Investment Rating - The industry investment rating is "Buy" [2] Core Insights - The aviation modified gas turbine is becoming one of the solutions to address the electricity gap [1] - The demand for aviation modified gas turbines is increasing due to the rapid growth of data centers and the need for reliable power supply [6][67] - The global market for aviation modified gas turbines is expected to reach $12.5 billion in sales over the next five years [75] Summary by Sections AIDC and Power Grid Renovation - The development of AI infrastructure and the renovation of power grids are driving strong demand for overseas power construction [14] - Global data center electricity consumption is projected to grow from 49 GW in 2023 to 96 GW in 2026, with 90% of this growth driven by AI [14] - The aging of power equipment in developed economies necessitates updates, with over 50% of grid infrastructure exceeding 20 years of use [16] Performance and Cost Efficiency of Aviation Modified Gas Turbines - Aviation modified gas turbines share core technologies with aircraft engines, making them efficient and cost-effective [55] - These turbines are increasingly being used in various applications, including emergency power and distributed energy systems [59] Flexibility and Rapid Installation of Aviation Modified Gas Turbines - Aviation modified gas turbines can be installed in as little as 1.5 months, making them ideal for data center power needs [65] - They offer quick start-up times and high efficiency, suitable for current trends in distributed and flexible power generation [63] Investment Recommendations - Companies such as Hangya Technology, Zhenhua Co., and others are expected to benefit from the growing demand for aviation modified gas turbines [6][67] - The report suggests focusing on companies that can enhance their market share in the aviation modified gas turbine sector due to the current supply-demand mismatch [6]

Investment Rating - The industry investment rating is "Buy" [3] Core Viewpoints - The report indicates that there is still room for further cuts in reserve requirement ratios and interest rates, with a focus on structural monetary policy support for high-quality economic development [15][19] - The central bank has implemented a reduction of 0.25 percentage points in various structural monetary policy tool rates, signaling a supportive monetary policy stance [15][19] - The report emphasizes the importance of timing for future policy implementations, particularly in relation to government bond issuance peaks and the maturity schedule of high-interest bank deposits [15] Summary by Sections 1. Monetary Policy Adjustments - The report notes a reduction of 0.25 percentage points in structural monetary policy tool rates, with a focus on supporting key areas through increased re-lending [15] - Future attention is directed towards December economic data and January LPR [22] 2. Central Bank Dynamics and Market Rates - The central bank conducted a total of 9,515 billion yuan in 7-day reverse repos at an interest rate of 1.40%, with a net injection of 9,741 billion yuan [16] - The report highlights that the funding rates remained stable, with expectations of slight increases due to tax payments and government bond net repayments [16] 3. Bank Financing Tracking - The report indicates that the total outstanding amount of interbank certificates of deposit (CDs) is 19.09 trillion yuan, with an average issuance rate of 1.65% [20] - The report also notes that there were no commercial bank bond issuances during the period, with a total outstanding commercial bank bond size of 3.38 trillion yuan [20]

Investment Rating - The industry investment rating is "Buy" [2] Core Views - December saw a record high in both cross-border net inflow and net settlement scale, with the bank's foreign-related payment surplus reaching 801.1 billion CNY, a year-on-year increase of 400.2 billion CNY [14][17] - The arbitrage trading return rate declined significantly, influenced by the depreciation of the US dollar against the offshore RMB, which fell by 1.32% to 6.98 [14][17] - The cross-border funds' net inflow in December was the highest on record, driven by a substantial increase in merchandise trade surplus [17][31] Summary by Sections Section 1: December Cross-Border Net Inflow and Settlement - The bank's foreign-related payment surplus in December was 801.1 billion CNY, with a year-on-year increase of 400.2 billion CNY, primarily due to a significant expansion in merchandise trade surplus [17] - The net settlement in December reached a historical high of 705.5 billion CNY, with a month-on-month increase of 589.1 billion CNY and a year-on-year increase of 780.6 billion CNY [31] Section 2: Arbitrage Trading Returns - The arbitrage trading return rate for 10Y US Treasury bonds in RMB terms fell by 1.43 percentage points to -1.77% due to the marginal appreciation of the RMB [14][17] - The 10Y China-US interest rate spread widened by 15 basis points, with the 10Y US Treasury yield rising by 16 basis points [14] Section 3: Cross-Border Funds and M2 Liquidity - Cross-border funds contributed significantly to M2 liquidity, with a total of 774.4 billion CNY added, reflecting an increase of 863.2 billion CNY month-on-month [55] - The cross-border funds' inflow had a pull rate of 0.10% on M2, indicating a continued upward trend [55]

