Investment Rating - The report maintains a strong recommendation for leading companies in various sub-sectors of the media and internet industry, particularly highlighting companies such as Shenzhou Taiyue, Southern Media, and Tencent Holdings [1]. Core Insights - The domestic AI commercialization is rapidly developing, with significant interest in AI applications across various industries. The report emphasizes the need for further exploration of profitable AI application models to support future demand for computing power and paid users [1]. - The gaming sector, particularly Giant Network's "Supernatural Action Group," is performing strongly, with the game achieving a significant revenue increase and expanding into international markets [2]. - The report notes that while the media industry experienced a slight decline of 0.19% recently, it has seen a year-to-date increase of 26.84%, ranking it 8th among all sectors [1][10]. Summary by Sections Media Industry Performance - The media industry index decreased by 0.19% from December 15 to December 21, while the Shanghai Composite Index rose by 0.03% during the same period [10]. - The media sector's year-to-date performance shows a 26.84% increase, ranking it 8th among all sectors [1][10]. Gaming Sector Highlights - Giant Network's "Supernatural Action Group" has continued its strong performance, with a revenue increase of 100% month-over-month, entering the top 10 in China's iOS mobile game revenue rankings [2]. - The game is set to expand into Southeast Asia and Japan in 2026, indicating a strategic move towards internationalization [2]. AI Commercialization - The report identifies a growing trend in AI applications, with notable developments in AI assistants, e-commerce, gaming, and video content. Companies like Tencent and Alibaba are leading in AI assistant and e-commerce innovations [1]. - The report highlights that while current AI application revenues are modest, the commercialization of AI is beginning to take shape in China, with various sectors starting to see profitability [1].

Group 1 - The core viewpoint of the report indicates that the tungsten price increase is expected to drive improvements in the tool industry structure, while the machine tool sector presents structural opportunities due to emerging industries [2][27] - In 2025, the overall demand for the machine tool industry was weak, leading to stock prices underperforming compared to the machinery industry index, with the machine tool (Shenwan) index rising by 28.3%, lagging behind the machinery equipment index by 11.2 percentage points [3][10] - The report highlights that the demand for machine tools is highly correlated with the manufacturing industry's prosperity, with the manufacturing PMI fluctuating between 49% and 51% in 2025, indicating a weak recovery in the manufacturing sector [13][17] Group 2 - The report suggests that the increase in tungsten prices, which are a core raw material for CNC tools (with over 80% tungsten content in hard alloy tools), is leading to a reshaping of the tool industry, benefiting leading companies while smaller firms face cost pressures [27][29] - The report notes that the overall effective demand for machine tools remains insufficient, with fixed asset investment and investment growth in major user sectors declining, resulting in an overall weak demand for machine tools [29][30] - Investment recommendations focus on key companies in the tool sector, such as Ouke Yi and Huarui Precision, and in the machine tool sector, such as Haitian Precision and Nuwei CNC, as they are expected to benefit from structural growth opportunities in high-end manufacturing and emerging industries [40][36]

Core Insights - The report indicates a notable recovery in movie ticket prices, alongside strong performance in metals and memory storage prices, suggesting an overall improvement in industry sentiment, particularly in resource products, midstream manufacturing, and information technology sectors [1][5]. Resource Products - The average transaction volume of construction steel has increased, with both steel billet and rebar prices rising. Coal prices have shown mixed trends, with some regions experiencing price increases while others see inventory fluctuations. The national cement price index has also risen [2][24]. - Industrial metal prices have generally increased, with copper, nickel, aluminum, tin, cobalt, and lead prices rising, while zinc prices have decreased. Most inventories have increased, particularly for zinc and tin [2][21]. Information Technology - The Philadelphia Semiconductor Index and Taiwan Semiconductor Industry Index have both risen, indicating a positive trend in the semiconductor sector. The prices of DDR4 and DDR5 DRAM memory have increased, reflecting strong demand in the market [5][25]. - The telecommunications sector has seen a three-month rolling year-on-year increase in main business revenue, suggesting robust growth in this area [5][24]. Midstream Manufacturing - Prices in the new energy supply chain have generally increased, with the photovoltaic price index also showing a week-on-week rise. The production of metal forming machine tools has seen a significant year-on-year increase, while the production of packaging equipment has declined [5][22]. - Port cargo throughput and container throughput have shown a narrowing year-on-year increase, indicating a potential slowdown in logistics activity [5][22]. Consumer Demand - Prices for fresh milk have risen, while the comprehensive price of sugar has decreased. Pork prices have increased, but the wholesale price of piglets has declined. The average price of live pigs has also decreased, indicating mixed trends in the livestock sector [5][18]. - The ten-day average box office revenue has increased, and movie ticket prices have risen, reflecting a recovery in consumer spending in the entertainment sector [5][20]. Financial and Real Estate - The monetary market has seen a net absorption of liquidity, with a decline in A-share turnover rate and daily transaction volume. The transaction area of commercial housing has increased, while the listing price index for second-hand houses has decreased [6][29]. Public Utilities - The ex-factory price of natural gas in China has decreased, while UK natural gas futures prices have risen. The average daily power generation of key power plants has shown a widening year-on-year decline [6][32].

