Investment Rating - The industry investment rating is "Increase" [2][18] Core Insights - The report indicates that the real estate market has shown mixed results in transaction volumes, with a stable and fluctuating trend expected to continue due to ongoing accommodative policies [2][3] - The report anticipates that the policy environment will remain supportive, which will help stabilize the market in 2026 [3] Summary by Sections Transaction Data - In the first week of 2026, the new housing transaction area in 30 major cities was 3.15 million square meters, a week-on-week increase of 5.2% but a year-on-year decrease of 20.6% [3] - First-tier cities saw a sales area of 710,000 square meters, up 31.0% week-on-week but down 24% year-on-year [3] - Second-tier cities recorded a sales area of 1.98 million square meters, a week-on-week increase of 2.83% and a year-on-year decrease of 15% [3] - Third-tier cities had a sales area of 470,000 square meters, down 12.3% week-on-week and down 34.5% year-on-year [3] Cumulative Transaction Data - As of January 1, 2026, the cumulative transaction area in 30 cities was 90,000 square meters, down 61.8% year-on-year [3] - Cumulative transaction areas for first-tier, second-tier, and third-tier cities were 30,000 square meters, 40,000 square meters, and 10,000 square meters respectively, with significant year-on-year declines [3] Land Transaction Data - The land supply area was 1.028 million square meters, with a transaction area of 3.33 million square meters, resulting in a supply-to-sales ratio of 0.31 [3] - The total land transfer amount was 121.8 billion yuan, with a year-on-year decrease of 15.9% [3] Inventory and Clearance Cycle - The inventory clearance cycle in 35 cities increased to 24.54 months, up 6.64% month-on-month and down 12.09% year-on-year [3]

Investment Rating - The report rates the construction industry as "Buy" [1] Core Insights - The National Development and Reform Commission has announced a significant investment plan for 2026, with a total of approximately 295 billion yuan allocated for major infrastructure projects, including the Guangzhou New Airport and the Zhanjiang to Haikou ferry project, with total investments exceeding 400 billion yuan [4][3] - The report emphasizes the orderly expansion of low-altitude economic application scenarios, with significant progress expected in housing quality improvement by 2030 [4][3] - The report recommends several companies in emerging sectors such as clean rooms, commercial aerospace, and controlled nuclear fusion, highlighting specific stocks like Yaxiang Integration and China Nuclear Engineering [4][6] Summary by Sections Recent Key Reports - The report discusses the need for high-demand, high-barrier, and high-profit leading companies in the construction industry, focusing on sectors like AI, controlled nuclear fusion, and low-altitude economy [8][10] Key Company Recommendations - Recommended companies include China Construction (dividend yield 5.29%), China Railway (dividend yield 4.81%), and China Communications Construction (dividend yield 3.39%), all of which are expected to benefit from stable growth and government investment [6][4] Macro/Meso/Micro Data Tables - The report includes various data tables that provide insights into the financial performance and projections of key construction companies, indicating a trend of improving cash flow and profitability in certain sectors [6][4] Infrastructure Investment Trends - The report predicts a significant increase in infrastructure investment, with a projected growth rate of 10.9% for broad infrastructure investment in 2025, driven by government policies and funding mechanisms [29][30]

