The CEWC signals continuity, not a pivot: front-loaded public capex and ongoing goods trade-in support; housing and services get guardrails, not a big bang. We thus expect 2026 to be a year of less deflation, not reflation. After a year of narrative repair, the 2026 question is whether China can exit deflation and broaden the recovery. In this note, we map the gap between the CEWC's new year playbook and market expectations. Reality check vs. market hopes: What is likely in 2026: December 18, 2025 04:16 AM ...

Summary of ZTO Express (Cayman) Inc. Conference Call Company Overview - **Company**: ZTO Express (Cayman) Inc. (ZTO) - **Industry**: Logistics and Express Delivery Key Points Discussed 1. Industry Outlook - ZTO expects the industry order volume to grow at a high-single-digit percentage in 2026, with ZTO anticipated to outperform the industry [1] - For 4Q25, ZTO expects profits to stabilize year-over-year, driven by an increase in Average Selling Price (ASP) due to anti-involution policies [1] 2. Competitive Landscape - The industry is shifting towards high-quality development, benefiting leading players like ZTO due to cost advantages and a more high-quality customer base [2] - ZTO's market share in reverse parcels is approximately 23%, with the top three players holding 70% of the market [2] 3. Automation and Cost Efficiency - ZTO has over 800 outlets utilizing autonomous vehicles, with more than 3,000 vehicles in operation [3] - The deployment of autonomous vehicles is expected to reduce the cost per parcel by 7-8 cents, with each vehicle capable of carrying hundreds of parcels and making three trips a day [3] - The price of autonomous vehicles has decreased by 30-40% over the past year [3] 4. Shareholder Returns - ZTO has distributed RMB 16 billion to shareholders over the past 1.5 years, maintaining a dividend payout ratio of 40% [4] - There is potential for increased dividends and buybacks in the future due to decreasing capital expenditures [4] 5. ASP Trends - The ASP increased by 4 cents month-over-month in August and by 3 cents in September, with the upward trend continuing into 4Q [15] - The number of low-value parcels has decreased due to the anti-involution policy, leading to a healthier parcel structure [15] 6. Capacity and Volume - The average daily capacity is currently 150 million parcels, with a utilization rate of approximately 80% [11] - During peak season next year, capacity can reach 160-170 million parcels [11] - ZTO handles approximately 7 million reverse parcels daily in 4Q, with around 30 million daily reverse parcels across major eCommerce platforms [10] 7. Financial Projections - Total revenue projections for ZTO are as follows: - 2025E: RMB 49.037 billion - 2026E: RMB 54.995 billion - 2027E: RMB 59.290 billion [12] - The company expects a gross margin of 25.8% in 2025E and 26.4% in 2026E [12] 8. Investment Rating - Goldman Sachs maintains a Buy rating on ZTO with a 12-month price target of US$23/HK$179, indicating an upside potential of 12% [4][16] - Key risks include slower-than-expected industry growth, intensified competition, and execution risks in business operations [14] Additional Insights - The implementation of anti-involution policies is strong, which may impact the overall market dynamics [5] - The focus on network healthiness and income levels of couriers is being emphasized by regulators [9] This summary encapsulates the critical insights from the conference call regarding ZTO Express, highlighting the company's strategic outlook, competitive advantages, and financial projections.

Summary of Key Points from the Conference Call on Metals & Mining Industry Overview - The conference call focused on the dynamics of the steel, iron ore, and metallurgical coal markets, highlighting current trends and future outlooks in these sectors [1] Steel Market Insights - Pre-emptive stocking and record long positioning earlier in the year, combined with weak demand from March to June, contributed to the underperformance of spot prices, which did not fully react to tariff hikes [2] - EU steel prices are at multi-year lows, but structural support and policy changes may limit further downside [2] - Inventories are normalizing, but prices remain below historical averages; tightness may emerge in the second half of the year [2] - Scrap markets are expected to recover due to substitution economics amid rising raw material costs [2] - US tariff exemptions are deemed unlikely due to complex compliance requirements, particularly concerning Chinese-origin steel [2] Iron Ore and Metallurgical Coal Insights - China's steel production remains robust, with mills operating above 90% capacity, driven by strong margins of $30-40 per ton [3] - The recent price rally in iron ore and steel is attributed more to sentiment and trader positioning rather than fundamentals [3] - Mills are restocking iron ore at higher prices, supported by healthy order books and margin confidence [3] - Steel demand is seasonally soft but remains flat year-over-year, with resilience in infrastructure and manufacturing offsetting weakness in the property sector [3] - A shift towards higher-grade ore is noted due to margin expansion and environmental restrictions [3] - The China Mineral Resources Group (CMRG) has been inactive during the recent price rally, which may affect market stability [3] US and EU Steel Price Dynamics - In the US, steel prices have moderated due to aggressive stocking ahead of anticipated tariffs, leading to a record long market [6] - EU prices have fallen to five-year lows due to ineffective safeguard duties and minimal import barriers [7] - The muted reaction in spot markets to tariff increases is attributed to weak demand across key sectors, with US domestic production up 8% year-to-date [8] Inventory and Demand Trends - US inventories have been drawn down and are close to the five-year average, but prices remain below average [9] - Recent weeks have seen service centers and fabricators begin drawing from stock, indicating a potential inflection point in demand [10] - Scrap prices in Turkey, the US, and the EU are at five-year lows, but a recovery is anticipated [13] Future Outlook - The commodities research team expects a more positive outlook for US hot-rolled coil (HRC) in 2026, supported by economic growth and increased end-use demand [15] - EU demand remains weak, but downside risk to prices appears limited, with potential support from fiscal expansions and tightening safeguard quotas [16] - China's steel demand is expected to remain flat year-over-year, with macro policy expectations and trader positioning playing significant roles in price dynamics [22] Additional Observations - A notable shift in mills' preference for high-grade iron ore is observed, driven by expanding steel margins and environmental considerations [25] - The degradation of Pilbara Blend fines has led to a discount in the premium market, which may impact pricing in the second half of the year [26] - China's National Energy Agency is inspecting potential overproduction among coal miners, which could lead to production cuts if oversupply persists [28]