Investment Rating - The report maintains a rating of "Buy" for several key stocks in the construction materials sector, including Yao Pi Glass, Yinlong Co., Puxin Co., Sanjike Tree, and Beixin Building Materials [9]. Core Insights - The construction materials sector saw a 3.64% increase from December 22 to December 26, 2025, with notable gains in glass fiber manufacturing (10.06%) and glass manufacturing (5.04%) [1][13]. - The report emphasizes the importance of demand stabilization and the implementation of anti-involution policies, particularly in the context of housing policy adjustments in Beijing [1]. - The report highlights the ongoing challenges in the cement market, with a focus on the need for macroeconomic improvements, especially in the housing sector, to stimulate demand [2][18]. Summary by Sections Cement Industry Tracking - As of December 26, 2025, the national cement price index was 352.28 CNY/ton, a decrease of 0.26% from the previous week [2][18]. - The cement output for the week was 2.877 million tons, down 2.73% week-on-week, indicating a continued contraction in demand as temperatures drop and the Spring Festival approaches [2][18]. - The capacity utilization rate for cement clinker kilns was 37.42%, reflecting a decrease of 0.23 percentage points from the previous week [2][18]. Glass Industry Tracking - The average price of float glass as of December 25, 2025, was 1140.08 CNY/ton, with a weekly decline of 0.98% [3]. - Inventory levels for glass products increased, with a total of 55.33 million heavy boxes reported, up 38,000 boxes from the previous week [3]. Glass Fiber Industry Tracking - The market for non-alkali glass fiber remained stable, with average prices holding steady [7]. - Demand for glass fiber products has shown signs of weakness, with reduced purchasing intentions from downstream buyers [7]. Consumer Building Materials - The consumer building materials sector is experiencing a weak recovery, with prices for upstream materials like aluminum alloy and acrylic remaining stable [7]. - The report suggests that consumer building materials will benefit from favorable second-hand housing transactions and consumption stimulus policies [1]. Carbon Fiber Industry Tracking - The carbon fiber market price remained stable, with a weekly production of 2,392 tons and an operating rate of 79.47% [8]. - The industry continues to face challenges with profitability, as the average production cost was reported at 105,900 CNY/ton, leading to negative margins for many companies [8].

Investment Rating - The report maintains an "Accumulate" rating for the food and beverage industry [7]. Core Insights - The report emphasizes that the liquor industry is expected to see a full risk release by 2025, with a dual improvement in supply and demand anticipated in 2026. Short-term sales are expected to improve, particularly during the Spring Festival, while medium-term recovery in sales, pricing, and financial reports is also expected [2][4]. - The report highlights the impact of the EU's anti-subsidy measures, which are likely to accelerate domestic replacements in deep processing, particularly in the dairy sector. This is expected to create opportunities in the food sector as companies prepare for the Spring Festival [4][8]. - The beer sector is experiencing a slight decline in major markets like China and the US, but global beer consumption is projected to grow by 0.5% in 2024, indicating a potential for recovery [3]. Summary by Sections Liquor Industry - The report discusses the proactive measures taken by leading liquor companies to optimize supply and enhance sales channels. Notable companies like Guizhou Moutai and Wuliangye are focusing on product structure and market innovation [2]. - The report suggests that companies such as Luzhou Laojiao and Yanghe Brewery are well-positioned for short-term recovery due to supply improvements and strong brand positioning [2]. Beer and Beverage Sector - Global beer consumption is projected to reach approximately 19.41 billion liters in 2024, with a slight increase despite declines in major markets [3]. - The establishment of a subsidiary in Thailand by Xiangpiaopiao is noted as a strategic move to enhance overseas business development [3]. Food Sector - The report indicates that the EU's anti-subsidy measures on dairy products will likely benefit domestic producers, particularly in the context of the upcoming Spring Festival [4][8]. - Companies like Yili and Anjoy Foods are highlighted as potential beneficiaries of the market expansion driven by these policy changes [8].

