Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights improvements in gross margin and expense ratio, with expectations for a peak in deliveries this year [4] - The company achieved a revenue of 37.62 billion yuan in the first half of 2025, representing a year-on-year increase of 14.3%, and a net profit attributable to shareholders of 1.91 billion yuan, up 12.9% year-on-year [7] - The report anticipates significant earnings elasticity due to a peak in coal and nuclear power deliveries in 2025, supported by a robust order backlog [7] Financial Summary - The company's revenue projections for 2025-2027 are 82.43 billion yuan, 87.34 billion yuan, and 91.09 billion yuan, with year-on-year growth rates of 20.18%, 5.95%, and 4.30% respectively [6] - The net profit attributable to shareholders is forecasted to be 4.06 billion yuan, 4.73 billion yuan, and 5.44 billion yuan for 2025-2027, with growth rates of 39%, 17%, and 15% respectively [7] - The price-to-earnings (P/E) ratios for the years 2025, 2026, and 2027 are projected to be 15.79, 13.56, and 11.78 respectively [6][7]

1. Report Industry Investment Rating - No specific industry investment rating is provided in the report. 2. Report Core View - Consumption shows significant differentiation, with strong resilience in service and online demand, while commodity consumption remains under pressure. In August, the total retail sales of consumer goods reached 4.0 trillion yuan, a year-on-year increase of 3.4%, down 0.3 pct from the previous month and has declined for three consecutive months. The year-on-year growth rate of service retail sales is faster than that of commodity retail sales. Some industry policies are optimized to offset the downward pressure. Domestic policies focus on consumption expansion and industrial upgrading. However, real estate risks are still not cleared. The average housing price in 100 cities across the country has dropped by more than 33% from the peak, and the average decline in first-tier cities has reached 29.5%. Currently, housing prices have not stopped falling. The economic structural contradictions are prominent, and further interest rate cuts, optimization of mortgage rates, and expansion of fiscal deficits may be needed to support growth. The bond market fluctuates in the short term, and the expectation of easing in the fourth quarter is rising. The report is bullish on the bond market in the short term. The bond market is insensitive to economic data. In the past quarter, the bond market trend has deviated significantly from the economic fundamentals. The short-term suppression of the bond market mainly comes from the stock market. As the stock investment ratio of institutional funds such as annuities reaches a high level, the actual impact of the stock market on the bond market may gradually weaken. Looking forward, with the start of the Fed's interest rate cut cycle and the weak recovery momentum of the domestic economy, the probability of reserve requirement ratio and interest rate cuts in the fourth quarter increases, and the yield of 10Y treasury bonds may drop to 1.65%. Although the short-term bond market may be disturbed by the risk appetite of the stock market, its allocation value is prominent under the support of fundamentals. [1][8][82] 3. Summary by Relevant Catalogs 3.1 Macro News - In August, the consumption growth rate continued to decline, with prominent performance in service consumption and online consumption. The total retail sales of consumer goods in August was 4.0 trillion yuan, a year-on-year increase of 3.4%, down 0.3 pct from the previous month and has declined for three consecutive months. From January to August, the total retail sales of consumer goods increased by 4.6% year-on-year, down 0.2 pct from January to July. In terms of sub-items, from January to August, the year-on-year growth rates of commodity retail sales and service retail sales were 4.8% and 5.1% respectively, down 0.1 pct from January to July [9]. - On September 16, nine departments including the Ministry of Commerce issued "Several Policy Measures to Expand Service Consumption", proposing 19 measures in five aspects [16]. - The Shanghai Municipal Finance Bureau issued a notice to optimize and adjust the personal housing property tax pilot policy, stating that homebuyers who hold a Shanghai residence permit for three years and work and live in Shanghai and purchase a new home in Shanghai as their family's first home are temporarily exempt from property tax [16]. - On September 18, the Fed announced a 25BP interest rate cut, lowering the federal funds rate from 4.25%-4.50% to 4.00%-4.25%, in line with market expectations. The interest rate dot plot shows that the median expectation of Fed officials is that there will be two more 25BP interest rate cuts this year, one more than the prediction in June [16]. 