Core Insights - Recent policies in China aim to combat "involution" and promote high-quality economic development through various measures targeting ten key industries [1][3][7] - The Ministry of Industry and Information Technology has released new growth plans for ten major industries, which collectively account for approximately 70% of the industrial economy [1][3] - The National Development and Reform Commission and the State Administration for Market Regulation have issued guidelines to address chaotic pricing competition, emphasizing fair market practices [1][3] Group 1: Policy Initiatives - The ten industries targeted for growth include steel, non-ferrous metals, petrochemicals, chemicals, building materials, machinery, automotive, electrical equipment, light industry, and electronic information manufacturing [1] - Each industry has been assigned specific quantitative growth targets, such as a 5% annual increase in value added for the petrochemical and non-ferrous metals sectors from 2025 to 2026 [1][3] - The recent announcement of measures to regulate pricing competition indicates a systematic approach to governance, moving from recognition to execution at both central and local levels [1][3] Group 2: Economic Indicators - In August, profits of industrial enterprises showed a significant turnaround, increasing by 20.4% year-on-year, marking the highest growth rate since December 2023 [3][4] - The Producer Price Index (PPI) remained stable in August, ending an eight-month decline, with a narrowing year-on-year drop of 0.7 percentage points [3][4] - Profit growth was particularly noted in upstream industries such as coal, steel, non-metallic minerals, and chemicals, suggesting a positive impact from the "involution" policies [3][4] Group 3: Investment Opportunities - Investors are encouraged to consider ETFs that align with the sectors benefiting from the "involution" policies, as these can provide efficient exposure to the relevant industries [5][6] - Specific ETFs are highlighted for sectors such as non-ferrous metals, petrochemicals, coal, and new energy vehicles, reflecting the anticipated benefits from the policy measures [6][7] - The ongoing "involution" policies are expected to enhance gross margins and capacity utilization, thereby improving the long-term investment value of related sectors [7]

[Table_Title] 研究报告 Research Report 12 Oct 2025 中国宏观 China Macro "反内卷"的路径选择与需求侧机遇 Path Selection for "Anti-Involution" and Demand-Side Opportunities Shengzu Wang 周林泓 Amber Zhou 李加惠 Jiahui Li, CFA 本文系统回顾了 2015 年重工业供给侧改革，并对"反内卷"做出展望。"反内卷"未来根据市场化程度的不同有两条路径，需求侧 持续发力，建议关注相关机会。 1、2015 年供给侧改革： sz.wang@htisec.com amber.lh.zhou@htisec.com jh.li@htisec.com [Table_yemei1] 观点聚焦 Investment Focus [Table_summary] (Please see APPENDIX 1 for English summary) ②若依赖市场化竞争来实现产能出清，或需要较长时间，这种情况下预计主要推动力为行业自律协会的号召，政策方面主要依 靠减少政府补助。短期内 ...

Investment Rating - The report maintains a "Buy" rating for the following companies: GCL-Poly Energy (3800 HK), Hewei Electric (603063 CH), Sany Renewable Energy (688349 CH), Daqo New Energy (688303 CH), and Tongwei Co., Ltd. (600438 CH) [6][8] Core Insights - The report highlights the recent announcement by the National Development and Reform Commission and the State Administration for Market Regulation regarding measures to combat price disorder in the market, which is expected to support the wind and solar industries [1][2] - Wind power is identified as a leading sector in the new energy industry, benefiting from improved bidding rules and a continuous recovery in turbine prices, with an average bidding price of 1616 RMB/kW in June 2025, up 5.8% from December 2024 [2] - Silicon materials are emphasized as a key focus for the solar industry, with prices for N-type silicon materials rising by 53.3% to 53,200 RMB/ton as of September 2025, driven by industry self-discipline and top-level design [2] Summary by Sections Policy Measures - The report outlines specific measures to regulate pricing behavior, including ensuring that operators do not bid below cost and establishing industry cost benchmarks [1] - The implementation of legal and regulatory penalties for non-compliance is expected to drive a steady improvement in market order [1] Investment Opportunities - The report expresses optimism about investment opportunities in wind and solar sectors, driven by a combination of domestic supply-side reforms and international demand growth due to the Federal Reserve's interest rate cuts [3] - Recommended stocks include Sany Renewable Energy, Hewei Electric, GCL-Poly Energy, Daqo New Energy, and Tongwei Co., Ltd. [3][6] Company Performance - GCL-Poly Energy is expected to benefit from strategic financing and industry consolidation, with a target price of 2.22 HKD [9] - Hewei Electric reported a 36.39% year-on-year revenue increase in H1 2025, with a target price of 48.05 RMB [9] - Sany Renewable Energy's revenue grew by 62.75% in H1 2025, with a target price of 38.01 RMB [9] - Daqo New Energy's financial resilience is highlighted despite losses, with a target price of 33.84 RMB [9] - Tongwei Co., Ltd. is positioned to benefit from ongoing industry reforms, with a target price of 25.39 RMB [10]

