东吴证券主要观点如下： 2025年供给持续饱满，需求略有回暖 上游铁水产量2025年处于2021-2025年较高水平，仅弱于2023年，与到港量同向增长。截至2025年11 月，铁水日均产量平均238万吨/天，yoy+3.7%。2025年钢材产量五大钢材均有下滑，受制于地产行业趋 势走弱，长材弱于板材。截至2025年10月中国粗钢产量累计8.2亿吨，yoy-4%。 2025年钢材表需同比小幅上升，板材贡献增量，长材有所拖累。截至2025年10月，中国钢材总表观消费 量9.3亿吨，yoy+5%。分品类来看，仍为长弱板强，截至11月底，五大钢材中板材消费量同比增加，其 中热轧、冷轧及中厚板消费量同比+1%/+2%/+5%，螺纹钢、线材有所下滑，yoy-5%/-8%，降幅收窄。 分行业来看，需求主要受地产拖累，造船+汽车+制造业+出口起到弥补作用。 预计2026年钢铁行业供给过剩仍为主要矛盾，价格或维持震荡态势 东吴证券预计，2026年基建、出口、造船、机械用钢正贡献，地产用钢略有拖累，供给略有过剩。 2025钢材价格震荡走弱，2026年预计钢价震荡运行 智通财经APP获悉，东吴证券发布研报称，截至2025年10月 ...

Core Views - The steel industry is expected to face oversupply issues in 2026, with prices likely to remain volatile [4][49] - The trend of "anti-involution" continues, with supply-side reforms expected to constrain crude steel production by 5%-10% [3][4] Supply and Demand Analysis - Supply remains robust, with iron water production at a high level; as of November 2025, the average daily iron water output was 2.38 million tons, up 3.7% year-on-year [3][8] - Steel production is projected to decline slightly in 2025, with a cumulative crude steel output of 820 million tons, down 4% year-on-year [3][15] - Demand for steel is expected to see a slight increase in 2025, driven by plate steel, while long steel products face challenges; total apparent steel consumption reached 930 million tons, up 5% year-on-year [3][22] Price Trends - Steel prices are anticipated to decline in 2025, with an expected range of 3000-3500 RMB/ton; the price is projected to stabilize in 2026 [3][4] - The decline in coking coal prices is expected to contribute to lower steel prices, with iron ore prices also having room to decrease [3][4] Profitability Outlook - The steel industry is expected to maintain profitability in 2025 due to declining costs, with average gross margins at their best levels from 2021 to 2025 [3][4] - The anticipated recovery in rebar prices to around 3500 RMB/ton could lead to an increase in profitability by 50-100 RMB/ton [3][4] Investment Strategy - Focus on product structure transformation and high-growth segments; recommended companies include Baosteel, Hualing Steel, and Nanjing Steel [3][4] - Investment lines for 2026 include stable profits from leading steel companies and opportunities in downstream sectors with strong profitability [3][4]

Core Viewpoint - The performance of Changjiang Electric Power has been underwhelming in the current bull market, despite the overall A-share market rising nearly 20% this year, indicating a shift in market dynamics and investor sentiment towards growth sectors over traditional dividend stocks [1][10]. Group 1: Company Performance and Historical Context - From July 2014 to July 2024, Changjiang Electric Power's stock price increased approximately 650%, with a market capitalization ranking it 11th in A-shares [3]. - The company operates six major hydropower stations, including the Three Gorges and Gezhouba, benefiting from a high barrier to entry and a stable revenue model due to the renewable nature of water resources [3][4]. - Revenue grew from 24.2 billion yuan to 84.5 billion yuan from 2015 to 2024, with a compound annual growth rate (CAGR) of about 13%, while net profit increased from 11.5 billion yuan to 32.5 billion yuan, with a CAGR of approximately 11% [4]. Group 2: Recent Performance and Market Dynamics - In the first half of this year, the company reported a 5% increase in revenue and nearly 15% growth in net profit, primarily due to favorable upstream water conditions [7]. - The valuation of Changjiang Electric Power rose from around 10 times earnings in 2014 to nearly 30 times in 2024, reflecting a significant increase in market preference for defensive stocks during periods of economic uncertainty [8][9]. Group 3: Challenges and Future Outlook - Since July 2024, the stock price has stagnated, with only a 2% increase despite a broader market rally, indicating a shift in the underlying growth expectations and valuation sustainability [10][11]. - The anticipated growth in earnings has weakened, as there are no new power stations to be integrated into the company, leading to a potential valuation bubble that may require correction [11]. - The ongoing market reforms in the electricity sector pose risks of downward pressure on electricity prices, which have historically shown cyclical behavior [12]. - The market sentiment has shifted from dividend-paying stocks to growth-oriented sectors, which may continue to influence investor behavior and stock performance in the near future [16][20].

