Group 1 - The manufacturing PMI in China increased by 0.4 percentage points to 49.8% in September, indicating a slight recovery in manufacturing activity [1] - Factors contributing to this recovery include the easing of adverse weather conditions, the implementation of consumer loan interest subsidies, and the full rollout of the third batch of national subsidies for trade-in programs [1] - The production index rose to 51.9%, the highest in nearly six months, while the new orders index increased to 49.7% [1] Group 2 - Large enterprises reported a PMI of 51.0%, while medium and small enterprises had PMIs of 48.8% and 48.2%, respectively, indicating varying levels of manufacturing activity across different enterprise sizes [1] - The non-manufacturing PMI recorded a value of 50.0%, a decrease of 0.3 percentage points from the previous month, with the construction sector index at 49.3% and the services sector index at 50.1% [5] - Certain service industries, such as postal and telecommunications, showed strong activity with indices above 60.0%, while sectors like catering and real estate remained below the critical point [5] Group 3 - Economic forecasts suggest that the fourth quarter may see the implementation of new policy measures to support economic growth, including financial tools and potential monetary easing [2][4] - The National Development and Reform Commission is actively working on new policy financial tools, with a total scale of 500 billion yuan aimed at enhancing effective investment [4] - Proposed fiscal measures may include increasing support for equipment updates and extending special government bonds, which could significantly bolster the macroeconomic environment, particularly in manufacturing [5]

1. Report Industry Investment Rating - Investment view: Range-bound trading [7] 2. Core Viewpoints of the Report - In Q4, the path of the Fed's interest rate cuts remains uncertain, and China's growth-stabilizing policies are expected to be rolled out. Affected by macro events, nickel prices are likely to consolidate at the bottom and are more sensitive to supply-side disturbances. Focus on mining news and macro changes in Q4, and the valuation range of pure nickel can refer to the production cost of integrated electrowon nickel (which fluctuates with ore prices). In terms of operations, short-term range trading is recommended, and combination strategies such as selling out-of-the-money call options can be used to increase returns, while paying attention to risk control [1]. 3. Summary by Relevant Catalogs 3.1 Market Review - In Q1, policies in nickel resource countries stimulated price increases; in Q2, trade conflicts and an intensified surplus led to a sharp decline; in Q3, the fundamentals were stable, and the Fed's interest rate cut in September provided a temporary boost. As of September 26, SHFE nickel closed at 121,380 yuan/ton, up 0.45% from mid-year, and LME nickel was reported at $15,230/ton, up 0.33% [8]. 3.2 Macro Analysis 3.2.1 Fed Interest Rate Cut - The Fed cut interest rates by 25bp in September, but the subsequent path remains uncertain. The economic outlook shows an upward adjustment of GDP growth expectations, while unemployment and inflation expectations are relatively stable [12][13]. - The US labor market has weakened significantly, with non-farm payrolls being persistently weak and the unemployment rate reaching a new high since October 2021. Inflation has been rising steadily, increasing market expectations for further interest rate cuts [21]. 3.2.2 China's Economic Situation - In H2, some macro data showed signs of weakening, including fixed asset investment and social consumption. The government may introduce new incremental measures in Q4, focusing on fiscal stimulus, central bank interest rate cuts, and stabilizing the real estate market [24][27]. - The "anti-involution" policies have been introduced, but their impact on the nickel industry chain is currently limited [28][29]. 3.3 Fundamental Analysis 3.3.1 Supply Side - Indonesia's nickel ore supply is stable, but there are risks of policy disturbances. The premium for nickel ore remains firm, and Indonesia's imports of nickel ore from the Philippines are increasing. The RKAB quota for 2026 will be re-approved in October, attracting market attention [31][32]. - China's nickel pig iron production has declined slightly, while Indonesia's production remains high but with a slowing growth rate. The import of nickel pig iron from Indonesia has increased year-on-year [43][44]. - The import of nickel intermediate products has increased, with a decline in the import of nickel matte. Indonesia's MHP production has increased significantly, while the production of nickel matte has decreased [51][54]. - The production of refined nickel has remained high, with both imports and exports increasing. The cost of integrated electrowon nickel production will be the focus of pure nickel valuation [58][68]. 3.3.2 Demand Side - The growth rate of stainless steel production has slowed down, and the demand has shown some resilience. The social inventory of stainless steel is gradually being depleted [70][80]. - The production of nickel sulfate has remained stable year-on-year, but the low proportion of ternary materials in power batteries has dragged down the demand for nickel. In the long term, solid-state batteries may drive the demand for high-nickel ternary materials [85][88]. - The consumption of nickel in alloy and special steel has maintained a certain growth rate, and attention should be paid to the situation of national stockpiling [92][93]. 3.3.3 Inventory - Global nickel inventory has continued to accumulate, and the spot premium has weakened slightly compared to mid-year [95]. 3.3.4 Supply-Demand Balance - The surplus pattern of primary nickel continues, and attention should be paid to supply-side disturbances in Q4. It is expected that China will have a surplus of 179,800 tons of primary nickel in 2025, and the global surplus will be 246,200 tons [100][102].