Investment Rating - The report maintains a "Buy" rating for key companies in the environmental sector, including High Energy Environment, Huicheng Environmental, and Hongcheng Environment [5]. Core Insights - The environmental monitoring and waste management sectors are expected to benefit from new regulatory guidelines aimed at standardizing pollution prevention techniques in landfill operations. This includes strict monitoring and management protocols to ensure environmental safety [1][12]. - The carbon trading market has shown significant price fluctuations, with a notable increase in trading volume and value, indicating a growing interest and potential in carbon-related investments [2]. - The report highlights the importance of focusing on high-dividend yielding assets and companies with strong growth potential, particularly in the context of low macroeconomic interest rates [2]. Summary by Sections Regulatory Developments - The Ministry of Ecology and Environment has proposed a technical guideline for pollution prevention in landfill excavation, emphasizing the need for standardized practices to mitigate secondary pollution [1][12]. - A joint announcement from the Market Supervision Administration and the Ministry of Ecology and Environment outlines new requirements for ecological environment monitoring institutions, aimed at enhancing data integrity and accountability [13][23]. Market Performance - The environmental sector has underperformed compared to the broader market, with the environmental index showing a 0.90% increase, lagging behind the Shanghai Composite Index and the ChiNext Index [3][28]. - Specific sub-sectors within the environmental industry, such as monitoring and solid waste management, have shown varying performance, with monitoring up by 4.21% [28]. Key Companies and Recommendations - High Energy Environment is recognized for its strong market position in hazardous waste management and resource recovery, with a focus on expanding its project portfolio [27]. - Huicheng Environmental is noted for its technological advancements in hazardous waste projects and its significant growth potential in the waste plastic recycling market [27]. - Hongcheng Environment is highlighted for its consistent dividend payouts and robust growth trajectory, making it an attractive investment option [27]. Investment Opportunities - The report suggests that the current low valuation and historical low levels of institutional holdings in the environmental sector present a favorable investment opportunity [24]. - Companies with strong technical capabilities and cash flow, as well as those benefiting from carbon neutrality initiatives, are recommended for investment [2][24].

Quantitative Models and Construction Methods Model Name: China Securities A500 Index - **Model Construction Idea**: The China Securities A500 Index aims to provide a balanced industry representation and incorporate ESG exclusion criteria to enhance the sustainability and resilience of its constituent stocks[2][21]. - **Model Construction Process**: 1. **Sample Space**: The index includes A-shares and depositary receipts issued by red-chip companies that meet specific criteria, such as not being ST or *ST securities, having been listed for more than a quarter, and being part of the Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect[21]. 2. **Exclusion Criteria**: Securities with a China Securities ESG rating of C or below are excluded[22]. 3. **Selection Criteria**: Securities are selected based on their market capitalization, liquidity, and industry representation to ensure a balanced distribution across sectors[22]. 4. **Final Selection**: The index includes 500 securities, with a focus on large-cap, highly liquid stocks, and aims to reflect the performance of the most representative listed companies in each industry[21][22]. - **Model Evaluation**: The inclusion of ESG criteria significantly optimizes the risk-return characteristics of the index, enhancing its investment value by reducing volatility and increasing excess returns[24][27]. Model Backtesting Results - **China Securities A500 Index**: - **Expected Annual Return**: 12.9%[9] - **Annualized Volatility**: Lower compared to the benchmark index after ESG exclusion[24] - **Correlation with Other Assets**: Low correlation with Hong Kong stocks, US stocks, commodities, gold, and bonds, making it suitable for risk diversification[17][19] - **Excess Return**: Significantly higher than the benchmark index after ESG exclusion[24] Quantitative Factors and Construction Methods Factor Name: ESG Exclusion - **Factor Construction Idea**: The ESG exclusion factor aims to enhance the sustainability and resilience of the index by excluding companies with poor ESG ratings[2][21]. - **Factor Construction Process**: 1. **ESG Rating**: Companies with a China Securities ESG rating of C or below are excluded from the index[22]. 