Investment Rating - The investment rating for the company is "Outperform the Market" [4][20]. Core Views - The company's revenue is projected to reach 41.2 billion yuan in 2025, representing a year-on-year increase of 7.5%, while the net profit attributable to the parent company is expected to decline by 7% to 4.0 billion yuan [7][8]. - The decline in profitability is primarily attributed to falling coal prices and asset impairment provisions [8]. - The aluminum smelting segment is expected to see significant profit growth due to rising aluminum prices and falling alumina prices, with the segment's gross profit projected to increase by 22 billion yuan year-on-year [2][8]. Financial Performance Summary - Revenue and Profit Forecast: - 2025 revenue: 41.2 billion yuan (+7.5% YoY) - 2025 net profit: 4.0 billion yuan (-7.0% YoY) - 2026-2028 projected revenue: 45.1 billion yuan each year [3][18]. - Earnings Per Share (EPS): - 2025 EPS: 1.78 yuan - 2026-2028 projected EPS: 4.13 yuan [3][18]. - Key Financial Ratios: - Return on Equity (ROE) for 2025: 16.3% - Price-to-Earnings (P/E) ratio for 2026: 7.4x [3][18]. Production Plans - The company plans to produce 1.7 million tons of aluminum products, 6.95 million tons of commercial coal, and 770,000 tons of carbon products in 2026 [7][8].

Investment Rating - The investment rating for the company is "Outperform the Market" [4][20]. Core Views - The company's revenue for 2025 is projected to be 41.2 billion yuan, an increase of 7.5% year-on-year, while the net profit attributable to the parent company is expected to decline by 7% to 4.0 billion yuan [7][8]. - The decline in profitability is primarily attributed to falling coal prices and asset impairment provisions [8]. - The aluminum smelting segment is expected to see significant profit growth due to rising aluminum prices and falling alumina prices, with a projected gross profit of 8.7 billion yuan in 2025, an increase of 22 billion yuan year-on-year [2][8]. Financial Forecasts - Revenue and profit forecasts for the company from 2024 to 2028 are as follows: - Revenue (in million yuan): 38,373 (2024), 41,241 (2025), 45,068 (2026E), 45,068 (2027E), 45,068 (2028E) [3]. - Net profit (in million yuan): 4,307 (2024), 4,005 (2025), 9,287 (2026E), 9,287 (2027E), 9,287 (2028E) [3]. - Earnings per share (in yuan): 1.91 (2024), 1.78 (2025), 4.13 (2026E), 4.13 (2027E), 4.13 (2028E) [3]. - The company plans to distribute cash dividends of 1.787 billion yuan in 2025, accounting for 44.61% of the net profit attributable to the parent company [7]. Production Plans - The company has announced its production plans for 2026, which include: - Aluminum products: 1.7 million tons - Commodity coal: 6.95 million tons - Carbon products: 770,000 tons - Aluminum foil: 121,000 tons - Cold-rolled products: 280,000 tons - Self-generated electricity: 9 billion kWh [7]. Market Position - The company is recognized as a leading player in the domestic electrolytic aluminum sector, benefiting from structural reforms in supply and is positioned within an industry upcycle [2][8].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任 何 損 失 承 擔 任 何 責 任。 馬鞍山鋼鐵股份有限公司 Maanshan Iron & Steel Company Limited （在中華人民共和國註冊成立之股份有限公司） 本公告乃根據《香港聯合交易所有限公司證券上市規則》第13.10B條而作出。 茲 載 列 馬 鞍 山 鋼 鐵 股 份 有 限 公 司（「 公 司 」）在 上 海 證 券 交 易 所 網 頁 (www.sse.com.cn)刊 登 的《2025年 年 度 報 告》，以 供 參 閱。 馬鞍山鋼鐵股份有限公司 董事會 2026年3月25日 中國安徽省馬鞍山市 於 本 公 告 日 期，本 公 司 董 事 包 括：執 行 董 事 蔣 育 翔；職 工 董 事 唐 琪 明； 獨 立 非 執 行 董 事 管 炳 春、何 安 瑞、仇 聖 桃 及 曾 祥 飛。 马鞍山钢铁股份有限公司 2025 年年度报告 （股票代號 ...

