Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical industry [3] Core Insights - The pharmaceutical and biotechnology index decreased by 0.68% this week, underperforming the CSI 300 index by 0.11 percentage points, ranking 19th in industry performance [12] - The healthcare sector has shown significant growth, with the medical services sub-sector increasing by 16.04% year-to-date, while traditional Chinese medicine has the lowest growth at 1.86% [17][19] - The J.P. Morgan Health Conference highlighted the strategic advancements of top global pharmaceutical companies, with over 20 Chinese firms participating, indicating a trend towards overseas collaboration in innovative drugs [34] Summary by Sections Market Review - The pharmaceutical index has risen by 7.08% from the beginning of 2026 to January 16, outperforming the CSI 300 index by 4.88 percentage points, ranking 8th in industry performance [12] - The medical services sub-sector has the highest year-to-date growth at 16.04%, while the lowest is traditional Chinese medicine at 1.86% [19] Individual Stock Performance - In the A-share market, 206 out of 478 pharmaceutical stocks rose, with the top five performers being Baolait (up 48.76%), Hualan Biological (up 32.72%), and Tianzhihang (up 27.67%) [23] - In the Hong Kong market, 59 out of 116 pharmaceutical stocks increased, with Ark Health leading at 51.66% growth [26] Industry News and Policies - The sixth batch of national high-value medical consumables procurement was opened on January 13, with 202 companies winning bids for 440 products [29] - Medtronic announced a strategic partnership with Precision Neuroscience to develop integrated solutions combining their technologies [29] - Boston Scientific plans to acquire Penumbra for approximately $14.5 billion, enhancing its portfolio in peripheral vascular interventions [30] Weekly Insights - The medical services sector's strong performance is attributed to positive revenue growth, with medical commercial and services sectors showing year-on-year revenue increases of 0.56% and 3.99%, respectively [33] - The J.P. Morgan Health Conference served as a significant platform for discussing trends in drug development and investment strategies, with a focus on AI and international collaborations [34]

Group 1: Overall ETF Fund Flow Situation - The overall net outflow of the stock ETFs (excluding cross-border) from January 12 to 16, 2026, reached 1412.8 billion, a change of -1436.2 billion compared to the previous week, with a significant outflow of 1545.6 billion occurring on January 15 and 16 alone [12][15] - Money market ETFs have seen continuous net outflows in recent weeks, while A-share industry and thematic ETFs recorded a net inflow of nearly 700 billion in a single week, indicating that individual investors are actively entering the market [15][17] - Hong Kong stock ETFs experienced a net inflow of over 10 billion, continuing the inflow trend, while cross-border industry and thematic ETFs had a net inflow of 104.2 billion, slightly decreasing by 31.6 billion from the previous week [17][21] Group 2: Wide-based/Style/Industry/Sub-sector ETF Fund Flow Analysis - The total net outflow of wide-based ETFs reached 2126.2 billion, with those linked to the CSI 300 index seeing a net outflow of over 1000 billion, while the CSI 500, CSI A500, and other wide-based ETFs also experienced varying degrees of outflow [21][22] - In terms of Smart Beta and major industries, there was a notable inflow in dividend ETFs, particularly in the latter half of the week, while technology and cyclical sectors remain the hottest directions [21][24] - From January 12 to 16, the inflow in the non-ferrous metals sector showed strong sustainability, with software, artificial intelligence, media, and military industries also seeing significant net inflows, although some divergence was observed in the latter half of the week [24][26] Group 3: Representative ETF Fund Flow Overview - The top five ETFs with the highest net inflows from January 12 to 16 were: - Harvest CSI Software Service ETF (75.4 billion) - Southern CSI Shenwan Non-ferrous Metals ETF (63.7 billion) - GF CSI Media ETF (62.7 billion) - Yongying National Satellite ETF (58.0 billion) - Huaxia CSI Electric Grid Equipment Thematic ETF (38.9 billion) - The ETFs with the highest net outflows during the same period included: - Huatai-PB CSI 300 ETF (-475.2 billion) - Huaxia CSI 300 ETF (-269.7 billion) - E Fund Shanghai Stock Sci-Tech 50 ETF (-249.1 billion) - E Fund ChiNext ETF (-239.0 billion) - Huaxia Shanghai Stock 50 ETF (-191.1 billion) [30]

