1. Report Industry Investment Rating No relevant information is provided in the content. 2. Core Viewpoints of the Report - In the situation of low core excess reserves, factors such as large - scale government bond net payments and frozen funds from new stock subscriptions on the Beijing Stock Exchange can lead to a tightening of the capital market and an increase in repurchase rates. However, the strong lending capacity of non - bank institutions like money market funds has kept the capital stratification spread low, which is favorable for inter - bank certificate of deposit (CD) pricing. But the investment in 1 - year CDs still requires consideration of cost - effectiveness [1][14][15]. 3. Summary According to the Table of Contents 3.1 From the Perspective of Low Core Excess Reserves to Understand the Capital Market and Stratification Spread - **Analysis of the Tightening Capital Market**: The official excess reserve ratio at the end of September 2025 was 1.40%, lower than that in September 2024 and the estimated value. The calculated core excess reserve ratio was 0.5%, lower than the previous forecast. Large - scale government bond net payments (nearly 500 billion yuan in the past week) and frozen funds from new stock subscriptions on the Beijing Stock Exchange (about 870 billion yuan) were the main reasons for the capital tightening in the past week. The impact of the full deposit of payment institution customer reserves during "Double Eleven" on the capital market was likely not the cause [2][12][13]. - **Analysis of the Compressed Capital Stratification Spread**: The continuous compression of the capital stratification spread indicates the strong lending capacity of non - bank institutions. Since 2024, regulatory measures have led to a shift of commercial bank deposits to non - bank institutions, increasing the lending power of non - bank institutions and decreasing that of commercial banks. This has compressed the spread between R007 and DR007. The compressed spread is beneficial for inter - bank CD pricing, but the investment in 1 - year CDs still needs to consider cost - effectiveness [4][14][15]. 3.2 Narrow - Sense Liquidity - **Central Bank Operations**: In November, the net investment of outright reverse repurchase was 50 billion yuan. In the past week, the net investment of pledged reverse repurchase was 626.2 billion yuan, with large net investments on Tuesday and Wednesday. As of November 14, the balance of reverse repurchases was 1122 billion yuan, at a relatively high level [16][17]. - **Institution Lending and Borrowing**: On November 14, the net lending amount of large - scale banks decreased compared to November 7, while the net lending balance of money market funds increased. The net lending of joint - stock banks was at a neutral level compared to previous years. The balance of bonds to be repurchased in the inter - bank market decreased, and the market leverage ratio declined [19][26]. - **Repurchase Market Transactions**: In the past week, the volume and price of the inter - bank pledged repurchase market were stable. The median daily trading volume decreased slightly, and the median R001 increased slightly. The liquidity friction was minimal [31]. - **Interest Rate Swaps**: The 1 - year interest rates of FR007 IRS and SHIBOR 3 - month IRS were basically flat compared to the previous week, and both were at relatively low levels in the historical range [38]. 3.3 Government Bonds - **Next - Week Net Payments**: In the past week, the net payment of government bonds was 472.5 billion yuan, and it is expected to be 362.9 billion yuan in the next week. The net payment pressure is relatively large, especially on Monday [39]. - **Current Issuance Progress**: As of November 14, the net financing progress of national debt was 91.5%, and the issuance progress of new local bonds was 93.3%. The issuance of refinancing special bonds has completed the annual task [40]. 3.4 Inter - bank Certificates of Deposit - **Absolute Yields**: On November 14, the SHIBOR quotes of various maturities and the yields of AAA - rated inter - bank CDs of various maturities showed different changes compared to November 7 [47][48]. - **Issuance and Stock**: In the past week, the total issuance of inter - bank CDs increased. In terms of issuance terms, the proportions of 6 - month and 9 - month CDs increased, while those of 1 - month, 3 - month, and 1 - year CDs decreased [50][52]. - **Relative Valuation**: On November 14, the spreads between the 1 - year AAA - rated inter - bank CD yield and R007, and between the 10 - year national debt yield and the 1 - year AAA - rated inter - bank CD yield were at certain historical quantiles [55].

