1. Report Industry Investment Rating - The industry rating is "Overweight", the previous rating was also "Overweight", and the rating remains unchanged [9] 2. Core Views of the Report - In 2025, fiscal policy was proactive. The issuance scale of government bonds increased significantly year - on - year and the issuance rhythm was advanced, leading to an increase in banks' bond allocation scale. The bond allocation rhythm was low in the first half and high in the second half, with structural differentiation. Banks increased their allocation of treasury bonds and reduced their allocation of certificates of deposit [12]. - It is expected that in 2026, banks will still maintain a certain demand for bond allocation, with a slightly stronger intensity than in 2025. The estimated bond allocation amount for banks in 2026E is 9.19 trillion yuan, with a year - on - year growth rate of 5.4% [12] 3. Summary According to the Directory 2025 Commercial Bank Bond Allocation Review 1.1 Fiscal Policy Is Proactive, and Banks' Bond Allocation Scale Increases Year - on - Year - The issuance scale of government bonds increased significantly year - on - year in 2025, and the issuance rhythm was advanced. From January to November, the net financing of government bonds (treasury bonds + local special bonds) increased by 3.07 trillion yuan year - on - year, and 96% of the annual issuance plan was completed [17]. - From January to October, commercial banks' cumulative bond allocation scale was 8.2 trillion yuan, a 24% increase compared to the same period in 2024. The allocation proportion of treasury bonds reached a peak in the past three years (56%), and the market share of narrow - sense interest - rate bond allocation also increased significantly [19] 1.2 Banks' Bond Allocation Rhythm Is Low in the First Half and High in the Second Half - In the first quarter, banks' bond allocation demand was weak due to the "good start" of credit and the upward pressure on long - term interest rates. Since the second quarter, with the continuous advancement of debt resolution policies, the decline in infrastructure and industrial investment, and the weakening of public - sector credit demand, combined with the periodic rise of long - term interest rates, banks' bond allocation demand has recovered [25] 1.3 Structural Differentiation: State - owned Big Banks and City Commercial Banks Strengthen Their Bond Allocation - State - owned big banks have a strong customer base and stable core deposits. Their deposit growth rate has continued to pick up this year, and their bond allocation intensity has increased moderately due to the imbalance between deposit and loan growth rates [32]. - The deposit growth of joint - stock banks has slowed down. Although their financial investment growth rate has generally recovered, their overall bond allocation intensity is weaker than that of state - owned big banks due to the limited scale of available funds [32]. - City commercial banks have sufficient available funds due to high deposit growth and high expansion rates, so their bond allocation intensity has increased [35]. - Rural commercial banks may have greater deposit - taking pressure and less new available funds. They have disposed of more financial investment assets to make up for profits, resulting in a slowdown in the growth of investment assets [35] 1.4 Increase in Treasury Bond Allocation and Decrease in Certificate of Deposit Allocation - The proportion of listed banks' financial investment has generally increased, with a significant increase in the investment proportion of state - owned banks. As of the end of October 2025, the proportion of treasury bond allocation in banks' stock bond investment structure increased by 2.7 percentage points compared to the beginning of the year, while the proportion of inter - bank certificates of deposit decreased by 1.4 percentage points [41]. - The increase in treasury bond allocation is due to the weak credit expansion of the private sector and the continuous increase in government financing demand. The decrease in certificate of deposit allocation is due to the continuous decline in the issuance interest rate of inter - bank certificates of deposit and the narrowing of the spread with banks' deposit - taking costs [46] 2026 Commercial Bank Bond Allocation Outlook 2.1 From the Total Amount Perspective: The Available Funds for Allocation Will Grow Steadily, and the Bond Allocation Demand Is Expected to Recover - Deposit growth has stabilized and increased. The deposit growth rate of residents has remained stable, and the deposit growth rate of non - financial enterprises has turned positive. The bond - issuing rate of large banks with good credit has increased significantly in the first three quarters, while that of small and medium - sized banks has decreased [51]. - The repair of the public - sector