1. Report Industry Investment Rating There is no information provided in the content about the industry investment rating. 2. Core Viewpoints of the Report - The Q4 government bond issuance plan has significant changes, and the probability of additional treasury bond issuance this year is low, while local bond issuance has its own characteristics and trends [2][3]. - The Q4 government bond issuance forecast shows that the net financing is expected to be around 2.4 trillion yuan, lower than the average level of the past five quarters, with the supply pressure in October concentrated in the second half of the month [5]. 3. Summary by Relevant Catalogs Q4 Treasury Bond Issuance Plan Highlights - The Q4 plan announced on September 30 by the Ministry of Finance has changes compared with the annual plan. Some maturity issuance dates in October are adjusted, and the 30 - year ultra - long special treasury bond cancellation of re - issuance is replaced by one re - issuance each of 50 - year and 20 - year bonds [2][9]. - After the new plan, the spread between 25 Te 6 and 25 Te 2 widened under selling pressure. The issuance scale of 25 Te 6 stopped at 247 billion yuan, and the spread rose from 9.5 BP on September 29 to 13.20 BP [2][10]. October Treasury Bond Volume Reduction: May Indicate Low Probability of Additional Treasury Bond Issuance This Year - The remaining quota for ordinary treasury bonds is about 1.06 trillion yuan, and the issuance of special treasury bonds has been completed [14]. - The single - issue scale of key - maturity coupon treasury bonds in October decreased to 130.6 billion yuan, indicating a low probability of additional issuance this year [3][14]. Local Bonds: Analysis of Remaining Quotas and Issuance Forms This Year Local Bond Stock Quota Issuance Progress - The remaining quota for new bonds is 83.09 billion yuan, including 12.83 billion yuan for new general bonds and 70.27 billion yuan for other new special bonds [21]. - The issuance of debt - resolution bonds has basically completed the stock quota. The 2 - trillion - yuan replacement bonds have issued 1.9924 trillion yuan, and the 800 - billion - yuan new special bonds for debt resolution have been fully issued [21]. How to View Local Bond Additional Issuance - The advance allocation of the 2026 new local government debt quota is a regular Q4 operation, and additional issuance needs to wait until next year. The potential advance - batch quota may be 312 billion yuan [22]. - The central government arranges 50 billion yuan from the local government debt balance quota to be allocated to local areas, corresponding to an additional issuance of 50 billion yuan in special refinancing bonds and new special bonds this year. Special refinancing bonds have started issuing next week [26]. - The probability of advancing the issuance of replacement bonds to this year may have decreased. The Ministry of Finance issued a 6 - trillion - yuan replacement bond quota to provinces in 2024, and additional approval is needed for early issuance [32]. Q4 Government Bond Issuance Forecast - The to - be - issued quota for Q4 government bonds may be 2.6 trillion yuan, and the remaining quota as of October 17 is about 2.4 trillion yuan [5][34]. - Local bond net financing in Q4 is expected to be around 1.2 trillion yuan, with October, November, and December at around 650 billion, 440 billion, and 80 billion yuan respectively [5][35]. - Treasury bond net financing in Q4 is expected to be around 1.2 trillion yuan, with October, November, and December at around 230 billion, 630 billion, and 340 billion yuan respectively [5][38]. - Government bond net financing in Q4 is expected to be around 2.4 trillion yuan, lower than the average of the past five quarters. The net financing in October, November, and December is around 890 billion, 1070 billion, and 420 billion yuan respectively. The supply pressure in October is concentrated in the second half of the month, and attention should be paid to the liquidity fluctuation risk [5][38].