Manufacturing Sector - In October, the manufacturing PMI recorded 49.0, a decrease of 0.8 from the previous month, marking a significant decline and the lowest level for the same period in nearly five years[1] - The production index and new orders index fell to 49.7 and 48.8, down 2.2 and 0.9 respectively, indicating a retreat in production and market demand[1] - New export orders index dropped to 45.9, a decline of 1.9, the second-lowest point this year, only higher than the April figure following the introduction of tariffs[1] Service Sector - The service sector PMI increased by 0.1 to 50.2, showing resilience in service consumption driven by the National Day and Mid-Autumn Festival[1] - The business activity expectation index for services stood at 56.1, indicating strong confidence among service enterprises regarding industry development[1] Construction Sector - The construction PMI fell to 49.1, down 0.2, remaining at the lowest level since 2019, reflecting ongoing demand weakness[1] - However, the civil engineering index rose significantly, exceeding 55, suggesting signs of accelerated infrastructure investment activities[1] Future Outlook - For November, favorable seasonal factors are expected to boost manufacturing PMI due to upcoming domestic and overseas demand events, including "Double Eleven" and Christmas[1] - Infrastructure investment is anticipated to increase in Q4, providing a solid foundation for growth, although the overall construction PMI may remain at historically low levels[1]

Core Viewpoint - The petrochemical industry is experiencing short-term fluctuations due to trade disputes, but the long-term outlook remains positive as the industry adapts and improves its competitive capabilities [1]. Industry Summary - The China Securities Petrochemical Industry Index has seen a decline of approximately 1.7%, with leading stocks including Sankeshu, Yara International, and Salt Lake Co. [1] - The petrochemical ETF (159731) is following the index's adjustments, presenting a potential investment opportunity [1]. - Despite the negative short-term impacts of trade disputes, the long-term trend for the petrochemical and chemical industry is improving, supported by the experience gained from previous trade conflicts [1]. - The industry has rapidly enhanced its capabilities over the past few years, which may lead to a new high-quality development cycle as policies adjust to counteract previous downturns [1]. ETF and Sector Composition - The petrochemical ETF (159731) and its linked funds (017855/017856) closely track the China Securities Petrochemical Industry Index [1]. - The basic chemical industry accounts for 61.93% of the index, while the oil and petrochemical sector represents 30.84% [1]. - The top ten weighted stocks in the index include Wanhua Chemical, China Petroleum, Salt Lake Co., Sinopec, CNOOC, Juhua Co., Zangge Mining, Jinfa Technology, Hualu Hengsheng, and Baofeng Energy, collectively accounting for 55.12% of the index [1].

Group 1: Report Industry Investment Rating - No information provided Group 2: Report's Core View - Due to high inventory and oversupply, nickel prices are expected to remain in low - level fluctuations, and stainless steel prices are expected to continue weak operation [1][3] Group 3: Market Analysis of Nickel Futures - On October 13, 2025, the main contract 2511 of Shanghai nickel opened at 122,190 yuan/ton and closed at 121,410 yuan/ton, down 1.68% from the previous trading day. The trading volume was 149,002 (-10,068) lots, and the open interest was 74,700 (-3,140) lots. Influenced by the US president's remarks, there are concerns about the escalation of Sino - US tariff friction, the main contract of Shanghai nickel opened low and moved low, and the LME inventory has reached the highest level since October 17, 2022 [1] Nickel Ore - The nickel ore market has a fair trading range, and prices are stable. The domestic 1.3% nickel ore is quoted at CIF44 without a deal. In the Philippines, the tender result of 1.4% nickel ore from Eramen Mine in Zambales is pending. The price of downstream nickel - iron has declined, and iron plants are cautious in purchasing nickel ore. Some northern domestic factories are preparing for "winter storage". In Indonesia, the nickel ore supply is loose, with the October (second - phase) domestic trade benchmark price expected to rise by 0.06 - 0.11 US dollars, and the current mainstream premium at +26 [1] Spot - Jinchuan Group's sales price in the Shanghai market is 123,600 yuan/ton, down 1,300 yuan/ton from the previous trading day. Spot trading is fair, and the premium and discount of refined nickel are slightly adjusted. The premium of Jinchuan nickel changes by 100 yuan/ton to 2,400 yuan/ton, the premium of imported nickel remains at 325 yuan/ton, and the premium of nickel beans is 2,450 yuan/ton. The previous trading day's Shanghai nickel warrant volume was 25,272 (44) tons, and the LME nickel inventory was 242,094 (4,716) tons [2] Group 4: Strategy of Nickel - It is recommended to mainly use range - bound operations for single - side trading, and there are no suggestions for inter - period, cross - variety, spot - futures, and options trading [3] Group 5: Market Analysis of Stainless Steel Futures - On October 13, 2025, the main contract 2512 of stainless steel opened at 12,800 yuan/ton and closed at 12,655 yuan/ton. The trading volume was 209,989 (+134,394) lots, and the open interest was 176,416 (-4,171) lots. Similar to Shanghai nickel, affected by the US president's remarks, the overall trend of metal futures is weak, and stainless steel also opened low and moved low [3] Spot - Due to the sharp decline in the futures market and weak demand, market confidence is severely hit, and spot trading is light. The stainless steel price in Wuxi market is 13,150 (+0) yuan/ton, and in Foshan market is 13,100 (-50) yuan/ton. The premium and discount of 304/2B is 480 - 780 yuan/ton. The ex - factory tax - included average price of high - nickel pig iron yesterday changed by - 2.50 yuan/nickel point to 951.0 yuan/nickel point [3] Group 6: Strategy of Stainless Steel - It is recommended to take a neutral stance for single - side trading, and there are no suggestions for inter - period, cross - variety, spot - futures, and options trading [5]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The glass futures continued to decline last week, with the main contract FG2601 closing 0.25% lower than before the National Day holiday at 1,207 yuan/ton. The spot price of Hebei Shahe white glass large sheets was 1,148 yuan/ton, down 0.69% from before the holiday. The glass fundamentals are neutral to weak, and it is expected to fluctuate weakly in the short term [2][3]. 3. Summary by Relevant Catalogs Glass Futures and Spot Market Weekly Review - The main contract FG2601 of glass futures closed at 1,207 yuan/ton last week, down 0.25% from before the National Day holiday. The spot price of Hebei Shahe white glass large sheets was 1,148 yuan/ton, down 0.69% from before the holiday. The main contract basis increased by 9.26% [2][3][7]. Influencing Factors Summary - **Positive Factors**: Under the influence of the "anti-involution" policy, there is an expectation of capacity clearance in the float glass industry [4]. - **Negative Factors**: The terminal demand in the real estate sector remains weak, with the number of orders from glass deep-processing enterprises at a historical low. The capital repayment in the deep-processing industry is not optimistic, and traders and processors are cautious, mainly digesting the original sheet inventory. The "anti-involution" market sentiment has faded [5]. Fundamental Analysis - **Supply**: The number of operating float glass production lines in the country was 225 last week, with an operating rate of 76.01% and a daily melting volume of 161,300 tons. The supply has stabilized at a low level [2]. - **Demand**: Some mid - and downstream players have carried out phased speculative restocking, driving a slight reduction in factory inventories. However, the recovery of the terminal real estate market is weak, and the orders of downstream deep - processing factories are weak. The traditional peak demand season is lackluster [2]. - **Inventory**: As of October 9, the inventory of national float glass enterprises was 62.824 million weight boxes, up 5.84% from the previous week, and the inventory is at a relatively high level in the same period [2]. Supply - Demand Balance Sheet - The annual supply - demand balance sheet of float glass from 2017 to 2024E shows changes in production, consumption, and net import ratios over the years. For example, in 2024E, the production was 5,510 million tons, the consumption was 5,310 million tons, and the net import ratio was - 0.90% [42].