Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - The issuance and net financing of local government bonds decreased both in the current period and are expected to decline in the next period. The current issuance and net financing are 825.28 billion yuan and 386.37 billion yuan respectively, and the next period's expected issuance and net financing are 323.01 billion yuan and -197.81 billion yuan respectively [3]. - The issuance progress of new local government bonds has slowed down, and the cumulative issuance progress is lower than that of the same period in 2023 and 2024. As of October 10, 2025, the cumulative issuance of new general bonds and new special bonds accounted for 83.9% and 83.0% of the annual quota respectively [3]. - The planned issuance scale of local government bonds from October to November 2025 is 892.1 billion yuan, including 500.9 billion yuan of new special bonds [3]. - The yield spread between 10Y local government bonds and treasury bonds widened, while the spread for 30Y local government bonds narrowed. The weekly turnover rate decreased compared to the previous period [3]. - The cost - effectiveness of exploring the yield spread between local government bonds and treasury bonds has increased, and 10Y local government bonds are more cost - effective [3]. Summary According to the Directory 1. The issuance volume of local government bonds decreased in the current period, and the weighted issuance term shortened - The current issuance of local government bonds totaled 825.28 billion yuan (compared to 1960.51 billion yuan in the previous period), and the next - period forecast issuance is 323.01 billion yuan [3][10]. - The weighted issuance term of local government bonds in the current period is 12.93 years, significantly shorter than the 19.81 years in the previous period [3][12]. - As of October 10, 2025, the cumulative issuance of new general bonds and new special bonds accounted for 83.9% and 83.0% of the annual quota respectively. Considering the next - period forecast issuance, they are 83.9% and 83.4% respectively [3][13][17]. - As of October 10, 2025, the cumulative issuance of special new special bonds is 1202.9 billion yuan (1.7 billion yuan was issued in the current period), and the cumulative issuance of replacement hidden - debt special refinancing bonds is 1986.2 billion yuan (0 billion yuan was issued in the current period), with an issuance progress of 99.3% [3]. 2. The yield spread between local government bonds and treasury bonds in the current period widened for 10Y and narrowed for 30Y, and the weekly turnover rate decreased - As of October 10, 2025, the yield spreads between 10 - year and 30 - year local government bonds and treasury bonds are 25.40BP and 15.71BP respectively, widening by 3.08BP and narrowing by 2.59BP compared to September 26, 2025 [3][27][32]. - The weekly turnover rate of local government bonds in the current period is 0.35%, a decrease compared to 0.89% in the previous period [3][40]. - The yield and liquidity of 7 - 10Y local government bonds in regions such as Jilin, Tianjin, and Sichuan are better than the national average [3].

Investment Rating - The report gives a "Buy" rating for the cosmetics and medical beauty industry, particularly highlighting the potential of specific companies like Water Sheep Co., Ltd. [13] Core Insights - The cosmetics and medical beauty sector has underperformed the market recently, with the Shenwan Beauty Care Index rising by 1.3% from September 29 to October 10, 2025, which is lower than the overall market performance [3][4] - The upcoming Tmall Double 11 event is expected to boost sales, with domestic brands actively participating with competitive discounts [8] - Water Sheep Co., Ltd. is identified as a leading technology-driven beauty company, with stable revenue projections and improving profit margins [9][10] Summary by Sections Industry Performance - The cosmetics and medical beauty sector has shown weaker performance compared to the market, with the Shenwan Cosmetics Index increasing by 1.2%, lagging behind the Shenwan A Index by 0.4 percentage points [3][4] - The top-performing stocks in the sector include Jiaheng Home Care (+35.0%), Yiyi Co., Ltd. (+18.6%), and Yanjing Co., Ltd. (+15.6%) [5] Upcoming Events - Tmall's Double 11 sales event is set to begin on October 15, 2025, with major domestic brands like Proya and Maogeping expected to participate actively [8] Company Focus: Water Sheep Co., Ltd. - Water Sheep Co., Ltd. has a dual business model of proprietary and CP agency brands, with projected revenues stabilizing between 4 to 5 billion yuan from 2021 to 2024 [9] - The company is expected to achieve net profits of 258 million, 331 million, and 398 million yuan for the years 2025, 2026, and 2027, respectively, reflecting significant growth [10][13] Market Trends - The overall retail sales of cosmetics in August 2025 grew by 5.1%, indicating a recovery in consumer demand [17] - The domestic market is seeing a shift in market share, with local brands gaining ground against international competitors [25] E-commerce Insights - Data shows that domestic brands are performing well on platforms like Douyin and Tmall, with significant growth in GMV for brands like Proya and Maogeping [14][15] Company Developments - Proya has filed for an IPO in Hong Kong, with stable revenue growth and a strong online presence [19] - The report highlights the strategic moves of various companies, including partnerships and new product launches, to enhance their market positions [24][23]