expenditure side will drive the recovery of effective financing demand, and the bond allocation scale of commercial banks is expected to increase steadily [57] 2.2 From the Duration Perspective - **① The demand for medium - and long - term bond allocation may increase under the trend of deposit term - to - maturity**: Since 2018, the proportion of time deposits on the liability side of banks has continued to rise. It is expected that the trend of deposit term - to - maturity will continue in 2026, and banks may increase their allocation of medium - and long - term interest - rate bonds to cover the more rigid deposit interest - payment costs [60]. - **② Banks' allocation of long - term and ultra - long - term bonds may be restricted under duration constraints**: Banks need to consider indicators such as interest - rate risk sensitivity, liquidity coverage ratio, and economic value change when allocating bonds. As of the end of 2024, some state - owned big banks' ΔEVE has exceeded 14% of their Tier - 1 capital, and their allocation space for long - term and ultra - long - term bonds may be relatively limited [64][68] 2.3 From the Liability Cost Perspective: The Cost of FTP for Proprietary Investment Decreases - Banks have actively adjusted the liability term structure and controlled costs. It is expected that the deposit repricing effect will continue in 2026, driving the cost of the liability side to decline further and the cost of proprietary bond investment to decrease, which is conducive to banks' bond allocation [79] 2.4 Summary of Banks' Bond Allocation Outlook - It is expected that in 2026, banks will still maintain a certain demand for bond allocation, with a slightly stronger intensity than in the previous year. From the perspective of asset growth rate, available funds are expected to grow steadily; from the perspective of asset - liability duration, banks may increase their allocation of medium - and long - term bonds, but the allocation of long - term and ultra - long - term bonds may be restricted; from the perspective of liability cost, banks' willingness to allocate bonds in the financial market may be further enhanced [82]

Economic Growth Trends - In November, industrial value added grew by 4.8% year-on-year, slightly down from 4.9% in October[1] - The service production index increased by 4.2% year-on-year in November, a decrease from 4.6% in October[1] - Overall economic growth momentum has weakened, with both industrial and service sectors falling below 5% growth since Q4[1] Consumer Spending and Retail Performance - Social retail sales grew by only 1.3% year-on-year in November, down from 2.9% in October[1] - Online retail sales increased by 1.5% year-on-year in November, significantly lower than the 4.9% growth in October[1] - The "Double Eleven" shopping festival saw reduced consumer engagement, impacting retail performance[1] Investment and Real Estate Market - Fixed asset investment fell by 2.6% cumulatively from January to November, with a 12% decline in November alone[2] - Real estate development investment dropped by 30.3% year-on-year in November, indicating a worsening trend[2] - The sales area of commercial housing decreased by 17.3% year-on-year in November, with sales revenue down by 25.1%[2] Policy Recommendations - The central economic work conference emphasized the need for stronger domestic demand to address the supply-demand imbalance[3] - Plans for 2026 include more proactive fiscal and monetary policies to stimulate consumption and stabilize investment[3] - Risks include potential trade frictions and continued declines in the real estate market, which may affect policy effectiveness[3]

Investment Rating - The industry investment rating is "Overweight" [5][11] Core Insights - The report emphasizes the value of leading companies in the home appliance sector, highlighting the importance of continuous innovation in smart terminals [1] - The central economic work conference has set the tone for 2026 economic work, focusing on domestic demand and optimizing policies for large-scale equipment updates and consumer goods replacement [1] - The report suggests that if subsidy policies continue into next year, it will help stabilize the domestic home appliance market and ensure the performance stability of leading companies [1] Summary by Sections White Goods - Online sales data for November shows significant declines: refrigerators, air conditioners, and washing machines saw sales drop by 23.17%, 26.13%, and 6.17% respectively, with volumes down by 28.31%, 26.24%, and 13.65% [2] - Offline sales experienced even steeper declines, with refrigerators, air conditioners, and washing machines down by 49.18%, 51.76%, and 40.4% in sales [2] - The report indicates that the pessimistic sales expectations are already reflected in the market, and the industry is moving past the peak