3.2 Meso-High Frequency Data 3.2.1 Consumption - As of September 14, the average daily retail volume of passenger car manufacturers was 6.1 million vehicles, a year-on-year increase of 0.5%, and the average daily wholesale volume was 6.7 million vehicles, a year-on-year decrease of 1.4% [15]. - As of September 18, the total national movie box office revenue in the past 7 days was 614.469 million yuan, a year-on-year increase of 19.3% [15]. - As of August 29, the total retail volume of three major household appliances was 1.337 million units, a year-on-year decrease of 9.9%, and the total retail sales were 3.37 billion yuan, a year-on-year increase of 5.2% [20]. 3.2.2 Transportation - As of September 14, the container throughput of ports in the current week was 6.652 million twenty-foot equivalent units, a year-on-year increase of 10.1% [23]. - As of September 19, the average migration scale index in the past 7 days was 496.3, a year-on-year decrease of 10.4% [23]. - As of September 14, the postal express pick-up volume in the current week was 3.83 billion pieces, a year-on-year increase of 8.5% [29]. - As of September 14, the railway freight volume in the current week was 80.434 million tons, a year-on-year increase of 3.7%, and the highway truck traffic volume was 57.712 million vehicles, a year-on-year decrease of 0.6% [31]. 3.2.3 Operating Rate - As of September 17, the blast furnace operating rate of major steel enterprises in the country was 78.1%, a year-on-year increase of 2.9 pct. As of September 18, the average asphalt operating rate was 26.0%, a year-on-year increase of 3.0 pct [36]. - As of September 18, the soda ash operating rate was 85.8%, a year-on-year increase of 6.9 pct, and the PVC operating rate was 76.8%, a year-on-year decrease of 1.2 pct. As of September 19, the average PX operating rate was 86.8%, and the average PTA operating rate was 78.1% [39]. 3.2.4 Real Estate - As of September 19, the total commercial housing transaction area in 30 large and medium-sized cities in the past 7 days was 1.731 million square meters, a year-on-year increase of 51.1% [43]. - As of September 12, the second-hand housing transaction area in 9 sample cities was 1.598 million square meters, a year-on-year increase of 1.6% [47]. 3.2.5 Prices - As of September 19, the average pork wholesale price was 19.7 yuan/kg, a year-on-year decrease of 26.6%, and a decrease of 2.0% compared to four weeks ago. The average vegetable wholesale price was 5.0 yuan/kg, a year-on-year decrease of 20.7%, and an increase of 3.4% compared to four weeks ago. The average wholesale price of 6 key fruits was 6.8 yuan/kg, a year-on-year decrease of 6.8%, and a decrease of 1.0% compared to four weeks ago [50]. - As of September 19, the average price of thermal coal at northern ports was 689.0 yuan/ton, a year-on-year decrease of 19.8%, and a decrease of 1.3% compared to four weeks ago. The average spot price of WTI crude oil was 63.3 US dollars/barrel, a year-on-year decrease of 9.5%, and an increase of 0.6% compared to four weeks ago [55][56]. - As of September 19, the average spot price of rebar was 3144.2 yuan/ton, a year-on-year decrease of 2.8%, and a decrease of 3.2% compared to four weeks ago. The average spot price of iron ore was 809.4 yuan/ton, a year-on-year increase of 14.5%, and an increase of 3.3% compared to four weeks ago [60]. 3.3 Bond and Foreign Exchange Markets - On September 19, the overnight Shibor was 1.46%, up 5.30BP from September 15. R001 was 1.50%, up 5.19BP from September 15; R007 was 1.52%, up 3.29BP from September 15. DR001 was 1.46%, up 5.04BP from September 15; DR007 was 1.51%, up 2.64BP from September 15. IBO001 was 1.50%, up 5.24BP from September 15; IBO007 was 1.54%, up 1.67BP from September 15 [63]. - Most treasury bond yields increased. On September 19, the yields to maturity of 1-year/5-year/10-year/30-year treasury bonds were 1.39%/1.62%/1.87%/2.20% respectively, down 1.0BP/up 0.5BP/up 0.8BP/up 1.7BP from September 12. The yields to maturity of 1-year/5-year/10-year/30-year China Development Bank bonds were 1.60%/1.79%/2.02%/2.29% respectively, up 2.1BP/down 2.9BP/down 0.9BP/up 2.7BP from September 12 [65]. - On September 19, the yields to maturity of 1-year/5-year/10-year local government bonds were 1.54%/1.83%/2.02% respectively, unchanged/down 1.5BP/down 0.4BP from September 12. The yields to maturity of AAA 1-month/1-year and AA+ 1-month/1-year interbank certificates of deposit were 1.58%/1.68%/1.60%/1.71% respectively, up 2.5BP/up 0.4BP/up 2.5BP/up 0.4BP from September 12 [67]. - As of September 19, 2025, the 10-year treasury bond yields of the United States, Japan, the United Kingdom, and Germany were 4.1%, 1.6%, 4.7%, and 2.8% respectively, up 8BP/4BP/4BP/4BP from September 12 [73]. - On September 19, the central parity rate and spot exchange rate of the US dollar against the RMB were 7.11/7.11 respectively, up 109/-99 pips from September 12 [76]. 