Summary of Conference Call on Shenzhou International Industry Overview - The textile industry in China is facing increased competition, with leading companies gaining market share due to globalization, quick response capabilities, and vertical integration advantages. [2][4] - The restructuring of the global textile supply chain has seen ASEAN replace China as the largest source of imports for the U.S., particularly in footwear manufacturing, while South Asia has taken over apparel manufacturing. [2][4] - China's reliance on textile imports from ASEAN is increasing, despite maintaining a competitive edge in upstream fiber and fabric production. [2][4] Key Points on Trade War Impact - The trade war has had a two-phase impact on the textile manufacturing sector, with the first phase (2018-2020) leading to a significant drop in U.S. imports from China by approximately 30%, reducing dependency from 40% to 27%. [3][5] - The second phase of the trade war (Trump 2.0) has seen a more aggressive approach with tariffs exceeding 40%, affecting the supply chain dynamics and leading brands to adjust their order patterns. [5][6] - Shenzhou International has been less affected by the trade war, with only 16% of its orders coming from the U.S., allowing it to maintain a strong performance outlook. [3][13] Financial Performance and Market Outlook - The current inventory turnover ratio in the U.S. is at a historical low, indicating a cautious demand outlook, but a clear replenishment trend is expected in 2026, albeit at a subdued pace. [7][10] - Leading manufacturers are expected to benefit from the trade war, with a focus on low-volatility dividend stocks, such as Yuyuan Group and Shenzhou International, which have attractive valuations and dividend yields. [7][10] - Shenzhou International is recommended for long-term value investment due to its high visibility in earnings, reasonable valuation (PE around 13 times), and a dividend yield of less than 6%. [7][13] Brand Strategies and Market Dynamics - Brands are responding to rising tariff costs by either increasing prices or sharing costs with manufacturers, with many expected to complete price adjustments by late 2025 or early 2026. [8][9] - Different brands are experiencing varied performance: Nike is in a destocking phase, Adidas is seeing strong wholesale orders, and Uniqlo is expanding in Western markets. [11][12] Competitive Landscape - Leading manufacturers are maintaining their competitive edge through high-quality production capabilities and quick response times, while smaller firms are struggling. [12] - The focus on overseas production in Southeast Asia is increasing, with a shift in orders from China to these regions, enhancing the performance outlook for leading manufacturers. [12] Conclusion - Shenzhou International is positioned well for future growth, with a strong competitive advantage in vertical integration and a favorable market outlook despite the challenges posed by the trade war. [13][14]

Group 1: Profit and Revenue Trends - From January to September 2025, the cumulative profit of national industrial enterprises increased by 3.2% year-on-year, up from 0.9% previously[2] - In September, the monthly revenue of industrial enterprises improved by approximately 3.1% year-on-year, an increase of 0.8 percentage points from the previous value[3] - The profit growth rate for September rose by 1.2 percentage points to 21.6%, marking two consecutive months of high growth[3] Group 2: Profit Structure and Contributions - The contributions to September's profit growth were +7.0% from industrial value added, -2.6% from PPI, and +15.2% from profit margin year-on-year[3] - In September, the cost, expenses, investment income, and profit per 100 yuan of revenue were 85.4, 8.3, -0.8, and 5.5 yuan respectively, with significant contributions from reduced expenses[3] - The profit margin structure showed a notable decrease in expense rates, contributing positively to overall profitability[12] Group 3: Inventory and Economic Outlook - In September, nominal inventory increased by 0.5 percentage points to 2.8%, indicating the first shift to replenishing inventory this year[5] - The report anticipates increased downward pressure on economic growth in Q4, despite recent fiscal policy measures aimed at boosting investment[5] - The ongoing improvement in the "anti-involution" industries has led to a more significant profit recovery compared to non-anti-involution sectors, with a 3.9 percentage point improvement in cumulative profit year-on-year for anti-involution industries[4]

