- The report introduces a valuation deviation model for convertible bonds, defined as "Pricing Deviation = Convertible Bond Price / CCBA Model Pricing - 1", which measures the valuation level of the convertible bond market. As of January 16, 2026, the pricing deviation indicator reached 12.83%, placing it at the 99.9th percentile since 2018 and 2021, indicating historically high valuation levels[6][10][15] - A rotation strategy between convertible bonds and a stock-bond portfolio is constructed based on the pricing deviation model. The Z-score is calculated as "Z = Pricing Deviation / 3-Year Standard Deviation", truncated at ±1.5 standard deviations, and then divided by -1.5 to derive a score. Convertible bond weight is determined as "50% + 50% × Score", with the remaining allocation to the stock-bond portfolio. This strategy achieves stable excess returns during periods of undervaluation in the convertible bond market[10][13][14] - A low-valuation strategy is developed using the CCB_out pricing model, which incorporates delisting risk. The pricing deviation is calculated as "Pricing Deviation = Convertible Bond Price / CCB_out Model Pricing - 1". The strategy selects the 15 convertible bonds with the lowest deviation in each of the biased-debt, balanced, and biased-equity categories, forming a pool of 45 bonds. The strategy achieves an annualized return of 20.8% and an excess return of 8.9% since 2018[21][23][24] - A low-valuation + strong momentum strategy combines the pricing deviation factor with a stock momentum factor, using equal-weighted scores of stock momentum over the past 1, 3, and 6 months. This strategy achieves an annualized return of 24.7% and an excess return of 12.4% since 2018[24][26][27] - A low-valuation + high-turnover strategy selects the lowest 50% of convertible bonds based on pricing deviation and further filters for high turnover using turnover rate factors (5-day and 21-day turnover rates for both convertible bonds and stocks). This strategy achieves an annualized return of 23.7% and an excess return of 11.5% since 2018[27][28][30] - A balanced biased-debt enhanced strategy selects the lowest 50% of convertible bonds based on pricing deviation, excluding biased-equity bonds. It applies turnover rate and stock momentum factors for biased-debt bonds and turnover rate factors for balanced bonds. This strategy achieves an annualized return of 22.6% since 2018, with a return of 16.7% in 2023[30][32][33] - A credit bond substitution strategy screens convertible bonds where "Convertible Bond YTM + 1% > 3-Year AA Credit Bond YTM". The strategy selects the top 20 convertible bonds with the strongest 1-month stock momentum, limits individual bond weights to 2%, and allocates the remaining portfolio to credit bonds. This strategy achieves an annualized return of 7.1% since 2018, with volatility and drawdowns below 3%[33][34][35] - A volatility control strategy selects the top 15 convertible bonds with the highest scores in low-valuation + strong momentum across biased-debt, balanced, and biased-equity categories, forming three enhanced strategies. It combines these with credit bonds and controls portfolio volatility at 4%. This strategy achieves an annualized return of 9.6% since 2018, with volatility and drawdowns around 4%-5%[35][36][38]

Investment Rating - The report maintains a "Buy" rating for Chow Tai Fook [5] Core Insights - Chow Tai Fook reported a significant acceleration in retail value growth for FY2026Q3, with a year-on-year increase of 17.8%. Retail values in mainland China, Hong Kong, Macau, and other markets grew by 16.9%, 22.9%, and 14.3% respectively, indicating an improving jewelry consumption atmosphere [1][2] - The company is actively optimizing its product and channel strategies, with a focus on enhancing store performance and expanding e-commerce. The same-store sales in mainland China increased by 21.4% for direct stores and 26.3% for franchise stores, benefiting from strong e-commerce growth [1][2] - Chow Tai Fook's e-commerce business saw a retail value increase of 25.3%, accounting for 7.4% of mainland retail value and 17.0% of sales volume, driven by successful promotional events and IP collaborations [1] Financial Performance - For FY2026, Chow Tai Fook is expected to achieve a revenue growth of 3.8% to HKD 93.03 billion and a net profit growth of 28.1% to HKD 7.575 billion. The projected earnings per share (EPS) for FY2026 is HKD 0.77, with a price-to-earnings (P/E) ratio of 18 times [2][4] - The company anticipates continued revenue growth of 4% in FY2026, with net profit expected to reach HKD 8.559 billion in FY2027 and HKD 9.646 billion in FY2028 [2][4] Market Expansion - Chow Tai Fook is pursuing global expansion, focusing on optimizing channels in mature markets while gradually entering new markets with growth potential. The company reported a 22.9% increase in retail value in Hong Kong, with Macau showing a remarkable growth of 31.3% [2][4]