of base pressure [2] - A coalition of major air conditioning companies has initiated a self-regulation agreement to replace copper with aluminum, which may help reduce costs and improve product quality [2] - Despite current weak demand, the report anticipates a gradual reduction in domestic sales pressure due to high base effects and subsidy tapering [2] Black Goods - November data shows a decline in online sales for televisions, with sales down by 27.01% and volumes down by 37.52% [3] - The report notes that the trend of structural upgrades in black goods continues, with MiniLED technology driving up average prices and margins [3] - The upcoming World Cup is expected to catalyze sales, as leading companies focus on high-end channels [3] Consumer Technology - The report highlights the impact of subsidy reductions and high base effects on the market for cleaning appliances, with a notable decline in sales for robotic vacuum cleaners [4] - The report suggests that the industry is experiencing a concentration of domestic brands, driven by AI innovations and cost reductions in the supply chain [4] Investment Recommendations - The report recommends focusing on white goods, particularly Haier and Midea, due to their strong market positions and benefits from ongoing transformations [8] - It also suggests selecting consumer technology stocks, including Anker Innovations and Roborock, as well as opportunities in the 3D printing industry [8] - For overseas expansion, TCL Electronics is highlighted as a company with good growth potential [8]

Group 1 - The core conclusion of the report emphasizes the stable growth foundation of the defense industry, driven by continuous increases in national defense spending, with a budget of 1.78 trillion yuan for 2025, reflecting a year-on-year growth of 7.15% [32][38] - The report highlights the importance of the military aircraft industry chain as the main growth logic, with a focus on the generational upgrade of advanced fighter jets and breakthroughs in domestic aero-engine technology [84] - The report suggests that the military-civilian integration strategy will provide long-term alpha for military enterprises, transitioning from revenue expansion to high-quality development [82][84] Group 2 - The military industry outperformed the broader market, with the CITIC Military Industry Index yielding 16.6% as of November 30, 2025, surpassing the CSI 300 by 1.5 percentage points but lagging behind the ChiNext by 26% [11][15] - The report indicates that the military industry is currently ranked 16th out of 30 in terms of performance among CITIC's primary industry indices [15] - The report notes that the military industry’s valuation is at a high level, with a price-to-earnings ratio of 99.27, placing it in the 80th percentile historically over the past decade [21] Group 3 - The report identifies key areas of focus within the military sector, including infrared technology, laser weapons, and military trade, suggesting specific companies for investment [84] - The report discusses the increasing global military trade, particularly in aircraft, which is projected to account for 43.62% of the military trade market in 2024, with missiles and artillery also showing significant growth [79] - The report emphasizes the potential of laser weapons in counter-drone applications, highlighting their advantages such as high precision and low cost [69][70]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In 2025, the number and scale of credit bond defaults decreased significantly, and the credit environment improved. The number of defaulted bonds was 16, with a total default amount of 15.084 billion yuan, a year-on-year decrease of 54 bonds and 77.145 billion yuan respectively [1][11]. - All first - time defaulting entities in 2025 were non - state - owned enterprises, and the number of defaults in the real estate industry decreased. Looking ahead to 2026, real estate may still be the main risk point in the credit bond market, and local risks of some weak - qualified small and medium - sized financial institutions should be vigilant, but the probability of a systemic impact on the market is low [1][13]. - The default rate dropped to a historically low level. In 2025, the marginal default rate was 0.22%, the second - lowest since 2014 [1][22]. - Last week, after an important meeting released a signal of monetary easing, credit bond yields turned downward in the second half of the week but the repair momentum was weak. Looking forward, due to the impact of wealth management funds returning to the balance sheet at the end of the quarter, incremental funds may be limited, and there is insufficient impetus to compress credit spreads. It is recommended to focus on the coupon strategy [2]. 