Investment Rating - The industry investment rating is maintained as "Positive" [5] Core Viewpoints - The recent significant drop in gold and silver prices is attributed to the end of silver short squeeze trading, leading to a release of short-term volatility. The mid-term outlook for gold prices remains bullish, with expectations of support around the $4000 level [8] - The market anticipates potential easing of geopolitical tensions, particularly regarding the Russia-Ukraine conflict, which has influenced market sentiment. However, the report suggests that the primary cause of the recent price drop is related to trading dynamics rather than changes in expectations [8] - The report highlights that the high U.S. fiscal deficit and ongoing debt issues will continue to drive investor interest in gold, supporting a mid-term upward trend in gold prices [8] Summary by Sections Market Dynamics - On October 21, gold prices experienced a significant decline, with London gold dropping by 6.3% to $4002.89, marking the largest single-day drop since April 2013. This was primarily due to the end of a silver short squeeze and subsequent market adjustments [8] - The report notes that the implied volatility of gold has decreased following the price drop, indicating a potential stabilization phase for gold prices in the near future [8] Price Analysis - Historical price movements are analyzed, showing that gold reached a high of $4381 on October 20, with expectations of support at the $4000 level. Previous significant corrections in April are referenced to illustrate potential price behavior [8] - The report suggests that if gold prices decline further, the risk-reward ratio for investing in gold may improve, indicating a favorable investment opportunity [8] Investment Recommendations - The report recommends focusing on leading global copper and gold mining companies, particularly Zijin Mining (601899), which is expected to see significant growth in copper production by 2026 [8]

Economic Growth and Investment Trends - The economy grew by 5.2% in the first three quarters of the year, aligning with expectations (consensus forecast of 5.1%), with a target of 5% for the entire year[6] - Fixed asset investment has turned negative year-on-year, indicating a significant decline in real estate development investment, which has been consistently negative and worsening as of September[6] - The current investment growth rate is at a historical low, with a 40 percentage point decrease in "expansion" compared to the end of last year, primarily due to the impact of long-term special government bonds[6] Consumer Spending and Stability - Consumer spending remains stable, with a year-on-year decline of 0.1 percentage points, which is crucial for achieving annual targets[6] - Retail sales of household appliances and audio-visual equipment saw a significant drop to 3.3% year-on-year in September, down 11 percentage points from the previous value[6] - The service sector production index maintained a year-on-year growth of 5.9% from January to September, indicating resilience in service consumption despite pressure on domestic demand[6] Manufacturing and Export Performance - The industrial added value for large-scale enterprises remained stable year-on-year, with a monthly increase of 1.3 percentage points compared to the previous value[6] - The mining and manufacturing sectors showed improvement, with exports increasing by 3.8% year-on-year in September, a significant recovery from a previous decline[6] - High-tech industries reported a year-on-year increase of 10.3% in added value, marking the highest level in six months[6] Future Outlook and Risks - There are concerns about internal demand pressures exceeding previous market forecasts, which may intensify in Q4, suggesting caution in growth expectations for the fourth quarter[6] - The introduction of new counter-cyclical policies, including a new 500 billion yuan policy financial tool, indicates ongoing support for achieving the 5% growth target[6] - Risks include potential fluctuations in external demand due to tariffs and trade issues, as well as employment pressures from rapid changes in certain industry dynamics[6]

Group 1: Economic Risks - The U.S. economy is facing deterioration, with the manufacturing PMI recorded at 49.1, remaining below the 50 mark for seven consecutive months[12] - The small business optimism index fell to 98.8 in September, below the expected value of 100.8, indicating a cooling trend in sales and credit expectations[12] - The consumer confidence index for October is at 55, down from 55.1, reflecting weak consumer sentiment towards the economic outlook[12] Group 2: Financial Risks - U.S. financial market liquidity is currently tight, with significant concerns following the credit failures of two small banks, leading to a 6.2% drop in the regional bank stock index[17] - The overall corporate debt level in the U.S. is manageable, with the non-financial corporate sector's leverage ratio at 73.7%, and corporate debt growth at approximately 1.7%, below historical averages[22] - The bad debt ratio for various loans has stabilized or declined, indicating a potential improvement in asset quality[22] Group 3: Policy Responses - The Federal Reserve is expected to initiate a new round of interest rate cuts in response to ongoing economic pressures, aligning with a global trend of fiscal and monetary easing[20] - The Fed's liquidity support tools are well-established, allowing for timely interventions to prevent systemic risks, even in the event of localized liquidity crises[20] - The recent tightening of liquidity is anticipated to ease, as the most significant pressures have passed, leading to a gradual stabilization of the financial system[20] Group 4: Market Trends - Risk assets have shown increased volatility, but significant downturns are unlikely, while safe-haven assets like gold are expected to continue their upward trend[11] - Gold prices have surged by 6.69% recently, reflecting heightened demand for safe-haven investments amid market uncertainties[35] - The U.S. dollar is losing its safe-haven status, with expectations of continued appreciation of non-U.S. currencies and gold against the dollar[29]

