Investment Rating - The report does not explicitly state an investment rating for the oil refining industry Core Insights - The domestic key refining project price difference is 2557.23 CNY/ton, with a week-on-week change of +11.87 CNY/ton (+0.47%), while the international key refining project price difference is 1254.57 CNY/ton, with a week-on-week change of -43.45 CNY/ton (-3.35%) [2][3] - Brent crude oil's average price for the week ending December 26, 2025, is 61.73 USD/barrel, reflecting a week-on-week increase of +2.74% [2][3] - The refining sector is affected by geopolitical tensions, particularly regarding Venezuela and Russia, which have led to supply concerns and fluctuations in oil prices [2][15] - The chemical sector is experiencing weak demand, leading to a downward shift in chemical product prices [2][49] - Polyester production has seen a significant increase in sales volume, with downstream demand improving, which has positively impacted upstream prices [2][55] Summary by Sections Refining Sector - The report highlights the impact of geopolitical events on oil prices, with Brent and WTI crude prices at 60.64 and 56.74 USD/barrel respectively, showing slight increases [2][15] - Domestic refined oil prices have slightly decreased, with diesel, gasoline, and aviation kerosene averaging 6566.86, 7622.14, and 5716.07 CNY/ton respectively [2][15] Chemical Sector - The report notes a decline in demand for chemical products, with prices for polyethylene and EVA showing downward trends [2][55] - The average price for LDPE, LLDPE, and HDPE is reported as 9000.00, 6329.29, and 8000.00 CNY/ton respectively, with corresponding price differences from crude oil [2][55] Polyester & Nylon Sector - The polyester sector has seen a significant increase in production and sales, with a notable reduction in inventory levels and a slight increase in prices for polyester filament yarn [2][55] - The report indicates that the nylon filament prices remain stable, with slight improvements in price differences [2][55] Stock Performance - The report provides stock performance data for six major refining companies, with notable increases in stock prices for companies like Hengli Petrochemical (+11.01%) and Rongsheng Petrochemical (+12.12%) over the past week [2]

Investment Rating - The steel industry is rated as "Positive" [2] Core Viewpoints - The steel sector has shown resilience with a 3.42% increase this week, outperforming the broader market, while specific segments like special steel and iron ore have seen even higher gains [2][10] - Supply constraints and seasonal demand weakness are expected to lead to a gradual increase in steel prices [2][3] - The overall demand for steel is projected to stabilize or slightly increase due to government policies aimed at economic growth, particularly in real estate and infrastructure [3] Supply Summary - As of December 26, the capacity utilization rate for blast furnaces in sample steel companies is 84.9%, a slight increase of 0.01 percentage points week-on-week [2][25] - The production of five major steel products reached 6.92 million tons, with a week-on-week increase of 0.02% [2][25] - Daily average pig iron production is 2.2658 million tons, showing a week-on-week increase of 0.03 tons but a year-on-year decrease of 28,300 tons [2][25] Demand Summary - The consumption of five major steel products was 8.336 million tons, a week-on-week decrease of 1.67 million tons [2][35] - The transaction volume of construction steel by mainstream traders was 95,000 tons, down 0.43 tons week-on-week [2][35] Inventory Summary - Social inventory of five major steel products is 8.726 million tons, down 339,100 tons week-on-week, a decrease of 3.74% [2][42] - Factory inventory of five major steel products is 3.854 million tons, down 28,800 tons week-on-week, a decrease of 0.74% [2][41] Price & Profit Summary - The comprehensive index for ordinary steel is 3,439.2 yuan/ton, a week-on-week decrease of 9.57 yuan/ton [2][48] - The profit for rebar from blast furnaces is 50 yuan/ton, an increase of 8.0 yuan/ton week-on-week [2][55] - The profit for electric arc furnace rebar is -4 yuan/ton, an increase of 3.0 yuan/ton week-on-week [2][55] Raw Material Summary - The spot price index for Australian iron ore (62% Fe) is 800 yuan/ton, a week-on-week increase of 2.0 yuan/ton [2][72] - The price for primary metallurgical coke is 1,770 yuan/ton, unchanged week-on-week [2][72] Company Valuation Summary - Key companies in the steel sector include Baosteel, Hualing Steel, and CITIC Special Steel, with projected earnings per share (EPS) and price-to-earnings (P/E) ratios indicating potential for growth [2][73]

