Investment Rating - The report indicates a strong upward trend in the emerging industries, with the EPMI rising to 57.6, marking the highest value in five years, confirming the upward cycle trend [1][2]. Core Insights - The emerging industries are experiencing a significant rebound post-holiday, particularly in information technology, which saw a PMI increase of 17.1 percentage points to 62.2, indicating robust growth momentum [3][76]. - The report anticipates a slight decline in the EPMI next month but expects it to remain at a high level, reflecting strong domestic demand compared to exports [2][3]. - Various sectors, including high-end equipment manufacturing, energy conservation, biotechnology, new materials, and new energy, are showing positive trends in production and orders, with many indicators reaching new highs [3][4][5]. Summary by Sections Section 1: Overview of Emerging Industry Index - The EPMI for March 2026 shows a significant recovery across all surveyed industries, with the highest PMI recorded in the business consulting services sector at 75 [10]. Section 2: PMI and Sub-indexes 1. **High-end Equipment Manufacturing** - PMI increased to 54.5, driven by post-holiday replenishment, with production and new orders showing strong recovery [18][20]. 2. **Energy Conservation Industry** - PMI rose to 53.5, with production and new orders also increasing, indicating a recovery in demand [25][29]. 3. **Biotechnology Industry** - PMI reached 57.4, with significant increases in production and new orders, reflecting strong seasonal demand [37][40]. 4. **New Materials Industry** - PMI surged to 59.7, with production and new orders rising sharply, indicating a robust seasonal demand [46][50]. 5. **New Energy Industry** - PMI increased to 59.2, with production and orders reflecting strong recovery post-holiday [56][60]. 6. **New Energy Vehicle Industry** - PMI rose to 54.7, showing signs of recovery, although still below peak levels [66][70]. 7. **New Generation Information Technology Industry** - PMI jumped to 62.2, indicating a strong demand recovery and expansion [76][80]. 8. **Health Care Services Industry** - PMI fell to 51.8, reflecting a slight decline in demand post-holiday [86][89]. 9. **Business Consulting Services Industry** - PMI remained high at 75, but new orders are low, indicating a lack of recovery momentum [93][97].

Economic Overview - The manufacturing PMI for February 2026 is reported at 49%, a decrease of 0.3 percentage points from the previous month, indicating ongoing economic pressure[5] - The non-manufacturing business activity index slightly increased to 49.5, reflecting seasonal effects from the Spring Festival, but still indicates contraction[8] Inflation and Prices - The CPI for February 2026 rose to 1.3% year-on-year, driven by seasonal factors and a low base from the previous year[18] - The PPI decreased by 0.9% year-on-year, with the decline narrowing by 0.5 percentage points, indicating some stabilization in production prices[20] Trade and Exports - In February 2026, total imports and exports amounted to $508.78 billion, with exports increasing by 39.6% and imports by 13.8% year-on-year[24] - The export growth is attributed to seasonal factors and strong foreign demand, despite a projected slowdown in export growth for the year[26] Sector Performance - The construction sector is experiencing significant weakness, with new orders at a historic low, primarily due to the Spring Festival and ongoing real estate downturn[41] - Consumer services, particularly in hospitality and entertainment, showed strong performance due to increased demand during the Spring Festival, marking a significant recovery in this sector[44] Monetary Policy and Credit - M1 growth rate increased to 4.9%, while M2 grew by 9%, indicating a slight recovery in liquidity despite seasonal pressures on credit demand[51] - The government is expected to increase public investment to stimulate demand and support economic recovery[5]

Investment Rating - The report indicates a mixed investment rating across various sectors, with some industries showing potential for growth while others are experiencing declines [11][12][15]. Core Insights - The report highlights that the FEPMI index for February 2026 shows a continued differentiation in the industry, influenced by the Spring Festival effect, with new industries still demonstrating advantages [11][12]. - Raw material sectors are experiencing internal differentiation, with petroleum dropping to a low of 41.9, chemicals at 40.8, and non-metallic minerals rebounding to 51.3, while non-ferrous metals remain stable [11][12]. - Equipment sectors have seen a monthly decline, with computers at 48.9, automobiles at 43.9, and electrical machinery at 43.3 [11][12]. - Consumer sectors are also showing a decline, with clothing dropping significantly to 38.4, pharmaceuticals at 49.9, and food processing slightly down to 50.2 [11][12]. Summary by Sections 1. Overall Situation of Chinese Manufacturing - In February 2026, among 12 key industries, 3 had indices above 50%, with non-metallic minerals at the highest of 51.3% [11]. - The lowest was in the chemical fiber manufacturing sector at 34.3% [11]. 