1. Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Views - The disclosure rate and pre - happy rate of listed companies' performance forecasts have both increased. The overall performance shows significant repair characteristics, and the market's consensus expectation for the whole year is more optimistic [1][2]. - As February enters the period of performance and economic data vacuum, the market's policy - gaming sentiment may gradually heat up. The stock market generally has good expected performance after the Spring Festival and before the Two Sessions. Attention can be paid to sectors with strong performance expectations and low premium rates [22]. - The convertible bond valuation still has support and may maintain high - level fluctuations. The new bond issuance continues to be light, but the pace of pre - plans has accelerated [3][4][60]. 3. Summary by Directory 3.1 Annual Report Forecast Period Ends, Driving Force Shifts to Performance Verification - **Disclosure and Pre - happy Rates**: As of January 30, 2026, the disclosure rate of performance forecasts of listed companies was 54.98%, a year - on - year increase of 1.83pct. The overall pre - happy rate was 36.87%, a year - on - year increase of 4.46pct [10]. - **Performance Repair**: The median year - on - year growth rate of the net profit attributable to the parent of the whole market in 2025 was 20.29%, a significant improvement compared with - 18.58% in 2024. The growth of industrial added value and the narrowing of PPI decline contributed to the positive growth of industrial enterprise profits [12]. - **Sector Performance**: The net profit growth rate of the GEM was relatively strong, with a growth rate center of 26.57% and a year - on - year increase of 74.62pct, driven by the low - base effect and the performance explosion in the computing power sector [12]. - **Industry Performance**: The pre - happy rates of the non - bank finance and non - ferrous metals industries led, and the net profit growth rate centers of these two industries were also among the top [18]. - **Convertible Bond Underlying Stocks**: The disclosure rate of convertible bond underlying stocks was 49.86%, and the pre - happy rate was 31.11%. The year - on - year growth rate center of the net profit in 2025 turned from loss to profit [20]. 3.2 Valuation Outlook - **Valuation Increase in January**: The convertible bond ETF share continued to grow, and major holders such as public funds increased their holdings. The convertible bond valuation rose to a new high, with the 100 - yuan parity fitted conversion premium rate reaching 37.11% as of January 30, 2026, a 3.05pct increase from the end of 2025 [23]. - **Future Valuation**: The probability of the spring rally continuing is not low. The adjustment of positions of financial products and insurance may be the key incremental factor in the first half of the year. The valuation may maintain high - level fluctuations [23]. 3.3 Key Focused Convertible Bonds - **January Performance**: From December 31, 2025, to January 30, 2026, the convertible bond portfolio rose 13.79%, outperforming the benchmark index by 7.95pct. Huayi and Huachen had obvious increases [36]. - **February Portfolio Adjustment**: The "Huachuang Convertible Bond" February key - focused portfolio was adjusted to include Xingqiu, Mingli, Yirui, Huachen, Huayi, Yifeng, Bengang, Peidi, Ziyin, Qingnong, Zhongyin, and Xingye [38]. 3.4 Market Review - **Market Performance in January**: The convertible bond market fluctuated strongly, with the small - cap style leading. The Shanghai Composite Index, Shenzhen Component Index, and other major indexes all rose, and the convertible bond valuation increased by 3.05pct month - on - month [45]. - **Market Trends**: The TMT and manufacturing sectors were popular, while the financial and real - estate sectors were relatively stable. Most industries in the convertible bond and underlying stock markets rose, and there was obvious rotation among sectors [49]. - **Fund Performance**: The daily trading volume of the equity and convertible bond markets increased, and the margin trading balance also increased. Most industries received net margin purchases [55][56]. 3.5 Supply and Demand Situation - **New Bond Issuance in January**: Five new convertible bonds were issued, with a total scale of 57.80 billion yuan, and four new convertible bonds were listed, with a total scale of 41.97 billion yuan. The online new - bond subscription decreased [60]. - **Pending Issuance and New Plans**: The total pending issuance scale was about 129.911 billion yuan. Eleven new board plans were added in January, with a total scale of 137.99 billion yuan, showing both month - on - month and year - on - year increases [67]. - **Redemption and Downward Revision**: Sixteen convertible bonds announced redemption, and five convertible bonds announced proposals for downward revision [75]. - **Holder Changes**: The total scale of convertible bonds held by various entities in the Shanghai and Shenzhen Stock Exchanges decreased. The scale of convertible bonds held by public funds increased, while that of enterprise annuities and securities companies decreased [82][85][89].

