1. Report Investment Rating for the Industry No information regarding the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - In 2025, with the dual - wheel drive of policy guidance and market demand, the financial leasing ABS market developed steadily, with an increase in the proportion of micro - leasing ABS, an expansion of specific - label products, and obvious leading effects among issuers. The market is expected to see continuous optimization of business structures, an increase in the diversity of issuers, and a growth in the market's recognition and activity [8][39]. - The policy environment in 2025 was favorable, with multiple departments introducing policies to support the financial leasing industry, promoting its return to the origin of "financing + leasing of physical assets" and strengthening support for key areas of the real economy [4]. 3. Summary by Relevant Catalogs 3.1 Financial Leasing ABS - Related Policy Summaries - **Asset Securitization - Related Policies**: In March 2025, the Asset Management Association of China issued the "Detailed Rules for Due Diligence in the Securitization Business of Debt - Type Assets". In May 2025, the Shanghai Stock Exchange revised relevant guidelines and issued a notice on pilot projects for bond re - issuance and asset - backed securities expansion [5]. - **Support for Key Areas**: Throughout 2025, relevant departments issued policies to support new industrialization, small and micro - enterprise financing, and green and low - carbon development, guiding the industry to return to its origin and strengthen support for key areas and weak links of the real economy [6]. 3.2 Market Operation of Financial Leasing ABS - **Market Issuance**: In 2025, 251 financial leasing ABS were issued, with a total issuance scale of 225.72 billion yuan, representing year - on - year increases of 11.06% and 6.93% respectively. The exchange market was the main issuance venue, and the proportion of micro - leasing ABS increased [9][11][13]. - **Issuing Entities**: In 2025, there were 118 issuing entities in the financial leasing ABS market, with 37 new ones compared to 2024. The top ten issuing entities accounted for 40.67% of the total issuance scale, with a slight decrease of 4.53 percentage points [19]. - **Leased Assets**: In 2025, the leased assets in financial leasing ABS were mainly mechanical equipment. The proportion of public - service - related leased assets decreased, while that of mechanical equipment increased. Green and intelligent leased assets and emerging industrial leased assets showed growth [23]. - **Credit Enhancement Methods**: In 2025, 94.75% of financial leasing ABS introduced external credit enhancement methods. Parent companies/shareholders, original equity holders, and third - party professional institutions provided credit enhancements, with high - credit - grade entities as the main credit enhancers [26]. - **Issuance Interest Rates**: In 2025, the average issuance interest rates of AAAsf and AA + sf priority securities of financial leasing ABS decreased by 40bps and 20bps respectively compared to the previous year [29]. - **Initial Ratings**: In 2025, AAAsf and AA + sf priority securities accounted for 90.02% and 2.88% of the total scale respectively, with the proportion of AAAsf remaining stable [32]. - **Rating Adjustments**: By the end of 2025, among the 866 outstanding priority securities of financial leasing ABS, 14 had their ratings upgraded, with no downgrades [35]. - **Secondary - Market Transactions**: In 2025, the total trading volume of financial leasing ABS in the whole market was 150.005 billion yuan, a year - on - year increase of 12.51%. It accounted for 8.50% of the total trading volume of asset - backed securities, ranking fifth in the market [38]. 3.3 Future Outlook for Financial Leasing ABS - **Business Structure Optimization**: Financial leasing companies will continue to optimize their business structures to better serve the real economy. - **Diversification of Issuing Entities**: Local state - owned financial leasing companies will gradually participate in the issuance of financial leasing ABS, while leading comprehensive leasing companies will maintain their leading positions. - **Asset Type and Label Changes**: In the short term, the proportion of micro - leasing ABS may continue to increase. In the long term, mechanical equipment - type leased assets will grow steadily, and specific - label products will continue to expand. - **Market Recognition and Activity**: The quality of underlying assets in financial leasing ABS is expected to improve, and the market's recognition and activity are likely to increase [39][41].

