1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - The mortgage interest subsidy policy can activate demand in the short term, but its overall effectiveness in boosting sales highly depends on the local market fundamentals and policy coordination environment [3][23]. - The mortgage interest subsidy policy is a tactical tool effective in a specific stage, and its ultimate effectiveness depends on whether it can form a synergy with supply - side reforms and macro - income improvement policies to jointly promote the market towards a new balance [24]. - In 2026, the possibility of a unified national standard and full - coverage mortgage interest subsidy policy is low. It is more likely to be gradually promoted in a top - down manner with local governments implementing policies according to the city's situation [36]. 3. Summary According to the Directory 2. Mortgage Interest Subsidy Policy's Main Forms and Burden - Reduction Effect Calculation - **Fixed - ratio subsidy model**: It is the most widely used mainstream model. Local governments calculate the total financial subsidy based on a certain fixed ratio of the initial loan principal for eligible first - home purchase loans within the policy window period. For example, Nanjing, Changchun, and Wuhan have different fixed - ratio subsidy policies [16]. - **Interest - ratio subsidy model**: Some regions use the method of subsidizing a percentage of the loan interest. It is usually applied in scenarios that require long - term incentives or refined support for specific groups, such as Yuncheng's policy for high - level talents [17]. - **Real - estate enterprise - oriented subsidy model**: It is a market - based supplementary behavior. Real - estate developers initiate and bear all costs to promote the sales of specific properties. In some cases, it can cooperate with local government policies [21]. - **Burden - reduction effect calculation**: Assuming a loan of 1 million yuan, a 30 - year term, and an estimated interest rate of 3.2%, different cities' policies have different monthly payment reduction effects, with the total subsidy amount and equivalent actual interest rates varying [22]. 3. Evaluation of Policy Effects in Pilot Cities: Impact on Real Estate Sales - **Tracking the effects of major pilot cities**: There are significant regional differences in policy effects. Nanjing Yuhuatai District had a significant short - term stimulation effect, with a 28.6% year - on - year increase in commercial residential sales area from June to December 2024, far exceeding the 4.9% increase in Nanjing city. Other regions had limited improvements [3][23]. - **Analysis and limitations of mortgage interest subsidy policy effects**: The policy can activate market demand and stabilize market expectations in the short term, but it has short - term and volatile characteristics. It cannot fundamentally reverse the market trend determined by long - term factors and cannot solve structural contradictions in the market [24]. 4. Prediction of Fiscal Fund Requirements if the Mortgage Interest Subsidy Policy is Implemented Nationwide in 2026 - **Prediction of new mortgage loan scale in 2026**: It is predicted that the total sales of new residential properties in 2026 will be about 6.2 trillion yuan, and that of second - hand residential properties will be about 8.8 trillion yuan. The new mortgage loan scale for new commercial residential properties is about 1.95 trillion yuan, and that for second - hand residential properties is about 2.75 trillion yuan [26][29]. - **Analysis of fiscal feasibility and the possibility of nationwide implementation**: The mortgage interest subsidy policy can achieve multiple policy goals, but it cannot solve deep - seated contradictions in the real estate market alone. Fiscal cost is a basic factor for policy promotion. A unified national policy is neither realistic nor sustainable. It is more likely to be gradually promoted in a top - down manner with local governments implementing policies according to the city's situation [35][36].

