Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company achieved a revenue of 86 million yuan in Q3 2025, representing a year-on-year increase of 8.12%, while the net profit attributable to shareholders was 14 million yuan, up 2.28% year-on-year [5][6] - The company is accelerating its globalization strategy by increasing investment in its wholly-owned subsidiary EC Precision (Germany) GmbH by up to 7.9 million euros [5][8] - The company focuses on the automotive precision metal parts sector, with a steady growth in its main business, including significant contributions from new energy vehicles and traditional fuel vehicles [6][7] Financial Performance - In H1 2025, the company reported a revenue of 166 million yuan, a 6.57% increase year-on-year, with new energy vehicles, general vehicles, and traditional fuel vehicles contributing 69 million, 38 million, and 43 million yuan respectively [6] - The gross margin for Q3 2025 was 31.62%, showing a slight decrease of 0.39 percentage points year-on-year [6] - The company forecasts revenues of 352 million, 429 million, and 508 million yuan for 2025, 2026, and 2027 respectively, with net profits projected at 57 million, 69 million, and 83 million yuan for the same years [11][13] Strategic Initiatives - The company is deepening its global strategy by establishing subsidiaries for surface treatment and forming a joint venture in Slovenia to meet local supply demands [8] - The company is focusing on developing new manufacturing processes for harmonic reducer flexible wheels to reduce production costs, which is expected to enhance its competitive edge [9][10] - The company has established strong relationships with leading global clients, ensuring a stable order flow and enhancing its market position [9]

Market Sentiment - The current market sentiment score is 78, indicating a "relatively hot" market condition, which suggests strong investor confidence [4][7][19]. Hot Themes Tracking - **Robotics Theme**: The establishment of a national standard organization for humanoid robots and embodied intelligence marks a transition from "technical exploration" to "industrial collaboration" and "scale implementation," which is expected to accelerate technology deployment and ecosystem formation. Related stocks include Sanhua Intelligent Control (002050) and Wolong Electric Drive (600580) [4]. - **Banking Theme**: Bank stocks exhibit high dividend characteristics, with the CSI Bank Index yielding 6.02%, significantly higher than the 10-year government bond yield. This makes bank stocks important investment targets for long-term funds like insurance and social security, especially during economic slowdowns. Related stocks include Agricultural Bank of China (601288) and Ningbo Bank (002142) [4]. - **Brain-Computer Interface Theme**: Neuralink plans to begin large-scale production of brain-computer interface devices in 2026, with a projected global market size of $12.4 billion by 2034 and a CAGR of 17% from 2025 to 2034. Related stocks include Apogee Medical (300753) and Maipu Medical (301033) [4]. Capital Flow Analysis - The top ten stocks with the highest net inflow include Aerospace Development (000547) with a net inflow of 193.34 million, Greenme (002340) with 126.57 million, and Northern Huachuang (002371) with 125.67 million [8]. - The top ten stocks with the highest net outflow include Leike Defense (002413) with a net outflow of -210.86 million, Haige Communication (002465) with -197.38 million, and Sanhua Intelligent Control (002050) with -192.55 million [10]. Industry Insights - The banking sector is highlighted for its stability and high dividend yield, making it a preferred choice for long-term investors during periods of economic uncertainty [4]. - The robotics industry is poised for significant growth due to the establishment of standards that will facilitate collaboration and reduce development costs, indicating a shift towards large-scale applications [4]. - The brain-computer interface market is expected to grow rapidly, driven by advancements in technology and increasing demand for innovative medical solutions [4].