Investment Rating - The report maintains an "Overweight" rating for the steel industry [4]. Core Insights - Demand is expected to gradually stabilize, and supply-side market clearing has begun, indicating a potential recovery in the steel industry's fundamentals [2][7]. - The report highlights that approximately 60% of steel companies are currently operating at a loss, but market-driven supply adjustments are starting to take place [4][9]. - The report emphasizes the importance of balancing supply and demand, optimizing product structure, and the need for structural reforms in the steel industry [4][6]. Summary by Sections Demand and Supply - Demand is anticipated to stabilize, with a notable decrease in the negative impact of the real estate sector on steel demand. Infrastructure and manufacturing sectors are expected to see steady growth in steel consumption [4][6]. - The total social inventory of major steel products reached 14.23 million tons, an increase of 200,000 tons week-on-week, while steel mill inventory rose to 5.52 million tons, up by 30,000 tons [9][13]. Profitability - The report indicates a rebound in profitability, with the average profit margin for rebar rising to 182 CNY/ton, an increase of 34 CNY/ton week-on-week. Hot-rolled coil profit margins also increased to 46 CNY/ton, up by 2 CNY/ton [33][39]. Price Trends - Steel prices have shown a week-on-week increase, with Shanghai rebar prices rising by 60 CNY/ton to 3,260 CNY/ton, and hot-rolled coil prices increasing by 60 CNY/ton to 3,310 CNY/ton [7][39]. - International steel prices have decreased, with U.S. rebar prices dropping to 1,026 USD/ton, a decline of 19 USD/ton week-on-week [36]. Raw Material Prices - Iron ore spot prices have rebounded, with the price at Rizhao Port reaching 799 CNY/ton, an increase of 20 CNY/ton. The futures price also rose by 21.5 CNY/ton to 772 CNY/ton [39][46]. - The report notes an increase in iron ore port inventory, which rose to 17.182 million tons, up by 700,000 tons week-on-week [46][53].

Investment Rating - The report maintains an "Overweight" rating for the steel industry [4]. Core Insights - Demand is expected to gradually stabilize, and supply-side adjustments are anticipated to continue, leading to a potential recovery in the steel industry's fundamentals [2]. - The report highlights that approximately 60% of steel companies are currently operating at a loss, indicating a market-driven supply clearance is beginning to occur [4]. - The report emphasizes the importance of balancing supply and demand, optimizing product structure, and the necessity for structural reforms in the steel industry during the "14th Five-Year Plan" period [4]. Summary by Sections Demand and Supply - Demand is projected to stabilize, with a decrease in the real estate sector's contribution to steel demand becoming less impactful. Growth in steel demand from infrastructure and manufacturing is expected to be steady [4]. - The total social inventory of major steel products reached 14.23 million tons, an increase of 200,000 tons week-on-week. Steel mill inventories also rose to 5.52 million tons, up by 30,000 tons [9][29]. Profitability - The report notes a rebound in production profits for rebar and hot-rolled steel, with average gross margins for hot-rolled steel increasing by 2 CNY/ton to 46 CNY/ton, and for rebar, the average gross margin rose by 34 CNY/ton to 182 CNY/ton [33][39]. Price Trends - Steel prices have shown a week-on-week increase, with Shanghai rebar prices rising by 60 CNY/ton to 3,260 CNY/ton, and hot-rolled coil prices increasing by 60 CNY/ton to 3,310 CNY/ton [7][39]. - International steel prices have decreased, with U.S. rebar prices dropping by 19 USD/ton to 1,026 USD/ton, and European prices falling by 58 USD/ton to 715 USD/ton [36]. Raw Material Prices - Iron ore spot prices have rebounded, with the price at Rizhao Port increasing by 20 CNY/ton to 799 CNY/ton, while futures prices rose by 21.5 CNY/ton to 772 CNY/ton [39][46]. - The report indicates an increase in iron ore port inventories, which rose by 700,000 tons to 17.182 million tons [46]. Recommendations - The report recommends focusing on leading companies with technological and product structure advantages, such as Baosteel, Hualing Steel, and Shougang, as well as low-cost and flexible steel companies like Fangda Special Steel and New Steel [4].

