Investment Rating - The report maintains a "Recommended" rating for the machinery industry, indicating a positive outlook for investment opportunities in this sector [2]. Core Insights - The machinery industry is experiencing a strong start in 2026, with excavator sales in January reaching 18,708 units, a year-on-year increase of 49.5%. Domestic sales grew by 61.4%, while exports increased by 40.5% [8]. - The North American tech giants are expected to continue significant capital expenditures in 2026, which will likely sustain demand for AIDC infrastructure [8]. - The report emphasizes the potential for a new recovery cycle in the equipment industry, driven by monetary and fiscal policies aimed at boosting domestic demand [8]. Summary by Sections Key Company Earnings Forecasts, Valuation, and Investment Ratings - Companies such as 汇川技术 (Inovance Technology), 法兰泰克 (Falan Tech), and 信捷电气 (Xinjie Electric) are rated as "Strong Buy" with projected EPS growth and favorable PE ratios [3]. - For example, 汇川技术 is expected to have an EPS of 2.11 yuan in 2025, with a PE ratio of 35.41, indicating strong growth potential [3]. Industry and Company Investment Views - The report highlights the ongoing recovery in the excavator market, with significant growth in both domestic and export sales, driven by infrastructure projects and demand in mining and forestry sectors [8]. - The report suggests focusing on companies like 三一重工 (Sany Heavy Industry) and 徐工机械 (XCMG) due to their strong market positions and growth prospects [8]. Key Data Tracking - The report provides insights into macroeconomic indicators, including a 5.3% increase in the absolute performance of the machinery sector over the past month, indicating a positive trend [6]. - The machinery sector's total market capitalization is reported at 63,677.25 billion yuan, reflecting its significant role in the overall market [5].

Investment Rating - The report assigns a strong buy rating for Coherent, anticipating a performance that will exceed the benchmark index by more than 20% in the next six months [44]. Core Insights - Coherent achieved record revenue of $1.69 billion in FY2026Q2, with a quarter-over-quarter growth of 7% and a year-over-year growth of 17%. The Non-GAAP gross margin improved to 39%, with a Non-GAAP diluted EPS of $1.29, reflecting an 11% quarter-over-quarter increase and a 35% year-over-year increase [3][7]. - The data center and communication segment accounts for over 70% of total revenue, with a year-over-year growth of 34% in Q2. The data center business saw a 36% increase, driven by strong demand for 800G and 1.6T transceivers [8][9]. - The company expects FY2026Q3 revenue to be between $1.7 billion and $1.84 billion, with a Non-GAAP gross margin forecasted between 38.5% and 40.5% [10]. Summary by Sections FY2026Q2 Performance Overview - Coherent reported a strong performance in FY2026Q2 with total revenue reaching a record $1.69 billion, a 7% increase from the previous quarter and a 17% increase year-over-year. Excluding revenue from the recently divested aerospace and defense business, revenue growth was 9% quarter-over-quarter and 22% year-over-year. The Non-GAAP gross margin was 39%, with a Non-GAAP operating margin of 19.9% and a diluted EPS of $1.29 [3][7]. Business Segment Performance 1. **Data Center and Communication Segment** - This segment is the core growth driver, contributing over 70% of total revenue. In Q2, revenue grew 34% year-over-year, with the data center business growing 36% due to strong demand for 800G and 1.6T transceivers. The communication business also performed well, with a 44% year-over-year increase [8][9]. 2. **Industrial Segment** - After excluding the recently divested aerospace and defense business, the industrial segment saw a 4% quarter-over-quarter growth and remained flat year-over-year. The semiconductor industry orders significantly increased in Q2, indicating potential for growth in the upcoming quarters [9]. FY2026Q3 Guidance - Coherent anticipates FY2026Q3 revenue between $1.7 billion and $1.84 billion, including $5 million from the Munich product division before its sale. The Non-GAAP gross margin is expected to be between 38.5% and 40.5%, with total operating expenses projected between $320 million and $340 million [10].