Investment Rating - The investment rating for the company is "Buy" and is maintained [2][6]. Core Insights - The company has been focused on linear drive systems for over 30 years and has achieved significant global expansion, becoming a leading player in the linear drive market with over 30% market share in electric sofa push rods [3][12]. - The linear drive market is expected to grow significantly, with a projected global market size of approximately $8.694 billion in 2025, reaching $10.38 billion by 2032, with a CAGR of 2.6% from 2026 to 2032 [4][50]. - The company is actively expanding into the humanoid robot sector, leveraging its strong technical capabilities in electromechanical integration [5][94]. Summary by Sections 1. Leading Company in Linear Drives - The company has established itself as a leader in the linear drive industry, with a focus on diverse application scenarios including smart homes, medical care, and automotive components [3][12]. - The company has a significant presence in North America and Europe, with a notable market share in electric sofa push rods [3][12]. 2. Broad Market Prospects for Linear Drives - The linear drive market is expanding into various fields, driven by global consumption upgrades and technological advancements [4][50]. - The smart home market is projected to grow to $173 billion by 2025, with a CAGR of 8.9% from 2022 to 2025 [58]. - The smart office market is expected to reach $51.63 billion in 2024, with a CAGR of 13.6% until 2029 [63]. 3. Strong Electromechanical Integration Capabilities - The company has developed a comprehensive vertical integration manufacturing system, allowing for in-house production of key components [5][94]. - The company is focusing on core motor technology and has made strategic investments in related fields such as gear reducers and joint modules [7][94]. 4. Profit Forecast and Rating - Revenue forecasts for 2025-2027 are projected at 1.378 billion, 1.530 billion, and 1.714 billion yuan respectively, with net profits expected to be 0.55 billion, 0.89 billion, and 1.11 billion yuan [6][8]. - The company is expected to gradually improve its profitability as overseas production capacity utilization increases and tariff impacts diminish [3][6].

Market Sentiment - The current market sentiment score is 92, indicating an "overheated" market condition, which suggests a high level of investor optimism [5][8][20]. Hot Themes Tracking - **Robotics Theme**: The establishment of a national standard organization for humanoid robots and embodied intelligence marks a transition from "technical exploration" to "industrial collaboration" and "scale deployment," which is expected to accelerate technology application and ecosystem formation. Related stocks include Sanhua Intelligent Control (002050) and Wolong Electric Drive (600580) [5]. - **Banking Theme**: Bank stocks exhibit high dividend characteristics, with the CSI Bank Index yielding 6.02%, significantly higher than the 10-year government bond yield. This makes bank stocks important investment targets for long-term funds like insurance and social security, especially during economic slowdowns. Related stocks include Agricultural Bank of China (601288) and Ningbo Bank (002142) [5]. - **Brain-Computer Interface Theme**: Neuralink plans to begin large-scale production of brain-computer interface devices in 2026, with a projected global market size of $12.4 billion by 2034 and a CAGR of 17% from 2025 to 2034. Related stocks include Aipeng Medical (300753) and Maipu Medical (301033) [5]. Capital Flow Analysis - The top ten stocks with the highest net inflow include Dongfang Caifu (300059) with a net inflow of 265.83 million, Shanzigao Technology (000981) with 145.54 million, and TCL Technology (000100) with 129.31 million [9]. - The top ten stocks with the highest net outflow include Zhongji Xuchuang (300308) with a net outflow of -264.73 million and Xinyi Sheng (300502) with -227.65 million [11]. Industry Insights - The report highlights the performance of various industries, with the non-ferrous metals and non-bank financial sectors showing significant net inflows, while industries like media and telecommunications are experiencing substantial net outflows [15][21].

Investment Rating - The report maintains a "Buy" rating for several companies in the AI and computing sectors, including Weike Technology (301196.SZ), Nengke Technology (603859.SH), Hehe Information (688615.SH), and Maixinlin (688685.SH) [9]. Core Insights - The report highlights the introduction of the Video-Thinker model by Xiaohongshu, which breaks the dependency on external tools for video reasoning, achieving state-of-the-art (SOTA) performance with a 7B parameter version [3][22]. - DeepSeek's new architecture, mHC, shows significant performance improvements with only a 6.7% increase in training time, marking a breakthrough in model efficiency [31][32]. - Kimi, a Chinese AI startup, completed a $500 million Series C funding round, with a post-money valuation of $4.3 billion, focusing on the development of its K3 model and talent incentives for 2026 [4][44]. Summary by Sections 1. Computing Dynamics - The report notes stable pricing in computing power leasing, with specific rates for various configurations [21]. - Xiaohongshu's Video-Thinker model integrates key capabilities such as temporal grounding and visual description, achieving new benchmarks in video reasoning [22][23]. - The model's training paradigm includes a two-stage process that enhances its reasoning capabilities while reducing reliance on external tools [26][27]. 2. AI Application Dynamics - Character.AI experienced an 8.32% increase in weekly traffic, indicating growing interest in AI applications [30]. - DeepSeek's mHC architecture addresses traditional bottlenecks in model efficiency, providing a robust framework for enhancing model capabilities [31][32]. 3. AI Financing Trends - Kimi's recent funding round will support the development of its K3 model and expansion of its talent pool, following significant technological advancements in 2025 [4][44]. - Meta's acquisition of Manus for $4-5 billion underscores the strategic importance of AI applications and the integration of advanced AI capabilities into its ecosystem [5][6]. 4. Market Performance - The report provides comparative performance metrics for various AI models, showcasing the advancements made by Video-Thinker over existing solutions [28][29]. - The overall market sentiment remains positive, with a focus on the long-term growth potential of AI applications and computing technologies [7].