Core Viewpoint - The article emphasizes the importance of prioritizing people's livelihoods in China's economic development strategy, particularly in the context of the 14th Five-Year Plan, which aims to enhance public welfare and improve living standards as a foundation for economic growth [1][2]. Group 1: Economic Growth and Livelihoods - The government work report highlights the need for a stronger focus on improving people's livelihoods, which is seen as a core support for expanding domestic demand and stabilizing economic growth [1]. - The 14th Five-Year Plan outlines seven key livelihood indicators, including employment, income, social security, education, and healthcare, as part of a long-term development goal [1][2]. - The article argues that enhancing livelihoods will stabilize expectations and increase income, thereby solidifying the foundation for expanding domestic demand [2]. Group 2: Employment and Social Security - The focus should be on key groups such as college graduates, migrant workers, and flexible employment personnel to improve employment support policies, which will stabilize income growth [2]. - A comprehensive social security system should be developed to enhance pension, healthcare, and unemployment benefits, thereby alleviating residents' concerns and encouraging consumption [2]. Group 3: Supply-Side Improvements - The article stresses the need to address supply-side shortcomings and enhance the quality of supply to support domestic demand and economic growth [2][3]. - It advocates for integrating livelihood improvements with consumption upgrades to enhance the adaptability of the supply system to the domestic market [3]. Group 4: Infrastructure and Market Development - There is a call to focus on expanding public service supply in key livelihood areas such as education, healthcare, and elderly care, while encouraging social participation in these services [3][4]. - The article suggests tapping into the potential of lower-tier markets by improving consumption infrastructure and public services, which will facilitate access to quality goods and services nationwide [3][4]. Group 5: Circular Economy and Resilience - Livelihood improvements are seen as essential for enhancing domestic circulation and economic resilience, which are crucial for long-term stable growth [4]. - The article emphasizes the need to align livelihood improvements with supply-side structural reforms to ensure that the benefits of improved livelihoods translate into sustained economic growth [4].

Core Insights - The report highlights the resilience of the Chinese economy amidst increasing internal and external uncertainties, emphasizing the need for structural reforms and a focus on quality growth [12][19] - The government has set a GDP growth target of 4.5%-5% for 2026, indicating a shift towards optimizing supply and enhancing price stability [13][25] - The report discusses the impact of geopolitical tensions, particularly in the Middle East, on global oil prices and inflation, which could influence monetary policy decisions by the Federal Reserve [9][10] Macro Economic Analysis - The U.S. labor market shows signs of pressure with a decrease of 92,000 non-farm jobs in February, which is below market expectations, indicating a potential slowdown in economic growth [5][8] - The unemployment rate in the U.S. rose slightly to 4.4%, while wage growth remains stable, suggesting that inflationary pressures may persist [6][7] - The report suggests that the Federal Reserve is likely to maintain a wait-and-see approach due to the current labor market conditions and geopolitical risks [8][10] Industry Insights - The AI sector is experiencing rapid evolution, with applications transitioning from chat-based systems to more complex agent-based models, which is expected to drive demand for cloud computing and related services [33][42] - The automotive industry, particularly in the realm of autonomous driving, is poised for growth as companies like Xiaoma Zhixing achieve operational profitability with their Robotaxi services [34][39] - The food and beverage sector is anticipated to benefit from government policies aimed at boosting consumption and enhancing supply chain dynamics, particularly in essential consumer goods [47][48] Investment Strategies - The report recommends focusing on companies that are leading in AI application and cloud infrastructure, as well as those involved in the autonomous vehicle supply chain [33][34][45] - It suggests that the food and beverage industry will see a recovery driven by increased consumer spending and supportive government policies [47] - The report emphasizes the importance of structural reforms in enhancing the quality of growth and addressing supply-side challenges in various sectors [12][25][28]