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - Last week, the soda ash futures continued to decline. The closing price of the main contract SA2601 dropped 1.20% compared to before the National Day holiday, reaching 1240 yuan/ton. The low - end price of heavy soda ash in Hebei Shahe was 1150 yuan/ton, down 1.71% from before the holiday. With ample supply, weak demand, and high inventory, the fundamentals of soda ash remain weak. Considering the possible intensification of Sino - US tariff frictions, the short - term trend is expected to be mainly weak and volatile [3]. Summary by Directory Weekly Viewpoint - Futures and spot prices of soda ash declined last week. Supply is at a high level, with an expected weekly output of 770,000 tons and an operating rate of 89%. The second - phase project of Yuangxing Energy is expected to be put into production by the end of the year. Demand is weak due to supply disturbances in downstream float glass and the implementation of "anti - involution" in photovoltaic glass. Inventory is at a historically high level, with the national factory inventory of soda ash at 1.6598 million tons as of October 9, up 0.50% from the previous week [3]. Influencing Factors Summary - **Likely to be favorable**: The peak maintenance period within the year is approaching, and production is expected to decline [5]. - **Likely to be unfavorable**: Since 2023, the production capacity of soda ash has expanded significantly, and there are still large production plans this year. The industry's output is at a historically high level. The production of heavy - soda downstream photovoltaic glass has decreased, weakening the demand for soda ash. The positive sentiment of macro - policies has faded [6][8]. Main Logic - The supply of soda ash is at a high level, terminal demand has declined, inventory is at a high level compared to the same period, and the mismatch between supply and demand in the industry has not been effectively improved [7]. Soda Ash Futures and Spot Weekly Market - The closing price of the main contract decreased from 1255 yuan/ton to 1240 yuan/ton, a drop of 1.20%. The low - end price of heavy soda ash in Shahe decreased from 1170 yuan/ton to 1150 yuan/ton, a drop of 1.71%. The main basis increased from - 85 yuan/ton to - 90 yuan/ton, an increase of 5.88% [9]. Soda Ash Spot Market - The low - end price of heavy soda ash in Hebei Shahe was 1150 yuan/ton, down 1.71% from the previous week [14]. Fundamentals - Supply - **Production profit**: The profit of the North China ammonia - soda process for heavy soda ash was - 89.25 yuan/ton, and that of the East China co - production process was - 114.50 yuan/ton. The production profit has rebounded from a historical low [17]. - **Operating rate, production capacity, and output**: The weekly operating rate of the soda ash industry was 88.41%. The weekly output was 770,800 tons, including 428,700 tons of heavy soda ash, at a historical high. The weekly production heavy - soda ratio was 55.62% [20][22][25]. - **Changes in production capacity**: In 2023, the newly added production capacity was 6.4 million tons; in 2024, it was 1.8 million tons; in 2025, the planned newly added production capacity was 7.5 million tons, with an actual production of 1 million tons [26]. Fundamentals - Demand - **Sales - to - production ratio**: The weekly sales - to - production ratio of soda ash was 92.23% [29]. - **Downstream demand**: The daily melting volume of national float glass was 161,300 tons, and the operating rate was 76.01% and stable [32]. Fundamentals - Inventory - The national soda ash factory inventory was 1.6598 million tons, up 0.50% from the previous week, and the inventory was above the five - year average [39]. Fundamentals - Supply - Demand Balance Sheet - Data on the annual supply - demand balance sheet of soda ash from 2017 to 2024E, including effective production capacity, output, operating rate, imports, exports, net imports, apparent supply, total demand, supply - demand gap, production capacity growth rate, output growth rate, apparent supply growth rate, and total demand growth rate, are provided [40].

