1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The net financing amount of local government bonds in 2026 is expected to rise overall compared to 2025, with preliminary forecasts of approximately 7.28 trillion, 7.66 trillion, and 8.04 trillion yuan under conservative, neutral, and optimistic scenarios respectively [1][16]. - The issuance rhythm of replacement bonds in Q1 2026 is expected to remain front - loaded, and the issuance rhythm of new special bonds may be faster than that in 2025 [4][34]. - The net financing amount of local government bonds in January 2026 is expected to be 649.9 billion yuan, with the issuance rhythm likely to be faster year - on - year, and the supply pressure in the second half of January is relatively large [4][41]. 3. Summary by Relevant Catalogs 3.1 2026 Local Government Bond Net Supply Estimation - **New Bonds**: The issuance scale mainly depends on the budget deficit ratio determined by the National People's Congress and the Chinese People's Political Consultative Conference in March each year, the distribution of central and local fiscal deficits, and the new special bond quota. As of the end of 2025, there is still an estimated 1.16 trillion yuan of space between the local government debt limit and the balance. The preliminary forecasts of the new bond issuance scale in 2026 under conservative, neutral, and optimistic scenarios are approximately 5.43 trillion, 5.72 trillion, and 6.00 trillion yuan respectively [2][8][10]. - **Special Refinancing Bonds**: The quota is arranged as needed. Referring to the 2025 level, the preliminary forecasts of the special refinancing bond issuance scale in 2026 under conservative, neutral, and optimistic scenarios are approximately 2.3 trillion, 2.4 trillion, and 2.5 trillion yuan respectively [2][15]. - **Net Repayment of Matured Local Government Bonds**: From 2021 to 2025, the average refinancing ratio of matured local government bonds was about 87.4%. Based on this ratio, the net repayment scale of matured local government bonds in 2026 is estimated to be about 456.1 billion yuan [2][16]. 3.2 How to Anticipate the Rhythm of Local Government Bond Net Supply Early? - **One - week - ahead Forecast**: Relatively accurate local government bond net supply data can be obtained 5 working days before issuance. Provincial financial departments are required to disclose key information such as the issuance scale and term at least 5 working days before the issuance of new general bonds, new special bonds, and refinancing bonds [21]. - **Monthly 21st Forecast**: On the 21st of each month, a preliminary judgment on the next - month's ten - day supply can be made. However, in practice, there are differences in information disclosure timeliness, issuance plan adjustments, and deviations between actual execution and plans. Subsequent forecasts can be dynamically revised by combining information such as national debt supply, local government bond quarterly issuance plans, local government bond limits, and local government bond weekly issuance data [22][23][29]. 3.3 Q1 2026 and January 2026 Local Government Bond Net Supply Forecast - **Policy Review and Outlook**: In Q1 2025, replacement bonds were issued intensively, and the issuance progress of new special bonds was lower than expected. In Q1 2026, it is expected that replacement bonds will maintain a front - loaded issuance trend, and the issuance rhythm of new special bonds may be faster [30][34]. - **Q1 2026 Local Government Bond Issuance Forecast**: As of December 28, 2025, the planned issuance total for Q1 2026 was about 1.75 trillion yuan. Assuming the same ratio as in 2025Q1, the actual issuance in 2026Q1 is expected to be 1.79 trillion yuan, with a corresponding net financing amount of 1.12 trillion yuan. The issuance term in 2026Q1 has no obvious pattern due to a small sample size [35][38]. - **January 2026 Local Government Bond Net Supply Forecast**: The net financing amount of local government bonds in January 2026 is expected to be 649.9 billion yuan, a year - on - year increase of 173.8 billion yuan. The supply pressure in the second half of January is relatively large. The issuance rhythm in January 2026 is likely to be faster than in the same period of 2025 [41][43]. - **Summary**: The issuance rhythm of local government bonds in January 2026 is expected to be significantly faster year - on - year. The planned issuance scale in 2026Q1 has decreased significantly year - on - year, but this is mainly due to incomplete disclosure of provincial and municipal issuance plans, so the year - on - year change has limited reference value [48].