Investment Rating - The report maintains an "Outperform" rating for the construction materials sector, indicating a positive outlook compared to the broader market [2] Core Views - A new round of urban renewal is beginning, which is expected to provide significant opportunities in the consumer building materials sector, effectively countering the decline in new housing market demand [8] - The report highlights that after a prolonged downturn in the real estate sector, profitability in various segments of the construction supply chain is starting to recover, particularly for leading companies that have undergone strategic adjustments [8] - The report emphasizes the potential for price increases in certain segments, such as waterproofing and coatings, as companies respond to improved market conditions [8] Summary by Sections Cement - The cement market is entering a seasonal downturn, with demand expected to decline. The average shipment rate for major regions has dropped to 29%, a decrease of approximately 10 percentage points [27][34] - The national average price for cement remains stable at around 353 RMB per ton, with minor fluctuations observed in specific regions [28][34] - The report suggests that after the Spring Festival, demand may recover as new key projects are expected to commence, potentially stabilizing prices [34] Glass - The glass market is also experiencing a decline in demand, with production capacity decreasing to approximately 14.95 million tons, the lowest in recent years [53] - The average price for float glass has increased slightly to 1,139 RMB per ton, with inventory levels decreasing [38] - The report indicates that the glass industry is facing profitability challenges, leading to accelerated production line cold repairs, which may help stabilize the market [53] Fiberglass - The fiberglass market is seeing stable pricing for both roving and electronic fabrics, with the price of 7628 electronic fabric currently at approximately 4.4-4.85 RMB per meter [55] - The report anticipates continued high demand for electronic fabrics, supported by structural adjustments and a shortage of high-end products [55] - Key recommendations include focusing on leading companies like China Jushi, with additional attention on International Composite Materials and Zhongcai Technology [55] Carbon Fiber - Carbon fiber prices are expected to remain stable in the short term, with the rapid development of commercial aerospace potentially driving new demand [55] - The report notes that the current price stability is a necessary step for increased market penetration, with significant growth expected in the aerospace sector [55] Consumer Building Materials - The report highlights the resilience of consumer building materials, with leading companies like Sanke Tree and Rabbit Baby showing strong growth potential as they emerge from profitability challenges [8] - The urban renewal initiative is expected to create substantial market opportunities, particularly for high-quality consumer building materials [8]

Group 1: National Unified Market Construction - The construction of a national unified market has been elevated to a core economic strategy, emphasizing the need to eliminate market barriers and facilitate economic circulation[8] - The central economic work conference in 2025 highlighted the importance of deepening the construction of a unified market, marking a transition from framework establishment to systematic implementation[9] - The construction process has seen significant progress, with improvements in property rights protection, market access, fair competition, and social credit systems[9] Group 2: Key Areas and Policies - The modern service industry is expected to be a crucial driver in the unified market construction, with coastal regions likely to be the first to pilot reforms[1] - Tax incentives and government subsidies have been adjusted, primarily affecting key industries such as electronics, automotive, and pharmaceuticals, which may accelerate industry restructuring[1] - The establishment of a unified market will require reforms in the fiscal and tax systems, as well as optimization of local performance evaluation systems[1] Group 3: Economic Impact and Participation - The participation of different provinces in the unified market varies significantly, with coastal provinces showing higher engagement levels[1] - The share of external factors in total inputs is over 50% for resource-related and some high-tech manufacturing industries, indicating smoother domestic flow of factors[14] - Service industries show lower external factor input ratios, with public administration, accommodation, and comprehensive technical services at 7.23%, 11.54%, and 11.99% respectively, suggesting potential bottlenecks in factor circulation[14]

