1. Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. 2. Core Viewpoints of the Report - This week, the bond market showed no obvious trend. The government work report met market expectations, and the hedging sentiment and inflation - rising expectations brought by the US - Iran conflict counteracted each other, keeping bond yields stable. It is expected that the 10 - year Treasury bond yield will remain around 1.8% until there is a clear signal of price recovery [1][13]. - The strong performance of the US economic data, including the significant rebound of the February ISM manufacturing PMI and the decline in the January unemployment rate, challenges the market's expectation of a sharp economic slowdown. The market's expectation of the Fed's short - term interest rate cut remains cautious, and US Treasury yields may face upward pressure [14][17]. 3. Summary by Relevant Catalogs 3.1 One - Week Viewpoint 3.1.1 Analysis of the Trend of Treasury Bond Yields - From February 28th to March 6th, the yield of the 10 - year Treasury bond active bond 250016 decreased by 0.2bp from 1.79% to 1.788%. During the week, the yield fluctuated slightly due to factors such as market sentiment, overseas events, and policy announcements [1][9]. 3.1.2 Impact of the Government Work Report - The quantitative indicators in the government work report, such as the GDP growth target of 4.5% - 5% and the CPI increase target of 2% in 2026, met market expectations. The deficit rate of 4% and local government bonds of 4.4 trillion yuan remained the same as in 2025, with an additional 300 billion yuan of policy - based financial instruments deployed earlier. The monetary policy continued the moderately loose tone, hinting at "precision drip - irrigation" [13]. 3.1.3 Impact of the US Economic Data - The US February ISM manufacturing PMI rebounded significantly to 52.6, much higher than the expected 48.5, indicating the acceleration of manufacturing expansion. The January unemployment rate decreased to 4.3%, and non - farm employment increased moderately, showing a stable labor market. This data combination weakens the market's urgency for the Fed to cut interest rates in the short term, and US Treasury yields may face upward pressure [14][17]. 3.2 Domestic and Overseas Data Summary 3.2.1 Liquidity Tracking - In the open - market operations from March 2nd to March 6th, 2026, the total net investment was - 136.34 billion yuan. The money market interest rates showed certain fluctuations, and the issuance and yield changes of interest - rate bonds were also presented [28][30]. 3.2.2 Domestic and Overseas Macroeconomic Data Tracking - Steel prices showed mixed trends, and LME non - ferrous metal futures official prices generally declined. The prices of commodities such as coal, oil, and vegetables also had corresponding changes, and the prices of US Treasury bonds and some international financial products showed different trends [46][64]. 3.3 One - Week Review of Local Government Bonds 3.3.1 Primary Market Issuance Overview - In the primary market from March 2nd to March 6th, 2026, 30 local government bonds were issued, with a total issuance amount of 272.484 billion yuan, a repayment amount of 17.261 billion yuan, and a net financing amount of 255.224 billion yuan. Six provinces and cities issued local government bonds, and three provinces and cities issued local special refinancing special bonds for replacing hidden debts [74][83]. 3.3.2 Secondary Market Overview - The stock of local government bonds this week was 56.63 trillion yuan, with a trading volume of 62.328 billion yuan and a turnover rate of 1.10%. The top three provinces with active local government bond trading were Guangdong, Hunan, and Jiangsu, and the top three active trading terms were 30Y, 10Y, and 20Y [94]. 3.3.3 Local Government Bond Issuance Plan for This Month - The report presents the local government bond issuance plan for this month, including the planned issuance amounts of different provinces and cities on different dates [99]. 3.4 One - Week Review of the Credit Bond Market 3.4.1 Primary Market Issuance Overview - In the primary market this week, 338 credit bonds were issued, with a total issuance amount of 270.632 billion yuan, a total repayment amount of 173.435 billion yuan, and a net financing amount of 97.196 billion yuan. The net financing amount increased by 187.285 billion yuan compared with last week. Among them, the net financing amount of urban investment bonds was 24.248 billion yuan, and that of industrial bonds was 72.949 billion yuan [101]. 3.4.2 Issuance Interest Rates - The actual issuance interest rates of various bond types this week showed different changes. For example, the issuance interest rate of short - term financing increased by 8.36bp, and that of medium - term notes increased by 31.82bp [113]. 3.4.3 Secondary Market Transaction Overview - The trading volume of credit bonds in the secondary market this week was 603.531 billion yuan. The trading volume of different bond types and ratings varied, and the yields of various bonds showed a general downward trend [115]. 3.4.4 Credit Spreads - The credit spreads of short - term financing and medium - term notes showed a differentiated trend, while the credit spreads of enterprise bonds generally declined, and the credit spreads of urban investment bonds also showed a differentiated trend [122][127][132]. 3.4.5 Grade Spreads - The grade spreads of short - term financing and medium - term notes showed a differentiated trend, the grade spreads of enterprise bonds decreased overall, and the grade spreads of urban investment bonds showed a differentiated trend [137][140][144]. 3.4.6 Trading Activity - The report lists the top five most actively traded bonds of each bond type this week, and the industrial sector had the largest weekly trading volume of bonds [146][147]. 3.4.7 Issuer's Credit Rating Changes - The issuer of Kunming Urban Construction Investment and Development Co., Ltd. had its credit rating raised from AA to AA+ by United Credit Rating Co., Ltd. on March 6, 2026, with a stable outlook [152].

