Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company is positioned as a core supplier in the automotive and oil & gas sectors, with new growth engines ignited by military products [1]. - The company is expected to benefit from the rapid development of the new energy vehicle industry and unconventional oil and gas development, with projected net profits for 2025-2027 being 9.3 billion, 11.1 billion, and 13.7 billion yuan respectively, corresponding to P/E ratios of 20, 17, and 14 times [1][6]. Summary by Sections 1. Market Expansion and Competitive Position - The company is a leading player in the automotive interior and exterior parts, high-performance functional materials, and oil & gas equipment sectors, with strong R&D capabilities [11]. - The company has a long development history and has established a new growth path through restructuring [13]. - The company leverages its strong technical strength to actively expand its product layout [15]. - The company's reasonable shareholding structure and subsidiaries contribute to revenue generation [18]. - The company has shown stable revenue growth, with a significant increase in operating income and enhanced cost control capabilities [24][25]. - A major project adjustment has been made to focus on core military products, optimizing resource allocation [27]. 2. Automotive Interior and Exterior Parts - The company provides a diverse range of automotive interior and exterior parts, closely collaborating with leading automotive manufacturers [32]. - The automotive industry is rapidly developing, and the automotive parts market is expected to grow significantly [35]. - The company maintains stable partnerships with major manufacturers, solidifying its market position [41]. - Government policies supporting the development of the new energy vehicle industry are expected to benefit the automotive parts sector [43]. 3. High-Performance Functional Materials - The company’s high-performance functional materials business is poised for growth, driven by increasing demand in various industries [46]. - The company has developed new products in electronic functional materials, leveraging its strong R&D capabilities [50]. - The company is well-positioned to benefit from the national high-speed rail "going out" strategy, which presents opportunities for its magnetic ticket business [46]. 4. Unconventional Oil and Gas Development - The company has significant technological advantages in unconventional oil and gas development, with a focus on deep-sea economic opportunities [52]. - The company’s oil and gas equipment business is expected to grow due to breakthroughs in unconventional resource extraction [55]. - The company has established a strong market position in the domestic oil and gas equipment sector, with products exported to over 20 countries [53]. 5. Military Business Growth - The company is focusing on military products, particularly large quantity explosive columns and collaborative production of explosive items, to fulfill its responsibilities in national defense [66]. - The demand for military fire control products is increasing due to accelerated national defense modernization [67]. - The company’s strategic adjustments align with national policies supporting defense and military modernization, positioning it for rapid growth in military business [70]. 6. Investment Recommendations - The company’s business segments are clearly defined, with traditional high-performance functional materials maintaining growth while focusing on automotive parts and oil & gas equipment [71]. - The automotive parts business is expected to grow at rates of 19%, 16%, and 14% from 2025 to 2027 [74]. - The oil and gas equipment business is projected to grow at a steady rate of 10% annually during the same period [74]. - The high-performance functional materials segment is anticipated to grow at 15% annually from 2025 to 2027 [75].

