Group 1: Report's Overall Information - Report Title: 3Y within General Credit Bonds and 3 - 5Y Tier 2 and Perpetual Bonds Spread Continues to Compress - Credit Spread Weekly Tracking 20251018 [1] - Report Date: October 18, 2025 [2] - Report Type: Special Report [2] Group 2: Report's Core Views - Interest rates are oscillating, and credit bonds continue to recover. The spreads of 1Y medium - low grade and 3Y medium - high grade bonds have significantly compressed. Credit spreads have generally converged, with short - duration spreads having a larger convergence amplitude. [2][5] - Urban investment bond spreads have generally declined by 4 - 5BP, with spreads of different external ratings and administrative levels all showing a downward trend. [2][9] - Most industrial bond spreads have declined, but the spreads of mixed - ownership real estate bonds have still increased. The spreads of central and state - owned enterprise real estate bonds have declined, while those of mixed - ownership and private real estate bonds have increased. The spreads of coal, steel, and chemical bonds have mostly declined. [2][20] - The yields of Tier 2 and perpetual bonds have all declined this week, and the spreads of 3 - 5Y bonds have continued to recover, with high - grade varieties performing better. [2][31] - The excess spread of 3Y industrial perpetual bonds has increased, while the excess spread of 5Y urban investment bonds has decreased. [2][34] Group 3: Summary by Directory I. Interest rates oscillate, and credit bonds continue to recover, with the spreads of 1Y medium - low grade and 3Y medium - high grade bonds significantly compressing - Interest rate bonds have maintained an oscillating pattern. The yields of 1Y, 3Y, 5Y, and 7Y China Development Bank bonds have increased by 1BP, 2BP, 1BP, and 2BP respectively compared to last week, while the yield of 10Y bonds has decreased by 1BP. [2][5] - Most credit bond yields have declined, and credit spreads have significantly converged. Short - duration credit spreads have a larger convergence amplitude. [2][5] - In terms of rating spreads, the spreads of different grades and terms have shown different changes. In terms of term spreads, the spreads of different grades and terms have also shown different trends. [5] II. Urban investment bond spreads have generally declined by 4 - 5BP - The credit spreads of external rating AAA platforms have generally declined by 4BP compared to last week, while those of AA+ and AA have both declined by 5BP. Spreads of platforms in different regions have different degrees of decline. [2][9] - In terms of administrative levels, the credit spreads of provincial platforms have generally declined by 4BP, while those of municipal and district - county platforms have both declined by 5BP. Spreads of platforms in different regions have different degrees of decline. [2][17] III. Most industrial bond spreads have declined, but the spreads of mixed - ownership real estate bonds have still increased - The spreads of central and state - owned enterprise real estate bonds have declined by 4BP, while those of mixed - ownership real estate bonds have increased by 46BP, and those of private real estate bonds have increased by 1BP. The spreads of some real estate companies have different degrees of change. [2][20] - The spreads of all grades of coal bonds have declined by 4BP; the spreads of AAA steel bonds have declined by 4BP, and those of AA+ have declined by 5BP; the spreads of AAA chemical bonds have declined by 4BP, and those of AA+ have declined by 5BP. The spreads of some companies have different degrees of decline. [2][20] IV. The spreads of 3 - 5Y Tier 2 and perpetual bonds continue to recover - The yields of 1Y Tier 2 capital bonds of all grades have declined by 1BP, and perpetual bonds have remained roughly flat, with credit spreads declining by 2 - 3BP. [2][31] - The yields of 3Y Tier 2 capital bonds of all grades have declined by 3 - 4BP, and the yields of perpetual bonds have declined by 2 - 3BP, with spreads compressing by 5 - 7BP. [2][31] - The yields of 5Y Tier 2 capital bonds of all grades have declined by 2 - 3BP, and the yields of all grades of perpetual bonds have declined by 3 - 5BP, with spreads declining by 3 - 6BP. [2][31] V. The excess spread of 3Y industrial perpetual bonds has increased, while the excess spread of 5Y urban investment bonds has decreased - The excess spread of industrial AAA 3Y perpetual bonds has increased by 0.99BP compared to last week to 15.51BP, at the 41.31% quantile since 2015. The excess spread of industrial 5Y perpetual bonds has remained flat compared to last week at 12.39BP, at the 25.90% quantile since 2015. [2][34] - The excess spread of urban investment AAA 3Y perpetual bonds has increased by 0.15BP to 4.97BP, at the 3.01% quantile. The excess spread of urban investment AAA 5Y perpetual bonds has declined by 3.39BP to 11.08BP, at the 16.73% quantile. [2][34] VI. Credit spread database compilation instructions - The overall market credit spreads, commercial bank Tier 2 and perpetual bond spreads, and urban investment/industrial perpetual bond credit spreads are calculated based on ChinaBond medium - short - term notes and ChinaBond perpetual bond data, with historical quantiles since the beginning of 2015. The credit spreads related to urban investment and industrial bonds are compiled and statistically analyzed by Cinda Securities R & D Center, with historical quantiles since the beginning of 2015. [39] - The calculation methods for various spreads and the sample selection criteria for industrial and urban investment bonds are provided. [41]

