Core Viewpoint - The Hong Kong gold retail brands experienced a significant decline in stock prices, with major players like Lao Pu Gold, Chow Tai Fook, and Luk Fook Group dropping over 7% as of the morning of November 3rd [1][2]. Group 1: Stock Performance - Lao Pu Gold saw a decrease of 7.52%, trading at HKD 633.000 [2] - Chow Tai Fook's stock fell by 7.23%, with a current price of HKD 14.120 [2] - Luk Fook Group's shares dropped by 7.15%, now priced at HKD 23.100 [2] - Chow Sang Sang experienced a decline of 6.89%, trading at HKD 12.970 [2] - In the A-share market, the precious metals sector also faced declines, with Hunan Gold down over 4% [3]. Group 2: Tax Policy Announcement - On November 1st, the Ministry of Finance and the State Administration of Taxation announced a tax policy regarding gold transactions [3]. - The announcement states that members or clients trading standard gold through the Shanghai Gold Exchange or Shanghai Futures Exchange will be exempt from value-added tax when selling standard gold [4]. - For transactions that do not involve physical delivery, the exchange will exempt value-added tax; for those that do involve physical delivery, the applicable value-added tax policy will be followed [4].

Group 1 - The Hong Kong gold stocks experienced a collective decline, with China Gold International dropping over 5%, Shandong Gold down more than 4%, and several other companies like Zijin Mining, Zijin Gold International, and Chifeng Jilong Gold falling over 3% [2] - In the Asian market, spot gold prices fell below $3970 per ounce, reflecting a decrease of 0.84% [4] - A new tax policy regarding gold was announced by the Ministry of Finance and the State Taxation Administration, set to take effect from November 1, 2025, until December 31, 2027, aimed at regulating gold trading and speculation [4] Group 2 - Professor Gong Xiuguo from Sichuan University highlighted that the current global uncertainties and high gold prices have attracted many investors to the gold market, which poses significant risks [4] - The new tax policy is expected to use tax leverage and clarify investment purposes to curb excessive speculation in gold trading, thereby reflecting true market demand more accurately [4]

Core Viewpoint - The announcement from the Ministry of Finance and the State Administration of Taxation regarding tax policies on gold has led to a significant increase in the prices of investment gold bars, with many products now priced above 1000 yuan per gram, and some brands exceeding 1200 yuan per gram [4][21]. Price Changes - On November 1, many investment gold bars that were previously priced below 1000 yuan per gram quickly disappeared from the market, with prices rising to over 1000 yuan per gram within a few hours [3][5]. - For instance, the price of a 10g gold bar from Shandong Gold has surged to 123,100 yuan, while a 10g dog head gold bar was priced at 12,430 yuan, compared to 913 yuan per gram just days earlier [17][21]. Market Reactions - Consumers expressed surprise and concern over the rapid price increases, with many noting that gold bars that were previously available for around 900 yuan per gram were now listed at significantly higher prices [5][13]. - Major retailers like Caibai Jewelry and banks have begun to adjust their offerings, with many standard investment gold bars being taken off the shelves or having their prices increased [13][22]. Availability - By the evening of November 1, most brands of investment gold bars and gold beans priced under 1000 yuan per gram were no longer available, indicating a market shift [22]. - Some banks reported that their gold bars were out of stock, reflecting a broader trend in the market where demand has surged following the announcement of the new tax policies [23][22].

