Core Viewpoint - The model of "bond financing" through state-owned asset securitization plays a crucial role in supporting local investment companies, providing significant advantages for their development. Group 1: Reasonable and Flexible Quota Range - The financing quota for local investment companies is set between 500 million to 1 billion, with a total scale controlled at 30% to 40% of fixed assets, ensuring that funding needs are met without excessive financing risks [2]. Group 2: Flexible Term Structure - The financing model features a flexible term design of 3 + 2 + 2 years, with a maximum duration of 7 years, allowing for annual interest payments and principal repayment at maturity, which aligns with the cash flow of various infrastructure projects [3]. Group 3: Significant Cost Advantages - Interest rates are set between 2.5% to 3.5%, with a comprehensive rate not exceeding 5%, providing a clear cost advantage over other financing methods, thereby reducing financial expenses and enhancing project profitability [4]. Group 4: Pure Credit Loans and Non-standard Asset Securitization - The model allows for pure credit loans without the need for fixed asset collateral, facilitating easier financing for local investment companies, and enables the securitization of non-standard assets, improving liquidity and value [5]. Group 5: Wide Range of Fund Uses - Funds can be used broadly as long as they align with national strategic directions, allowing local investment companies to flexibly allocate resources for both traditional infrastructure and emerging industries [6]. Group 6: Flexible Maturity Repayment Mechanism - The bond maturity can be extended, and policies allow for the issuance of new bonds to repay old ones before maturity, providing local investment companies with greater financial maneuverability and reducing liquidity risks [7].

Group 1: Macroeconomic Overview - The macroeconomic environment is characterized by a "slight decline" and "continuous improvement" interwoven, with manufacturing PMI and export growth showing slight decreases in October 2025 compared to the previous month [1][11] - The overall economic situation is improving compared to last year, with state-owned enterprises and listed companies showing signs of better performance, while support for small and medium-sized enterprises (SMEs) needs to be enhanced [1][16] - The production index and new orders index for October were 49.7% and 48.8%, respectively, indicating a slight decline, but large enterprises continue to show expansion with indices above 50 [3][12] Group 2: Industry Development and Policy Support - High-tech manufacturing, equipment manufacturing, and consumer goods industries are crucial for maintaining the overall prosperity of the manufacturing sector, with a focus on supporting SMEs towards "specialized, refined, and innovative" development [4][18] - New application scenarios are expected to emerge in fields such as digital economy, artificial intelligence, clean energy, and biotechnology, providing growth opportunities for related companies [4][18] - The government emphasizes the need for a complete industrial chain in technology innovation and application to enhance the "R&D-application-manufacturing" capabilities across industries [21][22] Group 3: Investment Strategy - Investment focus should be on economically strong provinces with good debt management, such as Guangdong, Jiangsu, and Zhejiang, with a recommended duration of 5 years [5][23] - Areas with significant debt resolution policies or funding support should be considered for shorter durations of 3-5 years, including Chongqing and Tianjin [5][25] - Attention should also be given to cities with strong industrial foundations and financial support, particularly those with important industrial chain positions [5][26]

Core Viewpoint - The gradual exit of local government financing platforms marks the end of an era, necessitating a transformation towards market-oriented operations for these entities [2][10]. Group 1: Exit from Government Financing Platforms - Since 2025, numerous local government financing platforms have announced their exit from government financing, with over 15 platforms making such announcements in October alone [1][2]. - The People's Bank of China and other departments issued a notice in August 2025, mandating the complete exit of local government financing platforms by June 2027 [1][2]. - As of September 26, 2025, 114 local government financing platforms have officially announced their exit, with Shandong leading with 28 exits [2][3]. Group 2: Policy and Market Dynamics - The "One Package Debt Relief" policy has been a driving force behind the structured exit of financing platforms, with clear timelines and standards established [2][3]. - The exit process is influenced by both policy enforcement and the internal need for financing platforms to transition towards market-oriented operations [3][4]. Group 3: Transformation and New Business Models - Financing platforms are encouraged to enhance their self-sustaining capabilities by shifting focus from traditional infrastructure projects to market-oriented businesses that generate continuous cash flow [10][11]. - The restructuring process involves consolidating core business areas, expanding into new market opportunities, and effectively managing existing assets to generate revenue [11][12]. - The transition from reliance on government credit to independent market operations is crucial for the sustainability of these platforms [10][11]. Group 4: Financial Communication and Debt Management - Effective communication with financial institutions