3.4 Institutional Behavior - Since the beginning of 2025, the duration of medium- and long-term pure bond funds for interest rate bonds has shown a trend of first decreasing, then increasing, and then decreasing. In the past month, it has been decreasing overall. On September 19, 2025, the estimated median duration was about 4.6 years, a decrease of about 0.2 years compared to last week (September 12) [79]. - Since the beginning of 2025, the duration of medium- and long-term pure bond funds for credit bonds has shown a fluctuating trend. In the past month, the duration has increased rapidly and then fluctuated. On September 19, 2025, the estimated average duration was about 3.1 years, and the estimated median duration was about 3.0 years, an increase of about 0.03 years compared to last week (September 12) [81]. 3.5 Investment Suggestions - The bond market fluctuates in the short term, and the expectation of easing in the fourth quarter is rising. The report is bullish on the bond market in the short term. The bond market is insensitive to economic data. In the past quarter, the bond market trend has deviated significantly from the economic fundamentals. The short-term suppression of the bond market mainly comes from the stock market. As the stock investment ratio of institutional funds such as annuities reaches a high level, the actual impact of the stock market on the bond market may gradually weaken. Looking forward, with the start of the Fed's interest rate cut cycle and the weak recovery momentum of the domestic economy, the probability of reserve requirement ratio and interest rate cuts in the fourth quarter increases, and the yield of 10Y treasury bonds may drop to 1.65%. Although the short-term bond market may be disturbed by the risk appetite of the stock market, its allocation value is prominent under the support of fundamentals [84].

Report Information - Report Title: Credit ABS Market Characteristics and Investment Opportunities Inventory - Report Date: September 22, 2025 - Analysts: Liao Zhiming, Zhang Yifan 1. Industry Investment Rating The report does not mention the industry investment rating. 2. Core Viewpoints - The issuance volume of credit ABS has decreased in recent years due to factors such as weak social financing demand and slow credit scale growth in China. In H1 2025, 102 credit ABS were issued, with a total issuance scale of RMB 95.885 billion, a year-on-year decrease of 22.9% and a decrease of about 77% compared to H1 2021. Since 2023, no RMBS products have been issued, and NPL ABS and auto mortgage ABS have become increasingly important, accounting for 37.8% and 35.8% of the total credit ABS issuance scale in H1 2025 respectively [3][6]. - The investor structure of credit ABS is relatively concentrated, with commercial banks being the largest investors, holding RMB 651.102 billion, accounting for 67.3% of the total credit ABS scale as of the end of July 2025. Different types of investors have different motivations and constraints for investing in credit ABS [3]. - The NPLS issuance scale reached a record high in 2024, and the RMBS performance has been relatively stable, with the early repayment pressure easing since H2 2024. The issuance proportion of green Auto ABS has been increasing year by year [3]. - There are investment opportunities in credit ABS. For NPLS, investors can focus on individual bonds with a ChinaBond valuation higher than 2.1%, a sub - layer ratio exceeding 24.5%, an actual/expected recovery ratio greater than 1.2, more than 5,200 underlying assets, and a bond rating of AAA. For RMBS, investors can focus on individual bonds with a bond rating of AAA, a ChinaBond valuation exceeding 1.9%, a sub - layer ratio higher than 12%, an expected recovery ratio exceeding 50%, more than 2,000 underlying assets, and a cumulative default rate lower than 0.5% [3]. 3. Summary by Directory 3.1 Credit ABS Product Characteristics 3.1.1 Primary Market Supply Characteristics - Since 2005, China has carried out credit asset securitization business, which has developed rapidly and diversified. In recent years, due to weak social financing demand and slow credit scale growth, the issuance volume of credit ABS has decreased. In H1 2025, 102 credit ABS were issued, with a total issuance scale of RMB 95.885 billion, a year - on - year decrease of 22.88% in scale and an increase of 18.60% in the number of issuances compared to the previous year, and a decrease of about 77% compared to H1 2021 [6]. - As of the end of July 2025, the custody scale of credit ABS products was RMB 966.822 billion, a decrease of 14.53% compared to the end of 2024. The significant reduction in RMBS issuance is the key factor for the contraction of credit ABS scale [9]. - Credit ABS is regulated by the National Financial Regulatory Administration, and its initiators include various financial institutions. Its trading venue is the inter - bank market, and it can be publicly or privately offered. The underlying assets can be divided into retail loans, corporate loans, and non - performing loans [12]. - From 2015 to 2021, the issuance scale of credit ABS grew rapidly, but since 2021, it has declined. Currently, auto mortgage ABS, small and micro - enterprise loan ABS, and NPLS are growing, and NPL ABS and auto mortgage ABS have become increasingly important, accounting for 37.79% and 35.82% of the total credit ABS issuance scale in H1 2025 respectively [14]. 