Core Viewpoint - The military industry is expected to perform well in the long term due to increasing great power competition and the emphasis on national defense modernization as outlined in the recent Party Congress [1][2]. Group 1: Military Industry Performance - The military sector has seen an increase, with the defense and military index rising by 2.60% during the week of October 20-24, underperforming the overall market by 0.28 percentage points [3]. - The China Securities National Security Index performed the best among military indices, increasing by 3.55% during the same period [3]. Group 2: Strategic Goals and Modernization - The 20th Central Committee's Fourth Plenary Session emphasized achieving the centenary military goals and advancing the modernization of national defense and the military [3]. - Key strategies include implementing Xi Jinping's strong military thought, adhering to the Party's absolute leadership over the military, and advancing the integration of mechanization, information technology, and intelligence [3]. - The session outlined a "three-step" strategy for modernization, focusing on political, reform, technological, talent, and legal aspects of military development [3].

Macro - The "15th Five-Year Plan" emphasizes a shift from "catching up" to "leading" in technology innovation, indicating a strategic focus on achieving technological advancements [4] - The construction of a modern industrial system highlights a dual-driven approach of advanced manufacturing and high-quality service industries [5] - The importance of domestic demand is prioritized over supply-side measures, reflecting a shift in policy focus [6] - The reform of the system includes accelerating the improvement of market-oriented allocation mechanisms for factors of production [6] - The emphasis on institutional openness has been significantly elevated, indicating a commitment to deepening reforms [7] - The focus on social welfare has been enhanced, with a more precise emphasis on ensuring basic living standards and equity [8] - The current economic pressures observed since the third quarter have been acknowledged, with expectations for new policies to be implemented in the fourth quarter [9] Overseas Strategy - The financial standards for listing are most flexible in the US, followed by Hong Kong, while A-shares have the strictest requirements [13] - The US market is the most inclusive regarding company structures, accepting various frameworks like WVR and VIE, while A-shares maintain a more cautious stance [14] - Listing efficiency is higher in the US and Hong Kong, with A-shares having a longer application process due to stringent regulatory scrutiny [15] Light Industry and Paper - Short-term supply of imported wood chips remains stable, but long-term supply of wood for pulping is limited due to the scarcity of forest resources [19] - Demand for broadleaf wood is expected to grow rapidly, with significant increases in production capacity projected from 2023 to 2035 [19] - Brazil is identified as a key player in eucalyptus production, with potential for yield improvements through modern cultivation techniques [19] - In China, Guangxi leads in eucalyptus production, but there are concerns about declining yields and the need for improved forestry practices [20] - The demand for imported eucalyptus has decreased, but short-term supply remains assured, particularly from Vietnam and Australia [21]

Core Viewpoint - The lithium battery downstream demand remains strong, driving prices higher due to inventory depletion, while cobalt products continue to rise but with slower downstream follow-up, indicating a potential slowdown in price increases [1][2]. Lithium Sector - The lithium sector is experiencing a peak demand season, with inventory depletion pushing prices up. The weekly price of lithium carbonate in Wuxi rose by 1.32% to 76,500 CNY/ton, while the price in the Shanghai Futures Exchange increased by 4.25% to 78,900 CNY/ton [1]. - Lithium concentrate prices reached 881 USD/ton, an increase of 35 USD/ton compared to the previous period, reflecting strong demand from downstream buyers [1][2]. - The production of battery-grade lithium carbonate averaged between 74,500 and 76,330 CNY/ton, with a weekly increase of 2.79% [2]. Cobalt Sector - Cobalt prices are experiencing upward pressure, but the actual demand from the downstream is limited, leading to a slower price increase. The average price of electrolytic cobalt rose by 6.96% to between 400,000 and 415,000 CNY/ton [3]. - Cobalt salt prices are stabilizing as downstream acceptance of current prices is low, focusing mainly on inventory digestion and essential replenishment [3]. - The integration of cobalt-nickel precursor production enhances competitive barriers for cobalt companies, as they extend their reach into the new energy sector [1][3]. Market Dynamics - The overall market is witnessing a strong demand for lithium, supported by the rapid growth of power batteries and a thriving energy storage market, with the operating rate of downstream manufacturers continuously increasing [2]. - Despite the strong demand, the supply side is also seeing new production lines coming online, which may exert pressure on prices in the latter part of November [2].