regarding existing debts is essential during the exit process, ensuring that all stakeholders are informed and agreements are reached [5][6]. - The management of existing operational debts must be handled carefully, utilizing strategies such as debt restructuring and asset optimization to maintain financial credibility [5][6]. Group 5: Ongoing Relationship with Local Governments - Despite exiting government financing platforms, the relationship between these entities and local governments remains significant, necessitating a clear delineation of responsibilities [6][7]. - The support from local governments is expected to continue, as these platforms still play vital roles in regional development [7][8]. Group 6: Regulatory Environment and Accountability - The regulatory environment has tightened around local government financing, with increased scrutiny on hidden debts and accountability for local officials [9][10]. - Recent cases of hidden debt have highlighted the need for compliance with national policies, reinforcing the urgency for financing platforms to adapt to new operational frameworks [9][10].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - 5000 billion yuan of new policy - based financial instruments are expected to drive 2 - 5 trillion yuan of infrastructure investment, focusing on new infrastructure and consumption - related infrastructure. In addition to accelerating the implementation of these instruments, it is recommended that fiscal policies further strengthen efforts, such as accelerating the use of existing tools like special bonds and special treasury bonds, and considering increasing the deficit ratio and issuing special treasury bonds [5][7]. - Some regions have announced debt - reduction goals. Shandong Zibo Zichuan District plans to eliminate high - interest debts above 7% by the end of the year and keep the government's comprehensive debt ratio below 200%. Anhui Chizhou aims to completely eliminate implicit debts by the end of 2025 [5][13]. - This week, 43 urban investment enterprises prepaid bond principal and interest, and 7 urban investment bonds cancelled their issuance [5][16][17]. Summary by Directory 1. News Commentary - **5000 billion yuan of new policy - based financial instruments**: Compared with the previous two rounds, the scale has moderately shrunk, and the supported fields are tilted towards new infrastructure and consumption - related infrastructure. It can support infrastructure investment this year, especially solve the problem of insufficient project capital, and theoretically drive 2 - 5 trillion yuan of infrastructure investment. It is also recommended to strengthen fiscal policies [5][10][11]. - **Debt - reduction goals in some regions**: Shandong Zibo Zichuan District will replace high - interest debts above 7% and control the comprehensive debt ratio. Anhui Chizhou will eliminate implicit debts and try to complete the exit of financing platforms [13][15]. - **Pre - payment of bonds by urban investment enterprises**: 43 urban investment enterprises prepaid bond principal and interest, involving 45 bonds with a total scale of 70.84 billion yuan [16]. - **Cancellation of bond issuance**: 7 urban investment bonds cancelled their issuance, with a planned total issuance scale of 47.00 billion yuan [17]. 2. Issuance of Local Government Bonds and Urban Investment Enterprise Bonds - **Local government bonds**: This week, the issuance and net financing scale increased. The 2 - trillion - yuan replacement quota has only 136.47 billion yuan left, and only Henan and Hubei have not completed the issuance. The weighted average issuance interest rate increased, and the weighted average issuance spread narrowed. The issuance was mainly in 30 - year terms, and Guangdong had the largest issuance scale [18][19]. - **Urban investment bonds**: The issuance scale increased, the net financing scale turned negative, the issuance interest rate increased, and the spread widened. The issuance was mainly private placement bonds, with a 5 - year term, and the issuer's main body level was mainly AA +. This week, 6 overseas urban investment bonds were issued, with a total scale of 57.45 billion yuan [24][25]. 3. Trading of Local Government Bonds and Urban Investment Enterprise Bonds - **Funding situation**: The central bank conducted reverse repurchase and MLF operations this week, with a net investment of 1122.3 billion yuan. Short - term funding rates fluctuated [30]. - **Credit rating adjustment**: There was no credit rating adjustment for urban investment enterprises this week [30]. - **Credit events and regulatory penalties**: No urban investment credit risk events occurred this week [30]. - **Local government bonds**: The spot trading scale increased by 3.21% to 508.935 billion yuan, and most of the maturity yields increased, with an average increase of 3.38BP [32]. - **Urban investment bonds**: The trading scale increased by 12.74% to 358.453 billion yuan, and the maturity yields increased across the board, with an average increase of 6.91BP. The spreads of 1 - year, 3 - year, and 5 - year AA + urban investment bonds widened [32]. - **Abnormal trading of urban investment bonds**: 12 bonds of 11 urban investment entities had 15 abnormal trades. Shandong had the most abnormal trading times [32]. 4. Important Announcements of Urban Investment Enterprises - 35 urban investment enterprises issued announcements regarding changes in senior management, legal representatives, directors, supervisors, etc., changes in controlling shareholders and actual controllers, equity/asset transfers, suspected disciplinary violations, and name changes [35].