Investment Rating - The report maintains an "Overweight" rating for the real estate industry, indicating a positive outlook compared to the overall market performance [2][10]. Core Insights - The real estate sector continues to face a sluggish fundamental environment, with performance under pressure in the short term. However, there are signs of potential recovery in the future, albeit at a slow pace [4][2]. - The report anticipates that the performance of the real estate sector will remain under pressure in Q3 2025 due to declining sales and low profit margins, but a gradual recovery is expected in 2025-2026 [4][2]. - The government is emphasizing policies to stabilize the real estate market, including urban renewal initiatives and easing purchase restrictions in major cities [4][2]. Summary by Sections Performance Expectations - The report predicts that the performance of the real estate sector will continue to be challenged in Q3 2025, primarily due to a decline in sales since 2021 and low profit margins driven by previous price cuts [4][2]. - Sales data shows that the top 50 real estate companies experienced a cumulative sales area decline of 25% year-on-year in Q1-Q3 2025, with significant monthly declines in July to September [4][2]. Company Performance Forecast - The report categorizes major companies based on their expected net profit growth for Q1-Q3 2025: - Companies with growth >+15%: Binjiang Group - Companies with growth between 0% and +15%: China Merchants Jinling - Companies with growth between -15% and 0%: China Merchants Shekou - Companies with growth between -30% and -15%: Jianfa Co., New Town Holdings - Companies with growth <=-30%: Poly Developments, Huafa Group [7][4]. Investment Recommendations - The report recommends focusing on new opportunities in the real estate sector, particularly in "good housing" policies and the revaluation of commercial real estate. Specific companies are highlighted for investment: - Good housing companies: Jianfa International, Binjiang Group, China Resources Land, Greentown China, China Jinmao, Jianfa Co. - Commercial real estate and undervalued companies: New Town Holdings, Yuexiu Property, China Merchants Shekou, Longfor Group, China Overseas Development, Poly Developments, Huafa Group [4][2].

Group 1 - The report highlights the escalation of Sino-US tensions, leading to a decline in global stock indices and a drop of 1.42% in the North Exchange 50 index. The market sentiment has turned cautious due to the announcement of additional tariffs by US President Trump, effective from November 1, 2025, which will impose a 100% tariff on all goods imported from China and export controls on key software [9][10][11]. - The report notes that the North Exchange has shown limited adjustment compared to previous market downturns, indicating that the market's price-performance ratio has reached a favorable level for potential investment opportunities post-adjustment. The strong stock ratio has decreased to 19.8%, which is historically low, and the relative excess return of the CSI 2000 compared to the CSI 1000 has also adjusted to a historical low [9][10][11]. Group 2 - The North Exchange 50 index experienced a decline of 1.42%, with a median PE ratio of 47.40 times. The total trading volume for the week was 16.14 billion shares, with a trading value of 38.008 billion yuan. The margin balance stood at 7.507 billion yuan [22][27][28]. - The report mentions that one new stock, Aomeisen, was listed this week, with a first-day increase of 349.82% and a turnover rate of 79.79%. As of October 10, 2025, there are 278 companies listed on the North Exchange [31][32]. Group 3 - The report indicates that among the stocks listed on the North Exchange, 143 stocks rose while 128 fell, resulting in a rise-fall ratio of 1.12. The top gainers included Changfu Co. and Lingge Technology, both in the machinery sector [38][40]. - The report also highlights the high turnover rates of certain stocks, with Jin Hua New Materials leading at 67.45%, followed by Changfu Co. and Lingge Technology [44]. Group 4 - The report discusses the recent regulatory updates regarding the issuance of convertible bonds and margin trading, aimed at optimizing these processes and enhancing investor protection [49]. - The new third board saw no new listings or delistings this week, with no new financing planned or completed, maintaining a total of 6022 companies listed [50][51].

