Report Overview The report is a macro monthly report from Hualian Futures, covering various aspects of the economy including foreign exchange, real estate, prices, trade, investment, and economic indicators in China and the US. 1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints - **Foreign Exchange**: After the Spring Festival, the RMB strengthened against the US dollar, driven by both external (Fed's rate - cut cycle and US policy uncertainty) and internal (resilient domestic economy and post - Spring Festival corporate settlement demand) factors. The central bank adjusted the foreign exchange risk reserve ratio to prevent rapid RMB appreciation [7]. - **Real Estate**: Shanghai introduced new real estate policies in February 2026, which are expected to help the Shanghai real estate market stabilize and recover first, leading the repair of first - tier cities [9]. - **Prices**: In January 2026, China's CPI showed a mild recovery and PPI continued to repair, with clear positive signals in core indicators [11]. - **Finance**: In January 2026, China's new social financing aggregate had an unexpected good start, with a credit structure characterized by strong consumption and weak mortgages, and an increase in M1 driving the activation of currency liquidity [13]. 3. Summary by Section 3.1 Monthly Viewpoint and Strategy - **Foreign Exchange**: The RMB exchange rate against the US dollar reached a new high. The RMB's appreciation was driven by external factors such as the Fed's rate - cut cycle and internal factors like the resilient domestic economy. The central bank adjusted the foreign exchange risk reserve ratio from 20% to 0 to balance the foreign exchange market [7]. - **Real Estate**: Shanghai issued new real estate policies in February 2026, including shortening the social security requirement for non - Shanghai residents to buy houses, increasing the provident fund loan limit, and relaxing the loan - set recognition. The national real estate market is still in an adjustment period, and Shanghai is expected to recover first [9]. - **Prices**: In January 2026, China's CPI increased by 0.2% year - on - year, with food prices down 0.7% and non - food prices up 0.4%. PPI decreased by 1.4% year - on - year, with the decline narrowing [11]. - **Finance**: In January 2026, China's new social financing aggregate was 7.22 trillion yuan, with government bonds being the main driving force. Credit data showed a structural differentiation, with strong consumer loans and weak mortgage loans. M1 - M2 scissors - difference narrowed, indicating more active currency liquidity [13]. 3.2 National Economic Accounting - **GDP Growth**: From 2023 - 2025, the GDP quarterly year - on - year growth rate showed fluctuations. Different industries had different growth rates, with the information transmission, software and information technology services and the leasing and business services industries showing relatively high growth [16]. - **Contribution of Three Industries**: The contributions of the three industries to the constant - price GDP quarterly year - on - year growth and the GDP quarterly year - on - year growth rate varied over time [17]. 3.3 Industry Data - **Industry Growth**: The growth rate of the industrial added value of different industries showed differences. For example, the automobile manufacturing, railway, ship, aerospace and other transportation equipment manufacturing industries had relatively high growth rates [30][34]. - **Industrial Output**: The output of major industrial products such as crude oil, coal, and steel also showed certain trends. For instance, the output of crude oil and steel fluctuated over time [36]. - **Electricity Consumption**: In November 2025, China's total social electricity consumption was 835.6 billion kWh, a year - on - year increase of 6.2%. The growth rate of high - energy - consuming industries in the secondary industry slowed down, while high - tech and equipment manufacturing maintained a high growth rate of 6% - 10% [45]. - **Industrial Profits**: In 2025, the total profit of industrial enterprises above the designated size was 7.3982 trillion yuan, a year - on - year increase of 0.6%. Different industries had different profit situations, with the ferrous metal smelting and rolling processing industry having a significant increase in profit [49]. - **Industrial Inventory**: At the end of 2025, the accounts receivable of industrial enterprises above the designated size was 27.43 trillion yuan, a year - on - year increase of 4.7%. The finished - product inventory was 6.73 trillion yuan, a year - on - year increase of 3.9%, and the actual inventory growth rate after excluding price factors was about 5.8% [59]. 3.4 Price Index - **CPI**: In January 2026, China's CPI increased by 0.2% year - on - year. Food prices decreased by 0.7%, and non - food prices increased by 0.4%. Different CPI sub - items had different price changes [66]. - **PPI**: In January 2026, China's PPI decreased by 1.4% year - on - year, with the decline narrowing. The prices of production materials and living materials both showed certain changes [74]. 3.5 Real Estate - **New Residential Prices**: In January 2026, the sales prices of new commercial residential buildings in first - tier cities decreased by 2.1% year - on - year, with Shanghai being an exception with a 4.2% increase. Second - and third - tier cities also saw price declines [85]. - **Second - hand Residential Prices**: In January 2026, the sales prices of second - hand residential buildings in first - tier cities decreased by 7.6% year - on - year. Second - and third - tier cities also had price declines [89]. 3.6 Foreign Trade and Investment - **Import and Export**: In December 2025, China's total import and export value was 601.42 billion US dollars, a year - on - year increase of 6.24%. Exports were 357.78 billion US dollars, a year - on - year increase of 6.6%, and imports were 243.64 billion US dollars, a year - on - year increase of 5.7% [99]. - **Key Commodity Exports and Imports**: The export and import amounts of key commodities such as agricultural products, industrial raw materials, and mechanical and electrical products showed different trends over time [106][107]. 3.7 Fixed - Asset Investment - **Total Fixed - Asset Investment**: In 2025, the national fixed - asset investment (excluding rural households) was 48.5186 trillion yuan, a year - on - year decrease of 3.8%. Different industries had different investment growth rates, with the secondary industry having a 2.5% increase and the third industry having a 7.4% decrease [119]. - **Real Estate Investment**: In 2025, the national real estate development investment was 8.2788 trillion yuan, a year - on - year decrease of 17.2%. The construction area, new construction area, completion area, sales area, and sales amount of real estate all showed declines [127][131][135]. 3.8 Domestic Trade - **Retail Sales**: The cumulative year - on - year growth rates of service retail sales and social consumer goods retail sales showed certain trends. The retail sales of different industries also had different growth rates [163][170]. 3.9 Transportation - **Freight and Passenger Transport**: The transportation volumes of different freight and passenger transport modes showed different trends. The traffic flow of subways in nine major cities and the investment in transportation fixed assets also had certain characteristics [173][174][176]. 3.10 Banking and Currency - **Social Financing**: The new social financing scale and its components showed different trends over time. The stock of social financing scale and its components also had different year - on - year growth rates [184][185]. - **Credit**: The new RMB loans and their components, including short - term and long - term loans, household loans, and enterprise loans, showed different trends [194]. - **Monetary Liquidity**: In January, the M1 growth rate declined significantly, and the M2 growth rate increased slightly. The M2 - M1 scissors - difference expanded to 4.7%, indicating a slowdown in capital activation [200]. - **Interest Rates and Exchange Rates**: The central bank emphasized reasonable interest rate control to promote a stable decline in the financing cost of the real economy. The RMB exchange rate against the US dollar and the US dollar index showed certain trends, and the foreign exchange and gold reserves increased [210][221]. 3.11 Fiscal and Employment - **Fiscal Revenue and Expenditure**: The general public fiscal revenue and expenditure of the central and local governments showed different trends. Different types of fiscal revenues and expenditures also had different changes [236][237]. - **Employment**: The number of newly - added urban jobs and the urban survey unemployment rate showed certain trends [241]. 3.12 Business Surveys - **Global Manufacturing PMI**: The global manufacturing PMI showed certain fluctuations from 2025 - 2026. Different countries and regions had different PMI values [246]. - **China Manufacturing PMI**: In January 2026, China's manufacturing PMI was 49.3%, a seasonal decline of 0.8 percentage points. Different sub - indicators such as production, new orders, and prices showed different trends [249]. - **China Non - Manufacturing PMI**: In January 2026, China's non - manufacturing business activity index was 49.4%, a decline of 0.8 percentage points. The construction and service industries both saw a decline in business activity, with different degrees of industry differentiation [257]. 3.13 US Macroeconomy - **GDP Growth**: The US real GDP环比折年率 showed fluctuations from 2023 - 2025. Different components such as private consumption, investment, and government spending had different contributions to GDP growth [264]. - **Employment**: The number of newly - added non - farm jobs and the unemployment rate in the US showed certain trends [265]. - **Treasury Yields**: The yields of US Treasury bonds of different maturities and the yield curve inversion degree showed certain trends [272]. - **Retail Sales**: The retail and food service sales in the US showed different year - on - year growth rates for different categories [273]. - **Federal Reserve**: The asset structure of the Federal Reserve and the federal funds rate showed certain trends. The reverse repurchase amount on the liability side of the Federal Reserve decreased significantly this year [274][277].