Report Summary 1. Report Industry Investment Rating There is no information provided regarding the industry investment rating in the given report. 2. Core Viewpoint of the Report The report suggests continuing to be patient and waiting for the stabilization of overseas markets. Although the macro - timing model's monthly score for December 2025 indicates a certain probability of adjustment in the Wind All - A Index, the adjustment space may be limited. In the whole month, the cost - effectiveness of the dividend sector may gradually weaken, while the technology growth sector may regain some attractiveness after the adjustment in November. More incremental funds still need time. The report is cautious about the micro - and small - cap direction in December. In the short - term, the equity market is expected to continue to fluctuate within a range due to overseas market disturbances [23][24]. 3. Summary by Directory 3.1 A - share Market行情 Overview (2025.12.08 - 2025.12.12) - **Equity ETF Net Inflow Statistics**: The top three types of equity ETFs in terms of net inflow in the past five trading days are scale index ETFs (2.843 billion yuan), style index ETFs (86 million yuan), and cross - border industry index ETFs (32 million yuan). The top three products are A500ETF Huatai - Peregrine (1.319 billion yuan), Science and Technology Innovation Board 50ETF (1.155 billion yuan), and A500ETF Southern (1.123 billion yuan) [8][9]. - **Main Broad - based Indexes**: The top three broad - based indexes in terms of increase and decrease are the Beijing Stock Exchange 50 (1.50%), the Science and Technology Innovation Composite Index (0.26%), and the Science and Technology Innovation 100 (0.19%); the bottom three are the Wind Micro - cap Stock Daily Equal - weighted Index (- 5.75%), the Dividend Index (- 2.10%), and the CSI Dividend Index (- 1.82%) [13]. - **Style Indexes**: The top three style indexes in terms of increase and decrease are mid - cap growth (0.30%), China Securities Mid - cap (0.09%), and small - cap growth (0.02%); the bottom three are mid - cap value (- 1.61%), finance (style. CITIC) (- 1.47%), and small - cap value (- 1.46%) [15]. - **Shenwan Primary Industry Indexes**: The top three Shenwan primary industry indexes in terms of increase and decrease are national defense and military industry (1.73%), communication (1.41%), and public utilities (0.33%); the bottom three are real estate (- 3.10%), textile and clothing (- 2.91%), and petroleum and petrochemicals (- 2.70%) [19]. 3.2 A - share Market行情 Outlook (2025.12.15 - 2025.12.19) - **Macro Model Results of the Broad - based Index**: The low - frequency monthly macro - model score for the Wind All - A Index as of December 1, 2025, is - 2 points, indicating possible shock adjustment but with limited adjustment space. The high - frequency daily macro - model score turned negative this week, suggesting that the broad - based index may show a shock trend [30][31]. - **Technical Analysis Model Results of Major Indexes** - **Main Broad - based Indexes**: As of December 12, 2025, the top three in the risk - trend model's comprehensive score are the Beijing Stock Exchange 50 (90.69 points), the Science and Technology Innovation 100 (62.89 points), and the Science and Technology Innovation Composite Index (62.71 points); the bottom three are the Wind Micro - cap Stock Daily Equal - weighted Index (26.88 points), the Dividend Index (40.28 points), and the ChiNext Index (40.82 points). Historically, in December, the top three in average returns are the Shenzhen Dividend (4.71%), the SSE 50 (4.43%), and the CSI 300 (3.88%); the bottom three are the Science and Technology Innovation 100 (- 4.99%), the Beijing Stock Exchange 50 (- 4.65%), and the Science and Technology Innovation 50 (- 2.43%) [34][39]. - **Style Indexes**: As of December 12, 2025, the top three in the risk - trend model's comprehensive score are consumption (style. CITIC) (64.24 points), China Securities Small - cap (56.76 points), and China Securities Mid - cap (56.24 points); the bottom three are large - cap value (34.67 points), China Securities Large - cap (41.48 points), and small - cap value (41.69 points). Historically, in December, the top three in average returns are finance (style. CITIC) (4.16%), large - cap value (3.98%), and China Securities Large - cap (3.75%); the bottom three are small - cap growth (- 0.53%), small - cap value (0.07%), and mid - cap growth (0.36%) [43][49]. - **Shenwan Primary Industry Indexes**: As of December 12, 2025, the top three in the risk - trend model's comprehensive score are non - bank finance (77.49 points), medicine and biology (71.35 points), and automobile (71.08 points); the bottom three are comprehensive (27.56 points), banks (28.07 points), and household appliances (29.3 points). Historically, in December, the top three in average returns are food materials (3.44%), non - bank finance (3.37%), and banks (3.16%); the bottom three are environmental protection (- 0.22%), comprehensive (- 0.14%), and electronics (0.09%) [51][59]. 3.3 Fund Allocation Suggestion The report recommends an evenly - weighted and relatively aggressive ETF allocation strategy, considering that the subsequent market may be in a range - bound situation. It also lists recommended ETFs, including Chemical ETF, Hong Kong Stock Innovative Drug ETF, Satellite ETF, etc. [62][64][65]

