Inflation Overview - December CPI in the U.S. remained at 2.7% year-on-year, unchanged from November, and the month-on-month growth was 0.3%, consistent with September levels[7] - Core CPI year-on-year growth was 2.6%, slightly below the market expectation of 2.7%, and month-on-month growth was 0.2%, also below the expected 0.3%[7] Structural Analysis - Core goods inflation was weak, with a month-on-month growth rate of 0% in December, primarily dragged down by used car prices, which fell from 0.29% in November to -1.11%[11] - In contrast, core services showed a general recovery, with housing services rebounding from 0.2% in September to 0.4% in December[11] Market Reaction and Future Outlook - The market's reaction to the inflation data was muted, with expectations for the first Fed rate cut still set for June 2026, despite the lower-than-expected inflation figures[16] - Future food inflation is expected to gradually cool, while used car prices may see marginal rebounds, and rent inflation is likely to remain stable, contributing to a continued moderate inflation environment[16] Risk Factors - Potential risks include escalating geopolitical conflicts leading to surges in oil prices, unexpected fiscal policies, and the possibility of the Fed's independence being compromised, which could destabilize market inflation expectations[22]

Downstream Consumption - The tourism sector continues to improve, with Shanghai Disneyland's crowd index increasing by 10.9% week-on-week and 103.5% year-on-year, indicating sustained high levels of visitor engagement [7] - Hainan's tourism price index rose by 11.7% week-on-week, driven by the lifting of travel restrictions, reflecting a significant improvement in tourism activity [7] - The real estate market remains under pressure, with a 38.9% year-on-year decline in transaction volume across 30 major cities, and a 17.4% decline in second-hand housing transactions in key cities [8] Technology & Manufacturing - The AI industry continues to thrive, with semiconductor sales in China reaching $20.23 billion in November 2025, a year-on-year increase of 22.9% [19] - DRAM prices for DDR4 and DDR5 increased by 8.3% and 6.6% respectively, indicating a tight supply-demand balance in the semiconductor market [19] - The manufacturing sector shows signs of recovery, with an increase in hiring intentions, as evidenced by a 21.8% year-on-year rise in job postings [33] Upstream Resources - Coal prices have rebounded by 2.5% week-on-week, attributed to improved winter demand [41] - Industrial metal prices are on the rise, with copper and aluminum prices increasing by 3.2% and 6.1% respectively, driven by supply disruptions and strong global demand expectations [43] Logistics and Passenger Flow - Passenger transport demand has decreased, with a 5.5% week-on-week drop in subway ridership in major cities, although year-on-year figures remain positive [47] - Freight logistics demand has rebounded post-holiday, with highway truck traffic and railway freight volumes increasing by 17.3% and 10.3% respectively [52]

Market Performance - Emerging markets continued to lead, with MSCI Global up by 1.5%, MSCI Developed Markets up by 1.1%, and MSCI Emerging Markets up by 4.2% [8][12] - In the developed markets, the South Korean Composite Index showed the strongest performance with an increase of 11.1%, while the Australian S&P 200 was the weakest, declining by 0.5% [8][12] - In the emerging markets, the Shanghai Composite Index performed best with a rise of 4.0%, while the Indian Sensex30 was the weakest, falling by 1.7% [8][12] Trading Sentiment - The volatility of major stock indices continued to rise, with trading volumes in various markets increasing significantly [25] - In Hong Kong, the short-selling ratio decreased to 14.7%, indicating a high investor sentiment, while North American sentiment remained at a historical high with the NAAIM manager exposure index rising to 97.7% [25][28] Earnings Expectations - The overall earnings expectations for Hong Kong stocks were revised downwards, with the Hang Seng Index's 2025 EPS forecast adjusted from 2072 to 2071 [71] - In contrast, Japanese stocks saw an upward revision in earnings expectations, with the Nikkei 225's 2025 EPS forecast increased from 2447 to 2451 [71][72] - The earnings expectations for the S&P 500 remained stable at 273, while the Eurozone STOXX50's forecast was revised down from 332 to 331 [71][72] Economic Expectations - Economic indicators showed a slight decline in the US and China, with the Citigroup Economic Surprise Index for the US decreasing due to mixed non-farm data and political uncertainties [8][71] - The Eurozone's Economic Surprise Index saw a slight increase, influenced by easing geopolitical tensions and changes in trade policies [8][71] Fund Flows - The probability of a Federal Reserve rate cut in January was significantly reduced, with market expectations for 2.1 rate cuts in 2026, a slight decrease from the previous week [58][59] - Global liquidity showed signs of tightening, with significant inflows into Hong Kong stocks, amounting to 167 billion HKD, despite some outflows from stable foreign capital [68][70]