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - In 2026, the terminal market will experience significant structural differentiation. Real - estate steel demand is expected to continue its negative growth. Fiscal policy may increase investment in general infrastructure, but the growth rate of traditional high - steel - consuming infrastructure may slow down. Manufacturing steel demand is also differentiated, and the impact on steel demand in 2026 may be relatively neutral. Steel exports will remain at a high level, but the growth rate will slow down [3]. - In the steel market, the supply side is relatively certain. Under the background of carbon peaking and carbon neutrality, the crude steel output will decline slightly year - on - year in 2026. The short - process steelmaking ratio is expected to increase slowly, and the decline of pig iron output will be smaller than that of crude steel [3]. - In the iron ore market, the domestic iron ore supply will be released slowly in 2026, while the global iron ore market has entered a supply - release period. However, China's iron ore demand faces pressure from economic structure transformation and a decline in steel consumption intensity. The global iron ore demand lacks growth points in 2026 [3]. - In 2026, rebar and hot - rolled coil prices are expected to be in a wide - range fluctuation. The rebar price is expected to be in the range of 2,900 - 3,500 yuan, with a slightly higher price center than in 2025, and the price may be slightly higher in the first half of the year. The hot - rolled coil price is expected to be in the range of 3,100 - 3,700 yuan. The iron ore price is expected to fluctuate widely in the range of 650 - 900 yuan, with a price center similar to that in 2025 [3]. 3. Summary by Relevant Catalogs 3.1 Steel and Iron Ore Industry Chain Analysis - **Steel - making Process**: There are two steel - making processes in China's steel industry: long - process and short - process. Long - process steel - making has a long production process, a wide range of raw materials, high production efficiency, and stable product quality. Short - process steel - making has less pollution and lower energy consumption, but lower production efficiency [14][15]. - **Industry Chain Structure**: The upstream of the steel industry mainly includes raw materials such as iron ore and fuel. The mid - stream is mainly the production of crude steel and various steel products. The downstream is the application fields of steel, including infrastructure, construction, machinery, automotive, and home appliance industries [17][18]. - **Iron Ore Mining and Processing**: The iron ore mining and processing process includes exploration, mining, crushing, screening, grinding, beneficiation, and transportation [22]. 3.2 Introduction to Steel and Iron Ore Futures and Options Contracts - **Rebar Futures and Options Contracts**: Rebar futures are traded on the Shanghai Futures Exchange. The trading unit is 10 tons per lot, and the minimum price change is 1 yuan/ton. The contract months are from January to December. The delivery system includes physical delivery [26][29]. - **Hot - rolled Coil Futures Contracts**: Hot - rolled coil futures are also traded on the Shanghai Futures Exchange. The trading unit is 10 tons per lot, and the minimum price change is 1 yuan/ton. The contract months are from January to December. The delivery system includes physical delivery [36][38]. - **Iron Ore Futures and Options Contracts**: Iron ore futures are traded on the Dalian Commodity Exchange. The trading unit is 100 tons per lot, and the minimum price change is 0.5 yuan/ton. The contract months are from January to December. The delivery system includes physical delivery [49][51]. 3.3 Long - term Trends and 2025 Market Summary - **Spot Market**: Since 2011, the prices of steel and iron ore in the spot market have generally gone through four stages: decline (2011 - 2015), rise (2016 - 2018), sharp fluctuation (2019 - 2022), and decline again (2023 - present). In 2025, the steel spot price continued to decline, and the iron ore spot price fluctuated within a range [66][73]. - **Futures Market**: The long - term trends of rebar and iron ore futures are similar to those of the spot market. In 2025, the rebar futures price continued to decline, and the iron ore futures price fluctuated within a range [81][86]. - **Trading Volume and Open Interest**: In 2025, the trading volume and open interest of rebar and hot - rolled coil futures were generally average, with a significant increase in July [92]. 