Group 1 - The core conclusion indicates that the buying power of institutional funds is expected to strengthen, with the Shanghai Composite Index achieving an "eight consecutive days of gains" and market trading volume recovering [2][8] - Positive factors catalyzing the year-end market rally include the rebound of US tech stocks, appreciation of the RMB, rising prices of non-ferrous metals (gold, silver, copper), and various themes in commercial aerospace [2][8] - The report emphasizes that the key factor driving the index to break through the upper range of the consolidation zone is the influx of incremental funds, particularly the gradual increase in institutional buying power [2][8] Group 2 - The appreciation of the RMB is beneficial for the return of overseas funds, with the RMB appreciating nearly 4% against the USD in 2025, and the offshore RMB/USD exchange rate breaking the "7" mark [9] - The report notes that the recent acceleration of inflows into stock ETFs indicates a significant increase in the net inflow scale of ETFs related to the CSI A500, suggesting that institutional funds are accelerating their layout [12][14] - The private equity fund management scale increased significantly by 1.04 trillion RMB in October 2025, reaching 7.0076 trillion RMB, and continued to rise to 7.0383 trillion RMB in November, indicating a potential important source of incremental funds for the market [14][15] Group 3 - The report highlights that there are currently no signs of accelerated inflows from resident incremental funds, but there is optimism for a seasonal surge in Q1, particularly in years when the Spring Festival is later [17][25] - The report suggests that the tactical foundation of the bull market remains solid, with the potential for a resonance between profit improvement and fund inflows [30][31] - The report recommends increasing allocations to value sectors and suggests that the technology sector typically shows significant excess returns during the spring market [36][37]

Investment Rating - The report does not specify a clear investment rating for the industry [2] Core Insights - The report highlights the issuance of the "Corporate Sustainability Disclosure Standards No. 1 - Climate (Trial)" by nine departments in China, which mandates companies to disclose their greenhouse gas emissions across different scopes [12][3] - The EU's carbon reduction process is facing challenges, leading to adjustments in the automotive sector's emissions targets, allowing for a 90% reduction in carbon emissions by 2035 compared to 2021 levels, rather than a complete ban on fuel vehicles [3][17] - The report indicates a significant growth in ESG financial products, with a total of 3,882 ESG bonds issued in China, amounting to a market size of 5.74 trillion RMB, with green bonds making up 62.11% of this total [4][28] - The report notes that the ESG public fund market consists of 947 products with a total net value of 116.67 billion RMB, where ESG strategy products account for 45.01% [4][33] - The report emphasizes the importance of technological innovation in achieving carbon neutrality, identifying key challenges and opportunities in the energy transition [8][41] Summary by Sections Domestic Focus - The "Corporate Sustainability Disclosure Standards No. 1 - Climate (Trial)" requires companies to disclose their greenhouse gas emissions, with a phased approach from voluntary to mandatory disclosures [12] - Beijing's green finance policy aims to support the construction of green factories, focusing on energy-saving and carbon-reduction projects [12] International Focus - The EU's adjustment to its automotive emissions targets reflects a shift in its green transportation strategy, allowing for continued sales of certain traditional fuel vehicles [3][17] - The EU is also coordinating new rules for plastic recycling to address challenges in the recycling market [19] ESG Financial Products Tracking - The report details the growth of ESG bonds, public funds, and bank wealth management products, highlighting their respective market sizes and issuance volumes [4][28][39] Index Tracking - Major ESG indices have shown varying performance, with the Shenzhen ESG 300 index leading in growth over the past year [40] Expert Opinions - Insights from experts emphasize the need for strategic information disclosure and the role of technology in the transition to carbon neutrality, identifying significant opportunities in the energy sector [8][41]

