Investment Rating - The report gives an "Overweight" rating for the construction and decoration industry, indicating a positive outlook compared to the overall market performance [2][9]. Core Insights - The construction industry is experiencing a slowdown in investment, leading to pressure on corporate profits. Despite this, infrastructure investment remains stable, acting as a stabilizing force in the overall economy [3][4]. - The report highlights that companies with a net profit growth rate below -10% include China Railway, China Metallurgical Group, and others, while those with growth rates above 20% include Jianfa Hecheng and Zhi Te New Materials [3][4]. - The report suggests that weak investment could lead to a valuation recovery for central state-owned enterprises in the construction sector, as current valuations are low with a PE ratio of 12.4X and a PB ratio of 0.82X as of October 10, 2025 [3][4]. Summary by Sections Investment Trends - Fixed asset investment growth has slowed, with infrastructure investment showing a year-on-year increase of 5.4% for the first eight months of 2025. The report notes that while manufacturing and real estate are under pressure, infrastructure investment remains relatively stable [3][4]. Profit Forecasts - The report provides a forecast for net profit growth rates for key companies in the industry, categorizing them into various growth ranges, with several companies expected to face profit pressures in 2025 [4]. Valuation Analysis - The report includes a valuation table for key companies in the construction industry, indicating their earnings per share (EPS), PE ratios, and projected net profit growth rates for 2024 to 2026. For instance, China Railway is projected to have a net profit decline of 17% in 2025, while Jianfa Hecheng is expected to see a significant increase of 45% [4].

Group 1: Market Sentiment Indicators - The market sentiment index as of October 10 is 1.75, a slight decrease from 1.85 on September 26, indicating a bearish sentiment [8][11] - The financing balance ratio continues to rise, reflecting an increase in market leverage sentiment and improving trading atmosphere [27][11] - The industry trading volatility continues to decline, suggesting a slowdown in fund switching activity and a decrease in market participants' divergent views on short-term industry value [21][11] Group 2: Timing Model Insights - The model indicates a preference for small-cap value style, with a weak signal strength due to a slight decline in the 5-day RSI relative to the 20-day RSI [45][46] - The short-term trend scores for industries such as non-ferrous metals, power equipment, real estate, machinery, and electronics are notably strong, with non-ferrous metals scoring the highest at 98.31 [34][36] - The model maintains a strong signal for value style, suggesting potential for further strengthening in the future [45][46] Group 3: Industry Crowding and Performance - Recent high returns in non-ferrous metals and coal are accompanied by high fund crowding, indicating potential volatility risks due to valuation and sentiment corrections [42][41] - Industries like automotive and electronics show high crowding but lower returns, while sectors with low crowding such as pharmaceuticals and beauty care may present long-term investment opportunities as risk appetite increases [42][41] - The average crowding levels for industries as of October 10 show automotive, environmental protection, real estate, power equipment, and electronics as the highest, while agriculture, computers, defense, beauty care, and pharmaceuticals are the lowest [40][41]

Investment Rating - The report rates the rare earth industry as "Overweight," indicating an expectation for the industry to outperform the overall market [3][9]. Core Insights - The new export control regulations on rare earths, issued by the Ministry of Commerce and the General Administration of Customs, expand the range of controlled heavy rare earth elements and strengthen the control over export purposes, particularly for military and advanced semiconductor applications [3]. - The regulations create a comprehensive control system over the entire rare earth industry chain, enhancing China's pricing power in the sector [3]. - The report suggests focusing on leading companies with resource integration capabilities and growth potential, such as China Rare Earth, Northern Rare Earth, Baotou Steel, Guangsheng Nonferrous, Jinli Permanent Magnet, and Zhenghai Magnetic Materials [3]. Summary by Sections Regulatory Changes - On October 9, new regulations were announced, expanding the list of controlled rare earth elements from 7 to 12, including holmium, erbium, thulium, ytterbium, and europium [3]. - Export controls will now apply to military uses and advanced semiconductor applications, requiring case-by-case approval [3]. Industry Impact - The new regulations are expected to enhance the strategic value of the rare earth sector amid the ongoing US-China competition, with potential for upward valuation in the sector [3]. - The comprehensive regulatory framework covers all aspects of the rare earth supply chain, including raw materials, auxiliary materials, equipment, technology, export destinations, end users, and final uses [3]. Company Valuations - The report provides a valuation table for key companies in the rare earth sector, highlighting their stock prices, earnings per share (EPS), price-to-earnings (PE) ratios, and price-to-book (PB) ratios for the years 2024 to 2027 [4]. - For instance, China Rare Earth is projected to have an EPS of 0.34 in 2025 with a PE ratio of 162, while Northern Rare Earth is expected to have an EPS of 0.77 with a PE ratio of 68 [4].