3.4 Terminal Market Demand Analysis - **Real - estate Steel Demand**: Since 2016, real - estate policies have gone through four stages: strict regulation, stable transformation, risk resolution, and full - force market stabilization. In 2025, the decline in real - estate sales narrowed, but investment continued to decline, and steel demand for real - estate is expected to be negative in 2026 [101][102][111]. - **Infrastructure Steel Demand**: Since 2021, the growth rate of infrastructure investment (excluding electricity) has continued to decline. In 2025, it decreased by 2.2% year - on - year. The growth of infrastructure investment depends on the issuance of special bonds [112]. - **Manufacturing Steel Demand**: Since 2021, the prosperity of the manufacturing industry has declined. In 2025, the investment growth rate slowed down, but it was still better than that of real - estate and infrastructure. The steel demand in the automotive, construction machinery, and home appliance industries showed different trends [115]. - **Steel Exports**: In 2025, China's steel exports maintained strong resilience. The export volume reached a record high, but the growth rate slowed down in the later stage. In 2026, steel exports are expected to remain at a high level [127][129]. 3.5 Steel Market Supply Analysis - **Crude Steel Supply**: Since 2021, China's crude steel output has declined. In 2025, the crude steel output was 961 million tons, a year - on - year decrease of 4.4%. In 2026, it is expected to continue to be below 1 billion tons, with a slight year - on - year decline [134][137]. - **Pig Iron Supply**: In recent years, the growth rate of pig iron output has been lower than that of crude steel, mainly due to the development of short - process steel - making. In 2026, pig iron output is expected to continue to decline, but the decline may be smaller than that of crude steel [138][144]. 3.6 Iron Ore Market Supply Analysis - **New Iron Ore Production Capacity**: In the next five years, the four major iron ore mines are expected to add a total of 200 million tons of new production capacity. In 2025, Vale is expected to add 40 million tons of new production capacity, and FMG is expected to add 22 million tons [147][150]. - **Shipping Targets of the Four Major Mines**: The shipping/target output of the four major mines has generally been increasing in recent years. In 2026, the guidance targets of the mines are expected to move up further [151]. - **China's Iron Ore Imports**: China's iron ore import dependence remains above 80%. In 2025, the import volume was 1.259 billion tons, a year - on - year increase of 1.8%. In 2026, the import volume is expected to remain at a high level, but with low growth [160][162]. - **Domestic Iron Ore Supply**: In 2025, China's domestic iron ore output decreased to less than 1 billion tons, a year - on - year decrease of 2.8%. In 2026, the domestic iron ore supply is expected to be released slowly [166]. 3.7 Steel and Iron Ore Market Inventory Analysis - **Steel Market Inventory**: In 2025, the inventory of rebar was relatively low, and it started to accumulate in the National Day period. The inventory of hot - rolled coil was relatively high, and it showed a significant accumulation trend after the National Day [168][170]. - **Iron Ore Market Inventory**: In 2025, the steel - mill inventory of imported iron ore was continuously low. The port iron ore inventory decreased in the first half of the year and increased in the second half, but it was still lower than that in 2024. High port inventory will suppress the market trend in 2026, especially in the first half [175]. 3.8 Forecast of Steel and Iron Ore Supply - Demand Balance Sheets - **Steel Supply - Demand Balance**: In the future, the output of crude steel, pig iron, and steel products will have low growth or negative growth. In 2026, domestic steel demand is expected to improve slightly, and exports will remain at a high level but with a low growth rate [177][180]. - **Iron Ore Supply - Demand Balance**: In 2025, the global iron ore market was in oversupply, and the price was in a downward trend. In 2026, the global iron ore supply will continue to increase, and demand lacks growth points [181]. 3.9 Futures Hedging Cases of Steel and Iron Ore Enterprises - **Rebar Futures Hedging**: A medium - sized construction company successfully hedged the price increase risk of rebar procurement through futures hedging in 2025, achieving the goal of locking in procurement costs [187][190]. - **Iron Ore Futures Hedging**: A steel - processing enterprise successfully hedged the price increase risk of iron ore procurement through futures hedging in 2025, achieving the goal of locking in raw material costs [191]. 