Market Performance - The A-share market showed signs of recovery with the CSI 300 index rising by 2.79% and the ESG 300 index increasing by 3.17% during the week of January 5-9, 2026[5] - The average daily trading volume across the A-share market was approximately 52.3 billion RMB, indicating a loosening of liquidity[5] ESG Fund Issuance - No new ESG fund products were issued in January 2026; however, a total of 184 ESG public fund products were issued in the past year, amounting to 70.809 billion units[7] - The total net asset value of existing ESG fund products reached 1,167.513 billion RMB, with ESG strategy funds accounting for the largest share at 45%[7] Green Bond Issuance - In January 2026, 32 ESG bonds were issued, totaling 21.1 billion RMB; over the past year, 1,241 ESG bonds were issued, amounting to 1,359.1 billion RMB[13] - The total outstanding ESG bonds in China reached 3,898, with green bonds making up 62.3% of the total outstanding amount of 5.77 trillion RMB[13] Trading Activity - The total trading volume of ESG green bonds for the week of January 5-9, 2026, was approximately 604.5826 billion RMB, with the interbank bond market accounting for 75.69% of the total trading volume[15] - Repo transactions dominated the trading activity, comprising 95.04% of the total trading volume during the same week[15] Bank Wealth Management Products - In January 2026, 24 ESG wealth management products were issued, primarily focused on pure ESG and social responsibility themes[17] - The total number of existing ESG bank wealth management products reached 1,212, with pure ESG products making up 53.96% of the total[17] Risk Factors - Potential risks include insufficient policy support for ESG initiatives, lack of standardized data reporting, and lower-than-expected product issuance volumes[21]

Investment Rating - The report assigns an "Accumulate" rating for the smart glasses industry, indicating a positive outlook for investment in this sector [4]. Core Insights - The smart glasses industry is expected to enter a rapid growth phase, with companies in the supply chain poised to benefit from an upturn in market conditions. Recommended companies include Mingyue Lens, which is actively collaborating with leading brands, and Inpias, which is accelerating its entry into the smart sports equipment market [4][6]. - CES 2026 showcased a variety of innovative smart glasses, highlighting trends such as differentiated design, multi-core solutions for improved performance, and a focus on niche markets. Notable products include AI-integrated devices that enhance user experience through features like automatic life recording and real-time translation [2][6][7]. Summary by Sections Industry Overview - CES 2026 attracted over 4,000 companies, with more than 250 exhibitors focused on XR (extended reality) technologies. Major Chinese brands like Thunderbird Innovation, XREAL, and Rokid presented their latest smart glasses, emphasizing unique designs and advanced functionalities [6][7]. Product Highlights - Key products featured at CES 2026 include: - Thunderbird's X3 Pro, the first dual-eye AR glasses with eSIM support - XREAL's AR glasses with a 240Hz refresh rate - Rokid's lightweight AI glasses, designed for comfort and functionality [7][8]. Market Projections - Global smart glasses sales are projected to reach 1.52 million units in 2024, with a significant increase to 3.5 million units in 2025, representing a 230% year-on-year growth. By 2029, global sales are expected to hit 60 million units, with a CAGR of 109% from 2025 to 2029 [4][6].