Investment Rating - Industry Rating: Recommended [5] Core Views - The report highlights that the recent U.S.-China trade negotiations have led to significant agreements, including the cancellation of certain tariffs and a pause on export controls, which may positively impact market sentiment [3][48] - The Federal Reserve's recent hawkish stance has pressured metal prices, particularly gold, but there remains underlying support due to ongoing geopolitical tensions and economic uncertainties [4][50] - Long-term trends indicate a continued focus on gold and silver investments, driven by concerns over global debt and currency devaluation, with specific stocks recommended for investment [51][52] Summary by Sections Precious Metals - Gold prices on COMEX fell by 1.20% to $4,077.20 per ounce, while silver prices decreased by 0.33% to $48.25 per ounce [1][30] - The gold-silver ratio declined by 0.88% to 84.50, indicating a potential for silver price recovery [30] - SPDR Gold ETF holdings decreased by 248,440.78 ounces, while SLV Silver ETF holdings fell by 8,982,443.90 ounces [30] Base Metals - Copper prices on LME dropped by 0.51% to $10,891.50 per ton, while aluminum prices increased by 1.10% to $2,888.00 per ton [9] - The report notes a tightening supply for copper due to ongoing geopolitical issues and production challenges, with a projected reduction in output [11][21] - The aluminum market remains stable, with domestic production capacity holding steady and demand from sectors like electric vehicles and power generation expected to support prices [22] Minor Metals - Magnesium prices decreased by 0.90% to 17,680 yuan per ton, with stable demand but reduced purchasing activity from export traders [17] - Molybdenum and vanadium prices have shown weakness, with ongoing pressure from oversupply and reduced demand in the steel sector [18]

Investment Rating - The report maintains a "Buy" rating for the industry, highlighting several companies as key investment opportunities [4][8]. Core Insights - The report emphasizes that the easing of China-US trade tensions will drive demand for industrial metals, leading to a positive outlook for prices [2][4]. - It identifies a strong demand for lithium and cobalt, particularly in the electric vehicle and energy storage sectors, while also noting supply constraints for cobalt due to logistical issues in the Democratic Republic of Congo [3][4]. - The report suggests that gold and silver prices may stabilize in a range due to reduced safe-haven demand, but long-term trends remain positive due to central bank purchases and weakening dollar credit [4][71]. Summary by Sections Industrial Metals - The report indicates that copper prices have recently surpassed $11,000 per ton, driven by positive signals from China-US trade talks and macroeconomic factors [2][43]. - Aluminum supply is tightening due to production cuts in overseas smelters, while domestic demand remains resilient despite some environmental restrictions [2][21]. - The report notes fluctuations in industrial metal prices, with aluminum up by 1.10%, copper down by 0.51%, and zinc up by 1.01% during the week [1][11]. Energy Metals - Lithium demand continues to exceed expectations, supported by growth in the electric vehicle and energy storage markets, leading to a bullish outlook for lithium prices [3][4]. - Cobalt supply remains tight due to export delays from the Democratic Republic of Congo, which is expected to maintain upward pressure on cobalt prices [3][4]. - Nickel prices are projected to remain strong despite some inventory accumulation in downstream sectors [3][4]. Precious Metals - The report anticipates that gold prices will enter a consolidation phase, with potential upward movement driven by central bank purchases and a weakening dollar [4][71]. - Recent geopolitical developments have reduced safe-haven demand for precious metals, leading to a technical adjustment in prices [4][71]. - The report recommends several companies in the precious metals sector, including Zijin Mining and Shandong Gold, as strong investment candidates [4][71].

