Report Industry Investment Ratings - Copper: Not specified [1] - Aluminum: Not specified [1] - Alumina: Not specified [1] - Cast Aluminum Alloy: Not specified [1] - Zinc: ★★★ (Three stars, indicating a clearer long - term trend and a relatively appropriate investment opportunity) [1] - Nickel and Stainless Steel: ★★★ [1] - Tin: Not specified [1] - Lithium Carbonate: Not specified [1] - Industrial Silicon: Not specified [1] - Polysilicon: Not specified [1] Core Views - The prices of various non - ferrous metals are affected by multiple factors such as inventory, market sentiment, supply and demand, and policies, showing different trends and investment opportunities [1][2][3] Summary by Related Catalogs Copper - Friday's Shanghai copper warehouse receipt fluctuated with a relatively narrow amplitude in the past two days. The current copper price was basically flat at 95,320 yuan. Shanghai had a discount of 95 yuan, and the premium in Guangdong expanded to 100 yuan. The refined - scrap price difference continued to widen. Technically, the strong short - term support for copper price was at 91,000 yuan, and the strength - weakness boundary was at 96,500 yuan [1] Aluminum, Alumina, and Aluminum Alloy - Shanghai aluminum rebounded. The spot discounts in East China, Central China, and South China were 90 yuan, 150 yuan, and 175 yuan respectively. The social inventory of aluminum ingots increased by 15,000 tons on Thursday compared with Monday. The market sentiment fluctuated with war information, and the risk was not eliminated. Shanghai aluminum mainly fluctuated. Cast aluminum alloy followed the aluminum price. The domestic alumina operating capacity was temporarily stable, but the over - supply prospect remained. Short - term alumina fluctuated waiting for the clarity of Guinea's mining policy [2] Zinc - The SMM zinc social inventory decreased by 17,000 tons to 249,500 tons. With price cuts to reduce inventory and the expectation of the peak season, holders held up prices, and the spot premium remained stable. Shanghai zinc rebounded after stabilizing at the annual line. Due to environmental protection in some northern regions, downstream demand was mainly for rigid procurement. After the zinc price rebounded, spot sales were mediocre. The macro - sentiment was still volatile. Shanghai zinc was expected to return to fundamental trading, and the peak - season inventory reduction should be continuously tracked, with the disk likely to enter a low - volatility consolidation [3] Nickel and Stainless Steel - Shanghai nickel fluctuated, market trading declined, and positions slowly increased. The strong US dollar put pressure on the market. The demand for stainless steel in the peak season was lower than expected, and downstream only made rigid restocking, with light trading. Due to macro - uncertainties, the futures market fluctuated weakly and could not drive the spot market. Although the social inventory decreased slightly, it was still at a high level, and inventory reduction was slow. Steel mills maintained high production schedules, resulting in high supply pressure. The rebound in upstream prices continued to push up the mid - stream prices and provided cost support. In the short term, it was still dominated by policy sentiment. With high inventories of nickel and stainless steel, attention should be paid to further changes in Indonesian policies, and the overall trend was a weak fluctuation [6] Tin - Shanghai tin increased its positions, and the intraday upward trend broke through 350,000 yuan, with the short - term price breaking upward. There was no specific news in the tin market, and the price volatility was related to the performance of equity assets. Funds tentatively went long. The uncertainty in the Middle East situation was still high, and the gap in the agreement direction between the two sides was large. Short - term attention should be paid to whether an actual cease - fire occurs. Patience and waiting were recommended [7] Lithium Carbonate - Lithium carbonate fluctuated strongly, and market trading was active. The macro - environment provided a strong time window, and the market was concerned about the supply shock from Zimbabwe. The overall inventory reduction speed in the market slowed down, and the change in the inventory structure was worthy of attention. The decline in smelter inventory slowed down, and the confidence of traders in hoarding goods wavered, and they began to sell to downstream. In terms of production, the production of lithium carbonate returned to a high level in early March, with weekly production hitting new highs. Waiting for the inventory inflection point. The latest quotation of Australian ore was 2,