3.10 Technical Analysis and Outlook of Futures Prices - **Seasonal Analysis**: Historically, rebar futures perform well in January and December, and are likely to decline in August. Hot - rolled coil futures perform well in January, June, and December, and are likely to decline in August and September. Iron ore futures perform well in January, November, and December, and are likely to decline in August [192][193][197]. - **Technical Analysis**: From the monthly chart of the main rebar contract, the rebar is in a downward channel. The main hot - rolled coil contract is also in a downward trend. The main iron ore contract fluctuates in a wide range [199][201][206]. 3.11 Option Analysis and Strategy Recommendations - For steel products in 2026, considering the seasonal characteristics, it is recommended to buy call options at low prices before the peak season, and buy put options at high crude - steel output and low - demand seasons. When the supply - demand contradiction is not prominent, the double - buying strategy is recommended [207]. - For iron ore, when the hot - metal output is above 2.4 million tons, it is advisable to buy put options. In a volatile market, the double - buying strategy can be considered [211]. 3.12 Industry Enterprise Research and 2026 Outlook - Different industry experts have different views on the 2026 steel and iron ore market. Some believe that the steel price will fluctuate around the average cost line, and the iron ore supply will be relatively loose; others believe that the steel price center may stop moving down, but the steel - mill profit may shrink [212]. 3.13 Summary of the Full Text and 2026 Operation Suggestions - **Summary**: In 2026, the macro - economy is expected to stabilize. The domestic demand for steel lacks long - term growth points, and the export growth rate will slow down. The crude steel output will decline slightly. The rebar and hot - rolled coil prices are expected to fluctuate widely, and the iron ore price will also fluctuate in a wide range [215][216]. - **Operation Suggestions**: For rebar and hot - rolled coil, it is recommended to conduct band trading in 2026. Pay attention to the phased trading opportunities of the hot - rolled coil - to - rebar spread. For options, buy call options at low prices before the peak season and buy put options at high - output and low - demand seasons. For iron ore, suppliers can consider selling for hedging, and steel mills can maintain a low - inventory strategy. Pay attention to the opportunity of selling the rebar - to - iron - ore ratio [217].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The GDP target was lowered to 4.5 - 5% in 2026, similar to the GDP target cut in 2016, aiming at "reducing supply + increasing prices" [3]. - "Anti - involution" + "dual - carbon leadership" = "Supply - side structural reform 2.0", with measures to reduce supply and the goal to increase prices [4]. - The core expectation for 2026 - 2027 is "improved corporate profitability and a resurgence of consumption upgrading" [6]. - In the equity market, it is recommended to narrow the scope of the technology sector to technology stocks with performance. Non - technology sectors such as non - ferrous metals and chemicals are expected to rise, and large - finance and large - consumption sectors may reverse, with related convertible bonds expected to achieve excess returns [7]. - The bond market is expected to emerge from the low - interest - rate era, and the 10 - year Treasury bond yield is expected to return to the 2 - 3% range, with a central level of 2.5% [8]. Summary by Related Catalogs 1. Content in the Government Work Report Related to "Reducing Supply" - The government pointed out "strong supply" issues since December 2025, different from previous years [4][14]. - The work deployment includes "continuously expanding domestic demand and optimizing supply", which actually means "eliminating overcapacity" [4][14]. - The inflation target aims to improve the general supply - demand relationship, including supply - side measures [4]. - The anti - involution measures now prioritize capacity control [4][15]. - The dual - carbon part involves actions to improve quality, reduce costs and carbon emissions in key industries and accelerate the elimination of backward production capacity [4][16]. 2. "Optimizing Supply" Needs to Be Coordinated with the "GDP Target Downgrade" - Since GDP is calculated by the production method, optimizing supply will reduce production to some extent, leading to a decline in GDP growth. Similar to 2016 - 2017, the GDP target was also lowered in 2026 [5][18]. 