Investment Rating - The industry investment rating is "Buy" [2] Core Insights - The report highlights that aviation modified gas turbines are becoming one of the solutions to address the electricity gap, driven by the increasing demand for data centers and the need for efficient power generation [1][15][55] - The global power consumption of data centers is expected to grow significantly, from 49 GW in 2023 to 96 GW in 2026, with 90% of this growth driven by AI [15][20] - The aging infrastructure of power grids in developed economies necessitates upgrades and replacements, creating further demand for power generation solutions [17][25] Summary by Sections Section 1: AIDC and Power Grid Renovation - The development of AI infrastructure is driving a surge in electricity demand for data centers, which is expected to double global power consumption from 2022 levels by 2026 [15][20] - Over 50% of power grid infrastructure in developed economies is over 20 years old, leading to urgent maintenance and replacement needs [17][25] Section 2: Performance and Cost-Effectiveness of Aviation Modified Gas Turbines - Aviation modified gas turbines share core technologies with aircraft engines, making them efficient and cost-effective for various applications [55][59] - The report details several successful models derived from aircraft engines, such as the LM2500 series, which has become widely used due to its performance and reliability [56][61] Section 3: Flexibility and Rapid Installation of Aviation Modified Gas Turbines - Aviation modified gas turbines can be installed in as little as 1.5 months, making them ideal for rapidly expanding data centers [65][67] - These turbines offer quick start-up times and high efficiency, making them suitable for distributed energy and emergency power applications [63][66] Section 4: Investment Recommendations - The report suggests focusing on companies that supply components and technologies for aviation modified gas turbines, as they are likely to benefit from the growing demand in this sector [6][70] - Companies such as 航亚科技, 振华股份, and 航发科技 are highlighted as potential beneficiaries of this trend [6][7]

Core Insights - The banking sector has shown weak relative and absolute returns recently, primarily due to market funds shifting towards high-beta and small-cap stocks, leading to a diversion of funds from low-beta banking stocks [18] - The report suggests that the banking sector is likely to experience further internal differentiation in 2026, with larger banks and wealth management banks expected to outperform [18] - Core stock recommendations include Ningbo Bank, China Merchants Bank, Qingdao Bank, and large state-owned banks [18] Section Summaries 1. Current Observation: A-shares in Banking Decline, H-shares Outperform - During the observation period from January 12 to January 16, 2026, the banking sector (CITIC first-level industry) declined by 2.6%, ranking 25th among all industries and underperforming the Wind All A index [16] - The performance of state-owned banks, joint-stock banks, city commercial banks, and rural commercial banks varied, with declines of -2.16%, -3.33%, -1.92%, and -2.24% respectively [16] - H-shares of banks increased by 2.4%, underperforming the Hang Seng Composite Index, while A-share banks showed mixed results [16] 2. Investment Recommendations: Beta Elasticity Dominates Recent Sector Performance - The report indicates that the recent downturn in the banking sector has solidified valuations, with limited further downside expected [18] - The anticipated trends include a shift towards non-bank financial services, wealth management, and disintermediation, with large banks expected to gain an advantage [18] 3. Sector Performance: Banking Sector Decline, Weekly Turnover Rate Increases - The banking sector's weekly turnover rate increased to 1.61%, ranking last among 30 CITIC first-level industries [42] - As of January 16, 2026, the banking sector's latest price-to-earnings (P/E) ratio was 6.89x, and the price-to-book (P/B) ratio was 0.67x, indicating valuations at historical average levels [42] 4. Individual Stock Performance: A-share Banks Overall Decline, City Commercial Banks Relatively Stable - Among A-share banks, Ningbo Bank saw a rise of 4.09%, while Beijing Bank, Huaxia Bank, and Shanghai Pudong Development Bank experienced declines of 4.90%, 4.73%, and 4.33% respectively [16] - In H-shares, Industrial and Commercial Bank of China and China Construction Bank increased by 3.59% and 3.16%, while China Everbright Bank and Chongqing Bank saw declines of 6.14% and 3.10% [16] 5. Convertible Bond Performance: Average Price Increase - The average price of banking convertible bonds rose by 0.06%, underperforming the Zhongzheng convertible bond index by 1.02 percentage points [17] - The top-performing convertible bonds included Chongqing Bank's convertible bond (+0.58%) and Industrial Bank's convertible bond (+0.18%) [17] 6. Profit Forecast Tracking: 2025 Profit Growth Expectations Remain Stable - For the current period, three banks (China Merchants Bank, Minsheng Bank, and Hangzhou Bank) showed changes in the consensus profit growth expectations for 2025 [17] - The net profit growth and revenue growth expectations for A-share banks in 2025 adjusted slightly downwards by -0.08 percentage points and -0.03 percentage points respectively [17]