- The report introduces the **Cinda-VIX volatility index**, which reflects investors' expectations of future volatility in the options market. The index is based on methodologies from international practices and adjusted for the characteristics of China's options market. It includes a term structure to capture volatility expectations across different time horizons. As of October 17, 2025, the 30-day Cinda-VIX values for major indices are: 22.97 for SSE 50, 24.07 for CSI 300, 35.47 for CSI 500, and 30.70 for CSI 1000[61][62][63] - The report also discusses the **Cinda-SKEW index**, which measures the skewness of implied volatility across different strike prices of options. This index helps investors understand market expectations regarding the distribution of future returns and potential tail risks. Higher SKEW values indicate increased concerns about significant market downturns. As of October 17, 2025, the SKEW values for major indices are: 103.13 for SSE 50, 102.83 for CSI 300, 99.44 for CSI 500, and 99.76 for CSI 1000[68][72][74] - The report evaluates **four futures hedging strategies** based on CSI 500, CSI 300, SSE 50, and CSI 1000 indices. These strategies include "continuous monthly hedging," "continuous quarterly hedging," and "minimum discount hedging." The strategies are tested over the period from July 22, 2022, to October 17, 2025. Key metrics such as annualized return, volatility, maximum drawdown, net value, annual turnover, and year-to-date returns are analyzed for each strategy. For example, the minimum discount strategy for CSI 500 futures achieved an annualized return of -1.54%, a volatility of 4.60%, and a maximum drawdown of -7.97%[44][47][46] - The **annualized basis adjustment model** is introduced to account for the impact of dividend expectations on futures basis. The formula used is: $ Annualized\ Basis = (Actual\ Basis + (Expected\ Dividend\ Points))/Index\ Price \times 360/Days\ to\ Maturity $ This adjustment ensures that the basis reflects the dividend impact during the contract's lifetime[19][20][21] - The report provides **dividend point forecasts** for the next year for major indices: CSI 500 (81.96), CSI 300 (83.80), SSE 50 (68.34), and CSI 1000 (62.81). Additionally, the dividend points for specific contracts are estimated, such as 2.16 for IC2511, 3.95 for IF2511, 4.91 for IH2511, and 1.19 for IM2511[9][11][15][17] - The **performance of the hedging strategies** for each index is detailed. For example, the minimum discount strategy for CSI 300 futures achieved an annualized return of 1.23%, a volatility of 3.07%, and a maximum drawdown of -4.06%. For SSE 50 futures, the minimum discount strategy achieved an annualized return of 1.73%, a volatility of 3.05%, and a maximum drawdown of -3.91%. For CSI 1000 futures, the minimum discount strategy achieved an annualized return of -4.17%, a volatility of 5.55%, and a maximum drawdown of -11.11%[52][56][58]