2. Hotspot Industries PMI and Sub-indexes - **Petroleum Processing and Coking Industry**: February PMI at 41.9, significantly below the four-year average of 46.08, indicating a seasonal low with production and new orders declining [15][20]. - **Non-ferrous Metal Smelting and Rolling Industry**: February PMI at 52.2, showing a seasonal low but better than the four-year average, with production and new orders also declining [24][29]. - **Non-metallic Mineral Products Industry**: February PMI at 51.3, indicating a seasonal high with new orders recovering [33][39]. - **Chemical Raw Materials and Products Manufacturing**: February PMI at 40.8, indicating a seasonal low with significant declines in production and new orders [43][49]. - **Black Metal Smelting and Rolling Industry**: February PMI at 44.3, indicating a seasonal low with slight declines in production and new orders [54][58]. - **Chemical Fiber and Rubber Plastic Products Industry**: February PMI at 34.3, indicating a significant seasonal low with major declines in production and orders [65][69]. - **Automobile Manufacturing Industry**: February PMI at 43.9, indicating a seasonal low with production and orders declining [74][79]. This comprehensive analysis provides insights into the current state of various industries, highlighting both opportunities and challenges within the manufacturing sector.

Market Overview - In Q4 2025, the asset securitization market issued a total of 658 transactions, amounting to 6,920.4 billion yuan, representing a year-on-year growth of 7.8%[9] - The total issuance for the year reached 23,170.8 billion yuan, with a year-on-year increase of 13.4%[9] Market Composition - In Q4 2025, the composition of the market by issuance amount was as follows: Credit ABS at 15.2%, ABN at 22.8%, and Corporate ABS at 62.0%[9] - The issuance of Credit ABS in Q4 2025 was 1,049.1 billion yuan, showing a significant year-on-year growth of 32.2%[9] Product Performance - The issuance of auto loan ABS in Q4 2025 was 649.9 billion yuan, marking the first quarterly year-on-year rebound for the year[9] - NPAS products remained the most active, with 44 transactions and a slight year-on-year increase of 6.0% in issuance amount[9] ABN Market Trends - ABN issuance in Q4 2025 totaled 1,578.7 billion yuan, reflecting a year-on-year decline of 7.7%[10] - For the entire year, ABN issuance reached 5,680.8 billion yuan, an increase of 8.4% compared to 2024[10] Corporate ABS Highlights - Corporate ABS issuance in Q4 2025 reached 4,292.5 billion yuan, with a year-on-year growth of 9.6%, achieving the highest quarterly issuance since 2022[10] - The top four product types in Corporate ABS accounted for over 60% of the total issuance for the year[10] Secondary Market Activity - The total transaction amount in the secondary market for asset securitization in Q4 2025 was 4,769.1 billion yuan, a year-on-year increase of 10.8%[13] - The turnover rate for Credit ABS in Q4 was 9.2%, indicating a significant increase in market activity compared to the beginning of the year[13] Credit Enhancement Levels - The number of outstanding priority securities for Credit ABS increased in Q4 2025, with RMBS showing a stable distribution of credit enhancement levels primarily between 2%-6%[16] - No negative anomalies were observed in the credit enhancement levels for outstanding securities during the quarter[16] Future Outlook - New guidelines from the People's Bank of China regarding small loan companies may impact ABS financing, potentially leading to lower loan rates and tighter credit risk preferences[17]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - In January, China's non-manufacturing business activity index fell by 0.8 percentage points month-on-month and by 0.8 percentage points year-on-year, indicating a decline in overall economic activity [1] - The construction industry reached a four-year low, with a significant drop in new orders and a decrease in the business activity index [1] - The telecommunications sector saw an increase in pricing, reflecting a rise in service charges [1] Summary by Sections Section 1: Overview of China's Non-Manufacturing Industry Index - The report highlights a decline in the non-manufacturing industry index, with specific sectors showing varied performance [4] Section 2: Non-Manufacturing Industry Index Details - The information and business services sector had the highest business activity index at 53.4, down 1.6 percentage points from the previous month but up 0.1 percentage points year-on-year [5] - The residential services sector showed the lowest index at 45.8, with a slight increase of 1.6 percentage points month-on-month but a decrease of 2.3 percentage points year-on-year [11] - The construction sector's business activity index fell to 47.0, down 3.0 percentage points from the previous month and down 3.6 percentage points year-on-year [24]

