Group 1: Coal Industry - The overall coal price center is expected to slightly decline due to weak demand and constrained supply [4][2] - Domestic economic resilience and increased electrification support total energy demand, but renewable energy continues to marginally replace thermal coal demand [4][2] - Domestic coal production may gradually shrink due to the exit of old and exhausted capacities, while imports are unlikely to see significant increases [4][2] Group 2: Construction Materials - The demand for construction materials is expected to remain at a low point in 2026, with three main focus areas: (1) sub-sectors benefiting from "anti-involution" policies such as cement, waterproofing, and glass; (2) consumer building material manufacturers maintaining relative profitability through improved business models; (3) fiberglass manufacturers potentially exceeding expectations due to AI infrastructure investments [6][5] - Cement production is projected to decline to approximately 15.4 billion tons in 2026, with a capacity utilization rate of around 64%, significantly improving from 55% in 2025 [6][5] Group 3: Steel Industry - The steel industry is expected to see marginal improvements in supply and demand under "anti-involution" policies, with a slight decrease in crude steel production anticipated [11][10] - The core contradiction in steel demand is shifting from real estate to exports, with a slight decline in demand projected at 0.6% for 2026 [11][10] - The release of raw material supply cycles is expected to alleviate profit erosion, leading to a potential recovery in steel industry profitability [11][10] Group 4: Paper Industry - The expansion of paper production capacity is nearing its end, with demand expected to continue a mild recovery supported by consumption stimulus policies [13][12] - The supply side is experiencing a gradual recovery in capacity utilization, particularly in the boxboard segment, while other varieties may take longer to recover [13][12] - The paper industry is facing short and rapid price cycles due to intense competition between paper mills and pulp mills, impacting profitability [13][12]

Core Viewpoint - The internet sector is entering a new expansion phase after a three-year period of cost reduction and efficiency improvement, with AI, overseas expansion, and instant retail as key investment areas [2][3]. Group 1: Expansion Strategies - Caution is advised regarding domestic consumption market expansion strategies due to insufficient macroeconomic support and industry penetration rates, which may lead to negative impacts in most cases [3]. - Overseas expansion is viewed positively as it breaks the domestic market ceiling, but challenges exist depending on whether the expansion involves virtual products, goods, or services [3]. - AI and technology-related expansions are highly favored, as they are less constrained by domestic market limitations and represent areas previously overlooked by the Chinese internet sector [3]. Group 2: Market Dynamics - The internet sector is experiencing a shift in valuation methods, with a focus on EPS during the 2023-2024 period, leading to potential undervaluation of businesses that do not contribute to EPS [4]. - The AI narrative is expected to drive future valuation adjustments, as seen with companies like Alibaba and Meitu, which have begun to be revalued based on their AI applications [4]. Group 3: E-commerce and Local Services - The e-commerce market is projected to show resilience, benefiting from national subsidies and instant retail, although growth rates may slow in 2026 due to base effects [6]. - The local services market is experiencing intensified competition, particularly in the food delivery sector, with penetration rates increasing from 14% to 16% year-on-year [6]. Group 4: Future Catalysts and Drivers - The overseas e-commerce market is expected to accelerate its transformation due to significant tariff disruptions, while instant retail is anticipated to become a new growth point, albeit with limited profit expectations initially [7]. - Domestic and outbound tourism markets are returning to rational growth, with domestic travel showing steady growth and outbound flights recovering to pre-pandemic levels [9]. Group 5: Cloud Computing and AI - The demand for AI in China is robust, with significant growth in various sectors, including internet, gaming, and finance, driving the need for GPU cloud services [11]. - Chinese cloud providers are increasing their capital expenditure on AI infrastructure, with Alibaba planning to invest 380 billion yuan over three years to enhance its AI capabilities [12]. - AI is expected to significantly enhance existing business efficiencies, with new applications emerging in media and content production [14].