Core Viewpoint - The article discusses the underperformance of Changjiang Electric Power in the context of a bullish A-share market, highlighting the reasons behind its stagnant stock price despite a strong historical performance [2][4][16]. Group 1: Company Performance - Changjiang Electric Power has seen a cumulative increase of approximately 650% from July 2014 to July 2024, with minimal volatility during this period [5]. - The company's revenue grew from 24.2 billion to 84.5 billion yuan, with a compound annual growth rate (CAGR) of about 13%, while net profit increased from 11.5 billion to 32.5 billion yuan, with a CAGR of around 11% [7]. - In the first half of this year, the company reported a 5% increase in revenue and nearly 15% growth in net profit, primarily due to favorable upstream water conditions [10]. Group 2: Market Position and Valuation - The business model of Changjiang Electric Power is considered superior due to its ownership of six large hydropower stations, which are less affected by commodity price fluctuations compared to thermal power [6]. - The valuation of Changjiang Electric Power has increased significantly, from around 10 times earnings in 2014 to nearly 30 times at its peak, reflecting its status as a defensive dividend stock during market downturns [12][14]. - The company has maintained a high dividend payout ratio of over 70%, making it attractive to institutional investors [14]. Group 3: Changing Market Dynamics - Since July 2024, the stock price of Changjiang Electric Power has stagnated, with only a 2% increase despite a broader market rally [16]. - The expectations for continuous earnings growth have weakened, as there are no new power stations to be injected into the company, leading to a potential valuation bubble [18]. - The ongoing market reforms in the electricity sector pose a risk of declining electricity prices, which could impact the company's profitability [19]. Group 4: Shift in Market Style - The market style has shifted from dividend-focused stocks to growth-oriented sectors, driven by macroeconomic policies aimed at stimulating the economy [20][23]. - The recent economic policies have led to a transition in market leadership from defensive sectors like electricity to technology and growth stocks, which may continue in the current bull market [24][30]. - The article suggests that the previous strong performance of dividend stocks may not be sustainable, and investors should consider viewing Changjiang Electric Power as a long-term low-risk investment with stable dividends rather than expecting significant capital appreciation [30].

Core Viewpoint - The current bull market is mirroring the seven-wave pattern observed in 2015, with the market transitioning through various phases of sector leadership, indicating a cyclical rotation among financial, cyclical, technology, and defensive sectors. Group 1: Financial Sector - The first wave of the bull market is led by financial institutions, including banks, brokerages, and insurance companies, which have successfully attracted new capital, with state-owned banks showing a year-to-date increase of 37% and Industrial and Commercial Bank of China briefly surpassing Apple in market capitalization [1] - The brokerage sector is experiencing a wave of mergers, leading to the emergence of "trillion-yuan investment banks" [1] - Insurance capital's equity allocation ratio has increased to 15% [1] Group 2: Cyclical Sector - The second wave sees cyclical stocks, such as coal, steel, and non-ferrous metals, taking over from financial stocks, reflecting market expectations for economic recovery [2] - The current rally in cyclical stocks is driven by two main factors: policy initiatives aimed at capacity reduction and a shift in capital towards these stocks as a safe haven, with individual stocks rising over 40% [2] Group 3: Technology Sector - The third wave is characterized by a surge in technology stocks, particularly in AI, semiconductors, and robotics, which are expected to be the most profitable areas moving forward [2] - The technology sector in 2025 shows two key trends: the rise of hard technology, with stocks like Cambrian Technology increasing by 387%, and a notable divergence in performance, as the sector's price-to-earnings ratio has reached 45 times, with some companies reporting disappointing earnings [2] Group 4: Consumer Sector - The fourth wave anticipates a rebound in consumer stocks as funds seek undervalued sectors after technology stocks reach a certain peak, with consumer sectors like liquor and pharmaceuticals currently lagging behind in performance [2] Group 5: Growth Stocks - The fifth wave indicates a shift of capital from high-profile stocks to mid and small-cap growth stocks, which may experience a rally driven by market sentiment rather than fundamentals, cautioning against blind chasing of high prices [2] Group 6: Defensive Sector - The sixth wave suggests a transition towards defensive sectors, such as utilities and transportation, as the bull market approaches its peak, with a clear market divergence where previously high-performing sectors begin to correct while defensive stocks continue to rise [3] Group 7: Market Transition - Currently, defensive sectors like utilities and electricity have not yet started to rally, indicating that the market is still in the middle phase of the cycle, transitioning from cyclical dominance to technology leadership [4] - The market is in a transitional phase from the second wave led by cyclical stocks to the third wave led by technology stocks, with key signals indicating that a full breakout in technology could lead to a subsequent push in consumer stocks, marking the entry into the fourth wave [4]

