Report Information - Report Date: November 18, 2025 [1] - Analyst: Zhang Hesheng [1] - Tel: 021 - 53686158 [1] - E-mail: zhanghesheng@shzq.com [1] - SAC Number: S0870523100004 [1] Market Performance Summary Stock Market - **US Stocks**: In the past week (20251110 - 20251116), the Nasdaq, S&P 500, and Dow Jones Industrial Average changed by -0.45%, 0.08%, and 0.34% respectively, and the Nasdaq China Technology Index changed by -2.16% [2] - **Hong Kong Stocks**: The Hang Seng Index rose by 1.26% during the same period [2] - **A-Shares**: The wind all A index changed by -0.47%. Among them, large-cap stocks declined while small-cap stocks rose. The CSI A100, CSI 300, CSI 500, CSI 1000, CSI 2000, and wind micro-cap stocks changed by -0.80%, -1.08%, -1.26%, -0.52%, 0.89%, and 3.10% respectively [3] - **Sector Performance**: In the Shanghai and Shenzhen stock markets, the growth sectors declined significantly. The Shanghai Composite 50 and STAR Market 50 changed by 0.00% and -3.85% respectively. The Shenzhen Component 100 and ChiNext Index changed by -1.81% and -3.01% respectively. The Beijing Stock Exchange 50 Index changed by -0.56% [4] - **Industry Performance**: Among the 30 CITIC industries, 20 industries rose and 10 industries fell. The leading industries were catering and tourism, textile and apparel, medicine, basic chemicals, comprehensive, commercial retail, and light industry manufacturing, with a weekly increase of more than 3.0%. From the perspective of ETF performance, Hong Kong innovative drug, tourism, chemical, and Hang Seng consumer ETFs led the way, with a weekly increase of more than 3.5% [5] Bond Market - **Domestic Bonds**: In the past week (20251110 - 20251116), the 10-year treasury bond futures main contract fell by 0.03% compared with November 7, 2025. The yield of the 10-year treasury bond active bond fell by 0.02 BP to 1.8140%. The yields of various maturity varieties rose and fell [6] - **Funding**: As of November 14, 2025, R007 was 1.4945%, up 2.68 BP from November 7, 2025; DR007 was 1.4673%, up 5.43 BP, and the spread between the two narrowed. The central bank's net investment in the open market in the past week was 6262 billion yuan [7] - **Leverage Level**: The bond market leverage level declined, and the 5-day average of inter-bank pledged repurchase volume decreased from 7.97 trillion yuan on November 7, 2025, to 7.44 trillion yuan on November 14, 2025 [9] - **US Bonds**: In the past week (20251110 - 20251116), US bond yields increased. As of November 14, 2025, the 10-year US bond yield increased by 3 BP to 4.14%. The yields of various maturity varieties increased, and the curve shifted upward as a whole [10] Foreign Exchange and Commodity Markets - **Foreign Exchange**: In the past week (20251110 - 20251116), the US dollar index declined by 0.26%. The US dollar against the euro, pound, and yen changed by -0.48%, -0.04%, and 0.72% respectively. The US dollar against the offshore and onshore RMB exchange rates declined slightly [11] - **Gold**: In the past week (20251110 - 20251116), gold prices rose. The London gold spot price rose by 1.93% to $4071.10 per ounce; the COMEX gold futures price rose by 2.29% to $4086.50 per ounce. The domestic gold price also rose, with the Shanghai gold spot rising by 3.27% to 948.03 yuan per gram and the futures rising by 3.43% to 950.50 yuan per gram [12] Outlook and Investment Suggestions - **Fed Policy**: The Fed may turn dovish again. Although the probability of the Fed cutting interest rates in December is less than 50%, the Fed may turn dovish again after seeing weak economic data [13] - **Domestic Equity Market**: A-shares are likely to maintain a high-level volatile trend. It is recommended to pay attention to investment opportunities in new energy, photovoltaic, coal, steel, chemical, chip, computing power, and artificial intelligence [13] - **Bond Market**: The logic of the bond bull market remains unchanged, but high risk appetite is not conducive to the decline of bond yields. Bond yields are likely to move sideways and fluctuate within a narrow range [13] - **Gold Market**: The gold price is expected to maintain a strong and volatile trend [13]