Investment Rating - The report assigns an "Overweight" rating for the healthcare service industry [3]. Core Insights - The healthcare insurance fund's income showed stable growth in 2025, with a cumulative income of CNY 26,320.68 billion from January to November, reflecting a year-on-year increase of 2.9%. The income from urban employee insurance reached CNY 16,643.79 billion (+5.7%), while the income from rural resident insurance decreased by 1.6% to CNY 9,676.89 billion [2][4]. - The cumulative expenditure of the healthcare insurance fund from January to November was CNY 21,100.46 billion, marking a year-on-year increase of 0.5%. Urban employee insurance expenditure was CNY 12,033.33 billion (+2.4%), and rural resident insurance expenditure was CNY 9,067.14 billion (-1.9%) [4][9]. - The cumulative surplus of the healthcare insurance fund as of November 2025 was CNY 5,220.22 billion, with a surplus rate of 19.8%. The urban employee insurance fund had a surplus of CNY 4,610.46 billion (27.7%), while the rural resident insurance fund had a surplus of CNY 609.75 billion (6.3%) [4][9]. Summary by Sections Income and Expenditure - The healthcare insurance fund's income in November 2025 was CNY 2,800.58 billion, showing a month-on-month increase of 11.2%. The urban employee insurance fund's income was CNY 1,492.65 billion (+4.4%), and the rural resident insurance fund's income was CNY 1,307.92 billion (+20.1%) [9]. - The expenditure for November 2025 was CNY 2,064.22 billion, reflecting a year-on-year increase of 13.0%. Urban employee insurance expenditure was CNY 1,093.39 billion (+3.9%), and rural resident insurance expenditure was CNY 970.85 billion (+25.3%) [9]. Fiscal Health Expenditure - Cumulative health expenditure from the general public budget was CNY 18,687 billion from January to November 2025, with a year-on-year growth of 4.7%. The expenditure in November alone was CNY 1,810 billion, marking a significant increase of 32.5% [7][8].

Investment Rating - The report maintains an "Overweight" rating for the aviation and oil transportation sectors, indicating a positive outlook for both industries [35]. Core Insights - The aviation sector is expected to see robust demand growth, driven by increased travel during the New Year holiday, with significant year-on-year increases in both passenger volume and ticket prices. The report suggests a strategic investment during the off-peak season, anticipating a long-term super cycle [3][4]. - In the oil transportation sector, while seasonal price declines are noted, the report emphasizes the potential for future price increases due to ongoing global oil production growth and limited capacity expansion. It recommends a contrarian investment approach during the off-peak period [3][4]. Summary by Sections Aviation Sector - The report highlights a strong increase in travel demand during the New Year holiday, with a 19% year-on-year increase in overall passenger movement from December 31, 2025, to January 2, 2026. Specifically, civil aviation saw a 13% increase [3][4]. - Domestic ticket prices are estimated to rise by over 10% year-on-year during the holiday period, despite a projected short-term dip in passenger flow post-holiday [3][4]. - The aviation industry is experiencing high load factors while ticket prices remain at historical lows, suggesting a favorable environment for profitability growth driven by demand recovery and market pricing dynamics [3][4]. Oil Transportation Sector - The report notes that the average daily earnings for Very Large Crude Carriers (VLCC) reached $51,000 in 2025, significantly higher than the $36,000 in 2023-2024, driven by improved capacity utilization and increased oil production from the Middle East and South America [3][4]. - Despite a recent decline in freight rates during the traditional off-peak season, the report maintains a positive outlook for future price increases, supported by ongoing global oil production growth and limited fleet expansion [3][4]. - The report suggests monitoring geopolitical developments, particularly in Venezuela, and recommends increasing positions in companies like COSCO Shipping Energy, China Merchants Energy Shipping, and China Shipbuilding Leasing [3][4].