Report Industry Investment Rating - The report does not provide a specific industry investment rating [1][3] Core Viewpoints - The more flexible growth target may not change China's interest rate trend. In 2026, the economic growth target is set at 4.5% - 5%. Fiscal policy is more proactive, with an estimated increase of 11.89 trillion yuan in government debt, about 30 billion yuan more than in 2025. However, considering the base effect, the government debt growth rate may decline. If the social financing growth rate slows down, it is beneficial to interest - rate bonds. Meanwhile, the flexibility of monetary policy operations may increase, with possible 1 - 2 reserve requirement ratio cuts of 25BP each and 1 - 2 policy interest rate cuts of 10BP each. Overall, the benchmark interest rate of the bond market in 2026 is likely to fluctuate within a range, and the 10 - year Treasury bond yield may mainly fluctuate between 1.6% - 1.9% [3] - The escalation of the Middle East situation and shipping safety issues disrupt inflation expectations. The attacks on ships in the Strait of Hormuz on March 6 led to a rapid increase in international oil prices, which affects US inflation expectations and the US Treasury market. However, from a medium - term perspective, the current Middle East situation is likely to have a pulse - like impact [3] Summary by Directory High - frequency Data Scan - This year, the growth rate of government debt may slow down relatively, but the economic growth target is more flexible, with more emphasis on the price level, and the flexibility of monetary policy may also be higher [1] Impact of the Middle East Situation - The attacks on ships in the Strait of Hormuz on March 6 led to a rapid increase in international oil prices. In January, energy CPI was the only item among the three major components of US CPI that decreased year - on - year, suppressing inflation. Rising oil prices will affect US inflation expectations and the US Treasury market. From a medium - term perspective, the current Middle East situation is likely to have a pulse - like impact. If the conflict de - escalates, the risk of further escalation may decrease [3] Impact of the Growth Target on Interest Rates - The 2026 economic growth target is set at 4.5% - 5%. Fiscal policy is more proactive, with an estimated increase of 11.89 trillion yuan in government debt, about 30 billion yuan more than in 2025. Considering the base effect, if the final increase in government debt is close to last year, the government debt growth rate may decline. If the social financing growth rate slows down, it is beneficial to interest - rate bonds. The flexibility of monetary policy operations may increase, with possible 1 - 2 reserve requirement ratio cuts of 25BP each and 1 - 2 policy interest rate cuts of 10BP each. In 2026, the benchmark interest rate of the bond market is likely to fluctuate within a range, and the 10 - year Treasury bond yield may mainly fluctuate between 1.6% - 1.9%. As of the week of March 7, the 10 - year Treasury bond yield was still below 1.8%. It is difficult for it to continue to decline before the interest rate cut is realized. The Middle East situation affects global inflation and China's imported inflation, so there should not be high expectations for the trend of interest - rate bonds in the near future [3] High - frequency Data Changes - This week, the average prices of Brent and WTI crude oil futures increased by 17.48% and 19.04% week - on - week respectively. The average price of LME copper spot decreased by 1.54% week - on - week, the copper - gold ratio decreased by 0.89% week - on - week, and the average price of aluminum spot increased by 6.59% week - on - week. The average wholesale price of pork decreased by 3.92% week - on - week, and the average wholesale price of 28 key - monitored vegetables decreased by 4.07% week - on - week. In the week of February 20, the price index of edible agricultural products increased by 4.61% year - on - year. The domestic cement price index decreased by 0.20% week - on - week, the Nanhua iron ore index increased by 1.36% week - on - week, the operating rate of coking enterprises with a capacity of over 2 million tons decreased by 0.90% week - on - week, the inventory index of rebar increased by 12.38% week - on - week, the price index of rebar decreased by 0.12% week - on - week, and the blast furnace operating rate of 247 domestic steel mills decreased by 3.18% week - on - week. In the week of February 20, the price index of means of production increased by 1.22% year - on - year [3]