Core Viewpoint - The 20th Central Committee's Fourth Plenary Session has set the tone for the "14th Five-Year Plan," focusing on advanced manufacturing and technological self-reliance, with the equipment manufacturing sector expected to benefit from long-term policy dividends [1] Group 1: Policy Direction - The "14th Five-Year Plan" emphasizes building a modern industrial system, upgrading traditional manufacturing towards intelligent, green, and clustered development, and reinforcing the manufacturing sector's role in the national economy [1] - Strategic emerging industries such as new energy, new materials, aerospace, and low-altitude economy will be cultivated, alongside future industries like quantum technology, biomanufacturing, hydrogen energy, nuclear fusion, and brain-computer interfaces [1] - The overarching policy theme for the next 5-10 years will be "traditional manufacturing upgrade + emerging industry rise + technological self-reliance," with high-end equipment, industrial mother machines, intelligent manufacturing, and new energy equipment expected to benefit continuously [1] Group 2: Robotics Industry - During the "14th Five-Year Plan," China's robotics industry is transitioning from "scale expansion" to "quality leap," with embodied intelligence and AI as core driving forces [2] - The Ministry of Industry and Information Technology and local financial and state-owned funds have prioritized humanoid robots, moving from foundational layout to tackling core components and complete machine intelligence [2] - The industry's core logic is summarized as "three upgrades": 1. Technology chain upgrade: from servo and reducer to large model control, forming a "software + hardware" closed loop 2. Industry chain upgrade: from component localization breakthroughs to complete machine system integration and scenario collaboration 3. Value chain upgrade: robots transitioning from cost centers to productivity tools, reshaping industry chain profits [2] Group 3: Forklift Industry - In September, forklift sales saw significant growth, with domestic sales recovering faster than exports. In September 2025, the industry sold 130,400 units, a year-on-year increase of 23%, with domestic sales at 81,100 units (+29.3%) and exports at 49,300 units (+13.9%) [3] - Cumulatively, from January to September, total sales reached 1,106,400 units, a year-on-year increase of 14%, with domestic and export sales growing by 13.1% and 15.5%, respectively [3] - Excluding electric walk-behind warehouse trucks, September forklift sales were 51,200 units, a year-on-year increase of 18.2%, with domestic sales at 31,900 units (+15.7%) and exports at 19,200 units (+22.7%) [3]

Group 1 - OpenAI launched the AI browser ChatGPT Atlas, marking a significant shift in how AI can reshape internet access, currently available for macOS users [1] - ChatGPT Atlas integrates a "tool + AI" paradigm, enhancing the browser's functionality to serve as an intelligent task terminal, capable of complex operations like booking flights and purchasing groceries [1] - The Chinese government emphasizes the importance of technology in the "14th Five-Year Plan," focusing on key areas such as integrated circuits, quantum technology, and other future industries to drive economic growth [2] Group 2 - Several U.S. quantum computing companies are negotiating with the U.S. Department of Commerce to secure federal funding in exchange for equity, indicating increased government intervention in key economic sectors [3] - Companies like IonQ, Rigetti Computing, and D-Wave Quantum are among those discussing potential government investment, with each company expected to receive at least $10 million [3] - The U.S. Department of Commerce's funding application process may include various terms beyond equity, such as warrants, intellectual property licenses, and revenue-sharing agreements [3]

Core Viewpoint - The article emphasizes that the "14th Five-Year Plan" period is crucial for achieving socialist modernization in China, with a focus on technology and consumption driving economic growth, and the potential for the Chinese stock market to experience a "transformation bull" trend leading to new highs in A/H stock indices [1][2]. Group 1: Importance of Domestic Demand - The importance of domestic demand is highlighted, with a shift towards building a strong domestic market, indicating a significant increase in the focus on consumption during the "14th Five-Year Plan" [2]. - The relationship between consumption and investment is discussed, with expectations that more policy resources will be directed towards consumption and livelihood sectors, such as elderly care, education, and healthcare [2]. Group 2: Modern Industrial System - The report stresses the need to maintain a reasonable proportion of manufacturing and to build a modern industrial system centered on advanced manufacturing [2]. - There is an emphasis on enhancing independent innovation capabilities and accelerating breakthroughs in key technologies, particularly in the context of de-globalization [2]. Group 3: Unified National Market - The establishment of a unified national market is crucial for breaking local protectionism and market segmentation, which can lead to resource misallocation and efficiency losses [3]. - The report mentions the importance of expanding institutional openness and maintaining a multilateral trade system to address global economic challenges [3]. Group 4: Investment Opportunities - The article identifies potential investment opportunities in sectors aligned with the goals of the "14th Five-Year Plan," including advanced manufacturing, renewable energy, machinery, and consumer goods [3]. - Specific sectors to watch include internet, semiconductors, military, media, and retail, as they are expected to benefit from the economic transformation [3].

Group 1 - The concept of RWA and its relationship with the digital economy, digital currency, and crypto assets is discussed. The digital economy includes two processes: industrial digitization and data assetization. Industrial digitization refers to the networked digital processing of economic activities, forming an efficient internet economy and sharing economy, suitable for central bank digital currencies and other cryptocurrencies. Data assetization involves using blockchain technology to lock in value creation outputs through tokenization, transforming data into wealth and assets, applicable to RWA [1] - RWA has characteristics such as widespread trading, convenience, traceability, low cost, high efficiency, and decentralization. These features significantly impact the real estate industry by improving issuance and trading efficiency, drastically reducing intermediary costs, lowering investment thresholds, and enhancing the transparency of the underlying assets [1] - The current global RWA asset value has reached $25.4 billion. Deloitte predicts that by 2035, the value of real estate RWA tokens will reach $4 trillion, with a compound annual growth rate of 27%. However, risks include policy and regulatory risks, technological bottlenecks and risks, systemic risks, valuation challenges, and other types of risks [1]

