Economic Overview - The current account surplus expanded by 89% year-on-year to $492.8 billion, with a trade surplus contributing 40% and a reduction in service trade deficit contributing 14%[2] - The current account surplus accounted for 4.0% of GDP in Q3, the highest since 2011, indicating a need to be cautious of rising trade protectionism risks[2] Capital Flows - The capital account deficit increased by 87% year-on-year to $545.3 billion, with the online capital account deficit rising by 105% to $570.5 billion, marking a historical high[11] - Domestic capital outflow reached a record high of $5.615 billion, while foreign capital shifted from a net inflow of $57.1 billion to a slight outflow of $90 million[11] Investment Trends - Outward securities investment net outflow reached $263.2 billion, the highest for the same period, while other investments saw a net outflow increase of $1.133 billion to $1.705 billion[16] - Foreign debt and equity investment outflows were significant, with net outflows of $277 billion and $275.2 billion respectively, both reaching historical highs[16] Foreign Exchange Reserves - Foreign exchange reserves increased by $136.3 billion to $3.34 trillion, the highest since December 2015, driven by positive valuation effects from exchange rates and asset prices[41] - Gold reserves reached $283.3 billion, accounting for 8.5% of total foreign exchange reserves, marking a historical high[42] Market Sensitivity - The private sector's net foreign position turned positive for three consecutive quarters, indicating a shift towards a net creditor status, with net assets rising to $358.7 billion from a net liability of $159.8 billion at the end of the previous year[47] - The sensitivity of market participants to RMB appreciation may have increased, as the expectation of currency depreciation has shifted[51]

Core Insights - The AI industry is transitioning from a "computing power competition" phase to a focus on "application landing," indicating a maturation of business models within the sector [1][3][4] - The successful listings of Zhizhu AI and MiniMax on the Hong Kong Stock Exchange signify that the large model industry has reached a relatively mature business model, with stable customer bases and clearer compliance boundaries [3][4] - The acceleration of AI application commercialization is expected to catalyze a new wave of software market activity, driven by the evolving business models in the AI sector [5][6] Market Trends - Since 2025, the AI industry chain has experienced a rotation from overseas computing power to domestic computing power, and now to storage and electricity, with AI applications showing limited growth compared to overseas computing power [6] - The AI market is entering its second half in 2026, with AI applications becoming a core focus for investors, offering high configuration cost-effectiveness [6] - Historical patterns indicate that hard technology follows a cyclical framework, while soft technology trends are more influenced by changes in business models, suggesting that the current AI application commercialization could drive significant market activity [5][6] Performance Indicators - The performance of AI application companies has shown signs of recovery, as evidenced by notable reversals in earnings reported in Q3 2025, indicating that the business models for AI applications are beginning to materialize [4][5] - The increasing performance of large models is expected to enhance the efficiency of downstream applications, creating a closed-loop commercial logic that is crucial for the sustainability of the AI industry [4][5]

Core Insights - The report predicts that global electric vehicle (EV) sales will maintain a high level of growth, potentially reaching a record high by 2026, driven by strong demand and the acceleration of solid-state battery technology commercialization [1][3] - The report maintains an "outperform" rating for the industry, highlighting the expected reshaping of the supply-demand landscape and the potential for profit growth across the supply chain [1] Industry Overview - The global EV market continues to expand, with a projected 2026 sales volume of approximately 26 million units, representing a year-on-year growth of about 15% [3][49] - In 2025, the global EV sales reached approximately 15.02 million units, reflecting a year-on-year increase of 