Quantitative Models and Construction Methods - **Model Name**: CSI 300 Enhanced Portfolio **Model Construction Idea**: The model aims to enhance the performance of the CSI 300 Index by leveraging quantitative strategies to generate excess returns over the benchmark[5][9][15] **Model Construction Process**: The portfolio is constructed by applying factor-based selection and weighting methodologies to the CSI 300 Index constituents. Factors such as valuation, growth, and momentum are utilized to optimize the portfolio's performance relative to the benchmark[15] **Model Evaluation**: The model demonstrates consistent excess returns over the CSI 300 Index, indicating its effectiveness in capturing alpha through quantitative strategies[15] - **Model Name**: CSI 500 Enhanced Portfolio **Model Construction Idea**: Similar to the CSI 300 Enhanced Portfolio, this model focuses on outperforming the CSI 500 Index by employing quantitative factor-based strategies[5][9][15] **Model Construction Process**: The portfolio is optimized using factors such as valuation and growth, applied to the CSI 500 Index constituents. The model aims to achieve a balance between risk and return while maintaining a low tracking error relative to the benchmark[15] **Model Evaluation**: The model shows moderate excess returns, though its performance is less consistent compared to the CSI 300 Enhanced Portfolio[15] - **Model Name**: CSI 1000 Enhanced Portfolio **Model Construction Idea**: This model targets excess returns over the CSI 1000 Index by leveraging quantitative factor-based strategies tailored to small-cap stocks[5][9][15] **Model Construction Process**: Factors such as momentum and growth are applied to the CSI 1000 Index constituents. The portfolio construction process emphasizes capturing the unique characteristics of small-cap stocks while managing risk[15] **Model Evaluation**: The model effectively captures alpha in the small-cap segment, with consistent excess returns over the benchmark[15] - **Model Name**: GARP Portfolio **Model Construction Idea**: The Growth at a Reasonable Price (GARP) strategy combines growth and valuation factors to identify stocks with strong growth potential at reasonable valuations[32] **Model Construction Process**: Stocks are selected based on a combination of growth metrics (e.g., earnings growth) and valuation metrics (e.g., price-to-earnings ratio). The portfolio is then optimized to balance growth and valuation characteristics[32] **Model Evaluation**: The GARP portfolio demonstrates strong long-term performance, though short-term results may vary depending on market conditions[32] - **Model Name**: Small-Cap Growth Portfolio **Model Construction Idea**: This model focuses on small-cap stocks with high growth potential, leveraging factors such as earnings growth and momentum[39] **Model Construction Process**: Stocks are selected from the small-cap universe based on growth and momentum factors. The portfolio is constructed to maximize exposure to these factors while managing risk[39] **Model Evaluation**: The portfolio shows strong performance in capturing growth opportunities in the small-cap segment, though it may be sensitive to market volatility[39] Model Backtesting Results - **CSI 300 Enhanced Portfolio**: - Weekly excess return: 0.19%[15] - Monthly excess return: 2.63%[15] - Annual excess return: 8.82%[15] - **CSI 500 Enhanced Portfolio**: - Weekly excess return: -0.10%[15] - Monthly excess return: -0.07%[15] - Annual excess return: 4.72%[15] - **CSI 1000 Enhanced Portfolio**: - Weekly excess return: 0.47%[15] - Monthly excess return: 0.96%[15] - Annual excess return: 4.67%[15] - **GARP Portfolio**: - Weekly excess return: -0.13%[32] - Monthly excess return: 1.53%[32] - Annual excess return: 23.51%[32] - **Small-Cap Growth Portfolio**: - Weekly excess return: 0.55%[39] - Monthly excess return: 5.00%[39] - Annual excess return: -6.37%[39] Quantitative Factors and Construction Methods - **Factor Name**: Market Capitalization (Size) **Factor Construction Idea**: This factor captures the performance difference between small-cap and large-cap stocks[42] **Factor Construction Process**: Stocks are ranked by market capitalization, and the top 10% (small-cap) and bottom 10% (large-cap) are selected to form long and short portfolios, respectively. The difference in returns between these portfolios represents the factor's performance[41][42] **Factor Evaluation**: The factor shows strong performance in favor of small-cap stocks, particularly in the short term[42] - **Factor Name**: Price-to-Book Ratio (PB) **Factor Construction Idea**: This valuation factor identifies undervalued stocks based on their book value relative to market price[42] **Factor Construction Process**: Stocks are ranked by PB ratio, and the top 10% (low PB) and bottom 10% (high PB) are selected to form long and short portfolios, respectively. The difference in returns between these portfolios represents the factor's performance[41][42] **Factor Evaluation**: The factor's performance is mixed, with periods of underperformance in certain market conditions[42] - **Factor Name**: Return on Equity (ROE) **Factor Construction Idea**: This profitability factor identifies companies with high returns on equity, indicating efficient use of capital[53] **Factor Construction Process**: Stocks are ranked by ROE, and the top 10% (high ROE) and bottom 10% (low ROE) are selected to form long and short portfolios, respectively. The difference in returns between these portfolios represents the factor's performance[41][53] **Factor Evaluation**: The factor demonstrates consistent positive returns, particularly in the long term[53] Factor Backtesting Results - **Market Capitalization (Size)**: - Weekly long-short return: 0.20%[42] - Monthly long-short return: -6.40%[42] - Annual long-short return: 45.24%[43] - **Price-to-Book Ratio (PB)**: - Weekly long-short return: -0.45%[42] - Monthly long-short return: -1.51%[42] - Annual long-short return: -12.78%[43] - **Return on Equity (ROE)**: - Weekly long-short return: 0.65%[53] - Monthly long-short return: 4.49%[53] - Annual long-short return: 2.82%[54]