Report Industry Investment Rating - No relevant information provided Core View of the Report - In January 2026, the business activity of China's non - manufacturing industry declined by 0.8 percentage points to 49.4%, ending the expansion trend. The new order index dropped by 1.2 to 46.1%, and the demand recovery was still weak. The construction industry was significantly affected by cold weather and the approaching Spring Festival, with a notable decline in the prosperity level, while the service industry was relatively stable. The business activity index of the service industry has been stable at around 49.5% for three consecutive months, and the new order index has been slightly above 47% for two consecutive months. The financial industry, new kinetic energy industries, and some festival - related consumer industries supported the stable operation of the service industry [1][8] Summary by Relevant Catalogs PMI National Indicators - The national business activity status was 49.4, with a month - on - month value of - 0.8 and a year - on - year value of - 0.8, lower than the recent average by 2.4 percentage points. The national new order (business demand) was 46.1, with a month - on - month value of - 1.2 and a year - on - year value of - 0.3, lower than the recent average by 2.7 percentage points. The production - order difference was 3.3, indicating a weakening relationship between production and demand [4] - The national charge price was 48.8, with a month - on - month increase of 0.8 and a year - on - year increase of 0.2, higher than the recent average by 0.2 percentage points. The national intermediate input price was 50, with a month - on - month decrease of 0.2 and a year - on - year decrease of - 0.4, lower than the recent average by 0.5 percentage points [5] - The absolute value of the comprehensive index this month was weaker than the recent average, and the month - on - month value was also weaker than the recent average [6] - Business activity status: 49.4, declining, with an absolute value weaker than recent years; New orders (business demand): 46.1, below 50, production higher than orders; Overseas new orders (business demand): 46.9, declining; Production and operation personnel: 46.1, flat compared to last month, at a low level; Charge price: 48.8, rising, at a medium level; Intermediate input price: 50, declining; Price difference: - 1.2, rising [7] Evaluation of PMI Indicators for Major and Sub - industries - **Major industries**: The service industry's activity status index declined compared to last month and was lower than the same period in previous years. The construction industry's activity status index also declined compared to last month and was lower than the same period in previous years. After standardizing the data, the construction industry was weaker than the service industry. In the construction industry, the business activity status was 48.8, with a month - on - month value of - 4, lower than the recent average by 4.4 percentage points; new orders (business demand) were 40.1, with a month - on - month value of - 7.3, lower than the recent average by 9.5 percentage points; charge price was 48.2, with a month - on - month value of 0.8, lower than the recent average by 2.1 percentage points. In the service industry, the business activity status was 49.5, with a month - on - month value of - 0.2, lower than the recent average by 2 percentage points; new orders (business demand) were 47.1, with a month - on - month value of - 0.2, lower than the recent average by 1.6 percentage points; charge price was 48.9, with a month - on - month value of 0.8, higher than the recent average by 0.6 percentage points [16][17][18] - **Sub - industries**: The highest economic status indicator was in the information and business service sub - industry, and the lowest was in the residential service sub - industry. The residential service sub - industry had the largest increase, while the building construction sub - industry had the largest decline [19] Comprehensive Analysis of Intermediate Input Price and Charge Price - The charge price was closely related to the main business income and profit indicators of each industry. This month, the national charge price increased compared to last month, indicating an expected rise in inflation. The national intermediate input price decreased compared to last month, and the difference between the charge price and the intermediate input price increased compared to last month, indicating a narrowing profit margin for enterprises. The national charge price was 48.8, with a month - on - month value of 0.8 and a year - on - year value of 0.2, higher than the recent average by 0.2 percentage points. The