Market Overview - The A-share market experienced a day of volatility with the ChiNext index dropping over 2.5% during the session [2] - Major indices closed in the red, with the Shanghai Composite Index at 3828.11 (-0.65%), Shenzhen Component at 13209.00 (-1.76%), and the ChiNext at 3151.53 (-2.60%) [1][2] Sector Performance - The top-performing sectors included Oil & Petrochemicals (+1.17%), Environmental Protection (+0.38%), and Public Utilities (+0.35%) [1] - Conversely, the weakest sectors were Computer (-3.26%), Electronics (-2.75%), and Media (-2.65%) [1] Investment Insights - The report highlights a robust performance of the basic pension insurance fund, which has reached an investment operation scale of 2.6 trillion, doubling since the end of the 13th Five-Year Plan [3] - The average annual investment return of the pension fund stands at 5.15%, indicating effective value preservation and growth [3] Future Market Outlook - The market is expected to show a trend of oscillating upward rather than a one-sided increase, with a focus on whether growth policies can effectively translate into improved corporate earnings [4] - Key sectors to watch include TMT (Technology, Media, and Telecommunications), Public Utilities, Non-ferrous Metals, and Financials [4]

Macro Strategy - The current economic situation indicates increasing pressure on stabilizing investment and consumption, suggesting that a new round of growth stabilization policies is imminent. The cumulative growth rate of fixed asset investment for the first eight months of this year is only 0.5%, necessitating coordinated fiscal and monetary policies to promote recovery [10][11] - The expected GDP growth for the third quarter is between 4.7% and 4.9%, with a cumulative growth rate of approximately 5.1% for the first three quarters. If the growth rate for the fourth quarter exceeds 4.5%, the annual target of around 5.0% can be achieved [10][11] - The report anticipates that the new policies will focus on four areas: early use of debt limits, introduction of new policy financial tools, potential interest rate cuts, and adjustments to consumption policies to stimulate demand [10][11] Fixed Income - The issuance of the Jin 25 convertible bond is set at a total scale of 2 billion yuan, with net proceeds allocated for the Zambia Lubanbi copper mine project and related operational and capital expenditures. The bond has a maturity of six years and a yield to maturity of 2.46% [20] Industry Analysis - The insurance industry showed strong growth in life insurance premiums in August, while non-auto property insurance faced short-term pressure. The valuation of insurance stocks remains low, with expected PEV ratios between 0.57 and 0.85 and PB ratios between 1.02 and 2.16 for 2025, indicating significant upside potential [7] - The report highlights that the demand for savings remains robust, and with ongoing regulatory guidance and proactive transformation by insurance companies, liability costs are expected to gradually decrease, alleviating pressure on interest margins [7] Energy Storage - The report emphasizes the rise of independent energy storage in China, with significant demand growth expected in both domestic and international markets. The ongoing shortage of energy storage cells is projected to continue until the second half of 2026, with price increases anticipated [8] - Key companies recommended for investment in the energy storage sector include CATL, Sungrow, and Yiwei Lithium Energy, among others, due to their competitive advantages and profit growth potential [8]

Core Viewpoint - The significant rebound in profit growth is largely attributed to low base effects and other short-term factors, while cost pressures remain high [2][11][66] Group 1: Profit and Revenue Analysis - In August, industrial profits increased by 21% year-on-year to 19.8%, driven by short-term factors such as expenses and other gains [2][11][66] - The profit margin improvement is mainly due to a notable rise in expenses and other gains, which increased by 3.8% to 2.2% and 24.8% to 18.3% respectively [2][11][66] - The revenue growth for industrial enterprises improved slightly, with a year-on-year increase of 2.3% in August, supported by significant recoveries in sectors like chemical fibers and non-metallic products [5][50][66] Group 2: Cost Pressure and Inventory - Cost pressures for industrial enterprises have not eased, with the overall cost rate at 85.6%, indicating a relative high compared to previous years [3][28][66] - The actual inventory growth showed a slight recovery, with nominal inventory decreasing by 0.1% year-on-year to 2.3%, while actual inventory increased by 0.3% to 7.2% [7][55][66] - Upstream inventory remains at historical highs, while midstream and downstream inventories are relatively low [7][55][66] Group 3: Industry-Specific Insights - The beverage and alcohol sector saw a dramatic profit increase of 234.8% year-on-year, significantly contributing to the overall profit growth of industrial enterprises [2][17][67] - The chemical and metallurgical sectors also contributed positively to profit recovery, with respective profit increases of 58.5% and 52.9% [46][67] - State-owned and joint-stock enterprises experienced substantial profit growth, with year-on-year increases of 53.1% and 30.9% respectively [52][66] Group 4: Future Outlook - Recent policies aimed at stabilizing growth in key industries are expected to alleviate cost pressures, with a focus on the effectiveness of these policies in the coming months [4][39][66] - The ongoing recovery in domestic demand is anticipated to support a continued upward trend in corporate profitability, despite potential negative impacts from