Group 1: Market Environment Differences - A-shares tend to drop more when they are more expensive, but they also rebound more significantly afterward, indicating a value-driven market[2] - U.S. stocks exhibit panic selling regardless of valuation, with the most expensive stocks rebounding the most during recovery phases, indicating a high-risk preference[2] - As of October 2, the dynamic P/E ratios for the Shanghai Composite Index, Hang Seng Index, and S&P 500 were 14.1, 11.7, and 22.2 respectively, up from 12.2, 10.2, and 20.5 in April[11] Group 2: Tariff Environment Differences - The current tariff escalation has exceeded market expectations, but the market's psychological resilience is stronger than in April[3] - In April, there was less than a 15% probability that tariffs would be reduced, while now the market perceives a higher likelihood of a TACO deal[3] Group 3: Foreign Trade Environment Differences - The foreign trade environment in China is significantly better than in April, aided by a global interest rate cut cycle initiated by the Federal Reserve[4] - The global manufacturing PMI has rebounded since April, indicating improved expectations for industrial production cycles[4] Group 4: Macro Environment Differences - Both China and the U.S. face short-term macroeconomic pressures, but mid-term conditions are expected to improve compared to April[5] - In China, the shift from precautionary savings to normal deposits indicates a recovery in the private sector economy, with M1 growth continuing to rise[5] Group 5: Exchange Rate Environment Differences - The RMB exchange rate is expected to remain stable, with increased flexibility viewed as beneficial for macroeconomic control[7] - For the USD, the risk of further depreciation is limited due to a high level of hedging by overseas investors and a neutral skew in options volatility[7]

Core Viewpoint - The Chinese yuan has appreciated against the US dollar, reaching levels not seen in about 10 months, primarily due to reduced concerns over US-China trade tensions and a stable economic growth rate in China above 5% [2][4]. Exchange Rate Trends - The yuan's exchange rate recently peaked at 1 USD = 7.1019 CNY, marking the highest level since November 2024, with fluctuations around 1 USD = 7.110 to 7.114 CNY [4]. - Earlier in April, the yuan had depreciated to 1 USD = 7.3518 CNY, the lowest level in 18 years, driven by significant tariffs imposed by the Trump administration and market fears regarding China's economic outlook [4]. Trade Agreements and Economic Factors - In May, the US and China reached an agreement to reduce additional tariffs by 115%, with a 90-day suspension of certain tariffs, which has contributed to the yuan's appreciation [6]. - The interest rate differential between the US and China has narrowed, with Chinese long-term rates rising and US rates expected to decline, further supporting the yuan's relative value [6]. Central Bank Policies - The People's Bank of China (PBOC) has adjusted the daily floating range of the yuan against the dollar to ±2% around the central rate, indicating a controlled approach to allow for some appreciation while preventing excessive depreciation [7]. - The PBOC has shown a willingness to let the yuan appreciate moderately, as evidenced by its setting of the central rate above the previous day's actual rate during periods of high selling pressure [7]. Economic Growth Projections - China's GDP growth rate is projected to exceed 5% in the first half of 2025, allowing for a toleration of yuan appreciation [7]. - The economic outlook for 2024 suggests higher growth driven by consumer incentives, but challenges may arise in achieving targets in the latter half of 2025 [7].

Overview of the Bond Market in the First Half of 2025 - The bond market exhibited high volatility and heavy trading characteristics, with a flattening yield curve and a narrowing spread between 10-year and 1-year government bonds [1][2][7] - The most significant turning point occurred in mid-March when the 10-year government bond yield briefly reached 1.9%, leading to a downward trend in yields for the remainder of the period [2][3] Phases of the Bond Market in the First Half of 2025 - **Phase 1 (Early January to Early February)**: The central bank's increased focus on long-term bonds and tightening liquidity led to a rise in short-term rates, with the 1-year government bond yield increasing by 13 basis points to 1.21%, while the 10-year yield decreased by 8 basis points to 1.60%, resulting in a flattening curve [3] - **Phase 2 (Early February to Mid-March)**: Continued tight liquidity and reassessment of monetary policy expectations caused both 1-year and 10-year yields to rise by 38 basis points and 30 basis points, respectively, leading to further curve flattening [4] - **Phase 3 (Mid-March to Early April)**: The central bank's supportive stance led to a downward adjustment in yields, with the 1-year and 10-year yields falling by 26 basis points and 15 basis points to 1.63% and 1.44%, respectively [5] - **Phase 4 (Early April to End of June)**: The bond market experienced a stable and slightly loose liquidity environment, with the 10-year yield fluctuating between 1.62% and 1.73%, while the 1-year yield decreased by 10 basis points to 1.34% [6] Outlook for the Second Half of 2025 - The bond market is expected to