Market Liquidity Overview - R007 increased from 1.5137% to 1.5360%, a rise of 2.23 basis points; DR007 rose from 1.4430% to 1.4935%, an increase of 5.05 basis points. The spread between R007 and DR007 narrowed by 2.82 basis points [9] - The net outflow of funds this week was 250.36 billion yuan, with net inflow decreasing by 167.59 billion yuan compared to last week. Fund supply was -184.25 billion yuan, while fund demand was 66.12 billion yuan [13] Industry Sector Liquidity Tracking - Most sectors in the CITIC first-level industry index saw gains, with the building materials sector leading at a weekly increase of 9.18%. Other sectors like petroleum and petrochemicals, and steel also experienced slight increases. The banking and telecommunications sectors led the declines, with decreases of 2.69% and 1.68% respectively [18] Style Sector Liquidity Tracking - Most style indices increased, with cyclical and growth styles leading at 4.64% and 1.81% respectively. The financial style was the only one to decline, down by 1.50%. Growth style accounted for 58.15% of the average daily trading volume, making it the most active sector [3]

Investment Rating - The industry rating is "Outperform" [1][51] Core Insights - Aircraft manufacturers are slowly recovering their production capacity, but delivery delays persist due to supply chain and labor shortages. Boeing is expected to deliver 600 aircraft in 2025, averaging about 50 per month, while Airbus is projected to deliver 793 aircraft, averaging about 66 per month. The backlog of aircraft orders remains at historically high levels [2][5][7]. - Global civil aviation passenger traffic growth has slowed down, with all regions except Africa experiencing a decrease in year-on-year growth rates compared to October. Africa's airlines saw an increase of 12.6%. Europe accounted for the largest share of international passenger traffic, with a year-on-year growth of 6.8% in November, while Asia's international passenger traffic grew by 9.3% [2][11][15][18]. - Overall, while aircraft manufacturers' production capacity is recovering, it still cannot meet the continuously expanding demand for aircraft. The aircraft leasing market remains strong, benefiting from the tight supply-demand situation. The Asia-Pacific aviation market has significant growth potential, providing broader development space for Chinese aircraft leasing companies, which are currently undervalued compared to global leader AerCap [2][3][4]. Summary by Sections 1. Aircraft Supply Continues to be Tight - Boeing's monthly delivery volume has significantly improved compared to last year, while Airbus's delivery volume is slightly better than the same period last year. However, both manufacturers' delivery levels are still far from previous highs [5]. - The backlog of aircraft orders remains at historical highs, with Boeing and Airbus accumulating new orders of 1,175 and 1,000 aircraft respectively in 2025 [7]. 2. Update on Civil Aviation Passenger Demand - In November 2025, global aviation revenue passenger kilometers (RPK) grew by 5.7% year-on-year, down from 6.6% in October. The global passenger load factor (PLF) reached 83.7%, the highest for November on record [11][15]. - The international passenger traffic in November showed robust growth, with Asia-Pacific and Europe regions maintaining strong performance, while North America saw a growth of 4.0% [18]. 3. Tracking Aircraft Leasing Companies - As of June 30, 2025, Bohai Leasing has the largest number of owned aircraft (628), while China Aircraft Leasing has the least (151). In terms of aircraft orders, Bohai Leasing also leads with 442 orders [39][44]. - The average remaining lease term for China Aircraft Leasing is relatively long at 7.9 years, ensuring long-term stability for the company's leases [47].

Market Liquidity Overview - R007 decreased from 1.5157% to 1.5137%, a reduction of 0.20 basis points; DR007 fell from 1.4727% to 1.4430%, down by 2.97 basis points. The spread between R007 and DR007 increased by 2.77 basis points [9] - The net outflow of funds this week was 82.499 billion yuan, with a decrease in net inflow of 11.712 billion yuan compared to last week. Fund supply was 78.941 billion yuan, while demand was 161.440 billion yuan. Specifically, fund supply decreased by 18.763 billion yuan, with net financing purchases increasing by 18.719 billion yuan and stock dividends rising by 42.153 billion yuan. The net redemption of stock ETFs decreased by 91.826 billion yuan [13] Industry Sector Liquidity Tracking - Most sectors in the CITIC first-level industry index declined, with a weak overall market style and a continuation of sector differentiation. The number of declining sectors exceeded those that rose, with the computer sector showing the most significant increase at 4.31%, while the defense and agriculture sectors led the declines at 5.66% and 3.49%, respectively [19] - The electronic industry received the most net leveraged capital inflow, totaling 20.163 billion yuan, while the building materials sector experienced a net outflow of 0.205 billion yuan, marking the most significant reduction [20] Style Sector Liquidity Tracking - Growth style had the largest increase at 1.78%, while financial style saw the largest decline at 2.73%. Growth style accounted for 60.86% of the average daily trading volume, making it the most active sector [3]