Core Viewpoint - Hong Kong real estate stocks experienced moderate gains following the announcement of an increase in stamp duty on residential property transactions exceeding HKD 100 million from 4.25% to 6.5%, which is expected to generate an additional HKD 1 billion in annual revenue for the government [1] Group 1: Market Reaction - New World Development (00016) rose by 2.49% to HKD 139.8, while Cheung Kong Property (01113) increased by 1.93% to HKD 47.56 [1] - Henderson Land Development (00012) saw a rise of 0.58% to HKD 34.78, and Wharf Real Estate Investment (01997) gained 0.54% to HKD 26.22 [1] Group 2: Government Policy Impact - The increase in stamp duty will affect approximately 0.3% of residential property transactions, with the measure expected to take effect retroactively after the legislative amendment is passed [1] - HSBC Research noted that following the announcement, some developers' stock prices fell by about 2% on the previous day, but this correction is viewed as healthy given the strong performance of the sector year-to-date [1] Group 3: Future Outlook - HSBC believes the impact of the stamp duty increase will be limited due to its small share of total market transaction volume [1] - The intention behind the policy is likely to increase fiscal revenue rather than suppress the overall residential market, with expectations that the policy stance will continue to favor the real estate market [1] - Real estate investment trusts may encounter new opportunities, with HSBC favoring New World Development, Henderson Land, and Sun Hung Kai Properties, all rated as "buy" [1]

