Core Viewpoint - Morgan Stanley's 2026 outlook for China's economy and stock market indicates a significant shift in global investors' perception, moving from a market lacking clear growth potential to one rich in growth opportunities, particularly in sectors like AI, new consumption, automation, and biotechnology [1][2]. Group 1: Foreign Investment Trends - Foreign investment sentiment towards the Chinese market is improving, with expectations for continued inflows in 2026 following a substantial valuation recovery in 2025 [2]. - The MSCI China Index has shown significant valuation recovery, marking a milestone for A-shares and Hong Kong stocks, leading to a renewed interest from global investors [2]. - Passive funds have seen a notable increase in inflows, while active funds remain cautious, with less than 5% of their global investment capacity allocated to Chinese stocks [3]. Group 2: Positive Economic Changes - Three positive changes in the Chinese economy have emerged since the "9·24" policy shift: 1. Enhanced policy responsiveness, with a focus on development and flexible adjustments [4]. 2. Resilience and innovation among Chinese enterprises, showcasing advancements in AI, smart vehicles, and biopharmaceuticals [4]. 3. A shift in global investor focus from dollar assets to diversified allocations, with a growing interest in China's tech innovations [4]. Group 3: Policy and Infrastructure Investment - The 2026 fiscal policy is expected to prioritize infrastructure investments in new areas such as underground pipeline renovations and green transition projects, driven by carbon reduction goals [5]. - Increased support for consumption through measures like birth subsidies and social security enhancements reflects a flexible and rich policy toolbox [5]. Group 4: Market Dynamics and Investment Strategy - The market's driving logic is set to change in 2026, with a completed valuation recovery and a stable, reasonable valuation level that can attract new capital [7]. - The anticipated easing of global liquidity, including three expected interest rate cuts by the Federal Reserve in the first half of 2026, will support stock assets [7]. - Investment strategies should focus on high-growth sectors aligned with China's long-term development, such as high-end manufacturing, AI, and biotechnology, while also including quality dividend-paying sectors like insurance [7].

Investment Overview - The company plans to invest CNY 49.75 million as a limited partner in the establishment of Wuxi Jiezhi Lianchuang Industrial Investment Partnership (Limited Partnership), accounting for 99.50% of the total planned fundraising amount of CNY 50 million, with an initial investment of CNY 20 million [2][3] - The transaction has been approved by the company's board and supervisory board, and does not require shareholder approval [2][3] - This transaction does not constitute a related party transaction or a major asset restructuring [2][3] Investment Target Details - The partnership will primarily invest in high-end manufacturing sectors such as semiconductors, robotics, and artificial intelligence that have synergistic effects with the company's industrial chain [3] - The general partner of the partnership is Wuxi Chuangxin Investment Partnership (Limited Partnership), with the following contributions: - Company: CNY 49.75 million (99.50%) - Wuxi Chuangxin: CNY 0.25 million (0.50%) [3] Partnership Agreement Highlights - The partnership will have a long-term operational period, initially set for 10 years, with the first 4 years designated for investment and the subsequent 6 years for post-investment management and exit [5] - The total scale of the partnership is CNY 50 million, with all partners contributing in cash [5] - The investment decision-making body will be an investment decision committee, which will oversee external investments and exits [5][6] Impact on the Company - The establishment of the partnership is expected to focus on industries that are synergistic with the company's operations, facilitating business expansion [6] - This investment aligns with the company's strategic planning and operational needs, and is not expected to adversely affect the company's cash flow or operational status [6]