3. Logic of Supply - side Structural Reform - The goal of supply - side structural reform is to "focus on improving the quality and efficiency of development", and the 2026 policy orientation of "seeking progress while maintaining stability and improving quality and efficiency" is similar [19]. 4. Effects of Supply - side Structural Reform from 2016 - 2017 - The effects of supply - side structural reform from 2016 - 2017 were: rising prices → improved corporate profitability → increased household income → consumption upgrading [21]. - The PPI fixed - base index can more accurately reflect the price trend, and since September 2025, it has been on an upward trend [21][23]. - There is a strong correlation between price levels and corporate profitability, and the median ROE of non - financial companies in the Wind All - A Index rebounded slightly in Q3 2025 [22]. - Since July 2025, China's prices have been rising, and it is expected that prices will enter an accelerated upward trend in 2026, leading to "improved corporate profitability and a resurgence of consumption upgrading" [26]. 5. Convertible Bond Market: The Direction of Prices and Corporate Profitability Determines the Style of the Convertible Bond Market - Although the equity market bull market since September 2024 is similar to the 2013 - 2015 bull market in appearance, the key factors are the directions of prices and corporate profitability [7][27]. - In 2013 - 2015 and 2024 - H1 2025, prices and corporate profitability were both declining. In 2016, as prices and corporate profitability rose, the stock market style shifted. It is expected that a similar change will occur in 2026 [27]. - In the equity market, it is recommended to focus on technology stocks with performance, and non - technology sectors such as non - ferrous metals and chemicals are expected to rise. Large - finance and large - consumption sectors may reverse, and related convertible bonds may achieve excess returns [7][27]. 6. Bond Market Viewpoint: The Bond Market Is Expected to Emerge from the Low - Interest - Rate Era - Bond yields are determined by the direction of prices (or price expectations) and the direction of capital interest rates (the central bank's attitude) [8][28]. - Historically, the directions of prices and capital interest rates often converge, but there are also some deviations. In such cases, the bond market follows the central bank's attitude [28]. - In H1 2026, capital interest rates may remain stable, short - term yields may stay low, while prices will rise more significantly, and long - term bond yields may trend upward [28]. - If the 12 - month average of PPI month - on - month can be maintained at around 0.2%, the year - on - year PPI will rise above 2%, and the 10 - year Treasury bond yield is expected to return to the 2 - 3% range, with a central level of 2.5% [29][30].

Core Viewpoint - The article discusses the Chinese government's economic policy goals for 2025, particularly focusing on maintaining a stable Consumer Price Index (CPI) growth rate of around 2% to improve the economic conditions for residents, businesses, and government finances [1][2]. Group 1: Economic Policy Goals - The government aims to guide a moderate recovery in prices to improve the economic situation for residents, businesses, and government finances [1]. - The CPI is expected to stabilize, with a notable narrowing of the Producer Price Index (PPI) decline, indicating an overall improvement in price momentum [1][2]. - The government emphasizes the importance of managing total demand and supply relationships to achieve the price growth target [2][3]. Group 2: Mechanisms for Achieving Goals - The approach to achieving the price growth target includes improving total supply-demand relationships and leveraging monetary policy for overall management rather than micro-level interventions [2][3]. - A comprehensive policy package is required, including proactive macroeconomic policies to expand domestic demand, boost consumption, and increase effective investment [3]. - Structural reforms on the supply side are necessary, particularly in addressing issues like "involution" through capacity control and quality standards [3]. Group 3: Consumer and Business Impact - While lower prices are generally favorable for consumers, consistently low prices can lead to reduced business sales, decreased investment, and increased employment pressure [2][3]. - The government aims to stabilize the prices of essential consumer goods while promoting a reasonable and moderate increase in consumption prices [3]. - Efforts will also focus on stabilizing asset prices and ensuring the healthy development of capital and real estate markets to facilitate smoother investment and consumption behaviors [3].