Group 1 - The core viewpoint is that in 2026, debt issues will be a global challenge, and there are three main ways to address this: real growth exceeding real interest rates (growth-based debt reduction), inflation exceeding expectations (inflation-based debt reduction), and fiscal tightening (fiscal-based debt reduction) [1] - AI and gold are expected to benefit from these pathways, forming a dual mainline logic for asset performance [1] - The A-share market is anticipated to continue a "slow bull" pattern in 2026, driven by a significant change in corporate profit structures despite weaknesses in real estate, infrastructure, consumption, social financing, and PPI [1] Group 2 - Non-financial companies in the A-share market have stabilized their net asset return on equity (ROE) over several quarters, with profits from eight advanced manufacturing industries increasing to 38% [1] - Companies with overseas revenue have seen their overseas revenue proportion rise to 20%, with overseas market gross margins exceeding domestic margins by 5 percentage points, which may drive overall ROE recovery in the A-share market [1] - Current valuation increases are relatively restrained, with limited overextension, suggesting potential for valuation improvement if profits recover [1] Group 3 - Investment direction should focus on industries with supply constraints and clear prosperity trends, such as the AI industry chain, which has strong capital expenditure demand and limited short-term supply release [1] - Other areas of interest include energy storage and metals, which have undergone capacity clearing [1] - Tactically, it is recommended to utilize market adjustments to position for spring rallies, prioritizing the aforementioned high-prosperity sectors [1]

1. Report Industry Investment Rating There is no information provided in the content about the report industry investment rating, so this part is skipped. 2. Core Viewpoints of the Report - Since the new round of local government debt resolution started in July 2023, "fiscal debt resolution" and "financial debt resolution" have been used to achieve "halt increase and resolve stock". After two years of implementing the package debt - resolution policy, the Central Economic Work Conference in December 2025 first mentioned the resolution of local operating debts. [1][5] - Although the debt resolution of urban investment platforms has received strong policy support, at the micro - level, some regions in economically strong provinces still have to raise high - interest funds through overseas bonds and non - standard channels to maintain the capital chain, and the pressure to resolve operating debts in some regions still exists. It is expected that in 2026, based on the "Document No. 35", the debt - resolution effectiveness will be further consolidated. [4] 3. Summary According to Relevant Catalogs 3.1 Fiscal and Financial Debt Resolution across the Country - The third round of debt resolution started in July 2023. "Fiscal debt resolution" mainly uses local government bonds to replace implicit debts, and the funds come from the "6 + 4+2" debt - resolution funds. In financial debt resolution, banks have become the main channel of low - interest funds. [5] - Key provinces have seen a contraction in debt due to fiscal debt - resolution funds. Among non - key provinces, 15 out of 19 still have an increase in urban investment interest - bearing debts. In terms of debt structure, 22 provinces achieved a reduction in non - standard debt scale in 2024, and the bank loan scale of 7 provinces shrank. [6] 3.2 Debt Resolution in Jiangsu, Zhejiang, and Shandong 3.2.1 Special Bond Replacement - Jiangsu, Zhejiang, and Shandong have large debt scales and have obtained a relatively large amount of replacement bonds, but the coverage of the issued replacement bonds for local urban investment interest - bearing debts at the end of 2023 is low. The large - scale operating debts still need to be resolved through market - based methods. [15][16] 3.2.2 Bank Borrowing and Domestic Bond Financing - The growth rate of urban investment interest - bearing debts in the three provinces has declined, and the comprehensive financing cost has decreased. The financing structure has tilted towards bank loans. Jiangsu and Zhejiang attract more participation from state - owned large - scale banks and joint - stock banks, while Shandong relies more on policy - based banks. [18] - The issuance interest rate of urban investment bonds has declined, and the domestic bond financing cost of the three provinces has decreased. However, under the background of supply contraction, the new replacement space is limited. Jiangsu and Zhejiang have a net repayment of urban investment bonds, while Shandong's net financing scale of urban investment bonds decreased significantly in 2025. [24] 3.2.3 Non - standard and Overseas Bond Financing - In non - standard financing, Jiangsu's non - standard scale shows a "south increase and north decrease" pattern. Shandong has achieved significant results in clearing non - standard debts, but there are still high - interest non - standard products and default events in some areas. Zhejiang's non - standard debt has increased significantly, with high - quality areas and areas with high debt pressure having different situations. [30][31][33] - In overseas bond financing, Shandong has the highest net financing scale of overseas bonds in the country, with a prominent problem of high financing costs. Zhejiang's overseas bond financing turned to net repayment in 2025, and most cities' issuance costs are below 6%. Jiangsu's overseas bond financing is mainly concentrated in northern Jiangsu, with relatively low costs. [42][44] 3.3 Summary and Consideration - Jiangsu and Zhejiang are more favored by state - owned large - scale banks and joint - stock banks, and the proportion of bank funds in the financing structure has increased significantly. They also use non - standard and overseas bond financing channels. Shandong faces more prominent debt - resolution challenges, relying more on policy - based banks, and having problems such as high - cost overseas bond financing and local non - standard debt default. [54][55][56]