Group 1: Report Industry Investment Rating - No relevant content found Group 2: Core Views of the Report - In the medium - term, the expectation of a slow - bull market in the equity market remains solid. With a temporary decline in market risk appetite, the dumbbell strategy is expected to achieve excess returns. The valuation factor and volatility factor are expected to strengthen marginally. In the short - term, attention should be paid to the risk of excess drawdown due to style mismatch in the convertible bond market. It is recommended to maintain a neutral position to enjoy the excess returns brought by the spill - over of the equity bull market, taking into account both growth and defense [1][22] Group 3: Summary by Relevant Catalog 1. Convertible Bond Weekly Thinking - From November 10 to November 14, 2025, the style of the convertible bond market changed significantly, with the tech - growth style retreating and the energy and consumption indices strengthening. The main line of the convertible bond market is not clear, and sector rotation has accelerated. The technology sectors represented by AI computing power and semiconductors have declined, while the power equipment and photovoltaic industries have performed well. The dividend style has strengthened due to risk - aversion and overseas tech valuation bubbles. As the year - end approaches, some investors may lock in profits, and the market is likely to be dominated by rotation, increasing the difficulty of convertible bond trading [11] - In the volatile market, the valuation of bond - like convertible bonds is firm, and the market tends to be defensive in the short - term. As of November 14, 2025, the median price of convertible bonds is close to 134 yuan, a recent high. The market style has shifted from offensive to defensive, with bond - biased convertible bonds performing better than equity - biased ones. The pure - bond premium rate of bond - like convertible bonds has been rising. In terms of valuation, the convertible bond valuation is oscillating at a high level, with the premium rate of bond - like convertible bonds at 84.51%, the balanced convertible bonds at about 22.66%, and the equity - like convertible bonds at 10.18%, down about 1.13 percentage points from the recent high [3][12] - In the volatile market, attention should be paid to the tail risk of the momentum factor to avoid the risk of excess return drawdown caused by trend reversal. The convertible bond momentum factor has performed well this year, mainly because it has captured the "trend effect" in the convertible bond market since Q2 2025. However, with the continuous small - scale outflow of passive funds represented by ETFs, there is a possibility of style switching in the convertible bond market. The momentum effect brought by liquidity premium may be the source of excess returns in the convertible bond market this year. In the short - term, attention should be paid to the risk of excess drawdown due to style mismatch. As the equity market enters the performance verification stage, the valuation factor and volatility factor are expected to strengthen, enabling investors to enjoy the excess returns from the value regression of undervalued convertible bonds and through high - selling and low - buying in the volatile market [4][14][19] - In November, investors are recommended to focus on convertible bonds such as Shangyin, Shouhua, Aola, Jingke, Baolong, Keshun, Yingbo, Wei, Jin 25, and Anji [23] 2. Convertible Bond Market Tracking 2.1 Convertible Bond Market Conditions - The report provides the performance data of various convertible bond indices in different time periods (recent week, recent two weeks, since September, recent month, recent two months, recent half - year, and recent one - year), including the Wande Convertible Bond Energy Index, Wande Convertible Bond Materials Index, etc. [24] 2.2 Convertible Bond Individual Securities - The report shows the top ten and bottom ten individual convertible bonds in terms of price increase and decrease in the recent week [26][27] 2.3 Convertible Bond Valuation - The report presents the valuation trends of bond - like, balanced, and equity - like convertible bonds, as well as the valuation trends of convertible bonds with different parities [28][36] 2.4 Convertible Bond Price - The report shows the proportion trend of high - price bonds and the median price trend of convertible bonds [38]

- The report discusses the microstructure rebalancing in the A-share market, highlighting the increased concentration of stock price movements driven by speculative capital inflows since June 2025, which has impacted quantitative products' portfolio construction and risk exposure adjustments[13][23][24] - Quantitative products have adjusted their exposure to micro-cap stocks, initially reducing their holdings to mitigate nonlinear market cap risks, and later increasing allocations to amplify excess returns as speculative capital inflows weakened post-October 2025[13][23][24] - The report emphasizes the Barra style factor performance, noting that fundamental factors such as BP value and investment quality have shown positive returns, while transaction-related factors like short-term momentum have also delivered strong excess returns during the market's recent fluctuations[23][24][25]