Investment Rating - The report maintains an "Outperform" rating for the utility sector [4] Core Insights - China's annual electricity consumption has surpassed 10 trillion kWh, making it the first country to reach this milestone. The State Grid plans to invest 4 trillion yuan in fixed assets during the 14th Five-Year Plan, a 40% increase from the previous plan. The focus will be on promoting renewable energy installations and enhancing the electricity consumption structure [2][21][23] Summary by Sections 1. National Electricity Consumption - In 2025, China's total electricity consumption reached 10.37 trillion kWh, a year-on-year increase of 5.24%. The growth was primarily driven by the tertiary industry and urban-rural residential electricity use, contributing 50% to the overall increase. Notably, the charging and swapping service industry saw a growth of 48.8% [3][50][21] 2. Weekly Sector Review - From January 12 to January 16, the Shanghai Composite Index fell by 0.45%, while the utility index rose by 0.06%. The performance varied across sub-sectors, with the thermal power sector increasing by 0.35% and the photovoltaic sector rising by 4.14% [29][31] 3. Utility Sector Dynamics 3.1 Electricity Tracking - In January 2026, the average transaction price in Jiangsu was 324.71 yuan/MWh, down 4.38% month-on-month and 19.87% year-on-year. In Shanxi, the average price in December 2025 was 292.07 yuan/MWh, up 1.03% month-on-month but down 7.35% year-on-year [39][41] - The total national electricity generation in November 2025 was approximately 779.2 billion kWh, a year-on-year increase of 3.96% but a month-on-month decrease of 2.62% [42] 3.2 Water Conditions - As of January 17, 2026, the water level at the Three Gorges Reservoir was 170.34 meters, which is normal compared to 168.70 meters in the same period of 2025. The inflow and outflow rates also showed increases of 2.78% and 19.49% year-on-year, respectively [53] 3.3 Coal Price and Inventory Tracking - The CCI index for thermal coal was reported at 704 yuan/ton as of January 14, 2026, reflecting a rise of 10 yuan/ton from January 7. The inventory at Qinhuangdao Port increased to 5.66 million tons as of January 18, 2026 [59][65] 3.4 Natural Gas Price Tracking - The LNG ex-factory price index in China was 3849 yuan/ton as of January 16, 2026, up 0.92% from January 9. The LNG import price was reported at 9.95 USD/million BTU, an increase of 6.08% [69] 4. Investment Recommendations - Short-term focus on waste incineration power generation and resource recovery capabilities, with specific companies highlighted for their growth potential. Long-term investment in stable dividend-paying assets is recommended, particularly in the hydroelectric sector [72]

Investment Rating - The report maintains a rating of "Outperform" for the industry, indicating a positive outlook compared to the broader market [5]. Core Insights - TSMC is expected to significantly increase its capital expenditure (Capex) to approximately $52-56 billion in 2026, up from $40.9 billion in 2025, reflecting strong demand in the computing and communication chip sectors [7][35]. - The launch of the Qianwen App, which integrates with Alibaba's ecosystem, is set to accelerate AI application deployment, potentially driving high growth in inference computing demand [7][40]. - The report highlights a robust long-term demand for computing power, with a focus on core segments of the computing industry, including optical modules, copper interconnects, switches, and AI applications [3][57]. Summary by Sections Industry Highlights - NVIDIA launched the next-generation AI computing platform, Rubin, which includes six new chips designed to enhance AI performance and efficiency [12]. - TSMC's expansion plans and partnerships with major tech companies like Apple and Google are expected to bolster the AI chip market [35][37]. - The domestic AI industry is entering a new phase of capitalized development, with several companies going public and increasing their market presence [39]. Market Review - The communication sector saw an overall increase, with the index rising by 3.1% over the past two weeks, ranking 14th among 31 sectors [2][48]. - The military communication, 5G, and industrial internet segments led the gains, with increases of 35.2%, 21.1%, and 21.0% respectively [2][52]. - Individual stock performance within the communication sector showed 110 stocks rising and 19 falling, with notable gains from companies like Shijia Technology and Xinke Mobile [2][56]. Configuration Recommendations - The report suggests focusing on key segments of the computing power industry, including optical modules, copper interconnects, switches, temperature control equipment, and AI applications [3][57].

Investment Rating - The report maintains an "Outperform" rating for the coal industry, indicating a projected performance that exceeds the broader market [2][14]. Core Insights - The coal prices are expected to rise before the Spring Festival due to a combination of cold weather and supply disruptions, making it difficult for prices to decline [7]. - The demand for coal remains relatively stable, with supply-side uncertainties increasing, particularly from Indonesia and Australia, which may lead to a tighter supply-demand balance [7]. - The report highlights that the average daily coal consumption has decreased slightly, but the upcoming cold wave is likely to push prices upward as demand increases [7]. Summary by Sections Supply and Demand Dynamics - A significant drop in temperatures is expected across many regions in China, which may impact coal consumption and prices [7]. - In December, coal imports reached 58.6 million tons, showing a year-on-year increase of 11.9%, but the total annual imports are projected to decline by 9.6% [7]. - Supply disruptions from Indonesia and Australia are anticipated, with Indonesian coal exports expected to drop significantly in January [7]. Price Trends - As of January 16, coal prices at Qinhuangdao port were reported at 697 RMB/ton, reflecting a slight increase compared to the previous week [7]. - The report notes that while daily coal consumption has decreased, the overall price trend is expected to be upward due to seasonal demand and supply constraints [9]. Recommendations - The report suggests focusing on companies such as Lu'an Huanneng, Yanzhou Coal, and Shanxi Coal International, which are expected to benefit from the anticipated price increases [9]. - For the long term, companies like China Coal Energy and Shenhua Group are recommended due to their robust dividend policies and operational stability [9].

