Investment Rating - The report maintains a "Positive" investment rating for the basic chemical industry, specifically for the spandex sector [5]. Core Insights - The spandex industry is expected to improve as supply and demand dynamics optimize due to accelerated capacity clearance. The report highlights the potential for recovery in spandex prices and profitability for leading companies with significant domestic capacity and cost advantages [3][43]. Supply Side Summary - The spandex industry is at the end of its expansion phase, with domestic capacity increasing from 593,900 tons in 2015 to 1,420,000 tons by January 2026, with major players like Huafeng Chemical leading the market [8][20]. - Since 2019, over 200,000 tons of capacity from small and medium enterprises have been shut down, leading to a concentration of supply among leading companies [26]. - The industry has faced prolonged negative gross margins since May 2023, indicating financial difficulties for many companies, which may lead to further exits from the market [29][41]. Demand Side Summary - Spandex demand is projected to grow significantly, driven by trends in activewear and tight-fitting clothing. The apparent consumption of spandex is expected to rise from 510,000 tons in 2017 to 1,027,000 tons by 2024, with a CAGR of 10.51% [33][35]. - The demand for spandex is primarily concentrated in the apparel sector, which accounts for 76% of total usage, with applications in leisurewear, jeans, underwear, and swimwear [33][34]. Supply-Demand Balance Summary - The supply-demand balance for the domestic spandex industry is improving, with limited new capacity expected and ongoing pressure on existing capacity. The anticipated demand growth from the activewear trend is expected to support this balance [40][41]. Investment Recommendations - The report recommends investing in leading companies with price and volume elasticity, specifically Huafeng Chemical (002064, Buy), Taihe New Materials (002254, Buy), and Xinxiang Chemical Fiber (000949, Not Rated). The potential profit increases from spandex price rises are highlighted, with significant earnings boosts projected for these companies [3][43][44].

Investment Rating - The report maintains a "Positive" outlook for the defense and military industry [4] Core Insights - The report emphasizes the importance of commercial aerospace and the progress of domestic large aircraft international certification [2] - The European Union Aviation Safety Agency (EASA) has begun flight testing the C919, which is expected to accelerate the global expansion of China's commercial aviation [11] - The aerospace work conference highlighted the need to break through reusable rocket technology, which is anticipated to accelerate the development of China's commercial aerospace industry [12] - The report continues to favor investment opportunities in commercial aerospace, military trade, and new quality combat capabilities [14] Summary by Sections 1.1 EASA Flight Testing of C919 - EASA has initiated flight evaluations of the C919 in Shanghai, indicating that the aircraft's performance is good and safe, with minor adjustments needed [11] - This certification is crucial for the C919 to enter international markets and compete with Boeing and Airbus, potentially reshaping the global civil aviation market [11] 1.2 Breakthrough in Reusable Rocket Technology - The aerospace work conference emphasized the importance of advancing reusable rocket technology and developing commercial aerospace and low-altitude economies [12] - The focus on low-orbit satellite constellations is seen as a new arena for major powers in space competition, with significant implications for satellite manufacturing, launching, and operations [13] 1.3 Continued Focus on Investment Opportunities - The report suggests that the "14th Five-Year Plan" will enhance the military sector's value, with a focus on unmanned and anti-unmanned equipment, deep-sea technology, and combat informationization [14] - The military sector is expected to see growth from both civilian and military trade, with a list of recommended stocks for investment opportunities in various segments [14][15]

Investment Rating - The report maintains a positive outlook on the non-ferrous metals industry [6] Core Viewpoints - The report indicates that negative feedback is intensifying, leading to potential price fluctuations. As industrial product prices rise, domestic downstream negative feedback is increasing, resulting in accelerated inventory accumulation. Recent margin increases by CME and SHFE for certain products may lead to significant short-term price volatility in industrial metals. However, the overall bullish trend for industrial products remains unchanged under the expectation of supportive policies [3][9] Summary by Sections 1. Cycle Assessment - Liquidity expectations are reverting, which does not hinder the long-term bullish logic. Recent statements from Trump favoring Hassett for the National Economic Council position have increased market expectations for the new Fed chair. The probability of a Fed rate cut in April has dropped to 30%. This has led to potential price fluctuations in precious metals due to a weakened narrative around short-term rate cuts [9][13] 2. Industry and Stock Performance - The non-ferrous metals sector rose by 3.03% in the week ending January 16, ranking third among all industries [18] 3. Precious Metals - Short-term narratives around rate cuts are faltering, leading to potential price volatility in precious metals. As of January 16, SHFE gold rose by 2.57% to 1,032.32 CNY per gram, while COMEX gold increased by 2.62% to 4,590.00 USD per ounce. The report notes that the People's Bank of China increased its gold reserves to 7,415 million ounces, marking a continuous increase for 14 months [14][29] 4. Copper - The report highlights that negative feedback is intensifying, leading to increased price volatility for copper. As of January 16, SHFE copper fell by 0.63% to 100,770 CNY per ton, while LME copper decreased by 1.50% to 12,803 USD per ton. The report also notes a significant increase in global visible copper inventory [17][28] 5. Aluminum - The aluminum processing sector shows resilience, with profitability per ton of aluminum expected to remain high. As of January 16, SHFE aluminum fell by 1.66% to 23,925 CNY per ton. The report indicates that the average profit for the aluminum industry is around 7,868 CNY per ton [16][89]