Core Insights - The report indicates that the 2025 Central Economic Work Conference is more focused on "structural adjustment," suggesting a potential for a structural market trend in the upcoming year [4][6][26] - Historical patterns show that years emphasizing "stabilizing growth" typically lead to stronger market performance, favoring large-cap stocks over small-cap and value stocks over growth stocks [2][10] - Conversely, years focused on "structural adjustment" tend to exhibit market volatility, with large-cap stocks remaining flat while small-cap stocks weaken [2][10] Summary by Sections Historical Performance Post-Central Economic Work Conference - The report categorizes past conferences into two themes: "stabilizing growth" and "structural adjustment," with specific years identified for each theme [1][2] - Years with a "stabilizing growth" focus include 2014, 2018, 2019, 2021, 2022, and 2024, characterized by economic slowdowns and policies aimed at maintaining stability [1][2] - Years emphasizing "structural adjustment" include 2013, 2015, 2016, 2017, 2020, and 2023, where the focus was on addressing structural issues and risks [2] Market Behavior and Style Preferences - In "stabilizing growth" years, the market index typically strengthens, with large-cap stocks outperforming small-cap stocks and value stocks outperforming growth stocks [2][10] - In "structural adjustment" years, the market tends to be more volatile, with large-cap stocks showing flat performance and small-cap stocks declining [2][10] Industry Performance Insights - The report notes that the focus of the Central Economic Work Conference influences the following year's market trends, with specific industry policies guiding investment directions [3][4] - For instance, the emphasis on "innovation-driven" policies in 2012 led to a TMT boom in 2013, while the focus on "new consumption" and "new infrastructure" in 2018 shaped market trends in 2019 [3] 2025 Conference Insights - The 2025 conference highlights a "supply strong, demand weak" scenario, indicating a need to balance supply and demand dynamics [4][6] - The report suggests that monetary policy will prioritize economic stability and reasonable price recovery, which could lead to improved corporate profitability if inflation expectations rise [6] - Expanding domestic demand is a key focus, with policies aimed at increasing consumer income and stabilizing investment to counteract previous declines in fixed asset investment growth [6] Market Outlook and Sector Allocation - The report anticipates a structural market trend in 2025, with specific sectors recommended for investment, including AI applications, semiconductor, and renewable energy sectors [7] - The report emphasizes the importance of monitoring macroeconomic conditions and policy developments to inform investment strategies in the upcoming year [7]

Group 1: Investment Rating - No investment rating for the industry is provided in the report Group 2: Core Viewpoints - The primary market saw 29 new green bonds issued in the inter - bank and exchange markets from December 8 - 12, 2025, with a total issuance scale of about 36.752 billion yuan, an increase of 16.015 billion yuan from the previous week [1] - The secondary market's weekly green - bond trading volume totaled 64.4 billion yuan, a decrease of 1.7 billion yuan from the previous week [2] - This week, the overall deviation amplitude of the weekly average trading price valuation of green bonds was not large, with the discount trading amplitude greater than the premium trading, and the discount trading ratio less than the premium trading [3] Group 3: Summary by Directory Primary Market Issuance - **Number and Scale**: 29 new green bonds were issued, with a total scale of about 36.752 billion yuan, up 16.015 billion yuan week - on - week [1] - **Issuance Term**: Most issuance terms were 3 years [1] - **Issuer Nature**: Included central state - owned enterprises, central enterprise subsidiaries, local