5 January 2026 | 8:20PM HKT Equity Research CHINA BASIC MATERIALS 2026 outlook - supply to set the path apart 2) Anti-involution (on oversupplied segments) remains a multi-year strategic policy effort. Potential changes in capacity management that drive the next 10% improvement in industry capacity utilization could lead to highly leveraged earnings revisions from where we are. We see meaningful progress in the capacity work in cement and coal, but slower than expected in steel. We expect a more stable year ...

January 5, 2026 01:28 AM GMT Investor Presentation | Asia Pacific M Foundation China Economics: Beijing's New Year Resolution Beijing's New Year Resolution vs. The Market's: Closing the Policy Gap (18 December 2025) Morgan Stanley Asia Limited Robin Xing Chief China Economist Robin.Xing@morganstanley.com +852 2848-6511 Zhipeng Cai Economist Zhipeng.Cai@morganstanley.com +852 2239-7820 For important disclosures, refer to the Disclosure Section, located at the end of this report. Downloaded by Neil.Wang@trowe ...

22 December 2025 | 1:43AM HKT Portfolio Strategy Research CHINA STRATEGY 10 equity lessons learned from 2025 As 2025 is coming to an end, we take this opportunity to reflect on the past year, highlighting 10 key lessons we've learned from the stock market that could be relevant for investors to position in Chinese equities in 2026. Kinger Lau, CFA +852-2978-1224 | kinger.lau@gs.com Goldman Sachs (Asia) L.L.C. Timothy Moe, CFA +65-6889-1199 | timothy.moe@gs.com Goldman Sachs (Singapore) Pte Si Fu, Ph.D. +852 ...

Some 52% of manufacturing exporters plan to move or are considering moving some production overseas, down from June 2025 (63%) and the peak level in 2024 (71%). Trade tension de-escalation may have been at play. In addition, the softer intention to move out may also reflect the notable progress in China's supply chain shifts over the past few years, as more than 60% of respondents already have an average 40-50% of production overseas. Mainland China's current weighted average additional US tariff rates are ...