Report Title - "Issuance Scale Hits a New High, Debt Resolution Enters a New Stage — A Review and Outlook of the Local Government Bond Market in 2025" [1] Report Industry Investment Rating - Not provided in the document Core Viewpoints - In 2025, the issuance scale of local government bonds reached a new high, and debt resolution advanced steadily. In 2026, local bonds are expected to be issued earlier and at a faster pace, with bond market interest rates fluctuating at a low level. The focus of debt resolution may shift to the resolution of the operating debt risks of financing platforms, and a unified long - term regulatory mechanism for government debt management is expected to be accelerated [3][43][46] Summary by Directory 1. Policy Review of Local Government Bonds - **Active Fiscal Policy**: In 2025, a more active fiscal policy was implemented, with a larger - scale government bond issuance plan. The deficit rate was raised to about 4%, and the deficit scale increased by 1.6 trillion yuan. The total new government debt scale reached 11.86 trillion yuan, an increase of 2.9 trillion yuan from the previous year. Policies also continued to standardize and promote land reserve special bonds and optimize the investment direction of special bonds [4][5][6] - **Debt Resolution**: The implicit debt replacement policy accelerated, and the list of high - risk debt areas was dynamically adjusted. Since the implementation of the "package debt resolution" policy, the implicit debt scale of local governments has decreased from 14.3 trillion yuan at the end of 2023 to 10.5 trillion yuan at the end of 2024, and the average interest cost has been reduced by more than 2.5 percentage points, saving over 4500 billion yuan in interest expenses [10] - **Monitoring and Management Mechanism**: The local debt monitoring system and government debt risk indicator system were improved, and the special bond management mechanism was optimized. Penalties for illegal debt - raising and false debt resolution were strengthened, and the reform and transformation of local government financing platforms were accelerated [11][12] 2. Review of the Local Government Bond Market from January to November 2025 - **Issuance Overview**: From January to November 2025, local government bonds were issued 2280 times, with a total amount of 10.01 trillion yuan, a year - on - year increase of 15.22%. Special bonds accounted for 75.00%. New special bonds reached 4.46 trillion yuan, a five - year high. Refinancing bonds were issued at 4.82 trillion yuan, a year - on - year increase of 19.60%, and special refinancing special bonds for implicit debt replacement reached 2.23 trillion yuan [15][16] - **Interest Rate and Spread Analysis**: The average issuance interest rate of local bonds fluctuated upward from January to November 2025, and the average spread continued to widen. The average spreads in the first three quarters were 11.28bp, 12.01bp, and 17.75bp respectively, and 18.81bp in October and November. Provincial spreads continued to show a differentiated trend [30][31][33] - **Investment Areas of Special Bonds**: Infrastructure was the main focus of special bond funds. The top five investment areas were urban infrastructure, transportation infrastructure construction, and industrial parks, accounting for 46.02% in total. Land reserve special bonds were restarted, with a total issuance of 3905.41 billion yuan from January to November 2025, showing an accelerating trend [40] 3. Future Outlook of Local Government Bonds - **Issuance Forecast**: In 2026, the advance - approval new debt quota is expected to be issued faster and in larger amounts. Local bonds will be issued earlier and at a faster pace, and the investment direction of special bond funds will be further optimized. The 2 - trillion - yuan debt resolution quota is expected to follow the 2025 issuance rhythm [42][43] - **Interest Rate Trend**: Bond market interest rates will fluctuate at a low level, with limited upward pressure and narrowed downward space. The market may face short - term liquidity tightening [44][45] - **Debt Resolution Focus**: The long - term regulatory mechanism for government debt management is expected to be accelerated. The focus of debt risk resolution may shift to the operating debt of financing platforms, and relevant supporting policies are expected to be introduced [46]

Policy Impact - The implementation of the "Artificial Intelligence + Manufacturing" policy will provide clear guidance and development opportunities for the computing power industry chain[4] - In the short term, the policy is expected to stimulate market confidence and direct funds towards computing infrastructure, increasing demand for computing hardware and intelligent computing center construction[5] - In the long term, the policy aims to address structural imbalances, core technology bottlenecks, and insufficient application scenarios in the computing power industry[15] Current Market Analysis - As of September 2025, the total scale of computing power centers in China has grown from 5.2 million racks to 12.5 million racks, with an annual growth rate of 30%[6] - There is a structural imbalance in the computing power market, with general computing power being relatively surplus while intelligent computing power is in