Core Viewpoint - The article discusses the cyclical nature of commodity markets, emphasizing the importance of macroeconomic factors such as the dollar cycle, global economic growth quality, and policy changes in major economies, while analyzing historical trends and their implications for future commodity pricing [4][5][6]. Group 1: Historical Context of Commodity Cycles - Different eras have distinct dominant factors influencing commodity prices, with a review structured around significant events and changes in the global landscape [7]. - The 1970s marked a unique period of stagflation, initiated by the collapse of the Bretton Woods system, leading to a decoupling of the dollar from gold, resulting in a chaotic economic environment where commodity prices surged despite economic recession [11][12]. - The 1980s saw a recovery with the stabilization of the dollar and economic growth in the U.S., where commodity prices were positively correlated with GDP, particularly during the period of the Plaza Accord [15][16]. Group 2: Economic Growth and Commodity Prices - The relationship between commodity cycles and economic growth attributes is significant, with emerging economies and new growth drivers having a more substantial impact on commodity trends than inventory cycles [10]. - The early 2000s experienced a super bull market in commodities driven by China's industrialization and demand, with the CRB index rising from 200 to 480 before the financial crisis [21][23]. - Post-financial crisis, the period from 2008 to 2018 was characterized by China's stimulus measures, which temporarily boosted commodity prices, but ultimately led to overcapacity and a prolonged bear market [28][32]. Group 3: Current and Future Trends - The era of de-globalization, marked by U.S.-China tensions and the COVID-19 pandemic, has reinforced the monetary attributes of commodities, leading to a recent bull market in the CRB index [35][38]. - The relationship between the CRB index and China's economic cycles has weakened, indicating a shift in the dynamics of commodity demand and pricing [39]. - The long-term price range of commodities is influenced by their monetary attributes and cyclical properties, with potential for the CRB index to rise to a new range of 500-700 due to ongoing monetary expansion [47].

Core Viewpoint - Liu Zhihui emphasizes a rational approach to investment amidst market volatility, focusing on macroeconomic cycles and industry allocation to achieve steady returns [2][3] Investment Philosophy - Liu's investment framework consists of three core elements: understanding macro cycles, assessing odds, and respecting market signals [3] - The investment philosophy includes "Investment Way," "Investment Method," and "Investment Technique," focusing on market trends, macro and industry analysis, and specific trading strategies [4] Multi-Asset Framework - Liu's investment strategy spans fixed income, equities, and convertible bonds, aiming for absolute returns through flexible allocation and odds thinking [5] - In bond investment, Liu adjusts duration and leverage based on macro analysis, credit environment, and market sentiment [6] Stock and Convertible Bond Strategy - Liu captures industry trends and cyclical turning points through sector rotation and concentrated allocation, focusing on both intrinsic value and market pricing signals [6] - For convertible bonds, Liu only allocates when they exhibit characteristics of downside protection and upside potential, guided by macroeconomic fundamentals [6] Recent Market Actions - In response to market adjustments, Liu increased exposure to sectors like innovative pharmaceuticals and AI, while also considering undervalued sectors such as machinery and real estate [7] - Liu maintains a neutral stance on the bond market, focusing on short-duration government bonds and high-rated credit bonds due to low yield levels [7]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - This week, the spot market for live pigs saw price fluctuations. Group slaughter schedules returned to normal, with farmers reluctant to sell, resulting in a loose supply. Post - festival slaughter volume decreased, but some second - fattening operations actively entered the market. The average slaughter weight increased slightly. In the futures market, prices were weak, and the basis of the LH2511 contract changed from negative to positive [1][2] - Next week, the spot price of live pigs is expected to be weak. Supply is on the rise, and demand is decreasing. The inventory cycle will shift from inventory accumulation to destocking, and the spot price is still searching for a bottom. For the LH2511 futures contract, attention should be paid to the basis - narrowing market, with a short - term support level of 10,000 yuan/ton and a pressure level of 11,500 yuan/ton [3][4] Summary by Relevant Catalogs 1. Market Review (10.13 - 10.19) Spot Market - The price of 20KG piglets in Henan remained at 20.4 yuan/kg, the live pig price in Henan rose from 11.13 yuan/kg last week to 11.38 yuan/kg, and the price of 50KG binary sows nationwide remained at 1,566 yuan/head. The average national slaughter weight was 124.67KG, a 0.17% increase from last week [1] Futures Market - The LH2511 contract of live pig futures had a high of 11,590 yuan/ton, a low of 11,020 yuan/ton, and a closing price of 11,050 yuan/ton (compared to 11,320 yuan/ton last week). The basis of the LH2511 contract was 330 yuan/ton (compared to - 190 yuan/ton last week) [2] 2. Market Outlook (10.20 - 10.26) Spot Market - The spot price of live pigs is expected to be weak. Supply is increasing, and demand is in a seasonal low. The inventory cycle is shifting from accumulation to destocking, and the spot price is still in the process of finding a bottom [3] Futures Market - The LH2511 contract price closed at 11,050 yuan/ton on October 17th. With group incremental slaughter and second - fattening re - entering the market, the inventory cycle is still in the passive accumulation stage. The 11 - month contract is still at a premium near delivery. Attention should be paid to the basis - narrowing market, with a short - term support level of 10,000 yuan/ton and a pressure level of 11,500 yuan/ton [4] 3. Other Data - This week's basis was 330 yuan/ton, and the LH2511 - LH2601 monthly spread was - 620 yuan/ton [10] - In August, pork production was 5.309 million tons, a 5.9% month - on - month increase; pork imports were 81,700 tons, a 7.46% month - on - month decrease [12]