Group 1 - The core viewpoint of the article emphasizes that the aerospace technology industry is expected to maintain high prosperity due to the resonance of domestic and international demand, particularly with the commencement of the "14th Five-Year Plan" in 2026 [2][5] - The article highlights that global defense spending is projected to increase by 9.4% year-on-year to approximately $2.72 trillion in 2024, marking the largest annual increase since the Cold War, which will drive demand for specialized equipment [2][6] - The domestic aerospace sector is expected to benefit from the modernization of special equipment and the release of new application models, with a focus on the continued growth of domestic demand [2][5] Group 2 - The demand for new domain and new quality equipment, such as hypersonic, unmanned, and intelligent systems, is anticipated to be released gradually, with significant growth potential in the supply chain's core segments [3][9] - The article notes that by 2026, the penetration rate of hypersonic equipment is expected to increase rapidly, driven by the demand for mid-to-long-range guided equipment [3][9] - Unmanned systems are projected to penetrate various demand fields, with high growth potential expected to be realized by 2026 due to the combination of domestic and international demand [3][9] Group 3 - The article discusses the emergence of new industries driven by technology spillover, including large aircraft, low-altitude economy, and commercial aerospace, which are entering a new stage of development [4][14] - By September 2025, the domestic commercial aircraft manufacturer COMAC is expected to have delivered 22 C919 aircraft, with production and delivery capabilities anticipated to continue improving [4][14] - The commercial aerospace sector is expected to accelerate its industrialization process, with satellite internet construction entering a normalized networking phase by 2026 [4][15] Group 4 - The article suggests that the aerospace technology industry should focus on three key directions: core equipment, new domain and new quality equipment, and the growth of emerging industries driven by technology spillover [4][16] - The resonance of domestic and international demand is expected to sustain the prosperity of core equipment in 2026, while new domain and new quality equipment are anticipated to realize their growth potential [4][16] - The booming development of large aircraft, commercial aerospace, and low-altitude economy is expected to gradually lead these industries into a new phase of development [4][16]

Core Viewpoint - The mechanical industry is expected to have significant investment opportunities in the technology innovation sector by 2026, with structural opportunities arising from both domestic demand recovery and high export demand [2][5]. Group 1: Technology Innovation and AI Infrastructure - The AI infrastructure is expected to benefit from high capital expenditure and rapid technological iterations, leading to new opportunities in the mechanical sector. Overseas capital expenditure for computing power is exceeding expectations, driving demand for PCB equipment and AIDC [2][5]. - The next generation of chips, such as Rubin, may increase processing requirements for PCB, cold plates, and quick connectors, while also promoting new technologies like micro-channel liquid cooling, enhancing the value of equipment and consumables [2][5]. Group 2: Humanoid Robots - The humanoid robot industry is anticipated to accelerate by 2026, with a focus on leading companies expanding production. The period from 2022 to 2025 is seen as a transition from prototype to small-scale engineering, with 2026 potentially marking the year of mass production for Tesla [7]. - Attention should be given to the performance upgrades of domestic humanoid robots and the rapid development of application scenarios [7]. Group 3: Export Chain - The export chain should focus on sectors with global competitiveness, such as engineering machinery, hardware tools, motorcycles, and oil service equipment, which are expected to benefit from internationalization and reforms [3][12]. - The engineering machinery sector is seeing significant growth in exports, particularly in the U.S. due to the recent interest rate cuts, which are likely to boost demand [11]. Group 4: Specialized Equipment - Specialized equipment sectors are expected to experience turning points and technological changes, with a focus on areas like solid-state batteries and nuclear fusion, as well as segments like 3C equipment and coal machinery that are showing signs of recovery [3][15]. - The lithium battery equipment sector is projected to see a growth spurt, with domestic capital expenditure expected to maintain a growth rate of around 20% [16]. Group 5: General Cyclical Opportunities - The general cyclical sector is expected to see a bottoming out, with structural opportunities emerging in areas like machine tools, injection molding machines, and industrial gases, as demand recovers [13][14]. - The demand for industrial gases is expected to improve, although there may still be pressure on gas prices [14]. Group 6: 3C Automation Equipment - The 3C automation equipment sector is anticipated to enter a hardware innovation phase in 2026, driven by new product trends such as foldable screens and AI glasses [17].