Group 1 - The report focuses on the rare metals ETF managed by GF Fund Management, which tracks the CSI Rare Metals Theme Index, selecting up to 50 listed companies involved in the mining, smelting, and processing of rare metals [2][8] - The best-performing stock in the ETF from May 1, 2025, to October 31, 2025, is Yunnan Tin Company (000960.SZ), chosen based on the deviation of its performance from the CSI Rare Metals Index and research coverage [2][8] - As of November 13, 2025, Yunnan Tin's stock price was 25.77 CNY, with a projected EPS of 26.8 CNY per share for 2027 based on a 15x PE ratio, indicating a closing position of 20.22% [2][9] Group 2 - From October 9, 2025, to November 13, 2025, the dynamic allocation strategy based on Yunnan Tin's stock outperformed the buy-and-hold strategy, achieving an end-period return of 8.89% with a maximum drawdown of 5.57% [3][9] - The buy-and-hold strategy for the rare metals ETF yielded a return of 10.33% with a maximum drawdown of 10.32% during the same period [3][9]

Investment Rating - The report maintains an "Overweight" rating for the electronics industry [1] Core Insights - Demand for advanced process capacity is continuously rising, with TSMC's 3nm capacity facing severe shortages due to strong demand from major AI chip clients like Nvidia [3][4] - TSMC's 3nm process is expected to have a significant supply gap by 2026, leading to high premiums for capacity and potentially pushing TSMC's overall gross margin above 60% [3] - The smartphone AP-SoC shipment volume is projected to reach 51% advanced process by 2025, indicating a shift towards advanced nodes across various price segments [4] Market Overview - The SW electronics index fell by 4.77% in the past week, underperforming the CSI 300 index by 3.68 percentage points, with all six sub-sectors showing declines [3] - The semiconductor sector is anticipated to experience a comprehensive recovery in 2025, with an accelerated clearing of the competitive landscape and a sustained recovery in industry profitability [5] Investment Recommendations - The report suggests focusing on semiconductor design stocks with real performance and low PE/PEG ratios, such as Zhongke Lanyun and Juxin Technology in the AIOT SoC chip sector [5] - In the analog chip sector, attention is recommended for Meixin Sheng and Nanchip Technology, while in the driver chip area, Fengcai Technology and Xinxiangwei are highlighted [5] - For semiconductor key materials, the report emphasizes the logic of domestic substitution, recommending leading electronic materials companies like Tongcheng New Materials and Dinglong Co [5]

Group 1: CPI Analysis - In October 2025, the national consumer price index (CPI) increased by 0.2% year-on-year, with urban areas rising by 0.3% and rural areas declining by 0.2%[12] - Food prices decreased by 2.9%, while non-food prices increased by 0.9%[12] - Core CPI rose by 1.2%, marking the highest increase since March 2024, indicating steady demand growth[15] Group 2: PPI Trends - The producer price index (PPI) fell by 2.1% year-on-year in October 2025, but the decline narrowed by 0.2 percentage points compared to the previous month[14] - PPI showed a month-on-month increase of 0.1%, marking the first rise in 2025[20] - Key industries such as black metal mining and coal mining saw price declines narrow or recover, indicating ongoing improvement in PPI[22] Group 3: Policy Implications - The low CPI and PPI levels create room for more aggressive macroeconomic policies, including proactive fiscal measures and moderate monetary easing[5] - Continuous improvement in industrial product prices suggests a stable economic recovery trend[30] Group 4: Risks - Potential risks include worsening geopolitical events, changes in international financial conditions, and unexpected shifts in China-U.S. policies[6]