Investment Rating - The investment rating for the airline transportation industry is "Positive" [2]. Core Viewpoints - The industry has maintained a high passenger load factor since the beginning of 2025, with domestic airlines focusing on low growth in capacity while increasing investment in international routes. The supply remains tight with a net fleet growth rate below 3%. The passenger load factor has improved year-on-year and compared to the same period in 2019, particularly in domestic routes. Domestic turnover has shown steady growth, while international turnover has significantly recovered to 2019 levels. Ticket prices have turned positive during the National Day and Mid-Autumn Festival holidays, with demand remaining robust. The fourth quarter is expected to see improvements in year-on-year comparisons due to a low base from the previous year, which will support the recovery of unit revenue for airlines [12][13][36]. Summary by Sections Investment Suggestions - The report suggests focusing on airlines such as China Southern Airlines, China Eastern Airlines, Air China, Spring Airlines, and Juneyao Airlines due to the expected recovery in unit revenue and profitability [13][36]. Passenger Load Factor and Ticket Prices - The passenger load factor remains high, with the industry achieving a load factor of 87.5% in August 2025, up 0.6 percentage points year-on-year and 0.9 percentage points compared to 2019. Domestic turnover increased by 3.5% year-on-year, while international and regional routes have recovered to 100.4% of 2019 levels [15][19]. - Ticket prices have shown a positive trend, with the average domestic ticket price reaching 942 RMB during the National Day holiday, reflecting a year-on-year decrease of only 1.5%. The average ticket price for early October 2025 was up 2.2% year-on-year [4][23]. Oil Prices and Exchange Rates - The average aviation fuel price in October 2025 was 5572 RMB per ton, a slight decrease of 0.1% year-on-year. The Brent crude oil price has also decreased, with an average of 64.25 USD per barrel in October, down 16.7% year-on-year. The Chinese Yuan has appreciated against the US Dollar, with the exchange rate at 7.0968 RMB per USD as of October 16, 2025 [5][36][40]. Airline Operations and Fleet Growth - Airlines have continued to invest in international capacity, with domestic and international passenger load factors remaining high. In September 2025, the domestic load factor for major airlines showed significant year-on-year increases, with China Eastern Airlines leading with a 3.4 percentage point increase compared to 2019 [41][44]. - In terms of fleet growth, Air China had the highest net increase in aircraft in September 2025, adding 5 aircraft, while other airlines also showed modest growth [6][41].

Group 1: Price Trends - Food prices have been in negative territory for several months, but consumer goods are driving a rebound in CPI, marking the first divergence since food prices turned negative[1] - In September, the PPI for non-ferrous, black, and energy sectors all saw year-on-year increases, with black PPI showing the largest rise[1] - The core CPI reached a new high for the year at 1%, indicating potential structural policy tools may be more effective moving forward[1] Group 2: Financial Data Insights - The divergence between social financing (社融) growth and loan balance growth that began in December 2024 appears to have ended, suggesting a return to synchronized growth[1] - The M2-M1 spread has narrowed further, indicating an increase in the liquidity of funds, which historically correlates with positive stock market performance[1] - In September, M2 growth slowed while M1 growth increased, reflecting a more active financial environment[1] Group 3: Economic Policy Implications - Current inflation levels are under pressure, necessitating a continuation of loose monetary policy, as both CPI and PPI remain in negative territory[1] - The government's CPI target for 2025 is set at around 2%, the lowest since 2003, indicating a cautious approach to inflation management[1] - The ongoing anti-involution policies are expected to support PPI recovery, with potential for CPI to turn positive in Q4 2025[1] Group 4: Risk Factors - Geopolitical risks and unexpected increases in international oil prices are highlighted as potential threats to economic stability[1]

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Insights - The company, Zijang Enterprises, has shown excellent profit performance with a projected net profit of 8.97 to 10.02 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 70.0% to 90.0% [2] - The third quarter net profit is expected to be between 4.24 and 5.30 billion yuan, indicating a significant year-on-year growth of 145.0% to 205.9% [2] - The strong profit performance in Q3 is attributed to the sale of shares in Shanghai Zijang New Materials, contributing approximately 240 million yuan to the reported profits [2] - The company is positioned as a leader in the packaging industry, with a diversified business model that includes beverage, paper-plastic, and aluminum-plastic film packaging [2][3] - The company is actively expanding both organically and through acquisitions, with a focus on strategic partnerships and new product development [2] Financial Performance Summary - The total revenue for 2023 is reported at 9.116 billion yuan, with a projected increase to 10.637 billion yuan in 2024 and 11.121 billion yuan in 2025, reflecting a year-on-year growth rate of 16.7% [4] - The net profit attributable to the parent company is expected to rise from 560 million yuan in 2023 to 1.095 billion yuan in 2025, with a significant growth rate of 35.3% [4] - The gross profit margin is projected to stabilize around 23.1% in 2025, with a return on equity (ROE) expected to reach 16.5% [4] - Earnings per share (EPS) is forecasted to increase from 0.37 yuan in 2023 to 0.72 yuan in 2025, indicating a positive trend in profitability [4] Business Segment Performance - The beverage and paper-plastic packaging segments accounted for 47.9% and 28.3% of total revenue, respectively, in the first half of 2025 [2] - The aluminum-plastic film segment is expected to grow by 24.7% year-on-year, contributing 6.2% to total revenue in the first half of 2025 [3] - The real estate development segment is projected to contribute approximately 6.9% to total revenue, with ongoing projects expected to generate additional income [3]