Investment Rating - The report maintains a "Strong Buy" rating for the construction and decoration industry, indicating a positive outlook for investment opportunities in this sector [3]. Core Insights - The report emphasizes the gradual introduction of pro-cyclical policies, suggesting a focus on bottom-tier cyclical stocks and the low-altitude commercial aerospace industry chain, which is expected to accelerate its development by 2026 due to policy catalysts [2][8]. - The report highlights the significant improvement in the operating data of some central state-owned enterprises in Q4 2025, with notable increases in new contracts signed, indicating a recovery in construction demand [2][8]. - The report identifies three main investment lines: 1. Focus on key engineering projects in the western region during the 14th Five-Year Plan, benefiting central state-owned enterprises [9]. 2. Investment in high-demand sectors such as tunneling, civil explosives, and geotechnical engineering [22]. 3. Active investment in new economic directions such as commercial aerospace, low-altitude economy, computing power, and AI [23]. Summary by Sections Industry View and Investment Recommendations - The report suggests focusing on high-quality computing power, the low-altitude commercial aerospace industry chain, and bottom-tier cyclical stocks, supported by the central bank's policies aimed at stabilizing growth [16]. - The report notes that as of January 16, 2026, the cumulative net financing of special bonds reached 1,060.7 billion yuan, significantly higher than the same period in previous years, indicating a positive trend in financing for infrastructure projects [18][19]. Market Review - The construction and decoration index increased by 0.27% while the overall A-share index decreased by 0.45%, resulting in an excess return of 0.71 percentage points for the sector [15][28]. - The report highlights the performance of various sub-sectors, with other professional engineering (+4.04%) and steel structures (+1.45%) showing strong performance [15][28]. Key Company Dynamics - The report tracks significant company announcements, including contract signings and management shareholding changes, indicating active corporate governance and strategic movements within the industry [34]. - For instance, China Chemical announced a plan for management share reduction due to personal financial needs, while China Electric Power signed major contracts for international projects, reflecting ongoing business expansion [34].

Investment Rating - The report maintains a "Strong Buy" rating for the fiberglass sector, indicating a positive outlook for investment opportunities in this industry [2]. Core Insights - The report highlights a favorable policy environment that is expected to support the fiberglass sector's growth, particularly in 2026, with anticipated price increases for electronic fabrics due to supply constraints and high demand for mid-to-high-end products [7][11]. - The report emphasizes the importance of leading companies in the construction materials sector, which are expected to show resilience and profitability as the real estate market stabilizes [7][11]. Summary by Sections Cement - The cement market is entering a seasonal slowdown, with prices expected to decline as demand weakens ahead of the Chinese New Year. The average price is around 353 RMB/ton, with a decrease of 4.7 RMB/ton week-on-week [25][27]. - Southern regions are experiencing a temporary uptick in demand due to project completions before the holiday, while northern regions face declining demand due to cold weather [32][34]. Glass - Float glass prices have seen a slight increase, with an average price of 1,138 RMB/ton, while inventory levels have decreased by 4% week-on-week [35]. - The report anticipates a stable price environment for glass in the short term, with supply reductions expected to support price stabilization as the industry faces ongoing profitability challenges [44]. Fiberglass - The report notes that electronic fabric prices have increased, with the G75 electronic yarn priced between 9,300-9,700 RMB/ton, and the 7628 electronic fabric priced at 4.4-4.85 RMB/meter, reflecting a stable demand and supply situation [49]. - The fiberglass sector is expected to benefit from structural adjustments in product offerings, leading to a favorable supply-demand balance and potential price increases in 2026 [11][45]. Carbon Fiber - Carbon fiber prices are expected to remain stable in the short term, with the report highlighting the potential for increased demand driven by advancements in commercial aerospace [11][13].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market index [3][6]. Core Insights - The company signed new contracts worth 71.24 billion yuan in 2025, representing a year-on-year growth of 12%. The fourth quarter alone saw new contracts of 11.35 billion yuan, up 7% year-on-year. As of the end of 2025, the company had an order backlog of 66.46 billion yuan, reflecting an 11.3% increase year-on-year [1]. - The company is accelerating its overseas expansion, with new contracts in international markets reaching 45.02 billion yuan, a significant increase of 24% year-on-year. In contrast, domestic contracts decreased by 4% to 26.21 billion yuan, indicating a gradual reduction in domestic project drag [5]. - The high-end equipment segment saw a remarkable growth of 30% in new contracts, totaling 9.3 billion yuan, with mining equipment orders doubling to 1.69 billion yuan, a 129% increase [5]. - The company is expected to maintain growth during the "14th Five-Year Plan" period, supported by a strong order backlog and increasing overseas business, while domestic engineering drag is anticipated to lessen [5]. Financial Projections - The company is projected to achieve a net profit attributable to shareholders of 3.078 billion yuan in 2025, with growth rates of 3.2%, 6.2%, and 7.7% for the years 2025, 2026, and 2027, respectively. The corresponding price-to-earnings ratios are estimated at 8.99, 8.46, and 7.86 times [6][7]. - Revenue forecasts for the years 2024 to 2027 are as follows: 46.127 billion yuan (2024), 48.558 billion yuan (2025), 51.026 billion yuan (2026), and 54.354 billion yuan (2027), with growth rates of 0.72%, 5.27%, 5.08%, and 6.52% respectively [7].