Investment Rating - The industry investment rating is "Overweight (Maintain)" [1] Core Viewpoints - The Ministry of Finance continues to implement measures to boost consumption, including providing financial subsidies for personal consumption loans and encouraging private investment [5] - The Consumer Price Index (CPI) showed a year-on-year increase of 0.2% in October 2025, indicating effective policies to expand domestic demand [5] - The demand for trendy toys is rapidly growing, driven by Generation Z and emotional value, with AI technology integration expected to enhance growth in the sector [6] - The long-term investment advantages of gold are highlighted, with expected growth in demand due to anticipated interest rate cuts and changing consumer preferences [7] - Recent tax policy adjustments for gold are expected to accelerate industry compliance and reshape market dynamics [8] - The sports and outdoor industry is seen as a significant contributor to economic growth, with ongoing government support for high-quality development [9] - The beauty and personal care industry is transitioning from penetration expansion to quality upgrades, with a focus on domestic brands and technological advantages [10] Summary by Sections Industry Overview - The retail industry index rose by 0.31% in the week of November 3-7, 2025, ranking 17th among 31 primary industries [4] Economic Policies - The Ministry of Finance's actions aim to stimulate consumption and enhance financial cooperation with local governments [5] Consumer Trends - The CPI and core CPI show positive trends, indicating a recovery in consumer spending [5] Sector-Specific Insights - Trendy toys are experiencing rapid demand growth, with AI integration expected to drive innovation [6] - The gold and jewelry sector is poised for growth due to changing consumer preferences and favorable tax policies [7][8] - The sports and outdoor sector is benefiting from government reforms and increased consumer confidence [9] - The beauty industry is shifting towards quality and brand loyalty, with a focus on domestic products [10] Investment Recommendations - Suggested companies to watch include: - Gold and jewelry: Laopuyin, Laofengxiang, Chaohongji [11] - Trendy toys: Pop Mart, Bluc, TOPTOY, Lezitiancheng [11] - Sports and outdoor: Anta, Li Ning, 361 Degrees, Bosideng [11] - Beauty and personal care: Proya, Mao Ge Ping, Jinbo Biological, Runben, Dengkang Oral, Baiya [11]

Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for its future performance [8]. Core Viewpoints - The company is a leading provider of precision welding and assembly equipment, actively expanding into the semiconductor packaging equipment sector, which presents significant growth potential [2][8]. - The company has a diversified business model focusing on three main areas: semiconductor packaging equipment, electrification and intelligence in new energy vehicles, and precision electronic assembly [2][17]. Summary by Sections 1. Company Overview - The company has been deeply engaged in the precision welding and assembly equipment industry for nearly 30 years, becoming a national-level "little giant" and a champion enterprise in the manufacturing sector [17]. - Following its listing in 2016, the company leveraged its core precision welding technology to expand into the automotive industry and further into semiconductor packaging equipment [17]. 2. Business Segments - The company operates four main business segments: 1. Precision welding and assembly equipment, which includes various welding technologies and has a strong presence in consumer electronics, automotive, and robotics [19]. 2. Machine vision process equipment, which has seen a compound annual growth rate (CAGR) of 16.10% from 2021 to 2024 [3]. 3. Die bonding packaging equipment, which is expected to grow significantly, with revenue projected to increase from 0.03 billion to 0.26 billion from 2021 to 2024, reflecting a CAGR of 110.57% [4]. 4. Intelligent manufacturing complete equipment, focusing on high-end equipment for new energy vehicles [3]. 3. Financial Performance - The company achieved a revenue of 9.45 billion in 2024, representing a year-on-year growth of 19.24%, with a net profit of 2.12 billion, up 11.10% [2][30]. - The revenue and net profit CAGR from 2016 to 2024 were 16.10% and 9.43%, respectively, indicating stable growth [26]. 4. Future Projections - Revenue projections for 2025, 2026, and 2027 are 10.90 billion, 13.30 billion, and 16.09 billion, with growth rates of 15.28%, 22.05%, and 21.01% respectively [8]. - The company is expected to maintain a high gross margin of over 50% and a net margin above 20% due to its strong competitive position and ongoing R&D investments [30].