short supply[6] - The geographical mismatch in computing power resources is evident, with high demand in the eastern regions and underutilization in the western regions[7] Core Technology Challenges - Domestic manufacturers hold a low market share in high-end AI training chips, with major markets dominated by foreign companies like NVIDIA and AMD[8] - The software ecosystem is monopolized by international standards like CUDA, creating barriers for domestic chip manufacturers to gain market acceptance[9] Application and Development Opportunities - The policy encourages the construction of high-level intelligent computing facilities and the deployment of computing resources in industrial scenarios, which will benefit related enterprises[5] - The expected market expansion will create a trillion-level incremental market as computing demand shifts from the internet to broader industrial applications[15] - The policy will promote the development of domestic high-end computing hardware and software ecosystems, enhancing the competitiveness of the computing power industry[13][14]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The issuance of the "AI + Manufacturing" action plan aligns with global industrial competition and domestic manufacturing transformation needs, aiming to empower the manufacturing sector with AI technology and establish a new quality productivity base [2][4] - The plan emphasizes the integration of AI into manufacturing processes, which is seen as a critical driver for enhancing China's competitive advantage in core technologies and industrial scale [4][10] - The report outlines a comprehensive development system that includes technical support, scenario empowerment, product innovation, ecological activation, and safety assurance [7][9] Summary by Sections Background and Core Positioning - The deep integration of AI and manufacturing is essential for reshaping industrial advantages and seizing development opportunities amid global competition [4] - The plan aims to accelerate the application of AI in manufacturing, addressing the long-standing issues of "large but not strong" in China's manufacturing sector [4][6] Key Policy Interpretations - The action plan focuses on precise implementation and deep advancement from "AI+" to "manufacturing empowerment," targeting specific sectors and processes within the manufacturing industry [5][6] - It sets a goal for China to achieve reliable supply of key AI technologies and maintain a leading position in industrial scale and empowerment levels by 2027 [6][10] Core Measures - The report identifies five core measures to build a comprehensive development system, including: - **Innovation Foundation**: Establishing a full-chain technical support system for AI in manufacturing [7] - **Intelligent Upgrade**: Promoting deep empowerment of AI across all processes and industries [8] - **Product Breakthrough**: Encouraging the iteration and upgrade of intelligent equipment and new business models [8] - **Ecological Cultivation**: Activating collaborative innovation among market entities [9] - **Safety Assurance**: Building a multi-dimensional safety protection system [9] Practical Implications - The action plan addresses the mismatch between computing power supply and manufacturing demand, emphasizing the need for practical applications of AI technologies [10] - It aims to facilitate a fundamental shift in manufacturing from factor-driven to innovation-driven growth, enhancing quality and efficiency [10][13] Challenges and Outlook - The report acknowledges challenges in the deep integration of AI and manufacturing, including performance limitations of industrial models and data fragmentation [11][12] - It anticipates that by 2027, 500 typical application scenarios will be established, leading to scalable implementations in key areas [13]

Investment Rating - The report indicates a cautious outlook on the commercial real estate sector in China, highlighting significant inventory pressure and credit risks for certain companies [2]. Core Insights - The commercial real estate market in China has experienced severe inventory pressure compared to the residential market, with the inventory multiple for commercial properties exceeding 12 times as of November 2025, indicating a significant imbalance in supply and demand [5][7]. - The report emphasizes the need for a transformation in commercial real estate companies towards lower leverage, specialization, and differentiation, particularly for those with high asset constraints and non-core area investments [2]. - The recovery of the retail property market is supported by the resilience of consumer spending in China, while the office market faces substantial challenges due to oversupply and prolonged inventory adjustments [2][12]. Summary by Sections 1. Inventory Pressure in Commercial Real Estate - The inventory multiple for commercial properties has been on the rise, reaching over 12 times by November 2025, compared to residential properties which have also seen an increase to nearly 7 times [5][7]. - The office sector specifically shows a troubling inventory multiple nearing 15 times, indicating a significant oversupply situation [11]. 