Investment Rating - The industry rating is "Positive" [1] Core Viewpoints - The report indicates that the coal consumption is approaching a turning point, with a clear direction and potential for growth. The recent cold wave is expected to increase coal demand as power plants will need to procure more coal, leading to a potential rise in coal prices [6][29] - The report highlights that the average daily coal sales from monitored enterprises increased by 2.7% week-on-week but decreased by 2.4% year-on-year, indicating a mixed demand scenario [2] - The report suggests that the supply-demand balance is expected to gradually improve in the fourth quarter, with coal prices likely to rise steadily [6][29] Summary by Sections Coal Market Performance - The coal sector underperformed slightly, with a decline of 0.78% compared to a 1.08% drop in the CSI 300 index, outperforming it by 0.3 percentage points [2] - The average daily coal production from monitored enterprises was 752 million tons, a 2% increase week-on-week but a 2.2% decrease year-on-year [2] Price Trends - The price of thermal coal (Q5500K) in the Bohai Rim region was 698 RMB/ton, up 0.58% week-on-week, while the import price index for thermal coal was 944 RMB/ton, up 6.19% week-on-week [3] - Coking coal prices also saw increases, with the main coking coal price at 1830 RMB/ton, up 1.7% week-on-week [4] Inventory Levels - Total coal inventory (including port storage) was 24.3 million tons, a 2.1% increase week-on-week but a 19.5% decrease year-on-year [2][8] - The report notes that the overall coal inventory in society was 17.68 million tons, with a week-on-week increase of 374,000 tons but a year-on-year decrease of 873,000 tons [3][28] Investment Recommendations - The report recommends focusing on flexible thermal coal companies and those in turnaround situations in coking coal and coke sectors. Key companies to watch include China Shenhua, Shaanxi Coal and Chemical Industry, and Yanzhou Coal Mining [6][29]

Core Insights - 2026 marks the beginning of the "14th Five-Year Plan," with strategies focusing on "reducing internal competition" and "promoting overseas expansion" as key measures to address current economic challenges and foster new growth momentum in the transportation sector [3]. Group 1: Industry Focus Areas - The transportation industry will concentrate on four main lines of development in alignment with the "14th Five-Year Plan" policies and industry trends [3]. - The aviation and express delivery sectors are highlighted for their potential in achieving high-quality development through reduced internal competition [4]. - The shipping industry is undergoing global changes, with oil transportation experiencing a boom while the dry bulk sector faces challenges [5]. Group 2: Overseas Expansion Opportunities - Jitu Express is positioned as a rare player in Southeast Asia and Latin America, benefiting from the rapid growth of Tiktok and a projected 65% increase in parcel volume in Southeast Asia for the first three quarters of 2025 [6]. - Jiao You International is focusing on logistics in Africa, with coal trade in Mongolia expected to rebound significantly in the second half of 2025, while Africa is anticipated to become a major growth driver [6]. - The aviation sector is expected to see accelerated profit recovery in 2026, with major airlines likely to achieve profitability in 2025 [6]. Group 3: Market Dynamics and Predictions - The express delivery sector is set to improve in 2026, with the industry experiencing a price recovery following a period of intense competition [6]. - Oil transportation is benefiting from OPEC+ production increases and seasonal demand, leading to rising freight rates [6]. - The dry bulk shipping sector is expected to see a recovery in demand due to new mining projects and potential interest rate cuts [6]. Group 4: Economic Transition and Stability - The report emphasizes the importance of stable output during the economic transition period, with recommendations for investments in highway and port infrastructure [6].