Core Insights - The report highlights a continuous improvement in the real estate sector, driven by favorable policies and a strengthening of the second-hand housing market [1] - The overall industry rating remains at "Buy," consistent with previous assessments [2] Group 1: Policy Developments - Central government policies are increasingly supportive, with the Ministry of Finance announcing an extension of the tax exemption policy for second-hand housing transactions until the end of 2027 [5][14] - The People's Bank of China has introduced measures including a 0.25 percentage point reduction in various structural monetary policy tool rates and a decrease in the minimum down payment for commercial properties from 50% to 30% [5][15] - The publication of multiple articles in "Qiushi" magazine indicates a heightened focus on real estate and urban development, suggesting a strong policy commitment [5][17] Group 2: Market Performance - The second-hand housing market has shown significant improvement, with a 40.3% year-on-year increase in transactions for the first 15 days of January, despite a 10% decline compared to the previous week [5][23] - New housing transactions remain low, with a 29.7% year-on-year decrease in sales volume, although there was a 9.9% week-on-week increase [5][23][26] - The average transaction price for second-hand homes in 33 cities increased by 0.6% week-on-week, indicating a stabilization in prices [5][25] Group 3: Land Market Dynamics - The total land transfer revenue remains low, with a 25.2% week-on-week decline and a 54.3% year-on-year decrease, reflecting weak market conditions [5][24] - There are localized instances of structural premiums in third and fourth-tier cities, suggesting potential opportunities despite overall market weakness [5][24] Group 4: Company Valuations and Financial Analysis - Key companies in the real estate sector, such as Vanke A and China Overseas Development, maintain a "Buy" rating with reasonable valuations projected for 2025 and 2026 [6] - The report includes detailed financial metrics for various companies, indicating expected earnings per share (EPS) and price-to-earnings (PE) ratios, which suggest potential for growth in the sector [6][30]