27.2% [15][19] - The penetration rate of EVs in the Chinese market has surpassed 50%, with expectations for continued growth despite the upcoming reduction in purchase tax exemptions [32] Battery Technology - The report emphasizes the ongoing upward trend in the power battery sector, with a significant increase in installed capacity expected to continue into 2026 [51] - Solid-state battery technology is entering a critical phase of pilot testing and small-scale production, which is anticipated to drive technological upgrades across the industry [3][51] Supply Chain Dynamics - The materials segment is expected to experience a recovery in profitability, driven by a consensus against excessive competition and a significant increase in demand [3][51] - Key materials such as lithium hexafluorophosphate are experiencing supply-demand mismatches, leading to price recovery and improved profitability for leading companies in the sector [3][51] Investment Recommendations - The report suggests focusing on leading companies in segments with tightening supply-demand dynamics, such as lithium iron phosphate cathodes, separators, anodes, and copper foils [3] - Recommended companies include CATL, EVE Energy, and others that are positioned to benefit from stable supply and mature processes [3]

中银国际证券股份有限公司 具备证券投资咨询业务资格 策略研究 证券分析师：王君 (8610)66229061 jun.wang@bocichina.com 证券投资咨询业务证书编号：S1300519060003 证券分析师：徐沛东 (8621)20328702 peidong.xu@bocichina.com 证券投资咨询业务证书编号：S1300518020001 证券分析师：郭晓希 (8610)66229019 xiaoxi.guo@bocichina.com 证券投资咨询业务证书编号：S1300521110001 证券分析师：徐亚 （8621）20328506 ya.xu@bocichina.com 证券投资咨询业务证书编号：S1300521070003 证券分析师：高天然 | 观点回顾 4 | | --- | | 大势与风格 5 | | 中观行业与景气 7 | | 一周市场总览、组合表现及热点追踪 9 | | 风险提示 10 | tianran.gao@bocichina.com 证券投资咨询业务证书编号：S1300522100001 策略研究 | 证券研究报告 — 总量周报 2026 年 1 月 11 ...

- The report does not contain any specific quantitative models or factors for analysis [1][2][3] - The report primarily focuses on market trends, valuation metrics, and style performance without detailing quantitative models or factor construction [1][2][3] - No formulas, construction processes, or backtesting results for quantitative models or factors are provided in the report [1][2][3]

Inflation Overview - December CPI increased by 0.2% month-on-month and 0.8% year-on-year, with core CPI rising by 1.2% year-on-year[2] - Food prices contributed approximately 0.05 percentage points to the month-on-month CPI increase, while industrial consumer goods prices (excluding energy) added about 0.16 percentage points[2] - Year-on-year, service prices contributed approximately 0.25 percentage points to CPI, and industrial consumer goods prices (excluding energy) contributed about 0.63 percentage points[2] PPI Analysis - December PPI increased by 0.2% month-on-month but decreased by 1.9% year-on-year, with PPIRM down by 2.1% year-on-year[2] - Key industries such as coal mining and lithium-ion battery manufacturing saw prices rise for three consecutive months, indicating improved supply-demand structures[19] - The year-on-year decline in PPI is narrowing, with notable increases in non-ferrous metals prices by 10.5%[19] Policy Impact - Consumer stimulus policies are showing continued effects, with a notable reduction in the drag from food prices on CPI[7] - The strategy to boost CPI growth in 2026 focuses on reducing food price impacts, improving industrial consumer goods prices, and enhancing service consumption[7] - Risks include potential global inflation resurgence and rapid economic downturns in Europe and the U.S.[22]

Report Title - "2025 December Inflation Data Review: Steady Price Recovery and Policy Room" [1] Report Date - January 9, 2026 [1] Report Industry Investment Rating - Not provided in the report Core Viewpoints - Nominal GDP growth rate may be an important indicator for interest rate cuts [1][3] - Demand - side policies still have room to play in 2026, and monetary policy may be the focus of incremental policies [3] - It is expected that there may be two 10BP policy interest rate cuts in monetary policy this year [3] Summary by Content Inflation Data in December 2025 - CPI year - on - year increase widened to 0.8%, food prices rose 1.1%, non - food prices rose 0.8%, consumer goods prices rose 1.0%, and service prices rose 0.6% [3] - Among the eight categories of prices, the year - on - year increases of food, tobacco and alcohol, household