Report Industry Investment Rating No relevant content provided. Report's Core View - Gansu Province has significant regional advantages and rich resources, with stable economic growth in 2024, but its economic aggregate and per capita GDP are still at the lower level in the country. The provincial government's debt scale is growing, but the debt ratio is at the middle level in the country due to the support of superior subsidy income. As one of the 12 key provinces for debt resolution, it continues to receive central debt - resolution policy support. The number of financing platforms has decreased significantly, and future work on platform clearance and transformation and upgrading will continue. - The economic and fiscal strengths of prefecture - level cities (prefectures) in Gansu are significantly differentiated. Lanzhou, the provincial capital, leads in economic development and fiscal strength. By the end of 2024, the government debt balances of all prefecture - level cities (prefectures) increased, and most of their debt ratios and debt - to - GDP ratios rose. - The number of bond - issuing urban investment enterprises in Gansu is small, mainly at the prefecture - level. In 2024, the net financing of bond - issuing urban investment enterprises was positive, and the regional financing environment improved. Since 2025, the short - term debt repayment pressure has increased. As of the end of 2024, the short - term debt repayment indicators of bond - issuing urban investment enterprises continued to weaken, and most of them still face great short - term debt repayment pressure. [4] Summary by Relevant Catalogs I. Gansu Province's Economic and Fiscal Strength (1) Regional Characteristics and Economic Development of Gansu Province - Gansu has significant regional advantages, rich in land, mineral, medicinal, and cultural and tourism resources, with relatively developed land and air transportation. During the "14th Five - Year Plan" period, the planned transportation fixed - asset investment scale (excluding railways) is about 500 billion yuan. As of the end of 2024, the total highway mileage reached 159,300 kilometers, and the railway operating mileage was 5,960 kilometers. [5][6] - The province's population is multi - ethnic, and the urbanization rate is lower than the national average. As of the end of 2024, the permanent population was 24.5834 million, and the urbanization rate was 56.83%. [7] - In 2024, Gansu's GDP was 1,300.29 billion yuan, ranking 27th in the country, with a growth rate of 5.8%. The per capita GDP was 58,300 yuan, ranking 31st. From January to June 2025, the GDP was 646.88 billion yuan, with a year - on - year growth of 6.3%, 1.0 percentage point higher than the national average. [8] - The industrial structure is relatively stable, with the tertiary industry as the main driving force for economic growth. The cultural and tourism industry has achieved "dual improvement in quantity and quality". In 2024, the tertiary industry added value was 694.48 billion yuan, a year - on - year increase of 4.6%. The province received 451 million domestic tourists, with domestic tourism revenue of 345.2 billion yuan, a year - on - year increase of 16.2% and 25.8% respectively. [11] - National strategies and policies, such as the Western Development Strategy, the Belt and Road Initiative, and the Yellow River Basin Ecological Protection and High - quality Development Strategy, have promoted the economic development of Gansu. The province also actively undertakes industrial transfer from the east - central regions, and Lanzhou New Area has strong economic growth momentum. [12][13][14] - The central government provides transfer payments and special funds to support Gansu's development. In 2024, the superior subsidy income in the general public budget revenue was 345.36 billion yuan, a year - on - year increase of 1.02%. [15] (2) Fiscal Strength and Debt Situation of Gansu - In 2024, Gansu's general public budget revenue ranked at the lower level in the country, with relatively weak overall fiscal strength and low fiscal self - sufficiency rate, but the general public budget revenue was relatively stable. The government - funded income decreased year - on - year, and the superior subsidy income contributed significantly to the local comprehensive financial resources. The government's debt - to - GDP ratio ranked behind in the country, and the debt ratio was at the middle level in the country. [17] - As one of the 12 key provinces