Investment Rating - The report maintains a "Buy" rating for the industry, indicating a positive outlook for investment opportunities [3]. Core Insights - The industry is expected to experience significant growth driven by deepening chip layouts, which will open up high growth potential for performance [1]. - The projected revenue for 2024 is 1,592 million, with a decline to 1,327 million in 2025, followed by a recovery to 1,738 million in 2026 and reaching 2,380 million by 2027, reflecting a compound annual growth rate (CAGR) of approximately 36.94% from 2025 to 2027 [2][7]. - The report highlights a strong commitment to performance, with expected EPS growth from 0.07 in 2025 to 0.35 in 2027, indicating a robust recovery and profitability trajectory [6][7]. Financial Projections - Revenue projections show a decline of 16.61% in 2025, followed by a rebound of 30.93% in 2026 and 36.94% in 2027 [2][7]. - EBITDA is expected to grow from 100 million in 2025 to 325 million in 2027, showcasing improved operational efficiency [7]. - The report anticipates a significant increase in net profit margin from 3.9% in 2025 to 12.3% in 2027, reflecting enhanced profitability [7]. Market Performance - The industry is projected to outperform the Shanghai and Shenzhen 300 index, with a relative performance graph indicating a positive trend [4][5]. - The report emphasizes the importance of strategic acquisitions and collaborations within the industry to enhance competitive positioning and market share [6]. Analyst Commentary - Analysts express confidence in the industry's growth potential, citing strong R&D capabilities and synergies with core business operations as key drivers for future success [6][9].

固收研究报告 供给面来看，预计 12 月政府债净供给在 6500 亿元左右，基本回落至年内较低水平。 其中主要是结存限额的使用驱动专项债继续发行落地。整体结构上，普通国债净供给大 约在 2256 亿元；地方债中，新增专项债和结存限额的特殊再融资债分别发行 1432 亿 元、2265 亿元，新增一般债供给 683 亿元。 关注重磅会议，把握 1.85%配置价值 ——11 月债市回顾及 12 月展望 核心观点 ⚫ 债市回顾：利 率 震 荡回 落 ， 收 益率 曲 线 牛 平 11 月 ， 在 政 策 空 窗期 ， 债市 受 资金 面 波 动 、 股债 跷 跷 板 继 续 演绎及 政 策 预 期 反 复 等 因 素影响下震荡加剧，整体呈现收益率震荡上行、曲线小幅走陡态势，10Y 国债收益率 上 行 5BP，1Y 国 债 收 益 率 上行 2BP。月初，受资金面收敛、信贷与通胀数据超预期、 公 募 费 率 新 规 预 期 以 及 权 益 市 场 走 强 带 来 的 股 债 跷 跷 板 效 应 影 响 ， 债 市 情 绪 偏 谨 慎 ， 10Y 国债收益率上行 1BP； 月 中旬 ， 资 金 面 受 买 断 式逆 回 ...

Core Insights - The ESG strategies experienced a pullback this week, with the ESG screening strategy and the ESG sentiment integration strategy both showing negative performance relative to the benchmark [1][5][9]. ESG Screening Strategy (CSI 300) - The ESG screening strategy, based on the report published on December 8, 2023, showed a decline of 0.80% as of November 28, 2025, compared to a 1.64% increase in the CSI 300 benchmark, resulting in an excess return of -2.44% [5][8]. - Over the last month, the total return was -0.4%, with a relative total return of 2%, a maximum gain of 2%, and a maximum loss of -3%. The Sharpe ratio was -0.97 [5][8]. Performance Statistics - Total Return: 0% (last month), -1% (last 3 months), 5% (last 6 months), 12% (last year), 5% (year-to-date), 75% (since inception) [8]. - Relative Total Return: 2% (last month), -2% (last 3 months), -13% (last 6 months), -3% (last year), -10% (year-to-date), 59% (since inception) [8]. - Maximum Drawdown: -3% (last month), -3% (last 3 months), -4% (last 6 months), -8% (last year), -7% (year-to-date), -8% (since inception) [8]. ESG Sentiment Integration Strategy (CSI 300) - The ESG sentiment integration strategy, based on the report published on February 28, 2025, declined by 0.88% as of November 28, 2025, compared to the CSI 300 benchmark's 1.64% increase, leading to an excess return of -2.52% [9][12]. - The total return for the last month was 1%, with a relative total return of 3%, a maximum gain of 2%, and a maximum loss of -1%. The Sharpe ratio was 1.79 [9][12]. Performance Statistics - Total Return: 1% (last month), 1% (last 3 months), 5% (last 6 months), 16% (last year), 8% (year-to-date), 123% (since inception) [12]. - Relative Total Return: 3% (last month), 1% (last 3 months), -13% (last 6 months), 1% (last year), -7% (year-to-date), 106% (since inception) [12]. - Maximum Drawdown: -1% (last month), -4% (last 3 months), -6% (last 6 months), -6% (last year), -6% (year-to-date), -10% (since inception) [12].