3. Summary According to the Directory 3.1 2025 Credit Bond Market Default Feature Summary - **Default Quantity and Scale Decreased Significantly, Credit Environment Improved**: In 2025, the number and amount of defaulted credit bonds continued the downward trend of the previous year. There were 16 defaulted bonds with a total amount of 15.084 billion yuan, a year - on - year decrease of 54 bonds and 77.145 billion yuan respectively. From 2014 - 2025, substantial defaults were the main type in the credit bond market (73.4%), and in 2025, there were 11 substantial defaults and 5 extensions [11]. - **First - time Defaulting Entities were All Non - state - owned Enterprises, Real Estate Industry Default Quantity Decreased**: The 16 first - time defaulted bonds in 2025 came from 12 non - state - owned enterprise issuers, covering 6 industries such as real estate and non - bank finance. Historically, non - state - owned enterprises had significantly more defaults than state - owned enterprises. The real estate industry was still the main risk point in 2026, and local risks of some small and medium - sized financial institutions should be watched out for [13][17]. - **Default Rate Dropped to a Historically Low Level**: In 2025, the marginal default rate was 0.22%, the second - lowest since 2014. The overall recovery rate from 2014 to 2025 was 13.76%, with state - owned enterprises having a higher recovery rate of 27.12% than non - state - owned enterprises at 10.28% [22]. 3.2 Credit Bond Yield Overview - Last week, after an important meeting released a signal of monetary easing, credit bond yields turned downward in the second half of the week but the repair momentum was weak. Overall, credit bond yields showed mixed trends, with financial bonds performing better than non - financial credit bonds, and the 3 - year non - financial credit bonds performing better [27]. - Wealth management scale and the proportion of broken - net products decreased. The average yield of wealth management products had been declining for 6 consecutive weeks since early November. Looking forward, due to the impact of wealth management funds returning to the balance sheet at the end of the quarter, incremental funds may be limited, and there is insufficient impetus to compress credit spreads. It is recommended to focus on the coupon strategy. Institutions with stable liability ends can moderately participate in 3 - year medium - and high - grade bank secondary and perpetual bonds and securities firm subordinated bonds with relatively high spreads [29][36]. 3.3 Primary Market - **Issuance Volume**: Last week, the issuance scale of credit bonds increased both month - on - month and year - on - year, while the net financing scale decreased month - on - month and increased year - on - year. The net financing scale of urban investment bonds and financial bonds decreased month - on - month, while that of industrial bonds increased [37]. - **Issuance Cost**: The average issuance interest rate of credit bonds increased slightly. The average issuance interest rate of urban investment bonds increased month - on - month, while that of industrial and financial bonds decreased [45]. - **Issuance Term**: The average issuance term of credit bonds decreased month - on - month. The issuance terms of industrial and financial bonds decreased, while that of urban investment bonds increased [47]. - **Cancellation of Issuance**: The number and scale of cancelled credit bond issuances decreased last week [53]. 3.4 Secondary Market - **Trading Volume**: Except for the trading volume of securities firm subordinated bonds, the trading volume of other types of credit bonds rebounded last week, with the trading volume of bank secondary capital bonds increasing by over 13 billion yuan. The trading terms of different types of bonds showed different trends in terms of remaining maturity and implied rating [57][58]. - **Trading Liquidity**: The turnover rates of urban investment bonds, industrial bonds, and financial bonds increased last week. The turnover rates of different terms of each type of bond also showed different trends [59]. - **Spread Tracking**: Last week, most urban investment bond spreads widened, with the 10 - year AA + grade urban investment bond spreads widening the most. Most industrial bond spreads also widened, with the real estate industry having the largest spread widening for both AAA and AA grades. Most bank secondary and perpetual bond spreads narrowed, while the spreads of securities firm subordinated bonds widened across the board, and most insurance subordinated bond spreads narrowed [65][73][76]. 3.5 Weekly Hot Bonds Overview Based on qeubee's bond liquidity scoring, the top 20 urban investment bonds, industrial bonds, and financial bonds in terms of liquidity scores were selected for investors' reference [80]. 3.6 Credit Rating Adjustment Review Last week, 3 bonds had their debt ratings downgraded, and there were no upgrades [84].