Quantitative Models and Construction Methods 1. Model Name: CCBA Pricing Deviation Model - **Model Construction Idea**: The model measures the valuation level of convertible bonds by calculating the pricing deviation, which reflects the difference between the market price and the theoretical price derived from the CCBA model[6] - **Model Construction Process**: The pricing deviation is calculated as: $ \text{Pricing Deviation} = \frac{\text{Convertible Bond Price}}{\text{CCBA Model Price}} - 1 $ This formula evaluates how much the market price deviates from the theoretical price. The CCBA model incorporates factors such as redemption probability adjustments[6][10] - **Model Evaluation**: The model effectively identifies valuation extremes in the convertible bond market, providing insights into market sentiment and potential risks[6][7] 2. Model Name: Convertible Bond & Stock-Bond Rotation Strategy - **Model Construction Idea**: This model uses the pricing deviation to determine the relative attractiveness of convertible bonds versus a stock-bond portfolio, enabling rotation between the two asset classes[10] - **Model Construction Process**: 1. Calculate the Z-score of the pricing deviation: $ Z = \frac{\text{Pricing Deviation}}{\text{3-Year Standard Deviation}} $ 2. Apply a ±1.5 standard deviation cap to the Z-score and normalize it: $ \text{Score} = \frac{Z}{-1.5} $ 3. Determine the convertible bond weight: $ \text{Convertible Bond Weight} = 50\% + 50\% \times \text{Score} $ 4. Allocate the remaining weight to the stock-bond portfolio (50% 7-10Y Treasury + 50% CSI 1000 Total Return Index)[10] - **Model Evaluation**: The strategy demonstrates stable excess returns by dynamically adjusting allocations based on valuation levels[10][13] 3. Model Name: Low Valuation Strategy - **Model Construction Idea**: This strategy selects convertible bonds with the lowest pricing deviation to construct a portfolio, aiming to capture undervalued opportunities[21] - **Model Construction Process**: 1. Use the CCBA_out model (CCBA model adjusted for delisting risk) to calculate pricing deviation: $ \text{Pricing Deviation} = \frac{\text{Convertible Bond Price}}{\text{CCBA_out Model Price}} - 1 $ 2. Select the 15 convertible bonds with the lowest pricing deviation from each of the three market segments (debt-heavy, balanced, equity-heavy), forming a pool of 45 bonds 3. Ensure bonds meet criteria such as a balance of over 300 million and a rating of AA- or above 4. Overweight undervalued segments and underweight overvalued ones[21] - **Model Evaluation**: The strategy achieves strong absolute and excess returns with high stability, even during challenging market conditions[21][24] 4. Model Name: Low Valuation + Strong Momentum Strategy - **Model Construction Idea**: Combines pricing deviation with stock momentum factors to enhance portfolio elasticity and returns[23] - **Model Construction Process**: 1. Use the pricing deviation factor from the CCBA_out model 2. Incorporate stock momentum factors based on the past 1, 3, and 6 months' momentum scores 3. Construct a portfolio by selecting bonds with strong momentum and low valuation[23] - **Model Evaluation**: The strategy delivers higher absolute and excess returns, with increased sensitivity to market trends[23][27] 5. Model Name: Low Valuation + High Turnover Strategy - **Model Construction Idea**: Focuses on convertible bonds with low valuation and high trading activity to capture liquidity-driven opportunities[27] - **Model Construction Process**: 1. Select the bottom 50% of convertible bonds based on pricing deviation 2. Within this pool, prioritize bonds with high turnover using metrics such as: - Convertible bond turnover rate (5-day and 21-day) - Ratio of convertible bond turnover to stock turnover (5-day and 21-day) 3. Construct the portfolio based on these criteria[27][30] - **Model Evaluation**: The strategy achieves robust absolute and excess returns, particularly in liquid market conditions[27][30] 6. Model Name: Balanced Debt-Enhanced Strategy - **Model Construction Idea**: Enhances