Report Industry Investment Rating - The report does not provide an industry investment rating [1][7] Core Viewpoints - After the holiday, the bond market continued to recover because the two reasons for the bond market adjustment in the third quarter had subsided: the deflation repair expectation was fully priced, and there was an expectation of regulatory policy loosening [6][9] - From the perspective of institutional behavior, if only the trading desks shift from defense to offense without the cooperation of allocation desks, the bond market recovery will not be significant. Last week, while the funding rate and Treasury bond rate both declined, the certificate of deposit (CD) rate rebounded from a low level, which is indicative of bank behavior and worthy of attention [6][9] - After the holiday, the issuance of CDs by various banks showed a simultaneous increase in volume and price, which may be due to two reasons: First, joint - stock banks and city commercial banks are more eager to catch up on CD issuance progress as their cumulative issuance scale is lower. Second, banks are pessimistic about their fourth - quarter asset - liability relationship, and large - scale banks are more likely to face this pressure [6][9] - If the first reason dominates, the CD issuance will be sensitive to the issuance price, and the primary market will shift from an increase in both volume and price to an increase in volume with stable or decreasing prices. If the second reason dominates, the CD issuance will be insensitive to the price, and the increase in both volume and price in the primary market will continue [6][10] - If the second situation dominates, it means that banks face significant asset - liability pressure, and their willingness to allocate bonds will not increase significantly, which will also affect the bond market recovery. Therefore, it is recommended to focus on the interest rate changes in the CD market. If the central bank strengthens its monetary policy to help solve banks' liability problems, bond yields are expected to decline more rapidly [6][10] Summary by Directory 1. Bond Market Weekly Viewpoint: Focus on CD Interest Rate Changes - The bond market continued to recover after the holiday due to the subsiding of the two factors causing the third - quarter adjustment. The analysis can refer to the previous report "The bond market will turn around in the fourth quarter, but it won't be an overnight success" [9] - The rebound of CD rates last week while other rates declined is worthy of attention as it reflects bank behavior [9] - The two possible reasons for the increase in CD issuance volume and price after the holiday are related to catching up on issuance progress and pessimistic asset - liability expectations [9] 2. This Week's Focus in the Fixed - Income Market: Interest - Bearing Bond Supply Reaches a High 2.1 Pay Attention to September Economic Data - This week, China will release September economic data and October LPR, while the US will release September seasonally - adjusted CPI and October University of Michigan Consumer Sentiment Index [16][17] 2.2 This Week's Interest - Bearing Bond Issuance Reaches around One Trillion - This week, the issuance scale of interest - bearing bonds is seasonally rising and is at a relatively high level compared to the same period in previous years, with a total issuance of about 1.0852 trillion yuan expected [17] - Treasury bonds: Four key - term general Treasury bonds with terms of 3, 5, 7, and 10 years are planned to be issued, with scales of 127 billion, 129 billion, 118 billion, and 149 billion yuan respectively. Three discount Treasury bonds with terms of 91, 91, and 182 days are also planned. The total Treasury bond issuance is expected to be around 688 billion yuan [18] - Local bonds: 79 local bonds are planned to be issued, with a total scale of 247.2 billion yuan, including new general bonds, new special bonds, refinancing general bonds, and refinancing special bonds [18][20] - Policy - bank financial bonds: The issuance is expected to be around 150 billion yuan [18] 3. Interest - Bearing Bond Review and Outlook: Narrowing of Term Spreads 3.1 Open - Market Operations Maintain Net Withdrawal - Reverse repurchases had a large - scale maturity, and open - market operations continued to have a net withdrawal. Last week, the net reverse - repurchase injection was 673.1 billion yuan, with a maturity volume remaining at a high level of around one trillion yuan. After a net withdrawal of 347.9 billion yuan from reverse - repurchases and a 150 - billion - yuan maturity of Treasury - deposit placements, the total net withdrawal from open - market operations was 497.9 billion yuan [21][22] - Funding rates mostly rebounded from a low level but remained in a loose range. The repurchase trading volume generally showed an upward trend, with a weekly average of over 8 trillion yuan, and the average overnight share was around 89.6%. In terms of price, funding rates rose from a low level and then declined, generally remaining stable [22] - CD issuance pressure increased, and secondary - market rates rebounded from a low level. From October 13th to October 19th, the issuance scale was 729.5 billion yuan (an increase of 513.6 billion yuan from the previous week), the maturity scale was 504.9 billion yuan (an increase of 369.9 billion yuan from the previous week), and the net financing was 224.7 billion yuan (an increase of 143.6 billion yuan from the previous week) [28] 3.2 Bond Market Sentiment Recovers - Last week, the bond market fluctuated around the expectation of Sino - US trade frictions. Coupled with the weakening of the equity market and lower - than - expected price and financial data, all were positive for the bond market recovery. The market's expectation of the subsequent issuance of new 30 - year Treasury bonds drove the narrowing of the spread between new and old bonds [42] - Finally, the yields of the 10 - year Treasury bond and the active - issue policy - bank bond changed by 0.4bp and - 2.1bp respectively to 1.75% and 1.91%. In terms of yields, term spreads narrowed, and long - end rates mostly declined [42] 4. High - Frequency Data: Weakening of Commercial Housing Transaction Data - On the production side, the operating rates were divergent. The blast - furnace operating rate remained flat at 84.3%, the semi - steel tire operating rate increased from 46.5% to 72.7%, the PTA operating rate decreased from 77.8% to 75.6%, and the asphalt operating rate increased from 34.5% to 35.8%. The year - on - year decline in the average daily crude - steel output in early October narrowed to - 3.5% [53] - On the demand side, the year - on - year growth rates of passenger - car manufacturers' wholesale and retail improved. In the week of October 12th, the year - on - year changes in manufacturers' wholesale and retail were - 0.5% and 6.7% respectively, an improvement from - 21% and - 18% in the previous week. The year - on - year growth rate of commercial housing transaction area weakened again. In the week of October 12th, the land premium rate in 100 large - and medium - sized cities declined, and the year - on - year growth rate of land transaction area was significantly negative. The sales area of commercial housing in 30 large - and medium - sized cities remained at a low level, and the year - on - year growth rate declined to a low of - 42%. In terms of export indices, the SCFI and CCFI composite indices changed by 12.9% and - 4.1% respectively [53] - On the price side, crude - oil prices continued to decline, copper and aluminum prices decreased, coal prices were divergent, the building - materials composite price index decreased, the cement and glass indices declined, rebar production decreased, inventory remained volatile at 4.56 million tons, and the futures price changed by - 2%. In the downstream consumption sector, vegetable, fruit, and pork prices changed by 2.4%, 0.3%, and - 3.9% respectively [54]