Core Insights - The Chinese liquor industry is undergoing significant changes, with a noticeable decline in traditional alcohol consumption during festive gatherings, particularly in the context of the 2025 Mid-Autumn Festival and National Day [1][19]. Group 1: Changes in Consumer Behavior - There is a marked reduction in the variety and quantity of mooncake and liquor displays in supermarkets compared to previous years, indicating a shift in consumer preferences [3][4]. - During family gatherings, the consumption of alcohol has decreased significantly, with many opting for beer instead of traditional spirits [6][10]. - Younger consumers are less enthusiastic about traditional drinking customs, preferring to order what they like and often practicing "AA" (going Dutch) during meals [11][13]. Group 2: Market Dynamics - The sales of high-end liquor brands like Moutai remain stable, but the purchasing behavior has shifted, with fewer customers buying in-store [4][19]. - The disappearance of domestic wine gift boxes reflects a broader trend where traditional consumption scenarios are shrinking, impacting local wine brands the most [23]. - Imported wines and premium spirits like whiskey are gaining traction, particularly among younger and affluent consumers, indicating a shift towards a more modern lifestyle [25]. Group 3: Industry Outlook - The liquor industry is experiencing a supply-side reform and consumption upgrade, moving away from reliance on traditional marketing and distribution strategies [27][29]. - Future opportunities for liquor companies lie in either solidifying their high-end market positions or focusing on affordable, quality "people's liquor" [27][19]. - The wine sector faces challenges that require brands to enhance quality and storytelling, moving beyond just high-priced gift baskets [29]. Group 4: Conclusion - The industry is transitioning towards a consumption model that values quality and personal preference over traditional status symbols, marking a significant shift in the liquor market landscape [31].

Summary of Key Points from Conference Call Records Industry Overview - The conference call primarily discusses the non-ferrous metals industry, particularly focusing on iron ore, copper, cobalt, tin, and antimony markets, as well as the implications of geopolitical factors on these sectors [1][2][3][4][5][6][19][21]. Core Insights and Arguments Guinea Simandou Iron Ore Project - The Guinea Simandou iron ore project is expected to export without the need for a supporting smelting plant due to inadequate local power infrastructure [1][4]. - The project is projected to start logistics in 2025, with potential exports reaching 30 million to 60 million tons in 2026, and possibly 120 million tons in the next 2-3 years, significantly impacting global shipping trade [3]. Iron Ore Trade and Market Reactions - A potential pause in cooperation between China and BHP over settlement currency issues could significantly affect iron ore trade, although current overseas market reactions are muted [1][5]. - Domestic investors are more sensitive to these developments, as evidenced by stock movements in related companies [5]. Steel Industry Dynamics - Short-term control of iron ore imports to manage steel production is unlikely, with supply-side reforms being crucial for long-term industry health [1][6]. - High-quality companies like Baosteel and Hualing Steel are identified as having medium to long-term investment value due to low valuations and high dividend yields [6]. Copper Market Supply and Demand - The copper market is expected to face significant supply disruptions, with major producers like Teck Resources and Efenhau Mine lowering production forecasts [1][8]. - Global copper supply is projected to be tight in the first half of 2026, with prices potentially reaching historical highs of $12,000 to $14,000 per ton [1][12]. AI and Data Center Demand for Copper - The demand for copper is significantly driven by AI and data centers, with each cabinet now using approximately 300 kg of copper, leading to an annual increase in demand of about 100,000 tons from AI-related equipment alone [9][12]. Cobalt Market Trends - Cobalt prices have risen to around 350,000 RMB per ton, with expectations to reach 400,000 to 450,000 RMB in Q4 2025 [1][16]. - Companies like Huayou Cobalt are expected to see profit increases due to rising cobalt prices [1][16]. Tin and Antimony Market Outlook - China's antimony exports have shown a significant increase since August 2025, highlighting its strategic value amid U.S. supply chain concerns [2][19]. - Huaxi Nonferrous is projected to increase tin production by 66%, with profits potentially reaching 1.6 billion RMB [2][19]. Strategic Metal Valuation - The valuation of strategic metals like copper and silver is expected to rise due to increased global focus on these resources [13]. - Companies like Zijin Mining are projected to have significant profit potential based on current market conditions [13]. Other Important Insights - The overall performance of the non-ferrous metals market has been strong, with steel markets also showing positive trends influenced by the Guinea Simandou project [3]. - The importance of supply chain security and strategic resource management is emphasized, particularly in light of geopolitical tensions and trade restrictions [21][25]. - The recovery of tin and antimony supply chains is critical, with disruptions in Indonesia and Myanmar affecting global supply [19][20]. This summary encapsulates the key points discussed in the conference call, providing insights into market dynamics, company performance, and future trends in the non-ferrous metals industry.