Investment Rating - The report maintains a "Recommended" rating for the automotive industry, indicating a positive outlook for investment opportunities [4][7]. Core Insights - TPU (Thermoplastic Polyurethane) is highlighted as a promising safety material for humanoid robots due to its mechanical strength, elasticity, and environmental friendliness. It is expected to significantly enhance the safety and durability of robotic structures [3]. - The report emphasizes the potential of the commercial space sector, particularly with Blue Arrow Aerospace's IPO, which is positioned to meet the growing demand for satellite launches in China [5][6]. Summary by Sections Humanoid Robot Sector - The Huaxin Humanoid Robot Index increased by 7.56% from December 29, 2025, to January 2, 2026, with a cumulative return of 113.6% since 2025 [17]. - Within the humanoid robot sector, components such as assemblies, dexterous hands, and screws showed significant price increases, with assemblies rising by 10.1% [20][24]. - Key companies in the humanoid robot space, such as Zhongjian Technology and Zhongding Co., experienced substantial stock price increases, with gains of 42.8% and 36.4%, respectively [24]. Automotive Sector - The CITIC Automotive Index rose by 1.5%, outperforming the broader market by 2.1 percentage points during the same period [33]. - The automotive sector's PE ratio stands at 33.0, placing it in the 44.6% percentile over the past four years, while the PB ratio is at 3.0, in the 96.3% percentile [49]. - Notable companies in the automotive sector, such as Mould Technology and Tianpu Co., saw significant stock price increases of 25.3% and 21.0%, respectively [42]. Company Recommendations - The report suggests focusing on companies with extensive experience in composite materials, such as Mould Technology and New Spring Co., which are well-positioned to leverage TPU applications in automotive components [4][6]. - Specific recommendations include Mould Technology for its leadership in automotive bumpers and New Spring Co. for its expertise in interior components [4][6].

Market Sentiment - The current market sentiment score is 93, indicating an "overheated" market condition [4][6][19] - Historical trends show that when sentiment is below or close to 30, the market tends to find support, while levels above 70 indicate resistance [6] Hot Themes Tracking - **Robotics Theme**: The establishment of a national standard organization for humanoid robots and embodied intelligence marks a shift from "technical exploration" to "industrial collaboration" and "scale deployment," which is expected to accelerate technology implementation and ecosystem formation. Related stocks include Sanhua Intelligent Control (002050) and Wolong Electric Drive (600580) [4] - **Banking Theme**: Bank stocks exhibit high dividend characteristics, with the CSI Bank Index yielding 6.02%, significantly higher than the 10-year government bond yield. In a slowing economy with increased market volatility, bank stocks become important investment targets for long-term funds like insurance and social security. Related stocks include Agricultural Bank of China (601288) and Ningbo Bank (002142) [4] - **Brain-Computer Interface Theme**: Neuralink plans to begin large-scale production of brain-computer interface devices in 2026, with a projected global market size of $12.4 billion by 2034 and a CAGR of 17% from 2025 to 2034. Related stocks include Apogee Medical (300753) and Maipu Medical (301033) [4] Capital Flow Analysis - The top ten stocks with the highest net inflow include Shenghong Technology (300476) with a net inflow of 200.75 million, followed by Tianji Co. (002759) with 87.06 million [7] - The top ten stocks with the highest net outflow include Aerospace Development (000547) with a net outflow of -164.86 million, followed by Xinyi Technology (300502) with -116.18 million [11] - The top ten industries with the highest net inflow include SW Nonferrous Metals and SW Basic Chemicals, while SW Communication and SW Automotive show the highest net outflow [14][20]