Investment Rating - The report rates the mining machinery industry as "Overweight" due to expected growth driven by rising metal prices [3][4]. Core Insights - Rising prices of precious and industrial metals are anticipated to boost capital expenditures on mining equipment, as increased profits for mining companies enhance their willingness to invest in new equipment [4]. - The demand for tools and spare parts is expected to rise directly with increased mining and processing volumes, with specific companies recommended for investment in these segments [4]. - The acceleration of new mining projects will lead to increased demand for complete machinery, with several companies highlighted as potential investment opportunities [4]. - Companies with mining assets are expected to benefit directly from price increases, particularly those involved in tungsten mining, which has seen significant price appreciation this year [4]. Summary by Sections Equipment Investment - The report emphasizes that equipment investment is driven by the upward trend in metal prices, which leads to increased mining activity and capital expenditures [4]. Tools and Spare Parts - The report categorizes mining tools into three types: dragging tools, rotating tools, and impact tools, recommending companies such as New Sharp, Hengli Drill, and Zhongtung High-Tech for investment [4]. Complete Machinery - The report identifies key segments in the mining process, including excavation, crushing, transportation, and mineral processing, and suggests companies like Xugong Machinery and Sany Heavy Industry for investment [4]. Mining Asset Companies - The report highlights the significant profit potential for companies with tungsten mining assets due to substantial price increases, recommending companies like Zhongtung High-Tech and Xiamen Tungsten for investment [4].

Investment Rating - The report suggests a positive outlook for the hydropower sector, recommending attention to large hydropower companies due to improved fundamentals [2][5][10]. Core Insights - The report highlights that the autumn floods have positively impacted hydropower generation, with significant increases in water inflow expected to continue [2][5]. - It notes the government's efforts to regulate irrational price competition in the electricity market, which is anticipated to alleviate non-competitive pricing behaviors [6][7]. - The report discusses the fluctuations in global natural gas prices, with U.S. prices remaining low while European prices have rebounded due to geopolitical tensions and increased heating demand [11][19]. Summary by Sections Electricity Sector - The report indicates that the hydropower generation for the first three quarters of 2025 was approximately 235.13 billion kWh, remaining stable compared to the previous year, although Q3 saw a decrease of 5.84% [2][5]. - The government has issued a notice to combat price disorder in the electricity market, promoting fair competition and price stability [6][7]. - Recommendations include focusing on large hydropower companies like Guotou Power and Chuan Investment Energy, as well as green energy firms due to stable returns from existing projects [10]. Natural Gas Sector - As of October 10, 2025, the Henry Hub spot price was $2.90/mmBtu, reflecting a weekly decrease of 9.03%, while European gas prices have seen an increase due to rising demand and geopolitical concerns [11][19]. - The report notes that LNG prices in Northeast Asia have risen to $11.00/mmBtu, influenced by European price trends [26]. - It suggests that the city gas companies are expected to benefit from lower costs and improved profitability due to recent price adjustments [32]. Environmental Sector - The report emphasizes the importance of high-dividend stocks in the environmental sector, recommending companies like Zhongshan Public Utilities and Everbright Environment for their stable performance [10]. - It also highlights the ongoing transition towards cleaner energy sources and the potential for increased returns from environmental value releases [10].

证券分析师 赵伟 A0230524070010 zhaowei@swsresearch.com 陈达飞 A0230524080010 chendf@swsresearch.com 赵宇 A0230524080007 zhaoyu2@swsresearch.com 王茂宇 A0230521120001 wangmy2@swsresearch.com 李欣誠 A0230524080004 lixy@swsresearch.com 联系人 "流动性笔记"系列之五 2025 年 10 月 13 日 界探 相关研究 陈达飞 (8621)23297818× chendf@swsresearch.com 美元的"十字路口 "流动性笔记"系列之五 10 月 6 日以来，美元强势升值,9 日盘中一度升至 99.6 高位,为 8 月初以来的新高。美元能 否打破三季度以来的低位震荡格局、长期贬值预期能否继续演绎? 一、热点思考：美元的"十字路口" (一) 近期美元反弹的三个阶段和两方面原因 本轮美元反弹的时间起点是 9 月中旬美联储重启降息之后，整体可以分为三个阶段理解：第一 阶段，9 月 17 日-25 日，在美联储如期降息 2 ...