3.1.2 Secondary Market Trading Characteristics - Since 2020, credit ABS has maintained a higher yield than policy financial bonds and credit bonds of the same term, but the yield spread has been narrowing [17]. - Before 2016, the secondary market trading of credit ABS was mainly concentrated in corporate loan ABS. After 2016, RMBS became the mainstream due to the booming real estate market. However, since 2023, the early repayment rate of RMBS has increased, leading to a contraction in its scale and a shift in trading focus to other products [19]. 3.2 Credit ABS Investor Structure Characteristics - As of the end of July 2025, commercial banks were the largest investors in credit ABS, holding RMB 651.102 billion, accounting for 67.34% of the total credit ABS scale. The investment direction of non - legal person products also generally represents the investment preference of commercial banks [23]. 3.2.1 Motivation and Constraints for Commercial Banks to Participate in Credit ABS Investment - The risk capital measurement rules have an important impact on commercial banks' investment in credit ABS. The new rules have refined the risk weight calculation methods, and the risk weights of high - rated and senior - tranche asset - backed securities have decreased significantly. However, commercial banks have a low investment willingness for non - performing loan securitization products and non - senior tranches due to their high risk weights [25][26]. 3.2.2 Influencing Factors for Other Types of Investors to Participate in Credit ABS Investment - **Mutual Funds**: Asset - backed securities are classified as illiquid assets, so mutual funds have a low participation rate. The investment proportion limit also restricts the investment of fund special accounts and securities company collective asset management products in credit ABS [31]. - **Asset Management Products**: Investment proportion restrictions limit the possibility of asset management products participating in securitized sub - products. However, trust plans and private funds have become more active investors in sub - products [32]. - **Insurance Companies**: After the implementation of the second - generation solvency regulations, the risk capital occupation of ABS is the same as that of bonds, and the scope of ABS products and managers that insurance institutions can invest in has been broadened. However, insurance institutions are prohibited from investing in ABS sub - shares, NPL ABS, and credit ABS with watch - list loans as underlying assets. In practice, insurance institutions have limited participation in credit ABS investment due to the short - term nature of ABS not matching their long - term liabilities [39][40]. 3.3 Credit ABS Sub - product Credit Performance - RMBS has maintained a relatively low cumulative default rate, and the early repayment pressure has eased since H2 2024. Due to the weak real estate market, the possibility of a significant increase in RMBS issuance scale is low [43]. - In recent years, the pressure on commercial banks to dispose of non - performing assets has increased. In 2024, the issuance scale of public NPLS in the inter - bank market reached a record high of RMB 50.867 billion, mainly composed of non - performing personal housing mortgage loans and non - performing credit card loans, with an increasing proportion of non - performing small and micro - enterprise loans [47]. - Since 2024, the average current issuance interest rates of small and micro - enterprise loan ABS and non - performing loan ABS have been relatively high, while that of personal auto loan ABS has been the lowest [48]. 3.4 Credit ABS Investment Opportunities Inventory - **NPLS**: Due to the higher actual recovery value of existing NPLS than the expected value, the market may underestimate its recovery ability. Institutions with strong due diligence and asset valuation capabilities can build a diversified NPLS investment portfolio to earn excess returns. It is recommended to focus on individual bonds with a ChinaBond valuation higher than 2.1%, a sub - layer ratio exceeding 24.5%, an actual/expected recovery ratio greater than 1.2, more than 5,200 underlying assets, and a bond rating of AAA [51]. - **RMBS**: In a low - interest - rate and volatile market environment, RMBS has high - quality collateral, a low default rate, and enhanced cash - flow stability. It is recommended to focus on individual bonds with a bond rating of AAA, a ChinaBond valuation exceeding 1.9%, a sub - layer ratio higher than 12%, an expected recovery ratio exceeding 50%, more than 2,000 underlying assets, and a cumulative default rate lower than 0.5% [51][54].