Monetary Policy Insights - Since the interest rate cut in May 2025, the yield curve has shown a "duration split," with monetary policy controlling short-term rates, inflation expectations influencing mid-term rates, and fiscal financing dominating long-term rates[1] - As of February 14, 2026, the benchmark rate DR001 has decreased by nearly 25 basis points to approximately 1.33% from around 1.58% at the time of the rate cut[19] - The average value of DR001 since the beginning of 2026 is 1.40%, indicating stable operation around the policy rate[15] Liquidity and Market Dynamics - In January 2026, the net investment in medium-term lending facilities (MLF) reached 7,000 billion yuan, with MLF balance accounting for 18% of the base currency, the highest since October 2024[10] - The scale of 6-month reverse repos in January 2026 reached 9,000 billion yuan, with a net injection of 3,000 billion yuan, indicating a focus on long-term liquidity provision[10] - The net purchase of government bonds in January 2026 expanded to 1,000 billion yuan, supporting long-term liquidity amid the absence of rate cuts[10] Interest Rate Outlook - There is still potential for a rate cut in 2026, with expectations for one operation or a 50 basis point reduction, while retaining the possibility of two additional cuts[28] - The weighted average interest rate for corporate loans was approximately 3.2% in January 2026, showing no significant decline compared to 3.10% in December 2025[28] Risks and Considerations - Risks include potential inflation exceeding market expectations due to policies aimed at reducing internal competition, which could lead to a rapid increase in interest rates[29] - Economic performance and stock market trends not meeting expectations could prompt further monetary easing, driving rates down quickly[29] - Trade tensions and uncertainties in 2026 may pose medium to long-term risks, impacting the performance of RMB-denominated financial assets[29]

Monetary Policy - The People's Bank of China conducted a 7-day reverse repurchase operation of 526 billion yuan, achieving a net withdrawal of 926.4 billion yuan[6] - The operation interest rate was set at 1.4%[6] - The latest Loan Prime Rate (LPR) remained unchanged for 9 consecutive months, with the 1-year LPR at 3.00% and the 5-year LPR at 3.50%[7] - A 600 billion yuan Medium-term Lending Facility (MLF) operation is scheduled for February 25, 2026, to maintain liquidity in the banking system[8] Industry News - China and Germany's bilateral trade has remained above 200 billion USD, with mutual investments exceeding 65 billion USD, accounting for nearly 25% of China's total trade with the EU[9] - The tourism-related service sales revenue increased by over 39% year-on-year during the Spring Festival, with daily sales growth of 13.7% compared to the previous year[12][13] Market Performance - On February 24, 2026, the North Exchange 50 index rose by 0.37%, while the ChiNext index increased by 0.99%[16] - The average market capitalization of the North Exchange component stocks was 3.195 billion yuan, with a trading volume of 16.379 billion yuan, a decrease of 0.057 billion yuan from the previous trading day[16] - Among the North Exchange stocks, 242 stocks closed higher, with *ST Yun Chuang leading at a 29.97% increase[17]

Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 41.9 CNY based on a 32x PE for 2026 [7]. Core Insights - The company has a robust growth outlook, with expected revenue and net profit growth driven by strong order inflows and advancements in heavy gas turbine technology [7]. - The company is positioned as a leader in the energy equipment sector, with a comprehensive business layout across various energy sources, including coal, nuclear, hydro, and renewable energy [12][13]. - The report highlights the company's ability to maintain a solid market share in traditional energy sectors while also expanding into renewable energy and gas turbine markets [7][12]. Summary by Sections Company Overview - Established in 1958, the company has evolved into a leading player in the energy equipment sector, covering a wide range of energy sources and technologies [12]. - The company has a strong market presence in coal, nuclear, hydro, and renewable energy sectors, with significant investments in R&D and manufacturing capabilities [12][13]. Financial Performance - The company has shown steady revenue growth, with projected revenues of 60.7 billion CNY in 2023, increasing to 100 billion CNY by 2027, representing a CAGR of approximately 10-15% [7]. - Net profit is expected to rebound from 2.9 billion CNY in 2024 to 5.4 billion CNY by 2027, with a significant increase in profit margins driven by operational efficiencies and high-margin product offerings [7]. Market Position and Strategy - The company is leveraging its technological advancements in heavy gas turbines to expand into international markets, particularly in Europe and the Middle East [7]. - The report emphasizes the importance of the company's diverse energy portfolio, which positions it well to meet the growing demand for flexible and clean energy solutions [12][13]. Future Outlook - The company is expected to benefit from the increasing demand for clean energy technologies, with projected revenue growth in clean energy equipment and renewable energy sectors [7]. - The report anticipates that the company's heavy gas turbine exports will contribute significantly to its revenue growth, enhancing its competitive position in the global market [7].