for debt resolution, Gansu continues to receive central debt - resolution policy support. In 2024 and from January to August 2025, it issued special refinancing bonds of 50.6 billion yuan and 44.3 billion yuan respectively. In 2024, it obtained a new government debt quota of 211.5 billion yuan, including a special debt quota of 194.4 billion yuan. [20] II. Economic and Fiscal Conditions of Prefecture - level Cities (Prefectures) in Gansu (1) Economic Strength of Prefecture - level Cities (Prefectures) in Gansu - The economic strength of prefecture - level cities (prefectures) in Gansu is significantly differentiated. Lanzhou, as the provincial capital, has a good industrial foundation and is significantly stronger than other cities. Jinchang and Jiayuguan have high per capita GDP due to rich resources. [21] - Gansu promotes the formation of an urban development pattern of "one belt, one corridor, one core, and two regional centers". Each city develops relevant industries based on its own resource advantages. Lanzhou provides core support for the provincial industrial development. [24] - In 2024, cities with GDP over 100 billion yuan were Lanzhou, Qingyang, and Jiuquan. Lanzhou had the highest GDP, accounting for 28.78% of the province's GDP. Jinchang, Jiuquan, and Jiayuguan had GDP growth rates over 7%. Gannan Tibetan Autonomous Prefecture had the lowest growth rate of 3.8%. [29] - Jinchang and Jiayuguan led in per capita GDP, while Linxia Hui Autonomous Prefecture ranked last. As of the end of 2024, Lanzhou had a concentrated population and a relatively high urbanization rate. Jinchang and Jiayuguan also had urbanization rates over 80%. [30] (2) Fiscal Strength and Debt Situation of Prefecture - level Cities (Prefectures) in Gansu - **Fiscal Revenue**: In 2024, the fiscal strength of prefecture - level cities (prefectures) in Gansu continued to be differentiated. Lanzhou's comprehensive fiscal strength was much higher than others, with high tax revenue contribution. Most cities' government - funded income decreased significantly due to the land transfer market. The superior subsidy income was large and contributed highly to the comprehensive financial resources. [31] - **Debt Situation**: By the end of 2024, the government debt balances of all prefecture - level cities (prefectures) increased. Most cities' debt - to - GDP ratios and debt ratios rose. Lanzhou had the highest debt ratio of 234.50%. In 2024, Gansu reduced 94 financing platforms, a year - on - year decrease of 35.9%. The province will continue to resolve debt risks and promote the transformation and upgrading of financing platforms. [38][39][41] III. Debt Repayment Ability of Urban Investment Enterprises in Gansu (1) Overview of Urban Investment Enterprises - As of September 8, 2025, there were 7 urban investment enterprises with outstanding bonds in Gansu, mainly at the prefecture - level, and the credit ratings were mainly AA. Since 2024, the credit ratings of these enterprises have not changed, but one enterprise's rating outlook remained negative. [45][46] (2) Bond Issuance of Urban Investment Enterprises - In 2024, the number and scale of bonds issued by urban investment enterprises in Gansu increased significantly, mainly concentrated in Lanzhou and Pingliang. The net financing was positive, and the regional financing environment improved. Since 2025, the short - term debt repayment pressure has increased. [47] (3) Debt Repayment Ability Analysis of Urban Investment Enterprises - As of the end of 2024, the total debt balance of bond - issuing urban investment enterprises in Gansu was 129.023 billion yuan, with high regional concentration. Most enterprises still faced great short - term debt repayment pressure, and the short - term debt repayment indicators continued to weaken. The provincial and Lanzhou - level enterprises had a significant increase in net cash inflow from financing activities. [50] (4) Support and Guarantee Ability of Fiscal Revenue for the Debt of Bond - issuing Urban Investment Enterprises - As of the end of 2024, the ratio of "total debt of bond - issuing urban investment enterprises + local government debt" to "comprehensive financial resources" in bond - issuing prefecture - level cities in Gansu was between 100% and 350%, with Lanzhou having the highest ratio of 316.26%, indicating weak support and guarantee ability. [58]