Core Viewpoint - The impact of alpha factors on China's export growth is increasingly significant, with expectations of a 1-3% growth in 2026 despite potential risks from alpha factors [1][4]. Group 1: Alpha Factors Impacting Exports - The article emphasizes the importance of alpha factors such as tariff changes, order front-loading, re-export regulations, and currency fluctuations on exports, moving away from reliance on beta factors [1][7]. - The new trade pattern is shaped by tariff shocks and geopolitical shifts, particularly the "interconnected yet separate" relationship between China and the U.S. [2][9]. - The performance of new industries in exports is attributed to China's internal economic transformation and industrial upgrades [2][14]. Group 2: 2026 Export Outlook - Order front-loading effects are largely absorbed, with limited risk of further exposure in the future [3][22]. - Re-export regulations are expected to have a minimal impact, as the focus is primarily on low-value or non-processed re-exports [3][25]. - The likelihood of increased tariffs is low, with diminishing impacts from existing tariffs due to effective countermeasures by China [3][32]. - Currency appreciation is anticipated to reduce export price increments, but the overall export volume may remain stable [3][37]. - The global economic outlook is expected to support China's export growth, with IMF predicting a recovery in global GDP growth in 2026 [4][41].

Core Insights - The article emphasizes the clear upward trend in the new tobacco industry driven by supply and demand dynamics, leading to accelerated expansion and increased involvement from international tobacco giants [1][2]. Industry Trends - The new oral tobacco products, which combine characteristics of heated non-combustible (HNB) and vaporized electronic cigarettes, are gaining popularity globally due to their ability to address traditional tobacco's limitations [2]. - New oral tobacco products are expected to gradually replace traditional products, similar to how HNB products have replaced cigarettes, while also attracting a new customer base with diverse flavor options [2]. - The tax environment for non-tobacco products is more favorable, and the competition is less intense compared to vaporized electronic cigarettes, leading to higher expected profit margins for new oral tobacco products [2]. Competitive Landscape - The market for new oral tobacco products has low entry barriers, but the market share remains concentrated among international tobacco companies, with no significant changes expected in the competitive landscape [3]. - The established customer base and sales channels of international tobacco companies, built over years of traditional oral tobacco operations, create a path dependency that hinders new entrants [3]. - The regulatory environment is stable and favorable for new oral tobacco products, as they pose lower public health risks compared to vaporized electronic cigarettes, which helps maintain a level playing field among brands [3]. Company Developments - Philip Morris International (PMI) made a significant move by acquiring the parent company of ZYN, a leading brand in new oral tobacco, for $16 billion, indicating strong confidence in the industry's future [4]. - The FDA's approval of 20 ZYN products for market release in January 2025, including various flavors, further supports the positive outlook for the industry [4]. - The online distributor Haypp has provided optimistic guidance for its 2025 performance, reinforcing the industry's high growth potential [4].

Core Viewpoint - The 20th Central Committee's Fourth Plenary Session has made strategic deployments for the "15th Five-Year Plan" period, indicating a more severe external situation while affirming strong economic resilience and confidence domestically. The focus has shifted from "catching up" to "leading" in technology goals, emphasizing advanced manufacturing and quality services in the industrial system, with policies leaning towards demand-side and livelihood improvements. Incremental policies are expected to be implemented in the fourth quarter to achieve annual targets [1][11]. Group 1: Economic Environment and Goals - The external situation is judged to be more severe, but domestic economic resilience remains strong, with confidence high. The long-term goals for 2035 have been raised, including significant increases in economic, technological, defense, and international influence [6][9]. - The meeting emphasizes the need to recognize the risks and uncertainties in the international landscape, contrasting with the previous assessment of being in a strategic opportunity period [6][9]. Group 2: Technological Innovation - The focus on technological innovation has shifted to "seizing the high ground of technological development," indicating a transition from "catching up" to "leading" in technology. This includes a stronger emphasis on original innovation and tackling key core technologies [7][9]. Group 3: Industrial System - The construction of a modern industrial system emphasizes a dual drive of advanced manufacturing and quality services. The focus is on building a modern industrial system centered on advanced manufacturing, while also improving the quality and efficiency of the service sector [7][9]. Group 4: Domestic Market and Demand-Side Policies - The importance of the demand side has increased compared to the supply side, with a shift in policy priorities to stimulate and expand consumption, particularly in residential service consumption [8][10]. Group 5: Institutional Reforms - New reforms include accelerating the improvement of market-oriented allocation mechanisms for factors of production, which will support the smooth operation of the economy [2][10]. Group 6: Livelihood and Social Welfare - The emphasis on livelihood has been elevated, with a focus on ensuring basic living standards and fairness, reflecting a shift towards more precise policy directions [10][11]. Group 7: Current Economic Situation - The meeting acknowledged the increasing economic pressures observed since the third quarter, indicating that incremental policies are likely to be implemented in the fourth quarter to address these challenges [11].