Investment Rating - The report assigns a rating of "Buy" for the company [3]. Core Insights - The company has a solid foundation in polymer materials and thermal management, with a strong management team and extensive industry experience. The high-frequency welded liquid cooling plates for new energy thermal management have shown significant growth due to their adoption in Kirin and Shenxing batteries [1][7]. - The company is in the early stages of developing its data center thermal management business, with plans to acquire Dongguan Zhaoke, a leading thermal materials company, which is expected to create synergies with its existing operations [1][7]. - The trend towards liquid cooling in data centers is driven by the increasing power density of servers, making it a preferred solution for high-performance computing environments [1][7]. Financial Performance - The company expects total revenue to grow from 559 million RMB in 2023 to 3,583 million RMB by 2027, with a compound annual growth rate (CAGR) of approximately 65% [2]. - The projected net profit for 2025 is 50 million RMB, increasing to 200 million RMB by 2027, reflecting a strong growth trajectory [8]. - The company reported a significant increase in revenue from its thermal management business, which reached 311 million RMB in the first half of 2025, a 95% year-on-year increase [19]. Business Overview - The company specializes in polymer materials and thermal management systems, with products widely used in telecommunications, power, automotive, and data center sectors. Its polymer materials include waterproof sealing materials, fire insulation materials, and automotive sealing strips [7][14]. - The thermal management segment is primarily driven by its subsidiaries, focusing on new energy vehicles, energy storage systems, and data center cooling solutions [16][18]. - The company has established long-term partnerships with major clients in various industries, including Huawei, China Mobile, and major automotive manufacturers [30][32]. Growth Potential - The acquisition of Dongguan Zhaoke is expected to enhance the company's capabilities in the thermal management sector, particularly in data centers, where demand for thermal solutions is rapidly increasing [1][47]. - The company is actively investing in research and development to maintain its competitive edge, with a focus on optimizing material formulations and manufacturing processes [25][27].

Market Style Characteristics - The market style during the year-end and beginning of the year shows a clear defensive characteristic, with large-cap value style prevailing while the small-cap style represented by the CSI 1000 is under pressure [1][3][8] - Institutional investors tend to adopt a conservative investment behavior due to annual performance assessments and settlements, leading to a significant reduction in risk appetite [3][8] - As the market enters the peak period for annual performance forecasts in January, uncertainty regarding earnings becomes a major concern, causing funds to flow towards more stable large-cap blue-chip stocks [3][8] Monetary Policy and Interest Rates - The central bank conducted a net injection of 219 billion yuan in the open market during the week of December 15-19, with upcoming reverse repos and MLF totaling 8.775 billion yuan [3][17] - Money market interest rates are declining, with the R007 rising by 0.7 basis points and the DR007 falling by 2.8 basis points, indicating a widening interest rate spread [3][17] Supply and Demand of Funds - The net inflow of funds in the secondary market has expanded, with a net buy of 34.2 billion yuan in financing and a net inflow of 560.8 billion yuan in ETFs [3][30] - The issuance of new equity public funds increased by 68.5 million units, while the net reduction by major shareholders rose to 121.9 billion yuan [3][30][34] Market Sentiment - The trading activity of financing funds has weakened, with the proportion of financing transactions in the A-share market decreasing to 11.3% [3][39] - The VIX index has declined, indicating an improvement in market risk appetite, while the focus on style indices and major industries has shifted towards consumer staples and discretionary sectors [3][41][45] Industry Preferences - The electronic, communication, and power equipment sectors received significant net inflows, with net inflows of 121.5 billion yuan, 67.2 billion yuan, and 47.6 billion yuan respectively [3][49] - The defense industry experienced net outflows, while the financing funds showed a net buy of 34.2 billion yuan, with the electronic sector leading the net buy [3][49]