Investment Rating - The report maintains a "Positive" investment rating for the non-ferrous and steel industry in China [6]. Core Viewpoints - The report emphasizes the importance of future positioning rather than past defensive strategies, suggesting that investors should focus on opportunities for excess returns in the upcoming year [9][15]. - Gold prices are expected to experience high volatility in the short term but are projected to reach new highs in the medium term due to credit and safe-haven demand [16]. - The rare earth sector is anticipated to maintain its strategic importance despite short-term price declines, with a widening supply-demand gap expected in the medium term [17]. - The copper market is viewed positively, with expectations of price increases in the medium term, encouraging investors to buy on dips [17]. Summary by Sections 1. Non-Ferrous Metals - Gold: Short-term volatility is high, but medium-term prospects are strong with expectations of new highs supported by credit and safe-haven demand [16]. - Rare Earths: Short-term price declines do not diminish the medium-term strategic position, with an anticipated widening supply-demand gap [17]. - Copper: Strong medium-term price outlook, with a recommendation to buy on dips due to expected economic recovery and increased manufacturing investment [17]. 2. Steel Industry - Profitability: Short-term profitability is under pressure, with both prices and costs declining [28]. - Supply and Demand: Weekly rebar consumption decreased to 2.2 million tons, down 8.84% week-on-week and 14.77% year-on-year [24][18]. - Inventory: Both social and steel mill inventories have increased, indicating a potential oversupply situation [25]. - Prices: The overall steel price index has slightly decreased, with specific products like hot-rolled steel experiencing a notable drop [38]. 3. New Energy Metals - Supply: Significant increase in lithium production, with August 2025 output reaching 80,040 tons, up 46.54% year-on-year [42]. - Demand: High growth in new energy vehicle production and sales, with August 2025 figures showing a 26% increase year-on-year [48]. - Prices: Lithium prices have risen, with battery-grade lithium carbonate averaging 75,750 yuan per ton, reflecting a 3.55% week-on-week increase [55].