Social Financing - In December 2025, the domestic social financing scale increased by 22,075 billion yuan, a year-on-year decrease of 6,462 billion yuan[1] - The new government bond issuance in December was 6,833 billion yuan, a year-on-year decrease of 10,733 billion yuan, primarily due to the earlier issuance schedule in 2025[5] - The total amount of new government bonds issued in 2025 was 13.84 trillion yuan, an increase of 2.54 trillion yuan compared to 2024[5] Loans and Deposits - In December 2025, non-financial companies and other sectors added 10,700 billion yuan in new RMB loans, a year-on-year increase of 5,800 billion yuan[10] - Fiscal deposits decreased by 1.38 trillion yuan in December, indicating a potential acceleration of fiscal funds into the real economy[10] - Resident household loans in December were negative at -916 billion yuan, reflecting weak consumer demand[15] Monetary Supply - M2 grew by 8.5% year-on-year in December, with an increase of 0.5 percentage points from the previous month, while M1 grew by 3.8%, down by 1.1 percentage points[16] - The M2-M1 gap widened to 4.7 percentage points, an increase of 1.6 percentage points from the previous month[16] Interest Rates - The central bank announced a structural interest rate cut of 0.25 percentage points, aimed at reducing financing costs for the real economy[20] - The weighted average interbank lending rate in December was 1.36%, down by 0.06 percentage points from the previous month[20]

Investment Rating - The report maintains a "Strong Buy" rating for the pharmaceutical and biotechnology sector, indicating a positive outlook for investment opportunities [3]. Core Insights - The pharmaceutical sector has shown a strong performance with a 7.81% increase in the index, outperforming the CSI 300 index by 5.03 percentage points, ranking 6th in industry performance [9][14]. - The report highlights significant growth in sub-sectors such as medical services and medical devices, with increases of 12.34% and 9.42% respectively [17][22]. - The report emphasizes the potential of small nucleic acid drugs, predicting a market valuation of $18.6 billion by 2029, with a CAGR of 29.5% from 2024 to 2029 [38]. - The upcoming JPMorgan Healthcare Conference is expected to showcase over 20 Chinese companies, with a focus on significant R&D advancements [39]. Summary by Sections Market Review - The pharmaceutical index increased by 7.81% this week, outperforming the CSI 300 index by 5.03 percentage points, ranking 6th in industry performance [14]. - The best-performing sub-sector this week was medical services, which rose by 12.34%, while traditional Chinese medicine had the smallest increase at 2.89% [17][22]. Individual Stock Performance - In the A-share market, 453 out of 478 pharmaceutical stocks rose, with the top five performers being Bibet (+68.89%), Innovation Medical (+61.04%), and Sanbo Brain Science (+56.15%) [25]. - In the Hong Kong market, 104 out of 116 pharmaceutical stocks increased, with the top performers including Zhaoyan New Drug (+30.76%) and Rongchang Bio (+28.51%) [29]. Industry News and Policies - The National Health Commission has outlined ten key initiatives for 2026, focusing on enhancing pediatric services and mental health care [32]. - The National Medical Products Administration has announced the establishment of two industry standards for brain-computer interface medical devices, indicating a regulatory push for this technology [32]. Weekly Insights - The report notes that the pharmaceutical sector is experiencing a "New Year Rally" driven by favorable policies for brain-computer interfaces and the launch of small nucleic acid innovative drugs [36]. - The report suggests monitoring companies involved in brain-computer interfaces, such as Chengyitong and Weisi Medical, as they are in the R&D phase [37].