Investment Rating - The industry maintains a "Buy" rating [8] Core Insights - The real estate market is entering a traditional off-season, with expectations for increased policy support [5] - In major cities, the transaction volume for new homes has seen a significant decline compared to second-hand homes, indicating weaker demand [4] - The market anticipates that other first-tier cities will follow Beijing's lead in optimizing purchase restrictions after observing declining transaction data [5] Summary by Sections Core Cities - Beijing: Second-hand home daily transactions averaged 558 units (up 16.3% year-on-year), while new home transactions averaged 80 units (down 45% year-on-year) [2] - Shanghai: Second-hand home daily transactions averaged 609 units (up 10% year-on-year), with new home transactions remaining flat [2] - Shenzhen: Second-hand home daily transactions averaged 201 units (up 68% year-on-year), while new home transactions dropped 57% [3] National Key Cities - New home transaction volume in 30 major cities decreased by 38% year-on-year, while second-hand home transactions increased by 9.2% year-on-year, primarily due to a low base effect from the previous year [4] Investment Recommendations - The report suggests focusing on leading real estate companies with land reserves in core cities and high-end improvement products, such as Poly Developments [5] - It also highlights the potential for valuation recovery in leading intermediary firms as the proportion of second-hand home transactions continues to rise, citing companies like I Love My Home [5]

Core Viewpoint - The article discusses the implications of a recent statement from a central media outlet regarding the real estate market in 2026, suggesting that significant policy measures may be implemented to revive the market, but the actual impact may be limited and focused on restoring confidence rather than immediate recovery [2][5][6]. Policy Analysis - The phrase "should be fully released" indicates a commitment to provide comprehensive policy support, emphasizing the importance of the real estate sector as a foundational industry for the economy [5]. - Since September 2024, various policies have been enacted, including the cancellation of restrictions and reductions in down payment ratios, with mortgage rates dropping below 3.5%, marking historical lows [5]. - The remaining significant restrictions are primarily in first-tier cities, indicating that while many tools have been utilized, the most impactful measures are yet to be fully implemented [5][6]. Market Sentiment - The central media's statement aims to boost market confidence, which has been severely affected by previous market fluctuations, leading to a lack of willingness among buyers to purchase homes [6]. - Data shows a significant decline in long-term loans for housing, with a year-on-year decrease exceeding 200 billion, reflecting a drop in consumer confidence and willingness to leverage for home purchases [6]. Future Predictions - The expectation for 2026 is that drastic measures, such as fully lifting purchase restrictions in first-tier cities, are unlikely due to potential negative long-term consequences for lower-tier cities [7]. - The approach is expected to be gradual, focusing on easing restrictions in suburban areas and prioritizing certain demographics for home purchasing [7][8]. Economic Context - The core issue affecting the real estate market is not the lack of policy measures but rather the financial insecurity of consumers, leading to a high savings rate of 35% in 2025, the highest in five years [11]. - The government is focusing on increasing income for urban and rural residents as a critical strategy to stimulate consumer spending and confidence in the housing market [11]. Conclusion - The article concludes that while policy announcements can create short-term excitement, genuine recovery in the real estate market will depend on consumers feeling financially secure enough to spend [11].