Investment Rating - The industry investment rating is "Positive" [2][3] Core Insights - The report highlights the opportunity for gas turbine development driven by the demand for electricity, particularly due to AI data centers and recent power outages in California [2][3] - GE Vernova anticipates signing contracts for 80GW of combined cycle gas turbines by the end of 2025, with an upward revision of revenue expectations from $45 billion to $52 billion by 2028 [3] - The report emphasizes the supply-demand mismatch in electricity, indicating that gas turbine generators have significant growth potential in the short term [3][4] Summary by Sections Industry Overview - The report discusses the impact of recent power outages in California, affecting 130,000 households and businesses, and the increasing focus of AI companies on electricity supply [3] - The report identifies gas turbines as a stable and efficient power generation technology, suitable for meeting the short-term electricity demands of AI data centers [4] Supply Chain Analysis - The gas turbine supply chain includes upstream companies providing key components such as high-temperature alloys and turbine blades, with notable companies like Linde Co., Yingliu Co., and Haomai Technology [5][6] - Midstream companies responsible for gas turbine generator development include Jereh Group, Dongfang Electric, and Shanghai Electric [7] - Downstream applications involve companies like Jereh Group and Xizi Clean Energy, which provide essential components for gas turbine power generation [9] Company Focus - Jereh Group is highlighted as a leading company in oil service equipment, with significant growth potential in the AI data center electricity sector, supported by strategic partnerships and contracts exceeding $100 million [10][11] - Linde Co. is recognized for its precision casting capabilities in gas turbine components, with expected growth in orders due to increasing demand from AI data centers [13] - Yingliu Co. specializes in high-end castings for gas turbines, maintaining strong partnerships with major players like GE and Siemens, positioning itself well for future growth [14] - Haomai Technology benefits from the expansion of AI data centers and the resulting demand for gas turbine generators [15]

Investment Rating - The report maintains a "Positive" investment rating for the sustainable aviation fuel (SAF) industry, consistent with the previous rating [2]. Core Insights - The demand for SAF is rapidly increasing, driven by strong EU regulations and rising prices. As of December 16, 2025, European SAF prices reached $2300-$2320 per ton, a 25% increase since the beginning of the year, while domestic prices rose to $2100-$2300 per ton, up 24% [4][8]. - The HEFA (Hydroprocessed Esters and Fatty Acids) process currently dominates the market, but other technologies like PtL (Power-to-Liquid) show significant long-term cost reduction potential. McKinsey predicts cost reductions of 22% for HEFA, 32% for ATJ (Alcohol-to-Jet), 24% for FT (Fischer-Tropsch), and 67% for PtL from 2020 to 2050 [4][24]. - Global SAF blending policies are accelerating, with significant increases in production and consumption expected. IATA forecasts that by 2025, SAF production will reach 0.06 million tons, accounting for 2% of total fuel demand, and by 2050, global demand could reach 350 million tons [4][32]. - China's SAF industry is rapidly expanding, with an expected total capacity exceeding 10.65 million tons per year by 2027, positioning the country as a major global exporter [4][5]. Summary by Sections 1. Aviation Industry Decarbonization Drives SAF Demand - SAF prices are driven by supply and demand dynamics, with expectations of maintaining high levels in the future due to geopolitical factors and regulatory frameworks [8][11]. - The aviation sector's carbon emissions are significant, with a need for low-carbon fuel alternatives to meet decarbonization goals [12][15]. 2. Global SAF Blending Policies Accelerate Production and Consumption - The SAF industry is heavily influenced by policy drivers, with various countries implementing specific blending targets and incentives to support SAF adoption [32][33]. - The EU's ReFuelEU Aviation regulation mandates increasing SAF blending ratios, aiming for 2% by 2025 and 70% by 2050 [33]. 3. Investment Recommendations - Companies with established HEFA processes and early capacity releases are expected to benefit from rising demand and prices. Key companies to watch include HaiXin Energy, PengYao Environmental, ShanGao Environmental, and LangKun Technology [4][5].