returns by combining low valuation, turnover, and momentum factors, while excluding equity-heavy bonds[30] - **Model Construction Process**: 1. Select the bottom 50% of convertible bonds based on pricing deviation 2. Exclude equity-heavy bonds to form a debt-heavy pool 3. Apply turnover and momentum factors to the debt-heavy pool 4. For balanced bonds, use turnover factors only[30][33] - **Model Evaluation**: The strategy achieves high absolute returns with controlled volatility and drawdowns, making it suitable for risk-averse investors[30][33] 7. Model Name: Credit Bond Substitution Strategy - **Model Construction Idea**: Replaces convertible bonds with credit bonds when the yield-to-maturity (YTM) of convertible bonds exceeds that of 3-year AA-rated credit bonds by 1%[33] - **Model Construction Process**: 1. Screen convertible bonds with: $ \text{Convertible Bond YTM} + 1\% > \text{3-Year AA Credit Bond YTM} $ 2. Select the top 20 bonds with the highest 1-month stock momentum for allocation 3. Limit individual bond weight to a maximum of 2% 4. Use volatility control methods to reduce short-term drawdowns and allocate remaining weight to credit bonds[33][35] - **Model Evaluation**: The strategy achieves moderate absolute returns with low volatility and drawdowns, making it suitable for conservative investors[33][35] 8. Model Name: Volatility Control Strategy - **Model Construction Idea**: Combines low valuation and strong momentum factors with volatility control to maintain portfolio stability[35] - **Model Construction Process**: 1. Select the top 15 convertible bonds with the highest combined scores of low valuation and strong momentum from each market segment (debt-heavy, balanced, equity-heavy) 2. Combine these enhanced strategies with credit bonds 3. Use volatility control methods to cap portfolio volatility at 4%[35][38] - **Model Evaluation**: The strategy achieves stable absolute returns with low volatility and drawdowns, making it suitable for risk-averse investors[35][38] --- Model Backtest Results 1. CCBA Pricing Deviation Model - Pricing deviation as of January 16, 2026: 12.83%, at the 99.9th percentile since 2018 and 2021[6][10] 2. Convertible Bond & Stock-Bond Rotation Strategy - Current convertible bond premium: 12.83%[10] 3. Low Valuation Strategy - Annualized return: 20.8% - Excess return: 8.9% - Information ratio (IR): 1.51[24] 4. Low Valuation + Strong Momentum Strategy - Annualized return: 24.7% - Excess return: 12.4% - IR: 2.15[27] 5. Low Valuation + High Turnover Strategy - Annualized return: 23.7% - Excess return: 11.5% - IR: 1.85[30] 6. Balanced Debt-Enhanced Strategy - Annualized return: 22.6% - Volatility: 12.1% - Maximum drawdown: 13.9%[33] 7. Credit Bond Substitution Strategy - Annualized return: 7.1% - Volatility: <3% - Maximum drawdown: <3%[35] 8. Volatility Control Strategy - Annualized return: 9.6% - Volatility: 4.4% - Maximum drawdown: 4.4%[38]

Group 1: Market Overview - The report highlights a recent increase in consumer prices, with the Consumer Price Index (CPI) rising for four consecutive months, reaching its highest level since March 2023 [2][3] - The Producer Price Index (PPI) has shown a narrowing decline, with month-on-month increases for five consecutive months, indicating a potential shift in inflation dynamics [2][3] Group 2: Pet Industry Insights - The pet industry is projected to grow by 4.1% in market size by 2025, driven by an increase in pet ownership and spending per pet [4][5] - The number of dogs and cats is expected to rise by 1.8%, with average annual spending on dogs increasing by 1.5% and on cats by 3.2% [4] - The trend towards younger pet ownership is identified as a key driver for high-quality growth in the industry [4] Group 3: Consumer Behavior and Trends - There is a notable shift towards scientific feeding practices among pet owners, with 55.3% expressing a willingness to learn about proper nutrition [6] - The preference for wet food is increasing, with significant growth in various categories such as cat treats and dog food, indicating a trend towards premium pet products [6][7] - The demand for specialized pet food for different life stages and sizes is rising, particularly for senior and small breed dogs, reflecting a more tailored approach to pet care [7] Group 4: Company-Specific Analysis - Li Ning - Li Ning has entered a new product and marketing cycle following its signing with the Olympic Committee, which is expected to enhance brand strength [8][9] - The demand for sports footwear remains resilient, with a growing trend towards diversification and specialization in the market [8] - The company is projected to see a rebound in net profit from 27.42 billion to 33.02 billion from 2025 to 2027, with a corresponding increase in earnings growth rates [9]