Industry Analysis: Northeast Real Estate and Construction Key Points Industry Overview - The real estate sector experienced a decline in sales, with total sales area down by 8.7% year-on-year and sales amount down by 12.6% in 2025 [1] - Real estate investment saw a significant drop of 17.2% year-on-year, with new construction and completions decreasing by 20.4% and 18.1% respectively [2] - Funding for real estate also declined, with total funds available down by 13.4% year-on-year and domestic loans decreasing by 7.3% [3] - As of December 2025, the price of second-hand homes in 70 large and medium-sized cities continued to decline, with a decrease of 0.7%, indicating a need for improved market confidence [4] Policy Insights - A recent article in "Qiushi" emphasized the financial attributes of real estate, suggesting that policies should be implemented comprehensively to restore market expectations [5] - The article indicates that more supportive policies for the real estate market are anticipated in 2026, which could provide significant relief [6] Investment Recommendations - The fourth quarter of 2025 showed a substantial year-on-year decline due to high base effects, but the emphasis on the financial role of real estate suggests its irreplaceable macro and microeconomic functions [7] - The expectation of stronger policy support in 2026 is seen as a positive indicator for the market [8]

Macroeconomic Overview - December PMI showed a seasonal rebound, indicating expectations for policy support in the coming year, particularly in the construction sector[2] - December CPI and PPI were 0.8% and -1.9% year-on-year, respectively, both exceeding expectations, with a month-on-month increase of 0.2%[2] - The first batch of special government bonds for 2026, amounting to 62.5 billion yuan, was issued earlier than in 2025, supporting consumer policies[2] Financial Market Performance - From December 29, 2025, to January 9, 2026, the equity market saw a significant increase, with daily trading volume averaging 25,806 billion yuan, up 6,154 billion yuan from the previous period[2] - The Shanghai Composite Index rose by 3.95%, while the Shenzhen Component Index increased by 3.79%[2] Fixed Income Market - Bond yields rose overall during the same period, with the 10-year government bond yield increasing by 5.1 basis points[2] - The central bank's net MLF injection of 100 billion yuan contributed to a stable and loose funding environment[2] International Market Dynamics - U.S. non-farm payrolls increased by 50,000 in December, below the expected 60,000, while the unemployment rate fell to 4.4%[2] - The U.S. dollar index rose by 1.12%, and oil prices increased due to geopolitical tensions, particularly regarding Venezuela[2] Risk Factors - Potential risks include weaker-than-expected fundamentals, slower-than-anticipated reserve requirement ratio cuts, and renewed inflation pressures in the U.S.[2]

Group 1 - The real estate market in November continued to show a differentiated trend, with new home prices rising month-on-month while the second-hand housing market remained in a price-for-volume exchange phase [1] - The average price of new residential properties in 100 cities across the country was 17,036 yuan per square meter, a month-on-month increase of 0.37% and a year-on-year increase of 2.68%. In contrast, the average price of second-hand residential properties was 13,143 yuan per square meter, showing a month-on-month decrease of 0.94% and a year-on-year decrease of 7.95% [1] - The supply of new homes remained low, with high-end improvement projects entering the market in core cities like Shanghai, Chengdu, and Hangzhou, which contributed to the structural increase in new home prices [1] Group 2 - The new home market is experiencing a stable and positive adjustment process, attributed to the high quality of new housing projects and their advantageous locations, which enhance their appreciation potential [2] - Over 560 real estate policies have been introduced across various regions this year, with 37 policies released in November alone, aimed at stabilizing the housing market and promoting home-buying demand [2] - The year-end performance of real estate companies is expected to see an increase in quality new projects in core cities, with new home transaction volumes likely to experience a "year-end tail" effect, although the overall market still faces pressure [2]

