Core Insights - The report emphasizes the positive outlook for domestic demand, which is expected to drive the development of new productive forces, as highlighted by the national financial work conference held on December 27-28, 2025 [5][13] - The aerospace sector continues to show high prosperity, with the China Aerospace Science and Technology Corporation achieving a record 73 space launch missions in 2025 [5][14] - The report recommends focusing on companies that align with the "S-curve" evolution, emphasizing supply chain reform, maintenance volume, and trends towards automation and intelligence [5][15] Industry Overview - The defense and aerospace industry is experiencing a significant increase in investment, with a focus on new productive forces and comprehensive human development [5][13] - The report notes the successful IPO acceptance of Blue Arrow Aerospace, which aims to raise 7.5 billion CNY, indicating strong market interest in commercial aerospace ventures [5][14] - The report identifies three key cycles within the industry: the evolution of the "S-curve," expansion of the "S-curve," and a new cycle focusing on emerging industries such as commercial aerospace, AI, and quantum computing [5][15] Company Recommendations - Recommended companies include: - **Aero Engine Corporation of China** (航发动力): Benefiting from high-end aviation equipment production and potential for domestic engine replacement in the civil aviation market [5][21] - **AVIC Xi'an Aircraft Industry Group** (中航西飞): A major manufacturer of military and civil aircraft, expected to benefit from modernization and military trade opportunities [5][22] - **China Power** (中国动力): Positioned to benefit from the recovery of the shipbuilding industry and the transition to dual-fuel engines [5][26] - **Aero Engine Control** (航发控制): Engaged in the production of control systems for military and civil aviation engines, with a strong competitive position [5][21] - **Ziguang Guowei** (紫光国微): Focused on the semiconductor industry with a strong emphasis on domestic market growth and AI integration [5][18] Financial Analysis - The report provides detailed financial metrics for key companies, including expected earnings per share (EPS), price-to-earnings (PE) ratios, and return on equity (ROE) for 2025 and 2026 [6] - For example, **航发动力** is projected to have an EPS of 0.34 CNY in 2026 with a PE ratio of 117.74 [6] - **中航重机** is expected to achieve a net profit of 11.21 billion CNY in 2025, with a dynamic PE ratio of approximately 28X [5][24] Market Performance - The report notes that the China Securities Military Industry Index has shown a weekly increase of 2.90%, outperforming major indices such as the Shanghai Composite and Shenzhen Component [5][34] - Year-to-date, the military industry index has increased by 42.34%, indicating strong market performance relative to other sectors [5][34]

Core Viewpoint - The Qinghai Special Equipment Inspection Institute has achieved a significant breakthrough in energy-saving and carbon reduction technology for large-scale staged combustion boilers, winning the first prize for technological invention at the inaugural China Power Engineering Society Science and Technology Awards [1][2]. Group 1: Project Overview - The project titled "Key Technologies and Applications for Ultra-Low Emission NOx and Collaborative Energy Saving and Carbon Reduction of Large Staged Combustion Boilers" was led by Harbin Institute of Technology in collaboration with several universities and companies [1]. - The award represents a recognition of the institute's research capabilities and collaborative innovation in the field of safety and energy-saving technology for special equipment in high-altitude environments [1]. Group 2: Research Focus and Achievements - The Qinghai Special Equipment Inspection Institute has focused on the operational mechanisms and energy-saving carbon reduction technologies of special equipment in high-altitude environments, utilizing platforms like the Qinghai Energy Efficiency Testing Laboratory [2]. - Since the 14th Five-Year Plan, the institute has been approved for over ten national and provincial-level research projects, contributing to the standardization of research outcomes [2]. - The institute participated in revising the national standard "Guidelines for Energy-Saving Design of Industrial Boiler Systems" (GB/T 34912-2024), which includes a new chapter on energy-saving design requirements for high-altitude environments, filling a gap in domestic technical standards [2]. Group 3: Future Directions - The Qinghai Special Equipment Inspection Institute aims to leverage this award as a new starting point, focusing on the construction of a high-altitude integrated service system for national quality infrastructure during the 15th Five-Year Plan [2]. - The institute plans to deepen its research with a focus on high-altitude characteristics, contributing to the construction of a new Qinghai and the national strategic framework [2].