2. **Selection Criteria**: The remaining companies are selected based on their market capitalization, liquidity, and industry representation[22]. - **Factor Evaluation**: The ESG exclusion factor significantly improves the risk-return profile of the index, reducing volatility and increasing excess returns[24][27]. Factor Backtesting Results - **ESG Exclusion Factor**: - **Annualized Return**: 3.96% for the China Securities 500 ESG Benchmark Index compared to 2.42% for the China Securities 500 Index[24] - **Annualized Volatility**: Lower for the ESG Benchmark Index compared to the standard index[24] - **Maximum Drawdown**: Lower for the ESG Benchmark Index compared to the standard index[24] Additional Information - **Index Characteristics**: The China Securities A500 Index includes large-cap, highly liquid stocks with a balanced representation of new and traditional economies, focusing on sectors such as electronics, electric power equipment and new energy, banking, non-ferrous metals, and pharmaceuticals[31][33][35]. - **Index Valuation and Profitability**: The index's current valuation is not high, with significant room for upward valuation adjustment. The expected earnings growth is high, making it a cost-effective investment[45][47]. Fund Information - **Fund Name**: China Securities A500 ETF - **Fund Objective**: To closely track the target index, minimizing tracking deviation and tracking error[51]. - **Fund Manager**: Managed by Mr. Li Jun, who has extensive experience in managing passive index products[53]. - **Fund Performance**: The fund has been operating steadily since its inception, closely tracking the performance of the China Securities A500 Index[54]. Fund Manager Information - **Asset Management Scale**: China Asset Management's scale continues to grow, ranking among the top in the industry with a comprehensive product line[57]. References - [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report Since mid - to late November, long - term bonds, especially ultra - long bonds, have undergone significant adjustments, possibly due to banks' selling under year - end duration indicator constraints. The mismatch between banks' asset and liability durations has intensified, with some state - owned banks' bank book interest rate risk indicators approaching regulatory limits. In 2026, the regulatory standards for bank book interest rate risk are likely to be adjusted. Possible adjustment methods include lowering the interest rate shock amplitude, relaxing regulatory indicator upper limits, and using special treasury bonds to supplement primary capital. It is expected that the probability of lowering the shock amplitude and issuing special treasury bonds to supplement capital next year is relatively high, and the indicator pressure will be alleviated compared to this year [1][2][4]. 3. Summary by Directory 3.1 Bank Book Interest Rate Indicator Regulatory Policy Evolution After the 2008 international financial crisis, the importance of bank account interest rate risk management became prominent. In 2009, the CBRC issued the "Guidelines for the Management of Commercial Bank Account Interest Rate Risk". In 2016, the Basel Committee on Banking Supervision released standards for bank book interest rate risk. In 2017, China comprehensively revised the 2009 guidelines. In July 2024, the Basel Committee revised the bank book interest rate shock scenario, to be officially implemented on January 1, 2026, with the "parallel upward" shock amplitude for interest rates adjusted from 250BP to 225BP [8][9]. 3.2 State - owned Banks' ΔEVE/Net Primary Capital Approaching the Upper Limit Banks divide financial assets into TPL, AC, and OCI accounts. AC and OCI accounts, mainly for allocation, face bank book interest rate risk management indicators. Due to the shortening of liability duration and the lengthening of asset duration, the mismatch between banks' asset and liability durations has intensified. In 2024, the ΔEVE/Net Primary Capital of Agricultural Bank of China (-14.31%), Industrial and Commercial Bank of China (-14.71%), and China Construction Bank (-14.73%) was close to the - 15% regulatory limit [10][19]. 