Investment Rating - The report maintains a positive outlook on the banking sector, indicating a stable performance with expected revenue growth and profit increase for listed banks in Q3 2025 [3][4]. Core Insights - The banking sector is projected to experience a slight slowdown in revenue growth, with a forecasted year-on-year increase of 0.6% for the first nine months of 2025, compared to a 1% growth in the first half of 2025. Net profit attributable to shareholders is expected to grow by 0.8% year-on-year [3][4]. - State-owned banks and joint-stock banks are expected to maintain stable growth, while regional banks are anticipated to lead in profit growth, particularly in high-quality regions such as Jiangsu and Sichuan [3][4]. - The report highlights three core supports for stable profitability: the stabilization of net interest income, recovery of non-interest income from low levels, and stable asset quality ensuring sustainable profits [3][4]. Revenue and Profit Forecast - For Q3 2025, state-owned banks are expected to see revenue growth of 1.3%, while joint-stock banks may experience a revenue decline of 2.4%. In contrast, city commercial banks are projected to achieve revenue and net profit growth of 5.8% and 8.2%, respectively [3][5]. - The report anticipates that the average loan interest rate for listed banks will stabilize around 3.7%, with a significant reduction in deposit costs contributing to this stability [4][5]. Non-Interest Income Analysis - The report notes that while non-interest income may decline by 10-20% in Q3 2025 due to rising bond market interest rates, the overall impact on cumulative revenue is expected to be limited due to favorable year-on-year comparisons [3][4]. - The recovery of fee income is highlighted as a potential driver for revenue improvement, with a projected year-on-year increase of 3% in non-interest income for the first half of 2025 [3][4]. Credit Growth and Asset Quality - Credit growth is expected to slow, with a year-on-year increase of approximately 6.6% in RMB loans as of August 2025. The report indicates a cautious approach to retail lending, with a focus on corporate lending [3][4]. - The non-performing loan (NPL) ratio is projected to remain stable at around 1.22%, with a slight decrease in the provision coverage ratio to 238% [4][5]. Investment Recommendations - The report suggests a focus on leading banks and high-quality regional banks as key investment opportunities, emphasizing the importance of stable earnings growth as a foundation for value recovery in the banking sector [4][5].

Investment Rating - The report maintains a "Positive" outlook on the hydropower sector, particularly large hydropower projects, due to improved fundamentals and favorable weather conditions [2][6]. Core Insights - The report highlights that the autumn floods have positively impacted hydropower generation, with significant increases in water inflow expected in the coming days [2][6]. - The announcement from the National Development and Reform Commission regarding the regulation of price competition is expected to alleviate irrational competition in the electricity market [2][8]. - Global natural gas prices are experiencing fluctuations, with U.S. prices remaining low while European prices are rebounding due to geopolitical tensions and increased heating demand [12][21]. Summary by Sections Electricity Sector - The report notes that hydropower generation in the Yangtze River basin has reached historical highs due to concentrated rainfall, with a total generation of approximately 235.13 billion kWh in the first three quarters of 2025, remaining stable compared to the previous year [2][6]. - The announcement on regulating price competition aims to create a fair market environment, which is expected to reduce irrational pricing behaviors in the electricity sector [7][8]. - Recommendations include focusing on large hydropower companies such as Guotou Power, Chuan Investment Energy, and Yangtze Power, as well as green energy firms like Xintian Green Energy and Longyuan Power [11]. Natural Gas Sector - As of October 10, 2025, U.S. Henry Hub spot prices were $2.90/mmBtu, reflecting a weekly decrease of 9.03%, while European gas prices, such as the TTF, saw an increase of 5.26% to €32.63/MWh [12][14]. - The report indicates that the natural gas consumption in August 2025 showed a year-on-year increase of 1.8%, with total consumption reaching 364.1 billion m³ [34]. - Investment recommendations include focusing on integrated natural gas companies like Kunlun Energy and New Hope Energy, as well as gas trading firms [36]. Environmental Sector - The report suggests that companies with stable performance and high dividend yields, such as Zhongshan Public Utilities and Everbright Environment, should be monitored for potential investment opportunities [11]. - The ongoing development of carbon trading markets and environmental regulations is expected to enhance the performance of companies in the environmental sector [46].