1. Report Industry Investment Rating - No information provided regarding the industry investment rating. 2. Core Viewpoints of the Report - The market value of convertible bonds held by public funds remains at a high level, and the increase at the beginning of the year is in line with expectations. The convertible bond market shows strong resilience, and convertible bond funds perform relatively well among various types of funds. [1][9] - The bottom - position style is stable, and the heavily - held bonds of funds continue to perform well. However, there may be profit - taking in convertible bonds of popular sectors, and they may underperform the underlying stocks. [2] - In terms of convertible bond strategies, the overall position should be maintained with prudent neutrality, and the elastic allocation should be shifted towards balance. [3] 3. Summary According to the Table of Contents I. How did institutional bonds perform after public funds increased their holdings at the beginning of the year? - The market value of convertible bonds held by public funds in Q4 2025 was 308.251 billion yuan, a year - on - year increase of 7.24%. In January 2026, the scale of convertible bonds held by public funds increased by 6.88% compared with the end of 2025, accounting for 44.08%. [9] - In the first week of February, the convertible bond market showed strong anti - decline ability, rising 0.05% against the trend. Convertible bond funds outperformed ordinary stock - type funds and hybrid funds. The higher the proportion of convertible bonds in the fund, the stronger the anti - decline performance. [14] - Bonds heavily held by institutions showed stronger resilience in the first week of February. For example, convertible bonds of bottom - position types such as Industrial Bank and Shanghai Commercial Bank rose 0.72% on average, 0.67 percentage points higher than the convertible bond index. [18] - Convertible bonds of popular sectors such as electronics, non - ferrous metals, and computers may have profit - taking, and they underperformed the underlying stocks to varying degrees. For example, Weice Convertible Bond and Dingjie Convertible Bond had significant callbacks. [20] II. Convertible Bond Strategy: Maintain a Prudent and Neutral Position, and Shift Elastic Allocation towards Balance - Affected by the nomination of Warsh as the Fed Chairman, the A - share market adjusted in the first half of the week and then recovered in the second half. Sectors with stable cash flows such as consumption, transportation, and banking showed compensatory growth. [25] - The average price of convertible bonds rose 0.65% to 139.63 yuan, and the 100 - yuan premium rate increased 1.83 percentage points to 38.94%. The overall position can be maintained with prudent neutrality, and the allocation focus should be adjusted in a timely manner, focusing on mid - stream manufacturing going global and consumer blue - chip stocks. [28] - New convertible bonds are relatively expensive, and non - trading funds should be cautious. Attention can be paid to near - maturity convertible bonds with strong conversion demands and the ability to promote conversion. The allocation strategy should shift from focusing on elasticity at the beginning of January to balanced allocation, with emphasis on convertible bonds priced between 130 - 150 yuan. [29] III. Market Review: Convertible Bonds Rose Weekly, and Valuation Increased (1) Weekly Market Performance: The Convertible Bond Market Rose Slightly, and Most Equity Sectors Performed Weakly - Last week, most major stock indexes declined, while the CSI Convertible Bond Index rose 0.05%. Small - cap stocks and convertible bonds showed better anti - decline performance. [35] - In terms of popular concepts, photovoltaic glass, space photovoltaic, and other concepts rose, while semiconductor - related concepts such as KIMI and MCU chips declined. [35] (2) Valuation Performance: The Premium Rates of Low - Rated and Small - Scale Convertible Bonds Rose Significantly - The closing prices of equity - biased, debt - biased, and balanced convertible bonds changed by - 5.11%, - 0.67%, and + 1.69% respectively compared with the previous Friday. The proportion of convertible bonds in the 120 - 130 yuan range decreased significantly. [43] - The premium rates of low - rated and small - scale convertible bonds rose significantly. The AA - rated convertible bonds rose 2.87 percentage points, and those with a scale of 20 - 50 billion yuan (including 50 billion yuan) rose 1.65 percentage points. [43] IV. Terms and Supply: Five Convertible Bonds Announced Early Redemption, and the