Investment Rating - The report does not explicitly state an investment rating for the automotive leasing ABN market Core Insights - The automotive leasing ABN market in China began in 2017 and is expected to see a significant rebound in issuance scale by 2025, with characteristics such as a recovery in public trading proportion, continuous growth in green transactions, and substantial changes in the composition of initiating institutions [1][3] - The issuance rate of automotive leasing ABNs has shown a downward trend, with significant differences in the security stratification between manufacturer-related and non-manufacturer-related transactions [1][10] - The asset performance of manufacturer-related public automotive leasing ABNs has seen a dynamic overdue rate and cumulative default rate significantly higher than the car loan ABS market since 2023, primarily due to specific samples and a reduction in ongoing transactions [1][34] Summary by Sections Issuance Overview - The automotive leasing ABN market saw a significant rebound in 2025, with a total issuance of 23 transactions amounting to 45.64 billion, doubling from the previous year, although it remains the smallest among the three automotive ABS sub-markets [3][4] - The issuance scale of automotive leasing ABS also turned positive in 2025, while the car loan ABS market continued to decline, indicating a higher level of market vitality in automotive financing leasing compared to car loans [3][4] Market Characteristics - Public trading proportion has rebounded, with public transactions providing more comprehensive information disclosure, which is crucial for market research [5] - The issuance of asset-backed commercial paper (ABCP) has declined, with only 2 transactions in 2025 [5] - Green transactions have seen continuous growth, with 54.3% of automotive leasing ABN issuance in 2025 being green, significantly outpacing the automotive leasing ABS and car loan ABS markets [6] Initiating Institutions - The composition of initiating institutions has changed significantly, with a majority of non-manufacturer-related transactions being initiated by internet-backed financing leasing companies [8] - In 2025, manufacturer-related transactions accounted for 75.9% of the issuance scale, remaining stable compared to the previous year [8] Security Characteristics - The issuance rates of automotive leasing ABNs have generally followed market trends, with a notable increase in 2022, but have since shown a downward trend [10] - The average issuance rate for non-manufacturer-related transactions was 2.33%, while for manufacturer-related transactions it was 1.94% in 2025 [10] - The proportion of priority securities in manufacturer-related transactions has been significantly higher than in non-manufacturer-related transactions [12] Asset Characteristics - The average asset pool size for manufacturer-related public automotive leasing ABNs is approximately 2.83 billion, significantly smaller than that of car loan ABS [19] - The average initial loan-to-value (LTV) ratio for manufacturer-related public automotive leasing ABNs is 70.3%, which is 6.5 percentage points higher than that of car loan ABS [23] - The asset pools predominantly consist of new car leasing payments, with minimal inclusion of used car assets [25] Asset Performance - The dynamic overdue rates for manufacturer-related public automotive leasing ABNs have been significantly higher than those of car loan ABS since 2023, influenced by specific high-LTV transactions [34] - The cumulative default rates for automotive leasing ABNs have shown an upward trend, particularly for transactions issued in 2023 and 2024, largely due to a few high-risk samples [39] - The early repayment rates for automotive leasing ABNs have shown seasonal fluctuations, generally remaining higher than those of car loan ABS [42]

Investment Rating - The report assigns a "low prosperity stable" credit outlook to the Chinese basic chemical industry for 2025 [3][20][25]. Core Viewpoints - The basic chemical industry in China is expected to experience a clear release of large-scale production capacity in 2025, but the pace of overall capacity expansion will slow down [3][4][10]. - Demand growth for the basic chemical industry is cautiously optimistic, driven by domestic consumption recovery, particularly in sectors like new energy vehicles and home appliances [3][10][20]. - The report highlights a divergence in demand growth prospects across different sub-sectors, with some facing challenges due to real estate market downturns and potential trade frictions [10][15][20]. Summary by Sections Industry Investment Rating - The credit outlook for the Chinese basic chemical industry is rated as "low prosperity stable" [3][20][25]. Capacity Expansion and Investment Trends - In 2025, the basic chemical industry will see a notable release of production capacity, but the expansion pace is expected to decline from previous years [4][8][10]. - Fixed asset investment in the chemical raw materials and chemical products manufacturing sector has shown high growth rates, but the chemical fiber manufacturing sector has seen a decline [4][10][20]. Demand Growth and Economic Context - The overall demand growth for the basic chemical industry is expected to be cautiously optimistic, influenced by government policies aimed at stimulating consumption [10][20]. - The report notes that the real estate sector's downturn poses a significant challenge to demand for certain chemical products [15][20]. Price Trends and Market Dynamics - The report anticipates a neutral to slightly bearish price trend for basic chemical products in 2025, influenced by supply-demand imbalances and weakening raw material cost support [10][20]. - Specific products, such as refrigerants in the fluorochemical sector, are expected to see positive price movements due to supply constraints and increased domestic demand [20][25]. Financial Metrics and Credit Quality - The report emphasizes the importance of differentiating credit quality across various sub-sectors within the basic chemical industry, as different segments will experience varying impacts from market conditions and regulatory changes [20][25].