Investment Rating - The report maintains a positive outlook on the petrochemical industry [2] Core Views - The report highlights the unprecedented scale of refinery shutdowns in Russia, leading to increased Ural crude oil exports. As of the end of September, 38% of Russia's refining capacity (approximately 338,000 tons per day) was offline, primarily due to drone attacks from Ukraine [3][4][5] - The upstream sector is experiencing a decline in oil prices, while day rates for jack-up rigs are increasing. Brent crude oil futures closed at $62.73 per barrel, down 2.79% from the previous week [3][18] - The refining sector is seeing a drop in overseas refined oil crack spreads, while olefin spreads are rising. The Singapore refining margin for major products was $20.06 per barrel, down $1.48 from the previous week [3][54] - The polyester sector shows signs of recovery, with expectations for improved profitability as supply and demand conditions improve [3][13] Summary by Sections Upstream Sector - Brent crude oil prices decreased to $62.73 per barrel, with a weekly decline of 2.79%. U.S. commercial crude oil inventories increased by 5.507 million barrels to 420 million barrels [3][20] - The number of U.S. drilling rigs decreased by 2 to 547, with a year-on-year reduction of 39 rigs [3][32] Refining Sector - The report notes a significant drop in Russian refining capacity due to drone attacks, with a 5.08% quarter-on-quarter decline in processing volume in Q3 2025 [3][9] - The report indicates that the domestic refining product spread has improved, but remains at a low level [3][51] Polyester Sector - The report indicates that PTA profitability has declined, while polyester filament profitability has increased. The average price of PTA in East China was 4,528.6 yuan per ton, down 1.69% week-on-week [3][13] - The report expresses optimism for leading polyester companies such as Tongkun Co. and Wankai New Materials, anticipating a gradual improvement in the industry [3][13] Investment Recommendations - The report recommends focusing on leading refining companies such as Hengli Petrochemical, Rongsheng Petrochemical, and Sinopec, as well as upstream oil service companies like CNOOC Services and Haiyou Engineering [3][13]

Investment Rating - The report maintains a positive outlook on the internet and gaming sectors, indicating a "Look Favorably" rating for the industry [5]. Core Insights - The gaming sector is recommended due to its resilience against US-China trade tensions and software export restrictions, with A-share gaming stocks expected to see increased capital inflow as restrictions are lifted [5]. - Current 2026 PE ratios are below 20x, with growth driven by younger demographics and overseas markets, supporting performance and valuation increases this year [5]. - AI applications are anticipated to further enhance valuations, with key companies like Tencent and Century Huatong showing strong performance metrics [5]. Summary by Sections Gaming Sector - Key recommendations include Tencent Holdings, with a DAU surpassing 30 million, and Century Huatong, which leads in overseas mobile game revenue [5]. - Other notable mentions are Giant Network and Kyeing Network, with significant growth in user engagement and revenue projections [5]. AI Video Opportunities - The launch of Sora2 by OpenAI is highlighted, emphasizing the importance of data accumulation in AI video competition [5]. - Companies like Bilibili and Kuaishou are identified as key players in the AI video space, with innovative applications and competitive pricing strategies [5]. Market Dynamics - The report notes that while trade tensions may cause short-term disruptions, advancements in domestic models and chips provide a strong foundation for growth in Hong Kong's internet and AI sectors [5]. - The competitive landscape in instant retail is expected to shift, impacting profitability expectations for internet companies [5]. Consumer Trends - The report identifies a trend towards "small happiness" consumption, with companies like NetEase Cloud Music and Pop Mart being highlighted for their defensive attributes in uncertain market conditions [5].