Group 1 - The A-share market is expected to welcome a "spring opening red" due to the resonance of policy expectations, liquidity, and fundamentals, with a focus on technology, non-bank financials, and consumption [2][4] - The Shanghai Composite Index closed at 3968.84 points in 2025, with an annual increase of 18.41%, confirming the strategic judgment of Guotai Junan [8][4] - The market is anticipated to stabilize at important levels, driven by factors such as the upcoming announcement of the new Federal Reserve chair, expectations of U.S. interest rate cuts in 2026, and increased liquidity from A500 ETF inflows [8][4][5] Group 2 - The report highlights a new trend of price signals indicating an economic upturn, with demand improving in sectors like chemicals and new energy, while supply is contracting [21][4] - The technology sector is expected to benefit from global chip technology breakthroughs and a continued trend of rising storage prices, with domestic computing infrastructure shortages likely accelerating localization [25][4] - Non-bank financials are projected to benefit from increased wealth management demand and capital market reforms, with recommendations for insurance and brokerage firms [41][4] Group 3 - The report emphasizes the importance of cyclical stocks in the context of expanding domestic demand and stable real estate policies, recommending sectors such as tourism services and consumer goods [25][4] - The AI application sector is highlighted as a key growth area, with significant developments in robotics and commercial aerospace, indicating strong investment potential [25][4] - The report notes that the insurance sector is expected to see improved profitability due to increased equity allocations and favorable market conditions [41][4]

Group 1 - The report indicates that long-term foreign capital is actively increasing its allocation in Hong Kong's software services sector [10][11] - In the recent week, stable foreign capital inflow into Hong Kong amounted to HKD 8.3 billion, while flexible foreign capital saw an outflow of HKD 5.9 billion [11] - The report highlights that the software services, telecommunications services, and non-ferrous metals sectors have attracted significant foreign investment recently [13] Group 2 - The report notes that in the Northbound trading, there was an estimated net outflow of CNY 3.1 billion in the recent week, contrasting with a net inflow of CNY 4.8 billion in the previous week [7] - The top active stocks in Northbound trading included Zijin Mining, with a total transaction amount of CNY 7.8 billion, accounting for 12% of the stock's total trading volume for the week [7] - The report also mentions that in the Asia-Pacific market, foreign capital saw a net outflow from Japan amounting to JPY 432.2 billion in the latest week [19] Group 3 - In the U.S. and European markets, there was a net inflow of USD 9.2 billion into the U.S. equity market in November, compared to a net inflow of USD 3.8 billion in the previous month [22] - The report states that European equity markets saw net inflows of USD 0.55 billion, USD 1.17 billion, and USD 1.4 billion into the UK, Germany, and France respectively in November [22] - Cumulatively, since 2020, the U.S. market has seen a total net inflow of USD 691.5 billion [22]

Group 1: Core Insights - The report highlights a recovery in trading activity for hot themes, particularly in AI applications and robotics, with commercial aerospace maintaining high interest [1][4][6] - The average daily trading volume for hot themes reached 860 million yuan, with an average turnover rate of 3.84%, indicating an overall rebound [4][6] - Key catalysts include Meta's acquisition of AI company Manus and the listing of domestic large model companies, which have boosted trading activity in AI applications [4][6] Group 2: AI Applications - Meta's acquisition of Manus for over 2 billion USD enhances its end-to-end execution capabilities, while domestic large model companies like Zhipu and MiniMax are strengthening their capital and global presence through Hong Kong listings [18][23] - The performance of AI application products is improving, driving user demand, and the commercialization of AI applications is accelerating, with significant growth in daily usage metrics [18][26] - Recommended investment directions include internet and medical applications benefiting from product upgrades and new scenarios, as well as domestic computing power and data center equipment [18][26] Group 3: Robotics - The robotics industry is entering a phase of scaled development, with the launch of personal robots and the establishment of a standardization committee for humanoid robots [19][38] - Key applications are emerging in industrial settings for repetitive and hazardous tasks, as well as in personalized consumer scenarios [19][39] - Investment recommendations focus on components benefiting from technological upgrades and companies capable of mass production, such as Tesla and other core suppliers [19][39] Group 4: Commercial Aerospace - The report outlines the approval of IPO applications for commercial rocket companies, with Blue Arrow Aerospace being the first to achieve this milestone [20][41] - The successful launch of reusable rockets is expected to drive the commercialization of the aerospace industry, with significant advancements in technology and infrastructure [20][41] - Investment opportunities include new infrastructure for rocket manufacturing and launch sites, as well as satellite communication and new technologies [20][41] Group 5: Domestic Consumption - The central government is promoting initiatives to boost domestic consumption, with new consumer scenarios emerging in sports events and winter tourism [22][48] - The report notes significant economic impacts from these initiatives, with projected growth in consumption related to sports and tourism [22][48] - Recommended investment areas include facilities for winter sports, OTA services, and consumer goods benefiting from improved demand [22][48]