state - owned enterprises, large private enterprises, other state - owned enterprises, Sino - foreign joint - ventures, small and medium - sized private enterprises, central financial enterprises, and other enterprises [1] - **Subject Rating**: Mostly AAA and AA + grades [1] - **Issuer Region**: Jiangsu, Hubei, Guangdong, Beijing, Inner Mongolia, Hebei, Fujian, Zhejiang, Sichuan, and Yunnan [1] - **Bond Types**: Transaction Association ABN, enterprise ABS, commercial bank ordinary bonds, general corporate bonds, ultra - short - term financing bills, and medium - term notes [1] Secondary Market Transaction - **Total Transaction Volume**: The weekly trading volume was 64.4 billion yuan, down 1.7 billion yuan from the previous week [2] - **By Bond Type**: The top three in trading volume were non - financial corporate credit bonds (27.9 billion yuan), financial institution bonds (26.3 billion yuan), and interest - rate bonds (6.9 billion yuan) [2] - **By Issuance Term**: Green bonds with a term of less than 3 years had the highest trading volume, accounting for about 82.45% [2] - **By Issuing Subject Industry**: The top three industries in trading volume were finance (28.1 billion yuan), public utilities (11.9 billion yuan), and transportation equipment (22 billion yuan) [2] - **By Issuing Subject Region**: The top three regions in trading volume were Beijing (16.2 billion yuan), Guangdong (7.6 billion yuan), and Tianjin (7.1 billion yuan) [2] Valuation Deviation of Top Thirty Individual Bonds - **Discount Bonds**: The top three discount - rate bonds were 25 ShuiNeng G1 (- 0.9844%), 25 JiShui 1B (- 0.6382%), and 22 FuYuan Green Bond 02 (- 0.6016%), with the rest having a discount rate within - 0.40%. The main industries of the subjects were finance, transportation, and real estate, and the regions were mainly Beijing, Tianjin, and Jiangsu [3] - **Premium Bonds**: The top three premium - rate bonds were 24 LvShe Building Materials GN001 (Sustainable Linked) (0.6964%), 18 YiChang Green Bond NPB (0.5590%), and 25 EDong G1 (0.4656%), with the rest having a premium rate within 0.36%. The main industries of the subjects were finance, construction, and energy, and the regions were mainly Fujian, Beijing, and Tianjin [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is building a comprehensive semiconductor ecosystem through its IDM platform, with AI computing driving opportunities in high-end optical chips [3] - The company has achieved significant technological breakthroughs, including a continuous power breakthrough of 132W for high-power single-tube chips and mass production of 50W products [3] - The company is benefiting from the explosion of AI computing power and supply chain restructuring, with high-end optical communication chips entering a phase of capacity release and technological iteration [4] - The company is expanding its business boundaries from laser chips to high-growth sectors such as automotive radar, optical computing, and new energy [3][4] Financial Summary - Total revenue is projected to decline from 290.21 million in 2023 to 272.64 million in 2024, followed by a significant increase to 477.12 million in 2025, 682.28 million in 2026, and 921.08 million in 2027 [1] - The net profit attributable to the parent company is expected to improve from a loss of 91.95 million in 2023 to a profit of 36.80 million in 2025, 72.82 million in 2026, and 150.41 million in 2027 [1] - The earnings per share (EPS) is forecasted to turn positive in 2025, reaching 0.21 yuan per share, and increasing to 0.85 yuan per share by 2027 [1] - The price-to-earnings (P/E) ratio is projected to decrease significantly from -283.74 in 2023 to 173.45 in 2027, indicating improving profitability [1]

Group 1 - The report identifies 2026 as a pivotal year for intelligent driving, marking the transition to a commercial model for B-end autonomous vehicles, with a potential explosion in C-end adoption expected by 2028 [3][45] - Three core drivers for L4 RoboX investment opportunities are highlighted: technological advancements, cost reductions, and operational improvements, particularly in first-tier cities [3][6] - The report proposes a new valuation framework for L4 RoboX, emphasizing the revenue-generating capacity of intelligent vehicles based on their ownership and capability levels [3][6] Group 2 - The past decade of intelligent driving is characterized as a 0-1 introduction phase, with