Group 1: Fiscal Policy Outlook - The fiscal policy in 2025 has shown significant expansion without improving fixed asset investment growth, which declined by 1.7% from January to October due to resources being allocated to debt repayment and other non-immediate projects [2] - For 2026, a more proactive fiscal policy is anticipated, with a projected fiscal deficit rate of around 4% and an increase in special bond issuance to approximately 5 trillion [2] Group 2: Aerospace and Defense Industry - The military's "14th Five-Year Plan" aims for modernization and includes a new structure of "4 military branches + 4 combat arms," focusing on mechanization, information technology, and intelligence [4] - In 2024, the revenue of 119 listed defense companies reached 419.43 billion, a 25.24% increase from 2020, with a compound annual growth rate of 5.79% [4] - By Q3 2025, these companies reported a total revenue of 280.18 billion, reflecting a year-on-year growth of 3.23% [4] Group 3: Internet Industry - NetEase - NetEase's game "Yanyun" launched overseas on November 15 and quickly reached the top 4 on Steam's bestseller list, with expected revenue contributions of 2 to 3 billion in 2026 [5] - The game "Dream of Fantasy" is projected to generate an additional 4 to 6 billion in revenue in 2025, indicating strong market performance [5] - Current valuations for NetEase remain low, with expectations for revenue and profit growth in the second half of the year [5] Group 4: Financial Services - Lexin - Lexin reported a net profit of 510 million in Q3 2025, a year-on-year increase of 68% [6] - The net profit take rate improved to 2.0%, attributed to reduced marketing expenses following a decrease in loan issuance [6] - The company is facing potential challenges in Q4 2025 due to tightening liquidity in the lending market, which may impact loan quality and profitability [6][7]

Core Viewpoint - Military stocks have generally risen, indicating a positive sentiment in the defense sector, driven by recent developments in naval capabilities and the urgency for domestic aircraft engine independence [1] Group 1: Stock Performance - Companies such as AVIC (02357) saw a rise of 4.58%, trading at HKD 4.34; China Shipbuilding Defense (00317) increased by 3.38%, trading at HKD 16.23; and Continental Aerospace Technology Holdings (00232) rose by 2.24%, trading at HKD 0.137 [1] Group 2: Industry Developments - A report from Dongfang Securities highlighted that three types of carrier-based aircraft have completed their first catapult takeoff and landing training, marking a milestone in China's naval strength and expanding the influence of military equipment [1] - The U.S. Treasury Secretary indicated that engines could become a significant bargaining chip in U.S.-China negotiations, emphasizing the urgent need for self-sufficiency in domestic aircraft engines [1] Group 3: Future Outlook - The military industry has stabilized in recent weeks, with the upcoming "14th Five-Year Plan" signaling the start of a new phase in equipment construction, focusing on domestic demand and military trade [1] - The second half of the year will require attention to the upward trend in domestic demand and positive developments in military trade, highlighting the sector's investment value [1]