Investment Rating - The report maintains a standard rating for the non-ferrous metals industry, indicating a positive outlook for investment opportunities in this sector [2][17]. Core Insights - The non-ferrous metals industry has shown a significant increase, with a 3.70% rise over the past two weeks, outperforming the CSI 300 index by 1.72 percentage points, ranking 4th among 31 industries [3][13]. - The energy metals sector has experienced a notable increase of 8.72%, while precious metals have seen a decline of 9.37% [19][22]. - The report highlights the impact of macroeconomic factors, such as the Federal Reserve's interest rate cuts, which have contributed to the upward trend in metal prices [51][67]. Market Review - As of October 30, 2025, the non-ferrous metals industry has risen by 79.55% year-to-date, leading the market performance among all sectors [13][19]. - The industrial metals segment is benefiting from a global easing cycle, with copper and aluminum prices gradually recovering [68]. - Precious metals, particularly gold and silver, have shown volatility, influenced by changes in investor sentiment and central bank purchasing trends [37][67]. Price Analysis - Key prices as of October 30, 2025: - LME Copper: $10,930/ton - LME Aluminum: $2,870/ton - LME Lead: $2,022/ton - LME Zinc: $3,044.50/ton - LME Nickel: $15,250/ton - LME Tin: $35,720/ton [26][68]. - For precious metals: - COMEX Gold: $4,038.30/oz (up $145.7 since early October) - COMEX Silver: $48.73/oz (up $1.31 since early October) [37][67]. Sector Performance - The report suggests focusing on specific companies within the industry: - Western Mining (601168) and Luoyang Molybdenum (603993) in the industrial metals sector [70]. - Xiamen Tungsten (600549) in the small metals sector [68][70]. - The energy metals sector, particularly lithium carbonate, is highlighted for its potential growth due to advancements in energy storage and solid-state battery technologies [69].

Investment Rating - The report maintains a "Recommended" rating for Shandong Gold (600547.SH) [6][3] Core Views - The company reported a revenue of 83.783 billion yuan for the first three quarters of 2025, a year-on-year increase of 25.04%, and a net profit attributable to shareholders of 3.956 billion yuan, up 91.51% year-on-year [1] - The increase in financial expenses has put pressure on performance, with Q3 2025 net profit declining by 35.58% quarter-on-quarter [2] - The company is a leading player in the industry with significant scale advantages, having multiple gold mines recognized among China's top producers [3] Summary by Sections Financial Performance - In Q3 2025, the company achieved a revenue of 27.017 billion yuan, a year-on-year increase of 27.25%, but a quarter-on-quarter decline of 12.37% [1] - The average gold price for the first three quarters of 2025 was 3,203 USD/ounce, a 39.6% increase year-on-year [2] - The gross profit margin for the first three quarters was 18.01%, an increase of 3.13 percentage points year-on-year, but lower than expected due to increased production costs from low-grade ore [2] Production and Exploration - The company produced 37.8 tons of gold in the first three quarters of 2025, a 6.64% increase year-on-year, with a production target of no less than 50 tons for 2025 [2][3] - Ongoing exploration projects have added 18.8 tons of new gold resources, with plans for further production capacity increases in the coming years [3] Future Outlook - The report forecasts net profits for 2025, 2026, and 2027 to be 6.546 billion, 8.329 billion, and 9.377 billion yuan respectively, with corresponding PE ratios of 25, 20, and 18 [5][3] - The company aims to increase its gold production capacity significantly by 2030, potentially reaching 80 tons [3]

Investment Rating - The report maintains an "Accumulate" rating for the company [5][7]. Core Views - The company's Q3 revenue reached 27.017 billion RMB, representing a year-over-year increase of 27.25% but a quarter-over-quarter decline of 12.37%. The net profit attributable to the parent company was 1.148 billion RMB, up 68.24% year-over-year but down 35.58% quarter-over-quarter [1]. - The decline in Q3 performance is attributed mainly to cost fluctuations and non-fair value changes, with a net loss of 625 million RMB from fair value changes [2]. - The company is recognized as a leading player in the gold sector, with significant resource advantages and growth potential, holding a gold metal reserve of 2,635.84 tons as of the end of 2024 [3]. - Despite a short-term decline in gold prices, the long-term outlook for gold remains positive, suggesting that the recent price drop may present an opportunity for accumulation once stability is achieved [4]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved a revenue of 83.783 billion RMB, a year-over-year increase of 25.04%, and a net profit of 3.956 billion RMB, up 91.51% year-over-year [1]. - The company's self-produced gold output for Q1-Q3 was 37.8 tons, with a year-over-year increase of 6.64% [2]. Growth Potential - The company is actively developing world-class gold production bases in the Jiaodong region, with projects expected to significantly increase annual gold production [3]. Price and Valuation - The report projects a downward adjustment in net profit for 2025-2027, with estimates of 6.338 billion RMB, 9.360 billion RMB, and 12.360 billion RMB respectively, reflecting a compound annual growth rate of 61.19% [5]. - The target price for the company's A/H shares is set at 38.52 RMB and 35.02 HKD, based on a price-to-book ratio of 3.53 for 2026 [5].