Group 1: New Energy Vehicles - The new energy vehicle sector is expected to enter a new upward cycle starting in 2025, driven by improvements in supply-demand structure and price stabilization within the industry chain [6][7] - Key drivers include changes in demand structure, diversification of application scenarios, and the release of a new vehicle cycle overseas [6] - The introduction of high-voltage fast-charging and extended-range models is expected to increase the battery capacity per vehicle, expanding applications beyond passenger cars to include heavy trucks, engineering machinery, and electric ships [6][7] Group 2: Energy Storage - The energy storage market is anticipated to grow significantly due to declining prices of lithium batteries, inverters, and photovoltaic components, making "photovoltaic + energy storage" economically viable in many countries [4][10] - The global energy storage market is projected to maintain an upward trend, with expected annual shipments surpassing 600 GWh and growth rates exceeding 20% by 2026 [10] - The domestic energy storage market is expected to reach an economic turning point following policy reforms, while emerging markets in Asia, Africa, and Latin America are becoming new growth areas [10][11] Group 3: Industrial Automation - The industrial automation sector is experiencing stable growth, with structural opportunities arising from the recovery of the new energy sector since 2025 [14][15] - The demand for high-performance power supply for AI data centers is driving growth in AIDC (Automated Identification and Data Capture) and robotics [15] - Companies are extending their existing technology into robotics, with a focus on humanoid robots and advanced motor technologies such as axial flux motors [15][16] Group 4: Power Equipment - The investment climate for domestic power grids is expected to remain positive, with a projected CAGR of around 7% for grid investment from 2026 to 2027 [17][19] - The focus on high-voltage direct current (HVDC) and flexible direct current transmission is expected to drive significant investment in the power grid [17] - The export potential for power equipment remains strong, with a 23% year-on-year increase in exports from January to August 2025, driven by global demand for renewable energy and grid modernization [19]

Core Viewpoint - The AI sector is expected to remain a significant growth driver in the software industry through 2026, with AI infrastructure (AI Infra) showing sustained high growth due to emerging applications and increasing enterprise-level AI deployment [2][3]. AI Applications - AI applications are proliferating, leading to upward revisions in investment expectations. Key areas of focus include AI search, multimodal capabilities, innovative hardware, next-generation interactions, intelligent cockpits, and embodied intelligence [4]. - AI search is predicted to capture 25% of traditional search traffic by 2026, creating new market opportunities beyond traditional ecosystems [4]. - The multimodal sector is advancing, with industrial models capable of understanding long videos, potentially doubling the market space for video generation [5]. - Innovative hardware is expected to accelerate the practical application of AI technologies, with companies like Plaud and OpenAI leading the charge in creating AI-native hardware [6][7]. Next-Generation Interactions - The next generation of voice interaction is emerging, with real-time voice communication becoming a standard capability among major model providers. This trend is expected to expand significantly [8]. Intelligent Cockpits and Driving - The integration of large models into intelligent cockpits is gaining traction, with companies exploring AI Box solutions to enhance vehicle capabilities [9]. Embodied Intelligence - The focus in embodied intelligence is shifting from physical robots to their cognitive capabilities, indicating a move towards collaborative industry models [10]. B2B AI Applications - The landscape for B2B AI applications is becoming clearer, although significant breakthroughs may still take time. The pace of AI application deployment varies widely across companies [11]. Telecommunications Services - Telecom operators are entering a post-5G cycle, with revenue growth slowing and capital expenditures decreasing, which supports dividend capabilities [12][13]. - Data centers are entering a performance realization phase, benefiting from increased downstream capital expenditures [14]. Education Sector - The "AI + Education" landscape is diversifying, with market concentration increasing in K12 education and a potential reshaping of the industry due to AI products [15][16]. - In higher education, attention is on cost trends and operational transitions, with signs of positive developments in the sector [17].