rising upstream prices [4][39][66]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - During the upcoming National Day holiday (October 1 - 8), the market has certain seasonal patterns, such as the risk of pre - holiday adjustment in the stock index and post - holiday upward movement, and pre - holiday depreciation and post - holiday repair of the RMB exchange rate. Gold has a relatively low risk for holding positions during the holiday, and there may be opportunities in commodity sectors like coking coal, steel, and non - metallic building materials in the month after the holiday [1]. - The gap between strong domestic expectations and weak reality has intensified. In August, China's economic data showed signs of weakness, and external tariff pressure increased. Recently, the government has frequently mentioned pro - growth policies, and attention should be paid to post - holiday policy expectations and the possible correction of the current "off - peak in peak season" expectation [1]. - The outlook for US inflation is clearer. The US economic data in August shows a mixed picture, with the ISM manufacturing index in contraction, CPI rising, PPI falling, and employment data underperforming expectations, which further supports the Fed's interest rate cut. The Fed has cut interest rates by 25 basis points, and the subsequent interest rate cut cycle is expected to be smooth. Meanwhile, the risk of a US government shutdown has increased, and the US has imposed additional tariffs [2]. - In the commodity market, the black and new energy metal sectors are sensitive to domestic supply - side factors, while precious metals and agricultural products are related to overseas inflation expectations. Different commodity sectors have different fundamentals and investment opportunities [3]. 3. Summary by Relevant Catalogs Market Analysis - **Holiday Risk Management**: During the National Day holiday, there are 6 overseas trading days. Historically, the stock index has a risk of pre - holiday adjustment and post - holiday rise, and the RMB exchange rate has a pattern of pre - holiday depreciation and post - holiday repair. Gold has a low risk for holding positions during the holiday, and post - holiday opportunities can be found in coking coal, steel, and non - metallic building materials. Important events during the holiday include the US government's temporary spending bill, US September non - farm payroll data, and the OPEC+ meeting [1]. - **Domestic Economic Situation**: In August, China's economic data showed "slow industry, weak investment, and sluggish consumption". External tariff pressure increased, and the government has frequently mentioned pro - growth policies. Attention should be paid to post - holiday policy expectations and the possible correction of the "off - peak in peak season" expectation [1]. US Economic Situation - **Inflation and Interest Rates**: The US ISM manufacturing index in August was in contraction for the sixth consecutive month, with new orders improving and the price index falling again. The CPI rose to 2.9% year - on - year, while the PPI growth slowed. The employment data was worse than expected, supporting the Fed's interest rate cut. The Fed cut interest rates by 25 basis points, and the subsequent interest rate cut cycle is expected to be smooth [2]. - **Other Economic Indicators**: The US retail sales in August increased by 0.6% month - on - month, and new home sales unexpectedly soared to an annualized 800,000 units. The risk of a US government shutdown has increased, and the US has imposed additional tariffs on various imported products [2]. Commodity Market - **Black and New Energy Metal Sectors**: These sectors are sensitive to domestic supply - side factors. The black sector is still dragged down by downstream demand expectations, and attention should be paid to the "anti - involution" situation. The long - term supply limitation in the non - ferrous sector has not been alleviated, but the marginal supply has slightly increased recently [3]. - **Precious Metals and Agricultural Products**: Precious metals and agricultural products are related to overseas inflation expectations. Although gold experienced "selling on the fact" after the Fed's interest rate cut, it is still expected to strengthen due to the de - dollarization trend and the interest rate cut cycle. Agricultural products are driven by tariffs and inflation expectations in the short term but need fundamental support and are subject to Sino - US negotiation disturbances [3]. - **Energy and Chemical Sectors**: The medium - term fundamental supply of energy is considered relatively loose, as OPEC+ plans to increase production in October. In the chemical sector, the "anti - involution" space of products like methanol, PVC, caustic soda, and urea is worth noting [3]. Strategy - For commodities and stock index futures, it is recommended to allocate long positions in industrial products and precious metals at low prices [4]. Macroeconomic Data - **US Economic Heat Map**: It shows various economic indicators such as GDP growth, investment, employment, inflation, consumption, fiscal revenue and expenditure, and trade from January 2024 to September 2025, reflecting the overall economic situation of the US [7]. - **European Economic Heat Map**: Presents data on GDP growth, industrial confidence, investment, employment, consumption, inflation, trade, credit, and fiscal surplus in Europe from October 2024 to September 2025 [8]. - **Chinese Economic Heat Map**: Displays China's GDP growth, trade, investment, consumption, inflation, financial, and fiscal data from September 2024 to August 2025, showing the characteristics of China's economic operation [9].

