Investment Rating - The report assigns a neutral investment rating to the emerging industries sector, with the Emerging Industries PMI (EPMI) at 50, indicating a stable outlook for the industry [1][7]. Core Insights - The EPMI increased by 0.9 percentage points to 50% in January 2026, showing a recovery during the off-season, which is significantly stronger than the same period in the previous two years [2][7]. - Production volume and product orders both rose to mid-levels, driven by policy support and pre-holiday preparations, indicating a seasonal uptick in demand [2][24]. - Export orders increased by 1 percentage point to 44.7%, while import orders rose by 0.9 percentage points to 41.3%, maintaining low levels but suggesting potential for future trade surplus growth [2][32]. Summary by Sections Data Overview - The EPMI for January 2026 is reported at 50, reflecting a 0.9 percentage point increase from the previous month [1][7]. - Key indices include: - Production volume: 53.6, up 1.6 points - Product orders: 48.7, up 1.5 points - Export orders: 44.7, up 1 point - Import orders: 41.3, up 0.9 points [2][26]. Production and Orders - Production volume and product orders have both rebounded, supported by pre-holiday production and policy incentives, indicating a reversal of seasonal trends [2][24]. - The production index is at 53.6, while product orders are at 48.7, both showing positive momentum [24][26]. Prices and Costs - The purchasing price index rose to 53.8, indicating a slight increase in costs, while the sales price index is at 46.9, suggesting that profitability remains somewhat stable [25][26]. - The increase in purchasing prices reflects initial signs of demand recovery [3][25]. Employment and Labor - The employment index stands at 50.1, indicating stable employment conditions, with a slight increase in employee compensation [3][29]. - The report highlights a structural mismatch in talent supply and demand, particularly for high-skilled positions [22]. Export and Import Dynamics - Export orders have shown stability, with a slight increase to 44.7, while imports remain low at 41.3, reflecting ongoing challenges in the international market [32][36]. - Companies are adapting by diversifying markets and enhancing product competitiveness to address export challenges [18][20]. R&D and Innovation - R&D activity and new product launches both recorded an index of 50.1, indicating a stabilization in innovation efforts despite cash flow pressures [3][33]. - Companies are focusing on increasing R&D investments to drive future growth [3][33]. Financing and Liquidity - The difficulty of obtaining loans has risen to 52.5, indicating tighter credit conditions for businesses, particularly for small and medium enterprises [3][34]. - Companies are calling for improved financial support and more flexible financing options to alleviate cash flow pressures [21][35].