Investment Rating - The investment rating for the company is "Buy" [2][6]. Core Insights - The company, Anheng Information, is a leading enterprise in network security and data security, focusing on AI as a core development strategy. The company aims to enhance its product offerings through an "AI + Security" approach, which is expected to drive new growth opportunities [5][12]. - The network security market in China is projected to grow from $11 billion in 2023 to $17.1 billion by 2028, with a compound annual growth rate (CAGR) of 9.2%. The company is well-positioned to benefit from this growth due to its comprehensive product offerings and strong market presence [5][56]. - The data security market is also expected to see significant growth, with an estimated investment size reaching 17.3 billion yuan by 2028, reflecting a CAGR of 16.7%. Anheng Information ranks third among domestic data security software vendors, indicating its competitive position in the market [5][65]. Summary by Sections 1. Main Business and Financial Analysis - Anheng Information has been deeply engaged in the network security and data security sectors for nearly 20 years, with AI leading its core development strategy. The company has a complete product line covering network security products, platforms, and services [15][25]. - The company has implemented a stock incentive plan to motivate its employees, with a relatively concentrated shareholding structure [19][21]. - The company’s revenue growth has faced short-term pressure, but AI-related products are gradually contributing to revenue. The company reported a revenue of 2.17 billion yuan in 2023, with a projected revenue of 2.14 billion yuan in 2025 [47][49]. 2. Domestic Data Security Market Outlook - The domestic data security market is experiencing healthy growth, with the market size expected to exceed 17.3 billion yuan by 2028. Anheng Information's data security products have seen significant growth, with new product contracts increasing by over 40% in 2024 [62][70]. - The company has successfully integrated AI capabilities into its data security platform, enhancing its product offerings and market competitiveness [13][71]. 3. AI + Security Strategy - The introduction of AI-driven security products, such as the Hengnao AI intelligent body, is expected to revolutionize the network security technology landscape. The market for security AI applications is projected to reach $1.6 billion by 2028, with a CAGR exceeding 230% [14][56]. - The company has launched several AI-enabled products that significantly enhance operational efficiency and security capabilities, including intelligent agents for data classification and API security [14][71]. 4. Profitability Forecast and Valuation - The company is expected to achieve profitability by 2025, with projected earnings per share (EPS) of 0.26 yuan in 2025, increasing to 1.25 yuan by 2027. The price-to-earnings (P/E) ratios are projected to be 197.94, 69.41, and 41.05 for 2025, 2026, and 2027, respectively [6][7].

Investment Rating - The investment rating for the company is not explicitly stated in the provided documents, but the overall sentiment appears positive based on the performance metrics and growth expectations. Core Insights - The company reported a revenue of 3.86 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 21.1%, with a net profit attributable to shareholders of 333 million yuan, up 18.2% year-on-year [1] - The third quarter of 2025 saw a revenue of 1.43 billion yuan, a 15.9% increase year-on-year, while the net profit attributable to shareholders decreased by 6.6% due to a one-time investment income from the previous year [1][2] - The company is experiencing strong growth in its self-owned brands, particularly in the domestic market, with notable performance from the "Guanpi" and "Leading" brands [2] - The overseas business is also performing well, with significant growth in the North American market, supported by the establishment of production facilities in the U.S., Canada, and Mexico [2] Financial Performance Summary - For the first three quarters of 2025, the gross profit margin was 29.1%, an increase of 2.2 percentage points year-on-year, indicating improved profitability [3] - The company expects net profits for 2025, 2026, and 2027 to be 469 million yuan, 597 million yuan, and 749 million yuan respectively, with corresponding P/E ratios of 34.6X, 27.2X, and 21.7X [3][5] - The projected total revenue for 2025 is 5.49 billion yuan, with a year-on-year growth rate of 22.9% [5] Operational Efficiency - The company has optimized its operational capabilities, with inventory turnover days reduced to approximately 65 days, a decrease of about 1 day year-on-year [3] - Cash flow from operating activities for the first three quarters of 2025 was 234 million yuan [3]

