51 billion CNY in investment costs annually, with a comprehensive fee rate reduction of about 20% [5]. - The new rules on redemption fees have been established to protect market liquidity while benefiting investors. The differentiation in redemption fees is aimed at encouraging long-term investment practices [5]. - The classification of products and supporting policies have been upgraded to create a more refined fee rate regulatory system, promoting the development of index funds and equity funds [5]. - The report emphasizes the importance of wealth management institutions' service capabilities in the context of the growing equity fund market, suggesting a focus on companies like Huatai Securities, CICC, Guotai Junan, and CITIC Securities [5]. Summary by Sections Regulatory Changes - The China Securities Regulatory Commission (CSRC) issued new regulations on public fund sales fees, effective from January 1, 2026, marking the completion of a three-phase fee reduction process [5]. - The third phase of the reform is projected to provide approximately 30 billion CNY in annual benefits to investors [5]. Product Classification - The new regulations simplify redemption fee structures into three tiers and allow flexible arrangements for different types of funds, particularly benefiting individual investors in index funds [5]. - The maximum subscription fee rates have been refined, with specific caps for different fund types, encouraging the growth of index funds [5]. Investment Recommendations - The report suggests focusing on companies that are well-positioned to benefit from the reforms and the anticipated growth in the equity fund market, including Huatai Securities (AH), CICC (H), Guotai Junan (AH), and CITIC Securities (AH) [5].