Macro Strategy - The market is currently in a structural chaos phase, but the overall index remains stable. The macro timing model for February 2026 has a score of 0, indicating a 78.57% probability of an increase in the A-share index over the next month, with an average increase of 3.37% [1][2][24] - There is a notable inflow of funds into sectors such as telecommunications, chips, chemicals, and oil and petrochemicals, while broad-based ETFs are experiencing outflows. This suggests a potential reduction in selling pressure from ETFs in the near future [1][2][24] - The cyclical industries, particularly oil and chemicals, are performing relatively well, while the non-ferrous metals sector is significantly affected by external macro events [1][2][24] Consumer Insights - The consumption during the Spring Festival showed a strong start, with daily sales of key retail and catering enterprises increasing by 8.6% year-on-year in the first four days, compared to 4.1% last year [5][25] - There is a forecast for a moderate recovery in consumption at the beginning of the year, with retail sales growth expected to be between 5% and 2.5% for January-February, a significant rebound from around 1% at the end of last year [5][25] - The service consumption is expected to be the main support for overall consumption in 2026, while goods consumption may be weaker than last year [5][25] Industry Recommendations - Dongfang Electric (600875) is expected to see continuous growth in its energy equipment business, with projected net profits of 3.5 billion, 4.52 billion, and 5.44 billion yuan for 2025-2027, representing growth rates of 20%, 29%, and 20% respectively [12][13] - China Tobacco Hong Kong (06055.HK) is projected to have net profits of 940 million, 1.06 billion, and 1.3 billion HKD for 2025-2027, with an upward adjustment in profit expectations due to improved gross margins from cigarette exports [13] - Liyang Chip (688135) is expanding its high-end testing capacity and is expected to continue growing, with a revenue increase of 23.11% year-on-year in the first three quarters of 2025 [14] - Taige Pharmaceutical (300347) is positioned to benefit from the expanding clinical CRO market, with a market share increase from 8.7% to 12.8% from 2019 to 2023, indicating strong growth potential [18] Market Trends - The overseas market has shown signs of stabilizing liquidity, with expectations for improved sentiment. The A-share market is anticipated to remain optimistic if precious metals stabilize and U.S. tech stocks recover [22][27] - The bond market has performed strongly due to a loose liquidity environment, with the central bank injecting nearly 1.8 trillion yuan in liquidity through reverse repos [10][11] - The overall economic data from the U.S. is expected to be stronger than anticipated, which may compress the Fed's rate cut expectations in March-April [27]

Investment Rating - The investment rating for China Tobacco Hong Kong (06055.HK) is "Buy" (maintained) [1] Core Views - The report highlights that China Tobacco Hong Kong is the only company authorized to export cigarettes to the domestic duty-free market, which is expected to enhance its gross profit margin [7] - The implementation of new regulations on January 1, 2026, will optimize the supply chain for cigarette exports, leading to improved profitability [7] - The company is projected to see steady growth in revenue and net profit, with significant increases expected in the coming years [1][7] Financial Projections - Total revenue is forecasted to grow from HKD 11,836 million in 2023 to HKD 17,470 million by 2027, reflecting a compound annual growth rate (CAGR) of approximately 8.71% [1] - Net profit attributable to shareholders is expected to rise from HKD 598.77 million in 2023 to HKD 1,300.22 million in 2027, with a notable increase of 59.71% in 2023 [1] - The earnings per share (EPS) is projected to increase from HKD 0.87 in 2023 to HKD 1.88 in 2027, indicating a strong upward trend [1] Profitability Metrics - The gross profit margin for the cigarette export business is anticipated to improve, with a reported margin of 17.6% in 2024 and an expected increase to 25.7% in the first half of 2025 [7] - The report estimates that the company will achieve a price-to-earnings (P/E) ratio of 34, 30, and 24 for the years 2025, 2026, and 2027 respectively, reflecting a positive outlook on valuation [1][7] Market Position - China Tobacco Hong Kong serves as the only publicly listed platform for China Tobacco's international business, with a robust development in the import and export of tobacco leaf products [7] - The company is positioned to leverage its unique status and regulatory advantages to enhance its market share and profitability in the duty-free segment [7]