1. Report Investment Rating - No information provided 2. Core Views - This week (March 16 - 22), the spot and futures markets of live pigs showed weak performance. The prices of 20KG piglets in Henan, live pigs in Henan, and 50KG binary sows nationwide all decreased. The average slaughter weight decreased by 0.04% week - on - week. The futures price of the LH2605 contract also declined, and the basis widened [1][2]. - Next week (March 23 - 29), the spot price of live pigs will continue to be weak. In March, enterprises' willingness to actively sell and destock has increased, but passive inventory accumulation is still occurring, and the price bottom has not been reached. From April to May, the supply pressure will be at a marginal high, and the market is expected to bottom out in April. The LH2605 contract may continue to decline, with a support level of 9500 yuan/ton and a pressure level of 10500 yuan/ton [3][4]. 3. Summary by Directory 3.1 Market Review (3.16 - 3.22) Spot Market - Henan 20KG piglet price was 27.25 yuan/kg (last week: 28.7 yuan/kg), Henan live pig price was 9.93 yuan/kg (last week: 10.18 yuan/kg), and the national 50KG binary sow price was 1536 yuan/head (last week: 1541 yuan/head) [1]. - Supply side: Group enterprises' slaughter volume gradually increased, and there was passive pressure on the social side. Demand side: Slaughter volume continued to rise above the seasonal level, the volume of passive segmentation and storage increased, and the speculative demand for secondary fattening accelerated [1]. - The national average slaughter weight was 125.55KG (last week: 125.6KG), with a week - on - week decrease of 0.04% [1]. Futures Market - The highest price of the LH2605 contract was 11125 yuan/ton, the lowest was 10215 yuan/ton, and the closing price was 10220 yuan/ton (last week: 11150 yuan/ton) [2]. - The basis of the main contract was - 290 yuan/ton (last week: - 970 yuan/ton) [2]. 3.2 Market Outlook (3.23 - 3.29) Spot Market - In March, enterprises' willingness to actively sell and destock increased, and the slaughter volume was at a historical high in the same period. However, the weight did not decrease, and passive inventory accumulation was still occurring, indicating that the inventory volume far exceeded expectations, and the price bottom had not been reached [3]. - From the supply perspective, the supply of standard pigs will continue to increase until April 2026. After the Spring Festival, there has been continuous passive inventory accumulation, and the weight is at the highest level in the same period in recent years. The double pressure of the production capacity cycle and the inventory cycle will be realized from April to May, and the supply pressure will be at a marginal high [3]. - From the demand perspective, the market had strong expectations for the pre - Spring Festival peak season, driving forward - looking speculative demand in January. However, the negative feedback of downstream losses during the peak season emerged, resulting in the increase in peak - season demand falling short of expectations. After the spot price fell after the Spring Festival, the slaughter volume remained at a high level above the seasonal level, and the speculative demand for secondary fattening and segmentation and storage increased, further overdrawing the speculative demand [3]. - It is expected that the market will bottom out in April [3]. Futures Market - The price of the LH2605 contract closed at 10220 yuan/ton on March 20. The market recognized that the inventory base exceeded expectations, and inventory continued to accumulate and was difficult to release in the short term. The cycle bottom had not appeared, and the destocking process may continue from April to May. Current policies mention production capacity reduction and require enterprises to reduce weight, which may drive the near - end spot price to find the bottom faster. The price of the March contract fell to 9600 yuan/ton, opening the downward space for the May contract. There is still a premium - driven factor, and attention should be paid to stop - profit and stop - loss [4]. - The short - term support level of the LH2605 contract is 9500 yuan/ton, and the pressure level is 10500 yuan/ton [4]. 3.3 Other Data - This week's basis was - 290 yuan/ton, and the LH2605 - LH2607 monthly spread was - 1060 yuan/ton [9]. - The average weight this week was 125.55KG (last week: 125.6KG) [13]. - In January, the pork production was 5.36 billion tons, a month - on - month decrease of 1.7%. In February, the pork import was 5.21 million tons, a month - on - month decrease of 22.77% [13].