Core Insights - The report indicates that the current market sentiment is rated at 61, categorized as "relatively hot," suggesting a strong investor confidence in the market [2][10] - Key themes identified include robotics, banking, and brokerage sectors, with significant developments and investment opportunities highlighted in each area [6] Group 1: Robotics Sector - The establishment of a national standard organization for humanoid robots and embodied intelligence on December 26, 2025, marks a transition from "technical exploration" to "industrial collaboration" and "scale implementation," which is expected to accelerate technology deployment and ecosystem formation [6] - Related investment opportunities include companies such as Sanhua Intelligent Control (002050) and Wolong Electric Drive (600580) [6] Group 2: Banking Sector - Banking stocks are characterized by high dividend yields, with the China Securities Banking Index yielding 6.02%, significantly higher than the 10-year government bond yield, making them attractive for long-term investors like insurance and social security funds [6] - Notable banking stocks include Agricultural Bank of China (601288) and Ningbo Bank (002142) [6] Group 3: Brokerage Sector - The China Securities Regulatory Commission's chairman emphasized on December 6 the need for differentiated regulation, which aims to support high-quality institutions while limiting weaker ones, thus enhancing capital efficiency [6] - The focus is shifting from mere scale and growth to high-quality development, with recommendations for brokerage firms to differentiate their operations [6] - Relevant brokerage stocks include CITIC Securities (600030) and Guotai Junan Securities (601211) [6]

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The focus of observation has shifted to the government bond issuance in January 2026. The government bond issuance in January 2026 is in line with expectations. The long - end bonds are at the upper limit of the expected range and are worth participating in. For equities, the style is generally balanced with growth slightly dominant before the significant increase in government bond issuance. The report recommends a portfolio of the Shanghai Composite 50 Index (40% position), the China Securities 1000 Index (40% position), and the 30 - year Treasury Bond ETF (20% position) [2][8][21] - In the deleveraging cycle, the stock - bond ratio favors equities to a limited extent, and the value style is more likely to be dominant. The report recommends an A + H dividend portfolio of 13 stocks and an A - share portfolio of 20 stocks, mainly concentrated in industries such as banking, telecommunications, petroleum and petrochemicals, and transportation [9][55] 3. Summary by Relevant Catalogs 3.1 National Asset Balance Sheet Analysis - **Liability Side**: In November 2025, the liability growth rate of the real - economy sector was 8.6% (previous value: 8.7%), in line with expectations. It is expected to decline to around 8.3% in December 2025, lower than the 8.8% at the end of 2024, consistent with the goal of stabilizing the macro - leverage ratio. The government debt growth rate is expected to decline to around 12.4% in December 2025 from 13.1% at the end of November 2025. The central bank's stance on stabilizing the macro - leverage ratio remains unchanged, and the quantitative fiscal targets are awaited from the Two Sessions in 2026 [2][16][17] - **Monetary Policy**: Last week, the capital market tightened marginally. The one - year Treasury bond yield rose to 1.34% at the weekend. It is estimated that the lower limit of the one - year Treasury bond yield is about 1.3%, with a central value around 1.4%, and a 10 - basis - point interest rate cut is expected in 2026. The term spread between the ten - year and one - year Treasury bonds narrowed to 51 basis points. The spreads between the ten - year and one - year Treasury bonds and between the thirty - year and ten - year Treasury bonds are expected to be in the range of 20 - 50 basis points, and the future yield ranges of the ten - year and thirty - year Treasury bonds are expected to be around 1.6% - 1.9% and 1.8% - 2.3% respectively [3][17] - **Asset Side**: In November 2025, the physical volume data showed signs of stabilizing at a low level compared to October. The full - year real economic growth target for 2025 was set at around 5%, and the nominal economic growth target was around 4.9%. It remains to be seen whether a nominal economic growth rate of around 5% will become the central target for China's nominal economic growth in the next 1 - 2 years [4][18] 3.2 Stock - Bond Cost - effectiveness and Stock - Bond Style - **Macroeconomic Background**: Since 2011, China has entered a period of declining potential economic growth, which seems to have ended in Q4 2024. Subsequently, China's profit cycle has entered a state of narrow - range oscillation at a low level. The government's policy goals of stabilizing the macro - leverage ratio, having the financial sector benefit the real economy, and ensuring that housing is for living in rather than speculation are still in effect, and the deleveraging on the liability side has limited room for further contraction. If the valuation of the technology sector in the US is re - evaluated, global funds may flow from the US to China, and attention should be paid to whether the RMB exchange rate will enter an appreciation channel. The risk appetite may also oscillate