Total Newly - Promoted Scale was Approximately 9.88 billion yuan (1) Terms: Five Convertible Bonds Announced Early Redemption Last Week, and Honglu Convertible Bond's Board of Directors Proposed a Downward Revision - As of February 6, Mengsheng, Feng 21, Rong 23, Xinzhi, and Shouhua Convertible Bonds announced early redemption; Daimei, Tairui, and other convertible bonds announced not to redeem early; Jiemei, Daimei, and other convertible bonds announced that they are expected to meet the early redemption conditions. [3][57] - Last week, Honglu Convertible Bond's board of directors proposed a downward revision. Meino and Hongchuan Convertible Bonds announced the results of the downward revision. Four convertible bonds announced not to revise downward, and five convertible bonds announced that they are expected to trigger a downward revision. [4][57] (2) Primary Market: Haitian Convertible Bond was Issued Last Week, and the Total Newly - Promoted Scale was Approximately 9.88 billion yuan - Haitian Convertible Bond was issued with a scale of 801 million yuan, and Shangtai Convertible Bond was listed with a scale of 1.734 billion yuan. There are 379 issued but not yet matured convertible bonds, with a balance of 530.884 billion yuan. [5][60] - There were no new board proposals last week. One company's convertible bond plan passed the general meeting of shareholders, three passed the approval of the issuance review committee, and there were no new approvals from the CSRC. Compared with the same period last year, the numbers were - 2, + 1, + 3, and - 3 respectively. [5][63] - As of February 6, seven listed companies obtained approval for convertible bond issuance, with a planned issuance scale of 5.363 billion yuan. Four new companies passed the issuance review committee, with a total scale of 4.517 billion yuan, and there were no new board proposals. [68]

Investment Rating - The report maintains a "Recommend" rating for the aviation sector, highlighting opportunities in the industry [2][3]. Core Insights - The Spring Festival travel rush has begun, with air passenger volume averaging 2.313 million per day, up 5.5% year-on-year, while railway passenger volume averaged 11.792 million, down 0.7% [1][10]. - The report emphasizes the competitive landscape in instant retail, particularly with the launch of the "30 Billion Free Order" campaign by Qianwen, which saw over 10 million orders in just 9 hours [2][35]. - The report identifies key players in the aviation sector, including China National Airlines, Southern Airlines, and Eastern Airlines, as well as low-cost carriers like Spring Airlines, which are expected to benefit from high price elasticity and operational efficiency [2][34]. Industry Data Tracking - Air cargo: The outbound air cargo price index at Pudong Airport increased by 5.3% week-on-week and 8.9% year-on-year as of February 2 [7][44]. - Shipping: VLCC freight rates increased by 2%, while the BDI decreased by 10% and SCFI decreased by 4% [7][48]. - The report highlights the expected compound annual growth rate (CAGR) of approximately 3% for aircraft imports over the next three years, indicating a supply constraint in the aviation sector [31][32]. Investment Recommendations - The report suggests focusing on "performance elasticity" and "dividend value" as key investment themes for the transportation sector in 2026 [7][31]. - It recommends leading companies in express logistics, such as Zhongtong and Yuantong, as well as the instant retail leader Shunfeng Tongcheng, which is expected to benefit from rapid growth and low valuation [7][31]. - The report also highlights the importance of dividend-paying assets, recommending Sichuan Chengyu and China Merchants Port for their stable performance and potential for dividend increases [7][31].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The most significant changes in market sentiment this week were observed in the oil and petrochemical, and food and beverage sectors, with the oil and petrochemical sector showing a positive change rate of 58.0% [26] - The overall market valuation for major indices is high, with the CSI 300, CSI 500, and CSI 1000 having rolling 5-year historical percentiles of 87%, 99%, and 98% respectively [36] - The report highlights that industries with valuations above the historical 80% percentile include power equipment, electronics, light industry manufacturing, and others, while food and beverage, comprehensive, and non-bank financials are below the 20% historical percentile [37] Market Sentiment Monitoring - The weekly heat change for major indices showed that the CSI 300 increased