Group 1: Passenger Vehicles - Domestic sales of passenger vehicles have gradually surpassed the previous high point of 2017, with expectations for steady growth if central and local subsidies remain effective. The resilience of growth needs to be observed through 2026 [2][3] - In the new energy sector, technological innovations and model iterations are expected to drive an increase in penetration rates, while the phase-out of purchase tax incentives by the end of 2025 may lead to temporary demand pull-forward. Domestic new energy vehicle sales are projected to maintain double-digit growth [2][3] - The global expansion of Chinese automotive brands is anticipated to accelerate, with overseas sales expected to grow by 5-10% by 2026, and the share of new energy vehicles in exports reaching 50% [8][10] Group 2: Commercial Vehicles - The heavy truck sector is expected to see continued support from the scrappage and renewal policy, with total industry volume projected to grow by 5% year-on-year, reaching 1.05-1.1 million units by 2026. Domestic sales are expected to remain flat or grow by 5% to 710,000-760,000 units, while exports may increase by 10% to 340,000 units [10] - The penetration rate of new energy heavy trucks in domestic sales is expected to reach around 30% by 2026, up from 25% in 2025. The L2+ level assisted driving heavy trucks are anticipated to achieve a breakthrough, with penetration rates reaching single digits [10] Group 3: Auto Parts - The growth potential of China's auto parts industry is shifting from domestic demand to international expansion, with a focus on securing orders from European automakers for new energy vehicle components by 2026 [2][11] Group 4: Robotics and Autonomous Driving - The robotics industry is entering a mass production phase, with humanoid robots showing long-term development potential. The industry is expected to accelerate progress, with key catalysts emerging from domestic manufacturers [11][12] - 2026 is projected to be the year for the mass production of L3 autonomous driving, driven by improved regulations and consumer awareness. The penetration rate of high-level autonomous driving is expected to exceed 40% by 2026 [12][13]

Semiconductor Industry - The semiconductor design sector is expected to maintain high global computing power investment levels through 2026, driven by strong demand for AI new terminals and related chips [2][5] - Domestic wafer manufacturing capacity is anticipated to expand rapidly, maintaining high utilization rates due to strong demand from AI, automotive electronics, and AIoT device upgrades [2][7] - Key investment themes in the manufacturing sector include advancements in process technology and domestic production of storage chips [2][7] ICT Equipment and Supply Chain - The domestic AI computing network is viewed positively, with recommendations to focus on servers, switches, PCBs, liquid cooling, and optical modules [2][10] - The telecommunications industry is expected to benefit from the commercialization of 6G, particularly in wireless communication base stations [2][10] Consumer Electronics - The global smartphone market is projected to experience a mild recovery, with 2026 potentially marking a significant year for AI consumer terminals [3][12] - AI-enabled products such as toys and learning machines are expected to see new developments, driven by decreasing costs of large model AI applications [3][12] Intelligent Driving and Robotics - The automotive electronics sector is expected to benefit from the acceleration of intelligent driving technologies, particularly in sensors and domain controllers [3][16] - The year 2026 is anticipated to be pivotal for the large-scale implementation of AI and robotics, with significant advancements in sensor technology and processing capabilities [3][17] Other Consumer Electronics - Despite short-term disruptions from tariffs, China's core position in the global consumer electronics supply chain remains strong [3][14]