Investment Rating - The report maintains a "Buy" rating for key companies in the power sector, including 大唐发电, 建投能源, 川投能源, 长江电力, and 中国广核, all of which are recommended for investment [6]. Core Insights - The report emphasizes that the power sector is entering a new phase of development, with fire power generation expected to benefit from capacity pricing and auxiliary services, leading to improved profitability and stability [4][5]. - Hydropower is projected to see growth driven by decreasing financial costs and increased installed capacity, making it an attractive investment opportunity [4]. - Nuclear power is entering a phase of active development, with a significant increase in approved and under-construction capacity expected in the coming years [4]. - The renewable energy sector faces challenges with pricing pressures but has potential for growth through integration with green hydrogen and other technologies [5]. Summary by Sections 1. Market Review - The public utility sector index increased by 4.9% from January to October 2025, underperforming compared to the Shanghai and Shenzhen 300 index, which rose by 16.0% [11]. - Fire power generation saw a profit increase of 16.8%, while nuclear and wind power faced profit declines of 12.4% and 16.4%, respectively [21]. 2. Fire Power - Fire power generation is transitioning to a more stable and regulated model, with expected capacity growth and improved profitability due to new pricing mechanisms [25]. - The average utilization hours for fire power are projected to decrease to around 3500 hours by 2030, reflecting a shift in operational dynamics [30]. 3. Hydropower - Hydropower generation is expected to benefit from improved water conditions and financial efficiencies, with long-term growth potential [4]. - The report highlights that financial costs are decreasing, and depreciation periods are expiring, contributing to the sector's attractiveness [4]. 4. Nuclear Power - The nuclear power sector is set for significant growth, with a focus on the approval of new units and advancements in fourth-generation technology [4]. - The report notes that the approved capacity for nuclear power is expected to exceed operational capacity by 107% in the coming years [4]. 5. Renewable Energy - The renewable energy sector is facing challenges with pricing, as competitive pricing mechanisms are being introduced, potentially impacting profitability [5]. - The report suggests that integrating renewable energy with technologies like green hydrogen could open new growth avenues [5]. 6. Investment Strategy - The report recommends focusing on companies with strong operational capabilities and cost advantages in the renewable energy sector, such as 龙源电力 and 三峡能源 [5]. - It also suggests that the investment strategy should consider the stability of fire power profitability and the attractive dividend yields of hydropower companies in a low-interest-rate environment [4].