3.3 How to Alleviate Bank Book Interest Rate Risk? - **2025 Risk Calculation**: Calculate the 2025 year - end ΔEVE based on the increment of AC and OCI financial investments and their growth rate; calculate the 2025 year - end estimated value of primary capital based on the cumulative year - on - year growth rate from Q3 2025 to Q3 2024; then calculate the theoretical value of ΔEVE/primary capital for each major bank. It is expected that the indicators of Agricultural Bank, Industrial and Commercial Bank, and China Construction Bank will exceed the 15% regulatory red line, and the indicators of Agricultural Bank, Industrial and Commercial Bank, China Construction Bank, and Bank of China will deteriorate marginally in 2025 [22]. - **2026 Possible Measures**: - **Lowering Interest Rate Shock Amplitude**: Lower the parallel upward shock amplitude of RMB in the IRRBB standard by 25BP from January 1, 2026. Static calculations based on 2025 forecast data show that the regulatory buffer space of △EVE/Net Primary Capital increases by 1.3%, and it can support large - scale banks to undertake 30 - year government bonds worth 649 billion yuan. For 5 - year and 10 - year bonds, the supportable scales are 2.8 trillion yuan and 1.3 trillion yuan respectively [2][23]. - **Relaxing Regulatory Indicator Upper Limits**: Static calculations based on 2025 forecast data show that when the regulatory indicator is raised by 1%, the regulatory buffer space of △EVE/Net Primary Capital can support large - scale banks to undertake 30 - year government bonds worth 484 billion yuan. For 5 - year and 10 - year bonds, the supportable scales are 2.0612 trillion yuan and 968.9 billion yuan respectively. If the regulatory indicator is raised by 2%, the supportable incremental scales for 5 - year, 10 - year, and 30 - year government bonds are 4.1225 trillion yuan, 1.9379 trillion yuan, and 968 billion yuan respectively [3][24][26]. - **Supplementing Primary Capital with Special Treasury Bonds**: This year, 50 billion yuan of special treasury bonds have been issued to support state - owned large - scale banks to supplement capital. If Agricultural Bank and Industrial and Commercial Bank each have 25 billion yuan of primary capital increase next year, based on the △EVE/primary capital regulatory requirement of 15%, the △EVE released by the 50 billion yuan of supplementary primary capital can support large - scale banks to undertake incremental scales of 5 - year, 10 - year, and 30 - year government bonds of 1.0166 trillion yuan, 477.9 billion yuan, and 238.7 billion yuan respectively. It is less likely to raise the regulatory threshold of "ΔEVE/primary capital" in IRRBB, while it is more likely to lower the interest rate shock amplitude and issue additional special treasury bonds to supplement capital. After these measures, the pressure on IRRBB in 2026 is expected to be alleviated compared to this year [3][4][28].

Group 1 - The core viewpoint of the report emphasizes that the next phase will be characterized by policy adjustments, structural changes, and differentiation in the market [1] - The overall sales volume of new and second-hand homes has not stabilized, with a notable decline in land acquisition activity [8][20] - The report indicates that the total sales area of commercial housing in China from January to October 2025 was 720 million square meters, a year-on-year decrease of 6.8%, while the sales amount reached 6.9 trillion yuan, down 9.6% year-on-year, reverting to levels seen in 2015 [9][10] Group 2 - In 2025, land transaction volumes continued to shrink from a low base, with the total land transfer area for residential use in 300 cities decreasing by 11.7% year-on-year [26] - The report highlights that the land market showed a high concentration in major cities, with the top ten cities accounting for nearly 50% of the total land transaction value [33] - The average premium rate for land transactions has shown a downward trend, dropping to 2.5% in November 2025, the lowest level of the year [29] Group 3 - The inventory of new homes remains at historically high levels, with the de-stocking cycle extending beyond previous peaks, particularly in third-tier cities where the de-stocking period has reached 46 months [39][43] - The report notes that the de-stocking pressure is particularly pronounced in second and third-tier cities, with a significant number of cities exceeding the warning line for inventory levels [40][41] - The report indicates that the effective inventory boundary is influenced by price elasticity, suggesting that even "ineffective inventory" can be converted into actual sales through reasonable discounts [34]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [5] Core Insights - The company is a rare EPCOS one-stop