Group 1 - The core viewpoint of the news is that the China Shipbuilding sector has shown a positive performance, with a 2.30% increase, ranking third among concept sectors on the trading day [1][2] - Within the China Shipbuilding sector, six stocks experienced gains, with Jiuzhiyang leading at a 20% increase, followed by China Haifang, China Ship Han Guang, and China Ship Special Gas, which rose by 1.26%, 1.06%, and 0.70% respectively [1][2] - The sector saw a net inflow of 306 million yuan from main funds, with Jiuzhiyang receiving the highest net inflow of 305 million yuan, followed by China Shipbuilding, China Haifang, and China Ship Special Gas with net inflows of 31.41 million yuan, 14.66 million yuan, and 4.89 million yuan respectively [2][3] Group 2 - The main fund inflow ratios for Jiuzhiyang, China Haifang, and China Ship Special Gas were 16.09%, 4.89%, and 3.43% respectively, indicating strong investor interest in these stocks [3] - The trading data shows that Jiuzhiyang had a turnover rate of 14.27%, while China Shipbuilding and China Haifang had turnover rates of 0.52% and 1.55% respectively [3][4] - Conversely, stocks like Kunshan Intelligent and China Power experienced declines of 0.32% and 0.48%, with negative net fund flows of -403.85 thousand yuan and -476.41 thousand yuan respectively [4]

Market Overview - The other power equipment sector experienced a decline of 0.57% compared to the previous trading day, with Haibosi leading the drop [1] - The Shanghai Composite Index closed at 3965.28, up 0.04%, while the Shenzhen Component Index closed at 13537.1, down 0.49% [1] Stock Performance - Notable gainers in the other power equipment sector included: - Xinfeng Energy (300593) with a closing price of 31.15, up 3.83%, and a trading volume of 622,600 shares, totaling 1.893 billion yuan [1] - ST Yishite (300376) closed at 6.45, up 3.20%, with a trading volume of 346,900 shares, totaling 224 million yuan [1] - Oulu Tong (300870) closed at 232.90, up 2.68%, with a trading volume of 166,400 shares, totaling 1.540 billion yuan [1] - Decliners included: - Haidao Feitan (688411) closed at 259.79, down 5.03%, with a trading volume of 31,500 shares, totaling 818 million yuan [2] - Xizi Clean Energy (002534) closed at 17.23, down 3.20%, with a trading volume of 140,600 shares, totaling 245 million yuan [2] - ST Huaxi (002630) closed at 2.58, down 3.01%, with a trading volume of 251,200 shares, totaling 65.3 million yuan [2] Capital Flow - The other power equipment sector saw a net outflow of 800.3 million yuan from institutional investors, while retail investors experienced a net inflow of 490 million yuan [2] - The capital flow for specific stocks showed: - Oulu Tong (300870) had a net inflow of 13.5 million yuan from institutional investors, but a net outflow of 139 million yuan from retail investors [3] - Xinfeng Energy (300593) had a net inflow of 54.67 million yuan from institutional investors, with a net outflow of 112 million yuan from retail investors [3] - Keda (002518) had a net inflow of 23.04 million yuan from institutional investors, but a net outflow of 26.74 million yuan from retail investors [3]