Investment Rating - The report maintains an "Outperform" rating for the commercial aerospace and construction sectors, indicating a positive outlook for these industries [3]. Core Insights - The report highlights that fixed asset investment (FAI) in 2025 is under pressure, with a total of 485,186 billion yuan, representing a year-on-year decline of 3.8%, which is a worsening of 1.2 percentage points compared to the previous 11 months [15]. - Infrastructure investment, excluding power and water supply sectors, decreased by 2.2% year-on-year, also reflecting a larger decline than earlier in the year [15]. - Real estate development investment reached 82,788 billion yuan in 2025, down 17.2% year-on-year, with new construction area dropping by 20.4% [15]. - The report emphasizes the potential for a rebound in the construction and real estate markets driven by supportive macro policies, particularly in urban renewal initiatives [16]. Summary by Sections 1. Industry Outlook and Investment Recommendations - The report suggests focusing on high-quality cyclical stocks in the construction sector, particularly those benefiting from urban renewal policies and major infrastructure projects [16][19]. - Key companies such as China State Construction and China Energy Engineering reported year-on-year increases in new contracts, indicating a positive trend in capital expenditure among leading firms [16]. 2. Market Performance Review - The construction decoration index rose by 1.88%, outperforming the overall A-share index, which increased by 0.83% [14]. - Notable performers in the sector included chemical engineering (+10.70%) and steel structure (+7.71%) [14]. 3. Key Company Dynamics - Roman Holdings is projected to achieve a profit of 1.8-2 billion yuan in 2025, marking a turnaround from previous losses, driven by strong demand for computing power in major cities [19]. - The report also notes the increasing importance of satellite remote sensing applications in the commercial aerospace sector, with new policies aimed at developing a comprehensive resource utilization system [19]. 4. Financing and Debt Issuance - As of January 23, 2026, special bond net financing reached 1,704.9 billion yuan, with new issuances totaling 1,746 billion yuan, indicating a stable financing environment compared to previous years [20][21]. - The report highlights that city investment bonds have seen a net financing contraction of 219 billion yuan, with no special government bonds issued so far in 2026 [21].

Investment Rating - The report maintains an investment rating of "Outperform the Market" for the coal industry, indicating an expected relative performance that exceeds the benchmark index by over 10% [2][14]. Core Insights - The report highlights a significant rebound in daily coal consumption due to a cold wave, with a focus on pre-holiday inventory replenishment needs [1]. - It notes that while coal prices have seen a decline, they are expected to stabilize as demand is projected to rise, particularly leading up to the Spring Festival [9]. - The supply side remains constrained due to "anti-involution" policies and strict safety regulations, which are likely to limit production increases [9]. Summary by Sections Production and Demand - In December, national raw coal production was 437 million tons, showing a year-on-year decrease of 1% and a slight month-on-month increase of 2.4%. The total annual production reached 4.832 billion tons, up 1.2% year-on-year [7]. - The report indicates that electricity generation, pig iron, and cement production saw year-on-year declines of 3.2%, 9.9%, and 6.6% respectively in December [7]. Price Trends - As of January 23, the Qinhuangdao coal price was 686 RMB/ton, reflecting a decrease of 11 RMB/ton year-on-year [7]. - The average daily coal consumption across 25 provinces was 6.59 million tons, up 12.1% year-on-year, while average inventory levels decreased by 5% [7]. Market Outlook - The report anticipates that coal prices may face upward pressure as the demand season approaches, despite recent price declines [9]. - It suggests that companies such as Lu'an Environmental Energy, Yanzhou Coal Mining, and Shanxi Coal International are worth monitoring for potential investment opportunities [9].

Strategy Insights - The report highlights a strong spring market driven by active trading in small-cap and thematic investments, with A-share trading volume exceeding 3 trillion, indicating robust market confidence and capital inflow [3][8][22] - The report identifies key themes for investment, including commercial aerospace, AI applications, and the price increase chain, which are expected to attract medium-risk capital [3][22] - The report notes a shift in market structure, with increased focus on real estate, resource products, and price increase chains, reflecting a rebalancing of investment styles [3][22] Market Dynamics - The A-share market has shown a recovery with the Shanghai Composite Index stabilizing and trading volumes rebounding, indicating a restoration of investor confidence [8][13] - Small-cap indices such as the CSI 500 and CSI 1000 have outperformed large-cap indices, suggesting a growing interest in mid and small-cap stocks [11][22] - The report emphasizes the importance of supply-demand mismatches in driving price increases across various sectors, particularly in the semiconductor and resource sectors [3][22][27] Sector Focus - The report suggests that the real estate sector is a critical area for investment, driven by recent policy signals aimed at boosting domestic demand, with leading companies in this sector likely to see revaluation opportunities [3][24] - The cyclical resource sector is expected to benefit from rising PPI and inflation expectations, with a notable increase in prices for industrial metals and chemicals [27][28] - Communication stocks, particularly in the optical communication segment, have faced downward pressure, indicating a need for cautious investment in this area despite overall market optimism [29][41]