service provider in the distribution network sector, expected to benefit from the long-term development of the new power system [1][14] - The demand for distribution network construction is anticipated to grow significantly as China promotes the new power system, with a projected investment of 321.6 billion yuan in 2024, a 10% increase year-on-year [2][23] - The company aims to establish 1,000 and 3,000 solar charging stations by 2027 and 2030, respectively, with the potential to contribute 350 million yuan in annual profit from 1,000 stations [3][41] Summary by Sections Company Overview - The company, established in 2007, has evolved into a comprehensive power service provider, extending its services to power engineering, equipment supply, and energy management [14][15] - It has developed a cloud platform that enhances its capabilities across five professional areas, covering six business segments including substations, solar/wind energy, energy storage, charging stations, digital energy, and power grids [1][14] Industry Analysis - The new power system in China emphasizes green, flexible, digital, and energy-efficient characteristics, with the distribution network serving as a core platform for user-side upgrades [2][23] - The distribution network investment is expected to increase, with a focus on integrating distributed renewable energy sources and electric vehicle charging facilities [2][23] Highlight 1: Solar Charging Stations - The company has a strong foundation in charging stations, energy storage, and substations, promoting the "solar + storage + charging" model [3][41] - The solar charging stations are designed to reduce costs through solar power generation and energy storage, aiming to create a comprehensive energy ecosystem [3] Highlight 2: Energy Management System - The company has established an "Energy Management System" that integrates artificial intelligence and IoT technologies, serving over 80,000 devices and various energy networks [4] - The microgrid business is projected to generate 115 million yuan in revenue in 2024, accounting for 5.9% of total revenue [4] Highlight 3: Financial Improvement - The company has been actively reducing accounts receivable, leading to improved cash flow, with a projected net inflow of 490 million yuan in 2024 [4] - The asset-liability ratio is steadily decreasing, with cash reserves expected to exceed 1.5 billion yuan by the end of 2024, representing 37% of the company's market value [4]

Investment Rating - The report maintains an "Accumulate" rating for the electricity industry [1] Core Insights - In November, the total electricity consumption in China increased by 6.2% year-on-year, with a cumulative electricity consumption of 94,602 billion kilowatt-hours from January to November, reflecting a 5.2% year-on-year growth [2][9] - The growth in electricity consumption was primarily driven by the tertiary industry and urban-rural residential electricity usage, with significant contributions from the charging and battery swapping services, as well as the information transmission, software, and IT services sectors [3][15] - Electricity production in November showed steady growth, with notable increases in wind and solar energy output [4][25] Summary by Sections Electricity Consumption - In November, the national total electricity consumption reached 8,356 billion kilowatt-hours, marking a 6.2% year-on-year increase [2][9] - The first industry saw a stable growth in electricity demand, with November's consumption increasing by 7.9% year-on-year, and a cumulative growth of 10.3% from January to November [3][15] - The second industry's electricity consumption growth slowed, with a 4.4% year-on-year increase in November and a cumulative growth of 3.7% [3][15] - The third industry exhibited strong growth, with a 10.3% year-on-year increase in November, driven by significant contributions from the charging services and IT sectors [3][15] Electricity Production - In November, the industrial electricity production was 7,792 billion kilowatt-hours, reflecting a 2.7% year-on-year increase, with an average daily production of 25.97 billion kilowatt-hours [4][25] - The report highlights a shift in the production mix, with industrial coal-fired electricity experiencing a decline of 4.2%, while hydropower grew by 17.1%, and both nuclear and solar power saw accelerated growth [4][28] Investment Recommendations - The report suggests focusing on high-dividend coal-fired power leaders and companies with stable electricity prices and coal-electricity integration, such as Huaneng International, Huadian International, and Datang Power [4][47] - It also recommends attention to wind and solar sectors, including Xintian Green Energy and Longyuan Power, as well as gas sector leaders like Chengran and New Hope Energy [4][47]