Core Insights - The A-share market saw collective gains last Friday, with the Shanghai Composite Index rising by 0.33%, the Shenzhen Component Index by 0.79%, and the ChiNext Index by 0.63%. The total trading volume in the Shanghai and Shenzhen markets reached 30,849.73 billion yuan [1][7] - In terms of industry performance, power equipment, non-ferrous metals, and national defense sectors led the gains, while communication, banking, and coal sectors lagged behind. Concept sectors such as BC batteries, perovskite batteries, and TOPCON battery concepts showed significant increases, while corn, Tonghuashun overseas 50, and soybean concepts experienced declines [1][7] Important News - Beijing has released measures to promote the development and utilization of commercial satellite remote sensing data resources from 2026 to 2030. The measures encourage capable enterprises to engage in mergers and acquisitions within the satellite data industry, aiming to create globally competitive leading enterprises [2][8] Industry Analysis - A joint document from nine government departments encourages horizontal mergers and acquisitions in the pharmaceutical retail sector. This initiative aims to enhance the professional services and health promotion functions of the pharmaceutical retail industry, establishing a better service platform for public health needs [3][9] - The document outlines several key policies, including optimizing the service of designated retail pharmacies, promoting participation in centralized drug procurement, and encouraging the integration of pharmaceutical wholesale and retail businesses. It also supports the development of commercial health insurance products tailored to the pharmaceutical retail sector [10][11] - The policy emphasizes support for prescription outflow, collaboration between retail and commercial insurance, and encourages the consolidation of retail pharmacies. This is expected to benefit leading companies in the pharmacy sector and open a window for industry consolidation [13]

Core Insights - The A-share market saw a collective rise in the three major indices, with the Shanghai Composite Index up by 0.86%, the Shenzhen Component Index up by 0.64%, and the ChiNext Index up by 1.01. The total trading volume in the Shanghai and Shenzhen markets reached 13,165.99 billion yuan [2][7] - In terms of industry performance, non-bank financials, transportation, and food and beverage sectors led the gains, while defense, beauty care, and machinery sectors lagged behind [2][7] - The Hang Seng Index rose by 2.3%, and the Hang Seng Technology Index increased by 2.13%. In the overseas markets, the Dow Jones fell by 0.64%, while the S&P 500 and Nasdaq both rose by 0.72% [2][7] Important News - The U.S. has adjusted tariffs on Chinese goods, revoking 91% of the additional tariffs and implementing a 34% reciprocal tariff, with 24% of these tariffs suspended for 90 days. Additionally, the tax rate on small packages from China has been reduced from 120% to 54% [3][8] - The People's Bank of China reported that the social financing scale increased by 8.7% year-on-year as of the end of April, with M2 balance growing by 8%. In the first four months of the year, new RMB loans increased by 1,006 billion yuan, and the social financing scale increased by 1,634 billion yuan [3][8] Industry Analysis - The report highlights a new policy initiative from seven departments aimed at accelerating the establishment of a technology finance system to support high-level technological self-reliance and innovation. This includes the establishment of a national venture capital guidance fund and enhanced support for technology innovation through various financial mechanisms [9][10] - The policy aims to promote regional innovation practices and enhance financial services for national strategic technology forces, thereby accelerating breakthroughs in key technologies and facilitating the transformation of technological achievements into commercial applications [10][11] Cosmetics Industry Overview - The cosmetics industry has shown overall weak performance due to external factors and recovering consumer demand. However, some companies have achieved significant revenue and net profit growth due to strong product capabilities and flexible marketing strategies [12] - From January 1 to May 6, 2025, the cosmetics sector rose by 29.07%, outperforming the CSI 300 Index by 32.28 percentage points. Notable performers include Bawei Co., which led the OEM sector, and Ruifeng Co., which led the brand sector [12][13] - Financial performance varies across segments, with some companies like Proya and Marubi showing strong growth, while others face short-term pressure. The report emphasizes the importance of R&D investment and product quality in driving future growth [13]