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: The conference call primarily discusses the implications of China's anti-involution policy on various sectors, particularly those facing overcapacity such as cement, steel, chemicals, alumina, lithium-ion batteries, new energy vehicles, and solar cells [3][34]. - **Economic Context**: The anti-involution policy aims to address issues of overcapacity, price wars, and margin erosion in China, pushing local producers to seek alternative overseas markets due to high inventories and price declines [1][9]. Core Insights and Arguments - **Overcapacity Issues**: Significant overcapacity is noted in sectors like cement, steel, chemicals, and aluminium, with specific vulnerabilities identified in fertilisers, household appliances, and integrated circuits [3][34]. - **Export Dynamics**: The movement of goods from China is expected to accelerate, with exports expanding to more sectors by 2026 as domestic demand remains sluggish [2][10]. - **Five-Year Plans**: The analysis of China's Five-Year Plans reveals a strategic focus on manufacturing and industrial production capacity, which has contributed to global oversupply and aggressive price undercutting in various sectors [15][16]. - **Export Performance**: Emerging sectors such as new energy vehicles and solar cells are experiencing significant export growth, with NEVs seeing a 688% increase in exports, while solar cells have surged by 170% [20][62]. Sector-Specific Observations - **Cement**: Exports increased by 105% due to producers seeking overseas markets amid declining domestic demand. However, enforcement of capacity controls may not fully alleviate oversupply pressures [63]. - **Fertilisers and Chemicals**: Fertiliser exports have declined sharply, particularly urea, due to government policies prioritising domestic supply. The value of exports surged due to global supply constraints [64][65]. - **Steel**: Steel exports rose by 75%, indicating a significant drop in domestic consumption. The shift towards higher-value products is noted, but overcapacity remains a risk [67][68]. - **Household Appliances**: Exports grew by 26%, driven by advancements in smart technology. Companies like Midea and Xiaomi are expanding overseas to mitigate domestic challenges [58][59]. - **Lithium-Ion Batteries**: Exports increased by 26%, with CATL positioned to benefit from rising demand, although competition is intensifying [42][45]. Additional Important Insights - **Price Trends**: Broad-based declines in the Producer Price Index (PPI) across upstream industries signal oversupply and weak demand, particularly in coal, petroleum, and steel [28][29]. - **Global Competition**: The rapid expansion of Chinese companies in international markets may lead to increased pricing competition and contribute to oversupply pressures globally [59]. - **Policy Implications**: The anti-involution campaign is expected to reshape competitive dynamics, encouraging firms to focus on innovation and brand strength rather than price wars [54]. This summary encapsulates the critical insights and data points discussed in the conference call, highlighting the challenges and opportunities within the Chinese industrial landscape.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Chinese economy**, particularly regarding the **property sector** and **services** industry, which are experiencing renewed pressure and signs of weakness [2][4]. Core Insights and Arguments - **Economic Growth Projections**: Despite a slowdown since Q3, China is expected to achieve a growth rate of **4.9% in 2025**, aligning with the target of "around 5%" for the current year [2]. - **Fiscal Policy Support**: Anticipation of continued fiscal support through special bonds, with the Minister of Finance indicating potential for stronger fiscal measures next year. A total of **RMB7 trillion** in project investments is expected, driven by new policy tools to assist local governments [3]. - **Monetary Policy Stance**: The monetary policy is expected to remain "moderately loose," with ongoing liquidity support through various measures, including RRR cuts and treasury purchases. Interest rate cuts are now anticipated in **2026** instead of this year [3]. - **Industrial Profit Decline**: Industrial profits fell by **5.5% year-on-year in October**, attributed to a higher base and rising financial costs, indicating squeezed profit margins in certain sectors due to oversupply and price competition [4]. - **Anti-involution Campaign**: The campaign aimed at addressing unfair pricing and promoting high-quality development is gaining momentum, although real indicators like pricing improvements have shown limited progress [5][7]. - **Battery Industry Regulation**: The Ministry of Industry and Information Technology (MIIT) is pushing for faster policy support in the battery sector, where capacity utilization was below **50% in 2024**, and prices have dropped by **80% over three years** [8]. - **Demand-Side Stimulus**: A plan to boost consumption has been released, targeting the creation of a **three trillion-yuan** consumer sector by **2027** and emphasizing both supply and demand-side measures [12]. Additional Important Insights - **Sector-Specific Developments**: The nonferrous metals industry saw a **14% year-on-year profit increase in October**, suggesting some sectors are responding positively to regulatory measures [9]. - **Consumption Trends**: The drop in services activity highlights the need for more consumption stimulus, with a focus on expanding services consumption and potential subsidy programs [12]. - **Real Estate Market**: New home sales in Tier-1 cities have shown seasonal increases, while overall new home sales remain below historical levels [40][46]. - **Logistics and Travel**: Metro volumes in large cities remain elevated, and cross-city travel is above historical levels, indicating a recovery in mobility [52][54]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the Chinese economy and specific industries.

ab 28 November 2025 Global Research China Equity Strategy 3Q25 results season wrap - market liquidity and anti-involution lifting earnings estimates Improved topline growth with divergent trends in sector margins MSCI China's 3Q25 revenue growth accelerated slightly to 2% YoY while earnings growth was sustained at 4% YoY. Post the results season, consensus earnings were revised up in the past month, most notably in non-bank financials. From a sector perspective, non-bank financials and tech continued to pos ...