1. Report Industry Investment Rating - No information provided in the given content. 2. Core Viewpoints of the Report - The fiscal achievements during the 14th Five - Year Plan include enhanced financial strength, stable macro - regulation, improved people's livelihood, and effective risk prevention. Over 60% of financing platforms have exited, and in the 15th Five - Year Plan, debt reduction and development will go hand in hand to promote a positive cycle between economic development and debt management [5][8][11]. - Gansu issued the first provincial - level implementation plan for the construction and operation of PPP stock projects, aiming to solve related problems and promote the compliance and stable operation of projects [5][15]. 3. Summary According to Relevant Catalogs 3.1. News Reviews 3.1.1. Fiscal Achievements during the 14th Five - Year Plan - Fiscal macro - regulation has achieved new breakthroughs, with fiscal policies becoming more proactive, enhancing counter - cyclical and cross - cyclical adjustments, and emphasizing expectation management. The deficit rate has increased from 2.7% to 4%, and the total national general public budget expenditure is expected to exceed 136 trillion yuan, a 24% increase from the 13th Five - Year Plan [8]. - The expenditure structure has been further optimized, with a more prominent people - oriented focus. Fiscal investment in people's livelihood is nearly 100 trillion yuan, and in 2025, 100 billion yuan is allocated for child - rearing subsidies and 20 billion yuan for free pre - school education [10]. - Local debt risks have significantly converged, with over 60% of financing platforms exiting. The "6 + 4+2 debt - reduction combination" has achieved positive results, and the Ministry of Finance will advance the issuance of some new local government debt quotas in 2026 [11][12]. - Fiscal and tax reform and management have advanced in depth, forming a good pattern of more scientific budget management, more perfect tax systems, and more sound fiscal systems [13]. 3.1.2. Gansu's PPP Stock Project Plan - Gansu issued the "Implementation Plan for the Standardized Construction and Operation of Government - Social Capital Cooperation Stock Projects" on September 8, 2025. The plan has three - stage goals and proposes multiple measures to ensure the smooth construction of ongoing projects and the stable operation of operational projects [15]. 3.1.3. Early Repayment of Bonds by 29 Urban Investment Enterprises - 29 urban investment enterprises early - repaid the principal and interest of 29 bonds, with a total scale of 5.067 billion yuan, a decrease of 127 million yuan compared to the previous period. Most of the enterprises are in the eastern region, and the main rating is AA [17][18]. 3.1.4. Cancellation of Issuance of 4 Urban Investment Bonds - Four urban investment bonds with a planned issuance scale of 2.1 billion yuan were cancelled from September 10 - 12, 2025. As of September 12, 79 urban investment bonds have been postponed or cancelled this year, with a total scale of 50.264 billion yuan [19]. 3.2. Issuance of Local Government Bonds and Urban Investment Enterprise Bonds 3.2.1. Local Government Bonds - This week, 53 local government bonds were issued, with the issuance scale rising 223.02% to 301.672 billion yuan and the net financing rising 425.16% to 192.779 billion yuan. The weighted average issuance interest rate rose 13.59 BP to 2.17%, and the weighted average issuance spread narrowed 1.72 BP to 19.47 BP [20]. - Shenzhen issued 1 billion yuan of offshore RMB local government bonds in Macau on September 9, and Hainan issued 5 billion yuan of RMB local government bonds in Hong Kong on September 12 [20][21]. 3.2.2. Urban Investment Bonds - This week, 131 urban investment bonds were issued, with the issuance scale rising 26.02% to 94.766 billion yuan and the net financing rising 56.269 billion yuan to 21.563 billion yuan. The average issuance interest rate was 2.38%, a 0.56 BP increase, and the issuance spread was 80.48 BP, a 4.37 BP narrowing [25][27]. - Three overseas urban investment bonds were issued, with a total scale of 2.84 billion yuan, and the weighted average issuance interest rate was 4.11% [27]. 