Report Industry Investment Rating No information provided. Core View of the Report Although the prices of the black sector may experience short - term periodic corrections due to real - time demand, in the medium to long term, the black sector may gradually become more cost - effective for multi - allocation. The key factor to watch is the emergence of a new demand engine. If it appears, the steel industry may start a new upward cycle; otherwise, prices may enter a consolidation phase and require a longer period of bottom - building [1][23]. Summary by Relevant Points Background of the Black Sector - Since 2022, the black sector has been characterized by "weak reality" due to the real estate downturn. The market has been playing the same game of policy "expectations" against the backdrop of "weak reality". In the fourth quarter of this year, the "Fourth Plenary Session" in mid - to late October, which will plan for the "15th Five - Year Plan", will be a crucial node for future expectation games [1][4]. Differences in This Expectation Game Price Decline Dynamics - The downward momentum of prices is objectively waning and has been compressed to near - extreme levels. Taking the rebar price index as an example, the magnitude and time of new lows have significantly shrunk, from nearly 14% and 5 months initially to less than 4% and one month most recently [7]. Fed's Interest - Rate Cut - The Fed has officially entered an interest - rate cut cycle, and with the "big and beautiful" tax and spending bill passed by the US Congress on July 3, 2024, it is relatively certain that overseas markets will enter a phase of both fiscal and monetary expansion, which is beneficial for global demand and commodity prices. Unlike previous recession - driven interest - rate cuts, the current US economy has not shown obvious signs of weakness, so commodity prices may not decline significantly before rising [9][10]. China's Capacity - Reduction Experience - China has rich experience in capacity reduction. In 1998 - 2002 and 2015 - 2016, the country effectively addressed over - capacity issues and emerged from insufficient demand and low inflation. With strong national will and sufficient fiscal policy space, demand - side policies supporting the "anti - involution" initiative are still worth anticipating [15][16]. Industry Cycle - The black sector has a cycle of approximately five years, and currently, it is approaching a critical cycle turning point. Historically, the steel industry cycle was closely related to the real estate cycle. However, under the current real - estate policy background, a new demand engine outside of real estate is needed to start a new cycle. The development of the Great Northwest is being considered, but its demand scale and time span are still under evaluation [19][22].

Core Viewpoint - The concept of "anti-involution" has evolved into a strategic issue affecting the overall economy of China, particularly as the country transitions to high-quality development. This phenomenon is characterized by supply-demand mismatches and disorderly competition in various industries, which hinder productivity and pose significant challenges to achieving high-quality growth [1][2]. Group 1: New Trends in "Anti-Involution" - The current "anti-involution" movement exhibits three new trends compared to the previous supply-side reform 1.0: upgraded goals, expanded governance targets, and evolved policy tools [3][4][5][6]. - The upgraded goals focus on quality improvement and breaking the cycle of involution, shifting from merely reducing excess capacity to establishing high-quality competition rules applicable to all market entities [4]. - The governance targets have expanded to include not only traditional industries but also emerging sectors and platform economies, addressing issues of blind investment and vicious competition [5]. - The policy tools have transitioned from administrative commands to rule-making and macro-guidance, emphasizing the establishment of legal frameworks and market mechanisms to facilitate industry upgrades [6]. Group 2: Impacts on the Banking Industry - The banking sector is experiencing "involution" due to insufficient effective demand and a continuous narrowing of net interest margins, leading to a reliance on "involution" as a survival strategy [2][13]. - The short-term response to this "involution" is characterized by a focus on expanding scale to counteract profit pressures, which can lead to a vicious cycle of price wars and increased operational risks [14][15]. - Long-term, the "involution" in banking can compress profit margins and increase operational risks, ultimately affecting the stability of the financial system and its support for the real economy [15][16]. Group 3: Solutions for the Banking Sector - To effectively counter "involution," banks must adapt their customer structures to align with the changing economic landscape, enhancing risk management capabilities and focusing on new economic sectors [16][17]. - The transition from traditional economic sectors to new ones is essential for banks to escape the "involution" trap, as the demand from traditional sectors continues to decline [16]. - A shift towards a more diversified customer base and improved risk management will enable banks to better serve the evolving needs of the economy and enhance their sustainability [16].

