Group 1: Background and Core Conclusions - The investigation covered all participants in the supply chain, focusing on "supply-side structural adjustment" and "industry supply-demand rebalancing" [2] - Goldman Sachs identified three core judgments: 1) Most commodity supply policies are in the planning stage but are positive for industry profit recovery; 2) If policy goals are achieved, the cement and steel industries will be most affected, with coal and cement potentially improving by 2026; 3) Short-term supply stability is uncertain due to supply-side "anti-involution" and new policy disturbances, while demand shows a "strong manufacturing, weak construction" pattern [2] Group 2: Supply-Side Core Line: "Anti-Involution" - The "anti-involution" policy focuses on capacity rebalancing through capacity exit, classified management, and limiting new additions to prevent long-term overcapacity issues [3] - Key industries prioritized include EV, photovoltaic, steel, cement, coal, pharmaceuticals, and electronics, with basic metals and chemicals following [3] Group 3: Key Policy Impacts - The new Mining Law effective July 2025 is a significant variable for supply, requiring "comprehensive development of associated minerals," leading to local supply disturbances [4] - Specific impacts include potential production halts in lithium and bauxite mining due to new regulations, with lithium production costs potentially increasing by 50,000 yuan per ton [4] Group 4: Commodity Supply and Demand Analysis - Steel and iron ore: Production cuts are uncertain, with local execution lacking; long-term capacity exit may reach 200 million tons, aiming to increase utilization from 71% to 83% by 2030 [5] - Coal: Operational capacity may decrease by 13 million tons by 2025 due to overcapacity and safety issues, while new capacity of 6 million tons is expected in 2026 [7] - Lithium: Cash costs for integrated lithium production have decreased to 70,000-80,000 yuan per ton, with potential further reductions [9] - Basic metals: Copper demand growth may slow to 4%-5% by 2025, while aluminum demand remains strong due to EV and electric bicycle needs [11][12] Group 5: Demand Side: Divergence with Growth Potential - Overall demand shows stable manufacturing-related demand while construction demand remains weak, with local government cash flow issues affecting new projects [14] - Key demand growth highlights include energy infrastructure projects boosting copper demand and new manufacturing trends driving aluminum demand [15]

Core Viewpoint - China National Airlines significantly reduced its net loss in the first half of the year, achieving profitability in Q2 2025, with a net profit of 240 million yuan compared to a net loss of 1.11 billion yuan in the same period last year [1] Financial Performance - In the first half of the year, the company reported a net loss attributable to shareholders of 1.81 billion yuan, a year-on-year reduction in loss of 980 million yuan [1] - Q2 2025 saw a net profit of 240 million yuan, marking a turnaround from a net loss of 1.11 billion yuan in the same quarter of the previous year [1] Future Outlook - The company is expected to benefit from the recovery of international flights, declining oil prices, industry supply-demand rebalancing, and improvements in operational efficiency, leading to stabilized revenue levels and gradual recovery in profitability [1] - However, short-term challenges include weak demand for business travel and pressure on peak season ticket prices, prompting a downward revision of the company's net profit forecasts for 2025-2027 to 1.53 billion, 3.47 billion, and 3.89 billion yuan respectively [1] Strategic Positioning - The company has a strong strategic position with its hub at Beijing Capital Airport, covering economically developed and densely populated regions of China, which is expected to continue benefiting from business travel and the recovery of international long-haul routes [1] - The company maintains a "buy" rating, reflecting confidence in its long-term advantages and market positioning [1]

Investment Rating - The report maintains an "Accumulate" rating for the company [2][7]. Core Views - The company achieved a revenue of 80.76 billion yuan in the first half of 2025, a year-on-year increase of 1.6%, with a net loss of 1.81 billion yuan, which is a reduction in loss by 0.98 billion yuan compared to the previous year [6]. - In Q2 2025, the company turned profitable with a net profit of 240 million yuan, compared to a net loss of 1.11 billion yuan in the same period last year [6]. - The international flight capacity is steadily recovering, while domestic flight capacity has slightly decreased, supporting an increase in passenger load factor [6]. - The company expects to benefit from the recovery of international flights, declining oil prices, and improved operational efficiency, leading to a stabilization of revenue levels and gradual recovery of profitability [7]. Financial Performance - In H1 2025, the company reported a passenger revenue of 73.2 billion yuan, a slight increase of 0.08% year-on-year, while cargo and mail revenue rose by 7.5% to 3.58 billion yuan [6]. - The unit cost per seat kilometer decreased by 2.2% year-on-year, with fuel costs per seat kilometer down by 13.3% [6]. - The company achieved a gross profit of 2.41 billion yuan in H1 2025, representing a year-on-year increase of 17.4% [6]. Operational Metrics - In H1 2025, the company's available seat kilometers (ASK) and revenue passenger kilometers (RPK) increased by 3.4% and 5.2% year-on-year, respectively, with a passenger load factor of 80.7%, up by 1.4 percentage points [6]. - The international ASK and RPK grew by 16.7% and 17% year-on-year, with a load factor of 76.5% [6]. Future Outlook - The company is positioned to benefit from its strategic hub at Beijing Capital Airport, which covers economically developed and densely populated areas, and is expected to continue to gain from business travel and international long-haul routes [7]. - The report projects a decline in net profit for 2025-2027, estimating 1.53 billion yuan, 3.47 billion yuan, and 3.89 billion yuan, respectively [7].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price based on expected performance over the next three years [4][6]. Core Views - The company experienced a slight decline in revenue for 2024, with a total of 15.65 billion yuan, down 0.2% year-on-year, and a significant drop in net profit by 78.1% to 380 million yuan [1][4]. - The glass industry is facing challenges due to insufficient demand in the real estate sector, leading to a continuous decline in float glass prices [2][4]. - The photovoltaic glass segment saw a significant increase in revenue by 68.6% to 5.75 billion yuan in 2024, but the profit margin decreased due to falling prices [3][4]. Summary by Sections Financial Performance - In 2024, the company reported a revenue of 15.65 billion yuan, with a net profit of 380 million yuan, reflecting a year-on-year decline of 78.1% [1][5]. - The float glass segment sold 107 million heavy boxes, down 6.4% year-on-year, with an average price of 64.3 yuan per heavy box, a decrease of 19.2% [2][4]. - The photovoltaic glass segment achieved a sales volume of 430 million square meters, up 124.0% year-on-year, but the average price fell to 13.2 yuan per square meter, down 24.7% [3][4]. Market Outlook - The float glass prices are expected to remain low until supply and demand are balanced, which may take time due to ongoing production capacity increases [2][4]. - The photovoltaic glass market is showing signs of recovery, but there may be pressure on prices as demand stabilizes and production ramps up [3][4]. Profitability Metrics - The company's gross margin for 2024 was 15.5%, down 9.5 percentage points year-on-year, primarily due to price declines in both float and photovoltaic glass [4][5]. - The net profit margin decreased to 1.7%, reflecting the impact of reduced gross margins and asset impairment losses totaling 257 million yuan [4][5]. Future Projections - The company is projected to recover with net profits of 829 million yuan, 1.1 billion yuan, and 1.65 billion yuan for 2025, 2026, and 2027 respectively, indicating a compound annual growth rate of 41.4% [4][5].