2. Price Dynamics and Supply-Demand Balance - The report discusses how asset prices in cities like Beijing and Shanghai have deviated from fundamentals, leading to high inventory multiples, while cities like Chongqing have maintained more stable prices and inventory levels [12][21]. - The historical context of Japan's real estate bubble is referenced, drawing parallels to the current situation in China, where rapid price increases have led to significant market imbalances [22][23]. 3. Recovery Path for Commercial Real Estate - The report outlines that the recovery of the commercial real estate market in China will require a prolonged period of inventory reduction and supply control, similar to Japan's experience post-bubble [29][41]. - It highlights that while Japan's retail market faced a prolonged downturn, China's retail sector shows signs of resilience, with consumer spending still holding up despite challenges [30][37]. 4. Corporate Strategies and Market Dynamics - The report notes that many residential developers have ventured into commercial real estate, leading to a mixed performance in the sector as companies face pressures to adapt to changing market conditions [53]. - It emphasizes the importance of learning from Japan's real estate recovery strategies, particularly the role of financial instruments like J-REITs in stabilizing the market [67].

Investment Rating - The report does not explicitly state an investment rating for the industry [2] Core Insights - The new regulations for government investment funds aim to promote compliance transformation and credit differentiation among urban investment enterprises [4][5] - The implementation of the new regulations is seen as a continuation and deepening of previous policies, addressing issues in the development of government investment funds and providing opportunities and challenges for urban investment enterprises [5][6] Summary by Sections New Regulations' Core Content and Intent - The "Work Method" focuses on "layout planning and investment control," transforming previous principles into executable systems [6] - The "Evaluation Method" establishes a comprehensive evaluation system with 13 indicators across three dimensions: policy compliance, productivity layout optimization, and policy execution capability [6][7] - The new regulations create a full-chain management system for government investment fund direction, enhancing fund efficiency and promoting high-quality development [6][7] Impact on Urban Investment Enterprises - Urban investment enterprises will participate in government investment funds in a more standardized and market-oriented manner, making decisions based on their financial status and management capabilities [12] - The new regulations present both opportunities and challenges for urban investment enterprises, as they align with government investment fund evaluation indicators and require enhanced professional investment and compliance management capabilities [13] - The new regulations may lead to further credit differentiation among urban investment enterprises, favoring those in regions with strong industrial foundations and financial resources [14][15]

Investment Rating - The report does not explicitly provide an investment rating for the industry but emphasizes the strategic importance of AI in manufacturing and its potential to enhance competitiveness on a global scale [4][10]. Core Insights - The issuance of the "AI + Manufacturing" action plan aligns with global industrial competition and domestic manufacturing transformation needs, aiming to empower manufacturing through AI technology [2][4]. - The plan focuses on creating a comprehensive development system that includes technology support, scenario empowerment, product innovation, ecosystem activation, and security assurance [7][10]. - By 2027, the plan aims for China's AI core technologies to achieve reliable supply, with the industry scale and empowerment level ranking among the world's top [6][13]. Summary by Sections Background and Core Positioning - The deep integration of AI and manufacturing is essential for reshaping industrial advantages and seizing development opportunities amid global competition [4]. - The plan is a response to the urgent need for China's manufacturing sector to upgrade and transition from scale expansion to quality and efficiency [4][5]. Key Policy Interpretations - The plan introduces five core measures to build a comprehensive development system, focusing on technology support, scenario empowerment, product innovation, ecosystem activation, and security assurance [7][9]. - It emphasizes the need for a dual-cycle empowerment system that connects technology supply and industrial application, fostering a collaborative ecosystem [6][10]. Challenges and Outlook - The report identifies challenges such as the need for real-time response capabilities in industrial models and the fragmentation of industrial data, which hinders model training accuracy [11][12]. - In the short term (1-2 years), the manufacturing sector is expected to enter a phase of benchmark leadership, with 500 typical application scenarios becoming replicable and scalable [13]. - In the long term, the AI-driven innovation ecosystem is projected to enhance China's global competitiveness in core technologies and industry scale, leading the global manufacturing sector towards intelligent transformation [13].