Summary of Conference Call for Zhongju Gaoxin Company Overview - **Company**: Zhongju Gaoxin - **Industry**: Seasoning and Condiments Key Points and Arguments Industry and Market Conditions - In 2025, the industry faced pressure due to high channel inventory and sluggish terminal sales, leading to price inversion issues in early 2025 [2][3] - By January 2026, channel inventory levels were reduced to an ideal range of 2-3 times, with only a few products still experiencing price inversion [2][3] Business Goals and Strategies - The 2026 operational goal is to restore existing business revenue to 2023 levels, with overall targets not lower than 2024, focusing on sales quality and profit margins [2][3] - The "Five-Star Plan" was initiated to expand new business areas, particularly through the "Catering Seed Plan," which aims to enhance the catering channel by integrating chefs and dishes [2][3][8] Mergers and Acquisitions - The acquisition of Sichuan Weizhi Mei is expected to be consolidated in March, serving as a platform to enhance the Chinese seasoning business and adapt to the fast-paced content e-commerce model [2][3][8][18] Channel Management and Governance - A Market Alliance Management Committee was established to empower distributors in local price and inventory management, transitioning the company from a "manager" to a "provider of products and services" [2][3][4][17] Digital Transformation and Cost Efficiency - The company is focusing on digital transformation through the S2B2b platform to build a dedicated supply chain, aiming to maintain gross margins despite rising raw material costs [2][3][4][9] Incentive Mechanisms - A new stock incentive plan is planned for 2026, utilizing over 4 million shares of treasury stock, along with an excess profit-sharing mechanism to enhance team motivation [2][3][19] Inventory Management - As of January 2026, channel inventory was approximately 3 times, with main sales areas at 2-2.5 times and non-main sales areas at 3.8 times, indicating a positive trend in inventory management [5][6] Pricing and Profitability - The price inversion issue began during the pandemic and was exacerbated by optimistic market predictions, leading to significant adjustments in sales strategies [6][7] - By January 2026, most price inversion issues were resolved, with only a few products remaining affected [6][7] Revenue and Market Share - The company aims to recover its revenue to 2023 levels while ensuring better inventory and sales conditions [10][11] - The market share loss was attributed to insufficient follow-up during supermarket adjustments, but overall impact remains manageable due to strong consumer loyalty [10][11] Product Development and Market Adaptation - The company plans to enhance product offerings by focusing on health-oriented and functional products, as well as regional specialties through acquisitions and partnerships [11][12] Competitive Landscape - The exit of small brands in the seasoning industry may alter the competitive landscape, primarily benefiting leading brands like Haidilao and Chef Bang [12][13] Catering Channel Focus - The catering channel is identified as a critical growth area, requiring a shift in organizational capabilities to provide comprehensive solutions for dishes [13][14] Financial Outlook - The net profit margin for 2026 is expected to exceed 2024 levels, with a focus on maintaining profitability amid new business developments [15][16] Distributor Support and Management - New policies will support distributors, transitioning from a management role to a service-oriented platform, enhancing local market operations [17] Acquisition Details - The acquisition of Weizhi Mei is valued at approximately 10-12 times PE, with the agreement signed before the Spring Festival [18] Stock Incentive Plans - A new stock incentive plan is anticipated for 2026, focusing on core management and broader employee engagement [19]

Core Viewpoint - In 2025, the cumulative year-on-year profit growth rate of industrial enterprises above designated size was 0.6%, with a significant V-shaped rebound in December, showing a 5.3% year-on-year increase. This improvement is attributed to the synergy of volume and price, increased industrial production activity, narrowing decline in PPI, and a substantial recovery in profit margins, along with policy benefits, low base effects, and concentrated year-end order deliveries [1] Summary by Sections Profit Growth and Drivers - The December profit growth was driven by improved industrial production activity and a narrowing decline in PPI, leading to a significant recovery in profit margins [1] - The structural analysis indicates that the profit share of upstream and midstream industries has increased, showing strong recovery, while downstream industries experienced differentiation, with only a few sectors like automotive and food seeing profit contraction [1] Demand and Inventory Management - Companies have begun proactive inventory reduction, leading to an expanded revenue decline in December, indicating that the foundation of terminal demand remains unstable [1] - The future pace of profit recovery will depend on the warming of domestic demand and the continued transmission of policy effects [1]