Core Viewpoint - The article discusses the fluctuations in shipping rates and trade dynamics between Asia and Europe, highlighting the impact of geopolitical events and economic conditions on the supply and demand in the shipping industry [3][5][11]. Demand Side: Resilience Expected but Growth May Slow - The shipping trade volume from Asia to Europe has seen a year-on-year growth of approximately 10%, which is historically high, but the price elasticity of shipping rates is lower than last year [5][11]. - Different freight forwarding companies report varying experiences regarding cargo volume, with most indicating an increase, but the perception of growth differs based on customer structure and product types [5][7]. - Factors driving significant growth in imports from China to Europe include cost advantages of Chinese products, shifts in export destinations due to tariffs, policy-driven stockpiling behaviors, and environmental factors such as high summer temperatures in Europe [7][10]. - The demand for certain categories, particularly textiles, machinery, and electric vehicles, remains strong, although the overall growth rate is expected to slow in the coming year [11]. Supply Side: Continued Loose Supply Conditions - The restructuring of shipping alliances has led to an increase in overall market capacity and the introduction of new shipping routes, affecting pricing dynamics and cargo strategies [13]. - The market is experiencing a loosening of supply as the benefits from the additional shipping routes due to geopolitical tensions diminish, leading to more scheduled repairs and maintenance of vessels [16][19]. - The delivery of new ships is expected to slow down next year, but some companies still face significant delivery pressures, which may contribute to ongoing supply looseness [19]. - The introduction of more car carriers is expected to divert container shipping volumes, particularly for electric vehicles, thereby reducing demand on container shipping routes to Europe [22].

Summary of Coal Industry Conference Call Industry Overview - The coal industry is experiencing a positive trend due to supportive policies and measures against excessive competition, leading to a stable outlook. The intervention of energy, safety, and environmental authorities since early July has resulted in a contraction in supply, with coal prices improving from a low of 610 CNY/ton in Q2 to around 712 CNY/ton post-holiday, indicating strong fundamentals in the coal sector [1][3][4]. Key Points Price Trends - The average coal price for 2025 is expected to be at a recent low, but with inventory depletion and ongoing supply-side policies, the average price for 2026 is projected to rise further. The bottom price for this year has been established, with marginal improvements in fundamentals [1][4]. - The price of thermal coal has shown strong resilience, maintaining high levels despite weak demand, driven by a recovery in marginal purchasing due to colder weather in northern regions [2][10]. Supply and Demand Dynamics - The supply side has contracted significantly due to policies aimed at reducing overproduction, with a potential reduction of 100 million tons in imports, corresponding to a supply contraction of about 2%. Domestic production is also declining, with marginal production growth of approximately 40-50 million tons this year, leading to an overall negative growth in supply [1][8][9]. - The overall supply-demand situation is characterized by slight negative growth without severe imbalances, as both supply and demand are weak [8]. Institutional Holdings and Market Sentiment - Institutional holdings in the coal sector are significantly low, with only about 0.2% in Q1 and 0.3% in Q2, indicating a low allocation. This low positioning, combined with improving fundamentals, suggests limited downside risk [1][5]. - The market sentiment has shifted towards more aggressive cyclical sectors, benefiting coal as other sectors face higher valuations and increased uncertainty due to trade tensions [5]. Quarterly Performance and Future Outlook - The third-quarter performance of coal companies is expected to show a noticeable improvement compared to Q2, with a general recovery in earnings. Although year-on-year growth may not be immediately visible, expectations for future growth remain positive [6][13]. - The coal sector is viewed as a favorable investment opportunity due to ongoing supply contraction and low institutional holdings, with recommendations for companies like Yanzhou Coal, Shaanxi Coal, and China Shenhua Energy, which are expected to provide stable returns [12][14]. Comparison with Historical Trends - The current market conditions bear similarities to those in 2020, where high inventory and low prices were followed by significant price increases due to supply reductions. The potential for unexpected price increases by the end of this year exists, driven by continued inspections and colder weather boosting demand [15]. Additional Insights - The focus on safety inspections and regulatory measures is expected to sustain supply reductions, with significant impacts on production levels continuing into the fourth quarter [9]. - The thermal coal market is anticipated to see increased demand as the heating season approaches, further supporting price stability [10]. This summary encapsulates the key insights from the conference call regarding the coal industry, highlighting the interplay of supply, demand, pricing trends, and market sentiment.