Investment Rating - The report maintains an "Overweight" rating for the gas industry [1] Core Insights - The report highlights that warmer weather and tensions in the US-Iran situation have led to a decline in US gas prices, while European gas prices have seen a slight increase [5][10] - It notes that the domestic gas prices remain stable during the Spring Festival holiday, with a year-on-year increase in China's apparent gas consumption of 2.3% to 433.2 billion cubic meters in 2025 [28] - The report emphasizes the ongoing progress in price adjustment mechanisms across cities, which is expected to enhance profitability and valuation recovery for city gas companies [40] Price Tracking - As of February 20, 2026, the week-on-week changes in gas prices are as follows: US HH down 3.4%, European TTF up 1.1%, East Asia JKM up 1.4%, and China's LNG ex-factory price stable at 2.5 yuan/cubic meter [10][12] - The report indicates that the US gas market price has decreased due to warmer weather, with storage levels dropping by 1.5% year-on-year [15][17] Supply and Demand Analysis - The report states that European gas consumption from January to November 2025 was 396.4 billion cubic meters, reflecting a year-on-year increase of 3.5% [17] - It also mentions that the average daily gas generation in Europe has decreased significantly, with a week-on-week drop of 34.1% and a year-on-year decline of 61.9% [17] Investment Recommendations - The report recommends focusing on city gas companies that are optimizing costs and promoting price adjustments, highlighting companies such as Xinao Energy, China Resources Gas, and Kunlun Energy [52] - It suggests paying attention to companies with quality long-term contracts and flexible scheduling, such as Jiufeng Energy and Xinao Shares [52] - The report emphasizes the importance of energy independence and recommends companies with gas production capabilities like Shouhua Gas [52]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is the exclusive exporter of cigarettes to the domestic duty-free market, and its gross profit margin is expected to improve due to regulatory changes [7] - The new regulations will enhance the supply chain for cigarette exports, leading to increased profitability [7] - The company is projected to achieve significant revenue and profit growth over the next few years, with net profits expected to reach 1,300.22 million HKD by 2027 [1][7] Financial Projections - Total revenue (in million HKD) is forecasted as follows: - 2023A: 11,836 - 2024A: 13,074 (up 10.46% YoY) - 2025E: 14,856 (up 13.63% YoY) - 2026E: 16,071 (up 8.17% YoY) - 2027E: 17,470 (up 8.71% YoY) [1] - Net profit attributable to the parent company (in million HKD) is projected as follows: - 2023A: 598.77 - 2024A: 853.74 (up 42.58% YoY) - 2025E: 938.26 (up 9.90% YoY) - 2026E: 1,057.95 (up 12.76% YoY) - 2027E: 1,300.22 (up 22.90% YoY) [1] - The latest diluted EPS (in HKD/share) is expected to be: - 2023A: 0.87 - 2024A: 1.23 - 2025E: 1.36 - 2026E: 1.53 - 2027E: 1.88 [1] - The P/E ratios are projected as follows: - 2024A: 37.04 - 2025E: 33.70 - 2026E: 29.89 - 2027E: 24.32 [1]

Investment Rating - The report maintains a "Buy" rating for the environmental protection sector, highlighting potential growth opportunities driven by carbon neutrality initiatives and market dynamics [1]. Core Insights - The report emphasizes the importance of advancing the national carbon market, with a clear roadmap for expansion and ongoing attention to UCO-related companies [9][10]. - It notes that Conch Group plans to increase its stake in Conch Venture by 10.61%, initiating a valuation reassessment [15]. - The 2026 strategy for the environmental sector focuses on value and growth resonance, driven by carbon neutrality [19]. - The report highlights significant growth in the sales of new energy sanitation vehicles, with a year-on-year increase of 70.9% and a penetration rate increase of 7.67 percentage points to 21.11% [26]. - It indicates stable prices for biofuels, with no