Investment Rating - The industry investment rating is "Overweight (Maintain)" [1] Core Viewpoints - The pharmaceutical and biotechnology industry is experiencing significant growth driven by advancements in AI technology, which enhances drug development efficiency and reduces costs [5][6] - Recent high-value collaborations in the AI pharmaceutical sector, such as those between companies like Insilico Medicine and Eli Lilly, highlight the increasing commercial value of domestic enterprises [3][4] - The AI+ healthcare market in China is projected to grow from 8.8 billion yuan in 2023 to 315.8 billion yuan by 2033, with a compound annual growth rate of 43% [5] Summary by Sections Industry Overview - The pharmaceutical and biotechnology sector is currently rated as "Overweight," indicating a favorable outlook compared to the benchmark index [1] - The industry has shown resilience and potential for growth, particularly in the context of AI-driven innovations [5] Recent Developments - Insilico Medicine has entered a strategic partnership with Eli Lilly, aiming to leverage AI technology for drug discovery, with potential earnings exceeding $100 million [3] - Crystal Technology has also formed a multi-target strategic collaboration with Eli Lilly, with a total agreement value of up to $345 million [4] Market Potential - The AI+ healthcare market in China is rapidly expanding, with the number of AI pharmaceutical companies reaching 105 by the end of 2024 [5] - The integration of AI in drug development is expected to shorten research cycles and improve success rates, supported by favorable government policies [6]

Report Information - Report Date: November 11, 2025 [1] - Analyst: Zhang Hesheng [1] - Tel: 021 - 53686158 [1] - E - mail: zhanghesheng@shzq.com [1] - SAC Number: S0870523100004 [1] Market Performance Summary Stock Market - **U.S. Stocks**: Over the past week (20251103 - 20251109), the Nasdaq, S&P 500, and Dow Jones Industrial Average changed by -3.04%, -1.63%, and -1.21% respectively, and the Nasdaq China Technology Index changed by -3.39% [2] - **Hong Kong Stocks**: The Hang Seng Index changed by 1.29% during the same period [2] - **A - shares**: The wind All - A Index changed by 0.63%. Among different indices, the CSI A100, CSI 300, CSI 500, CSI 1000, CSI 2000, and wind Micro - cap stocks changed by 0.94%, 0.82%, -0.04%, 0.47%, 0.88%, and 3.16% respectively. In terms of sector styles, most indices in Shanghai and Shenzhen markets rose, while the North Securities 50 Index changed by -3.79%. Among 30 Citic industries, 17 industries rose and 13 fell, with electric power and new energy, steel, petrochemicals, coal, and basic chemicals leading the gains with weekly increases of over 3.0%. Grid equipment, photovoltaic, carbon neutrality, new energy, coal, environmental protection, and Hong Kong stock dividend ETFs led with weekly increases of over 4% [3] Bond Market - **Chinese Treasury Bonds**: In the past week (20251103 - 20251109), the 10 - year Treasury bond futures main contract fell by 0.22% compared to October 31, 2025. The yield of the 10 - year active Treasury bond increased by 1.88 BP to 1.8142%. Yields of all maturity varieties increased, and the yield curve shifted upward [4] - **Funding and Leverage**: As of November 7, 2025, R007 was 1.4677%, down 2.46 BP from October 31, 2025; DR007 was 1.4130%, down 4.21 BP, and the spread between them widened. The central bank's open - market operations had a net withdrawal of 1572.2 billion yuan in the past week. The bond market leverage level increased, with the 5 - day average of inter - bank pledged repo volume increasing from 6.70 trillion yuan on October 31, 2025, to 7.97 trillion yuan on November 7, 2025 [5][7] - **U.S. Treasury Bonds**: In the past week (20251103 - 20251109), long - term U.S. Treasury bond yields rose while short - term yields fell. As of November 7, 2025, the 10 - year U.S. Treasury bond yield remained unchanged at 4.11% compared to October 31, 2025. The yield curve became steeper [8] Currency and Commodity Markets - **Exchange Rates**: The U.S. dollar index decreased by 0.18% in the past week (20251103 - 20251109), and the U.S. dollar depreciated against the euro, pound, and yen. The U.S. dollar exchange rate against the offshore and onshore RMB increased slightly [9] - **Gold Prices**: Gold prices continued to fall in the past week (20251103 - 20251109). London gold spot prices decreased by 0.43% to $3994.10 per ounce, and COMEX gold futures prices decreased by 0.01% to $3995.20 per ounce. Domestic gold prices also fell, with Shanghai gold spot down 0.38% to 918.03 yuan per gram and futures down 0.16% to 919.02 yuan per gram [10] Outlook and Recommendations - **A - shares**: A - shares are likely to maintain a high - level oscillation. It is recommended to focus on investment opportunities in sectors such as electric power and new energy, photovoltaic, coal, steel, chemicals, chips, computing power, and artificial intelligence [11] - **Bond Market**: High risk appetite is not conducive to the bond market, but the high absolute yield has long - term allocation value [11] - **Gold**: Although the long - term upward trend of gold prices remains unchanged, there is a lack of short - term catalysts for growth, and it is likely to decline slightly or move sideways [11]