Summary of Key Points from Conference Call Records Industry Overview - The petrochemical industry is closely tied to ethylene profitability, with historical cycles lasting approximately 6-8 years, and the next peak expected around 2025 due to pandemic impacts [1][4][17]. - Oil prices are positively correlated with the petrochemical stock index, necessitating attention to supply-demand dynamics and full costs, with Middle Eastern countries requiring higher oil prices for fiscal balance [1][5][7]. - The real estate industry requires a comprehensive analysis of policy, valuation, economy, and profitability, with significant influence from the synchronized monetary cycles of China and the US [1][26]. Core Insights and Arguments - **Oil Price Dynamics**: Oil prices are a critical indicator for the petrochemical industry, with fluctuations directly affecting stock indices. The expected price range is between $45-80 per barrel in the coming years [1][5][14]. - **OPEC Strategies**: OPEC will shift to a market share preservation strategy in 2025 due to increased production from non-OPEC countries and US inflation control measures [1][9][13]. - **Geopolitical Risks**: Geopolitical factors significantly impact oil prices, with recent tensions having a pronounced effect, although risks have somewhat diminished recently [1][12][16]. - **Investment Focus**: Investment in the petrochemical sector should prioritize new materials and fine chemicals, moving away from outdated small-scale operations [1][24]. Additional Important Content - **Capital Expenditure**: High oil prices encourage capital expenditure among companies, while low prices can lead to reduced production and investment [6][10]. - **Ethylene as an Indicator**: Ethylene profitability serves as a key measure of the petrochemical industry's health, with historical data indicating cyclical peaks and troughs [4][17]. - **Real Estate Market Dynamics**: The real estate sector is currently undervalued, with stable cash flows and dividend capabilities, making it an area of interest for investors [1][43]. - **Supply-Side Reforms**: The shift from demand-side to supply-side reforms in real estate aims to improve supply quality, despite potential short-term negative impacts on the economy and employment [1][38][40]. Conclusion The petrochemical and real estate industries are undergoing significant transformations influenced by cyclical patterns, geopolitical factors, and strategic shifts in investment focus. Investors should remain vigilant about these dynamics to identify potential opportunities and risks in the market.

Core Viewpoint - The Trump administration is adjusting its messaging strategy in response to weak employment data and ongoing inflation pressures, with advisors suggesting a focus on a more optimistic future outlook, specifically indicating improvements starting in 2026 [1][2][6]. Group 1: Economic Messaging Strategy - Trump's advisors are portraying a positive economic outlook despite current instability, asserting that economic indicators will show improvement by the end of 2025 [1][6]. - The administration's messaging has shifted from focusing on immediate economic performance to emphasizing future potential, with Trump stating that the "big year" for economic growth will be in 2026 rather than 2025 [1][2]. - The White House is focusing on supply-side reforms and significant manufacturing investments to revitalize the U.S. industrial sector [7]. Group 2: Employment and Economic Data - The administration is facing political and economic pressures, with recent employment data showing only 22,000 new jobs added in August [4][8]. - Public perception of Trump's economic leadership has declined, with only 37% of adults approving of his handling of the economy, while 62% disapprove [10]. - Surveys indicate that a significant portion of voters believe Trump's policies have worsened the economy since he took office, with 45% stating the economy has deteriorated [11]. Group 3: Policy Challenges and Economic Outlook - Independent economists warn that some of Trump's policies, particularly regarding immigration and tariffs, may hinder short-term growth and increase costs [14]. - Many economists anticipate improvements in the economy next year as tariff uncertainties diminish and the Federal Reserve potentially lowers interest rates [15]. - There are concerns that ignoring comprehensive economic indicators in policy-making could lead to significant government errors [17].