Core Viewpoint - The unique phenomenon of "AI tech stocks and resource commodities (gold, copper) rising simultaneously" in 2025 reflects a common pricing strategy among major economies addressing the core issue of debt. The resolution of debt relies on technological advancements to enhance total factor productivity (AI path) or through inflation to dilute debt (resource path), representing two sides of the same macroeconomic logic [1][8]. Group 1: Changes in Profit Structure - The profit structure of China's A-share market has fundamentally changed, evolving from a previous "80/20" model to a current "60% traditional domestic demand + 40% emerging industries and overseas" model. The overseas segment shows higher profit quality than domestic operations, becoming a core support for market resilience [1][9]. - The overseas revenue share of A-share companies has exceeded 20% and continues to rise, with overseas business margins significantly higher than domestic ones, indicating that overall profitability will not experience systemic decline even if domestic profits remain under pressure [9]. Group 2: Market Trends and Predictions - A-share ROE is expected to show a clearer upward trend, transitioning from a "fast bull" to a healthier "slow bull" market due to valuation constraints, enhanced regulatory oversight, and the entry of long-term incremental funds [1][16]. - The period from December to January is identified as a critical "buy the dip" window, with expectations of a "spring rally" in February to March, suggesting a favorable environment for investment in sectors that have undergone sufficient adjustments [4][22]. Group 3: Global Market Review - The performance of major markets, including the US, Germany, China, Japan, and South Korea, has shown a strong correlation in the rise of technology and resource sectors, particularly in non-ferrous metals, driven primarily by earnings growth rather than mere valuation expansion [5][6]. - The simultaneous rise of technology and resource assets, particularly gold and AI stocks, reflects a dual pricing strategy addressing the global debt issue, with both sectors benefiting from the same macroeconomic conditions [7][8]. Group 4: Supply Constraints and Industry Trends - Supply constraints are becoming a dominant variable in various industries, including AI computing power, semiconductors, and resource sectors, indicating that as long as supply cannot be rapidly expanded, industry trends are unlikely to change [20][21]. - The copper price is expected to replicate the upward trajectory of gold, driven by historically low global inventories and anticipated recovery in manufacturing due to fiscal and monetary easing [3][14][15]. Group 5: Funding Sources and Market Dynamics - Three relatively certain sources of incremental funds are identified: long-term funds represented by state-owned enterprises, insurance funds with increasing equity allocation, and high-net-worth individuals reallocating from low-yield fixed income to equities [18][19]. - The current market environment suggests a "slow bull" rather than a rapid bull market, with traditional macro indicators losing significance while industry trends, global demand, and supply constraints become more critical pricing factors [23].

Group 1 - The core viewpoint is that there are three methods for debt reduction without substantial defaults: real growth exceeding real interest rates (growth-based debt reduction), inflation exceeding expectations (inflation-based debt reduction), and fiscal tightening (fiscal-based debt reduction) [1] - AI and gold are expected to ultimately benefit from the aforementioned debt reduction pathways [1]

Investment Rating - The coal industry is rated as "Overweight" indicating an expectation of outperforming the overall market [2][32]. Core Insights - The report highlights that the domestic coal prices are under pressure due to high inventory levels and a seasonal decline in demand, but a reduction in imports is expected to support prices [2][20]. - The report emphasizes that while thermal coal prices have decreased, coking coal prices are expected to stabilize and potentially rebound as demand increases with the arrival of the peak season [2][10]. - The report recommends specific companies for investment, including China Shenhua, Shaanxi Coal and Chemical Industry, and China Coal Energy, which are characterized by stable operations and high dividends [2][26]. Summary by Sections Recent Industry Policies and Dynamics - Indonesia is considering increasing mining royalties for coal, nickel, and copper, which could impact coal supply dynamics [9]. - A joint initiative by Chinese coal associations aims to control the import of low-quality coal to maintain market balance [9]. Price Trends - Domestic thermal coal prices have shown a slight increase in some regions, while the overall price index remains stable [10]. - International coal prices have fluctuated, with Indonesian coal prices increasing slightly, while Australian and South African prices have decreased [11]. Inventory and Supply Chain - The average daily coal inflow and outflow at the Bohai Rim ports have increased, with total inventory decreasing slightly [20]. - Coastal shipping rates have risen significantly, indicating potential cost pressures in the supply chain [23]. Company Valuations - The report provides a detailed valuation table for key companies in the coal sector, highlighting their earnings per share (EPS) and price-to-earnings (PE) ratios, indicating potential investment opportunities [26].