1. Report's Industry Investment Rating - Not mentioned in the provided content 2. Core View of the Report - For the first quarter of 2026, the continuation of loose funds does not contradict concerns about long - bond supply. With the central bank's support, the volatility of inter - bank funds in the first quarter may be significantly weaker than seasonal, and the central level of fund rates will likely remain low. The downward trend of certificate of deposit (CD) rates will come but requires positive catalysts. Around the "cost reduction" of bank liabilities, the replacement of maturing time deposits and further deposit rate cuts in the first quarter are expected to drive CD rates lower [3][7][23] 3. Summary According to the Table of Contents 3.1 Long - bond Supply Surges: Need to Worry about Fund Convergence? 3.1.1 The Continuation of Loose Funds Does Not Contradict Concerns about Long - bond Supply - Long - bond supply - demand and inter - bank fund supply - demand are almost parallel dimensions. Currently, there is a shortage of duration indicators but no shortage of liquidity. The core of the current supply pressure is the lack of institutional capacity to absorb long - bonds, not the "pumping effect" of large - scale government bond net financing. Large banks' current behavior pattern is "no shortage of liquidity, shortage of duration indicators". In early January 2026, large banks' net fund lending reached a record high for the same period, and they increased their purchases of short - term treasury bonds [7][8][10] 3.1.2 The Key is the Central Bank's Current Willingness to Support Inter - bank Funds - After the iteration of the monetary policy framework, the central bank's ability to smooth out fund fluctuations is no longer a problem. The key is its willingness to support funds. In the first quarter of 2026, with the tone of moderate loosening and abundant liquidity, the central bank will likely hedge against fluctuations to ensure the stable operation of fund rates. Although there are concerns about inter - bank fund supply and demand due to early government bond issuance and seasonal factors, these may not be the core of the problem. Since the second half of 2024, the seasonality of inter - bank fund rates has been greatly weakened [14][16][17] 3.1.3 After the Iteration of the Monetary Policy Framework, the Central Bank's Ability to Stabilize Fund Fluctuations is Stronger - Since the second half of 2024, the central bank has continuously iterated the monetary policy framework to enhance liquidity control. The optimization of liquidity injection tools has two effects: injecting relatively cheap medium - and long - term funds without sending a clear interest - rate cut signal and strengthening the central bank's control over short - term funds. In the first quarter of 2026, the central bank's operations to support liquidity may be flexible, including large - scale outright/MLF injections, treasury bond trading, or even reserve requirement ratio cuts [18][20][22] 3.2 Funds May Remain Stable and Loose, and CD Rates Need Positive Catalysts to Decline - In early 2026, the central level of fund rates will likely remain low, and the volatility will be significantly lower than in the same period of history. If outright and MLF operations are insufficient to smooth out fund fluctuations, it may trigger a reserve requirement ratio cut. The prediction that CD issuance in 2025 would not catch up with the schedule was verified, and the 1 - year CD rate has stabilized around 1.60 - 1.65%. The downward trend of CD rates will come but needs positive catalysts. The replacement of maturing time deposits (the scale of maturing time deposits subject to repricing in the first quarter of 2026 accounts for 40% of the whole year) and further deposit rate cuts are expected to drive CD rates lower [23]

Fundraising Performance - In December 2025, 18 new stocks were listed on the A-share market, raising a total of 31.41 billion yuan, marking the highest monthly fundraising since September 2023[4] - For the entire year of 2025, a total of 116 new stocks were listed, raising 131.77 billion yuan, which represents increases of 16% and 96% compared to the same period in 2024, respectively[5] - The monthly fundraising amount in December 2025 exceeded 30 billion yuan, driven by several large projects including Moer Thread and Muxi Co., which raised over 4 billion yuan each[3] Initial Performance of New Stocks - In December 2025, 14 out of 15 new stocks listed on the Shanghai and Shenzhen markets adopted offline issuance, with an average first-day increase of 249%, continuing the upward trend from November[11] - The average first-day increase for new stocks on the Sci-Tech Innovation Board exceeded 300%, with Moer Thread and Muxi Co. seeing increases of over 600% and 400%, respectively[14] - The main board saw an average first-day increase of 200% for its four new stocks, with China Uranium Industry leading at 269%[14] Subscription Returns - In December 2025, the estimated returns for A/B class accounts from new stock subscriptions were 5.48 million yuan and 2.87 million yuan, respectively, marking the highest monthly returns of the year[21] - The returns from the Sci-Tech Innovation Board's new stocks contributed significantly, with the average return for A/B class accounts being 4.71 million yuan and 2.13 million yuan, respectively[21] Investment Strategy and Risks - The current optimal strategy is to participate in low-priced, small-cap new stocks with expected first-day increases exceeding expectations, as well as large-cap stocks with significant offline allocation[22] - Risks include an increased rate of new stock price declines and a potential decrease in subscription success rates, which could impact overall returns[3]

Investment Rating - The report rates the beer industry as "Buy" [1] Core Insights - The beer industry is entering a new normal characterized by stock competition, with structural opportunities arising from category and channel changes. The demand for beer in China has been gradually declining in 2023, and it is expected to follow a long-term downward trend similar to overseas experiences. The average selling price (ASP) of leading companies is projected to increase by only 0.4% in 2024 due to weaker-than-expected demand recovery and inflation decline [4][7] - The rise of craft beer represents a significant opportunity for the industry, with leading companies likely to benefit from this trend. The penetration rate of craft beer in China is estimated to be around 3%, which is still significantly lower than the 5-15% levels seen in developed countries [4][20] - New retail channels are rapidly growing, driven by consumer demands for convenience, rationality, and differentiation. The estimated sales of beer through new retail channels are around 30 billion yuan, with a penetration rate of approximately 6% and an annual growth rate of about 20% [4][61] Summary by Sections 1. Industry New Phase: Stock Era, Channel Change, Craft Beer Rise - The beer industry in China is experiencing a new normal with both volume and price entering a downward trend. The production volume is expected to decline by 0.4% in 2023 and 1.0% in 2024 [7][4] - The concentration of leading companies is expected to decrease slightly, with the CR5 ratio projected to drop by 3.5 percentage points to around 74.8% in 2024 [14][4] 2. Category Change: Demand Shift Creates Opportunities, Large Companies to Benefit - The demand for beer in China is at a turning point, with potential for big single product opportunities. The younger generation is becoming the main consumer group, leading to a shift in drinking culture towards personal preference [23][24] - The craft beer market is expected to grow significantly, with an estimated annual growth rate in sales exceeding double digits. The penetration rate of craft beer is projected to reach around 3% by 2025 [29][30] 3. Channel Change: Demand Stock Competition, Impact on Structure Manageable - The structure of beer distribution channels is changing, with a decline in traditional on-premise sales and an increase in new retail channels. The new retail channel is expected to account for about 6% of total beer sales, with significant growth in instant retail and membership warehouse stores [56][61] - The rapid growth of new retail channels is driven by improved logistics efficiency and changing consumer preferences for convenience and differentiated products [57][61]