Investment Rating - The industry investment rating is maintained as "Buy" [2][7]. Core Views - Recent data indicates that the year-on-year decline in second-hand housing transactions in first-tier cities has narrowed, while new housing transactions remain under pressure [1][6]. - The market is entering a traditional off-season for transactions, with significant year-on-year declines in new housing sales, while second-hand housing sales are also slowing down [7]. Summary by Sections Recent Performance - In Beijing, the average daily transaction of second-hand homes was 504 units, down 14.5% year-on-year, while new homes saw a 43.3% decline with 85 units sold [4]. - In Shanghai, second-hand homes had an average daily transaction of 756 units, down 15% year-on-year, and new homes saw a 2% decline with 315 units sold [4]. - In Shenzhen, second-hand homes had an average daily transaction of 171 units, down 29%, and new homes saw a significant 77% decline with 64 units sold [5]. - For November (up to the 15th), second-hand home transactions in first-tier cities showed a year-on-year decline of 24%, while new homes declined by 47% [4][5]. Market Trends - The new housing transaction area in 30 major cities decreased by 26% year-on-year, with a notable narrowing of the decline compared to the previous week [6]. - The cumulative transaction area from January to November showed a year-on-year decline of 9.6% [6]. - The year-on-year decline in second-hand housing transactions across 13 cities was 21% for the week and 31% for November, with a cumulative increase of 5% from January to November [6]. Investment Recommendations - The report suggests focusing on leading real estate companies with strong land acquisition capabilities and land reserves in core cities, such as Poly Developments [7]. - It also highlights the potential for valuation recovery among leading intermediary firms benefiting from an increase in second-hand housing transactions, such as Wo Ai Wo Jia [7].

Global Market Overview - Global stock markets experienced a broad rally, with notable gains in the Nikkei 225 index, which rose by 6.72% during the holiday period [1][4] - The S&P 500 index increased by 0.8%, while the Nasdaq rose by 0.87% [1][4] - The VIX index, a measure of market volatility, decreased by 4.55% [4] Foreign Exchange Market - The US dollar index saw a slight increase of 0.86%, while the Japanese yen depreciated significantly by 2.55% against the dollar [2][4] - The Chinese yuan experienced a minor depreciation of 0.21% [2][4] Commodity Market - Gold prices reached a historic high, surpassing $4000 per ounce, with a 3.31% increase [2][4] - The energy sector faced declines, with WTI crude oil dropping by 1.61% to $62.16 per barrel [2][4] - Agricultural products showed mixed results, with soybean oil rising by 2.80% and wheat falling by 2.22% [2][4] Domestic Consumption and Travel - During the National Day holiday, travel activity was robust, with 826 million trips taken, representing 59% of the national population [6] - Total tourism spending exceeded 2.5 trillion yuan, marking a significant increase in service consumption, which accounted for 53% of total consumption [6] Real Estate Market - New policies aimed at optimizing the real estate market were introduced during the holiday, with over 470 measures implemented across approximately 200 cities [7] - The core cities are expected to see increased new housing supply, supporting new home sales [7] Economic Data and Government Actions - The US federal government experienced a shutdown, halting the release of key economic data, including employment statistics and inflation reports [11][12] - China's foreign exchange reserves increased to $333.87 billion by the end of September, reflecting a 0.5% rise [10] International Relations and Trade - Mexico initiated multiple anti-dumping investigations against Chinese products, reflecting rising trade tensions [9] - The US announced a 25% tariff on imported medium and heavy trucks, impacting trade dynamics [17] Energy Sector Developments - OPEC+ decided to maintain its production increase of 137,000 barrels per day for November [24] - The number of active oil and gas rigs in the US remained stable at 549, down 6.15% year-on-year [25] Metal and Mining Sector Insights - Copper premiums reached a historic high due to supply issues in Chile, with Aurubis setting a premium of $315 per ton for 2026 [39] - Goldman Sachs raised its copper price forecast for 2026 to $10,500 per ton, driven by supply constraints [41] Agricultural Products and Food Supply - The USDA reported a decrease of 8% in US old crop soybean stocks as of September 1, totaling 316 million bushels [49] - Brazil's sugar exports in September fell by 16% year-on-year, while cotton exports increased by 5% [66][64]

Group 1 - The recent government policy report did not introduce significant surprises for the real estate market, as measures like stamp duty exemptions and the "Home Purchase Scheme" were not implemented, which is not expected to cause downward pressure [1] - The only slightly positive easing measure is the relaxation of the new "Capital Investor Scheme," allowing residential units valued over HKD 30 million to qualify, which aligns with expectations [1] - Following the policy report, Hong Kong real estate stocks reacted mildly, with the sector underperforming the Hang Seng Index by 2% on September 17 [1] Group 2 - Despite the lack of strong easing policies in the report, the company believes the real estate market may stabilize in the second half of 2025, with property prices expected to rise by 3-5% in 2026 [1] - Preferred developers include Henderson Land Development (00012) and Sino Land Company (00083) [1] - Among property owners, the most favored are Swire Properties (01972) and Hang Lung Properties (00101), followed by Wharf Real Estate Investment Company (01997) and Link REIT (00823) [1]