Core Insights - The Trump administration's economic team is adjusting its messaging strategy in response to weak employment data and ongoing inflation pressures, advising the president to convey a message of patience until next year [1][2] - Despite the current economic challenges, advisors are optimistic about future improvements, projecting that economic indicators will begin to show positive changes by early 2026 [1][3] - Public perception of Trump's economic leadership has become increasingly negative, with recent polls indicating that only 37% of adults approve of his handling of the economy [5] Group 1: Economic Messaging Strategy - Advisors suggest that Trump should focus on a long-term optimistic outlook, indicating that significant economic improvements are expected by 2026 [1][2] - The administration is emphasizing supply-side reforms and historic trade agreements aimed at revitalizing American manufacturing [3] Group 2: Economic Reality and Public Perception - Key economic indicators remain weak, with monthly job growth slowing and inflation continuing to affect consumers [4] - Public opinion has shifted negatively, with a significant portion of voters believing that Trump's policies have worsened the economy since he took office [5] Group 3: Policy Challenges - Independent economists warn that some of Trump's policies, particularly regarding immigration and tariffs, may hinder growth and increase costs in the short term [7] - There is a concern that ignoring comprehensive economic indicators in policy-making could lead to significant government errors [8]

Group 1 - The core viewpoint emphasizes the need to reduce excess manufacturing capacity while expanding effective capacity in the service sector to mitigate economic downturn risks and promote structural transformation [1][2] - China's manufacturing capacity has significantly exceeded domestic demand, leading to intensified competition and prolonged low price levels, with nominal GDP growth lagging behind actual GDP expansion [1][2] - The government has implemented capacity governance and anti-involution measures since July to prevent redundant investments and curb excess capacity, which helps break the negative cycle of falling prices and weakened demand [1][2] Group 2 - The long-term potential for the development of China's service industry is substantial, with its GDP share around 55%, significantly lower than the nearly 70% in developed countries [3] - There is strong demand and insufficient supply in various service sectors such as communication, education, healthcare, and tourism, necessitating further market opening to increase service capacity [3] - Policy measures should focus on breaking industry monopolies, lowering entry barriers, and opening up to private and foreign enterprises to fully unleash the potential of service supply and consumption [3]