within a certain range [6][19] - **Market Performance**: Last week, the capital market tightened marginally, resulting in a double - kill of stocks and bonds, with the growth style still dominant. The yields of both long - and short - term bonds rose, and the stock - bond cost - effectiveness favored stocks. The ten - year Treasury bond yield rose by 1 basis point to 1.85%, the one - year Treasury bond yield rose by 5 basis points to 1.34%, and the thirty - year Treasury bond yield rose by 4 basis points to 2.27%. The broad - based rotation strategy outperformed the CSI 300 Index by 0.03 pct last week but has underperformed the CSI 300 Index by - 5.34 pct since its establishment in July 2024, with a maximum drawdown of 12.1% (compared to 15.7% for the CSI 300 Index) [7][20] 3.3 Industry Recommendations - **Industry Performance Review**: This week, the A - share market rose with increased trading volume. The Shanghai Composite Index rose 0.13%, while the Shenzhen Component Index fell 0.58% and the ChiNext Index fell 1.25%. Among the Shenwan primary industries, petroleum and petrochemicals, national defense and military industry, media, automobiles, and machinery and equipment had the largest increases, with weekly changes of 3.9%, 3.1%, 2.1%, 1.4%, and 1.3% respectively. Public utilities, food and beverages, power equipment, pharmaceuticals, and non - bank finance had the largest declines, with weekly changes of - 2.7%, - 2.3%, - 2.2%, - 2.1%, and - 1.8% respectively [26][27] - **Industry Crowding and Trading Volume**: As of December 31, the top five industries in terms of crowding were electronics, power equipment, machinery and equipment, national defense and military industry, and computers, with values of 15.5%, 9.4%, 8.9%, 8%, and 6.8% respectively. The bottom five were comprehensive, beauty care, coal, steel, and petroleum and petrochemicals. The top five industries with increased crowding this week were media, machinery and equipment, household appliances, computers, and national defense and military industry. The trading volume of the entire A - share market rebounded this week. Media, petroleum and petrochemicals, computers, beauty care, and national defense and military industry had the highest year - on - year growth rates in trading volume [28][30] - **Industry Valuation and Earnings**: This week, among the Shenwan primary industries, the PE (TTM) of petroleum and petrochemicals, national defense and military industry, media, machinery and equipment, and automobiles had the largest increases, while public utilities, food and beverages, power equipment, pharmaceuticals, and non - bank finance had the largest declines. Industries with high full - year 2024 profit forecasts and relatively low current valuations compared to historical levels include banking, insurance, coal, public utilities, transportation, pharmaceuticals, beauty care, new energy, and consumer electronics [34][35] - **Industry Prosperity**: Externally, there was a marginal decline in demand. The global manufacturing PMI decreased from 50.5 to 50.4 in December. Internally, the second - hand housing price remained flat in the latest week, and the quantity indicators showed mixed trends. The capacity utilization rate of ten industries showed a fluctuating upward trend from May to December 2025 [39] - **Public Fund Market Review**: In the fifth week of December (December 29 - 31), most actively managed public equity funds outperformed the CSI 300 Index. As of December 31, the net asset value of actively managed public equity funds was 3.95 trillion yuan, slightly up from 3.66 trillion yuan in Q4 2024 [52] - **Industry Recommendations**: In the deleveraging cycle, an A + H dividend portfolio of 13 stocks and an A - share portfolio of 20 stocks are recommended, mainly concentrated in industries such as banking, telecommunications, petroleum and petrochemicals, and transportation [55]

- The report mentions an A-share timing model, specifically the "wave model," which turned bullish on November 14, 2025, and has maintained a high position since then. This model is used to determine optimal market entry and exit points based on market trends and signals[1][29] - Another timing model, the "short-term model," is highlighted for its bullish signal on the CSI 1000 index, while the bullish signals for the CSI 300 and CSI 500 indices have ended. This model focuses on short-term market movements and provides directional signals for specific indices[1][29] - The report also discusses a "Hong Kong stock timing model," which indicates a high certainty of a liquidity-driven bullish trend post-New Year. This model is used to assess market conditions and timing for Hong Kong stocks, with a focus on buy-side activity confirmation[4][29] - A "gold timing model" is mentioned, which has been adjusted to a higher position. This model evaluates the market conditions for gold investments, considering factors like the U.S. dollar index and short-term trading opportunities[5][29] - The report includes a "small-cap A-share timing model," which suggests a bullish outlook for small-cap stocks in January 2026. This model is used to analyze and predict trends in small-cap segments of the A-share market[6][29] - The "dividend growth A-share timing model" is also highlighted, which has been adjusted to favor growth stocks in January 2026. This model focuses on identifying opportunities in dividend-paying growth stocks within the A-share market[6][29]