Group 1: Inflation Data Analysis - In August 2025, the Consumer Price Index (CPI) decreased by 0.4% year-on-year, marking a return to negative growth after two months[6] - Food prices fell by 4.3% year-on-year, with significant declines in pork (16.1%), fresh vegetables (15.2%), and eggs (14.2%) contributing to a downward pressure on CPI[6] - Non-food prices increased by 0.5% year-on-year, partially offsetting the decline in food prices[6] - The core CPI, excluding food and energy, rose by 0.9% year-on-year, indicating potential effectiveness of domestic demand policies[6] Group 2: PPI and Economic Outlook - The Producer Price Index (PPI) decreased by 2.9% year-on-year in August, but the decline narrowed by 0.7 percentage points compared to the previous month, suggesting a potential turning point[11] - The PPI's month-on-month change improved from a decline of 0.2% to flat, ending an eight-month downward trend[12] - The improvement in PPI is attributed to the effectiveness of supply-side reforms, particularly in coal and new energy vehicle sectors[11] - Current PPI conditions support a downward trend in interest rates rather than an upward shift, indicating a need for continued policy efforts to stabilize economic recovery[1]

Market Overview - The current market trend indicates the establishment of a bull market, which began on September 24 last year with a series of housing policies [1] - The market experienced a rapid increase, with a notable surge of 1000 points within a few trading days, followed by a correction phase lasting over a quarter [1] - Recent policies have shifted towards economic stimulation, emphasizing the need to boost domestic demand and consumption [1] Policy Impact - Central government meetings have increasingly focused on stabilizing the real estate market and enhancing the attractiveness of the capital market [1] - A significant policy signal was the joint announcement by five departments to promote long-term capital inflow into the market, indicating institutional investors are increasing their equity positions [1] Valuation Insights - The current market valuation remains low, with a price-to-earnings ratio of approximately 13-14, compared to a historical average of 17-18, suggesting over 20% potential upside [3] - Chinese stocks are significantly undervalued compared to U.S. stocks, with many trading at only 1/2 to 1/3 of their U.S. counterparts [3] Capital Flow Dynamics - There is a clear trend of household savings shifting towards the capital market, with total household savings increasing by nearly 60 trillion over five years, now reaching 160 trillion [4] - The stock market is seen as the primary outlet for these savings, especially as the real estate market can no longer absorb significant capital [4] Market Participation - In July, new stock accounts reached 2 million, and many equity funds launched with initial scales exceeding 1 billion, indicating a strong recovery in market participation [5] - The balance of margin trading has surpassed 2 trillion for the first time in a decade, reflecting increased investor engagement [5] Economic Implications - The current bull market is expected to enhance consumer spending, as rising stock prices will directly increase household wealth, leading to greater consumption [6] - A thriving stock market is anticipated to positively impact sectors like dining, tourism, and real estate, as increased wealth will enable consumers to pay off loans and potentially invest in property [6] IPO and Innovation - A bullish market will likely accelerate the pace of IPOs, providing more opportunities for tech innovation and supporting the growth of new enterprises [7] - The stock market is viewed as a crucial engine for economic growth, complementing traditional drivers like investment, consumption, and exports [7]

Group 1 - The A-share market has experienced continuous breakthroughs and significant increases due to low domestic interest rates, ample liquidity, and policy support, alongside a growing expectation of a rate cut by the Federal Reserve in September [1][2] - The Shanghai Composite Index has risen over 1%, surpassing 3700 points, which has attracted more external capital, including foreign investment, as the China-US interest rate differential narrows and the pressure of RMB depreciation eases [1][2] - The Federal Reserve is expected to cut rates by 25 basis points in September, with potential further cuts by the end of the year, which could lower the benchmark interest rate from the current 4.25%-4.5% to below 4%, providing support for the US economic recovery [2] Group 2 - The current bull market trend is gradually establishing itself, with significant policy support being a crucial factor, as the Central Political Bureau has emphasized stabilizing the real estate and stock markets [3][4] - Institutional investors, including insurance funds, public funds, and pension funds, have increased their allocations to equity assets, contributing to a substantial influx of capital into the market [3][4] - The total market capitalization of A-shares has surpassed 100 trillion yuan, indicating a strong market sentiment and increased trading volume, with multiple trading days exceeding 2 trillion yuan [4] Group 3 - There is a noticeable trend of residents shifting savings to the capital market, with nearly 60 trillion yuan added to savings accounts over the past five years, driven by low interest rates on deposits [4] - The current bull market is expected to last two to three years, characterized by a slow and steady growth rather than a rapid surge, encouraging value investing and the allocation of quality stocks and funds [4] Group 4 - The fourth technological revolution is underway, particularly with the widespread application of artificial intelligence, as demonstrated by the progress of "Wukong AI" in the aerospace sector [5][6] - The humanoid robot sector is gaining attention, with significant events and IPOs attracting investor interest, positioning humanoid robots as a potential fourth major industry in China [6] Group 5 - The People's Bank of China has emphasized a moderately loose monetary policy, focusing on promoting reasonable price recovery and improving consumer demand through supply-side reforms [7] - The government has set a GDP growth target of around 5% and a CPI target of 2%, with measures to stimulate consumption and achieve the inflation target being crucial [7]