Group 1: Export Performance - In September, China's exports in USD terms increased by 8.3% year-on-year, exceeding Bloomberg's consensus expectation of 7.1% and significantly higher than August's 4.4%[12] - The year-on-year average for September over two years was 5.3%, lower than August's 6.5%[12] - The increase in exports was supported by a low base effect from last year, where September exports had a month-on-month decline of -1.6%[4] Group 2: Import Performance - September imports also saw a significant increase, with a year-on-year growth of 7.4%, surpassing the expected 1.5% and August's 1.3%[62] - Month-on-month, imports rose by 8.5%, exceeding historical averages for the past 5, 10, and 20 years[62] Group 3: Economic Indicators - The PMI new export orders index for China rose to 47.8% in September, the highest in nearly five years, indicating resilience in export demand[4] - The global trade outlook for 2026 has been revised down from 1.8% to 0.5% due to the gradual impact of tariffs and the diminishing demand front-loading phenomenon[26] Group 4: Regional Export Trends - Exports to the US showed a year-on-year decline of -26.8%, while exports to the EU, ASEAN, and Africa increased by 14%, 15.8%, and 56.8% respectively[19] - The export growth momentum to the US remains at historically low levels, with a three-month average month-on-month change of -3.1%[20]

Core Viewpoint - The A-share market experienced a significant decline, with the China Petroleum and Chemical Industry Index dropping approximately 2.3%. The market is currently presenting a low-positioning opportunity for investors in the petrochemical sector [1]. Group 1: Market Performance - The three major A-share indices opened sharply lower and fluctuated throughout the day, with the China Petroleum and Chemical Industry Index also showing a downward trend [1]. - Among the constituent stocks, only Tongcheng New Materials, Zhongfu Shenying, and Hangyang Co. saw gains, while the majority experienced declines [1]. Group 2: Investment Insights - Huachuang Securities noted that absolute return funds have been the main buyers of chemical sector bottom chips recently, indicating that this allocation is far from over. The combination of bottoming, low allocation, and high elasticity is crucial for new capital entering the chemical sector [1]. - A potential upward turning point in the Producer Price Index (PPI) could signal the start of a new inventory cycle, which is particularly sensitive in the chemical sector. The market may be overlooking the impact of low inflation on restoring downstream confidence and restarting the inventory cycle [1]. Group 3: Sector Analysis - The petrochemical ETF (159731) closely tracks the China Petroleum and Chemical Industry Index, which is composed of three major sectors: refining and trading (25.60%), chemical products (23.72%), and agricultural chemicals (19.91%). These sectors are expected to benefit significantly from policies aimed at reducing excess capacity and restructuring [1].

Core Viewpoint - The current appreciation cycle of the RMB is characterized by a smaller magnitude compared to previous cycles, primarily driven by the Federal Reserve's monetary policy and domestic factors such as the transition of the RMB into a financing currency and trade war hedging needs [1][4][11]. External Drivers - The external factors influencing the RMB exchange rate include the US dollar index and US dollar interest rates, with a focus on domestic dollar liquidity due to China's incomplete capital account convertibility [4][5]. - The current weakening of the dollar index is attributed to the divergence in monetary policies among major economies and increased hedging against dollar depreciation risks by market institutions [4][11]. Internal Drivers - The domestic environment is characterized by a "loose monetary + loose credit" cycle, contrasting with previous appreciation cycles that featured "tight monetary + loose credit" conditions, contributing to the smaller magnitude of the current appreciation [7][11]. - The RMB has shifted from being an investment currency to a financing currency, which, combined with low exchange rate elasticity, leads to a market preference for holding long positions in USD against RMB, thus suppressing the appreciation potential [11][13]. Market Outlook - The RMB is expected to remain in the current appreciation cycle until at least mid-next year, driven by the Federal Reserve's continued easing and the anticipated release of pending settlement orders [13][15]. - The fourth quarter may see a slight rebound in the dollar index, influenced by external factors, but the overall trend for the RMB remains upward, with caution advised for locking in exchange rates before the Spring Festival [18].