Investment Rating - The report maintains a "Strong Buy" investment rating for China Power [1][3]. Core Views - China Power is currently undervalued due to the pressure on ship market volume and prices this year. However, there are signs of recovery in the short term, and long-term growth is expected from bulk carriers and oil tankers, along with the trend towards alternative fuels [1][7]. - The company is positioned as a leading player in the domestic ship engine market, with a significant increase in revenue and profit expected in the coming years [7][9]. Summary by Relevant Sections Financial Performance - For the first three quarters of 2025, China Power achieved revenue of 40.97 billion yuan, a year-on-year increase of 12%, and a net profit attributable to shareholders of 1.21 billion yuan, up 63% year-on-year [7][9]. - The company’s revenue growth rates are projected at 17% for 2025, 15% for 2026, and 12% for 2027, with net profits expected to reach 2.2 billion yuan, 3.1 billion yuan, and 4.25 billion yuan respectively [8][70]. Market Outlook - The ship market is showing signs of recovery, with expectations for increased demand for bulk carriers and oil tankers. The aging fleet and low order-to-capacity ratios for these vessels indicate a tightening supply in the future [2][30][35]. - The report highlights that the global shipbuilding market is currently in an upward cycle driven by the need for fleet renewal and compliance with environmental regulations [23][24]. Valuation - China Power's current price-to-book (PB) ratio is below 1.2, and the projected price-to-earnings (PE) ratio for 2026 is only 15 times, both indicating a significant undervaluation compared to historical averages [7][72]. - The company has over 40 billion yuan in cash, which is close to its market capitalization, providing a strong safety margin for investors [15][72]. Business Segments - The diesel engine segment is becoming the core profit driver for China Power, with its revenue share increasing significantly. By 2027, it is expected to contribute approximately 30 billion yuan to net profits [11][70]. - The report emphasizes the structural opportunities in the ship engine market due to the rising penetration of alternative fuels and the expected increase in orders and prices for ship engines [7][57].

Core Viewpoint - The announcement from Kexuan Power Holdings (00476) indicates a legal decision from the Chongqing Arbitration Commission regarding the sale of Chongqing Zhongtong New Energy Vehicle Technology Co., Ltd. and the associated financial obligations [1] Group 1: Legal Proceedings - The company and its wholly-owned subsidiary, China Power (600482) New Energy Technology Co., Ltd., received a statutory demand letter dated December 24, 2025, from legal advisors representing creditors [1] - The statutory demand requires the company (as guarantor) and China Power (as the primary debtor) to repay a total of RMB 38.9672 million within three weeks of receiving the demand [1] - The amount includes the price paid by the buyer under the sale agreement dated June 2, 2023, along with penalties and compensation [1] Group 2: Financial Implications - If the repayment is not made, creditors may file for liquidation against both the company and China Power [1]

Core Viewpoint - The announcement from Kexuan Power Holdings (00476) indicates a legal ruling from the Chongqing Arbitration Commission regarding the sale of Chongqing Zhongtong New Energy Vehicle Technology Co., Ltd. and highlights potential financial liabilities for the company and its subsidiary [1] Group 1: Legal and Financial Implications - The company and its wholly-owned subsidiary, China Power New Energy Technology Co., Ltd., received a statutory demand letter on December 24, 2025, from legal representatives acting on behalf of creditors [1] - The statutory demand requires the company and China Power to repay a total of RMB 38.9672 million within three weeks of receiving the demand, which includes the price paid by the buyer under the sale agreement dated June 2, 2023, along with penalties and compensation [1] - Failure to repay the amount may result in creditors filing for liquidation against both the company and China Power [1]

Core Viewpoint - The other power equipment sector experienced a significant increase of 3.7% on December 24, with Xinle Energy leading the gains, reflecting positive market sentiment in this industry [1]. Group 1: Market Performance - The Shanghai Composite Index closed at 3940.95, up by 0.53%, while the Shenzhen Component Index closed at 13486.42, up by 0.88% [1]. - Notable stocks in the other power equipment sector included: - Xinfu Energy (300593) with a closing price of 30.24, up by 20.00% and a trading volume of 632,300 shares, totaling a transaction value of 1.83 billion [1]. - Zhongheng Electric (002364) closed at 27.67, up by 10.02% with a trading volume of 547,300 shares [1]. - Jinshi Technology (002951) closed at 15.29, up by 10.00% with a transaction value of 209 million [1]. Group 2: Capital Flow - The other power equipment sector saw a net inflow of 1.933 billion in main funds, while retail investors experienced a net outflow of 762 million [2]. - The capital flow for key stocks included: - Maigemit (002851) had a main fund net inflow of 460 million, but retail funds saw a net outflow of 189 million [3]. - Zhongheng Electric (002364) had a main fund net inflow of 401 million, with retail funds experiencing a net outflow of 210 million [3]. - Shanghai Electric (601727) recorded a main fund net inflow of 83.28 million, while retail funds had a net outflow of 21.53 million [3].