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In September, fiscal revenue slightly rebounded while fiscal expenditure continued to decline. The fourth - quarter bond supply pressure is limited [1][8]. - The increase in general budget revenue in September was mainly due to the rise in tax revenue growth and the expansion of the decline in non - tax revenue. Tax revenue such as income tax, VAT, and securities transaction stamp duty had high year - on - year growth rates. Government fund revenue turned slightly positive year - on - year [1][2][11]. - In terms of expenditure, the expenditure of the first - account (general public budget) increased slightly year - on - year, while that of the second - account (government funds) decreased significantly. Traditional infrastructure expenditure continued to contract, and social security expenditure maintained a high growth rate [3][19]. - Cumulatively, the fiscal revenue growth rate is close to the annual budget growth rate, and there is a divergence in the expenditure of the two accounts. The fourth - quarter government bond supply is relatively small even if the 500 billion yuan of remaining quota is issued [4][25][29]. Summary by Related Catalogs Fiscal Revenue - **General Situation of Fiscal Revenue**: In September, the year - on - year growth rate of broad fiscal revenue was 3.2%, up from the previous value of 0.3%. The general public budget revenue in September had a year - on - year growth of 2.6% (previous value: 2.0%), with tax revenue growing by 8.7% (previous value: 3.4%) and non - tax revenue dropping by 11.4% (previous value: - 3.8%) [1][8][11]. - **Tax Revenue**: In September, the year - on - year growth rate of tax revenue was 8.7%. Among the four major taxes, corporate income tax grew by 19.6% year - on - year, individual income tax by 16.7%, VAT by 7.6% (contributing the most to the month's tax revenue growth, up to 3.24%), and securities transaction stamp duty by 342.4%, driven by the high activity of the stock market [2][13][14]. - **Government Fund Revenue**: In September, the year - on - year growth rate of government fund revenue was 5.6% (previous value: - 5.7%), and the cumulative year - on - year growth rate was - 0.5%. There may be a need to boost the year - end government fund revenue [2][17]. Fiscal Expenditure - **General Situation of Fiscal Expenditure**: In September, the year - on - year growth rate of broad fiscal expenditure was 2.3%, down from the previous value of 6.0%. The general public budget expenditure had a year - on - year growth of 3.08% (previous value: 0.82%), and the government fund expenditure had a year - on - year growth of 0.4% (previous value: 19.8%) [1][3][8]. - **Expenditure Structure**: Traditional infrastructure expenditure continued to contract, with an overall year - on - year growth rate of - 1.2% (previous value: - 10.1%), showing significant internal differentiation. Expenditure on science and technology grew by 26.6% year - on - year, and social security expenditure by 8.8% [3][19]. Cumulative Fiscal Situation - **Revenue**: From January to September, the cumulative year - on - year growth rate of general public budget revenue was 0.5%, tax revenue was 0.7%, and non - tax revenue was - 0.4%. The fiscal revenue growth rate reached the initial budget (0.1%), but the improvement of the fiscal revenue structure fell short of expectations. The cumulative year - on - year growth rate of government fund revenue was - 0.5%, lower than the initial budget of 0.7% [4][25]. - **Expenditure**: From January to September, the fiscal expenditure growth rate was 3.1%, lower than the annual budget growth rate of 4.4%. The growth rate of government fund expenditure was 23.9%, slightly higher than the annual budget growth rate of 23.1%. The expenditure rhythm of the first - account was relatively slow, and the second - account had an early - stage expenditure boost, with limited space for further efforts from September to December [4][25]. Fourth - Quarter Government Bond Supply - The peak of government bond supply has passed. According to the annual budget, the remaining government bond supply in the fourth quarter is about 2 trillion yuan. Even if the 500 billion yuan of remaining quota is issued in the fourth quarter, the net financing of government bonds will still be significantly lower than the same period last year [4][29].