highest charge price was in the wholesale industry at 51.6, and the highest month - on - month value was also in the wholesale industry at 4 [20] Main Sub - indicators - New order index: 47.3%, a month - on - month increase of 1.6 percentage points. In the construction industry, it was 47.4%, a month - on - month increase of 1.3 percentage points; in the service industry, it was 47.3%, a month - on - month increase of 1.7 percentage points [23] - Input price index: 50.2%, a month - on - month decrease of 0.2 percentage points. In the construction industry, it was 50.8%, a month - on - month increase of 1.1 percentage points; in the service industry, it was 50.1%, a month - on - month decrease of 0.4 percentage points [23] - Sales price index: 48%, a month - on - month decrease of 1.1 percentage points. In the construction industry, it was 47.4%, a month - on - month decrease of 1 percentage points; in the service industry, it was 48.1%, a month - on - month decrease of 1.1 percentage points [23] - Employee index: 46.1%, a month - on - month increase of 0.8 percentage points. In the construction industry, it was 41%, a month - on - month decrease of 0.8 percentage points; in the service industry, it was 47%, a month - on - month increase of 1.1 percentage points [23] - Business activity expectation index: 56.5%, a month - on - month increase of 0.3 percentage points. In the construction industry, it was 57.4%, a month - on - month decrease of 0.5 percentage points; in the service industry, it was 56.4%, a month - on - month increase of 0.5 percentage points [23]

Core Viewpoints - The report indicates that the adjustment process in the market is not yet over, with a long-term pressure point at 4200, suggesting that the current rebound is not the main upward trend for the year and requires further consolidation before resuming upward movement [1] Fundamental Analysis - The domestic economy continues to recover steadily, with a predicted slow price recovery and a significant bottoming out of the manufacturing PMI expected in February 2026. The CPI rose to 1.2% year-on-year in December 2025, while the PPI turned positive at 0.5%, indicating a substantial recovery in corporate revenues and narrowing profit declines for industrial enterprises [2] - Consumer spending is on the rise, with retail sales growth steadily increasing, enhancing consumption's role in economic growth. In the U.S., GDP growth exceeded expectations at 2.8% in Q4 2025, with non-farm payrolls adding 198,000 jobs, supporting global capital market risk appetite [2] Liquidity Analysis - The liquidity in the market remains ample, with continuous inflow of new funds. The central bank has been actively releasing liquidity through reverse repos, and there is room for further policy actions such as rate cuts [3][4] - Domestic liquidity is supported by rising CPI and PPI, improving corporate profitability, and increasing household income, attracting more medium to long-term funds into the equity market. Insurance products are seeing strong sales, contributing to a rigid demand for asset allocation in A-shares [4] Policy Analysis - The macro policy for 2026 focuses on "increasing residents' income," with the stock market's wealth effect being a crucial driver for consumption growth. Regulatory measures are in place to guide the market towards a "slow bull" trend while managing short-term volatility [5] - The external environment remains uncertain due to geopolitical factors and trade policies from the U.S. government, which may exert short-term pressure on global capital market risk appetite [5] Technical Analysis - The report notes that the 4200 point pressure level has been reached, indicating a significant need for technical adjustment. The market's overall trading volume has not shown a significant decline, suggesting continued buying interest [6] - The A-share market is expected to complete a bottoming process before the Spring Festival, with the 4000 point level providing solid technical support. Once short-term adjustments are complete, the market is anticipated to enter a mid-term upward channel, transitioning from growth to value dominance [6]

Investment Rating - The report indicates a recovery in the overall industry, with consumer goods leading the major categories [1] Core Insights - The national PMI for December is 50.1, reflecting a month-on-month increase of 0.9 percentage points and a year-on-year increase of 0, which is 1.4 percentage points higher than the recent average [1][3] - The production index has rebounded to 51.7, with a month-on-month increase of 1.7 percentage points, while the new orders index has risen to 50.8, up by 1.6 percentage points [4][9] - The highest absolute values among industries this month are in pharmaceuticals, clothing, transportation, and communication, while the highest month-on-month increases are seen in petroleum, clothing, and timber [1][3] Summary by Sections