Investment Rating - The report maintains a "Buy" rating for the environmental sector [4] Core Insights - CCUS technology is essential for achieving carbon neutrality and is the only viable option for low-carbon utilization of fossil energy. It is a crucial method for significant greenhouse gas reduction and a feasible decarbonization solution for hard-to-abate industries such as steel, cement, and chemicals [18][21] - According to predictions from Beijing Institute of Technology, between 2030 and 2060, approximately 23.9 to 33.5 billion tons of CO2 emissions will need to be reduced through CCUS technology, even with advancements in renewable energy and energy efficiency technologies [18] - The report highlights that as of mid-2024, there are about 120 CCUS projects in China with a capture capacity of 6 million tons per year, driven by supportive policies [4][25] Market Performance - As of December 26, the environmental sector rose by 1.9%, outperforming the broader market, which also increased by 1.9% [11] - The report notes that various sub-sectors within the environmental industry showed mixed performance, with the environmental equipment sector rising by 9.21% [14][16] Industry Dynamics - Recent meetings led by the Minister of Ecology and Environment have resulted in the approval of several national ecological environment standards aimed at enhancing pollution control and environmental restoration [29][30] - The report discusses the rapid development of the CCUS industry in China, with a significant increase in project numbers and capacities from 40 projects in 2021 to approximately 120 projects by mid-2024 [26][28] Investment Recommendations - The report suggests that the "14th Five-Year Plan" will maintain high demand for energy conservation and environmental protection, with a focus on resource recycling. It recommends key companies such as Huanlan Environment, Xingrong Environment, and Hongcheng Environment for investment [55]

- The report discusses the construction and evaluation of various quantitative models and factors, including the Cinda-VIX and Cinda-SKEW indices, which are designed to reflect market volatility and skewness, respectively[6][61][62] - The Cinda-VIX index reflects the expected future volatility of the underlying asset as implied by option prices. It has a term structure that shows the expected volatility over different time horizons. As of December 26, 2025, the 30-day Cinda-VIX values for the SSE 50, CSI 300, CSI 500, and CSI 1000 indices were 16.35, 17.09, 24.97, and 20.60, respectively[62][63][64] - The Cinda-SKEW index captures the skewness in the implied volatility of options with different strike prices. It measures the market's perception of tail risk. As of December 26, 2025, the SKEW values for the SSE 50, CSI 300, CSI 500, and CSI 1000 indices were 99.83, 100.24, 103.00, and 102.52, respectively[70][71][76] - The report also includes backtesting results for various hedging strategies using stock index futures. The strategies include continuous hedging and minimum discount hedging, applied to the CSI 500, CSI 300, SSE 50, and CSI 1000 indices. The backtesting period is from July 22, 2022, to December 26, 2025[43][44][45] - For the CSI 500 index futures hedging strategy, the annualized returns for the continuous monthly, continuous quarterly, and minimum discount strategies were -3.47%, -2.70%, and -1.99%, respectively. The corresponding volatilities were 3.78%, 4.68%, and 4.48%, and the maximum drawdowns were -11.51%, -9.16%, and -8.93%[46][47][49] - For the CSI 300 index futures hedging strategy, the annualized returns for the continuous monthly, continuous quarterly, and minimum discount strategies were 0.26%, 0.59%, and 0.99%, respectively. The corresponding volatilities were 2.88%, 3.23%, and 3.00%, and the maximum drawdowns were -3.95%, -4.03%, and -4.06%[48][50][52] - For the SSE 50 index futures hedging strategy, the annualized returns for the continuous monthly, continuous quarterly, and minimum discount strategies were 1.02%, 1.93%, and 1.55%, respectively. The corresponding volatilities were 2.95%, 3.35%, and 2.97%, and the maximum drawdowns were -4.22%, -3.76%, and -3.91%[53][54][56] - For the CSI 1000 index futures hedging strategy, the annualized returns for the continuous monthly, continuous quarterly, and minimum discount strategies were -6.53%, -4.91%, and -4.47%, respectively. The corresponding volatilities were 4.73%, 5.74%, and 5.49%, and the maximum drawdowns were -14.01%, -12.63%, and -11.11%[57][58][60]

