Summary of Conference Call Notes Company Overview - The focus is on **China National Materials Group Corporation (中材国际)**, which is expected to experience a significant improvement in its fundamentals by 2026, supported by a strong dividend yield [1][2]. Key Points and Arguments 1. **Order Growth**: - The company reported a **12% year-on-year increase** in new contracts for 2025, with equipment orders rising by **30%** and overseas equipment orders increasing by **51%**. This is expected to significantly accelerate revenue growth due to the shorter project cycle of equipment projects, which is **7 months** compared to engineering projects [1]. 2. **International Market Performance**: - The overseas market remains robust, with a projected **24% growth** in overseas orders for 2025. This includes increases of **26%** in overseas engineering, **51%** in equipment, and stable performance in operations and maintenance. The proportion of overseas contracts has risen to **63%**, an increase of **6 percentage points** from 2024, indicating a continuous optimization of the order structure [1][2]. 3. **Domestic Market Recovery**: - Concerns regarding the domestic business have eased, with the order decline expected to narrow to **-4%** in 2025, compared to an **18% decline** in the first three quarters. A stabilization or slight recovery is anticipated in 2026, driven by contributions from phosphate chemical projects, which are expected to offset declines in new cement construction [2]. 4. **Performance Outlook**: - The year 2026 marks the first year of the company's **14th Five-Year Plan**, with expectations for a strong start in performance [2]. 5. **Incentives and Valuation**: - The potential introduction of an equity incentive plan could further enhance performance growth expectations. The company forecasts a stable performance for 2025, with an anticipated growth of **8%-10%** in 2026. The projected dividend yield for 2026 is **6%**, and if the yield shifts to **4%**, the reasonable market value could reach **40.5 billion**, indicating over **40% upside potential**. The current valuation is considered to be at a bottom range with sufficient safety margins [3]. Additional Important Content - **Risk Factors**: - The company faces several risks, including credit impairment risks, potential underperformance in overseas order conversion, and foreign exchange loss risks [3].

Market Overview - The A-share market experienced a collective decline, with the Shanghai Composite Index down by 0.75%, the Shenzhen Component Index down by 0.76%, and the ChiNext Index down by 1.68% [1] ETF Performance - The Kexin Pharmaceutical ETF (588130) rose by 4.28%, with the latest price at 1.195 yuan and a turnover rate of 13.94% [1] Stock Performance - Among the constituent stocks, three major gainers included: - 3SBio Inc. up by 20.00% - Zai Lab Ltd. up by 15.50% - EdiGene Inc. up by 14.08% - Maiwei Biopharma up by 11.54% - Rongchang Biopharma up by 10.14% - Conversely, the major decliners included: - Haoyuan Pharmaceutical down by 4.80% - Yirui Technology down by 1.59% - Bairen Medical down by 1.14% - Aohua Endoscopy down by 0.59% - Aibot Medical down by 0.40% [1] Investment Recommendations - Guosen Securities suggests focusing on innovative pharmaceutical companies with differentiated innovation capabilities and global commercialization potential, as well as leading CDMO companies with high growth in new and existing orders. - The long-term logic of innovative drugs is favored, with attention on potential bottom reversal targets. - Recommendations also include low-valuation medical device companies that are expected to see performance turning points or acceleration [1]