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company's performance is supported by water storage, leading to stable profits from coal-fired electricity generation [5] - The company reported a revenue of 25.7 billion yuan in the first half of 2025, a year-on-year decrease of 5.18%, while the net profit attributable to shareholders was 3.795 billion yuan, an increase of 1.36% [7] - The company has a strong position in hydroelectric power, with significant potential for future growth in renewable energy projects [7] Financial Summary - Revenue projections for 2023 to 2027 are as follows: 56.712 billion yuan (2023), 57.819 billion yuan (2024), 56.952 billion yuan (2025E), 59.840 billion yuan (2026E), and 62.124 billion yuan (2027E) [6] - Net profit attributable to shareholders is projected to be 6.705 billion yuan (2023), 6.643 billion yuan (2024), 7.068 billion yuan (2025E), 7.471 billion yuan (2026E), and 7.736 billion yuan (2027E) [6] - The company’s average on-grid electricity price was 0.353 yuan/kWh in the first half of 2025, a decrease of 6.4% year-on-year [7] - The company has a total installed capacity of 44.09 million kW, with hydro, thermal, wind, and solar power contributing 21.3 million kW, 12.41 million kW, 3.99 million kW, and 5.85 million kW respectively [7]

Investment Rating - The investment rating for the construction industry is "Positive" (maintained) [4] Core Viewpoints - The construction industry is experiencing revenue and profit pressure, but recovery momentum is gradually accumulating under supportive policies [4][8] - In the first half of 2025, the construction sector achieved revenue of 3.97 trillion yuan, a year-on-year decrease of 6.02%, and a net profit attributable to shareholders of 91.5 billion yuan, down 6.60% year-on-year [4][8] - Despite the overall decline, the gap between revenue and net profit growth rates has narrowed significantly compared to the first half of 2024, indicating a temporary easing of profit pressure [4][8] - The issuance of 4.4 trillion yuan in special bonds and ongoing investment stabilization policies are expected to gradually open up profit recovery space for the sector [4][8] Summary by Sections Industry Overview - The construction sector's revenue growth is slowing, with profits under pressure. In the first half of 2025, the sector's revenue decreased by 6.02% year-on-year, while net profit fell by 6.60% [8] - The revenue growth rate has declined by 3.04 percentage points compared to the first half of 2024, but the net profit growth rate has improved by 2.77 percentage points [8] - The overall gross margin for the construction sector in the first half of 2025 was 10.02%, down 0.16 percentage points year-on-year, while the net margin was 2.87%, down 0.04 percentage points [13] Subsector Performance - The performance of subsectors is mixed, with the steel structure sector showing revenue growth of 2.02%, driven by overseas industrial building orders [4][32] - The landscaping sector and chemical engineering saw significant profit growth, with net profits increasing by 70.48% and 19.81% respectively [4][32] - The gross margin improvements are concentrated in landscaping, chemical engineering, and international engineering, while the net margin for steel structures and central enterprises has declined [34] Central Enterprises and Orders - In the first half of 2025, the nine major central construction enterprises signed new orders totaling 7.79 trillion yuan, a slight increase of 0.17% year-on-year, despite an overall industry decline [4][56] - The central enterprises' new orders in overseas markets grew by 16.35% year-on-year, becoming a significant support for order structure optimization [56] - The valuation of central enterprises remains low, with expected PE ratios around 5 times and PB ratios below 0.5 times, indicating strong shareholder returns [59]

Investment Rating - The investment rating for the coal industry is "Positive" (maintained) [4] Core Viewpoints - The coal supply is expected to significantly improve the supply-demand balance due to ongoing production checks and a reduction in coal output [5][39] - In August 2025, the national raw coal production was 39,049.7 million tons, a year-on-year decrease of 3.2%, marking two consecutive months of negative growth [5][11] - The policy of "checking overproduction" has accelerated the contraction of supply, leading to a notable shift in production trends [5][39] - The domestic coal price has been under pressure, with northern port prices remaining at or below 650 yuan/ton, impacting the operations of coal companies in key production areas [7][41] - The coal industry is expected to enter a new phase of supply-demand rebalancing driven by policy changes, with a potential price floor at 700 