Domestic Macro - Demand Side - Consumer demand shows signs of recovery with metro passenger volume increasing by 4.7% year-on-year as of November 28[1] - Retail sales of passenger cars in November reached 1.384 million units, down 11.9% year-on-year[1] - The Baltic Dry Index (BDI) averaged 2184.0, up 9.5% month-on-month and 42.9% year-on-year, indicating rising external demand[1] Domestic Macro - Production Side - National daily coal consumption in power plants decreased by 2.68% year-on-year to 4.72 million tons as of November 29[2] - The average operating rate of blast furnaces recorded 82.30%, down 1.55 percentage points month-on-month[2] - Cement dispatch rate was 33.44%, down 4.27 percentage points month-on-month, reflecting weak construction activity[2] Price Performance - Pork prices fell by 0.26% week-on-week, while vegetable prices increased by 1.23%[2] - WTI crude oil rose by 0.84% and Brent crude by 1.02% as of November 29, indicating volatility in oil prices[2] - The average wholesale price of apples increased by 2.14%, driven by reduced production and quality issues[1] Fiscal and Monetary Policy - Special new bonds issued totaled 1.35 trillion yuan, with a significant acceleration in issuance[2] - MLF net injection reached 100 billion yuan, marking the ninth consecutive month of net MLF injections[2] - The yield curve for government bonds has steepened, with the 30-year yield at 2.1851%[2] Overseas Macro - US economic activity shows signs of marginal cooling, with retail sales increasing only 0.2% in September[3] - Ongoing US-Russia peace negotiations face significant unresolved issues, maintaining high uncertainty in the conflict[3] - Initial jobless claims in the US fell to 216,000, indicating a return to low levels, but continued claims remain high at 1.96 million[3]

Group 1: PMI and Economic Indicators - The manufacturing PMI for November 2025 is 49.2%, an increase of 0.2 percentage points from the previous month, indicating an improvement in economic conditions[1] - The production index rose to 50% from 49.7%, returning to the expansion zone, while the new orders index increased to 49.2% from 48.8%[2] - The new export orders index improved significantly by 1.7 percentage points to 47.6%, suggesting a recovery in external demand[2] Group 2: Price and Inventory Trends - The purchasing price index for raw materials rose by 1.1 percentage points to 53.6%, while the factory price index increased by 0.7 percentage points to 48.2%[3] - The inventory index for finished products decreased by 0.8 percentage points to 47.3%, indicating a passive destocking trend among enterprises[4] - Raw material inventory remained stable at 47.3%, while procurement volume increased by 0.5 percentage points to 49.5%[4] Group 3: Sector Performance - The construction industry index rose by 0.5 percentage points to 49.6%, driven by year-end project completions[6] - The service industry index fell by 0.7 percentage points to 59.5%, reflecting a seasonal decline in consumer-related services[6] - Significant increases in export orders were noted in textiles, non-metallic minerals, general equipment, pharmaceutical manufacturing, and non-ferrous metals[2]

Group 1: Profit Growth Analysis - Profit growth for industrial enterprises from January to October 2025 is 1.9%, down from 3.2% in the previous period[1] - The main reasons for the narrowing profit growth are the weakening low base effect and declining production[1] - Industrial production in October 2025 decreased by 4.9%, a drop of 1.6 percentage points compared to the previous month[1] Group 2: Price and Profit Margin Trends - The Producer Price Index (PPI) showed a slight improvement in October 2025, increasing by 0.1% compared to a decline of 2.1% in the previous month[1] - Profit margins slightly decreased to 5.25% from 5.26% in the previous month[1] - Mining industry profit margins improved slightly, while manufacturing and utility sectors saw a decline compared to September[1] Group 3: Demand and Inventory Dynamics - Weak demand has led to passive inventory accumulation, with inventory levels increasing by 6.82% in October 2025[1] - The Purchasing Managers' Index (PMI) fell by 1.2 percentage points to 47.3% in October 2025, indicating contraction in manufacturing activity[1] Group 4: Future Outlook and Investment Implications - Future profit trends are expected to stabilize after short-term fluctuations, supported by domestic demand expansion policies[2] - External demand and geopolitical risks will also influence future profit trajectories[2] - Equipment and high-tech manufacturing sectors remain the main drivers of profit growth[1]