Group 1: Dollar Performance and Trends - The dollar index rose to a high of 99.6 on October 9, marking the highest level since early August, following a strong appreciation since October 6[5] - The dollar's rebound can be divided into three phases, with the first phase seeing a rise from 96.6 to 98.6, an increase of 2.1%[14] - The second phase, from September 26 to October 3, saw a slight decline in the dollar index to 97.7 due to government shutdown concerns[17] - The third phase, from October 6 to October 9, was driven by political turmoil in Japan and France, leading to a spike in the dollar index to 99.6[18] Group 2: Factors Influencing Dollar Rebound - The rebound is viewed as a temporary phase within a longer-term depreciation trend, with four main reasons for potential difficulty in sustaining the rise[6] - The expectation of a prolonged government shutdown could lead to renewed downward pressure on the dollar, with a 67% probability of a shutdown lasting more than 15 days[21] - Recent political changes in Japan and France are seen as one-time events that are unlikely to alter the dollar's long-term trajectory significantly[25] - Ongoing trade tensions between the U.S. and China may act as a new resistance to the dollar's rebound, potentially counteracting its recent gains[26] Group 3: Economic Indicators and Predictions - The U.S. economy shows resilience, with GDP growth for Q3 2025 projected at 3.8%, which diminishes the necessity for aggressive rate cuts[28] - Market expectations indicate that the Federal Reserve may lower rates 2-4 times by the end of 2026, which is ahead of the Fed's own guidance[29] - The dollar's long-term depreciation hypothesis suggests that a stable dollar index below 95 or 90 requires new "game changers" such as significant fiscal tightening or unexpected monetary policy shifts in non-U.S. economies[34]

Investment Rating - The report gives an "Overweight" rating for the construction materials industry, indicating a positive outlook for the sector's performance relative to the overall market [30]. Core Insights - The construction materials industry is increasingly focused on ESG (Environmental, Social, and Governance) criteria, with a particular emphasis on green materials and carbon constraints. This report is part of a series aimed at developing an ESG evaluation system for state-owned enterprises in the construction materials sector [3][8]. - Recent policies have heightened the requirements for low-carbon, green, and environmentally responsible practices within the construction materials industry, leading to the establishment of industry standards and guidelines [3][9]. - The report outlines a comprehensive ESG evaluation framework that includes specific indicators tailored to the construction materials sector, emphasizing the importance of product quality and green materials [3][13]. Summary by Sections 1. ESG Policies for Construction Materials State-Owned Enterprises - The construction materials industry is a critical component of the national economy, with increasing policy demands for low-carbon and green practices. Recent initiatives include the establishment of a certification framework for green materials and the promotion of sustainable development practices [9][10]. - Key policies include the introduction of green material product certifications and the promotion of carbon peak strategies, with significant milestones set for 2025 [9][10]. 2. Construction Materials ESG Evaluation System - The ESG evaluation system for state-owned enterprises in the construction materials sector incorporates additional indicators such as "green materials" and "product quality," reflecting the industry's substantial carbon emissions [13][23]. - The evaluation framework consists of five categories of positive indicators and one category of negative indicators, with a total of 18 primary indicators and 51 secondary indicators [13][23]. - Specific areas of focus include importance assessment, environmental impact, climate change response, social responsibility, and corporate governance, each with defined scoring metrics [13][23][24]. 3. Detailed Indicator Breakdown - **Importance Assessment**: This is a core component of the evaluation, emphasizing the assessment process for significant issues, with a total score of 9 points available [14][25]. - **Environmental Indicators**: These are aligned with green development principles, including a new indicator for "green materials," with a total score of 17 points [15][17]. - **Climate Change Response**: This section includes 4 primary indicators and 18 secondary indicators, with a total score of 18 points, focusing on climate governance and management [18][19]. - **Social Responsibility**: This includes a new indicator for "quality responsibility," with a total score of 22 points, reflecting the industry's commitment to product safety and quality [20][21]. - **Governance Indicators**: These emphasize the importance of governance mechanisms, with a total score of 34 points available [23][24]. 4. Conclusion - The report highlights the growing importance of ESG practices in the construction materials industry, driven by regulatory requirements and market expectations. The establishment of a robust ESG evaluation framework is expected to enhance the industry's sustainability and competitiveness [3][12].