张一平 S1090513080007 zhangyiping@cmschina.com.cn 张静静 S1090522050003 zhangjingjing@cmschina.com.cn 证券研究报告 | 宏观定期报告 2025 年 12 月 23 日 如何扭转增长速度放缓趋势 显微镜下的中国经济（2025 年第 48 期） 频率：每周 投资需求的改善主要看中央财政扩张程度，消费需求的改善主要依赖服务消费 的回暖。 定期报告 相关报告 | 1、 | 开工率 5 | | --- | --- | | 2、 | 产能利用率 10 | | 3、 | 产量 14 | | 4、 | 价格 19 | | 5、 | 库存 26 | | 6、 | 房地产市场 31 | | 7、 | 出行与物流 34 | 1、《配置窗口逐渐开启——宏 观与大类资产周报》2025-12-21 2、《地缘博弈持续———国际 时政周评》2025-12-21 3、《服务消费是提高居民消费 率的主要抓手之一—显微镜下 的 中 国 经 济 （ 2025 年 第 47 期）》2025-12-15 敬请阅读末页的重要说明 下半年以来，经济增长数据不断放缓。 ...

Core Insights - The report highlights the approval of China's first batch of L3 autonomous driving vehicles, marking a significant step towards commercial application in limited scenarios [3][15] - Multiple companies have successfully commercialized L4 level autonomous taxis overseas, indicating a growing trend in the global autonomous driving market [3][17] - Google has launched Gemini 3 Flash, which innovatively breaks the "speed-quality-cost" trade-off, positioning itself as a leading model in the AI landscape [3][36] Industry Trends - China's first L3 autonomous driving vehicles, including Changan's SC7000AAARBEV and Arcfox's BJ7001A61NBEV, have received approval for limited road testing in Beijing and Chongqing, with specific operational speed limits of 50 km/h and 80 km/h respectively [15][18] - The domestic autonomous driving sector is expanding internationally, with companies like Momenta partnering with Grab in Singapore and launching Robotaxi services in Abu Dhabi and Dubai [17][19] - The report notes that the global autonomous driving market is on the verge of rapid expansion, with L3/4/5 penetration rates expected to rise significantly by 2030, driven by increasing demand and technological advancements [27][31] Investment Recommendations - The report suggests focusing on five key sectors with marginal improvements: AI hardware, commercial aerospace, AI applications, non-ferrous metals, and innovative pharmaceuticals, as they present potential investment opportunities [4][56] - In the AI hardware sector, the report anticipates continued performance from leading companies like NVIDIA, which has exceeded earnings expectations, and highlights the acceleration of global AI infrastructure development [56][58] - The commercial aerospace sector is expected to benefit from government policies encouraging expansion and investment, indicating a favorable environment for growth [56][59] Global Market Performance - The report notes mixed performance in global stock markets, with financial, consumer staples, and materials sectors showing strength, while other sectors performed moderately [60]

Investment Rating - The report adjusts the investment rating for the company to "Buy" [1][7]. Core Insights - The company has launched an equity incentive plan and management share buyback, indicating confidence in long-term business development [1][7]. - The company is currently in a strategic adjustment phase, actively promoting strategic upgrades to support long-term growth, with expectations of gradually restoring same-store sales growth and increasing store opening pace [1][7]. - The recent equity incentive plan aims to bind key talent and enhance motivation, while the management's share buyback reflects their confidence in the company's future [7]. Financial Data and Valuation - The company’s main revenue for 2023 is projected at 11,392 million, with a year-on-year growth of 1%. However, a decline is expected in 2024 and 2025, with revenues of 10,273 million and 8,553 million respectively, reflecting a decrease of 10% and 17% [2][11]. - The adjusted net profit for 2025 is forecasted to be -363 million, with a gradual recovery expected in 2026 and 2027, reaching 17 million and 73 million respectively [2][11]. - The earnings per share (EPS) is expected to be -0.25 in 2025, with a recovery to 0.01 in 2026 and 0.05 in 2027 [2][11]. - The company’s total market capitalization is approximately 3.5 billion HKD, with a current share price of 1.76 HKD [3]. Shareholder Information - The major shareholder, Yu Huiyong, plans to increase his stake by purchasing up to 10 million H shares within the next 12 months, currently holding approximately 36.8% of the company’s issued shares [7].