Investment Rating - The report maintains a "Buy" rating for Li Ning [6] Core Insights - The signing of the Chinese Olympic Committee in the first half of 2025 marks the beginning of a new product and marketing cycle for Li Ning, with expectations for improved performance and stock price recovery in the medium to long term [1][14] - The company has faced pressure on its fundamentals due to fluctuations in the consumer environment, with a reported revenue of 14.8 billion yuan and a net profit of 1.7 billion yuan in the first half of 2025, reflecting a year-on-year change of +3.3% and -11% respectively [1][15] - The sportswear market is expected to grow, with the Chinese sports apparel market projected to reach 260.2 billion yuan by 2024, and a CAGR of 9% from 2025 to 2029 [2] Company Overview - Li Ning's short-term operations are experiencing fluctuations, but the fundamentals are expected to improve. The company has seen a decline in revenue and net profit since 2022, with a forecasted revenue of 28.7 billion yuan and a net profit of 3 billion yuan for 2024 [15] - The revenue structure is primarily wholesale, with 46% from wholesale, 23% from direct sales, and 29% from e-commerce as of the first half of 2025 [15] Industry Trends - The demand for sports footwear and apparel among residents is resilient, with increasing participation in sports leading to a diversified and professionalized market [2] - The report highlights the importance of the Olympic cycle in enhancing brand strength and increasing sponsorship in niche categories [2] Competitive Positioning - Li Ning is focusing on product optimization and enhancing brand strength during the Olympic cycle, with a significant increase in sponsorship for running and basketball categories [3] - The company is also expanding its outdoor product offerings and enhancing the diversity of its store inventory to drive revenue growth [3] Financial Forecast and Investment Recommendations - The forecast for net profit from 2025 to 2027 is 2.742 billion yuan, 2.901 billion yuan, and 3.302 billion yuan respectively, with growth rates of -9%, +5.8%, and +13.8% [4] - The current market capitalization corresponds to a PE ratio of 17 times for 2026, indicating potential for valuation improvement as the company's marketing strategies and product optimizations take effect [4]

Investment Rating - The report maintains an "Accumulate" rating for the pet industry [4] Core Insights - The pet industry is expected to grow at a rate of 4.1% in 2025, marking a transition to high-quality growth, with the market size reaching 312.6 billion yuan [9][10] - The number of pet dogs and cats is increasing, with a year-on-year growth of 1.8%, and the average annual spending per dog and cat is also rising [10][14] - The trend of younger pet owners is driving the industry towards high-quality development, with 90s and 00s generations becoming the main consumer groups [14] Summary by Sections 1. Industry Scale - The pet industry market size is projected to reach 312.6 billion yuan in 2025, growing by 4.1% compared to 2024 [9] - The dog market is expected to reach 160.6 billion yuan, while the cat market is projected to reach 152.0 billion yuan, with respective growth rates of 3.2% and 5.2% [9] - By 2028, the market size is anticipated to reach 405.0 billion yuan [9] 2. Market Dynamics - The market is characterized by a "stronger getting stronger" trend, with domestic brands gaining market share [20] - In the 2025 Double Eleven shopping festival, domestic brands accounted for over 70% of the market share, and the top 10 brands on Tmall reached a concentration ratio of 44% [20] - Online channels, particularly Tmall, remain the largest market, accounting for 29% of the total market share, while offline channels like pet stores and hospitals account for 33% [22] 3. Trends - There is a significant shift towards scientific feeding practices, with 55.3% of pet owners willing to learn about scientific feeding methods [40] - The trend of wet food consumption is accelerating, with notable growth in various categories such as cat freeze-dried food and dog baked food [40] - The demand for specialized pet food for different life stages and sizes is increasing, particularly for senior dogs, which saw