Macro Strategy - The report highlights that export control measures on key metals have become a crucial advantage for China in the context of major power competition, particularly against the US and EU [8][9] - China's leading position in key metals is attributed to its resource advantages and a complete industrial system, which is difficult for developed economies to replicate in the short term [8] Fixed Income - The bond market is expected to face challenges in 2026, with less likelihood of a one-sided decline in interest rates as seen from 2022 to 2024, suggesting a need for a more flexible trading strategy [10] - The report notes that the 10-year government bond yield increased slightly to 1.8425% during the week, reflecting market reactions to policy announcements [10] Industry Analysis Minshi Group (敏实集团) - Minshi Group is a leading global supplier of automotive exterior and structural parts, benefiting from the acceleration of electric vehicle adoption in Europe, particularly in the battery box business [22][24] - The company is expanding into humanoid robotics and liquid cooling for servers, which are expected to open new growth opportunities [22][24] - Profit forecasts for Minshi Group indicate net profits of 2.753 billion, 3.257 billion, and 3.878 billion yuan for 2025-2027, with corresponding EPS of 2.34, 2.76, and 3.29 yuan, and P/E ratios of 11.91, 10.07, and 8.46 respectively [22] Zhongwei Company (中微公司) - Zhongwei Company plans to acquire Hangzhou Zhonggui to enhance its capabilities in CMP equipment, which is crucial for semiconductor manufacturing [7] - The acquisition aims to strengthen Zhongwei's competitiveness in complete process solutions, complementing its existing dry process equipment [7] - Profit forecasts for Zhongwei Company remain at 2.44 billion, 3.41 billion, and 4.46 billion yuan for 2025-2027, with dynamic P/E ratios of 70, 50, and 38 respectively [7]

Group 1: Key Metals Overview - China has strengthened export controls on key metals, becoming a crucial bargaining chip in geopolitical tensions with the US and EU amid rising global trade uncertainties[1] - The US Geological Survey (USGS) 2024 data indicates that China leads in 30 out of 44 key minerals, highlighting its dominant position in the global supply chain[1] - China's rare earth reserves account for approximately 48% of global totals, with the US holding only 4.3%[8] Group 2: Specific Metals and Their Importance - China's production of rare earths is projected to reach 270,000 tons in 2024, representing about 69.2% of global output[8] - China holds around 68% of the world's gallium reserves, with a production capacity that significantly influences global technology sectors, including semiconductors and AI chips[15] - In 2024, China's antimony reserves are estimated at 670,000 tons, making up about 29.7% of global reserves, while its production is expected to be around 60% of the global total[22] Group 3: Strategic Advantages and Implications - China's comprehensive industrial system, which includes talent, technology, and advanced production capabilities, underpins its leading position in key metals[26] - The monopolistic control over processing technologies for key metals allows China to significantly influence global technological development paths[26] - The strategic value of key metals is expected to increase with the growth of new energy and AI industries, necessitating continued innovation and international cooperation from China[27] Group 4: Risks and Challenges - Potential changes in export control measures for key metals could exceed expectations, impacting global supply chains[28] - Increased geopolitical complexities may disrupt the supply of key metals, posing risks to China's industrial recovery[28] - The pace of economic policy implementation may fall short of expectations, affecting industrial production in China[28]