3.3. Trading of Local Government Bonds and Urban Investment Enterprise Bonds - The central bank conducted 1.2645 trillion yuan of reverse repurchase operations in the open market this week, with 1.0684 trillion yuan of reverse repurchases maturing, resulting in a net investment of 196.1 billion yuan [31]. - Short - term capital interest rates all increased. The trading volume of local government bond spot reached 434.793 billion yuan, a 15.64% increase, and most of the maturity yields increased, with an average increase of 4.67 BP [31]. - The trading volume of urban investment bonds was 253.397 billion yuan, a 0.57% increase, and all maturity yields increased, with an average increase of 5.63 BP. The spreads of 1 - year, 3 - year, and 5 - year AA+ urban investment bonds all widened [33]. - Ten urban investment entities had 14 abnormal transactions of 10 bonds, with the number of entities and abnormal transactions increasing compared to last week, while the number of bonds remained unchanged [33]. 3.4. Important Announcements of Urban Investment Enterprises - This week, 56 urban investment enterprises announced changes in senior management, legal representatives, directors, supervisors, etc., as well as changes in controlling shareholders, actual controllers, equity/asset transfers, cumulative new borrowings, name changes, business scope changes, and changes in the use of raised funds [36].

Group 1: Policy Context - The concept of "involution" was officially introduced in China's policy discourse during the Politburo meeting on July 30, 2024, emphasizing the need to prevent "malicious competition" in industries[1] - The 2025 Politburo meeting reiterated the importance of optimizing market competition order and regulating disorderly competition among enterprises[2] - A series of policies and regulations have been implemented since 2020 to combat administrative monopolies and local protectionism, aiming to break the cycle of homogeneous competition[3] Group 2: Characteristics of Involution in Urban Investment Enterprises - Urban investment enterprises exhibit involution through homogeneous business layouts, debt-income mismatches, and administrative intervention[5] - Homogeneous business layouts are evident in three core areas: industrial parks, cultural tourism projects, and infrastructure, leading to resource wastage[5] - Debt-income mismatches result in continuous debt service payments exceeding operational income, creating a rigid financial gap and forcing enterprises into a cycle of borrowing[6] Group 3: Causes of Involution - The root causes of involution include institutional environment, government-enterprise relations, and the inherent capabilities of urban investment enterprises[8] - Institutional factors involve market segmentation and local protectionism, distorting competitive logic and limiting asset allocation[8] - Government-enterprise relations lead to urban investment enterprises being treated as "government tools," undermining their market autonomy and operational capabilities[9] Group 4: Key Paths for Counteracting Involution - Reconstructing assessment indicators to detach urban investment enterprises from local government performance metrics is crucial[11] - Transitioning urban investment enterprises from "financing platforms" to "city operators" can enhance their market-driven operational capabilities[13] - Promoting cross-regional cooperation among urban investment enterprises can facilitate resource sharing and risk mitigation, transforming competition into collaboration[15]

Report Investment Rating No investment rating information is provided in the report. Core Viewpoints - The Central Urban Work Conference points out a new direction for urban development. Special bond support areas may be further tilted towards urban renewal, green - low - carbon, safety - resilience, and smart governance. Urban investment enterprises can participate in urban renewal and smart city operations to accelerate market - oriented transformation [7][9]. - Jilin plans to issue 26 billion yuan of special bonds for small and medium - sized banks to support the establishment of a provincial rural commercial bank. In the future, more provinces may issue relevant bonds to support small and medium - sized banks and explore the feasibility of supporting other local small and medium - sized financial institutions [11]. - This week, the issuance and net financing of local government bonds and urban investment bonds both increased, with different trends in issuance costs and structures [16][20]. Summary by Directory 1. News Review - **Central Urban Work Conference**: Held from July 14th to 15th, it emphasizes "five transformations" and "seven key tasks". Special bond support areas may be tilted towards urban renewal, etc., and urban investment enterprises can accelerate transformation [7][8][9]. - **Jilin's Special Bond Issuance**: Jilin plans to issue 26 billion yuan of special bonds for small and medium - sized banks on July 22nd. More provinces may follow suit to support small and medium - sized banks and explore supporting other local small and medium - sized financial institutions [11][12]. - **Early Redemption of Urban Investment Bonds**: 18 urban investment enterprises redeemed bond principal and interest in advance this week, involving 20 bonds with a total scale of 2.704 billion yuan [14][15]. - **Cancellation or Postponement of Urban Investment Bond Issuance**: No urban investment bonds were cancelled or postponed this week [16]. 