Group 1: Price Transmission Dynamics - The core issue is not whether prices will rise, but whether price increases can be transmitted from upstream to downstream[2] - The ability to transmit prices is strongest upstream, followed by midstream, and weakest downstream[8] - The supply-demand structure from 2023 to 2025 will have a greater negative impact on PPI than in 2014-2015[8] Group 2: PPI and Cost Transmission - The PPI's month-on-month changes align closely with the calculated model, indicating the model's effectiveness[16] - PPI year-on-year can be split into contributions from cost transmission and supply-demand structure, with the latter being more detrimental in 2023-2025[17] - The capacity utilization rate in the second half of 2025 is expected to weaken, impacting price transmission in the first half of 2026[20] Group 3: Oil Price Impact - A 1% increase in Brent crude oil prices leads to a 0.041% increase in PPI when considering limited transmission through the oil and chemical chain[22] - When accounting for substitution effects, the same 1% increase in oil prices can raise PPI by 0.071%[22] - In an ideal scenario where the supply-demand structure is fully restored, a 1% increase in oil prices could raise PPI by approximately 0.083%[23]

Investment Rating - The report maintains a "Positive" outlook for the real estate industry [6] Core Insights - The report emphasizes the importance of price performance over transaction volume during the current "small spring" season in the real estate market, suggesting that price trends are crucial for assessing the overall market trajectory [2][3] - The recent policy from the Ministry of Natural Resources, which focuses on "strict control of new land and revitalization of existing land," aligns with the government's long-standing approach and does not imply a halt in land supply [3][51][52] - The report highlights that while transaction volumes in major cities like Shanghai have shown significant increases, asset prices remain relatively stable, indicating a need for ongoing monitoring of price trends [2][4][31] Market Performance - The A-share real estate index experienced a weekly decline of 0.53%, underperforming compared to the CSI 300 index [10][11] - In the Hong Kong market, the index for Hong Kong property stocks fell by 2.65%, while the index for Hong Kong-funded property companies dropped by 5.88%, both underperforming against the Hang Seng Index [14][15] Secondary Housing Weekly Tracking - In the secondary housing market, Shanghai and Beijing saw week-on-week price increases, while the national average price declined by 0.1%, with a narrowing of the decline [21][25] - Transaction volumes in major cities have surged, with Shanghai recording a single-day transaction high of 1,472 units, marking a significant increase in activity [31][33] New Housing Weekly Tracking - The "small spring" trend continues in the new housing market, with a 73% week-on-week increase in transaction volumes in first-tier cities, particularly notable in Guangzhou and Shanghai [47][48] - The total inventory of new homes has slightly decreased, with first-tier cities showing a 1.0% week-on-week decline [49][50] Key Event Commentary - The Ministry of Natural Resources has clarified its development direction, emphasizing the need to balance new and existing land use, which is expected to influence future land acquisition strategies for real estate companies [3][51][52] Investment Recommendations - The report suggests focusing on national real estate companies or local state-owned enterprises that have rich experience in urban renewal projects, as future land acquisition will increasingly depend on revitalizing existing land [3][5]

Core Insights - The report highlights that geopolitical conflicts have escalated beyond expectations, creating opportunities for strategic investments in the market [2][3] - The focus on supply chain resilience is shifting from non-ferrous and chemical sectors to energy and agriculture, indicating a broader investment strategy towards safety and self-sufficiency [3] Market Strategy - The current market is experiencing a transition within the mid-cap blue-chip style, where supply chain resilience is becoming a key investment theme, particularly as it expands from non-ferrous and chemical sectors to energy and agriculture [3] - Relevant ETFs include Agricultural ETFs (159825/159827), Livestock ETFs (516760/159865/159867), and New Energy ETFs (159387/159122/159187) [3] Industry Strategy - The report notes that rising energy prices are positively impacting the agricultural sector, with specific commodities like live pigs and rubber already at the beginning of a price uptrend due to supply adjustments [4][9] - The agricultural sector is viewed as having high investment value due to price increase expectations and strategic safety considerations, with a continued positive outlook on pig farming, animal health, and planting chains [9] Thematic Strategy - The report suggests that rising oil prices will accelerate the global adoption of new energy vehicles, enhancing their cost advantages over traditional fuel vehicles [5][9] - Domestic car manufacturers, particularly independent brands, are expected to gain competitive advantages in the global new energy vehicle market, which will become a significant growth area for these companies [9]