Investment Rating - The report rates the environmental protection industry as "Overweight," indicating that the industry is expected to outperform the overall market [9]. Core Insights - The municipal water sector shows stable operations, with some companies benefiting from strategic expansions and adjustments in sewage treatment prices. However, the engineering business is expected to decline due to decreased demand [3]. - The waste incineration sector remains stable, with operational improvements despite a slowdown in new project construction and bidding. Different companies exhibit varied performance due to factors like historical revenue recognition and depreciation from new capacity [3]. - The sanitation market is stable, with an increase in orders for unmanned sanitation services, indicating a digital transformation in urban services [3]. - Equipment performance varies significantly across different sectors, with conventional equipment facing margin pressure due to intense competition, while power environmental equipment benefits from increased demand [3]. Summary by Category Municipal Water - Overall stable operations with some companies like Tianyuan Environmental and Zhongshan Public Utilities showing significant year-on-year net profit growth of 18% and 32% respectively for Q1-3 2025 [4]. Waste Incineration - The sector is experiencing steady operational improvements, with companies like Huanlan Environment and Green Power expected to see net profit growth of 16% and 15% respectively for Q1-3 2025 [4]. Sanitation - The sanitation market is stable, with companies like Yingfeng Environment and Yuhua Tian expected to see net profit growth of 3% and 5% respectively for Q1-3 2025 [4]. Equipment - Conventional equipment companies are expected to see a decline in net profit growth, with Jingjin Equipment projected to drop by 25% for Q1-3 2025. In contrast, Qingda Environmental is expected to see a significant increase of 255% [4]. Investment Recommendations - The report recommends investing in companies with stable profitability and improving cash flows in the municipal environmental sector, including Zhongshan Public Utilities, Junxin Co., and Huanlan Environment [3]. - For unmanned sanitation, companies like Yingfeng Environment and Yuhua Tian are highlighted as key players in the digital transformation of urban services [3]. - The report also suggests focusing on SAF suppliers and green methanol producers as EU policies begin to take effect, with companies like Haineng Energy and Pengyao Environmental being potential beneficiaries [3].

Investment Rating - The report maintains an "Optimistic" rating for the chemical industry [6][4]. Core Views - Recent price increases in titanium dioxide and significant rises in refrigerant long-term contract prices are noted, indicating a potential recovery in profitability for the titanium dioxide sector [6]. - The macroeconomic outlook for the chemical industry is influenced by stable global GDP growth of 2.8%, with oil demand expected to rise despite some slowdown due to tariffs [6][7]. - The report suggests a strategic focus on sectors benefiting from "anti-involution" policies, including textiles, agriculture, and export-related chemicals [6]. Industry Dynamics - Oil supply is expected to increase significantly, driven by non-OPEC production, while demand remains stable [7]. - The chemical sector is experiencing a recovery phase, with improvements in supply-demand relationships and policy effects leading to price stabilization in various industrial products [9]. - The report highlights the importance of monitoring the performance of key materials in the semiconductor and OLED sectors, as well as the impact of geopolitical events on oil prices [6][12]. Sector Recommendations - The report recommends focusing on specific companies within the textile chain, agricultural chain, and export-related chemicals, such as: - Textile: Companies like Lu Xi Chemical and Tongkun Co. - Agriculture: Companies like Hualu Hengsheng and Baofeng Energy [6]. - Emphasis is placed on the potential for recovery in the titanium dioxide market, particularly with the easing of trade tensions and seasonal demand increases [6][4]. - The report also suggests monitoring the performance of companies in the fine chemicals sector, such as Xinhecheng and Juhua Co., as they may benefit from ongoing market trends [20].