a sales increase of 67% in 2024 [45]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - The recent price increase is structural and unlikely to have a trend - setting impact on interest rates. The central bank may keep monetary policy stable or make minor adjustments, and the bond market may recover after a short - term shock [5][16][35] Group 3: Summary Based on Related Content 1. Current Price Situation - In December 2025, CPI increased by 0.1 percentage points year - on - year to 0.8%, rising for 4 consecutive months to the highest level since March 2023. PPI's year - on - year decline narrowed, and its month - on - month figure was at or above zero for 5 consecutive months, reaching the highest level since September 2024 [1][8] 2. Structural Characteristics of Price Increase - **CPI**: Gold price increases have continuously pushed up CPI. The year - on - year growth rate of other supplies and services in CPI rose from 3% - 5% in 2024 to 5% - 17% in 2025, contributing 0.5 percentage points to the year - on - year CPI growth rate in December 2025. In the past two months, vegetable prices have also had a short - term impact, with the contribution to CPI year - on - year growth rising from about - 0.3% to 0.3% and 0.4% in November and December [2][9] - **PPI**: It is mainly driven by the non - ferrous metals industry. From August to December 2025, the cumulative month - on - month increases in PPI of non - ferrous metal mining and dressing and non - ferrous metal smelting and rolling processing industries were 14.9% and 8.7% respectively [2][9] 3. Impact of Price Increase on Interest Rates - **Lack of Impact on Corporate Profit and Financing Demand**: Although PPI has improved, corporate profits have not improved. In November 2025, the total profit of industrial enterprises decreased by about 13% year - on - year, so it is difficult to drive up corporate financing demand [3][17] - **Limited Monetary Policy Response**: The central bank's monetary policy has limited ability to regulate input - driven and industry - concentrated price increases. Referring to the situation of pork prices in 2019, the central bank may not respond significantly [4][17] 4. Historical Cases of Limited Impact of Structural Price Increase on Interest Rates - **2019 Pork Price Case**: In the second half of 2019, pork prices significantly pushed up CPI, but the central bank did not tighten monetary policy. Instead, it kept interest rates stable and even cut the MLF rate by 5bps in November 2019 [4][17] - **2021 Coal Price Case**: In 2021, coal prices soared due to supply - side factors, and PPI rose significantly. The central bank regarded it as a short - term cost shock, maintained normal monetary policy, and did not significantly raise the interest rate center [24][26]

Investment Rating - The report maintains a "Buy" rating for Li Ning Company [6] Core Views - The signing of the Chinese Olympic Committee in the first half of 2025 marks the beginning of a new product and marketing cycle for Li Ning, with potential for brand strength recovery and performance improvement [1][14] - Despite short-term pressures from fluctuating consumer environments, the company is positioned for a potential upward trend in stock price if revenue or profit improves in the medium to long term [1][4] Company Overview - Li Ning's revenue and net profit for the first half of 2025 are projected at 14.8 billion and 1.7 billion yuan, respectively, reflecting a year-on-year change of +3.3% and -11% [1][15] - The company has faced challenges since 2022, with a decline in brand revenue in the third and fourth quarters of 2025 [1][15] - The current channel structure is primarily wholesale, with revenue contributions of 46% from wholesale, 23% from direct sales, and 29% from e-commerce as of the first half of 2025 [15] Industry Trends - The demand for sports footwear and apparel among residents is resilient, with a projected market size of 260.2 billion yuan by 2024 and a CAGR of 9% from 2025 to 2029 [2] - The diversification and specialization of sports participation are becoming more pronounced, with increased demand for professional products driven by rising participation in running and social sports [2] Competitive Strength - The Olympic cycle is expected to enhance Li Ning's brand power and strengthen sponsorship in niche categories [2][3] - The company is focusing on professional running shoes and outdoor products, which are anticipated to contribute to revenue growth [3][4] Product Insights - In the first