Investment Rating - The report maintains a positive outlook on the non-ferrous metals industry [6] Core Viewpoints - Financial attributes are under pressure, returning to supply and demand support. The ongoing Iran-Israel conflict is prolonging, leading to significant oil price increases and raising concerns about persistent inflation. In the short term, the compression of interest rate cuts is suppressing overall financial attributes, but the rising inflation level indicates that precious metals and industrial metals are gaining momentum for the long term. The actual supply and demand of various metals may determine the price floor during the fluctuation period [3][9] Summary by Sections 1. Cycle Judgment: Financial Attributes Under Pressure, Returning to Supply and Demand Support - The Iran-Israel conflict is escalating, causing oil prices to rise sharply and triggering market concerns about uncontrollable inflation. The FedWatch indicates that the market is pricing in only a 25 basis point rate cut in December 2026. The core PCE in the U.S. rose by 3.1% year-on-year and 0.4% month-on-month in January. The overall financial attributes are under pressure due to the compressed rate cut space, but the elevated inflation level suggests that precious and industrial metals are building momentum for the future [9][13] 2. Industry and Individual Stock Performance - The non-ferrous metals sector saw a decline of 3.69% in the week ending March 13, ranking 26th among all industries [19][20] 3. Precious Metals: Deepening Stagflation Expectations, Gold Prices May Fluctuate and Accumulate - As of March 13, the SHFE gold price fell by 0.68% to 1,133.00 CNY per gram, while COMEX gold dropped by 2.27% to 5,021.00 USD per ounce. The inventory of SHFE gold increased by 0.38 tons to 105 tons, while COMEX gold inventory decreased by 15.03 tons to 923 tons. The net long position of non-commercial COMEX gold increased by 0.30 thousand contracts, and SPDR gold holdings decreased by 56,500 ounces [14][27] 4. Copper: Financial Attributes Under Pressure, Seasonal Demand Still to be Tested - As of March 13, the SHFE copper price fell by 0.73% to 100,310 CNY per ton, and LME copper decreased by 0.63% to 12,780.5 USD per ton. The domestic refined copper operating rate was 72.92%, up 10.45 percentage points from the previous week. Global visible copper inventory totaled approximately 1.5416 million tons, an increase of 15,100 tons from the previous week [16][24][77] 5. Aluminum: Supply Disturbance Premium Continues, Aluminum Prices Remain Supported - As of March 13, the SHFE aluminum price rose by 0.99% to 24,960 CNY per ton, while LME aluminum fell by 0.19% to 3,439.5 USD per ton. The domestic electrolytic aluminum operating capacity was stable at 44.325 million tons, with concerns about supply disturbances in the Middle East still present. The average profit for the aluminum industry was approximately 8,822.36 CNY per ton [16][85][87]