Core Viewpoint - The bond market in China has entered a bull market in 2024, driven by weak economic conditions, moderate monetary policy easing, and reduced bank funding costs, leading to declining interest rates and narrowing credit spreads [1][2][8]. Bond Market Performance Interest Rate Bonds - Since the beginning of 2024, the bond market has shown a bull market trend, with the 1-year government bond yield dropping to a low of 0.9307% on December 23, 2024, the lowest since June 3, 2009 [2][4]. - The 10-year government bond yield reached a historical low of 1.5958% on February 7, 2025, indicating a low interest rate environment [2][4]. Credit Bonds - The scale of credit bond defaults has continued to decline in 2024, with a notable decrease in the proportion of defaults from real estate companies and AAA-rated bonds [5][6]. - The number of defaulting companies decreased from 37 in 2021 to 23 in 2024, and the default scale dropped from 1,076 billion to 241 billion [6]. Factors Driving Bond Yield Decline - Economic slowdown is evident, with the manufacturing PMI below 50 for nine months, indicating weak production [8][9]. - Monetary policy has become more accommodative, with two interest rate cuts totaling 30 basis points and two reserve requirement ratio cuts of 1 percentage point in 2024 [8][9]. - The cost of bank liabilities has decreased due to various policy measures, increasing demand for bond investments [8][9]. - Institutional demand for bonds has surged amid a weak stock market and ample liquidity, leading to significant bond purchases [9][10]. Outlook for the Bond Market Interest Rate Bonds - The bond market may experience increased volatility due to ongoing U.S.-China trade negotiations and potential government policies aimed at stabilizing growth [11][12]. - The issuance of long-term special government bonds is expected to increase, with a total of 11.86 trillion yuan in new government debt planned for 2025 [11][12]. Credit Bonds - The default rate for credit bonds is expected to remain low, particularly in the real estate sector, due to improved sales and financing conditions [20][21]. - Credit spreads are likely to narrow, but the potential for further compression is limited due to already low levels [22]. Investment Strategy Recommendations - Investors should closely monitor the 1-year interbank certificate of deposit rates as they significantly influence the 10-year government bond yields [24][25]. - A strategy to go long on short-term bonds is recommended, as the yield curve is expected to steepen [26]. - Identifying structural opportunities in credit spreads is crucial, focusing on liquidity risk management and sector rotation [27]. - Enhancing trading capabilities and utilizing derivatives for hedging, along with diversifying into fixed-income-like assets, can optimize portfolio performance [28].