Investment Rating - The investment rating for the utility sector is "Positive" [2] Core Insights - The utility sector has shown a weekly increase of 0.8%, underperforming the broader market, which rose by 1.9% [4][12] - The power sector specifically increased by 0.65%, while the gas sector saw a larger increase of 2.59% [4][16] - The report highlights a continuous growth in global offshore oil and gas exploration and development investments, with a compound annual growth rate of 11% over the past five years [5] Summary by Sections Market Performance - As of December 26, the utility sector's performance was below the market average, with the power sector up by 0.65% and the gas sector up by 2.59% [4][12] - The top-performing sub-sectors included thermal power generation, which rose by 2.45%, while hydropower saw a decline of 0.77% [16] Power Industry Data Tracking - The price of thermal coal at Qinhuangdao Port (Q5500) was 677 CNY/ton, down 34 CNY/ton week-on-week [4][21] - Coal inventory at Qinhuangdao Port decreased to 6.97 million tons, a drop of 310,000 tons week-on-week [30] - Daily coal consumption in inland provinces increased to 3.967 million tons, up 5.56% week-on-week [30] Natural Gas Industry Data Tracking - Domestic LNG prices decreased to 3,937 CNY/ton, a 3.39% decline week-on-week [57] - European TTF gas prices rose by 5.4% week-on-week, while U.S. HH prices fell by 10.4% [61] - The EU's natural gas supply for week 50 was 6.11 billion cubic meters, a 0.9% increase week-on-week [65] Key Industry News - Guangdong Electric Trading Center reported a total transaction volume of 359.44 billion kWh for 2026, with an average transaction price of 372.14 CNY/kWh [5] - The report indicates that the power sector is expected to see profitability improvements and value reassessment due to ongoing supply-demand tensions [5] Investment Recommendations - The report suggests focusing on national coal power leaders such as Guodian Power, Huaneng International, and Huadian International, as well as regional leaders in tight supply areas [5] - For natural gas, companies with low-cost long-term gas sources and receiving station assets are recommended for potential profit growth [5]

Investment Rating - The report assigns a "Buy" rating for the company Xiaogoods City (600415) [2] Core Insights - The company aims to become a "global first-class" comprehensive trade service provider by establishing three ecosystems: commodity display and trading, supporting services, and trade services, enhancing trade efficiency and creating value for small commodity circulation. In 2024, the company is expected to achieve a revenue of 15.74 billion yuan, a year-on-year increase of 39.3%, and a net profit attributable to shareholders of 3.07 billion yuan, a year-on-year increase of 14.9% [3][12][19] Summary by Relevant Sections Company Overview - Xiaogoods City is positioned as a leader in the small commodity market, focusing on becoming a comprehensive trade service provider. The company has established a significant market presence in Yiwu, which is the largest small commodity distribution center globally, with over 800,000 square meters of market space and 2.1 million types of products [14][19] Financial Performance - In the first half of 2025, the company reported revenues of 7.71 billion yuan, a year-on-year increase of 13.99%, and a net profit of 1.69 billion yuan, a year-on-year increase of 16.78%. The trade services segment saw a remarkable revenue increase of 43.16%, indicating that new business areas are becoming the core engine of growth [5][15][31] Market Dynamics - The Yiwu market has experienced continuous growth, with the total import and export volume reaching 668.93 billion yuan in 2024, a year-on-year increase of 18.2%. The "1039" market procurement trade model has significantly reduced customs clearance time and costs, facilitating small commodity exports [4][13][45] Digital Transformation - The company is accelerating its digital transformation through the chinagoods platform, which has registered 4.09 million buyers across over 150 countries. The platform is expected to achieve a GMV of 45 billion yuan in the first half of 2024, enhancing operational efficiency for merchants [4][12][19] Growth Opportunities - The global digital trade center project is expected to enhance the company's market position by adopting a market-oriented pricing mechanism, which will significantly improve profitability. The project aims to integrate digital services with physical trade, creating a comprehensive service platform for small commodity trade [53][61][56]