Investment Rating - The industry outlook for automotive finance companies is rated as "Stable" for 2025 [3][4]. Core Insights - The automotive finance industry is experiencing a structural transformation due to the electrification of vehicles, with traditional energy vehicle sales declining while new energy vehicle sales are surging, leading to a stabilization of the industry's scale [3][4][24]. - The asset quality of automotive finance companies showed slight improvement in 2023, but some companies still face retail risk, and asset quality is expected to remain under pressure in the future [3][29]. - Despite a decline in overall profit growth, the high interest margin and low credit cost advantages of automotive finance companies are expected to sustain their long-term profitability [32][43]. Summary by Sections Industry Overview - By the end of 2023, the total asset size of 25 automotive finance companies reached 946.82 billion yuan, marking a 2.5% decline compared to the previous year, following a negative growth of 1.8% in 2022 [5][8]. - The market share of domestic automotive finance companies is increasing due to the rapid growth of the new energy vehicle market, with retail penetration rates exceeding 50% for several months [3][9]. Asset Quality and Risk - The non-performing loan (NPL) ratio for automotive finance companies improved slightly in 2023, dropping to 0.58%, but asset quality pressures remain due to the overall economic slowdown [25][29]. - The retail financial penetration rate of automotive finance companies decreased from 26% in 2021 to 21% in 2023, indicating a decline in market share due to increased competition from commercial banks [11][13]. Profitability and Revenue - In 2023, the revenue growth rate for automotive finance companies was 2.9%, while net profit decreased by 11.2%, primarily due to increased credit costs and operational expenses [32][34]. - The average interest margin for automotive finance companies remained high at 4.86%, despite a slight decline, which is significantly above the average level of commercial banks [36][40]. Financing and Capital Structure - The average capital adequacy ratio for the industry was 24.57% at the end of 2023, reflecting a steady increase in capital levels amid a shrinking industry scale [44][45]. - The financing structure of automotive finance companies remains stable, with a significant reliance on short-term debt, which accounted for 81% of total liabilities in 2023 [38][56]. Market Trends - The penetration rate of new energy vehicles reached 52.9% by October 2024, indicating a significant shift in consumer preferences towards electric vehicles [18][19]. - The issuance of green asset-backed securities (ABS) is increasing, with green ABS accounting for approximately 30% of total ABS issued by automotive finance companies [52][53].

Investment Rating - The report maintains a stable outlook for the commercial banking sector, with a focus on the balance between loan growth and interest margin pressures [1][6][14]. Core Insights - The commercial banking sector is experiencing a slowdown in credit growth due to weak demand, with a shift in credit structure towards corporate lending while retail lending remains weak [1][2]. - The net interest margin for commercial banks has narrowed to 1.7% in 2023 and is expected to further decline to 1.5% in Q1 2024, driven by various factors including interest rate cuts and increased loan write-offs [1][6][14]. - The asset quality of commercial banks remains stable, with non-performing loans (NPLs) totaling CNY 3.2 trillion, reflecting an 8.14% year-on-year increase, while the NPL ratio stands at 1.59% as of Q1 2024 [15][18][20]. Summary by Sections Credit Demand and Structure - In 2023, credit demand was weak, leading to a slowdown in credit growth, with the overall loan growth rate at 10.6% [1][2]. - The credit structure is shifting towards emerging and supported sectors, with significant growth in green loans and manufacturing loans, which outpaced the overall loan growth rate [2][3]. Interest Margin and Profitability - The net interest margin has been under pressure, with a decline from 1.7% to 1.5% expected in Q1 2024, as banks focus on reducing deposit costs to alleviate margin pressures [1][6][14]. - Non-interest income has increased to 25.6% of total revenue, as banks seek alternative revenue sources amid declining interest income [6][8]. Asset Quality - The asset quality of commercial banks is stable, with a slight increase in NPLs and a stable NPL ratio, indicating effective management of credit risks [15][18][20]. - The report highlights that the NPL ratio for real estate loans has been rising, with significant exposure to credit risks in this sector [23][27]. Capital Adequacy - Capital adequacy ratios have remained stable, with the average capital adequacy ratio for commercial banks at 15.1% as of the end of 2023, indicating a need for external capital supplementation due to pressures on internal capital generation [35][37][41]. - The issuance of subordinated debt and perpetual bonds is expected to increase as banks seek to bolster their capital positions in light of upcoming redemptions [41][43].