yuan/ton [7][41] Summary by Sections Coal Production - In August 2025, coal production in Shanxi decreased by 6.7% year-on-year, while Inner Mongolia and Shaanxi saw slight increases of 0.3% and 1.1%, respectively [5][11] - The production checks initiated by the National Energy Administration have significantly influenced the supply contraction process [5][41] Coal Imports - In August 2025, coal imports were 42.74 million tons, a year-on-year decrease of 6.7%, continuing a six-month trend of declining imports [6][19] - The cumulative coal imports from January to August 2025 were 29,994 million tons, down 12.2% year-on-year [6][19] Investment Recommendations - Recommended stocks include high-dividend and stable performance coal companies such as China Coal Energy, China Shenhua Energy, and Shaanxi Coal and Chemical Industry [7][41] - Attention is also suggested for companies with high dividends and elasticity, such as Yanzhou Coal Mining Company [7][41]

Investment Rating - The industry investment rating is "Positive" (maintained) [5] Core Viewpoints - VLCC freight rates have reached the highest level for September since 1990, with the VLCC TD3c TCE reaching $96,000 per day on September 16, 2025, and expected to rise further due to tight capacity [6] - The commencement of the West Simandou iron ore project is anticipated to support the bulk shipping market starting from Q4 2025, with an expected shipment volume of 2-3 million tons in 2025 [6] - Potential trade agreements between China and the U.S. could provide additional demand for oil and bulk shipping in Q4 2025 [6] - The combination of OPEC+ oil production increases and the West Simandou project, along with the Federal Reserve's interest rate cuts, is expected to create a favorable environment for both oil and bulk shipping markets starting from Q4 2025 [6] Summary by Sections Shipping Market Performance - VLCC freight rates are at a historical high for September, indicating strong demand and tight supply conditions [6] - The upcoming release of Middle Eastern cargoes and the lowest available VLCC capacity in the past year may lead to further increases in freight rates [6] West Simandou Project - The West Simandou iron ore project has officially commenced operations, with the first batch of shipments expected in November 2025 [6] - The project has significant iron ore reserves exceeding 2.25 billion tons and an annual production capacity of 120 million tons, requiring at least 155 Capesize vessels for transportation [6] Trade Relations Impact - Recent discussions between Chinese President Xi Jinping and U.S. President Donald Trump may pave the way for a trade agreement, potentially increasing oil and agricultural imports from the U.S. [6] - The reduction in tariffs could enhance shipping demand, particularly in the oil and bulk sectors [6] Investment Recommendations - The report suggests focusing on companies such as China Merchants Energy Shipping, COSCO Shipping Energy Transportation, Haitong Development, HNA Technology, and China National Offshore Oil Corporation [6]

Investment Rating - The investment rating for the non-ferrous metals industry is "Positive" (maintained) [4] Core Views - The report highlights that the recent interest rate cut by the Federal Reserve may lead to fluctuations in copper prices, with a focus on demand during the peak season of September and October [4] - Cobalt prices are expected to rise due to a potential extension of the export ban from the Democratic Republic of Congo, which could accelerate the depletion of raw material inventories [4] - Lithium prices are anticipated to rebound from the bottom as demand increases during the peak season [4] Summary by Sections 1. Industry Overview - The U.S. retail sales for August exceeded expectations, with a month-on-month increase of 0.6% [8] - The Federal Reserve cut interest rates by 25 basis points, lowering the upper limit of the benchmark rate from 4.5% to 4.25% [8] 2. Market Performance - The non-ferrous metals sector underperformed, with a decline of 4.02% compared to a 1.30% drop in the Shanghai Composite Index [10] - The sector's PE_TTM valuation is 23.96, down by 0.80 from the previous week, while the PB_LF valuation is 2.87, down by 0.09 [19] 3. Copper - Copper prices saw a decline, with LME copper down 0.85% and SHFE copper down 1.42% [24] - Domestic copper inventories increased by 12.50%, indicating a potential oversupply [24] 4. Aluminum - Aluminum prices decreased, with LME aluminum down 0.43% and SHFE aluminum down 1.00% [35] - The aluminum industry is facing a profit margin squeeze, with profits down to 4,793 CNY/ton [35] 5. Lithium - Lithium carbonate prices increased by 1.45% to 73,500 CNY/ton, while lithium spodumene prices rose by 2.02% to 859 USD/ton [74] - The report indicates that lithium prices may have bottomed out and are expected to recover [74] 6. Cobalt - Cobalt prices increased, with MB cobalt rising by 0.93% to 16.30 USD/pound and domestic cobalt prices up by 1.84% to 277,000 CNY/ton [86] - The potential extension of the DRC's cobalt export ban could lead to a significant price rebound [86]