- The report focuses on the "Fixed Income+" (固收+) product, which aims to achieve absolute returns higher than pure fixed-income products, with risk-return characteristics between bond and equity products. The specific scope includes mixed bond funds with average convertible bond positions not exceeding 80% over the past eight quarters and equity positions (stocks + 0.5×convertible bonds) not exceeding 40% on average, with a maximum equity position of 60%[18] - The classification of "Fixed Income+" funds is based on long-term equity risk exposure, dividing them into three categories: conservative, balanced, and aggressive. The classification thresholds are set at 15% and 25% for average equity positions over the past eight quarters[21][20] - The report highlights the growth in "Fixed Income+" fund scale, with a total increase of 7700.41 billion yuan (63.50%) from the end of 2024 to Q3 2025. Among the categories, conservative funds grew by 3695.98 billion yuan, balanced funds by 2101.94 billion yuan, and aggressive funds nearly doubled with an increase of 1902.49 billion yuan[18][21] - The performance of "Fixed Income+" funds from 2020 to 2025 demonstrates strong stability and cross-cycle return capabilities. Even aggressive funds show significantly lower drawdowns compared to equity and convertible bond products. The products exhibit strong return elasticity during equity market uptrends and resilience during downturns[31][35] - The leverage ratio of "Fixed Income+" funds has been declining, from 1.24 at the end of 2023 to 1.10 by Q3 2025. Conservative funds generally maintain higher leverage, while aggressive funds rely more on equity asset elasticity for returns[57][60] - The duration of "Fixed Income+" funds has increased from 1.92 years in 2024 to 3.04 years by Q3 2025, reflecting a strategy to extend duration for bond yield enhancement amid declining bond yields[61][63]

Group 1: Manufacturing Sector - December Manufacturing PMI recorded at 50.1%, up 0.9 percentage points from the previous month, marking the first entry into the expansion zone since April 2025[2] - Production index rose to 51.7%, an increase of 1.7 percentage points, while new orders index reached 50.8%, up 1.6 percentage points, indicating improved production and demand[12] - Large enterprises' PMI increased to 50.8%, up 1.5 percentage points, supporting the manufacturing recovery, while small enterprises' PMI fell to 48.6%, reflecting ongoing challenges[18] Group 2: Non-Manufacturing Sector - December Non-Manufacturing Business Activity Index rose to 50.2%, returning to the expansion zone, showing improvement from November[3] - Construction PMI recorded at 52.8%, up 3.2 percentage points, driven by favorable weather and accelerated project progress[25] - Service sector Business Activity Index increased to 49.7%, still in contraction, with significant variation across industries, indicating a slow recovery[25] Group 3: Economic Outlook - Overall PMI data for December reflects a phase of economic recovery, confirming the effectiveness of growth stabilization policies[5] - Anticipated economic expansion supported by upcoming consumption peaks and infrastructure projects, alongside a special bond issuance plan of 62.5 billion yuan to stimulate consumption[5] - Risks include potential delays in policy implementation, slow global economic recovery, and insufficient domestic demand[6]