goods and services, education, culture and entertainment, healthcare, and other goods and services expanded compared with November; the year - on - year increases of clothing, housing, and transportation and communication shrank (or the year - on - year declines expanded) [3] - PPI monthly increase widened and year - on - year decline narrowed, indicating that the recovery of upstream prices was transmitted to downstream as policies to expand domestic demand and promote consumption continued to show effects [3] - Core CPI continued to stabilize and recover, with a year - on - year increase of 1.2%, and the increase was basically the same as the previous month [3] - Food price year - on - year increase expanded to 1.1%, higher than the increase of edible agricultural product prices, and there may be room for further expansion [3] - Rent CPI monthly decline narrowed, and year - on - year decline slightly expanded, reflecting that the supply and demand of urban housing may still be in a balanced state [3] Monetary Policy Outlook - The Central Economic Work Conference in 2025 required that promoting stable economic growth and reasonable price recovery be important considerations for monetary policy, and flexibly and efficiently use various policy tools such as reserve requirement ratio cuts and interest rate cuts to maintain sufficient liquidity [3] - Considering the requirements of stable economic growth and reasonable price recovery, nominal GDP growth rate may become an important reference for monetary policy [3] - In 2025, China's GDP had ideal real growth in the first half of the year and good price recovery in the second half, but the two did not show a trend of strengthening simultaneously. So, demand - side policies still have room to play in 2026, and monetary policy may be the focus of incremental policies [3] - It is expected that there may be two 10BP policy interest rate cuts in monetary policy this year. If the Q4 2025 economic data shows that the nominal GDP year - on - year growth rate is stronger than 3.7% in Q3, the interest rate cut may be later; if it is lower than 3.7%, an interest rate cut in the near future cannot be ruled out [3]

Core Insights - The report highlights the current industry allocation of the Bank of China’s multi-strategy system, with significant positions in basic chemicals (13.7%), non-bank financials (13.7%), and coal (9.1%) among others [1] - The average weekly return for the CITIC primary industries is reported at 3.3%, with the best-performing sectors being defense and military (13.1%), media (9.6%), and non-ferrous metals (6.7%) [3][10] - The report indicates a composite strategy return of 2.9% for the week, underperforming the CITIC primary industry equal-weight benchmark by 0.4% [3] Industry Performance Review - The best-performing sectors for the week include defense and military (13.1%), media (9.6%), and non-ferrous metals (6.7%), while the worst performers are banking (-1.3%), oil and petrochemicals (-0.7%), and agriculture, forestry, animal husbandry, and fishery (-0.5%) [10][11] - The average monthly return for the CITIC primary industries stands at 6.7% [10] Valuation Risk Warning - The report employs a valuation warning system based on the PB ratio over the past six years, identifying sectors with a PB ratio above the 95th percentile as overvalued. Currently, sectors such as retail, computers, non-ferrous metals, defense and military, oil and petrochemicals, electronics, media, and machinery are flagged for high valuation risk [12][13] Single Strategy Rankings and Recent Performance - The top three industries based on the high prosperity industry rotation strategy (S1) are non-bank financials, coal, and basic chemicals [14][15] - The report outlines the performance of various strategies, with the highest excess return from the implied sentiment momentum strategy (S2) at 0.9% [3] Macro Style Rotation Strategy - The macro style rotation strategy identifies the top six industries based on macroeconomic indicators as banking, oil and petrochemicals, coal, home appliances, non-ferrous metals, and construction [21][23] Long-term Reversal Strategy - The long-term reversal strategy focuses on industries that exhibit momentum effects within two years and reversal effects beyond three years, utilizing a composite of three factors for industry ranking [26]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - In 2025, Chinese USD corporate bonds delivered high - single - digit returns (6.87%), showing overall resilience but slightly underperforming the broader Asia ex - Japan USD corporate bond universe (7.47%) due to the Vanke onshore debt maturity extension talks at year - end [4][5][6]. - Chinese IG bonds performed marginally stronger than HY bonds. The decline in sub - 10 - year US Treasury yields supported Chinese IG bonds, and their spread tightening outpaced that of HY bonds [4][15][24]. - The issuance volume in the Chinese USD bond primary market rebounded in 2025, but the net issuance was still deeply negative due to large - scale maturities, redemptions, and buybacks [4][39][40]. Summaries by Related Catalogs Performance Analysis - Chinese corporate bonds had a total return of 6.87% in 2025, lower than the 7.47% of the Asia ex - Japan corporate bond index and 7.75% of the iBoxx Global USD Corporate Bond Index [5][6]. - The iBoxx USD China IG Index posted a 6.87% total return, outperforming Chinese HY bonds but trailing the 7.51% return of the Asia ex - Japan IG index. Chinese HY bonds had a 6.70% return, significantly below the 9.38% of the Asia ex - Japan USD HY index [7][10][14]. Market Analysis - In 2025, the decline in sub - 10 - year US Treasury yields supported Chinese IG bonds. The Fed cut rates in September, October, and December and restarted balance - sheet expansion in December [15][19]. - By year - end, 2 - year, 5 - year, and 10 - year Treasury yields declined by 77bps, 66bps, and 40bps respectively, while the 30 - year yield edged up 6bps, steepening the yield curve [16][19]. - In 2026, the actual number of Fed rate cuts may exceed expectations due to a potentially more dovish voting committee [17][19]. Spread Analysis - Chinese IG bond spreads tightened by 24bps to 47bps in 2025, driven by negative net issuance and strong investor demand. Chinese HY bond spreads tightened by 16bps [24][25][28]. High - Yield Financing Environment - Some HY industrial and property developers returned to the primary market in 2025 with over - subscriptions, but Vanke's onshore bond extension affected other HY property developers' offshore refinancing [30][33]. - The government focused on stabilizing the property market. Developers' operations continued to diverge, and the sector was in a bottoming - out phase. Quality SOE and central SOE property bonds are preferred [31][33]. - Chinese developers' default resolution and restructuring deepened, and creditors shifted focus to more sophisticated claims protection [32][33]. Sector Performance - In IG, tech, property, and AMC bonds had returns over 8% as spreads narrowed. Central SOE perpetual and bank senior bonds had lower returns. In non - defaulting HY, HY industrial bonds had 15.9% returns, and HY property bonds had 8.8% returns despite the Vanke incident. Bank AT1 bonds underperformed with 5.5% returns [37][41]. - In the broader Asia ex - Japan credit market, bank, basic materials, and consumer services sectors had total returns above 8% [38][41]. Issuance Review - In 2025, the Chinese USD bond primary market issuance volume rebounded to US$101.7bn (+23% YoY). Excluding restructuring issuances, new issuance rose 6% YoY to US$81.1bn. Net issuance was deeply negative due to US$155.5bn of maturities, redemptions, and buybacks [4][39][42]. - Chinese issuers' activity in the Asia ex - Japan USD bond market increased slightly, accounting for 47% of total issuance volume compared to 43% in 2024. Non - Chinese Asia ex - Japan issuers' issuance volume grew 7.6% to US$116.4bn [40][42]. - Monthly issuance peaks were in February, May, September, and November, supported by financial and sovereign issuers. IG non - financial corporates' issuance was sensitive to USD interest rates. Rated HY bond volume increased, with non - property issuers dominant. Unrated bonds mainly came from LGFVs, small - scale leasing companies, and property restructuring [44][46]. - In 2025, issuance was mainly under 4 years (76.3%), but demand for longer - term funding emerged. The industrial sector became the largest issuer group (41%), overtaking the financial sector (32.7%). Property sector issuance was 22.4%, mainly for debt restructuring. LGFV issuance decreased to 29.8%. SOEs dominated new issuance (72%), and non - SOE issuers' proportion rose to 28% [45][47].