Investment Rating - The report does not provide a specific investment rating for the company [1] Core Insights - The company plans to issue shares and pay cash to acquire assets, specifically targeting "Hangzhou Gao Ye Jia You Hao Duo Mao Pet Food Co., Ltd." The transaction details are expected to be disclosed within 10 trading days [1] - Gao Ye Jia, established in 2018, has become a leading domestic pet food and supplies brand, with a projected GMV exceeding 600 million yuan in 2024, and a significant growth in its cat litter brand, Xu Cui Hua, which saw a 247% year-on-year increase [2] - The company is enhancing its brand portfolio through external expansion, with a focus on maintaining the original management team post-acquisition, which is expected to contribute significantly to profits in 2026 [2] Financial Projections - The company is expected to achieve a net profit of 240 million yuan, 290 million yuan, and 360 million yuan for the years 2025, 2026, and 2027 respectively, with corresponding PE ratios of 27.4X, 22.1X, and 18.2X [3] - Total revenue is projected to grow from 1,337 million yuan in 2023 to 2,828 million yuan by 2027, reflecting a compound annual growth rate [3] - The gross profit margin is expected to improve from 17.0% in 2023 to 20.9% in 2027, indicating enhanced operational efficiency [3] Important Financial Metrics - The company's total revenue for 2025 is estimated at 2,009 million yuan, with a year-on-year growth rate of 11.8% [3] - The net profit attributable to the parent company is projected to be 235 million yuan in 2025, representing a 9.2% increase from the previous year [3] - The return on equity (ROE) is expected to rise from 5.8% in 2023 to 17.3% in 2027, showcasing improved profitability [3]

Investment Rating - The investment rating for Smoore International (6969.HK) is not explicitly stated in the provided documents, but the report indicates a positive outlook based on revenue growth and market opportunities [1]. Core Insights - Smoore International reported a record high revenue of 10.21 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 21.8%. The total comprehensive income for the period was 785 million yuan, down 25.5% year-on-year. In Q3 alone, revenue reached 4.196 billion yuan, with a quarter-on-quarter increase of 27.5% and a year-on-year increase of 27.2% [1]. - The company is expected to benefit from stringent global regulations, particularly in the vaping sector, with steady growth anticipated in the U.S. and high growth in Europe due to the introduction of compliant products [2]. - The HNB (Heated Not Burned) segment is gradually contributing to revenue growth, with expectations for increased shipments and market expansion in key regions like Poland and Italy [2]. - The adjusted net profit margin for Q3 2025 was approximately 10.6%, down from 13.0% in Q3 2024, primarily due to changes in product mix affecting gross margins. However, the company is optimizing its expense ratios, which are expected to decline as HNB product sales increase [3]. Financial Summary - For the fiscal years 2024 to 2027, the projected total revenue is as follows: - 2024: 11.799 billion yuan - 2025: 14.610 billion yuan - 2026: 17.669 billion yuan - 2027: 21.253 billion yuan - The expected growth rates year-on-year are 6% for 2024, 24% for 2025, 21% for 2026, and 20% for 2027 [4]. - The projected net profit attributable to the parent company is: - 2024: 1.303 billion yuan - 2025: 1.088 billion yuan - 2026: 2.040 billion yuan - 2027: 3.050 billion yuan - The corresponding P/E ratios are projected to be 57.75X for 2024, 83.46X for 2025, 44.52X for 2026, and 29.78X for 2027 [4][6].

Investment Rating - The investment rating for the education industry is "Positive" [2] Core Insights - The National Civil Service Bureau announced the 2026 civil service examination recruitment, widening the age limit for applicants, which is expected to boost the number of registrations [3] - The age limit has been extended by 3 years, allowing applicants aged 18 to 43 years, which is anticipated to stimulate a rapid increase in registration numbers [3] - Although the number of recruits is slightly reduced to 38,100, a decrease of 4%, it is believed that this will not dampen the enthusiasm for civil service examinations due to the small reduction and the increasing number of graduates [3] - The policy allowing recent graduates to maintain their status for three years is expected to enhance demand for full-time preparation and long-term training programs [3] - The report suggests focusing on investment opportunities in the recruitment training sector due to the expected increase in competition and training demand [3] Summary by Sections - **Event Summary**: The announcement of the civil service examination for 2026 includes a widening of the age limit, which is likely to increase the number of applicants [3] - **Recruitment Numbers**: The planned recruitment for 2026 is 38,100, a slight decrease of 4%, but this is not expected to affect the enthusiasm for civil service exams [3] - **Impact on Training Demand**: The three-year eligibility for recent graduates is likely to boost demand for full-time and long-term training programs [3] - **Investment Recommendations**: The report recommends focusing on investment opportunities in the recruitment training industry due to the anticipated increase in applicant numbers and competition [3]