by 3.34%, while the CSI 500 decreased by 5.98% [15] - The top five industries with positive heat change rates were oil and petrochemical, food and beverage, coal, non-ferrous metals, and textile and apparel [26] - The top five secondary industries with the highest positive heat change rates included jewelry, planting, liquor II, lighting equipment II, and oil service engineering [26] Market Valuation Monitoring - The report indicates that the current valuation of the CSI 300 is at a historical high, with a percentile of 87% [36] - Industries such as wind power equipment, aerospace equipment, and semiconductor are currently above the 80% historical percentile [40] Event Tracking - A total of 13 stock incentive events were tracked this week, with notable companies including Good Home and Blue Universe [41] - There were 37 significant shareholder changes, with 32 reductions and 5 increases [44] - 13 private placement events were reported, including companies like Guoxuan High-Tech and Yiwang Technology [46] Analyst Coverage - This week, analysts initiated coverage on 21 stocks, including companies like Juran Smart Home and Tianrun Industrial [47] - Two stocks had their ratings upgraded, namely New Dairy and Wancheng Group [49] - The report lists the top 20 stocks with the most institutional research, highlighting companies such as Yingtang Smart Control and Zhongji Xuchuang [48]

Group 1 - The report highlights three main market concerns: the nearing end of industry rotation, significant suppression of risk appetite, and the transition to stock game before the Spring Festival [1][9][21] - The current market is entering a mid-to-long-term capital allocation phase, with the A-share bull market exhibiting high Sharpe characteristics, driven by improving fundamentals and stable free cash flow generation [2][21] - The report emphasizes that quality growth is superior to pure high-dividend value, with a focus on cyclical and real estate sectors, while large-cap stocks are favored over small-cap stocks due to tightening liquidity [3][35][41] Group 2 - The technology and cyclical sectors remain the main investment themes, with expectations of PPI turning positive, which will enhance EPS pricing and support growth in sectors like computing hardware, energy storage, AI applications, and smart driving [4][36] - The report categorizes growth into two types: high-growth sectors such as electronics and media, and sectors with performance elasticity under low bases, including steel, construction materials, and high-end manufacturing [33][38] - The report notes that the remaining liquidity is tightening, which may put pressure on high-valuation factors, indicating that the influence of valuation factors will diminish in the coming year [35][41]

Investment Rating - The report maintains a "Recommend" rating for the aviation sector, highlighting potential opportunities in the industry [2][3]. Core Insights - The Spring Festival travel rush has begun, with air passenger volume averaging 2.313 million per day, up 5.5% year-on-year, while railway passenger volume averaged 11.792 million, down 0.7% year-on-year [1][10]. - The report emphasizes the competitive landscape in instant retail, particularly with the launch of the "30 Billion Free Order" campaign by Qianwen, which saw over 10 million orders in just 9 hours [2][35]. - The report identifies key players in the aviation sector, including China National Airlines, Southern Airlines, and Eastern Airlines, as well as low-cost carriers like Spring Airlines, which are expected to benefit from high price elasticity and operational efficiency [2][34]. Industry Data Tracking - Air freight rates at Pudong Airport increased by 5.3% week-on-week and 8.9% year-on-year as of February 2 [7][44]. - The VLCC freight rate rose by 2% week-on-week, while the BDI decreased by 10% [7][48]. - The report highlights the growth potential in the express logistics sector, particularly for leading companies like Zhongtong and Yuantong, as well as the promising outlook for instant retail leader SF Express [7][31]. Investment Recommendations - The report suggests focusing on "performance elasticity" and "dividend value" as key investment themes for the transportation sector in 2026 [7][31]. - It recommends continued investment in the aviation sector due to expected low growth in aircraft supply and a projected 5% increase in passenger numbers [2][31]. - The report also emphasizes the importance of dividend assets, recommending companies like Sichuan Chengyu and China Merchants Port for their stable performance and potential for increased dividends [7][31].