Investment Rating - The report maintains a positive outlook on the non-ferrous metals industry [6] Core Viewpoints - The report indicates that negative feedback is intensifying, leading to potential price fluctuations. As industrial product prices rise, domestic downstream negative feedback is increasing, resulting in accelerated inventory accumulation. Recent margin increases by CME and SHFE for certain products may lead to significant short-term price volatility in industrial metals. However, the overall bullish trend for industrial products remains unchanged under the support of domestic and international policies [3][9] Summary by Sections 1. Cycle Assessment - Liquidity expectations are rebounding, which does not hinder the long-term bullish logic. Recent statements from Trump favoring Hassett for the National Economic Council chair have increased market expectations for the next Federal Reserve chair. The probability of a rate cut in April has dropped to 30%. This may lead to price fluctuations in precious metals due to the weakened short-term rate cut narrative. In the industrial sector, as prices rise, negative feedback from domestic downstream is intensifying, and inventory is accumulating rapidly [9][13] 2. Industry and Stock Performance - The non-ferrous metals sector rose by 3.03% in the week ending January 16, ranking third among all industries [18] 3. Precious Metals - Short-term rate cut narratives are challenged, leading to potential price fluctuations in precious metals. For the week ending January 16, SHFE gold rose by 2.57% to 1,032.32 CNY per gram, while COMEX gold increased by 2.62% to 4,590.00 USD per ounce. SHFE silver surged by 20.03% to 22,483.00 CNY per kilogram, and COMEX silver rose by 12.30% to 89.19 USD per ounce [14][15][29] 4. Copper - Negative feedback is intensifying, leading to increased price volatility for copper. For the week ending January 16, SHFE copper fell by 0.63% to 100,770 CNY per ton, while LME copper decreased by 1.50% to 12,803 USD per ton. The supply side remains tight, and the transmission to the smelting end is approaching [17][28] 5. Aluminum - The processing operation remains resilient, and the profit per ton of aluminum is expected to stay high. For the week ending January 16, SHFE aluminum fell by 1.66% to 23,925 CNY per ton, while LME aluminum decreased by 0.06% to 3,134 USD per ton. The processing operation rate slightly increased to 60.2%, with overall inventory accumulating [16][89]

Investment Rating - The report maintains a "Positive" investment rating for the non-ferrous and steel industry in China [6]. Core Views - The report emphasizes the strategic opportunities in industrial metals, suggesting a focus on this sector as the global trend of de-globalization deepens and the technological attributes of strategic metals increase. With copper prices approaching 100,000, it is seen as a favorable time for strategic allocation in industrial metals [9][14]. - The zinc sector is highlighted as an overlooked basic material in the context of de-globalization, with improving supply-demand dynamics expected to drive prices higher. The report notes that the recent decline in zinc smelting fees indicates ongoing supply tightness, and there is optimism regarding demand from re-industrialization in Asia, Africa, and Latin America [9][14]. - The copper sector is viewed positively, with short-term price fluctuations not affecting the upward trend in equities. The report anticipates improvements in copper prices and smelting fees due to supply constraints and upcoming mine restarts [9][15]. - The aluminum sector is expected to benefit from geopolitical concerns, with China's electrolytic aluminum industry poised to enjoy valuation premiums due to its supply chain security and competitive advantages [9][16]. Summary by Sections Industrial Metals - The report suggests focusing on industrial metals as the market sentiment cools, with potential investment opportunities emerging [9][14]. - Zinc is identified as a critical material with a positive outlook due to supply-demand improvements and infrastructure needs in developing regions [9][14]. - Copper is expected to see price stability and profit improvements for smelting companies as major mines plan to resume operations [9][15]. - Aluminum is projected to experience steady growth in profitability, supported by supply chain advantages and rising demand for aluminum as a substitute for copper [9][16]. Steel Industry - The steel sector is currently facing a weak fundamental backdrop as it approaches the seasonal low around the Spring Festival, with expectations for policy measures to support the industry [17]. - Steel production has seen a slight decrease, with rebar consumption increasing by 8.79% week-on-week, indicating a marginal strengthening in demand [22][17]. - Inventory levels show a divergence between social and steel mill stocks, with total steel inventory slightly increasing [24]. - Steel prices have generally seen a minor increase, with the overall price index rising by 0.15% [36]. New Energy Metals - Lithium carbonate production in December 2025 saw a significant year-on-year increase of 69.09%, indicating strong supply growth in the new energy sector [40]. - The demand for new energy vehicles remains robust, with production and sales showing substantial year-on-year growth [44]. - Prices for lithium and cobalt have risen, reflecting the increasing demand and supply dynamics in the new energy metals market [49][50].