Policy Overview - The central bank's structural monetary policy focuses on "interest rate cuts and expansion" targeting agriculture, small enterprises, private businesses, and technological innovation, without implementing total "reserve requirement ratio (RRR) cuts or interest rate reductions" for now[4] - The recent policy shift indicates a transition from "leading the market curve" to "synchronizing with the market," reflecting a more precise and coordinated monetary approach[4] Monetary Policy Details - The central bank lowered the re-lending and re-discount rates by 25 basis points (BP), with the one-year re-lending rate now at 1.25%[4] - An additional 500 billion yuan in re-lending for agriculture and small enterprises has been allocated, with a 1 trillion yuan re-lending specifically for private enterprises[4] - The re-lending quota for technological innovation and transformation has been increased by 400 billion yuan, and a combined risk-sharing tool for technological innovation and private enterprise bonds has been established with a total re-lending quota of 200 billion yuan[4] Economic Context - Since the implementation of previous policies, domestic inflation has shown a mild recovery, with the Consumer Price Index (CPI) increasing by 0.8% year-on-year in December 2025, and the Producer Price Index (PPI) declining by 1.9%[5] - Exports achieved a year-on-year growth of 5.5% in 2025 despite external challenges, indicating sustained competitiveness[5] - The Hang Seng Index led global markets, while the Shanghai Composite Index reached 4,100 points on January 15, 2026, highlighting improved market confidence[5] Future Outlook - The central bank emphasizes that the space for RRR cuts is greater than for interest rate reductions, with an increased focus on government bond operations to manage liquidity[6] - The absence of specific policies for the real estate market suggests that future support will likely rely more on fiscal measures rather than monetary policy, such as interest subsidies and reduced transaction costs[7] - Overall, the structural monetary policy reflects a balance between stabilizing growth, mitigating risks, and promoting transformation amid ongoing economic challenges[7]

Financial Overview - Total assets of local financial holding companies are projected to grow from CNY 84,530.60 million at the end of 2023 to CNY 108,296.23 million by June 2025, representing an increase of approximately 28.3%[2] - Total profit is expected to rise from CNY 1,158.03 million in 2023 to CNY 698.61 million by June 2025, indicating a decline in profitability[2] - The net profit is forecasted to decrease from CNY 970.31 million in 2023 to CNY 573.61 million by June 2025, reflecting a significant drop in earnings[2] Concentration Ratios - The asset concentration ratio (CR5) is expected to increase from 42.46% at the end of 2023 to 46.15% by June 2025, indicating a trend towards asset concentration among the top five firms[1] - The profit concentration ratio (CR10) is projected to rise from 60.98% in 2023 to 63.88% by June 2025, showing that profit generation is becoming increasingly concentrated among the top ten firms[1] Regulatory Environment - The financial regulatory framework has deepened since 2024, focusing on compliance and risk prevention, which has increased management costs and governance challenges for local financial holding companies[6] - The regulatory trend is moving towards a more legal and refined approach, with stricter requirements for risk identification and internal control for subsidiaries[6] Market Dynamics - The local financial holding industry has formed a three-tier development structure, with significant resource and risk differentiation across regions, necessitating attention to operational risks of new platforms[6] - The capital strength of local financial holding companies shows significant differentiation, with provincial platforms generally having better short-term debt repayment capabilities compared to city-level platforms[6] Credit Risk Outlook - The overall credit rating of the local financial holding industry remains stable and at a high level, with provincial platforms generally having better credit quality than city-level platforms[6] - The industry is expected to face continued pressure on profitability in 2026, but with macroeconomic recovery and government support, the overall credit risk is considered manageable[6]