Investment Rating - The report maintains an "Overweight" rating for the innovative pharmaceutical and medical device industry chain [4][8]. Core Viewpoints - The report continues to recommend the innovative pharmaceutical and medical device industry chain, highlighting a selection of A-share and H-share stocks with an "Overweight" rating [2][8][11]. - The performance of the pharmaceutical sector in December 2025 was weaker than the broader market, with the SW Pharmaceutical Biotechnology index declining by 4.1% compared to a 2.1% increase in the Shanghai Composite Index [18][30]. - The report notes that the premium level of the pharmaceutical sector relative to the entire A-share market is currently at a normal level, with a relative premium rate of 63.2% as of December 31, 2025 [29][32]. Summary by Sections A-Share Recommendations - The report lists the following A-share stocks with an "Overweight" rating: - 恒瑞医药 (Hengrui Medicine) - 科伦药业 (Kelun Pharmaceutical) - 华东医药 (East China Pharmaceutical) - 恩华药业 (Enhua Pharmaceutical) - 特宝生物 (Tebao Biological) - 京新药业 (Jingxin Pharmaceutical) - 益方生物 (Yifang Biological) - 药明康德 (WuXi AppTec) - 泰格医药 (Tigermed) - 乐普医疗 (Lepu Medical) - 联影医疗 (United Imaging) - 微电生理 (Microelectrophysiology) [8][9]. H-Share Recommendations - The report maintains an "Overweight" rating for the following H-share stocks: - 翰森制药 (Hansoh Pharmaceutical) - 三生制药 (3SBio) - 科伦博泰生物 (Kelun-Botai Biological) - 康方生物 (CanSino Biologics) - 映恩生物 (InnoCare Pharma) - 百济神州 (BeiGene) [11][12]. Performance Analysis - The report indicates that the 国泰海通医药 monthly portfolio outperformed the pharmaceutical index in December 2025, with an average decline of 1.8% compared to a 3.9% decline in the overall pharmaceutical index [14][15]. - The report highlights the best-performing stocks in December 2025, with 泰格医药 (Tigermed) increasing by 11.2%, 特宝生物 (Tebao Biological) by 7.5%, and 惠泰医疗 (Huitai Medical) by 3.9% [15][18].

Group 1 - The report highlights a significant reduction in credit bond issuance towards the end of the year, with a net repayment of 635 billion yuan, contrasting with a net financing of 482 billion yuan in the previous week [6][8]. - The primary active maturities remain in the short to medium term, with a focus on 3-year bonds as potential riding opportunities following the implementation of new redemption regulations [1][6]. - The report indicates a low trading volume in the secondary market, with total transactions amounting to 3964.25 billion yuan, a sharp decline from 9679.95 billion yuan in the previous week [6][9]. Group 2 - The issuance of short-term financing bonds totaled 380.8 billion yuan, while 942.8 billion yuan matured, indicating a significant outflow [6][7]. - The report notes that the majority of issuers are rated AA+, accounting for 39.44% of the total, with the construction sector being the largest contributor at 43.66% [6][7]. - The yield on 3-year AAA medium-term notes increased by 3.15 basis points to 1.89%, reflecting a general upward trend in medium to long-term yields [9][10].