Investment Rating - The report maintains a "Buy" rating for several companies in the environmental sector, including Huanlan Environment, Sanfeng Environment, and others, indicating a positive outlook for their stock performance [5]. Core Insights - The environmental industry is entering a critical phase of carbon reduction, with a focus on recycling and waste incineration. The demand for green energy and recycling industries is expected to rise significantly as China transitions to a dual control system for carbon emissions starting in 2026 [4][17]. - The introduction of the EU carbon tariff in 2026 is anticipated to increase the cost of exports from China, prompting companies to adopt greener practices to mitigate carbon emissions [4][17]. - High dividend assets in the environmental sector are expected to remain attractive in 2026, with companies like Guangda Environment and Huanlan Environment showing significant stock price increases in 2025 [4][5]. - The bio-diesel sector is experiencing a rise in UCO prices, which are expected to benefit companies involved in waste oil processing and bio-fuel production [19][25]. Summary by Sections Section 1: Market Performance - The environmental sector has shown strong performance in 2026, with water treatment, energy-saving, and recycling sectors leading the gains. Companies are diversifying into secondary businesses to enhance growth [11][14]. Section 2: Policy and Regulatory Developments - The report highlights the implementation of the "Solid Waste Comprehensive Governance Action Plan" aimed at reducing industrial solid waste and enhancing recycling efforts [33]. - The introduction of the carbon trading market and the EU carbon tariff are significant regulatory changes that will impact the industry [17][31]. Section 3: Company Performance and Recommendations - Key companies recommended for investment include Huanlan Environment, Shanghai Industrial Holdings, and others, which are expected to benefit from favorable market conditions and policy support [4][5]. - The report notes that the environmental sector's valuation is currently at a historical low, suggesting potential for future growth [45][52]. Section 4: Financial Analysis - The financial metrics for key companies indicate a positive outlook, with projected earnings per share (EPS) and price-to-earnings (PE) ratios suggesting undervaluation relative to historical performance [5]. Section 5: Market Trends - The report tracks the performance of various sub-sectors within the environmental industry, noting that energy-saving manufacturing and recycling have shown the most significant growth [49]. Section 6: Export and Pricing Trends - UCO prices have remained strong, with recent data showing a 6.1% increase compared to early 2025, indicating robust demand for bio-diesel feedstock [19][23]. Section 7: Carbon Market Activity - The carbon market has seen significant trading volumes, with recent data indicating a closing price of 78.50 CNY per ton, reflecting ongoing market activity and interest [31]. Section 8: Company Announcements - Recent announcements from companies like Dongjiang Environmental and Zhongyuan Environmental indicate strategic acquisitions aimed at enhancing operational capabilities and market positioning [42].

Investment Rating - The investment rating for the company is "Buy" with a current price of HKD 87.20 and a fair value of HKD 121.32 [5]. Core Insights - The company is expected to benefit from both same-store sales growth and expansion, with a 2025 profit forecast slightly exceeding expectations. The projected net profit for 2025 is between RMB 4.95 billion and RMB 5.25 billion, representing a year-on-year growth of 50%-60% [7]. - The management's background in e-commerce has allowed the company to effectively capture the benefits of the takeaway market, enhancing user acquisition and retention capabilities. The main brand is expected to maintain resilience in same-store sales growth [7]. - The company has opened 905 new franchise stores and closed 645 in the first half of 2025, with a net increase of approximately 2,000 stores expected by the end of the year [7]. - The adjusted net profit forecasts for 2025, 2026, and 2027 are RMB 5.7 billion, RMB 6.6 billion, and RMB 7.7 billion, respectively, indicating a clear growth strategy [7]. Financial Summary - Revenue projections for the company are as follows: RMB 3.348 billion in 2023, RMB 3.285 billion in 2024, RMB 4.348 billion in 2025, RMB 4.917 billion in 2026, and RMB 5.719 billion in 2027, with growth rates of 52.3%, -1.9%, 32.4%, 13.1%, and 16.3% respectively [4][11]. - The EBITDA is expected to grow from RMB 610 million in 2023 to RMB 988 million in 2027, with corresponding growth rates of 52.3%, -1.9%, 32.4%, 13.1%, and 16.3% [4]. - Non-GAAP net profit is projected to increase from RMB 416 million in 2023 to RMB 775 million in 2027, with growth rates of 169.8%, 0.4%, 37.5%, 14.6%, and 17.7% [4][11]. - The company maintains a strong return on equity (ROE) of 49.6% in 2023, expected to decrease gradually to 29.8% by 2027 [4][11].