significant hardware and software iterations leading to major capability upgrades [4][11] - The report outlines three distinct phases of intelligent driving development from 2015 to 2025, detailing the evolution from initial high valuations to a focus on performance and software opportunities [4][21] - The transition from hardware-centric to software-centric investment strategies is emphasized, with a shift towards AI-driven pricing models for intelligent vehicles [4][32] Group 3 - Key catalysts for 2026 include significant model iterations from major players like Tesla and Xiaopeng, as well as the acceleration of RoboX deployments by various companies [7][45] - The report suggests a focus on B-end software companies over C-end hardware companies for investment, highlighting specific stocks in both H-shares and A-shares markets [7][45] - The RoboX commercial model is expected to rely on a combination of technological breakthroughs, cost management, and effective operational strategies, including regulatory support [65][66] Group 4 - The report outlines the expected market dynamics for intelligent driving from 2026 to 2030, predicting a shift towards a new pricing system that values results over processes [47][48] - The intelligent vehicle market is anticipated to undergo significant transformations, with RoboX expected to redefine the automotive landscape and create new revenue streams [47][61] - The report emphasizes the importance of hardware sales as a precursor to software monetization in the intelligent vehicle sector, advocating for a focus on user value creation [51][53]

Report Summary 1. Industry Investment Rating No industry investment rating is provided in the report. 2. Core View The report tracks the weekly data of secondary capital bonds from December 8, 2025, to December 12, 2025, including the issuance in the primary market, trading in the secondary market, and the valuation deviation of the top 30 individual bonds. 3. Summary by Directory Primary Market Issuance - Four secondary capital bonds were newly issued in the inter - bank and exchange markets, with a total issuance scale of 36 billion yuan. The issuance term was 10 years. The issuers included other enterprises, large private enterprises, and central enterprise subsidiaries, with credit ratings of AA +, AA -, AA, and AAA, located in Jiangsu, Zhejiang, and Guangdong provinces [1]. Secondary Market Trading - The weekly trading volume of secondary capital bonds totaled approximately 329.2 billion yuan, an increase of 134.3 billion yuan from the previous week. The top three most - traded bonds were 25 CCB Secondary Capital Bond 03BC (66.381 billion yuan), 25 BOC Secondary Capital Bond 01BC (16.157 billion yuan), and 25 Huishang Bank Secondary Capital Bond 01 (12.305 billion yuan) [2]. - By the issuer's region, the top three in trading volume were Beijing, Anhui, and Shanghai, with approximately 271.9 billion yuan, 12.4 billion yuan, and 11 billion yuan respectively [2]. - As of December 12, the changes in the yields to maturity of 5Y, 7Y, and 10Y secondary capital bonds with ratings of AAA -, AA +, and AA compared to the previous week were as follows: for 5Y bonds, - 0.40BP, - 1.63BP, - 1.63BP; for 7Y bonds, - 5.55BP, - 4.38BP, - 4.38BP; for 10Y bonds, - 3.91BP, - 2.99BP, - 2.99BP [2][11]. Valuation Deviation of the Top 30 Individual Bonds - The overall valuation deviation of the weekly trading average price of secondary capital bonds was not significant. The proportion of discount transactions was greater than that of premium transactions, and the discount amplitude was larger. - Among the discount - traded bonds, the top three in terms of discount rate were 23 EXIM Bank Secondary Capital Bond 02B (- 0.5669%), 24 Hankou Bank Secondary Capital Bond 01 (- 0.3695%), and 22 ICBC Secondary 01 (- 0.3295%), with most other discount rates within - 0.33%. The implied ratings of ChinaBond were mainly AAA -, AA +, and AA -, and the bonds were mostly from Beijing, Shanghai, and Jilin [3]. - Among the premium - traded bonds, the top three in terms of premium rate were 21 Great Wall Huaxi Bank Secondary 02 (0.4779%), 22 Great Wall Huaxi Secondary Capital Bond 01 (0.4722%), and 25 China Resources Bank Secondary Capital Bond 02 (0.2109%), with most other premium rates within 0.21%. The implied ratings of ChinaBond were mainly AAA -, AA, and AA +, and the bonds were mostly from Beijing, Zhejiang, and Sichuan [3].