Investment Rating - The report maintains a "Positive" investment rating for the defense and military industry in China [5] Core Viewpoints - The military trade market in China is continuously expanding, with significant developments such as Indonesia's procurement of the J-10 fighter jet, indicating a rapid growth in the military trade market scale [11] - The "Qianfan Constellation" satellite network has resumed operations after a 7-month hiatus, with the recent launch of 18 satellites, suggesting an acceleration in low-orbit satellite deployment [12] - The current market conditions show stabilization in military sector stock prices, with a focus on domestic demand and the upcoming "14th Five-Year Plan" which is expected to clarify new equipment construction plans [16][17] Summary by Sections Investment Suggestions and Targets - The report highlights several investment targets within the military electronics sector, including: - Aerospace Electric (002025, Buy) - Zhonghang Optics (002179, Buy) - Aerospace Electronics (600879, Not Rated) - In the new quality and domain sector, notable mentions include: - Haige Communication (002465, Buy) - New Light Optoelectronics (688011, Increase Holding) - For the engine chain, key targets include: - West Superconducting (688122, Buy) - Huqin Technology (688281, Increase Holding) - In military trade and main equipment, companies like AVIC Shenyang Aircraft (600760, Not Rated) are highlighted [17]

Investment Rating - The investment rating for the company is "Buy" with a target price of 43.69 CNY, based on a PE valuation of 17X for comparable companies in 2026 [3][5]. Core Views - The company is expected to benefit from rising gold and copper prices, with a solid foundation for performance growth due to resource expansion [2][10]. - The forecasted earnings per share for 2025-2027 are 1.84, 2.57, and 3.01 CNY, respectively, reflecting an upward adjustment from previous estimates [3]. - The company’s revenue is projected to grow significantly, with a 30.5% increase in 2025, followed by 18.4% in 2026 and 7.6% in 2027 [4][10]. Financial Performance Summary - Revenue (CNY million): 293,403 in 2023, projected to reach 396,103 in 2025, 468,920 in 2026, and 504,583 in 2027, with year-on-year growth rates of 8.5%, 30.5%, 18.4%, and 7.6% respectively [4]. - Operating profit (CNY million): Expected to grow from 31,937 in 2023 to 73,287 in 2025, and 103,328 in 2026, with significant growth rates of 52.9% in 2024 and 50.1% in 2025 [4]. - Net profit attributable to the parent company (CNY million): Forecasted to increase from 21,119 in 2023 to 48,860 in 2025, and 68,199 in 2026, with growth rates of 51.8% in 2024 and 52.4% in 2025 [4]. - Gross margin is expected to improve from 15.8% in 2023 to 22.5% in 2025, and net margin from 7.2% to 12.3% in the same period [4]. Market Performance - The company's stock price as of October 17, 2025, is 30.17 CNY, with a 52-week high of 32.65 CNY and a low of 14.67 CNY [5]. - The company has shown strong absolute performance over various time frames, including a 59.43% increase over three months and a 79.97% increase over twelve months [6].

Report Summary 1. Report Industry Investment Rating No industry investment rating information is provided in the report. 2. Core Views of the Report - The convertible bond market had a poor profit - making effect last week. Although the underlying stocks fell sharply, there was no panic selling in convertible bonds. The valuation declined, and it is likely to remain at the current level or slightly compress. [7][10] - In an environment where pure bonds are weak and the demand for convertible bonds exceeds the supply, convertible bonds are still relatively high - quality assets. The short - term structural opportunities are greater than the trend opportunities, and the instrumental attribute of convertible bonds has become stronger. The cashing pressure continues, and the key to the subsequent trend lies in the equity market. One should seize structural opportunities and buy on dips to bet on rebounds. [7][10] - This week, the market was significantly pressured by events such as Sino - US tariffs. The main stock indices closed down, and the capital style switched in the short term. The A - share market is expected to maintain an oscillating upward trend, and the slow - bull pattern remains unchanged. [7][10] - This week, convertible bonds followed the decline of the equity market. The average daily trading volume decreased significantly to 68.844 billion yuan. The CSI Convertible Bond Index fell 2.35%, the parity center decreased by 3.0% to 109.3 yuan, and the conversion premium rate center increased by 1.7% to 21.2%. AAA - rated convertible bonds performed well this week, while high - price and low - rated convertible bonds performed weakly. [7][18] 3. Summary According to the Directory 3.1 Convertible Bond Views: Cashing Pressure Remains, but the Correction is Still Controllable - The convertible bond market's current information is neutral. The subsequent trend depends on the equity market. One should grasp structural opportunities and buy on dips to bet on rebounds. The cashing pressure continues, but the correction is controllable. [7][10] 3.2 Convertible Bond Review: Convertible Bonds Followed the Equity Market Downward, and the Valuation Retracement was Limited 3.2.1 Market Overall Performance: Affected by Both Domestic and Foreign Factors, All Indices Closed Down - From October 13th to 17th, affected by both domestic and foreign factors, the main indices closed down. The Shanghai Composite Index fell 1.47%, the Shenzhen Component Index fell 4.99%, the CSI 300 fell 2.22%, the CSI 1000 fell 4.62%, the ChiNext Index fell 5.71%, the STAR 50 fell 6.16%, and the Beijing Stock Exchange 50 fell 4.91%. [15] - In terms of industries, banking, coal, and food and beverage led the gains, while electronics, media, and automobiles led the losses. The average daily trading volume decreased by 407.953 billion yuan to 2.19 trillion yuan. [15] - The top ten convertible bonds in terms of gains last week were Tongguang, Liugong, Yanpai, etc. In terms of trading volume, Guanchong, Yuguang, Huicheng, etc. were relatively active. [15] 3.2.2 Trading Volume Shrunk Significantly, and High - Rated Convertible Bonds Performed Well - This week, convertible bonds followed the equity market down. The average daily trading volume decreased significantly to 68.844 billion yuan. The CSI Convertible Bond Index fell 2.35%, the parity center decreased by 3.0% to 109.3 yuan, and the conversion premium rate center increased by 1.7% to 21.2%. [18] - In terms of style, AAA - rated convertible bonds performed well this week, while high - price and low - rated convertible bonds performed weakly. [18]