Report Industry Investment Rating - The report does not mention the industry investment rating. Core Viewpoints of the Report - The report proposes an active equity fund product research system for allocation - type funds, aiming to make product research configurable and practical. Allocation - type funds are defined as those that serve allocation goals, focus on controllable excess returns, and provide significant Stable beta + tool attributes [4][9]. - Aiming to beat the portfolio benchmark, an enhanced bottom - position fund pool for the all - market equity - oriented fund index is established, updated quarterly, to provide better risk - return ratio targets for portfolio bottom - position allocation [4][20]. - The bottom - position fund portfolio focuses on achieving a slight victory over the benchmark, with characteristics such as stable operation, style alignment with the benchmark, and high - win - rate to create excess returns [23]. Summary by Directory 1. Allocation - type Funds: Serving Allocation Goals and Providing Stable beta+ - **Product Research System Advancement**: The current fund product research has completed in - depth exploration and full - scale Alpha decomposition of fund products. However, the results often focus on label improvement, making it difficult to serve clear allocation goals. The report suggests advancing to the stage of productizing fund managers' capabilities, making products configurable and practical [8]. - **Providing Allocation Attributes and Serving Allocation Goals**: Any fund that meets allocation goals from the perspective of allocation attributes belongs to the category of allocation - type funds. Different allocation schemes can select different types of allocation - type funds, including those from risk - return, style, investment methodology, and asset - class perspectives. The goal is to select high - quality active equity products for investors' portfolio allocation [11][12]. - **Focusing on Controllable Excess Returns**: The rapid development of ETFs has challenged active equity funds in terms of scale, excess returns, and allocation. Active equity funds should focus on controllable, trackable, and sustainable excess returns, with stock - picking ability as the foundation. Regulatory policies also guide the industry to return to the origin of value creation [13][14][15]. - **Providing Stable beta + Tool Attributes**: Stable beta + funds are active equity products that leverage fund managers' stock - picking abilities and have stable allocation - attribute excess returns. They fill the gap between traditional passive investment and active management, providing better risk - adjusted returns and enhancing portfolio elasticity for institutional investors [16][17]. 2. Allocation - type Funds: Slight Victory over the Benchmark, Enhanced Bottom - position Fund Selection - **Building the Bottom - position around the Benchmark**: For portfolio investors, beating the portfolio benchmark is an important goal. The Wind All - Market Active Equity Fund Index 885001.WI is used as a performance comparison benchmark. The bottom - position fund portfolio aims for a slight victory over the benchmark while meeting the stability requirements [21][22]. - **Selection Method for Slight - Victory Benchmark, Enhanced Bottom - position Funds**: First, the funds need to meet basic conditions such as appropriate scale, long - term equity orientation, and stable fund managers. Then, through style constraints (correlation coefficient with the index ≥ 0.86 and better 1 - year cumulative return) and short - term win - rate selection (monthly win - rate over 60% in the past 6 months), the top 10 funds are selected as the active bottom - position. If there are less than 10 funds, all are included, and no more than 3 products managed by the same fund manager are selected in the same period [24][30]. 3. Results of Slight - Victory Benchmark, Enhanced Bottom - position Fund Selection - **Selection Results**: The latest selection results as of December 31, 2025, show that the fund targets in the portfolio have significant growth attributes, relatively dispersed allocation sectors, and no significant industry labels. The funds have good return indicators and significant excess returns compared to the benchmark [25][27]. - **Performance of the Portfolio**: In the back - testing period (2017/01/01–2026/02/28), the portfolio achieved continuous and stable excess returns, with an annualized return of 13.28% and a maximum drawdown of - 33.38%, significantly better than the benchmark. It has characteristics such as outstanding bear - market defense ability, stable performance in bull markets, and superior risk control. In the long - term, the annual positive - return probability is 70%, and the annual win - rate relative to the benchmark is 80% [33][34][35].

Core Viewpoints - The index is expected to continue in a fluctuating pattern, with the new energy manufacturing sector likely to lead the next phase of mid-cap blue-chip market performance [3][12]. Market Analysis - The ongoing geopolitical tensions, particularly in the Middle East, have limited direct impacts on the domestic market, maintaining a "chaotic external environment but stable internal conditions" scenario. The index is anticipated to face some short-term pullback pressure but is expected to remain within a defined fluctuation range [4][13]. Industry Comparison - Investment opportunities are shifting towards mid-cap blue-chip stocks, particularly in the manufacturing sector. The new energy industry in China, including photovoltaic, wind power, and power transmission, is identified as a core focus area due to its global competitive advantages. Attention is also directed towards machinery and military sectors. While maintaining views on previously recommended cyclical sectors, expectations for upward potential should be moderated as market anticipations become more fully priced [5][14]. Thematic Investment - The concept of energy sovereignty is emerging as a key investment theme. The global urgency for energy sovereignty is transforming into a rigid demand for energy infrastructure, elevating energy construction from an economic cycle issue to a strategic security concern. China's new energy manufacturing is positioned to meet this global security demand, with specific investment opportunities highlighted in photovoltaic, offshore wind, and power transmission sectors. Additionally, resource sovereignty remains a focus, with strategic resource assets being reassessed under the new geopolitical order, emphasizing the importance of pricing power in sectors like rare earths and other critical materials [6][15].