Investment Rating - The report assigns an "Accumulate" rating for the industry [5] Core Insights - With the proliferation of AI tools, GEO (Generated Engine Optimization) is expected to become a new marketing paradigm, allowing e-commerce operation companies to leverage their understanding of platforms and content marketing to capture incremental brand marketing demand [2][5] - The Chinese GEO market is rapidly growing, with a year-on-year increase of 215% in Q2 2025, and over 78% of enterprise decision-makers prioritizing AI search optimization in their digital transformation strategies [5] - The transition from traditional SEO to GEO is anticipated to reshape brand marketing strategies, with e-commerce operation companies positioned to benefit from this shift due to their close collaboration with platforms and deep understanding of consumer insights [5] Summary by Sections Industry Overview - The report highlights the shift from SEO to GEO as a significant change in digital marketing strategies, emphasizing the need for brands to adapt to new consumer information acquisition methods [2][5] Investment Recommendations - E-commerce operation companies such as Ruoyuchen, Yiwang Yichuang, and Shuiyang Co. are recommended as key players to watch, with additional related companies including Qingsong Technology, Liren Lizhuang, Baozun E-commerce, and Kaichun Co. [5] Market Trends - The report notes that traditional search engine traffic is projected to decline by 25% by 2026, while AI chatbots and other virtual AI optimization methods are expected to capture more market share [5] - The conversion rate for businesses using GEO is reported to be 2.8 times higher than that of traditional search engines, with a 40% reduction in user decision-making cycles [5]

Investment Rating - The report assigns an "Overweight" rating for the non-ferrous metals industry [5] Core Insights - The balance between supply and demand is crucial, but macroeconomic factors such as monetary policy, geopolitical tensions, and supply disruptions will significantly influence metal price trends [2] - Precious metals are supported by geopolitical factors, with gold prices expected to be bolstered by central bank purchases and rising ETF holdings [5] - Copper is transitioning from a commodity to a strategic asset, with price fluctuations influenced by macroeconomic resilience and supply disruptions [5] - Aluminum prices are expected to remain strong due to robust macroeconomic performance and easing liquidity [5] - Energy metals like lithium are facing demand preemption due to export tax adjustments, while cobalt prices remain high due to tight raw material supply [5] Summary by Sections Precious Metals - Gold prices have risen, with SHFE gold increasing by 2.57% to 1,006.48 CNY/g and COMEX gold rising by 4.36% to 4,518.40 USD/oz [8][25] - Silver prices also saw significant increases, with SHFE silver up 3.85% to 18,731 CNY/kg and COMEX silver up 12.36% to 79.79 USD/oz [9][25] - Central bank gold reserves in China increased to 7,415 million ounces, marking a continuous expansion over 14 months [8] Copper - Copper prices increased, with SHFE copper rising by 3.23% to 101,410 CNY/ton and LME copper up 4.24% to 12,998 USD/ton [10][22] - Supply disruptions from the Mantoverde copper mine strike in Chile are expected to maintain price strength [10] - The copper market is characterized by low inventory levels, with global visible inventory at 909,000 tons [10][67] Aluminum - Aluminum prices have shown strong performance, with SHFE aluminum increasing by 6.13% to 24,330 CNY/ton and LME aluminum up 4.00% to 3,136 USD/ton [10][79] - The average operating rate for aluminum processing has slightly increased to 60.1% [93] Energy Metals - Lithium production is on the rise, with a weekly increase of 115 tons, although demand is showing signs of weakness [11] - Cobalt prices remain elevated due to tight supply conditions, with companies extending their operations into downstream sectors [11] Rare Earths - Rare earth prices have rebounded, with significant increases in the prices of praseodymium-neodymium oxide and dysprosium oxide [11]