Investment Rating - The industry is rated as "Overweight," indicating an expected increase in performance exceeding the market benchmark index by more than 10% over the next 6-12 months [39]. Core Insights - The North Exchange market has shown a significant recovery, with the average daily trading volume of all A-shares reaching 19.51 billion yuan, a week-on-week increase of 40.6%. The North Index 50 rose by 2.79% during the same period [1][7]. - Key stocks that performed well include Tianli Composite (up 117.2%), Dapeng Industrial (up 51.1%), and Chicheng Co. (up 40.7%). Conversely, stocks with the largest declines included *ST Guandao (down 77.2%) and Hongxi Technology (down 12.4%) [1][16]. - Recent policy developments, including a meeting of the Central Political Bureau focusing on economic work for 2026 and the announcement allowing Nvidia to sell H200 chips to China, are expected to influence market sentiment positively [1][19][23]. Summary by Sections Market Overview - The North Exchange's average daily trading volume reached 19.51 billion yuan, marking a 40.6% increase from the previous week. The North Index 50 saw a rise of 2.79%, with an average turnover rate of 2.6% [1][7][34]. Key News and Policies - The Central Political Bureau's meeting emphasized the importance of economic stability and growth for 2026, while the U.S. government's policy shift regarding AI chip sales to China is expected to impact market dynamics positively [19][23]. Core Driving Factors - The macroeconomic environment has improved, with the Federal Reserve's interest rate cut and domestic policies focusing on enhancing capital market functions. This has led to increased risk appetite among investors [32][33]. - The performance of new stocks has been strong, with significant interest in newly listed companies, indicating a healthy market for initial public offerings [33]. Investment Recommendations and Strategies - Future investment strategies should focus on three areas: the value of weight stocks in the North Index 50, companies with strong performance and R&D investment, and sectors benefiting from policy support such as commercial aerospace and humanoid robots [2][35].

Group 1: Restaurant Industry Insights - The report emphasizes the resilience of the restaurant industry, highlighting key companies such as Yum China, Xiaocaiyuan, Haidilao, and Dashishi as potential investment opportunities due to their operational capabilities and market positioning [2][10] - The restaurant sector is expected to benefit from government policies aimed at boosting service consumption, with specific measures outlined to enhance the sector's growth [7] - Restaurant revenue is projected to account for 12% of total retail sales in 2024, with growth rates of 20% and 5% for 2023 and 2024 respectively, indicating a stronger performance compared to overall retail sales [8] Group 2: Computer Industry Outlook - The computer industry is anticipated to see significant advancements in AI applications, with a focus on increasing computational power and model sophistication [3][12] - The report highlights the emergence of large AI models and their commercial applications, indicating a strong growth trajectory for AI-related technologies [12][14] - The demand for AI capabilities is expected to drive investments in domestic AI chip development, with a focus on enhancing performance and establishing a robust software ecosystem [13] Group 3: Aerospace and Defense Sector - Hangya Technology is positioned as a key player in the aerospace engine components market, leveraging its expertise in precision forging technology to meet rising international demand [4][16] - The company reported a revenue of 530 million yuan and a net profit of 78 million yuan for the first three quarters of 2025, reflecting a year-on-year growth of 1.95% in revenue but a decline of 16.04% in net profit [16][17] - The report forecasts significant revenue growth for Hangya Technology, projecting revenues of 817 million yuan, 1.09 billion yuan, and 1.51 billion yuan for 2025 to 2027, with corresponding net profits increasing substantially [17] Group 4: Macro Economic Context - The macroeconomic environment is characterized by a stable growth outlook, with a projected GDP growth target of around 5% for 2026, supported by proactive fiscal and monetary policies [30] - The report notes a focus on domestic demand as a primary driver of economic growth, with specific measures aimed at stabilizing the real estate market and enhancing employment [30][31] - Financial data indicates a slight decline in loan growth, with a notable drop in household loans, while overall social financing growth is stabilizing [18][19]

Investment Rating - The report indicates a positive outlook for the insurance sector, recommending specific companies such as China Pacific Insurance, China Ping An, China Life (H), and China Taiping, while also recommending New China Life Insurance [4][17]. Core Insights - The financial industry experienced a mixed performance, with the non-bank financial index rising by 0.81%, outperforming the CSI 300 index by 0.89 percentage points. The insurance sector showed a notable increase of 2.36%, while the banking sector declined by 1.77% [2][11]. - The central economic work conference emphasized a proactive fiscal policy, which is expected to benefit the insurance sector by increasing infrastructure asset supply and improving credit risk perceptions [14][15]. - The report highlights the potential for valuation recovery in the brokerage sector, driven by regulatory changes that align public fund interests with long-term investor returns [18][19]. Summary by Sections 1. Weekly Performance and Sector Insights - The non-bank financial index rose by 0.81%, with the insurance sector outperforming the CSI 300 index by 2.44 percentage points [2][11]. - The banking sector underperformed, with a decline of 1.77%, attributed to macroeconomic policy expectations [3][21]. 2. Insurance Sector Data Tracking - The insurance sector's premium income showed steady growth, with life insurance and property insurance premiums increasing by 9.6% and 4.0% year-on-year, respectively [17][26]. - The report notes that the 10-year government bond yield decreased to 1.84%, which is favorable for the insurance sector's investment strategies [31]. 3. Brokerage Sector Data Tracking - The brokerage sector's PB valuation stands at 1.37x, indicating potential for valuation recovery as earnings improve [19][42]. - Regulatory changes in public fund sales are expected to enhance the industry's focus on long-term investor interests [18][19]. 4. Banking Sector Data Tracking - The banking sector's PB valuation is at 0.54x, suggesting it remains undervalued [21][25]. - The central economic work conference's focus on domestic demand and flexible monetary policy is expected to support the banking sector's growth [22][23].