2. Issuance of Local Government Bonds and Urban Investment Enterprise Bonds - **Local Government Bonds**: 45 local bonds were issued this week, with a scale of 231.79 billion yuan, a net financing of 110.229 billion yuan. The issuance of new special bonds exceeded half of the annual quota. The weighted average issuance interest rate rose to 1.80%, and the spread widened to 10.35BP [16]. - **Urban Investment Bonds**: 135 urban investment bonds were issued this week, with a scale of 88.943 billion yuan, and the net financing was - 3.301 billion yuan. The overall issuance interest rate was 2.13%, and the spread was 66.47BP. Four overseas urban investment bonds were issued, with a total scale of 4.467 billion yuan [20]. 3. Trading of Local Government Bonds and Urban Investment Enterprise Bonds - **Funds and Credit Rating Adjustment**: The central bank net - withdrew 22.65 billion yuan this week. On July 9th, 2025, Zhongzheng Pengyuan downgraded the rating of "22 Shenshan Investment MTN001" of Guangdong Shenshan Investment Holding Group Co., Ltd. from AAA to AA+ [23][24]. - **Trading Volume and Yield**: The trading volume of local government bonds was 390.614 billion yuan, a decrease of 30.89%. The trading volume of urban investment bonds was 284.91 billion yuan, a decrease of 2.16%. The yields of both mostly increased [24]. - **Abnormal Trading of Urban Investment Bonds**: 18 urban investment entities had 22 abnormal bond trades, with an increase in the number of entities, bonds, and trades [25]. 4. Important Announcements of Urban Investment Enterprises 86 urban investment enterprises issued announcements on changes in senior management, legal representatives, etc., including changes in executives, legal representatives, directors, and supervisors; changes in controlling shareholders and actual controllers; equity/asset transfers; changes in fund use; cumulative new borrowings; and external guarantees [29].

Group 1 - The core issue in Guangxi, particularly in Liuzhou, revolves around debt resolution and economic development, with significant attention from the regional government [2][5] - Liuzhou has successfully completed a phase of debt resolution, achieving a "zero" status for non-standard debt by the end of June, and has maintained a stable financial environment for over four years [2][5] - The local government aims to resolve over 100 billion yuan in debt principal and interest in 2024, while reducing interest expenses by 1.6 billion yuan [2][5] Group 2 - Liuzhou's public budget revenue for 2024 is projected at 14.9 billion yuan, with a local government debt balance of 104.3 billion yuan, resulting in a wide debt ratio of approximately 490% [5][21] - The urgency of debt resolution is underscored by the national goal to reduce local government hidden debt from 14.3 trillion yuan to 2.3 trillion yuan by 2028, requiring an annual reduction of 460 billion yuan [6][19] - The overall local government debt, including hidden debts, is a significant concern, with the total government debt reaching approximately 70.77 trillion yuan by the end of 2023 [7][8] Group 3 - The current debt resolution strategy primarily involves debt replacement, converting high-interest, short-term debts into lower-interest, long-term obligations [16][19] - Challenges in debt resolution include the ongoing pressure of interest payments on existing debts, which remain high despite lower new financing rates [16][17] - The economic structure of Liuzhou is fragile, with a GDP growth rate of only 1.5% in 2024, indicating a need for structural adjustments to ensure sustainable economic development [21][22] Group 4 - The local government is focusing on high-quality development as a long-term solution to the debt crisis, rather than merely reducing debt levels [22][23] - The new leadership emphasizes the importance of industrial revitalization and sustainable economic practices to overcome the current financial challenges [23]