Core Insights - The precious metals sector experienced a slight increase of 0.12% on October 31, with Hunan Gold leading the gains [1] - The Shanghai Composite Index closed at 3954.79, down 0.81%, while the Shenzhen Component Index closed at 13378.21, down 1.14% [1] Precious Metals Sector Performance - Hunan Zhi Yu (002155) saw a closing price of 21.74, with a rise of 7.09% and a trading volume of 1.7026 million shares [1] - Sichuan Gold (001337) closed at 27.31, up 1.49%, with a trading volume of 158,200 shares [1] - Hunan Silver (002716) closed at 6.43, increasing by 0.94%, with a trading volume of 1.6527 million shares [1] - Chifeng Gold (600988) closed at 29.79, up 0.44%, with a trading volume of 466,700 shares [1] - Other notable performances include Hengbang Shares (002237) down 0.45% and Western Gold (601069) down 0.47% [1] Capital Flow Analysis - The precious metals sector saw a net inflow of 569 million yuan from main funds, while retail funds experienced a net outflow of 317 million yuan [3][4] - Hunan Gold (002155) had a main fund net inflow of 390 million yuan, while retail funds saw a net outflow of 131 million yuan [4] - Chifeng Gold (600988) reported a main fund net inflow of 182 million yuan, with retail funds experiencing a net outflow of 141 million yuan [4] ETF Information - The gold stock ETF (product code: 159562) tracks the CSI Hong Kong and Shanghai Gold Industry Stock Index and has seen a 5-day change of 1.74% [6] - The ETF has a price-to-earnings ratio of 23.97 and a recent net inflow of 10.435 million yuan [6]

Group 1: Global Gold Demand Trends - In Q3 2025, global central banks accelerated gold purchases, totaling 220 tons, a 28% increase from Q2 and a 10% increase year-on-year [1] - The total net gold purchases by central banks for the first three quarters of 2025 reached 634 tons, significantly above the average levels prior to 2022, despite being lower than the exceptionally high levels of the past three years [1] - Factors driving gold demand include persistent inflation pressures and uncertainties in global trade policies, leading investors to seek safe-haven assets [1] Group 2: Federal Reserve Actions - The Federal Reserve announced a 25 basis point rate cut to 3.75%-4.00% and plans to end quantitative tightening (QT) in December, signaling marginal improvements in liquidity [2] - Despite the rate cut, Fed Chair Powell indicated that further rate cuts in December are not guaranteed, which dampened market expectations for continued easing and maintained a hawkish tone [2] - The tightening of short-term liquidity is pushing up overnight and repo rates, which may suppress gold price elasticity in the short term [2] Group 3: Gold ETF Performance - As of October 30, 2025, the gold stock ETF fund has seen a net value increase of 43.75% over the past six months, ranking among the top two comparable funds [4] - The fund has a historical average monthly return of 9.45% and a 100% probability of profit over a one-year holding period [4] - The fund's management fee is 0.50% and the custody fee is 0.10%, with a Sharpe ratio of 1.73, indicating higher returns for the same level of risk compared to peers [5] Group 4: Market Activity and Stock Performance - As of October 31, 2025, the CSI Hong Kong-Shenzhen Gold Industry Stock Index fell by 0.24%, with mixed performance among constituent stocks [3] - Notable gainers included Hunan Gold, which rose by 7.44%, while Jiangxi Copper led the declines with a drop of 4.12% [3] - The gold stock ETF fund experienced a net outflow of 316.68 million yuan, with a total inflow of 1.80781 billion yuan over the last 16 trading days [3]