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [6] Core Insights - The company reported a 46% year-on-year increase in integrated supply chain revenue for Q3 2025, indicating a strong expansion into high-value markets [2] - Total revenue for Q3 2025 reached 55.08 billion yuan, a 24.1% increase year-on-year, while adjusted net profit was 2.02 billion yuan, down 21.5% year-on-year [9] - The company is actively expanding its overseas business and enhancing instant retail capabilities, including a partnership with a well-known electric vehicle brand in the Middle East [5] Revenue Breakdown - Revenue from other clients amounted to 24.9 billion yuan, a 5.1% increase year-on-year, accounting for 45.3% of total revenue [3] - Revenue from JD Group reached 21.2 billion yuan, a 65.8% increase year-on-year, representing 38.5% of total revenue [3] - External customer revenue was 33.88 billion yuan, a 7.2% increase year-on-year, making up 61.5% of total revenue [3] Operational Highlights - As of September 30, 2025, the company operated over 1,600 warehouses and more than 2,000 cloud warehouses, with a total management area exceeding 34 million square meters [4] - The company successfully launched a dedicated air cargo route from Shenzhen to Singapore, enhancing its logistics network in the Asia-Pacific region [4] Profit Forecast - The company is expected to see continued revenue growth, with projected adjusted net profits of 8.43 billion yuan, 9.11 billion yuan, and 10 billion yuan for 2025, 2026, and 2027 respectively [10]

Economic Overview - October economic data shows a continued weakening trend, with industrial added value growing by 4.9% year-on-year, slightly below market expectations[1] - Retail sales in October increased by 2.9% year-on-year, down 0.1 percentage points from the previous month, marking five consecutive months of decline[4] - Fixed asset investment from January to October decreased by 1.7% year-on-year, with October showing a significant drop of 12.2%[7] Production Insights - The industrial production index for October reflects a 4.9% year-on-year growth, with a month-on-month increase of 0.17%[3] - New growth drivers are emerging, particularly in high-tech manufacturing, which grew by 7.2%, outpacing overall industrial growth[16] - Service sector production index rose by 4.6% year-on-year, although this was impacted by last year's high base[17] Consumption Trends - The consumption of automobiles, home appliances, and furniture has significantly weakened, contrasting with the resilience seen in communication equipment[4] - Jewelry retail sales showed strong growth at 37.6% year-on-year, driven by asset allocation and recovery in wedding-related spending[21] - The "old-for-new" policy's effectiveness is diminishing, leading to anticipated pressure on retail sales in the fourth quarter[20] Investment Dynamics - Manufacturing investment saw a year-on-year decline of 6.7% in October, with a cumulative growth of only 2.7% from January to October[37] - Infrastructure investment remains weak, with a year-on-year decrease of 12.1% in October, continuing a downward trend[45] - The real estate sector experienced a significant decline, with investment down 14.7% year-on-year from January to October[31] Employment and Policy Outlook - The urban unemployment rate in October was reported at 5.1%, showing a slight decrease, indicating some stabilization in the job market[8] - The government maintains a cautious stance on large-scale stimulus policies, focusing instead on structural optimization and supply upgrades[23] - Future investment confidence may improve following recent diplomatic engagements and the introduction of new financial tools to support infrastructure projects[32]

Asset Allocation - The investment research framework has evolved from the traditional Merrill Lynch clock to a Chinese-style monetary credit model, reflecting significant changes in China's economic development model and the diminishing role of investment in driving economic growth [12] - In the new era, liquidity is identified as a core factor influencing asset prices, with the monetary cycle remaining highly relevant. Additionally, international factors, exemplified by US-China relations, significantly impact export engines and cross-border capital flows, becoming crucial for capturing asset price changes [12] Historical Review of Stock and Bond Performance - The report reviews stock and bond performance since 2018, highlighting that in 2018, macroeconomic fundamentals were weak, leading to significant stock market declines while bonds provided good coupon returns. In 2019, equity markets experienced volatility, and bonds continued to offer protection [18] - The analysis indicates that from 2020 to 2025, equity markets have shown resilience driven by technology stocks and structural bull markets, while bonds have entered a bull market phase characterized by declining yields [18] Long-term Bond Market Trends - Historical data shows that each bond bull market corresponds with a downward trend in 10-year government bond yields, driven by the interplay of "debt bulls" and "asset scarcity" [20] - The current bond bull market has seen 10-year government bond yields reach new lows, indicating a significant shift in the bond market landscape [21] Equity Market Trends - The equity market is believed to be in a long-term upward trend, with the current phase identified as the third wave of a five-wave cycle. This phase is expected to last longer than previous cycles, indicating a gradual upward movement [25] - The report draws parallels with Japan's experience, noting that after the economic bubble burst in the 1990s, the Japanese stock market entered a long-term upward channel, supported by structural reforms and monetary easing [29] Core Investment Themes - The report emphasizes a bullish outlook on A-shares and Hong Kong stocks, driven by stable US-China relations and a supportive global monetary environment. It suggests that technology stocks will lead the market in the next 5-10 years [36] - The bond market is expected to maintain a volatile environment, with a focus on coupon strategies as interest rates are projected to fluctuate between 1.7% and 2.0% [36]