Market Overview - The performance of major indices during the sample period shows that SGE Gold 9999, CSI 2000, and S&P 500 had returns of 1.24%, 0.30%, and 0.10% respectively, ranking them at the top [1] - In terms of industry performance, retail trade, non-bank financials, and beauty care sectors led with returns of 6.66%, 2.90%, and 2.87% respectively, while electronics, power equipment, and machinery sectors lagged with returns of -3.28%, -3.12%, and -1.56% [1][15] ETF Product Overview Market Performance - Commodity ETFs had the best average performance with a weighted average return of 0.92%, while QDII ETFs had the worst performance with a return of -2.01% [19] - CSI 2000 and CSI 500 ETFs performed well with weighted average returns of 0.63% and 0.06% respectively, while STAR Market related ETFs had poor performance with returns of -2.55% and -2.48% [19] Fund Flow - Broad-based ETFs saw the highest net inflow of 406.15 billion, while money market ETFs experienced the largest net outflow of -19.43 billion [2][25] - From an industry perspective, technology sector ETFs had the highest net inflow of 100.54 billion, while traditional manufacturing sector ETFs had the lowest net inflow of -29.55 billion [27] Trading Volume - Broad-based ETFs experienced the highest increase in average daily trading volume, with a change rate of 20.12%, while QDII ETFs saw a decrease of -7.34% [31][33] - Financial real estate sector ETFs had the highest increase in average daily trading volume change rate at 15.85%, while the biopharmaceutical sector saw a decrease of -7.10% [37]

Quantitative Models and Construction Methods 1. Model Name: RSI (Relative Strength Index) - **Model Construction Idea**: RSI is used to measure the relative strength of price movements over a specific period, identifying overbought or oversold market conditions[2] - **Model Construction Process**: The RSI is calculated using the following formula: $ RSI = 100 - \frac{100}{1 + RS} $ where $ RS = \frac{\text{Average Gain over N periods}}{\text{Average Loss over N periods}} $ In this report, the RSI is calculated over a 12-day period. RSI values above 70 indicate an overbought market, while values below 30 indicate an oversold market[2] - **Model Evaluation**: RSI is a widely used technical indicator for short-term market trend analysis, providing insights into potential price reversals[2] 2. Model Name: Net Purchase (NetBuy) - **Model Construction Idea**: This model calculates the net purchase amount of ETFs to assess fund inflows or outflows on a daily basis[2] - **Model Construction Process**: The formula for NetBuy is: $ NETBUY(T) = NAV(T) - NAV(T-1) \times (1 + R(T)) $ where: - $ NETBUY(T) $ is the net purchase amount on day T - $ NAV(T) $ is the net asset value on day T - $ NAV(T-1) $ is the net asset value on the previous day - $ R(T) $ is the return on day T[2] - **Model Evaluation**: This model provides a clear view of daily fund flows, which is critical for understanding investor sentiment and market dynamics[2] --- Model Backtesting Results RSI Model - RSI values for various ETFs are provided, such as: - Huatai-PineBridge CSI 300 ETF: RSI = 48.56[4] - E Fund CSI 300 ETF: RSI = 47.80[4] - Southern CSI 500 ETF: RSI = 50.43[4] - Huaxia SSE 50 ETF: RSI = 34.90[4] - Huaxia Hang Seng Technology ETF: RSI = 34.54[7] Net Purchase Model - Net purchase values for various ETFs are provided, such as: - Huatai-PineBridge CSI 300 ETF: NetBuy = 8.08 billion RMB[4] - E Fund CSI 300 ETF: NetBuy = 2.37 billion RMB[4] - Southern CSI 500 ETF: NetBuy = 0.58 billion RMB[4] - Huaxia SSE 50 ETF: NetBuy = -1.09 billion RMB[4] - Huaxia Hang Seng Technology ETF: NetBuy = 4.02 billion RMB[7]