Macroeconomic Data Review - The GDP for 2025 reached 14,018.79 billion yuan, growing by 5.0% year-on-year, with a fourth-quarter growth of 4.5% [1][4] - The overall economic performance in 2025 showed a trend of high growth at the beginning of the year followed by a decline, with external demand outpacing internal demand [4][6] - The fixed asset investment for the year decreased by 3.8% year-on-year, indicating a continued downward trend in investment [4][5] - The industrial added value for December increased by 5.2% year-on-year, with high-tech manufacturing maintaining robust growth [4][32] - The service sector production index grew by 5.0% year-on-year in December, reflecting an improving overall economic climate [4][38] Consumption Trends - The retail sales of consumer goods in December grew by 0.9% year-on-year, a decline of 0.4 percentage points from the previous month [4][19] - The performance of service retail was better than that of goods retail, with significant increases in categories such as cosmetics and sports entertainment [4][21] - The consumption growth rate for basic living goods showed a decline, while the "two new" products experienced a narrowing of the year-on-year decline [4][21] Investment Insights - Fixed asset investment saw a further decline, with December showing a continued decrease across all three major investment categories [4][5] - The construction and installation projects remained weak, while equipment and tool purchases continued to drive investment growth [4][24] Industrial Performance - The industrial sector showed stable growth, with the added value of industries above designated size increasing by 5.2% year-on-year in December [4][32] - High-tech manufacturing industries led the growth, with a year-on-year increase of 11% in December [4][32] Real Estate Market - The real estate sector continued to show weakness, with new construction, construction area, completion area, and sales area all declining [5][38] - The price index for new residential properties in 70 large and medium-sized cities fell by 3.0% year-on-year in December, indicating a widening decline [5][44] Outlook for 2026 - Several factors are expected to support a strong start for the economy in 2026, including proactive macro policies and the potential for significant project traction [6][11] - The upcoming local government elections may also contribute to improved economic performance, as historically, such years have seen better growth [6][11]

Investment Rating - The report maintains an "Outperform" rating for the non-bank financial sector, indicating a positive outlook compared to the market [2]. Core Insights - The implementation of new regulations for public fund performance benchmarks aims to reshape the industry towards long-term value creation, moving from a "scale-oriented" to a "capability-oriented" approach [14][16]. - The insurance sector shows high efficiency in claims processing, with claim acceptance rates generally above 99%, driven by technology such as AI and big data [43][44]. Summary by Sections 1. Securities Business Overview and Weekly Review - The new public fund performance benchmark regulations will take effect on March 1, 2026, addressing issues like benchmark ambiguity and style drift, thereby enhancing the accountability of fund managers [14][15]. - The report highlights a mixed performance among major indices, with the Shanghai Composite Index at 4,136.16 points, up 0.84% week-on-week, while the non-bank financial index fell by 1.70% [16][19]. 2. Insurance Business Overview and Weekly Review - Recent claims reports from various insurance companies indicate a high claim acceptance rate, with companies like Ping An Life achieving 99.2% [43]. - Despite high acceptance rates, consumer perceptions of "claim difficulties" persist, primarily due to misunderstandings regarding policy terms and inadequate preparation of claim materials [44]. - The average payout for critical illness insurance is around 100,000 CNY, while the average treatment cost for severe illnesses can reach 400,000 CNY, highlighting a significant coverage gap [44]. 3. Market Liquidity Tracking - The central bank's net injection in the open market was 9,795 billion CNY for the week of January 19-23, 2026, indicating ongoing liquidity management efforts [49].

Group 1 - The bond market sentiment has improved, with the long-end yields reaching a temporary low, as the 30Y active bond yield broke through 2.25%, down approximately 9 basis points from the monthly high [7][9] - Economic data for December was largely in line with expectations, having a limited impact on the bond market, while the equity market showed a slight slowdown [7][9] - The People's Bank of China announced an excess rollover of MLF, injecting liquidity into the market, which contributed to the overall downward trend in bond yields [7][9] Group 2 - The issuance of government bonds in Q1 2026 is expected to continue to be front-loaded, with a higher proportion of long-term bonds [13][14] - In January 2026, local government bond issuance significantly exceeded the same period last year, with 773.4 billion yuan issued, an increase of 215.9 billion yuan year-on-year, and a high proportion of long-term bonds [28][29] - The demand for long-term bonds remains weak, with institutional enthusiasm for new bonds not particularly high, although there is still some demand for new issues [33][38] Group 3 - The financial institutions' asset allocation pressure has eased, indicating a gradual weakening of the "asset shortage" in the bond market, which corresponds to fluctuations in the 10Y government bond yield [46] - The attractiveness of equity assets remains high, and the new margin policy is not expected to have a significant disruptive effect on the market [47][49] - The overall performance of long-term pure bond funds has been significantly lower compared to equity-related funds, indicating a lack of profitability in the bond market [49][51]

Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [2][5]. Core Insights - The company has established a high self-sufficiency and synergistic integrated ecosystem in the electrolytic aluminum industry, focusing on green aluminum transformation and global market expansion, which enhances its risk resilience and performance stability [5]. - The company is positioned as the 12th largest electrolytic aluminum producer in China, with a production capacity of 788,100 tons per year, and is strategically located in Inner Mongolia, benefiting from abundant coal resources [4][13][49]. - The global and domestic demand for electrolytic aluminum is expected to grow, driven by sectors such as new energy vehicles and high-end manufacturing, with a projected increase in global demand from 74 million tons in 2025 to 77 million tons in 2028 [4][36]. Summary by Sections Company Overview - The company was founded in 2012 in Hohhot, Inner Mongolia, focusing on the production of electrolytic aluminum and alumina, gradually building an integrated industrial layout [13]. - The company has seen rapid revenue growth, with revenues of 13.49 billion, 13.81 billion, and 15.16 billion RMB from 2022 to 2024, reflecting a CAGR of 6% [19]. Electrolytic Aluminum Business - The domestic supply of electrolytic aluminum is constrained by a production cap of approximately 45 million tons per year, leading to a tight supply-demand balance [36]. - The company’s electrolytic aluminum production capacity is 788,100 tons per year, with a high capacity utilization rate of over 95% [49][58]. - The average selling price of electrolytic aluminum has fluctuated, with prices of 17,572, 16,174, and 17,120 RMB per ton from 2022 to 2024, while production costs have decreased due to falling raw material prices [60][66]. Alumina Business - The company has a current alumina production capacity of 1.2 million tons in Shandong, with plans to enhance its supply capabilities through the construction of a 1.5 million ton per year hydroxide aluminum production facility [76][81]. - The global alumina demand is projected to grow from 142 million tons in 2025 to 149 million tons in 2028, with China being the largest consumer [71]. Global Expansion and Green Transformation - The company is initiating a global strategy by planning to invest in a 500,000 ton per year electrolytic aluminum project in Saudi Arabia, targeting markets in the Middle East, North Africa, and Europe [4][5]. - The company is also constructing a large-scale wind and solar power station in Inner Mongolia to increase its green energy ratio, which is expected to significantly reduce carbon emissions associated with aluminum production [4].

Market Overview - The recent economic data from the US has shown overall strength, leading to a reduction in interest rate cut expectations and an increase in short-term bond yields [1] - Major stock indices have risen for the second consecutive trading day, with small-cap indices reaching new highs and outperforming the S&P 500 for 15 consecutive days [1] - Despite easing geopolitical concerns, gold prices have increased by 1.8% to surpass $4900, while silver and platinum have shown even more aggressive gains, with silver rising by 4% and platinum by over 6.3% [1] Core Insights - The Q3 GDP final value has been revised up to 4.4%, with personal consumption remaining resilient; PCE in November increased by 0.2% month-on-month and 2.8% year-on-year, indicating no signs of renewed inflation [3] - Initial jobless claims were reported at 200,000, lower than market expectations and still within a low range, suggesting the economy is performing slightly better than anticipated [3] - The report indicates that the market no longer expects rapid and significant interest rate cuts this year, shifting the trading logic from "good is bad" to a more stable outlook [3] Sector Focus - Upcoming earnings reports from major tech companies such as Meta, Tesla, Microsoft, and Apple are critical, with a focus on their capital expenditure (CapEx) [3] - CapEx may expand due to rising prices in storage and hardware, but it fundamentally depends on the demand and commercialization prospects of AI applications; delays in commercialization could lead to lower-than-expected CapEx, affecting pricing power in storage and computing [3] - The market has shifted from extreme panic to a phase of upward volatility, with expectations of continued recovery in the short term; however, broader market fluctuations are likely due to ongoing geopolitical issues and the fragility of long-term US Treasury bonds [3] Investment Strategy - The report suggests continuing to allocate investments in energy, resources, the non-ferrous sector, semiconductors, and small-cap cyclical stocks, while using banks, consumer goods, and precious metals as defensive hedges against risks [3]