Profit Growth Overview - In 2025, the cumulative year-on-year profit growth rate for industrial enterprises was 0.6%, with December showing a significant increase of 5.3% compared to November's -13.1%[1] - The profit recovery is characterized as a "V-shaped" rebound, driven by improved production activity, narrowing PPI declines, and a substantial recovery in profit margins[1][4] Contributing Factors - The increase in profits is attributed to a combination of rising production volumes, improved pricing environments, and enhanced profit margins, with December's profit margin rising from 5.29% to 5.31%[5] - The industrial added value in December rose to 5.2%, up from 4.8% in November, indicating improved industrial production activity[5] Sector Performance - The profit share of upstream and midstream industries increased to 29.6% and 53.7%, respectively, while the downstream sector saw a slight decrease to 16.7%[6] - Upstream sectors like coal mining and non-ferrous metals showed strong profit recovery, while downstream sectors like automotive and food experienced profit contractions[6][14] Revenue Trends - Cumulative revenue growth for industrial enterprises in 2025 was 1.1%, with December showing a decline of 3.2%, indicating ongoing challenges in end-demand recovery[10] - The inventory growth rate for industrial finished products was 3.9%, signaling a shift from replenishment to destocking as companies respond to weak demand[10] Future Outlook - The sustainability of profit recovery is contingent on the strengthening of domestic demand and the continued effectiveness of policy measures[15] - Risks include external uncertainties and the potential for domestic demand recovery to fall short of expectations[16]

Core Viewpoint - Kweichou Moutai achieved positive growth in Q3 2025 despite a challenging environment characterized by a "ban on alcohol" and weak demand, with revenue reaching CNY 39.81 billion, a year-on-year increase of 0.3%, which was below market expectations of CNY 42.5 billion [1][11]. Financial Performance - The company reported a net profit of CNY 19.22 billion in Q3 2025, reflecting a year-on-year growth of 0.6%, slightly outpacing revenue growth [4][11]. - Moutai liquor revenue reached CNY 34.9 billion, marking a year-on-year increase of 7.1%, although there was a downward trend compared to the previous two quarters [2][15]. Market Dynamics - The decline in demand was particularly pronounced in the gifting segment, indicating weak business demand from small and medium enterprises, while banquet demand showed a less significant decline [3][15]. - Series liquor revenue fell sharply to CNY 4.1 billion, a year-on-year decrease of 33.7%, attributed to high inventory levels and weak demand [3][17]. Channel Performance - Direct sales revenue decreased by 14.8% to CNY 15.6 billion, with the direct sales channel's share dropping to 40%, reflecting the weak demand at the terminal level [4][20]. - Contract liabilities decreased to CNY 7.8 billion, down 22% year-on-year, indicating a recovery from the previous quarter's steep decline [5][22]. Profitability Metrics - The overall gross profit margin slightly improved by 0.2 percentage points to 91.4%, driven by a higher proportion of Moutai liquor sales [4][25]. - The company reduced marketing expenditures, resulting in a sales expense ratio decline of 1 percentage point to 3.1%, while management expenses remained stable [4][25]. Industry Context - The current phase of the industry is characterized by a proactive reduction of inventory, with terminal sales beginning to show improvement, suggesting a potential bottoming out of the market [6][7]. - The market's expectations regarding Moutai's pricing have stabilized, indicating that short-term price fluctuations may have a muted impact on the company's valuation [6][7].

Domestic Insights - The August PMI manufacturing price index increased, likely due to the upward shift in upstream commodity prices, which may hinder future corporate profit recovery[2] - The current domestic market is in a new bull market phase, with wealth effects expected to boost service consumption as a highlight for Q4 economic growth[2] - September is a critical observation window for RMB appreciation, especially if US-China negotiations show substantial progress[2] Overseas Insights - In August, non-farm payrolls added only 22,000 jobs, significantly below the expected 75,000, indicating a moderate slowdown in employment rather than a rapid decline[15] - The unemployment rate rose to 4.3% in August from 4.2% in July, reinforcing concerns about employment risks discussed at the Jackson Hole meeting[15] - The weak non-farm data suggests the Federal Reserve may lower interest rates by 75 basis points this year, with weak dollar trading likely to continue in the coming weeks[15] Liquidity and Market Trends - The overall liquidity tightened this week, with the benchmark interest rate down approximately 7.412 basis points[19] - The average daily transaction volume in the interbank pledged repo market increased by about 2417.16 billion CNY, reaching 73138.95 billion CNY[20] - Government bond issuance pressure decreased, with a net repayment of 1184.54 billion CNY and a planned issuance of 8376.7 billion CNY next week[21] Asset Performance - The Shanghai Composite Index fell by 1.18% this week, while the Shenzhen Component Index decreased by 0.83%[39] - Gold prices showed an upward trend, while international crude oil prices experienced a downward trend[37] - The US 10-year Treasury yield declined, reflecting a mixed performance in European bond yields[39]