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - In 2025, the issuance scale of panda bonds exceeded 160 billion yuan, ranking second in history. Benefiting from factors such as the cost - advantage of domestic financing, continuous introduction of policy optimization, and the improvement of RMB internationalization, it is expected that panda bonds will remain popular in 2026, and the issuance volume may stay at a historically high level [1][34] 3. Summary According to the Directory 3.1 2025 Panda Bond Issuance Overview - **Issuance Scale and Quantity**: In 2025, 44 entities issued 114 panda bonds with a total scale of 163.66 billion yuan. The number of issuers remained the same as last year, the number of issuance periods increased by 4.5% year - on - year, and the scale decreased by 16.0% year - on - year but was still at a high historical level [3] - **Reasons for High - level Issuance**: Firstly, the domestic financing cost has an advantage, and the panda bond market is still attractive to overseas issuers. Although the interest rate spread has narrowed due to the continuous interest rate cuts by European and American central banks, the domestic financing cost is still low. Secondly, policies for optimizing panda bond systems were continuously introduced, providing institutional convenience. Thirdly, the internationalization of the RMB continued to improve, and the exchange rate strengthened, increasing the attractiveness of RMB assets [5][8][11] 3.2 Characteristics and New Trends of the 2025 Panda Bond Market - **Low - interest Environment and Cost Reduction**: The domestic market maintained a low - interest environment. The issuance of panda bonds was concentrated in the medium - and long - term, and the average issuance cost hit a new low. The issuance volume of panda bonds reached a peak from June to July, and there was a significant correlation between the monthly issuance scale and the domestic interest rate trend [13][14] - **Optimized Issuer Structure**: The issuer structure of panda bonds was more optimized. The proportion of panda bond issuers with foreign backgrounds reached a new high since 2019, and the sources of issuers were more diversified. The registration locations of issuers showed a decentralized trend [15] - **Diversified Industry Distribution**: The industry distribution of panda bond issuers was relatively diversified. Financial institutions ranked first in the issuance scale, and the scale of panda bonds issued by the daily consumption industry decreased significantly. There were new issuances of sovereign panda bonds [19][20] - **Reduction in Rated Bond Quantity**: The number of panda bonds issued with ratings decreased. The credit ratings of bonds were mainly concentrated in the AAA level, and the proportion of unrated panda bonds increased [21] - **Change in Sustainable Development - themed Bonds**: The issuance scale of sustainable development - themed panda bonds continued to decline. Green panda bonds accounted for the highest proportion, and product innovation was more active, with new science - and technology innovation panda bonds issued [24][25] 3.3 Outlook for the 2026 Panda Bond Market - **Low Financing Cost**: It is expected that the financing cost of panda bonds will remain low in 2026. The PBOC will continue to implement a moderately loose monetary policy, and the Fed's monetary policy may continue to be loose, but there are significant differences in the interest rate cut rhythm. The relative financing cost advantage of the RMB still exists, but the inversion of the Sino - US interest rate spread may continue to narrow [27][29] - **Continuous Improvement of External Conditions**: RMB internationalization is expected to continue to advance, and relevant panda bond regulations are expected to be continuously improved. The PBOC welcomes more overseas entities to issue panda bonds, which will provide a good external environment for the panda bond market [30][31] - **High Refinancing Demand**: In 2026, the panda bond market will face a peak of maturity and repayment. The high refinancing demand will support the issuance of panda bonds [32] - **Diversified Expansion of Issuers**: Driven by the Belt and Road Initiative and multilateral mechanisms, the panda bond market will see opportunities for the expansion of diversified issuers in 2026 [33] - **Overall Forecast**: In 2026, panda bonds are expected to remain popular, and the issuance volume may stay at a historically high level [34]