Investment Rating - The report maintains a positive outlook for the computer industry, expecting a continued "scissor difference" in Q3 2025, indicating structural growth despite varying performance among companies [3][4][11]. Core Insights - The report predicts that 22% of the tracked companies will see net profit growth exceeding 50%, with notable performers including 深信服 (1528%), 卡莱特 (998%), and 新国都 (235%) [4][5]. - The report highlights a trend of cost reduction through layoffs and non-essential cost cuts, leading to improved efficiency and profitability across the industry [3][4]. - The report identifies key investment targets in various segments, including AIGC, digital economy leaders, and data innovation [3][4]. Summary by Sections Q3 2025 Performance Forecast - Among 54 tracked companies, 11 are expected to exceed 50% profit growth, while 9 will see growth between 30%-50% [4][5]. - 36% of companies are projected to have growth between 0%-30%, and 22% are expected to experience a decline [5][6]. Key Company Performances - 深信服 is projected to achieve a staggering 1528% profit growth, while 卡莱特 is expected to see 998% growth [4][5]. - Companies like 海康威视 and 金山办公 are expected to maintain stable growth rates of around 9% and 15%, respectively [8][10]. - 联想集团 is forecasted to face a significant decline of 99% in profit, indicating challenges in its operational strategy [6][10]. Investment Targets - The report categorizes investment targets into four segments: AIGC, digital economy leaders, data innovation, and AIGC computing power [3][4]. - Notable companies in the AIGC segment include 金山办公 and 道通科技, while 海光信息 and 软通动力 are highlighted in the data innovation category [3][4].

Investment Rating - The report does not explicitly state an investment rating for the industry Core Views - The shipping and shipbuilding industry is poised for historical opportunities due to China's countermeasures against the U.S. shipping fees, which may lead to non-linear price increases in the short term and a reduction in available vessels in the medium term [19][20] - The report highlights the potential for a surge in shipbuilding orders if U.S. investments in Chinese shipbuilding are exempted from tariffs, and the implications of U.S.-China negotiations on the industry [19][20] Summary by Sections 1. Industry Market Performance - The transportation index increased by 1.09%, outperforming the CSI 300 index by 1.60 percentage points, with the road freight sector showing the highest increase of 3.04% [4][5] - Shipping data indicates that the coastal dry bulk freight index in China remained stable, while the Shanghai export container freight index rose by 4.12% [4][5] 2. Sub-industry Weekly Insights - The shipping and shipbuilding sector is expected to benefit from China's recent regulatory changes, which impose special port fees on U.S. vessels, potentially leading to increased operational costs for U.S. shipping companies [20][21] - The report identifies key companies to watch, including China Shipping and China State Shipbuilding, as they may benefit from these developments [19] 3. High Dividend Stocks in Transportation - The report lists high dividend stocks in the transportation sector, including China Shipping (603167.SH) with a projected dividend yield of 10.92% and Daqin Railway (601006.SH) with a yield of 3.75% [17] - The report emphasizes the importance of dividend yields as a factor for investment decisions in the transportation sector [17] 4. ETF Size Changes - The report provides data on the changes in the size of various ETFs related to the transportation sector, indicating a general trend of growth in assets under management [13][14] 5. Potential Investment Opportunities - The report suggests that the shipping sector, particularly oil tankers and dry bulk carriers, may present significant investment opportunities due to the ongoing geopolitical tensions and regulatory changes [19][20] - Companies such as China Shipping and China State Shipbuilding are highlighted as potential beneficiaries of these market dynamics [19]