Investment Rating - The report maintains a "Positive" outlook for the non-ferrous and steel industry in China [6] Core Views - Continuous focus on strategic opportunities in industrial metals is emphasized, with a recommendation to concentrate on the industrial metal sector as the market sentiment cools and volatility increases [9][14] - The zinc sector is highlighted as an overlooked foundational material in the context of de-globalization, with expectations for price increases due to improving supply-demand dynamics [9][14] - The copper sector is viewed positively in the medium term, with expectations for price and smelting fee improvements despite short-term fluctuations [9][15] - The aluminum sector is expected to benefit from supply chain security and competitive advantages, leading to potential valuation premiums [9][16] Summary by Sections Industrial Metals - The report suggests that industrial metals are entering a favorable strategic allocation period as copper prices approach 100,000 [9][14] - Zinc is expected to see price increases driven by demand from re-industrialization in Asia, Africa, and Latin America, despite domestic construction concerns [9][14] - Copper prices are anticipated to improve due to supply constraints, with significant copper mines expected to resume production in 2026 [9][15] - The aluminum sector is projected to experience steady profit growth due to enhanced supply chain security and rising aluminum prices [9][16] Steel Industry - The steel industry is facing a weak fundamental outlook as it approaches the seasonal low around the Spring Festival, with expectations for policy measures to support the sector [17] - Weekly rebar consumption increased by 8.79% week-on-week, indicating a marginal strengthening in demand [22] - Steel production saw a slight decrease, with iron output down by 0.65% and rebar production down by 0.39% [19][22] - Steel prices have shown a slight increase, with the overall steel price index rising by 0.15% [36] New Energy Metals - Lithium carbonate production in December 2025 saw a significant year-on-year increase of 69.09%, indicating strong supply growth [40] - The demand for new energy vehicles remains robust, with production and sales showing substantial year-on-year growth [44] - Prices for lithium and cobalt have risen significantly, reflecting strong market demand [49][51]

Core Views - The market is returning to a healthy state, and a steady oscillation is essential for long-term sustainability, with a focus on mid-cap blue chips and themes aligned with national strategies [10][11]. Market Analysis - The index experienced a pullback after a high this week, confirming the expectation of a stable market after a short-term emotional release. The regulatory body's work meeting outlined five key tasks for 2026, reinforcing confidence among domestic and international investors and stabilizing the current downward trend in market risk assessment [3][11]. - The regulatory body's precise management of market expectations has effectively mitigated the risk of a market frenzy, leading to a shift in risk preferences. High-risk investors are likely to lower their risk appetite, while low-risk investors are gaining confidence, resulting in an overall movement towards a balanced risk preference [3][11]. Industry Comparison - The report emphasizes a focus on mid-cap blue chips, particularly in the cyclical chemical sector. The previous trends in technology and dividends are seen as reaching their peak, with future investment opportunities expected to arise in stocks with moderate risk characteristics. The mid-cap blue chip market is anticipated to rise, especially in the chemical sector, where profit improvements are expected due to optimized supply structures and marginally improving demand [12][3]. Thematic Investments - Attention is directed towards the semiconductor, robotics, and aerospace satellite sectors. The semiconductor industry is experiencing an upward shift in expectations, with TSMC's positive outlook potentially leading to a revaluation of the sector. Domestic wafer manufacturers are expected to expand production this year, and the capital processes of domestic memory chip leaders are advancing, aligning with national strategies for self-sufficiency [13][3]. - In robotics, significant industry milestones are anticipated in the first quarter, including the release of Tesla's V3 version and its mass production by year-end. The robotics sector is also expected to gain visibility during major events like the Spring Festival [4][13]. - The aerospace satellite sector remains a key focus for national support, with expectations for progress in catching up with international advancements. Investment should focus on companies with genuine performance release expectations or those significantly involved in national aerospace initiatives [4][13]. - The nuclear fusion sector is projected to experience a series of industrial catalysts, transitioning from theoretical research to engineering practice, which is expected to generate substantial investment demand in the future [14][3]. - Short-term price increases are anticipated, with structural growth in demand and supply constraints providing upward price elasticity for related commodities, particularly in non-ferrous metals and chemicals [14][3].