Overall Inventory Cycle - As of June 2025, total U.S. inventory increased by 2.89% year-on-year, compared to a previous value of 2.64%[1] - Total U.S. sales in June 2025 rose by 3.94% year-on-year, up from 3.32% previously[1] - Since April 2025, the U.S. has shifted from passive inventory replenishment to active destocking, but inflationary pressures are slowing this process[1] - Actual inventory growth rates from April to June 2025 were 2.2%, 1.6%, and 1.3% respectively[1] Industry Inventory Cycle - In June 2025, 7 out of 14 major industries were in active destocking, including oil, gas, chemicals, and automotive sectors[1] - The historical percentile for overall inventory growth in June was 35.3%, with specific industries like construction materials at 84.5% and chemicals at 64.6%[1] - Oil and chemical sectors are likely in active destocking, while construction and metal inventories remain high, indicating a potential shift to active destocking[1] - The transportation sector has been in active destocking since April 2025, while automotive parts have also transitioned to active destocking since December 2024[1]

Investment Rating - The report maintains a "Recommended" rating for China Feihe (06186.HK) with a target price of HKD 5.1 [1][4]. Core Views - The company reported a 9.36% year-on-year decline in revenue for H1 2025, totaling CNY 9.151 billion, and a 46.66% drop in net profit to CNY 1 billion. The interim dividend declared is HKD 0.1209 per share, amounting to CNY 1 billion [1][4]. - The company is facing significant operational pressure due to intensified competition and proactive inventory reduction, which has led to a decrease in market share [4]. - The gross margin for H1 2025 was 61.58%, down 6.3 percentage points year-on-year, primarily due to changes in sales structure and losses from raw milk powder [4]. - The company is implementing various measures to adjust operations, including inventory management and the introduction of new customized products, aiming for a recovery in performance [4]. Financial Summary - **Revenue Forecasts**: - 2024A: CNY 20.749 billion - 2025E: CNY 18.792 billion - 2026E: CNY 19.835 billion - 2027E: CNY 20.469 billion - Year-on-year growth rates: 5.6%, -9.4%, 5.5%, 3.2% [1][10]. - **Net Profit Forecasts**: - 2024A: CNY 3.570 billion - 2025E: CNY 2.190 billion - 2026E: CNY 3.001 billion - 2027E: CNY 3.384 billion - Year-on-year growth rates: 5.3%, -38.7%, 37.1%, 12.8% [1][10]. - **Earnings Per Share (EPS)**: - 2024: CNY 0.39 - 2025: CNY 0.24 - 2026: CNY 0.33 - 2027: CNY 0.37 [1][10]. - **Valuation Ratios**: - Price-to-Earnings (P/E) ratios for 2025E: 17 - Price-to-Book (P/B) ratios for 2025E: 1.4 [1][10]. Market Performance - The current share price is HKD 4.39, with a market capitalization of HKD 39.8 billion [2]. - The stock has experienced a 12-month high of HKD 6.80 and a low of HKD 3.34 [2]. Strategic Adjustments - The company is focusing on health-oriented strategies and actively promoting reforms to address operational challenges, including inventory adjustments and the launch of new products [4]. - The company aims to improve channel profitability and market presence through these strategic initiatives [4].

Core Viewpoint - The overall decline in corporate profits has narrowed in July, showing a differentiated structure primarily due to profit recovery relying on "anti-involution" policies leading to supply contraction and price increases, alongside demand support from certain high-end manufacturing sectors. However, downstream consumer demand remains weak, causing marginal profit shrinkage in downstream industries. The current inventory cycle is characterized by proactive destocking driven by policies. A comprehensive recovery in corporate profits will require policy efforts to boost downstream demand, transitioning profit recovery from structural to comprehensive [1]. Summary by Sections - Corporate Profit Trends: The decline in corporate profits has slowed down, indicating a potential recovery phase influenced by specific policies and market conditions [1]. - Structural Differentiation: The recovery is uneven, with high-end manufacturing benefiting while downstream sectors face challenges due to weak consumer demand [1]. - Inventory Cycle: The current phase is marked by proactive destocking, suggesting a strategic approach to inventory management under policy guidance [1]. - Future Outlook: A full recovery in corporate profits hinges on policy measures aimed at stimulating downstream demand, which is essential for transitioning from structural recovery to overall profit growth [1].