Investment Rating - The report initiates coverage with a "Buy" rating for the company, considering its leadership in the exterior and structural components sector and ongoing expansion into new products and customers [3]. Core Insights - The company is a leading global supplier of automotive exterior and body structure components, with a diversified business model that includes metal trims, plastic parts, aluminum components, and battery boxes for electric vehicles [1][14]. - The battery box business is highlighted as a key growth driver, with a projected revenue CAGR of 173% from 2020 to 2024, and it is expected to account for 27% of total revenue by the first half of 2025 [2][3]. - The company is actively expanding into emerging sectors such as humanoid robotics, liquid cooling for AI servers, and low-altitude flying vehicles, which are expected to contribute to long-term growth [3][11]. Summary by Sections 1. Company Overview - The company has over 30 years of experience in the automotive parts industry and serves more than 70 leading automotive manufacturers globally, with overseas revenue increasing from 41% in 2021 to 65% in the first half of 2025 [1][14]. - The business structure is continuously optimized, with the battery box segment becoming the largest revenue source [1][2]. 2. Business Performance - The traditional exterior parts business remains robust, with steady growth driven by lightweight and intelligent upgrades [2]. - The aluminum product segment is benefiting from the automotive lightweight trend, with a projected revenue CAGR of 12% from 2020 to 2024 and a maintained gross margin above 30% [1][2]. 3. Financial Projections - The company expects to achieve net profits of 2.81 billion, 3.44 billion, and 4.07 billion RMB for the years 2025, 2026, and 2027, respectively, reflecting year-on-year growth rates of 21%, 22%, and 18% [3][5]. - The projected P/E ratios for 2025, 2026, and 2027 are 13x, 11x, and 9x, respectively, indicating a favorable valuation as the company scales its operations [3][5]. 4. Emerging Business Opportunities - The company is entering new markets such as humanoid robotics and AI server cooling, with strategic partnerships established to enhance its product offerings [3][11]. - Collaborations with companies like EHang for low-altitude flying vehicles and Siemens for wireless charging systems are part of the company's strategy to diversify its revenue streams [3][11].

Group 1: Livestock Industry - The pig industry is currently in a phase of deep losses, with supply contraction expected to continue into the first half of 2026, leading to a significant reduction in production capacity. The average pig price for 2025 is projected to be below the cost line, with quarterly estimates of 15.5 CNY/kg, 13.5 CNY/kg, 16.4 CNY/kg, and 17.7 CNY/kg, resulting in an annual average of approximately 13.4 CNY/kg [11][25][26] - The white chicken market is experiencing a cautious outlook, with a projected supply growth of less than 5% for 2026. The decline in the sales of commodity broiler chicks indicates a more conservative price expectation within the industry [30][35] - The yellow chicken sector remains stable, with production capacity not significantly affected. The prices are expected to follow trends in other protein sources, with a focus on seasonal price increases [39] - The beef market is anticipated to see a price increase due to a clear reduction in both domestic and international supply. The wholesale price of beef has been rising, reaching 66.21 CNY/kg in December, reflecting a year-on-year increase of 9.1% [42][70] Group 2: Agricultural Inputs and Other Sectors - The feed industry is showing signs of recovery, with a 6.6% year-on-year increase in feed production for the first three quarters of 2025, indicating improved demand from the livestock sector [71][76] - The edible mushroom sector is witnessing a rebound, particularly with the reversal of the predicament faced by enoki mushrooms and the potential growth of new products like Cordyceps [3][80] - The pet industry continues to thrive, with a notable trend towards high-end domestic products, as evidenced by the performance of brands like Guibao Pet and Zhongchong Co. [4][63] - The natural sweetener market is expected to grow as consumer awareness of sugar reduction increases, with companies like Bailong Chuangyuan and Baolingbao positioned to benefit from this trend [4][71]