Summary of TBEA Co (600089.SS) Conference Call Company Overview - **Company**: TBEA Co (600089.SS) - **Industry**: Power Transmission & Distribution (T&D), Polysilicon, Coal, Aluminum Key Points Financial Performance - **Revenue Growth**: TBEA's revenue increased by 0.9% year-on-year (yoy) to Rmb72,988 million in 9M25, driven by a 14% increase in the power T&D segment, which includes Rmb35,909 million from electrical equipment sales [12][13] - **Net Profit**: The net profit rose by 27.6% yoy to Rmb5,484 million in 9M25, with a significant contribution from fair value gains on equity investments [12][14] - **Profit Before Tax**: Increased by 37.7% yoy to Rmb7,339 million, primarily due to a 30% growth in the power T&D segment [2][14] Segment Performance - **Power T&D Segment**: Revenue from this segment grew by 14% yoy, with electrical equipment sales contributing Rmb20.24 billion, up 24% yoy [13][14] - **Polysilicon Sales**: The sales price of polysilicon rebounded significantly, with production of 59,400 tonnes and sales of 54,700 tonnes in 9M25 [20][21] - **Coal Sales**: Coal sales decreased by 32% yoy to Rmb2,994 million, reflecting reduced demand from coal-fired power plants [2][14] Strategic Initiatives - **Revenue Target**: TBEA aims to nearly double its revenue from the power T&D segment from Rmb50-60 billion in 2025E to Rmb100 billion by 2030E [1][3] - **Export Growth**: The company targets to increase its overseas sales mix of electrical equipment from 11% in 9M25 to 30% in 2030E, with new orders from abroad up 88% yoy to US$1.24 billion [1][3][16] - **Polysilicon Production**: TBEA plans to improve production efficiency and product quality in its polysilicon segment, with a focus on controlling output based on demand [22][24] Market Dynamics - **UHV Construction**: The company expects more UHV power transmission lines to be approved in the 15th Five-Year Plan (FYP), anticipating a rise in electricity demand and renewable energy integration [18][19] - **Offshore Wind Development**: TBEA is positioned to benefit from the growth in offshore wind projects, having supplied equipment to about 50% of installed projects in China [19] Valuation and Recommendations - **Target Price**: The DCF-based target price is set at Rmb26.00, reflecting a 44% increase from the previous estimate [1][26] - **Earnings Revision**: Net profit estimates for 2025-27E have been raised by 4-6%, supported by higher margins from export sales and increased polysilicon prices [25][26] Additional Insights - **Cost Management**: The unit cash cost of polysilicon production has decreased to below Rmb30/kg, with total production costs at Rmb34/kg in 3Q25 [20][22] - **Coal Production Strategy**: TBEA plans to expand its annual coal output from 74 million tonnes to over 100 million tonnes, focusing on value-added coal chemical products [23][24] This summary encapsulates the key insights from TBEA's conference call, highlighting the company's financial performance, strategic initiatives, and market outlook.