Group 1: Market Performance - The Shanghai Composite Index increased by 1.08% and the Shenzhen Component Index rose by 0.19% during the period from November 3 to November 7, 2025 [2] - The power equipment and coal industries performed well, with most sectors showing positive growth [9] - Active equity funds saw an average increase of 0.09%, while active mixed funds rose by 0.16% during the same period [2][12] Group 2: Fund Performance - The average return of convertible bond funds was 0.60%, with an impressive year-to-date average return of 22.14% [15] - Among active equity funds, the top performers included the "Guangfa High-end Manufacturing Stock A" with a return of 7.07% and "Yifangda Strategic Emerging Industries Stock A" with a return of 102.27% year-to-date [13] - The "HuaXia CSI Electric Grid Equipment Theme ETF" led the index funds with a return of 11.36% during the period [14] Group 3: QDII Fund Performance - The average return for Greater China equity QDII funds was 0.47%, while global equity QDII funds saw a decline of 0.92% [19] - The best-performing QDII fund this period was the "Huatai-PB CSI Hong Kong 300 Financial Services ETF" with a return of 3.95% [17] - Year-to-date, alternative asset-gold QDII funds showed significant growth, with an increase of 47.17% [19]

Investment Rating - The report maintains an "Overweight" rating for the electronics industry [1] Core Viewpoints - The demand for AI is overheating, leading to a structural supply-demand imbalance in the global memory chip market, particularly for DRAM, driven by data center needs [3][4] - Major cloud service providers in the US have increased capital expenditures, indicating strong demand for high-end storage chips, which is causing manufacturers to shift capacity towards more profitable DDR5 and HBM products [3] - The global smartphone market revenue grew by 5% year-on-year in Q3 2025, reaching a historical high of $112 billion, with a 4% increase in shipment volume [4] Summary by Sections Market Overview - The SW electronics index fell by 0.09% in the past week, underperforming the CSI 300 index by 0.92 percentage points [3] - Among six sub-sectors, the performance varied, with other electronics II and components showing gains of 5.03% and 2.14%, respectively, while consumer electronics declined by 2.45% [3] Semiconductor Sector Insights - The report highlights that the supply chain for DRAM is facing severe disruptions, with major manufacturers like Samsung halting contract quotes for DDR5, leading to increased spot market prices [3] - The capital expenditure required to increase advanced DDR technology capacity is substantial, estimated at around $10 billion for a monthly increase of 10,000 wafers [3] Investment Recommendations - The report suggests maintaining an "Overweight" rating for the electronics sector, anticipating a comprehensive recovery in the semiconductor industry in 2025 [4] - Specific stocks to watch include semiconductor design firms with low PE/PEG ratios, AIOT SoC chips, and key materials for semiconductors, focusing on domestic alternatives [4][6]