significant fluctuations in the prices of waste cooking oil and grease [34]. - The report discusses the rising prices of lithium and carbonate, although profitability in lithium recycling has decreased [47][48]. Summary by Sections Industry Trends - The report outlines the ongoing development of the national carbon market, with a focus on expanding coverage to additional industries and tightening quota management [10][12]. - It highlights the expected growth in the sanitation equipment sector, particularly in new energy vehicles, driven by policy support and economic validation [26]. Company Updates - Conch Group's planned increase in its stake in Conch Venture is expected to enhance its control and initiate a valuation reassessment, with a current market cap of HKD 23.4 billion and a price-to-book ratio of 0.44 [15][17]. - The report recommends several companies for investment, including Longking Environmental, High Energy Environment, and others, based on their growth potential and market positioning [4]. Market Performance - The environmental sector is projected to benefit from a combination of value reassessment and growth opportunities, particularly in waste management and renewable energy sectors [19][20]. - The report notes that the sanitation vehicle market is experiencing significant growth, with a notable increase in the sales of new energy vehicles [26].

Investment Rating - The report maintains a positive outlook on the photovoltaic equipment industry, indicating a recovery and growth trajectory for 2026, driven by space computing applications and increasing overseas ground demand. Core Insights - The photovoltaic equipment sector is characterized by both growth and cyclical attributes, with supply, demand, and technological factors resonating together [2]. - The industry is expected to enter a recovery phase in 2026, following a significant adjustment in 2025, where leading equipment manufacturers have strengthened cash flow management and reduced operational risks [5]. - The emergence of space computing applications is anticipated to expand the long-term growth potential of the photovoltaic sector, transitioning from ground energy to orbital energy systems [5]. - Overseas demand, particularly from the U.S. and the Middle East, is projected to be a significant source of incremental growth in 2026, with U.S. solar installations remaining robust and local manufacturing policies enhancing supply chain security [5]. - A new round of technological iterations is seen as a key variable for capacity reset amid supply-demand imbalances, with advancements in HJT technology expected to drive structural expansion [5]. Summary by Sections Section 1: 2025 Industry Fundamentals and 2026 Outlook - The fundamentals of leading photovoltaic equipment manufacturers are expected to bottom out in 2025, with a positive outlook for 2026 driven by recovery in equipment orders [5]. - The report highlights the importance of cash flow management and risk control among leading manufacturers, with adjustments in payment models to mitigate risks during industry downturns [9][10]. Section 2: Space Computing Applications - The report discusses the significant reduction in launch costs due to advancements in reusable rocket technology, which is expected to facilitate the deployment of space data centers powered by photovoltaic energy [38]. - The U.S. and China are leading in the planning and deployment of space computing capabilities, with ambitious goals for satellite constellations and data centers [41][42]. Section 3: Overseas Ground Demand - The U.S. market is highlighted as a key area for growth, with local manufacturing policies and high installation rates driving demand for photovoltaic equipment [5]. - The report notes that Middle Eastern countries are also increasing their solar installation plans, providing further opportunities for growth [5]. Section 4: Domestic Policy Changes and Technological Iteration - The report emphasizes the need to monitor domestic policy changes and the ongoing technological advancements within the industry, which are crucial for maintaining competitiveness [5]. Section 5: Investment Recommendations - The report recommends focusing on leading companies in the HJT technology space, such as Maiwei Co., Jinsheng Electric, and Aotwei, as well as those specializing in automation and thin silicon wafer cutting equipment [5].