Core Insights - Quantum computing is accelerating from experimental validation to commercial application, with significant breakthroughs from global tech giants and Chinese prototypes, leading to a projected market growth from $5 billion in 2024 to over $800 billion by 2035, with a CAGR exceeding 55% [2][5][30] - The industry is entering a rapid growth phase, with hardware segments expected to benefit first, particularly in key equipment like dilution refrigerators and measurement control systems [5][30] Industry Overview - Quantum computing, based on quantum mechanics, offers significant advantages in solving complex problems through quantum bits (qubits) that allow for information superposition and entanglement, leading to exponential growth in encoded information [5][7] - Major economies are incorporating quantum information technology into national strategies, with the U.S. increasing funding by $2.7 billion for quantum initiatives from 2025 to 2029, while China emphasizes engineering and commercialization in its planning [5][26] Market Dynamics - The global quantum computing market is expected to reach $50.37 billion in 2024, with a CAGR of 58.65% from 2024 to 2029, and projected to exceed $8,077.50 billion by 2035 [30][32] - North America, Europe, and China are the leading regions in the quantum computing market, with North America holding the largest share at 29.8% in 2024 [32] Technological Pathways - Various hardware routes are being explored, including superconducting and ion trap technologies, with superconducting quantum computing leading in patent filings and industrialization progress [15][18] - The development of measurement and control systems is crucial for achieving fault-tolerant quantum computing, with significant advancements made in China to break foreign monopolies [60][62] Application Landscape - Current quantum computing applications are focused on quantum simulation, quantum combinatorial optimization, and quantum linear algebra, with expected implementation timelines ranging from 5 to 20 years across various industries [65][66] - The total market for quantum computing applications is projected to reach $202.67 billion by 2035, with significant collaborations between quantum computing firms and industry giants [65]

Core Viewpoint - The U.S. economy in 2025 is experiencing significant divergence, with traditional industries like manufacturing and real estate under pressure from tariffs and immigration policies, while the technology sector is buoyed by a surge in capital expenditure driven by artificial intelligence (AI) [3][5][6]. Supply Side: Tariff and Population Pressures - Tariffs have increased significantly, with the effective tariff rate rising from 2.4% last year to 11.5% this year, leading to a supply contraction effect [7][9]. - Immigration policies have tightened, resulting in a projected decline in population growth from an average of 1.5% during the Biden administration to 0.6% under Trump, which will further suppress labor supply and demand in housing and consumption [8][9]. - The combination of tariffs and reduced immigration is expected to create ongoing supply-side pressures, impacting economic growth potential if productivity does not improve [10]. Demand Side: AI Investment Cycle Fluctuations - AI is contributing approximately 0.7 percentage points to the U.S. GDP growth in the first half of 2025, but the marginal returns on capital investment are expected to decline as investment scales up [13][19]. - Other demand sectors are also facing cooling trends, with the real estate market undergoing active de-inventory and consumer spending showing a "K-shaped" recovery, where high-income groups maintain spending while low-income groups struggle [30][31]. - The AI investment cycle is characterized by heavy capital expenditure, which may not replicate the rapid growth seen during the internet bubble due to higher costs and a more cautious investment environment [19][20]. Inflation: Sticky Dynamics - Inflation is expected to exhibit stickiness, with core goods inflation influenced by tariffs and rental inflation continuing to slow down [4][37]. - Non-rent core service prices are supported by structural demand and labor costs, indicating resilience despite economic pressures [4][38]. - Consumer inflation expectations are rising, complicating the Federal Reserve's ability to achieve its inflation targets, with potential shifts in expectations from 2% to 3% [39][46]. Policy Outlook: Fiscal and Monetary Dynamics - Fiscal and monetary policies are anticipated to marginally loosen, but the overall stimulative effect may be limited due to offsetting tariff revenues [5][45]. - The Federal Reserve is expected to lower interest rates by 50 basis points in 2026, bringing the federal funds rate to a range of 3%-3.25% [5][45]. - The economic outlook for 2026 predicts a real GDP growth rate of 1.7%, with risks of "stagflation" emerging from supply-side constraints and demand-side weaknesses [5][54].