continue its oscillating pattern, with a slight downward shift in the yield center, projecting the 10-year government bond yield to have a low point around 1.5% and a high point between 1.7% and 1.8% [8] Fundamental Outlook - The economy is projected to achieve a 5% growth rate, supported by manageable tariff impacts and proactive fiscal policies, although internal factors such as real estate and financing demand will require close monitoring [9] Policy Outlook - The macro policy will focus on high-quality development amidst external uncertainties, with monetary policy expected to maintain a moderately loose stance, including potential interest rate cuts [10] Supply and Demand Outlook - Supply pressures are manageable, with a net issuance of government bonds expected to be lower than the previous year, while demand from the insurance sector may stabilize [11][12] Funding Outlook - The funding environment is anticipated to remain stable, with the central bank's reverse repo rates likely to maintain a central role, and the possibility of a rate cut in the latter part of the year [13][14]

Investment Rating - The industry investment rating is maintained as "Buy" [2] Core Views - The June PMI for the machinery industry has rebounded to 49.7%, indicating a recovery in general equipment and engineering machinery sectors [4][6] - Despite a decline in domestic engineering machinery operations, exports are experiencing rapid growth, with a year-on-year increase of 8.8% in May [5][6] - The overall demand for machinery equipment is expected to improve in the second half of the year due to easing US-China trade tensions and supportive fiscal and monetary policies [6] Summary by Sections Industry Performance - Over the past 12 months, the machinery industry has shown a relative return of 19.5% and an absolute return of 35.6% [3] General Equipment - The production index and new orders index have increased to 51.0% and 50.2%, respectively, indicating expansion [4] - The overall manufacturing sector is showing resilience, with a continuous recovery in PMI for May and June [4] Engineering Machinery - The average working hours for major engineering machinery products in June were 77.2 hours, down 9.1% year-on-year [5] - The average operating rate for engineering machinery was 56.9%, a decline of 7.55 percentage points year-on-year [5] Investment Recommendations - The report suggests focusing on the engineering machinery sector, which is expected to benefit from domestic demand recovery and strong export growth [6] - Specific companies to watch include Anhui Heli, Hangcha Group, Sany Heavy Industry, XCMG, Zoomlion, and Hengli Hydraulic [6] Key Company Forecasts - The report includes earnings forecasts and ratings for key companies, with several companies rated as "Buy" [20]

Group 1: Aviation Sector - The aviation sector is expected to see strong demand during the summer peak season, with a recommendation to focus on pre-peak investment opportunities. The industry has gradually emerged from the low-demand season since March, with rational pricing strategies from airlines supporting demand [3][12]. - In 2024, the total revenue of six listed airlines is projected to reach 521.8 billion yuan, a year-on-year increase of 14%, with a tax pre-profit of 3 billion yuan, a significant recovery from a loss of 9 billion yuan in 2023. Different airlines show varying degrees of profit improvement [10][12]. - The report highlights that the international oil price decline will significantly enhance airline profits. A 5% drop in Brent crude oil prices could increase the pre-tax profits of major airlines by 29 billion yuan for Air China and 23 billion yuan for Eastern Airlines [14][15]. Group 2: Express Delivery Sector - The express delivery sector is anticipated to maintain strong growth resilience, with business volumes expected to increase by 21.5% in 2024 and 21.6% in Q1 2025. The total business volume for 2024 is projected to reach 1.758 billion pieces [32][35]. - The market concentration in the express delivery industry is on the rise, with the CR8 index expected to reach 85.2% in 2024 and 86.9% in Q1 2025, indicating a more consolidated market [32][35]. - Revenue for the express delivery industry is forecasted to grow by 13.8% in 2024, reaching 1.4 trillion yuan, with a slight pressure on average ticket prices, which are expected to decline by 14.2% [35][36]. Group 3: Dividend and Asset Value - The report emphasizes the value of dividend assets in the transportation sector, with cash dividend ratios for highways, railways, and ports projected at 51%, 47%, and 36% respectively for 2024, indicating strong cash flow stability [44][45]. - The TTM dividend yields for these sectors are expected to be 3.0% for highways, 3.3% for railways, and 2.3% for ports, reflecting a stable increase compared to previous years [44][45]. Group 4: Shipping Sector - The shipping sector faces short-term pressure due to US-China tariff disputes, but structural opportunities may arise. The report suggests that the tariff situation could lead to a shift in import demands, particularly for agricultural products, which may benefit dry bulk shipping [48][56]. - Historical data indicates that previous trade disputes have led to increased shipping rates for certain routes, suggesting potential for similar outcomes in the current context [48][56].