Core Viewpoint - The 2026 Bond Market Annual Forum highlighted expectations for long-term interest rates to remain in a wide range of fluctuations, with potential for a gradual recovery in the macro economy if housing prices stabilize in the next two years [1] Group 1: Interest Rate Trends - Long-term interest rates are expected to experience wide fluctuations at the bottom [1] - A gradual upward trend in the interest rate center is anticipated, driven by a potential stabilization in housing prices and ongoing "anti-involution" efforts [1] Group 2: Investment Strategies - The market environment suggests avoiding unilateral duration strategies, favoring a focus on coupon strategies [1] - Recommendations include using short-duration credit bonds as a base, employing leverage strategies for interest rate arbitrage, and actively managing long-end volatility to enhance returns [1] - There is an emphasis on actively positioning in "fixed income +" opportunities [1]

Group 1 - The net inflow of funds into the government bond ETF (511010) exceeded 280 million yuan in the past 20 days, indicating the value of allocation in the bond market [1] - Historical trends suggest that interest rates are more likely to follow a trend rather than revert to the mean, with macroeconomic fundamentals showing a clear trend and monetary policy maintaining stability [1] - The economic environment in China has been in a bottoming phase since 2015, with weak investment from traditional sectors but strong government investment, resilient exports, and consumer spending hovering at the bottom [1] Group 2 - The December CPI showed a mild increase, while the PPI's year-on-year decline narrowed, indicating that the economic bottom structure in China is gradually being established [1] - The central bank's monetary policy report from the fourth quarter of last year revealed limited new content and did not signal an urgent need for interest rate cuts, reflecting a neutral to slightly optimistic view on the macro economy [1] - If the current macro environment persists, the probability of interest rates rising is greater than that of falling, and the cost-effectiveness of wave trading is not as high as it was 25 years ago [2]

Summary of Insurance Sector Conference Call Industry Overview - The insurance sector in A-shares and H-shares is currently undervalued, with significant room for valuation recovery, particularly in Hong Kong stocks, where low valuation companies have performed notably well [1][4][12]. - Concerns exist regarding the high equity asset allocation ratio of insurance companies, which reached 15.4% by the end of Q3 2025, leading to increased profit uncertainty and valuation pressure [1][5][6]. Key Insights and Arguments - The decline in interest rates has resulted in a decrease in net investment yield for insurance companies, estimated to drop by 30-50 basis points annually. To meet profit targets, companies have increased their equity asset allocation [1][7]. - The pre-sale performance for the 2026 "opening red" period has exceeded expectations, driven by demand for dividend insurance products and the bancassurance channel, indicating marginal improvement in new business [1][8]. - Low valuation stocks like Ping An and China Pacific have shown strong performance due to their significant valuation recovery potential, while New China Life outperformed them earlier due to its lower valuation characteristics [1][9][11]. Valuation and Market Trends - A-shares and H-shares insurance companies exhibit interesting valuation phenomena, with the lowest valued companies in Hong Kong seeing the most significant price increases, indicating a clear valuation recovery trend [4]. - The average valuation recovery potential in A-shares is estimated at over 25%, while Hong Kong stocks have even greater potential based on current 10-year government bond yield assumptions [12]. Investment Opportunities - Current investment opportunities in the insurance sector are primarily focused on valuation recovery rather than short-term growth from specific companies. The core issue is the trend in interest rates, which directly impacts valuations [13]. - Recommended stocks include Ping An and China Pacific in A-shares, and China Life in H-shares, as they are expected to benefit from rising prices and interest rates, along with having substantial valuation recovery potential [2][14][17]. Future Outlook - The improvement in cash flow certainty for insurance companies is anticipated as the speed of decline in net investment yield is slower than that of liability costs. However, this external momentum will require time to manifest [16]. - The overall recommendation emphasizes the potential of low valuation insurance stocks that can benefit from the anticipated changes in the economic environment and cash flow certainty [18].

Group 1 - The Deputy Chief Cabinet Secretary of Japan, Aoki Kazuhiko, refrained from commenting on the foreign exchange market [1] - Emphasized the importance of stable fluctuations in exchange rates reflecting the fundamentals [1] - Stated that there will be continued close monitoring of interest rate trends [1]