Investment Rating - The report maintains a "Positive" outlook for the coal industry [5] Core Insights - The coal industry is shifting from scale expansion to quality improvement, with companies actively promoting integration and restructuring [3][8] - Despite concerns about seasonal price trends in the coal industry from March to May, the report suggests that the bottom of the long-term cycle has been reached, with potential for an upward trend [3] - Short-term price rebounds for thermal coal and coking coal are expected, indicating a potential recovery in market sentiment [3] - The restructuring efforts in the coal sector are expected to enhance the competitiveness of quality listed companies in the future [3] Summary by Sections Investment Suggestions and Targets - The long-term fundamentals of the coal industry are expected to improve, highlighting the value of sector allocation [3] - Domestic production capacity is anticipated to decrease, and imports are expected to contract, indicating a potential upward trend in the coal sector [3] - The report notes that both thermal coal and coking coal prices have stopped declining and are showing signs of recovery [3] Industry Fundamentals - The report indicates a significant recovery in coal mine operating rates, with independent coking plants beginning seasonal restocking [22][31] - The average daily output of pig iron and the utilization rate of cement production capacity have shown a decline [24][26] - The report highlights that coal prices have continued to rise, although the upward trend has faced some resistance recently [13][15] Price Comparisons and Valuations - The coal sector has outperformed the CSI 300 index since the beginning of 2026, with a reported increase of 3.1% [8] - The price-to-book ratio (PB) for the coal sector is at 1.45 times, indicating a historically low valuation compared to the broader market [8]

Investment Rating - The report maintains a "Positive" investment rating for the agriculture industry [5] Core Insights - The report highlights that the recovery in pig prices is driven by inventory replenishment, with prices expected to reach a turning point in Q2 2026 [2][12] - The report emphasizes the structural growth trends in the post-cycle sector, indicating that if the current round of pig production capacity reduction proceeds smoothly, profits in the industry chain are likely to gradually transmit downstream [3][35] Summary by Sections Pig Farming Sector - The report forecasts a significant recovery in pig prices, with the national average price reaching 13 CNY/kg by January 18, 2026, following a structural supply shortage [12] - The report notes that the market's pessimistic expectations regarding pig prices are likely to be corrected, as the supply side shows structural shortages and the average weight of pigs remains at historical lows [9][12] Poultry Sector - White feather broiler prices have shown a slight decline, with the average price at 7.59 CNY/kg as of January 16, 2026, reflecting limited increases in slaughter volumes and rising inventory levels among processing enterprises [16] - Yellow feather broiler prices are expected to remain strong, with price differentials among different types of chickens widening [21] Feed Sector - The report indicates that raw material prices for feed are stabilizing at the bottom, with corn prices rising to 2363.92 CNY/ton and wheat prices at 2515.89 CNY/ton as of January 16, 2026 [25][43] - The demand side shows strong pricing from traders, with some deep processing enterprises increasing purchase prices [25] Investment Recommendations - The report recommends focusing on the pig farming sector, with specific stocks such as Muyuan Foods (002714) and Wens Foodstuff Group (300498) being highlighted for potential investment [3][35] - It also suggests opportunities in the planting chain and pet food sectors, with companies like Suqian Agricultural Development (601952) and Pet Food Company (301498) being noted [3][35]

Investment Rating - The investment rating for the automotive and parts industry is maintained at Neutral [5] Core Insights - The report emphasizes the ongoing preheating of Optimus V3, with a strong expectation for its release in Q1 2026, suggesting continued attention on core suppliers of T robots [12][15] - A new proposal in the U.S. Congress aims to significantly increase the deployment cap for autonomous vehicles, which could facilitate the large-scale rollout of Cybercab services [13] - The Ministry of Industry and Information Technology (MIIT) has set a directive to accelerate breakthroughs in autonomous driving technology, indicating a potential speed-up in the commercialization of high-level autonomous driving [14] Summary by Sections Investment Recommendations and Targets - The report suggests that the high-level autonomous driving supply chain and companies that can secure entry into the Tesla and other robot supply chains will benefit. Competitive domestic brands and companies leading in autonomous driving technology are expected to continue expanding their market share. Key sectors to watch include humanoid robots, liquid cooling supply chains, T chains, and autonomous driving companies [3][15][16] Sales Tracking - According to preliminary statistics, from January 1 to 11, 2026, the wholesale sales of passenger cars in China were 381,000 units, a year-on-year decrease of 40%, while retail sales were 328,000 units, down 32% year-on-year [17] Market Performance - The automotive sector outperformed the Shanghai and Shenzhen 300 index, with the commercial vehicle sector showing strong performance [31][33]