Policy Updates - The approval of the Chengdu-Chongqing Economic Circle Land Space Planning marks a significant step in establishing a new growth engine for high-quality development in China, positioning it as the fourth major growth source after Beijing-Tianjin-Hebei, Yangtze River Delta, and Guangdong-Hong Kong-Macau[4] - The plan emphasizes enhancing economic development capabilities and facilitating industrial transfer, particularly in the context of national strategic hinterland construction[4] Economic Performance - China's GDP grew by 5.2% year-on-year in the first three quarters of 2025, demonstrating strong economic resilience[7] - Retail sales of consumer goods are projected to increase from 39.1 trillion yuan in 2020 to 48.3 trillion yuan in 2024, reflecting a robust internal demand[7] Fiscal Policy - The Ministry of Finance reported a 3.4% increase in national fiscal expenditure, with social security, education, and technology spending growing over 5%[33] - A special long-term bond issuance of 3,000 billion yuan is expected to drive sales exceeding 1.6 trillion yuan through consumer goods replacement programs[32] Monetary Policy - The central bank's report indicated a 5.2% GDP growth target for 2025, with nominal GDP growth expected to reach 4.8%[38] - In October 2025, M1 growth declined to 6.2%, while M2 growth fell to 8.2%, indicating a tightening monetary environment[43] Regional Development - The Chengdu-Chongqing region is set to play a crucial role in national economic development, with a focus on infrastructure connectivity and institutional reforms to enhance economic capabilities[48] - The region's GDP is projected to significantly contribute to the overall economic landscape of Western China, with a strategic emphasis on high-quality development[50]

Group 1: 2025 A-Share Market Review - As of November 14, 2025, the overall A-Share index increased by 26.58%, with the ChiNext index and STAR 50 leading at 45.29% and 37.65% respectively [6] - Among 31 primary industries, 30 saw an increase in closing prices compared to the end of the previous year, with non-ferrous metals, communication, and electric equipment leading with gains exceeding 50% [4][19] - The food and beverage industry experienced a decline of 3.40% [4][19] Group 2: 2026 Investment Environment Analysis - The 2026 investment environment is characterized by a stable macroeconomic policy in China, with expected resilience in economic growth and a potential recovery in inflation from low levels [4][36] - The international landscape remains uncertain, with geopolitical risks and trade order challenges impacting global economic growth [36][40] - The "14th Five-Year Plan" is expected to provide a clear development blueprint, enhancing market confidence in China's long-term economic resilience [4][36] Group 3: Market Trend Predictions for 2026 - The A-Share market is anticipated to benefit from improved liquidity, with the current valuation being relatively reasonable compared to global equity markets [4][36] - Earnings growth is expected to become a key focus, driven by the deepening of China's economic transformation and the continuous development of emerging industries [4][36] - The PPI decline is expected to narrow, potentially leading to an increase in corporate profit margins [4][36] Group 4: Style Judgments for 2026 - Small-cap stocks are expected to perform well, particularly in the context of a favorable environment for risk appetite driven by the Fed's anticipated rate cuts and the upward trend in emerging industries [4][36] - Growth stocks are projected to continue outperforming value stocks in the first three quarters of 2026, supported by favorable policies and market conditions [4][36] - In the fourth quarter, as the U.S. midterm elections approach, market risk appetite may shift, potentially favoring value stocks [4][36] Group 5: Structural Investment Opportunities - The "14th Five-Year Plan" is expected to create significant policy dividends and industry opportunities, focusing on two main lines: new productivity driven by technology and the "anti-involution" policy promoting supply-demand optimization [4][36] - Key sectors to watch include artificial intelligence, new energy, and quantum technology, which are highlighted in the "14th Five-Year Plan" [4][36] - The consumer sector is seen as a potential area for investment, with policies aimed at expanding domestic demand [4][36]

Core Insights - The ESG sentiment integration strategy achieved an excess return of 4.13% compared to the benchmark index, with a total return of 2% over the last month [1][9] - The ESG screening strategy underperformed with a decline of 1.64%, but still outperformed the benchmark by 2.13% [1][5] ESG Screening Strategy (CSI 300) - The strategy, based on the report published on December 8, 2023, considers incremental risk information provided by ESG factors and incorporates Markowitz portfolio theory [1][5] - Performance metrics include a total return of -0.2% over the last month, a maximum gain of 2%, and a maximum loss of -2%, with a Sharpe ratio of -0.44 [1][8] ESG Sentiment Integration Strategy (CSI 300) - This strategy, detailed in the report from February 28, 2025, also utilizes ESG sentiment data and Markowitz portfolio theory [1][9] - The strategy's performance shows a total return of 2% over the last month, with a maximum gain of 2% and a maximum loss of -1%, achieving a Sharpe ratio of 3.44 [1][12]