Manufacturing PMI - The manufacturing PMI index stands at 50.1, with 4 industries above 50 and 11 below [3] - The highest PMI is in the pharmaceutical manufacturing sector at 58.9, while the lowest is in general equipment manufacturing at 40.7 [3] New Orders Index - The new orders index is at 50.8, with 3 industries above 50 and 8 below [4] - The highest new orders index is also in pharmaceuticals at 62.5, while the lowest is in petroleum processing at 35.7 [5][6] Profit Trend Index - The profit trend index for manufacturing is -2.3, showing a month-on-month increase of 2.1 percentage points [7] - The highest profit trend index is in the automotive manufacturing sector at 9.3, while the lowest is in non-ferrous metal smelting at -25 [7][10] Production Index - The production index is at 51.7, with 5 industries above 50 and 9 below [9] - The highest production index is in the textile and apparel sector at 67.9, while the lowest is in general equipment manufacturing at 38.9 [9] Purchase Price Index - The purchase price index is at 53.1, down by 0.5 percentage points from last month [13] - The highest purchase price index is in non-ferrous metal smelting at 68.8, while the lowest is in petroleum processing at 32.1 [13][14] Finished Goods Inventory Index - The finished goods inventory index is at 48.2, with 4 industries above 50 and 10 below [17] - The highest inventory index is in pharmaceuticals at 55, while the lowest is in metal products at 31.3 [17] Export Orders Index - The export orders index is at 49, with 3 industries above 50 and 8 below [18] - The highest export orders index is in textiles at 62.5, while the lowest is in agricultural products at 33.3 [19][22]

Market Overview - Gold prices reached historical highs in October, driven by increased risk aversion due to multiple factors including U.S. government shutdown and Fed rate cut expectations[5] - The U.S. government shutdown has caused an estimated economic loss of at least $18 billion, with potential permanent losses of up to $14 billion if it continues[8] - The easing of U.S.-China trade tensions has led to a decline in gold prices as risk demand decreases[11] Federal Reserve Actions - The Federal Reserve cut the federal funds rate by 25 basis points to a target range of 3.75% to 4.00% on October 29, marking the fifth cut since September 2024[15] - Fed Chairman Powell indicated that further rate cuts in December are not guaranteed, increasing uncertainty around future monetary policy[17] - The probability of a 25 basis point cut in December dropped to 67.8% following Powell's comments, reflecting market skepticism about aggressive easing[18] Global Gold Demand - Global gold demand reached a record high of 1,313 tons in Q3 2025, with investment demand leading the growth, particularly through ETFs which saw inflows of 222 tons, amounting to $26 billion[28] - Central banks continued to increase gold reserves, with China's central bank adding 5 tons in Q3, maintaining a total of 2,304 tons[28] - The World Gold Council reported that Q3 2025 saw a 44% year-on-year increase in total demand value, reaching $146 billion[28]

Economic Performance - In 2024, Shandong Province achieved a GDP of 9.9 trillion yuan, with a year-on-year growth of 5.7%, surpassing the national growth rate by 0.7 percentage points[2] - Fixed asset investment (excluding farmers) grew by 3.3%, with manufacturing investment increasing by 15.1% and high-tech industry investment rising by 15.9%[3] - The total retail sales of consumer goods reached 3.8 trillion yuan, growing by 5.0% year-on-year, with online retail sales at 754.3 billion yuan, up 7.8%[3] Financial Sector Performance - The total social financing scale in Shandong reached 23.8 trillion yuan, with a year-on-year growth of 10.2%[62] - New loans amounted to 1.2 trillion yuan, with a year-on-year growth of 9.0%, exceeding the national average by 1.8 percentage points[44] - The balance of debt financing tools issued by enterprises was 622.8 billion yuan, reflecting a 9.6% increase year-on-year[66] Employment and Income - Urban employment increased by 1.245 million, achieving 113.2% of the annual target, while per capita disposable income rose by 5.5%[34] - The rural per capita disposable income growth rate outpaced that of urban residents, indicating a positive trend in rural economic conditions[34] Price Stability - The consumer price index (CPI) rose by 0.2%, with food prices declining by 0.5% and non-food prices increasing by 0.4%[35] - The industrial producer price index (PPI) decreased by 2.1%, with the decline narrowing by 1.4 percentage points compared to the previous year[35] Financial Risk Management - The non-performing loan ratio in the banking sector was 1.15%, a decrease of 0.01 percentage points, marking six consecutive years of decline[59] - The provision coverage ratio reached 276.6%, indicating enhanced risk resistance capabilities within the banking institutions[59]