Investment Rating - The industry investment rating is maintained as "Positive" [6] Core Viewpoints - The supply and demand expectations for cobalt and lithium metals are both increasing, leading to price fluctuations. In the short term, lithium prices are expected to remain high due to upstream reluctance to sell and cautious downstream procurement, influenced by export restrictions in Zimbabwe. The cobalt market is supported by structural tightness in raw materials, with price resilience expected as downstream restocking demand gradually releases [4][9][13]. Summary by Sections 1. Cycle Assessment - The core targets in lithium and cobalt have clear investment value, suggesting active positioning. Lithium prices are experiencing fluctuations, with futures contracts showing a decline. The lithium concentrate price is reported at $2,210 per ton, up $55 from the previous week. The market is characterized by a standoff between upstream reluctance to sell and downstream purchasing at lower prices [9][13][14]. 2. Company and Industry Dynamics - Recent announcements include adjustments to trading fees for lithium futures contracts by the Guangxi Futures Exchange. Additionally, Ningde Times is accelerating the resumption and mining progress of lithium mines, which is expected to enhance supply chain resource security [16][17]. 3. Core Data on New Energy Materials - In February, domestic production of lithium carbonate and lithium hydroxide decreased by 15% month-on-month, while cobalt sulfate production fell by 10%. However, year-on-year comparisons show increases of 30% and 14%, respectively [19][23][29]. The inventory levels are undergoing structural adjustments, with lithium carbonate weekly production up by 3.70% and inventory down by 0.42% [51][59]. 4. Price Trends - The average price of battery-grade lithium carbonate decreased by 1.19%, while the price of battery-grade lithium hydroxide fell by 2.09%. In contrast, the average price of ternary materials increased by 1.25% [15][66][85]. 5. Inventory Changes - The inventory of phosphoric iron lithium increased by 5.22%, and the inventory of ternary materials rose by 1.17% [59][60]. In the cobalt segment, core product inventories generally decreased in February, with cobalt intermediate inventory down by 18.57% [61][64].

Investment Rating - The report maintains a "Positive" outlook for the coal industry [6] Core Viewpoints - The trend of destocking in the downstream coal market has ended, and a rebound in coking coal prices is expected due to improved fundamentals and changing market expectations [9] - The coal sector is anticipated to show upward elasticity in response to rising overseas energy prices, particularly in the context of escalating conflicts between the US and Iran [3][50] - Coking coal stocks are recommended for investment, including Huabei Mining (600985), Pingmei Shenma (601666), Shanxi Coking Coal (000983), and Lu'an Environmental Energy (601699), all rated as "Buy" or "Increase" [3][50] Summary by Sections Industry Overview - The coal industry is experiencing a recovery in production and shipping rates, with upstream coal mines returning to normal operational levels post the Spring Festival [9][23] - The demand for coal is currently weak due to seasonal factors, particularly in the power generation and steel sectors [9][23] Price Trends - Coking coal prices have shown a slight decline recently, with the price of low-sulfur coking coal at 1,448 RMB/ton, down 40 RMB/ton [9] - The Newcastle coal futures price surged approximately 9.3% recently, reaching the highest level since November 2024 [9] Supply and Demand Dynamics - The inventory levels at independent coking plants and steel mills have stabilized, indicating the end of destocking trends [9][27] - Port coal inventories have increased, reflecting a seasonal uptick in supply despite weak demand [9][27] Shipping and Transportation - The CBCFI coal freight index has risen, and the daily shipping volume on the Daqin line has returned to high levels, indicating improved logistics in the coal sector [9][43][48] Market Performance - The coal mining index has outperformed both the CSI 300 and ChiNext indices since the beginning of 2026, with a cumulative increase of 26.4% [9][49] - The price-to-book ratio of the coal industry index stands at 1.82, indicating a relative valuation compared to the broader market [9]