Group 1 - The core view of the report indicates that Hong Kong stocks outperformed global investor expectations in 2025, with the Hang Seng Index rising by 30%, the Hang Seng Tech Index by 26.7%, and the Hang Seng China Enterprises Index by 26.2%, surpassing major global markets such as the S&P 500, DAX, and Nikkei 225 [1][8][11] - The report anticipates that Hong Kong stocks will continue to rise in 2026 due to several factors, including expected interest rate cuts by the Federal Reserve, a temporary easing of Sino-US relations, and synchronized monetary and fiscal policies in China [1][16][21] - The report emphasizes that the main investment themes for 2026 will be technology and cyclical sectors, with a focus on innovative pharmaceuticals, suggesting a barbell strategy for portfolio allocation to mitigate potential risks from overseas macroeconomic and political uncertainties [1][3][16] Group 2 - The report highlights that the first half of 2026 is expected to present more trading opportunities, driven by domestic and international factors, including a favorable policy environment in China and anticipated interest rate cuts by the Federal Reserve [2][16] - It is noted that the cyclical sectors are likely to benefit from domestic policies aimed at reducing internal competition and improving global demand, with a focus on commodities and real estate stocks in Hong Kong [3][16] - The report also points out the potential for continued inflows of southbound capital into Hong Kong stocks, driven by a "wealth effect" as market performance improves [1][11][16]

Core Views - The building materials sector slightly underperformed the overall A-share market in 2025, with a return of 19.62% compared to a -4.85% excess return relative to the Wind All A Index [2][10] - The macro outlook suggests that total policies are expected to strengthen, with physical demand support likely to increase, as emphasized in the December Politburo meeting [2][15][20] - The glass fiber industry is anticipated to see a resonance between traditional and emerging fields, with demand growth expected to remain stable despite a potential slowdown [2][23][45] 2025 Market Review - The building materials sector's performance can be segmented into several phases, with notable periods of underperformance and outperformance against the A-share market [10][12] - The glass fiber sub-sector showed significant excess returns driven by high demand in wind power and thermoplastics [10][12] - The cement sub-sector experienced a boost due to improved domestic demand expectations and effective supply-side discipline [10][12] Macro Outlook - Fixed asset investment in China saw a year-on-year decline of 1.7% from January to October 2025, with infrastructure and real estate investments dropping by 0.1% and 14.7%, respectively [15][19] - The Politburo's focus on expanding domestic demand and optimizing supply is expected to lead to a moderate increase in total policies [15][20] - The anticipated fiscal spending for 2026 is projected to reach 41.62 trillion yuan, a 2.1% increase year-on-year, with a focus on effective investment [20][21] Glass Fiber Industry - The supply shock in the glass fiber industry is gradually being digested, with new capacity expected to be limited in the medium term [23][39] - The effective production capacity for glass fiber is projected to reach 759.2 million tons for roving and 107.7 million tons for electronic fabrics in 2026, representing year-on-year increases of 6.9% and 7.3%, respectively [23][40] - Demand for glass fiber is expected to remain stable, supported by wind power and thermoplastics, despite potential declines in growth rates [45][46] Cement Industry - The cement industry is expected to maintain self-discipline in supply, with a focus on eliminating outdated capacity, which will support profitability [3][20] - The exit of 10,952 million tons of outdated capacity is projected, which will enhance the utilization rate of clinker capacity [3][20] - The profitability of the cement sector is expected to improve in 2026, particularly in regions with significant infrastructure projects [3][20] Glass Industry - The glass industry is experiencing accelerated supply clearance, which is expected to provide price elasticity in 2026 [2][3] - The current state of losses in the industry is likely to drive the closure of high-cost production lines, leading to a potential rebound in prices in the first half of 2026 [2][3] - Long-term policies aimed at curbing disorderly competition are expected to stabilize industry profitability and enhance the competitive advantage of leading companies [2][3]

Group 1 - The report indicates that in 2025, China's natural gas consumption is expected to increase slightly to 4,302 billion cubic meters, a year-on-year growth of 2.4%, influenced by factors such as a warm winter and tariff policies [3][20][21] - Domestic self-sufficiency in natural gas is projected to rise by 3 percentage points to 60% in 2025, with production increasing by 6.5% to 2,171 billion cubic meters, while imports are expected to decline by 6.3% to 1,444 billion cubic meters [3][23][24] - The report highlights that LNG supply is shifting towards a more relaxed state, which is anticipated to lower domestic gas costs and enhance the economic viability of natural gas [4][29] Group 2 - The economic viability of natural gas is expected to improve significantly, with a potential demand increase of 1.7 times by 2030, driven by the clean energy value of natural gas [5][47] - The report notes a trend of cost reduction and the implementation of pricing mechanisms, which are expected to restore profitability in the industry [6][12] - The structural impact of connection services is diminishing, with derivative businesses in gas sales expected to grow rapidly, becoming a new growth point for city gas companies [10][31] Group 3 - The report recommends focusing on companies with quality long-term contracts and cost advantages, such as Jiufeng Energy and Xin'ao Shares, which are expected to benefit from the release of overseas gas sources [11][12] - It is suggested to pay attention to companies like New Natural Gas and Blue Flame Holdings, which possess gas production capabilities amid increasing uncertainties in U.S. gas imports [12][11] - The report emphasizes the importance of energy self-sufficiency in light of rising uncertainties regarding U.S. gas imports, highlighting the need for companies to enhance their production capabilities [12][11]