Monetary Policy Outlook - The Bank of Japan (BOJ) is expected to discuss interest rate hikes in its upcoming meeting on December 19, with market expectations for a rate increase reaching approximately 90%[1] - If the BOJ raises rates to 0.75%, it would mark the highest borrowing cost in Japan since 1995[1] - The primary drivers for this policy adjustment include medium-term inflation expectations, wage growth prospects, and exchange rate pressures, rather than short-term price fluctuations[1] Economic Impact - The persistent depreciation of the yen has led to increased import costs and a solidified trade deficit, significantly impacting Japan's economic fundamentals[1] - The BOJ's rate hike aims to narrow the interest rate differential between Japan and the U.S., stabilize the yen, and address trade imbalances[1] - Japan's government debt has reached 1,323.72 trillion yen, accounting for 263% of GDP, raising concerns about fiscal sustainability amid rising interest rates[1] Market Reactions - The anticipated rate hike is expected to lead to structural adjustments in major asset classes, with the yen likely benefiting from the narrowing interest rate differential and triggering unwinding of carry trades[2] - Short-term bond yields are projected to rise sharply, while long-term yields may see a slight increase, further intensifying fiscal pressure on the Japanese government[2] - The stock market may experience short-term volatility, but structural differentiation is expected in the medium term, with bank stocks likely benefiting from improved net interest margins[2] Future Projections - The BOJ is likely to continue its rate hike cycle, with one to two additional hikes anticipated in 2026, contingent on wage growth and core inflation trends[3] - The government's aggressive fiscal policies may face constraints from both internal and external pressures, limiting their impact on the BOJ's monetary policy decisions[3]

Global and A-share Market Overview - The A-share market showed mixed performance last week, with the North China 50 Index recording the highest increase of 2.79%, while the Hong Kong market saw a decline, with the Hang Seng Index down by 0.42% [1][12] - The top-performing ETFs were primarily those tracking TMT sector indices [1] ETF New Issuance Statistics - A total of 20 stock ETFs were reported in the A-share market last week, with 7 new stock ETFs established [2][17] - In the US market, 21 equity ETFs were newly established, of which 17 were actively managed ETFs [1][24] Fund Flow A-share Market - The net inflow for the top 10 ETFs was dominated by the CSI A500 Index ETFs, with a total net inflow of nearly 10 billion yuan [2][25] - The top net inflows were recorded for the CSI A500 ETFs, while the largest outflows were seen in industry index ETFs [2][28] - In the thematic ETF category, the Central Enterprise 50 ETF had the highest net inflow, while the technology ETF experienced the largest outflow [2][28] US Stock ETF Market - The AI and big data thematic ETFs saw the highest net inflows, while cybersecurity thematic ETFs experienced net outflows [3] - The total net inflow for ETFs investing in A-shares and Hong Kong stocks amounted to 177 million USD [3] ETF Strategy Performance - The performance of the diffusion indicator + RRG ETF rotation strategy yielded a return of 0.73%, with excess returns of 1.3% and 0.81% relative to the CSI Equal Weight and CSI 300 indices, respectively [4] - The 50% base + intraday momentum strategy showed varying returns across different ETFs, with the CSI 500 ETF achieving a return of 0.75% [4]