Monetary Supply Trends - As of the end of October, M2 growth rate was 8.2%, down from 8.4%, a decrease of 0.2 percentage points[1] - M1 growth rate was 6.2%, down from 7.2%, a decline of 1 percentage point[1] - The M1-M2 gap widened to -2%, an increase of 0.8 percentage points from the previous month[1] Deposit Dynamics - Household deposits decreased by 1.34 trillion yuan, a year-on-year decline of 770 billion yuan[12] - Non-financial enterprise deposits fell by 1.09 trillion yuan, a year-on-year decrease of 355.3 billion yuan[12] - Fiscal deposits increased by 720 billion yuan, a year-on-year increase of 124.8 billion yuan[12] - Non-bank deposits rose by 1.85 trillion yuan, a year-on-year increase of 770 billion yuan[12] Credit and Financing - New RMB loans in October amounted to 220 billion yuan, a year-on-year decrease of 280 billion yuan[3] - Social financing increased by 815 billion yuan, a year-on-year decline of 432.1 billion yuan, with a month-end growth rate of 8.5%[8] - Corporate loans increased by 350 billion yuan, a year-on-year increase of 220 billion yuan[5] Economic Outlook - The central bank indicated that the most significant pressure points may have passed, suggesting a potential decrease in the likelihood of rate cuts in the fourth quarter[15] - The cumulative excess savings of households since 2020 is estimated at approximately 2.54 trillion yuan, reflecting ongoing shifts in deposit behavior[14]

Market Overview - The Shanghai Composite Index rose by 0.7%, while the CSI 300 increased by 1.2%, the STAR Market 50 by 1.4%, the CSI 1000 by 1.4%, and the ChiNext Index by 2.6%. The Hang Seng Index saw a rise of 0.6% [5][7] - The best-performing sectors included power equipment (+4.3%), non-ferrous metals (+4.0%), comprehensive (+3.3%), basic chemicals (+2.6%), and building materials (+1.7%). The worst-performing sectors were utilities (-0.3%), telecommunications (-0.2%), oil and petrochemicals (-0.1%), banks (-0.1%), and home appliances (+0.3%) [5][7] - The total trading volume in the Shanghai and Shenzhen markets was 20,420 billion, with a net outflow of 3.52 billion HKD from southbound funds [5][7] Key Recommendations - The report recommends Inke Recycling (688087) as a leading player in the integrated recycling plastic industry, highlighting its solid quality and steady growth. The recommendation is based on the global shift towards recycled plastics and the company's advantages in full industry chain layout, global channel development, and overseas production capacity [8] - The expected revenue for Inke Recycling from 2025 to 2027 is projected to be 3,355.96 million, 3,869.30 million, and 4,494.48 million respectively, with revenue growth rates of 14.78%, 15.30%, and 16.16%. The net profit attributable to shareholders is expected to be 298.44 million, 357.11 million, and 434.07 million, with growth rates of -2.89%, 19.66%, and 21.55% respectively [8] Industry Insights - The Chinese traditional medicine industry is expected to see continuous improvement in revenue growth rates from Q1 to Q3 of 2025. The report anticipates that excellent companies will accelerate revenue growth after clearing channel inventory, coupled with the recovery of gross margins due to declining prices of traditional Chinese medicine materials [10][11] - The report emphasizes that 2026 marks the beginning of the "14th Five-Year Plan," and state-owned enterprises are likely to focus on achieving a strong start for the "15th Five-Year Plan," which may lead to improved performance in the second half of 2025 [10][11] - The macroeconomic report indicates that achieving the growth target for a moderately developed country requires an average annual GDP growth of 4.17% during the "15th" and "16th Five-Year Plans." This growth target is based on the actual GDP growth rate, not nominal [12][13]