Summary of J.P. Morgan's 2026 China Economic Outlook Industry Overview - The report focuses on the **Chinese economy** and its outlook for 2026, highlighting challenges and opportunities in various sectors. Key Economic Forecasts - **Real GDP Growth**: Expected to slow from **4.9% in 2025** to **4.4% in 2026** [2][5][22] - **Nominal GDP Growth**: Forecasted at **4.0% in 2025** and **4.2% in 2026** [2][5] - **CPI Inflation**: Projected to rise to **0.6% in 2026** from **0.0% in 2025** [2][5] - **PPI Deflation**: Expected to persist, with a forecast of **-1.3% in 2026** [2][5] - **Policy Rate**: Anticipated to remain stable around **1.4%** [2] Core Insights - **Economic Resilience**: Despite trade war fears, China's economy showed resilience in 2025, with exports and fiscal expansion supporting growth [5][6][9] - **Deflationary Pressures**: Production continues to outpace demand, leading to intensified deflation and a decline in nominal GDP growth to **4.3%** [5][7] - **Investment Trends**: Investment growth is expected to recover, particularly in high-tech manufacturing, but real estate investment is projected to contract by another **10%** [5][40] - **Consumption Growth**: Modest consumption growth is anticipated, with limited support from subsidies and transfers [5][26][33] Policy and Structural Changes - **15th Five-Year Plan**: Emphasizes advanced manufacturing and technology indigenization, with a lukewarm approach to services [13][14] - **Fiscal Policy**: A fiscal impulse of **0.4-0.5% of GDP** is expected, with total bond issuance reaching **14.5 trillion yuan** in 2026 [5][66] - **Monetary Policy**: The PBOC is expected to implement measured monetary easing, including rate cuts and RRR adjustments [70][78] Trade and Export Dynamics - **Export Growth**: Expected to moderate to **3.4% in 2026**, with net exports contributing less to GDP growth [49][48] - **US-China Trade Relations**: The fragile truce in trade relations may impact future export dynamics, with tariffs likely remaining elevated [18][20][51] Risks and Challenges - **Downside Risks**: Include potential bankruptcies due to anti-involution measures, further deterioration in the housing market, and renewed US-China tensions [89] - **Upside Potential**: Larger-than-expected fiscal expansion and stronger policy shifts towards consumption could enhance growth prospects [89] Additional Considerations - **Household Consumption**: Remains low due to high savings rates driven by job insecurity and a weak social safety net [30][33] - **Investment Recovery**: Uneven, with public investment expected to outpace private investment, particularly in high-tech sectors [39][40] This summary encapsulates the critical insights and forecasts from J.P. Morgan's 2026 China Economic Outlook, providing a comprehensive overview of the anticipated economic landscape.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: A-share market in China - **Outlook for 2026**: Expected earnings growth of 8% YoY, driven by faster nominal GDP growth and margin recovery due to supportive policies and anti-involution efforts [2][42][43] Core Insights and Arguments - **Earnings Growth**: A-share earnings growth is projected to accelerate from 6% in 2025 to 8% in 2026, supported by a recovery in margins and nominal GDP growth [2][42] - **Market Valuation**: The A-share market's equity risk premium remains above historical averages, indicating potential for further re-rating as macro policies and household savings shift towards equities [2][62][63] - **Market Correction**: Recent market pullbacks are attributed to short-term factors, including profit-taking and a retreat in global tech sectors, but are seen as buying opportunities [3][18] - **Investment Themes**: Key themes for 2026 include technology self-reliance, consumer recovery, selective investments in solar and lithium sectors, and the global competitiveness of Chinese companies [4][28] Tactical Style and Sector Allocations - **Investment Style**: Growth stocks are expected to outperform value stocks, with cyclicals likely to outperform defensives due to narrowing PPI contraction [5][71] - **Sector Preferences**: Favorable sectors include electronics, telecom, non-bank financials, national defense, non-ferrous metals, chemicals, and electrical equipment [5][63] Preferred A-share Stocks - **Top Picks**: - **Sungrow (300274.SZ)**: Buy, market cap Rmb 3,643 million, target price Rmb 225.00, upside 28% [6] - **NAURA Technology (002371.SZ)**: Buy, market cap Rmb 3,028 million, target price Rmb 545.50, upside 31% [6] - **Wanhua Chemical (600309.SS)**: Buy, market cap Rmb 1,979 million, target price Rmb 84.00, upside 33% [6] - **Huatai Securities A (601688.SS)**: Buy, market cap Rmb 1,890 million, target price Rmb 31.20, upside 49% [6] Economic Indicators and Projections - **GDP Growth**: Expected real GDP growth of 4.5% in 2026, with CPI inflation at 0.4% and a slight decline in PPI [28][30] - **Infrastructure Investment**: Anticipated recovery in infrastructure investment growth to 4-6% in 2026, supported by special financing tools [29] - **Consumption Policies**: Shift towards consumption-focused policies is expected, with household consumption share projected to rise from 40% in 2024 to 43-45% by 2030 [33][37] Risks and Considerations - **Trade Tensions**: Ongoing trade tensions with the US and potential tech constraints pose risks to the A-share market [35] - **Property Market**: Continued downturn in the property market may affect overall economic sentiment and consumption [29][33] Additional Insights - **Liquidity Trends**: The balance of margin financing has stabilized, indicating a cautious approach among investors [18][21] - **Household Savings**: There is significant potential for reallocation of household savings into the A-share market, which could drive further valuation re-rating [78][81] This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the A-share market outlook, investment strategies, and economic projections for 2026.