Production - In November 2025, the industrial added value of large-scale industries grew by 4.8% year-on-year, a slight decrease of 0.1 percentage points from the previous month[1] - The mining industry recorded a growth of 6.3%, outperforming manufacturing at 4.6% and water, electricity, and gas at 4.3%, indicating ongoing reliance on traditional resource sectors[12] - The sales rate of industrial products fell to 96.5%, reflecting a misalignment between production expansion and end demand[13] Consumption - The total retail sales of consumer goods in November 2025 increased by 1.3% year-on-year, marking a decline of 1.6 percentage points from October, the lowest monthly growth since December 2022[2] - Service retail sales grew by 5.4% year-on-year from January to November, indicating a shift towards service-oriented consumption[16] - Online retail sales of physical goods increased by 5.7%, accounting for 25.9% of total retail sales, highlighting the impact of digital consumption trends[17] Investment - From January to November 2025, national fixed asset investment (excluding rural households) decreased by 2.6%, with a widening decline of 0.9 percentage points compared to the previous period[5] - Real estate investment saw a cumulative decline of 15.9%, with housing sales area and sales amount both decreasing by 7.8% and 11.1% respectively, continuing a negative growth trend for 43 months[25] - Manufacturing investment fell by 0.8 percentage points to 1.9%, with a monthly decline of 4.5%, reflecting ongoing challenges in the sector[24] Economic Outlook - The economic data for November indicates that insufficient effective demand remains the primary contradiction in the economy, opening up further space for policy support[27] - Future policies to boost domestic demand are expected to focus on enhancing employment, increasing residents' income, and improving social security[28]

Monetary Policy Changes - The Federal Reserve lowered interest rates by 25 basis points to a range of 3.5-3.75% in December, marking a total reduction of 75 basis points for 2025[1] - The Fed announced plans to begin purchasing short-term government bonds to maintain adequate reserve levels[1] Economic Outlook - The Fed raised GDP growth forecasts for 2025, 2026, and 2027 to 1.7%, 2.3%, and 2.0%, respectively, with increases of 0.1, 0.5, and 0.1 percentage points compared to previous estimates[4] - Inflation expectations were lowered, with PCE forecasts for 2025 and 2026 adjusted to 2.9% and 2.4%, down by 0.1 and 0.2 percentage points, respectively[4] Labor Market Insights - The labor market's resilience has weakened, with employment growth slowing and the unemployment rate slightly increasing since September[2] - The Fed's decision to cut rates reflects concerns over the labor market rather than inflation, which is primarily driven by tariff-related products[1] Internal Fed Dynamics - The Fed's decision faced some dissent, with a 9-3 vote indicating differing opinions on the rate cut[5] - The upcoming nomination of a new Fed chair by Trump could influence future monetary policy, particularly regarding rate cuts[5] Debt and Fiscal Policy - As of November 2025, the total U.S. national debt exceeded $38 trillion, with an average interest rate on outstanding debt rising to 3.36%[6] - The 2026 defense budget is set at $1.01 trillion, reflecting a 13% increase from 2025, which adds pressure to fiscal resources[7] Market Reactions - Following the rate cut, U.S. stock indices rose, and precious metals like gold and silver also saw price increases[7] - The dollar index slightly decreased to around 98.59, while U.S. Treasury yields fell[7] Risks to Consider - Potential risks include a faster-than-expected decline in U.S. employment and inflation rates not decreasing as anticipated[8]

Group 1: CPI Analysis - In November 2025, the CPI increased by 0.7% year-on-year, marking the highest level in 2025 and the highest since March 2024, while it slightly decreased by 0.1% month-on-month[1] - Core CPI, excluding food and energy, rose by 1.2% year-on-year, remaining above 1% for three consecutive months, indicating a gradual recovery in consumer spending[1] - Food prices shifted from a 2.9% decline in October to a 0.2% increase in November, primarily driving the CPI increase[1] Group 2: PPI Insights - In November 2025, the PPI increased by 0.1% month-on-month, achieving positive growth for two consecutive months, but the year-on-year decline widened to -2.2%[2] - Key industries such as coal mining and photovoltaic equipment manufacturing showed narrowing year-on-year price declines, reflecting effective supply-demand optimization policies[2] - The prices of new materials and intelligent technologies rose significantly, with external storage devices increasing by 13.9% year-on-year, indicating a shift towards industrial upgrading[2] Group 3: Market Outlook - The CPI's recovery is largely dependent on short-term supply shocks from fresh produce, while long-term food prices, such as pork, remain low[4] - The divergence in price trends between traditional and emerging industries reflects ongoing economic transformation, with traditional sectors still undergoing capacity reduction[4] - Future expectations suggest a gradual recovery in prices across key industries, with CPI likely to continue a moderate upward trend and PPI expected to turn positive in 2026[4]