half of 2025, the revenue breakdown by category is as follows: running (34%), basketball (17%), training (16%), and sports lifestyle (29%), with running and training categories showing a growth of 15% each [3][15] - Li Ning is emphasizing the development of running shoes and enhancing the technological attributes of its training series [3] Channel Insights - As of the first half of 2025, Li Ning operates 4,821 franchise stores and 1,278 direct stores, with plans to open new store types focusing on Olympic and outdoor series products [3] - E-commerce revenue grew by 7% year-on-year to 4.3 billion yuan, accounting for 29% of total revenue, indicating a stable growth strategy in this channel [3] Profit Forecast and Investment Recommendations - The projected net profits for Li Ning from 2025 to 2027 are 2.742 billion, 2.901 billion, and 3.302 billion yuan, with growth rates of -9%, +5.8%, and +13.8%, respectively [4][5] - The current market capitalization corresponds to a PE ratio of 17 times for 2026, suggesting potential for valuation improvement as the company's Olympic marketing strategy and product optimization continue [4]

Investment Rating - The report maintains a "Buy" rating for the company [3][6]. Core Insights - The company is expected to achieve a net profit attributable to shareholders of 2.735 billion to 3.282 billion yuan for the year 2025, representing a year-on-year increase of 50% to 80% [1]. - The company's Q4 2025 net profit is projected to be between 1.529 billion and 2.076 billion yuan, showing a year-on-year growth of 30.5% to 77.1% and a quarter-on-quarter increase of 117.2% to 194.9% [1]. - The increase in user activity on the company's website and app, along with the growing demand from financial clients, has led to a rise in advertising and internet promotion service revenue [1]. - The number of new A-share accounts opened in 2025 has exceeded that of 2024, reaching 27.44 million, a year-on-year increase of 9.8% [2]. - The A-share trading volume for 2025 is expected to grow by 63.3% year-on-year, reaching 420 trillion yuan [2]. - The company is investing in artificial intelligence and has developed a benchmark for evaluating large language models in financial scenarios, enhancing its product competitiveness [3]. Financial Projections - The projected revenues for 2025, 2026, and 2027 are 6.458 billion, 8.303 billion, and 10.299 billion yuan respectively, with corresponding net profits of 2.972 billion, 3.925 billion, and 4.991 billion yuan [3][5]. - The earnings per share (EPS) for 2025 is estimated at 5.53 yuan, with a projected price-to-earnings (P/E) ratio of 64.7 [5][6].

Investment Rating - The report maintains a "Buy" rating for Anta Sports [5] Core Views - Anta Sports is expected to have stable operations in 2025, with a focus on long-term multi-brand performance [1] - The company anticipates a revenue growth of over 10% in 2026, despite a slight decline in net profit margin [3] - The report highlights the strong performance of the Fila brand and other brands, with significant growth expected in the outdoor segment [2][3] Summary by Sections Anta Brand Performance - In Q4 2025, Anta brand revenue is expected to decline by a low single-digit percentage year-on-year, attributed to a weak domestic consumption environment and the late timing of the Chinese New Year [1] - The inventory turnover ratio for Anta is projected to be slightly above 5, indicating a healthy inventory level [1] Fila Brand Performance - Fila brand revenue is expected to grow in the mid-single digits year-on-year in Q4 2025, with a faster growth rate compared to Q3 [2] - The report anticipates double-digit growth for Fila's e-commerce sales during major promotional events [2] Other Brands Performance - Other brands under Anta are projected to see a revenue growth of 35% to 40% in Q4 2025, with strong brand presence in the high-end outdoor market [2] - The report indicates that Maia Active is also expected to perform well in Q4 2025 [2] Financial Projections - For 2025, the company is projected to achieve a revenue of approximately 785.64 billion yuan, with a net profit of around 13.2 billion yuan, reflecting an 11% increase from 2024 [3] - The expected net profit for 2026 is forecasted to be 14 billion yuan, representing a 6.4% growth [3] Valuation Metrics - The report adjusts profit forecasts for 2025-2027, estimating net profits of 131.94 billion yuan, 140.35 billion yuan, and 159.37 billion yuan respectively [3] - The projected P/E ratio for 2026 is 15 times [3]