Investment Rating - The report assigns an "Accumulate" rating for the company, indicating a positive outlook based on its industry-leading position in equipment business and strong momentum in fresh beer operations [5][66]. Core Views - The company is a leading manufacturer in the beer equipment sector, known for its "turnkey" capabilities, which provide comprehensive solutions from design to installation, enhancing customer loyalty [7][10]. - The fresh beer segment is expected to drive significant growth, with a focus on differentiated products and a successful transition to a franchise model for its small bar operations [10][46]. - Revenue and profit forecasts indicate substantial growth, with projected net profits increasing significantly from 2025 to 2027, reflecting a strong recovery and expansion in both beer manufacturing and equipment sectors [6][64]. Summary by Sections Market Performance - As of September 18, 2025, the company's closing price is 25.31 RMB, with a total market capitalization of approximately 3,054.95 million RMB and a debt-to-asset ratio of 60.61% [3]. Financial Forecasts and Valuation - Revenue projections for 2025-2027 are estimated at 17.01 billion RMB, 18.87 billion RMB, and 20.12 billion RMB, with year-on-year growth rates of 14.12%, 10.97%, and 6.62% respectively [6][64]. - The expected net profits for the same period are 0.79 billion RMB, 0.98 billion RMB, and 1.23 billion RMB, with growth rates of 273.29%, 23.98%, and 26.45% respectively [6][64]. Business Overview - The company has established a robust presence in the beer equipment market, leveraging its technical expertise and extensive project experience to secure a strong order backlog [10][24]. - The company’s dual business model, combining equipment manufacturing and craft beer production, positions it well for future growth, particularly in the high-end beer segment [10][14]. Growth Drivers - The fresh beer segment is anticipated to grow significantly, supported by the successful launch of new products and the expansion of sales channels, including strategic partnerships with major retailers [10][49]. - The company has successfully developed a new type of draft beer machine, which is expected to enhance sales in the immediate consumption market [56][60]. Competitive Position - The company is recognized for its strong brand reputation and customer loyalty, having established long-term relationships with major players in the beer industry [10][34]. - The report highlights the company's unique "turnkey" service model as a competitive advantage, allowing it to meet the complex needs of beer manufacturers efficiently [31][32].

Investment Rating - The report maintains a "Positive" investment rating for the industry [4]. Core Viewpoints - The report highlights the potential growth of the game "Delta Action" within the FPS market, indicating that it has the potential to carve out a new growth path [4]. - The FPS market remains a significant segment, with a stable monthly market size of approximately 1-1.5 billion in China, driven by a new generation of players [11][14]. - The "Loot Extraction" genre is identified as having greater growth potential compared to other FPS sub-genres, with the report suggesting that it is becoming a key differentiated sub-category within the shooting game ecosystem [22][39]. Summary by Sections Industry Performance - The FPS market is characterized by a stable user base and strong monetization capabilities, with shooting games accounting for 13.89% of revenue among the top 100 mobile games in 2024 despite only representing 5% of the total number of products [11][14]. Game Analysis - "Delta Action" has shown strong performance metrics, ranking first in downloads on iOS in April and May 2025, and achieving a monthly active user (MAU) count of 38.63 million by June 2025 [4][42]. - The game has successfully integrated classic IP value and innovative gameplay, filling a market gap for high-tactical, resource-driven experiences [5][6]. Market Trends - The report notes that the "Loot Extraction" genre is evolving, with significant contributions from major developers like Tencent and NetEase, indicating a trend towards lighter, localized adaptations of this genre [36][39]. - The report emphasizes the importance of continuous updates and operational optimizations, which have helped "Delta Action" maintain a top position in the mobile game sales rankings [52].