Investment Rating - The industry investment rating is maintained as "Positive" [6] Core Viewpoints - The report indicates that both supply and demand are expected to increase, leading to a complex price dynamic in the cobalt and lithium metal sectors. In the short term, lithium prices are expected to remain high due to upstream withholding and cautious downstream purchasing, influenced by export restrictions from Zimbabwe. The cobalt sector is supported by structural tightness in raw materials, providing price resilience. In the medium term, while geopolitical tensions in the Middle East and concentrated raw material arrivals may pressure lithium prices, there is still upward momentum expected in the second quarter for both lithium and cobalt products [4][9][13] Summary by Sections 1. Cycle Assessment - The lithium and cobalt sectors are identified as having clear investment value, with recommendations for active positioning. Lithium prices are fluctuating within a high range, with recent data showing a weekly decrease in futures contracts. The lithium concentrate price has increased by 55 USD per ton week-on-week, while lithium salt prices are experiencing a downward trend due to market dynamics [9][13][14] 2. Company and Industry Dynamics - Recent announcements include adjustments to trading fees for lithium carbonate futures by the Guangxi Futures Exchange. Additionally, CATL is accelerating the resumption and mining progress of lithium mines, which is expected to enhance supply chain resource security [16][17] 3. Core Data on New Energy Materials - In February, domestic production of lithium carbonate and lithium hydroxide decreased by 15% month-on-month, while cobalt sulfate production fell by 10%. However, year-on-year comparisons show increases of 30% and 14% respectively for lithium carbonate and lithium hydroxide [19][20][23] 4. Lithium Salt Import and Export - In December, lithium carbonate imports rose by 9% month-on-month, while lithium hydroxide exports surged by 88%. This indicates a robust demand for lithium salts in the market [38][44] 5. Weekly Data on Lithium Salts - Weekly data shows a 3.70% increase in lithium carbonate production and a 0.42% decrease in inventory levels, reflecting a tightening supply situation [51][52] 6. Downstream Material Inventory - Weekly inventory levels for lithium iron phosphate and ternary materials increased by 5.22% and 1.17% respectively, indicating a buildup in stock [59][60] 7. Cobalt Segment Inventory - In February, inventory levels for key cobalt products generally decreased, with cobalt intermediate inventory down by 18.57% and electrolytic cobalt inventory down by 16.17% [61][64] 8. Price Trends for New Energy Metal Materials - The report notes mixed price movements, with lithium prices showing weakness while cobalt and nickel prices exhibit varied trends. The average price for battery-grade lithium carbonate decreased by 1.19% week-on-week [66][71]

Investment Rating - The report maintains a "Buy" rating for the banking sector, indicating a positive outlook for the industry in 2026 [4][23]. Core Insights - The banking sector is expected to return to a fundamental narrative in 2026, supported by policy financial tools and resilient asset expansion. The sector is currently in a deposit repricing cycle, which is likely to stabilize net interest margins. Structural risks are anticipated to receive policy support [4][23]. - The report highlights two main investment themes: 1. High-quality small and medium-sized banks with solid fundamentals, including Nanjing Bank (601009, Buy), Ningbo Bank (002142, Buy), and Chongqing Rural Commercial Bank (601077, Buy) 2. Large state-owned banks with stable fundamentals and good defensive value, including Bank of Communications (601328, Not Rated) and Industrial and Commercial Bank of China (601398, Not Rated) [4][23]. Summary by Sections Social Financing and Credit Growth - In February 2026, social financing grew by 8.2% year-on-year, with a net increase of 2.38 trillion yuan, exceeding market expectations. The increase in social financing was driven by a significant rise in corporate loans and government bonds [10][11]. - The total new RMB loans in February were 900 billion yuan, with a year-on-year decrease of 1.1 trillion yuan. Corporate loans increased significantly, while retail loans saw a notable decline due to regulatory tightening and weak housing demand [14][15]. M1 and M2 Growth - M1 increased by 5.9% year-on-year, while M2 grew by 9.0%. The growth in M1 was attributed to increased fiscal spending and a shift of corporate deposits to household savings [20][21]. - In February, new RMB deposits totaled 1.17 trillion yuan, with a significant increase in household deposits, while corporate deposits decreased substantially [20][22]. Investment Recommendations - The report emphasizes the potential for absolute returns in the banking sector in 2026, driven by favorable policies and a stable economic environment. It suggests focusing on quality small and medium-sized banks and large state-owned banks for investment opportunities [4][23].