Report Industry Investment Rating - Not mentioned in the provided content Core Viewpoints - In 2026, fiscal policy may maintain the general deficit ratio basically stable compared to 2025, and monetary policy has room for two 10BP interest rate cuts and 1 - 2 times of 25BP reserve requirement ratio cuts. The coordinated fiscal and monetary policies have a significant impact on interest rates. The bond market in 2026 is expected to remain range - bound with band trading opportunities, especially when the 10 - year Treasury yield approaches or reaches 1.9% [3][57]. Summary by Relevant Catalogs 1. Fiscal, Monetary Policy Coordination and the Bond Market Relationship - Fiscal and monetary policy coordination is crucial for bond market interest rates. An expansionary fiscal policy shifts the IS curve to the right, putting upward pressure on interest rates, while an expansionary monetary policy shifts the LM curve downward, exerting downward pressure on interest rates. When both policies are implemented simultaneously, the net impact on interest rates depends on which policy is more active [11]. 2. Overall Ideas for Fiscal and Monetary Policy Coordination in 2026 - The 2025 Central Economic Work Conference called for a proactive fiscal policy and a moderately loose monetary policy in 2026. The central bank aims to promote stable economic growth and reasonable price recovery, and keep the social comprehensive financing cost at a low level. The Ministry of Finance will continue to implement a more proactive fiscal policy, focusing on improving the efficiency of fiscal funds [16][17][18]. 3. Review of China's Fiscal and Monetary Policy Coordination in 2025 - In 2025, China's fiscal policy remained strong, with the ratio of fiscal total expenditure to GDP rising again. Fiscal revenue as a share of GDP declined, including budget - internal revenue and government - funded revenue. As a result, government bond supply grew at a high rate. The monetary policy met market expectations, with a 50BP reserve requirement ratio cut and a 10BP policy interest rate cut, supporting the growth of money supply and social financing [20][23][26]. 4. Analysis of the Policy Space for Demand - Side Stimulus in China in 2026 - In 2026, demand - side policies still need to be strengthened as the nominal GDP growth slowed down in the second half of 2025, possibly due to limited demand - side support. Monetary policy still has some room for action. Low - interest rates are consistent with supporting economic growth and social financing. The 10 - year Treasury yield in the range of 1.6 - 1.9% may be the central bank's perceived balance state [30][32][35]. 5. Outlook for China's Fiscal and Monetary Policy Coordination in 2026 - Fiscal policy may keep the general deficit ratio stable, with the ratios of fiscal total expenditure and budget - internal revenue to GDP remaining stable. The decline in government - funded revenue as a share of GDP may be limited. Monetary policy is expected to be the focus of incremental policies, with two 10BP interest rate cuts and 1 - 2 times of 25BP reserve requirement ratio cuts. If only one 25BP reserve requirement ratio cut is implemented, the central bank will increase the base money supply [43][46][47]. 6. Challenges Faced by China's Bond Market: Lack of Duration Preference - As bank deposit growth slows down, the bond market faces the challenge of a lack of duration preference. The proportion of bonds held by commercial banks and insurance institutions has decreased, making it more difficult to balance the upward pressure on yields. Therefore, it is important for monetary policy to maintain interest rates in a low - level range [52][54][55]. 7. Main Conclusions - In 2026, fiscal policy may maintain the general deficit ratio stable compared to 2025, and monetary policy has room for two 10BP interest rate cuts and 1 - 2 times of 25BP reserve requirement ratio cuts. The coordinated fiscal and monetary policies have a significant impact on interest rates. The bond market in 2026 will still be affected by the lack of duration preference, but the pressure from the expected policy combination will be less than in 2025. The bond market is expected to remain range - bound with band trading opportunities, especially when the 10 - year Treasury yield approaches or reaches 1.9% [57].