Group 1 - The core view of the report emphasizes that the 2-3 year medium-rated entities remain suitable for investment, balancing both defensive and offensive strategies. Current high-grade, short-duration spreads have compressed to very low levels, with some high liquidity central enterprises' valuations nearly indistinguishable from similar-term government bonds, indicating limited room for further compression [6][9]. - The report notes that the absolute yield attractiveness of high-grade, medium-term spreads has diminished, with most spreads now below 2.2%. There are still some medium to low-rated entities yielding between 2.15% and 2.3% that can be explored, as evidenced by recent performance [6][9]. - The report highlights that the credit bond market's attention is currently low, with a strong preference for controlling duration and maintaining liquidity, leading to weak buying power. The focus remains on 2-3 year medium-rated entities [6][9]. Group 2 - The weekly review indicates a rebound in issuance volume post-holiday, with net financing increasing to 184.7 billion yuan, marking a return to levels close to 200 billion yuan after a two-month period [11][13]. - The report states that credit spreads across various grades and maturities have continued to narrow, with the average spread compression around 1-3 basis points, while low-rated and long-term bonds remained stable [11][17]. - The report also mentions that the average credit spread for city investment bonds has narrowed by approximately 4 basis points, with minimal differentiation among provinces, while industry credit spreads have also contracted by 3 basis points [22][23].

Economic Growth and Technology - The current U.S. economic growth is increasingly driven by technology investments, particularly in AI, with GDP growth potentially remaining relatively high[5] - AI-related capital expenditures have surged, accounting for approximately 34% of total private investment and contributing 0.6% to GDP, the highest level since the 2000 tech boom[11] - Construction spending related to AI has shown significant growth, with annualized spending on data centers reaching about $41 billion, representing 0.14% of GDP[14] Employment Trends - The U.S. is experiencing a "no job growth" phenomenon, where employment growth lags behind economic growth, indicating a structural issue in the labor market[29] - Employment risks have exceeded expectations, with recent data suggesting a near-recession state, as non-farm payrolls added only 22,000 jobs in August[29] - Historical comparisons indicate that "no job growth" may become a norm, similar to past economic cycles in 1991, 2001, and 2010[34] Productivity and Inflation - Labor productivity has improved slightly, with a nearly 6% increase since the introduction of ChatGPT in 2022, but this has not translated into job growth[42] - Insufficient wage growth is expected to limit inflationary pressures, with unit labor costs rising only about 2%, aligning with the Federal Reserve's inflation target[45] Market Dynamics - Technology stocks have significantly outperformed the broader market, with major AI companies' market capitalization rising from 15% to nearly 30% of the S&P 500[48] - Current indicators suggest that the AI sector remains in an expansion phase, but there are signs of declining free cash flow among tech giants, indicating potential structural risks[53] Policy Implications - The macroeconomic environment will play a crucial role in shaping the future of the tech cycle, with ongoing policy support potentially benefiting the AI narrative[67] - The report highlights the importance of monitoring macroeconomic conditions, as the sustainability of the AI narrative depends on overall economic performance[56]