Investment Rating - The report assigns a "Buy" rating to the company with a current price of 8.70 CNY and a fair value of 10.50 CNY [2]. Core Insights - The company, Qingsong Co., Ltd., has transitioned to focus on the cosmetics ODM sector, with a significant recovery in profitability expected as operational efficiencies improve and customer orders rebound [10]. - The company has undergone a strategic shift by divesting its turpentine business and acquiring 100% of the cosmetics OEM leader, Norsbel, enhancing its competitive position in the cosmetics manufacturing industry [15][16]. - The report forecasts a positive trend in revenue and net profit, with expected net profits of 1.3 billion CNY in 2025, 1.8 billion CNY in 2026, and 2.3 billion CNY in 2027, supported by a robust customer base and product focus [10]. Summary by Sections Company Overview - Qingsong Co., Ltd. has evolved from a turpentine producer to a leading player in the cosmetics ODM market, acquiring Norsbel to strengthen its business model [15]. - The company has faced challenges due to the pandemic and regulatory pressures but is now on a recovery path with improved operational efficiency [16]. Financial Analysis - The company reported revenues of 19.69 billion CNY in 2023, with a projected slight decline to 19.40 billion CNY in 2024, followed by a recovery to 21.11 billion CNY in 2025 [9][27]. - The net profit is expected to turn positive in 2024, with significant growth projected in subsequent years, reflecting a recovery from previous losses [10][27]. Industry Analysis - The global beauty and personal care market is projected to grow to 651.6 billion USD by 2024, with a steady recovery anticipated in the cosmetics sector [43]. - The Chinese cosmetics market is expected to reach 73.7 billion USD by 2025, indicating a shift towards stable growth as the industry matures [46]. - Regulatory changes are expected to benefit compliant companies, leading to increased market concentration and the exit of non-compliant players [51]. Strategic Focus - The company is concentrating on high-value product categories, particularly facial masks, and aims to enhance its customer base by focusing on key clients [10]. - The operational strategy includes optimizing product offerings and improving supply chain efficiency, which is expected to enhance profitability and market share [10].

Market Overview - The commodity market has shown significant differentiation since 2025, with precious metals like gold and silver leading the market, increasing by 63% and 111% respectively, while energy and agricultural products have underperformed, with crude oil down 16% and agricultural indices only slightly up by 3% [5][12] - As of early 2026, metals such as gold, silver, copper, and aluminum continue to rise, with smaller metals like nickel and tin experiencing sharp increases, indicating a clear rotation in the market and heightened investor sentiment regarding the potential onset of a new super cycle in commodities [5][12] Historical Super Cycles - Since 1850, there have been five historical super cycles in commodities, characterized by a pattern of "bull short, bear long," with the average upward phase lasting about 13 years and a price increase of approximately 75%, while the downward phase averages 21 years with a price decline of about 47% [5][13][21] - The first cycle (1850-1898) was driven by the spread of the Industrial Revolution and global infrastructure development, while the second cycle (1899-1932) was influenced by the Second Industrial Revolution and World War I, leading to price increases in strategic resources like copper and oil [14][16][21] Bullish Logic: Financial Attributes and Industrial Trends - The bullish argument is primarily based on the safe-haven value and industrial demand, with global monetary easing and fiscal expansion contributing to a noticeable recovery in economic sentiment across major economies [23][25] - The ongoing trend of de-dollarization has positioned commodities as a preferred option for sovereign nations to hedge against credit devaluation, with central banks continuing to increase their gold reserves, indicating a potential rise in commodity ETF allocations [25][30] Bearish Views: Demand Slowdown and Policy Constraints - Bearish concerns focus on the demand side, highlighting a lack of new engines for growth, particularly as emerging economies like India exhibit "dematerialization" growth, leading to lower metal consumption per unit of GDP [64] - Central banks are increasingly prioritizing inflation control, which may lead to a tightening response to rapid commodity price increases, potentially suppressing overall commodity market space [64][66]