Core Viewpoint - The significant rebound in profit growth is largely attributed to low base effects and other short-term factors, while cost pressures remain high [2][11][67] Group 1: Profit and Revenue Analysis - In August, industrial profits increased by 21.9% year-on-year, reaching 20.4%, primarily due to an improvement in operating profit margins [40][68] - The profit margin for industrial enterprises rose by 20.2% month-on-month to 17.5% in August, while the Producer Price Index (PPI) increased by 0.7% to -2.9% [40][68] - Revenue growth for industrial enterprises improved, with a month-on-month increase of 1.2% to 2.3% in August, driven by significant recoveries in sectors like chemical fibers and non-metallic products [49][68] Group 2: Cost and Inventory Insights - The cost pressure for industrial enterprises remains elevated, with an overall cost rate of 85.6%, which is relatively high compared to previous years [27][67] - The actual inventory growth rate slightly rebounded, with nominal inventory decreasing by 0.1% year-on-year to 2.3%, while actual inventory increased by 0.3% to 7.2% [54][68] - Upstream inventory levels are at historical highs, while midstream and downstream inventories are relatively low [54][68] Group 3: Industry-Specific Performance - The beverage and alcohol sector saw a remarkable profit growth of 234.8% year-on-year, significantly contributing to the overall profit increase of industrial enterprises [17][66] - Other sectors such as electric power supply, coal mining, and non-ferrous processing also contributed positively to profit recovery, with respective contributions of 4.9%, 3%, and 2.2% [17][66] - The chemical fiber and non-metallic products sectors experienced substantial revenue growth, with increases of 22.2% and 7.4% respectively [49][68] Group 4: Future Outlook - Recent policies aimed at stabilizing growth in key industries are expected to alleviate cost pressures, with a focus on the effectiveness of these policies in the coming months [4][38] - The ongoing "anti-involution" policies are anticipated to gradually reduce rigid cost pressures, while domestic demand is expected to recover [4][38] - However, attention should be paid to the potential negative impact of rising upstream prices on corporate profitability [4][38]

Profit Performance - In August, industrial profits increased significantly, with a year-on-year rise of 21.9% to 20.4%[36] - The profit margin improved due to a rise in operating profit margin, which increased by 20.2% to 17.5%[36] - The profit growth was influenced by low base effects and strong performance in the capital market[2] Revenue Trends - Cumulative revenue for industrial enterprises in August showed a year-on-year growth of 2.3%, consistent with the previous value[6] - Revenue from the chemical fiber and non-metallic products sectors saw significant increases, with year-on-year growth of 22.2% and 7.4% respectively[41] - Actual revenue growth, excluding price factors, rose by 0.5% to 5.2% in August[19] Cost Pressures - Industrial enterprises faced high cost pressures, with the cost rate at 85.6%, remaining at a relatively high level historically[21] - The cost contribution to profit year-on-year decreased by 9.3% to -3.4%[21] - Specific sectors like petrochemicals and metallurgy reported cost rates of 85.8% and 86.7%, reflecting increases compared to the previous month[21] Industry Contributions - The beverage industry saw a remarkable profit increase of 234.8% to 226.8%, contributing significantly to overall industrial profit growth[14] - Other sectors such as electric power supply and coal mining also contributed positively, with profit increases of 4.9% and 3% respectively[14] Future Outlook - New policies aimed at stabilizing growth in key industries have been introduced since September, which may alleviate cost pressures[34] - The ongoing "anti-involution" policies are expected to gradually reduce rigid cost pressures, supporting a long-term trend of profit recovery[34] - However, attention is needed on the potential negative impact of rising upstream prices on corporate profitability[34]

Economic Overview - The economic growth momentum in China has declined due to extreme weather, policy adjustments, and external factors since Q3 2023 [1] - Fixed asset investment growth for the first eight months of the year is at a record low of 0.5%, while retail sales growth has dropped to 3.4%, indicating a potential further slowdown in Q4 [1] - The impact of high U.S. tariffs on global trade and China's exports may become more pronounced in Q4, increasing the necessity for policies to stabilize growth and employment [1] Policy Measures - Analysts expect a new round of growth-stabilizing policies to be introduced in Q4, focusing on fiscal expansion, monetary easing, and boosting consumption and the real estate market [2][4] - The government has a relatively low debt ratio compared to other major economies, providing ample policy space for intervention [2] Fiscal Policy - Proposed fiscal measures include establishing new policy financial tools estimated at 500 billion yuan to support infrastructure investment, which could leverage around 6 trillion yuan in total investment [4][5] - The issuance of special government bonds and increasing funding for "two new" initiatives (equipment updates and consumption subsidies) are also anticipated to stimulate consumption [5] - Local government land use rights revenue has decreased by 4.7%, necessitating additional special bonds to support infrastructure and affordable housing projects [5][6] Monetary Policy - There is a possibility of new interest rate cuts and reserve requirement ratio reductions by the central bank in Q4 to enhance liquidity and stimulate lending [7] - The current low inflation environment allows for a more accommodative monetary policy without immediate concerns about high inflation [7] Real Estate and Consumption - The real estate sector is expected to see comprehensive support policies in Q4, including expedited loan approvals for key projects and potential tax reductions for transactions [8][9] - Consumption policies may expand to include a wider range of goods and services, with potential increases in "trade-in" subsidies to stabilize consumer spending [9]