- The report constructs a "total heat" indicator by aggregating the browsing, self-selection, and click counts of individual stocks, normalized as a percentage of the total market on the same day, and then multiplied by 10,000, with a value range of [0,10000][7] - The "total heat" indicator is used as a proxy for "sentiment heat" to track the attention levels of broad-based indices, industries, and concepts[7] - The broad-based indices are divided into groups: CSI 300, CSI 500, CSI 1000, CSI 2000, and "others," with the total heat indicators of the constituent stocks summed up to obtain the heat of these indices[8] - A simple rotation strategy is constructed based on the weekly heat change rate, buying the broad-based index with the highest heat change rate MA2 at the end of each week, and staying out of the market if the "others" group has the highest change rate[12] - The rotation strategy based on the broad-based heat change rate MA2 has an annualized return of 8.74% since 2017, with a maximum drawdown of 23.5%, and a return of 5.2% in 2026[15] - The weekly heat change rate MA2 for the main broad-based indices shows that the CSI 300 had the highest increase of 3.34% compared to the previous week, while the CSI 500 had the largest decrease of 5.98%[15] - The heat change rate MA2 for the Shenwan first-level industries shows that the oil and petrochemical industry had the highest increase of 58.0% compared to the previous week, while the electronics industry had the largest decrease of -14.1%[26] - The heat change rate MA2 for the Shenwan second-level industries shows that the top five industries with the highest positive change rates are jewelry, planting, liquor II, lighting equipment II, and oil service engineering[26] - The heat change rate for concepts shows that the top five concepts with the highest positive change rates are Huawei Digital Energy, horse racing concept, duty-free shops, Huawei Euler, and pumped storage[27] - Two simple portfolios are constructed: one selects the top 10 stocks with the highest total heat from the top five concepts with the highest heat change rates each week, and the other selects the bottom 10 stocks with the lowest total heat from the same concepts[30] - The historical performance of the portfolios shows that the bottom group can achieve an annualized return of 15.71% with a maximum drawdown of 28.89%[32]

- The report discusses multiple quantitative models for market timing, including short-term, medium-term, and long-term models. These models are constructed based on price-volume, acceleration and trend, momentum, and limit-up/down perspectives. The report emphasizes the importance of combining signals from different models and periods to achieve a balanced strategy[9][11][12] - The short-term models include the "Volume Model" (neutral), "Feature Institutional Model" (neutral), "Feature Volume Model" (bearish), "Smart Algorithm CSI 300 Model" (bullish), and "Smart Algorithm CSI 500 Model" (bearish)[11][70] - Medium-term models include the "Limit-Up/Down Model" (neutral), "Up-Down Return Difference Model" (bullish for some broad-based indices), and "Calendar Effect Model" (bullish)[12][71] - The long-term model is the "Long-Term Momentum Model," which is neutral[72] - Comprehensive models such as the "A-Share Comprehensive Weapon V3 Model" and "A-Share Comprehensive CSI 2000 Model" are neutral[73] - For Hong Kong stocks, the medium-term models include the "Turnover-to-Volatility Model" (bearish), "Hang Seng Index Up-Down Return Difference Model" (neutral), and "Up-Down Return Similarity Model" (bullish)[13][74] - Backtesting results for the "Cup-and-Handle Pattern" show a weekly decline of -0.44%, outperforming the Shanghai Composite Index by 0.83%. Since December 31, 2020, the cumulative return of this pattern is 19.67%, exceeding the Shanghai Composite Index by 2.61%[43][44] - Backtesting results for the "Double-Bottom Pattern" show a weekly decline of -0.88%, outperforming the Shanghai Composite Index by 0.39%. Since December 31, 2020, the cumulative return of this pattern is 23.45%, exceeding the Shanghai Composite Index by 6.39%[43][50]

- The short-term trading volume model is neutral[2][11] - The characteristic institutional model based on the Dragon and Tiger list is neutral[2][11] - The characteristic trading volume model is bearish[2][11] - The intelligent algorithm model for the CSI 300 is bullish[2][11] - The intelligent algorithm model for the CSI 500 is bearish[2][11] - The mid-term limit-up and limit-down model is neutral[2][12] - The mid-term up-down return difference model is bullish for some broad-based indices[2][12] - The mid-term calendar effect model is bullish[2][12] - The long-term momentum model is neutral[2][12] - The comprehensive A-share V3 model is neutral[2][13] - The comprehensive A-share Guozheng 2000 model is neutral[2][13] - The mid-term trading volume to volatility model for Hong Kong stocks is bearish[2][13] - The Hang Seng Index up-down return difference model is neutral[2][13] - The Hang Seng Index up-down return similarity model is bullish[2][13]