Report Title - The outlook for the steel market in the fourth quarter of 2025 by Nanhua Futures: A glimmer of hope but lacking momentum [1] Report Industry Investment Rating - Not provided in the content Core Viewpoints - The steel market is expected to show a volatile trend with a ceiling and a floor. The upper pressure comes from the current supply - demand contradiction in the fundamentals and unclear supply - demand adjustment policies, while the lower support is due to the continuous resilience of export demand and the expectation of supply contraction [3]. - The fourth - quarter demand performance is crucial. If demand recovers, the high - supply pattern may continue and drive up prices; if demand remains weak, the risk of oversupply will intensify [7]. - The market is highly concerned about the implementation and enforcement of supply - side policies, especially the "anti - involution" policy [8]. - Although the market has not triggered large - scale negative feedback, the squeezed profit margin has sent a warning signal [9]. Summary by Directory 2. Third - quarter Market Review - In July, driven by the expectation of the "anti - involution" policy and the supply contraction caused by coal mine over - production inspections, the steel market rose. The low inventory at all links in the industry chain led to a bottom - up replenishment and increased speculative demand, resulting in a cost - driven price increase [4]. - In August, after the Politburo meeting in late July did not immediately introduce clear "anti - involution" implementation details, market optimism declined. The trading logic returned to fundamentals. High supply and weak demand led to over - seasonal inventory accumulation and price decline, showing signs of negative feedback [5]. - In September, the price premium from the "anti - involution" expectation was basically digested. The market refocused on macro factors. The cost support limited the downward space, and the market entered a volatile consolidation stage [5]. 3. Core Concerns 3.1 Fourth - quarter Demand Acceptance Capacity - Steel apparent consumption has been stable this year, but recent weak demand has led to inverse - seasonal inventory accumulation. Fourth - quarter demand is crucial for the balance of supply and demand [7]. 3.2 Impact of Supply - side Policies - The market is highly concerned about the implementation and enforcement of supply - side policies, especially the "anti - involution" policy and its potential impact on the steel supply structure and market expectations [8]. 3.3 Whether Negative Feedback Production Cuts Will Be Triggered - The squeezed profit margin has sent a warning signal. The market is closely watching whether negative feedback will form and lead to active production cuts by steel mills [9]. 4. Valuation Feedback and Supply - Demand Outlook 4.1 Valuation Feedback - The recent strengthening of the basis reflects the market's pessimistic expectation of future supply and demand, but it is still in a neutral range in the long - term and seasonal perspective [10]. - The current core contradiction is the over - seasonal inventory accumulation caused by high supply and weak demand. The profit margin is in a neutral - high range, and there is still room for further compression [10]. - The current 01 contract coil - to - rebar spread is above the normal cost difference range. Although it is reasonable based on fundamentals, it is at a high level and showing a weakening trend, indicating a potential downward adjustment in steel valuation [11]. 4.2 Steel Demand Outlook 4.2.1 Real Estate: Yet to Stabilize - The real estate market showed a short - term recovery last year, but sales and prices have weakened again this year. The real estate end's steel consumption, mainly in new construction and construction, is still weak due to factors such as low developer investment willingness and high inventory [16][20]. 4.2.2 Infrastructure: Tight Capital in the Debt - Resolution Context - In 2025, the growth rate of infrastructure investment has slowed down. The power, water, transportation, and water conservancy sectors have all weakened. The current debt - resolution and "anti - involution" policies have restricted investment. The slow issuance of special bonds and the focus on debt - resolution and land acquisition have led to tight infrastructure funds, and the physical workload in the fourth quarter is expected to be low [23][28]. 4.2.3 Manufacturing: Domestic Demand Weakening, External Demand Resilient - Domestic manufacturing demand has shown a "strong - then - weak" trend this year. The "anti - involution" policy and the weakening effect of previous policies have led to a slowdown in domestic demand. However, external demand is expected to remain resilient due to China's product cost - effectiveness and the stable overseas demand environment [36][40]. 4.2.4 Direct Steel Exports: Demand Increment and Cost Substitution - From January to August, China's steel and billet exports increased significantly. The growth is mainly due to overseas demand expansion and cost substitution. However, there are risks such as export inspections and anti - dumping investigations in the future [43]. 4.2.5 Summary of the Fourth - quarter Demand Outlook in 2025 - From January to September, the overall demand showed some resilience, but there may be speculative demand in the third - quarter. In the fourth quarter, demand growth momentum is expected to weaken. Real estate demand will remain under pressure, infrastructure demand will be weak, domestic manufacturing demand will decline, and direct steel exports may slow down [57][59]. 4.3 Supply and Inventory 4.3.1 Supply Overview: Deviation between Third - Party and Statistical Data - As of September 18, the daily average pig iron output and scrap consumption increased compared to last year according to third - party data, but the statistical data shows a decrease in crude steel production. There is a deviation between the two [61]. 4.3.2 How to View the "Anti - Involution" in the Steel Industry? - The market has not achieved the rumored annual crude steel production reduction target. The "anti - involution" policy has not had a significant impact. Steel mills have high production enthusiasm due to good profits. The policy may be included in the "14th Five - Year Plan" for industry governance, but in the short term, steel supply will remain elastic [64][65]. 4.3.3 Whether Negative Feedback Production Cuts Are Needed? - Steel mills still have some profit margins and limited motivation for self - initiated production cuts. If demand remains weak and supply stays high, the market may enter a negative - feedback adjustment stage. The raw material cost support limits the downward space of steel prices [67][78].