Report Summary 1. Industry Investment Rating No industry investment rating is provided in the report. 2. Core Views - The highlights in 2024 are the significant slowdown in the growth rates of interest - bearing debt and urban investment bonds of urban investment platforms, the remarkable effect of "hidden debt turning into explicit debt", and the convergence of investment and financing intensity [6][8][66]. - Concerns include the need to improve the financing structure, the considerable debt pressure in economically large provinces like Zhejiang and Jiangsu, the reduction of book funds and the decline in the coverage ratio of monetary funds to short - term debt, and the large - scale outstanding project payments from local governments to urban investment platforms and inter - state - owned enterprise transactions [6][8][67]. - In 2025, the focuses of urban investment include the delisting of financing platforms and their subsequent market - oriented transformation, the settlement of overdue enterprise accounts, and the resolution of non - standard products involving the public [9][68]. 3. Summary by Directory 3.1 2024 Urban Investment Debt Resolution Achievements - **Overall Debt Scale and Growth Rate**: The interest - bearing debt and urban investment bonds of urban investment platforms increased slightly year - on - year, with growth rates dropping to the lowest since 2019. The debt growth rate has declined for four consecutive years. The reasons are debt replacement by local government bonds, weakened project financing demand, and strict bond financing policies [13]. - **Provincial Debt Changes**: Six key provinces saw a year - on - year decrease in interest - bearing debt, with Tianjin and Guizhou having the most significant reduction. In terms of bonds, 12 provinces had a year - on - year decrease in urban investment bond scale, with Jiangsu, Tianjin, Hunan, and Guizhou having obvious shrinkage [17][19]. - **Debt Ratio Changes**: The local broad and explicit debt ratios continued to rise, with the explicit debt ratio's year - on - year growth rate reaching a new high in recent years. Since 2021, the growth rate of the explicit debt ratio has been higher than that of the broad debt ratio, in line with the debt resolution idea of "hidden to explicit". Most provinces saw an increase in the broad debt ratio in 2024, except for six provinces [22][25]. - **Financing Structure Changes**: The proportions of bank loans and bonds in urban investment debt both decreased year - on - year, with a combined decrease of 2.2 percentage points. This part of the financing demand may have shifted to high - cost non - standard financing channels [4][27]. - **Debt Maturity Structure Changes**: The proportion of long - term debt increased slightly in 2024, but there is still room for improvement compared with 2019 - 2022 [39]. 3.2 Information Revealed by the Three Financial Statements of Urban Investment Platforms - **Balance Sheet**: The asset - liability ratio of urban investment platforms was basically stable, but the short - term solvency weakened. The coverage ratio of monetary funds to short - term debt decreased, and the government's project payments and inter - state - owned enterprise transactions may still need improvement [5][43]. - **Income Statement**: The operating income of urban investment platforms decreased for the first time in six years in 2024, and the net profit continued to decline. This is related to the tight investment and financing environment and the change in government assessment focus [5][51]. - **Cash Flow Statement**: The net operating cash flow of urban investment platforms deviated from the income statement and increased significantly after turning positive in 2023. The net investment cash flow was continuously negative, and the net financing cash flow decreased by 39% year - on - year, indicating a convergence of investment and financing intensity [5][57][60]. 3.3 Summary and Outlook - **Summary**: The growth rates of interest - bearing debt and urban investment bonds slowed down, the debt scale was effectively controlled, and the investment and financing intensity of urban investment platforms converged [66]. - **Outlook**: In 2025, focus on the delisting and market - oriented transformation of financing platforms, the settlement of overdue enterprise accounts, and the resolution of non - standard products involving the public [9][68].