1. Report Industry Investment Rating - The report does not explicitly mention the industry investment rating. 2. Core Viewpoints of the Report - Currently, it is a good window for non - bank institutions to take long positions. They should maintain long - term durations and seize the bull market around the end of the quarter. It is expected that long - term bond yields will hit new lows around the end of the quarter, and the 10 - year Treasury bond yield is expected to fall to the 1.4% - 1.5% level in the third quarter [6][21]. 3. Summary by Related Content Bond Market Performance - This week, the bond market continued to strengthen in a volatile manner, with more significant declines in the yields of non - active varieties. The overnight rate remained around 1.4%, and R007 stayed within 1.6%. The yields of 10 - year and 30 - year Treasury bonds decreased by 0.4bps and 1.2bps to 1.64% and 1.84% respectively. The yields of other varieties declined more notably, such as the 1 - year certificate of deposit yield dropping by 3.3bps to 1.64%, and the yields of 3 - year and 5 - year AAA - secondary capital bonds falling by 2.7bps and 2.4bps to 1.81% and 1.91% last week [1][9]. Narrowing of Yield Spreads - Recently, non - active bonds or non - active varieties have outperformed active bonds or active varieties, with significant narrowing of relevant yield spreads. For example, the yield of the 50 - year Treasury bond dropped from 2.08% at the end of last month to 1.95% on June 20, a decrease of 12.3bps, and the yield spread between the 50 - year and 30 - year Treasury bonds narrowed by 6.4bps. The yield spread between 30 - year local government bonds and Treasury bonds also narrowed by 2.8bps this week, and the yield spread between 10 - year AAA medium - term notes and 10 - year Treasury bonds narrowed by 4.2bps to 41.4bps last week. The yield spread between non - active and active bonds also significantly narrowed, such as the spread between the 30 - year active bond (2500002.IB) and the second - active bond (2400006.IB) narrowing by 2.2bps this week. The narrowing is mainly due to two reasons: first, after the yields approach previous lows, key varieties receive more attention, and before key points are broken through, the market compresses non - active varieties and tenors; second, strong long - buying sentiment and improved liquidity of relevant varieties compress the premium of ultra - long bonds, which is most evident in the 50 - year Treasury bond [2][10]. Selling Pressure from Banks - If the market space is to be further expanded, active varieties need to break through key points, which may occur around the end of this quarter. The key force is banks, especially city and rural commercial banks. Due to the pressure of quarter - end indicator assessments such as average duration and liquidity indicators, as well as the need to realize floating profits when banks' profitability is insufficient, banks usually face significant bond - selling pressure at the quarter - end. Currently, small and medium - sized banks may face greater selling pressure than large - sized banks. On one hand, the central bank's care for liquidity and the significant decline in the liability costs of large - sized banks have alleviated their pressure; on the other hand, the profitability of small and medium - sized banks may be weaker than that of large - sized banks. In the first quarter, the year - on - year net profit growth rate of city commercial banks declined the most, at - 6.7%, while those of joint - stock banks and rural commercial banks were - 4.5% and - 2.0% respectively, and large - sized banks had a slight positive growth of 0.1%. Seasonally, small and medium - sized banks usually reduce their bond holdings in May or June, and this reduction is more obvious considering government bond supply. They will then increase their bond allocations in July and August [3][13]. Asset Shortage Situation - The current market is in an asset shortage situation. On one hand, the supply of government bonds is slowing down, and it is expected to slow down in the second half of the year. From the perspective of year - on - year increase, government bonds may enter a stage of year - on - year decrease in the third quarter. Due to the accelerated credit投放 in the previous period and the increase in real interest rates, the credit rhythm has also slowed down, as reflected by the year - on - year decrease in new credit in April and May of the second quarter. On the other hand, the supply of funds remains abundant, and the liability side of banks remains stable. The current capital price is significantly lower than the same period in previous years, and even when the quarter - end shock occurs, the funds are not significantly tightened. The liability side of small and medium - sized banks is stable, with a deposit growth rate of 7.7% in May, an increase from April, indicating that small and medium - sized banks are generally under - allocated in the context of asset shortage [4][16]. Future Bond - Buying Behavior of Banks - For banks, the bonds sold before the quarter - end may be bought back after the quarter - end. Small and medium - sized banks find it difficult to continuously sell bonds in the context of asset shortage. After the quarter - end indicator pressure eases, banks are more likely to buy back bonds. If not, the funds obtained from selling bonds will continue to exist in the form of excess reserves or short - term capital lending, which will lead to looser funds after the quarter - end, and the capital price may fall more than expected. The decline in short - term interest rates will lead to a steeper yield curve and increase the cost - effectiveness of long - term bonds. In a market where supply is lower than demand, the shift of small and medium - sized banks from large - scale selling to buying may lead to a further rapid strengthening of the market, and bond yields may experience a new downward trend [5][19].