Investment Rating - The report maintains a positive outlook on the shipping industry, particularly recommending stocks such as China Shipbuilding, China Power, and Sumec [4]. Core Insights - The report highlights the launch of the first shipping industry index fund on December 19, 2025, and notes a continued increase in second-hand ship prices, with a 5-year-old VLCC price rising by $2 million to $120 million [4]. - Seasonal fluctuations are observed in freight rates, with oil and bulk carrier second-hand prices increasing. The report recommends stocks like COSCO Shipping and China Merchants Energy [4]. - The report anticipates a significant improvement in airline profitability due to supply constraints and increasing passenger demand, recommending stocks such as China Eastern Airlines and Spring Airlines [4]. Summary by Sections Shipping Industry - The second-hand ship price index increased by 0.38% to 194.32 points, with a recommendation for COSCO Shipping and China Merchants Energy [4]. - VLCC freight rates decreased by 11% to $101,623 per day, while Suezmax rates increased by 9% to $78,107 per day [4]. Airline Sector - The report indicates that the global aircraft manufacturing chain is facing unprecedented challenges, with an aging fleet and supply constraints expected to continue [4]. - Airlines are projected to experience significant profitability improvements, with recommendations for stocks such as China Eastern Airlines and China Southern Airlines [4]. Logistics and Express Delivery - The express delivery sector is entering a new phase of competition, with three potential scenarios outlined for industry performance [4]. - Recommended stocks include Shentong Express and Yunda Holdings, with a focus on companies benefiting from Southeast Asian e-commerce growth [4]. Rail and Road Transport - Rail freight volume and highway truck traffic are expected to maintain steady growth, with data showing a slight decrease in freight volume [4]. - The report suggests that traditional high-dividend investment themes and potential value management catalysts will be key investment lines through 2025 [4].

Investment Rating - The report maintains a positive outlook on the shipping industry, particularly recommending stocks such as China Shipbuilding, China Power, and Sumec [4]. Core Insights - The launch of the first shipping industry index fund on December 19, 2025, indicates a growing interest in the sector. The prices of second-hand ships continue to rise, with a notable increase in the price of 5-year-old VLCC ships by $2 million to $120 million [4]. - The report highlights a seasonal decline in freight rates as the Christmas holiday approaches, while the prices of oil and bulk second-hand ships are on the rise. The second-hand bulk carrier price index increased by 0.38% to 194.32 points [4]. - The report emphasizes the resilience of the air transport sector, predicting significant improvements in airline profitability due to supply constraints and increasing passenger demand, recommending stocks like China Eastern Airlines and Spring Airlines [4]. Summary by Sections Shipping Industry - The report notes that the second-hand ship market is experiencing a positive trend, with specific recommendations for stocks such as China Shipbuilding and China Power [4]. - VLCC freight rates have decreased by 11% week-on-week, averaging $101,623 per day, while the Middle East to Far East route recorded $109,772 per day [4]. - The report anticipates that shipping rates may face downward pressure but highlights shipowners' reluctance to significantly lower prices [4]. Air Transport - The report indicates that the global aircraft manufacturing chain is facing unprecedented challenges, with an aging fleet expected to continue. The report suggests that airlines are poised for a golden era of profitability due to improved operational metrics and demand recovery [4]. - Recommended stocks in the airline sector include China Eastern Airlines, China Southern Airlines, and Cathay Pacific [4]. Logistics and Express Delivery - The express delivery sector is entering a new phase of competition, with three potential scenarios outlined for industry performance. Recommendations include Shentong Express and Yunda Express, with a focus on companies benefiting from Southeast Asian e-commerce growth [4]. - The report notes that the logistics demand remains robust, with rail freight and highway truck traffic showing steady growth [4]. Market Performance - The transportation index rose by 2.04%, outperforming the Shanghai Composite Index by 2.31 percentage points. The air transport sector saw the highest increase at 6.84% [5][12]. - The report provides insights into the performance of various sub-sectors within transportation, highlighting the resilience of air transport and the challenges faced by the express delivery sector [5][12].