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report The report comprehensively analyzes the primary and secondary market conditions of local government bonds. In the primary market, there are changes in net financing, issuance terms, issuance spreads, and fundraising directions. In the secondary market, the secondary spreads and trading volume of local government bonds have their own characteristics. [1][5] 3. Summary According to Relevant Catalogs 3.1 Primary Market Issuance Situation - **Net Financing**: This week, local government bonds issued a total of 40 billion yuan, with a net financing decrease of 34.2 billion yuan compared to the previous week. The net financing was 28.1 billion yuan, including 6 billion yuan in new general bonds, 29.3 billion yuan in new special bonds, 3.9 billion yuan in refinancing general bonds, and 0.9 billion yuan in refinancing special bonds. Next week, the planned issuance is 2 billion yuan, with a repayment of 5.2 billion yuan and a net repayment of 3.2 billion yuan, a decrease of 64.1 billion yuan compared to the previous week. [1][3] - **Issuance Terms**: This week, the 10 - year local government bonds had the highest issuance proportion (36%), and the proportion of 10 - year and above issuances was 87%, showing an increase compared to the previous week. The issuance proportions of 7 - year, 10 - year, 15 - year, 20 - year, and 30 - year local government bonds were 5%, 36%, 18%, 7%, and 26% respectively. The issuance proportion of 30 - year local government bonds increased significantly, while that of 20 - year local government bonds decreased by about 14 percentage points. [1] - **Debt - Resolution - Related Local Government Bonds**: No special refinancing bonds were issued this week. In 2025, 34 regions have disclosed plans to issue a total of 2,298.2 billion yuan in special refinancing bonds, including 2,000 billion yuan in special bonds for replacing implicit debts. Among them, Jiangsu, Hunan, Henan, and Guizhou have 251.1 billion yuan, 128.8 billion yuan, 122.7 billion yuan, and 117.6 billion yuan respectively. This week, 1.2 billion yuan in special special bonds were issued. As of the end of this week, 1,366.8 billion yuan in special special bonds have been disclosed for issuance in 2025. [2][19] - **Issuance Spreads**: This week, the weighted average issuance spread of local government bonds was 20.7bp, widening compared to the previous week. The 15 - year local government bonds had the highest weighted average issuance spread, reaching 25bp. The weighted average issuance spreads of 3 - year, 5 - year, and 7 - year local government bonds narrowed, while those of the rest widened. Guangxi, Yunnan, and Xinjiang had weighted average issuance spreads exceeding 20bp. [2] - **Fundraising Directions**: As of the end of this week, the main fundraising directions of new special bonds since 2025 have been cold - chain logistics, municipal and industrial park infrastructure construction (28%), transportation infrastructure (17%), land reserve (17%), affordable housing projects (11%), and social undertakings (11%). Compared with 2024, the proportion of land reserve (+17.1%) increased significantly, while that of cold - chain logistics, municipal and industrial park infrastructure construction (-8.5%) decreased significantly. [2] - **Issuance Plans**: As of the end of this week, 34 regions have disclosed their local government bond issuance plans for the fourth quarter of 2025. Considering the actual issuance scale in October and November, the total disclosed issuance scale for the fourth quarter is about 1.65 trillion yuan, with 176 billion yuan in December. The planned issuance of new bonds and refinancing bonds in the fourth quarter is 935.7 billion yuan and 713.5 billion yuan respectively. Additionally, 18 regions have disclosed their local government bond issuance plans for the first quarter of 2026, with a total disclosed issuance scale of about 1.07 trillion yuan, including 571.6 billion yuan in January. The planned issuance of new bonds and refinancing bonds in the first quarter is 439.6 billion yuan and 625.7 billion yuan respectively. [3] 3.2 Secondary Market Situation - **Secondary Spreads**: This week, the secondary spreads of 3 - year and 15 - year local government bonds were relatively high, and the secondary spread of 1 - year local government bonds narrowed. The secondary spreads of 3 - year and 15 - year local government bonds reached 18.9bp and 18.7bp respectively. From the perspective of the historical quantile in the past three years, the historical quantiles of the secondary spreads of 3 - year and 30 - year local government bonds were relatively high, at 79% and 55% respectively. Regionally, the secondary spreads of 10 - 15 - year local government bonds in strong and medium - strength regions were relatively high, both above 16bp, and the 3 - 5 - year local government bonds in each region also had relatively high secondary spreads. [5] - **Trading Volume**: This week, both the trading volume and turnover rate of local government bonds decreased compared to the previous week. The local government bonds in Ningxia and Shenzhen had relatively high turnover rates. The trading volume of local government bonds this week reached 432 billion yuan, with a turnover rate of 0.79%. Among them, the trading volume of Guangdong's local government bonds was large, reaching 40.5 billion yuan; the turnover rates of Ningxia and Shenzhen's local government bonds were relatively high, both reaching 2.3%. [5]

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