Report Industry Investment Rating No information regarding the report industry investment rating is provided in the content. Core Viewpoints of the Report In Q3 2025, under the influence of the "anti - involution" policy and the new public fund fee regulations, the bond market weakened, and the bond fund market scale declined. Active bond funds adopted a "defensive" strategy of reducing leverage and shortening duration. In terms of performance, hybrid secondary bond funds had outstanding returns, while other types of funds showed different degrees of decline. In terms of bond holdings, active bond funds increased their holdings of convertible bonds and reduced their holdings of other bond types. In terms of heavy - held credit bonds, they increased their holdings of urban investment bonds and industrial bonds and reduced their holdings of financial bonds [1][2][3]. Summary According to Relevant Catalogs 1. Overview of the Bond Fund Market in Q3 2025 - The number of bond funds increased, with 3,936 funds at the end of Q3 2025, a quarter - on - quarter increase of 74 funds or 1.92%. The market scale decreased, with a total market scale of 10.69 trillion yuan, a quarter - on - quarter decrease of 0.24 trillion yuan or 2.23%. The fund shares had a net redemption of 475.2 billion shares, with a redemption ratio of 4.95% [12]. - In terms of market structure, medium - and long - term pure bond funds dominated the market, accounting for 55.5% of the total scale, followed by passive index bond funds at 14.7% [14]. - Different types of funds had different trends. Pure bond funds and hybrid primary bond funds had net redemptions and a decrease in market scale, while hybrid secondary bond funds and convertible bond funds had net subscriptions and an increase in market scale [17]. 2. Quarterly Performance of Active Bond Funds 2.1 Performance: Significantly Improved Quarterly Returns of Hybrid Secondary Bond Funds - In Q3 2025, the single - quarter weighted average returns of short - term pure bond funds, medium - and long - term pure bond funds, hybrid primary bond funds, and hybrid secondary bond funds were 0.17%, - 0.19%, 0.48%, and 4.31% respectively. Compared with the previous quarter, the return of hybrid secondary bond funds increased by 262.5 BP, while those of other funds decreased [22]. 2.2 Leverage Ratio and Duration: Reducing Leverage and Shortening Duration - At the end of Q3 2025, the single - quarter weighted average leverage ratios of short - term pure bond funds, medium - and long - term pure bond funds, hybrid primary bond funds, and hybrid secondary bond funds were 110.96%, 119.72%, 113.12%, and 108.14% respectively, with quarter - on - quarter decreases [25]. - The weighted average durations of heavy - held bonds were 0.91 years, 2.80 years, 3.16 years, and 3.77 years respectively, also showing quarter - on - quarter decreases [28]. 2.3 Bond Holdings: Increasing Holdings of Convertible Bonds and Reducing Holdings of Other Bond Types - At the end of Q3 2025, the total bond holding market value of active bond funds decreased by 7.66% quarter - on - quarter. Only the market value of convertible bonds held by active bond funds increased quarter - on - quarter, while other bond types decreased to varying degrees [30]. - By fund type, the bond holding scales of pure bond funds and hybrid primary bond funds decreased, while that of hybrid secondary bond funds increased [33]. 3. Analysis of Heavy - Held Credit Bonds of Active Bond Funds 3.1 Urban Investment Bonds: Leading Increase in Holdings in Regions such as Jiangxi and Jiangsu - **Heavy - Held Region Analysis**: At the end of Q3 2025, the market value of heavy - held urban investment bonds by active bond funds was 76.841 billion yuan, a quarter - on - quarter increase of 4.344 billion yuan. Regions such as Zhejiang, Jiangsu, and Shandong had large heavy - held market values. Active bond funds increased their holdings in regions such as Jiangxi and Jiangsu and reduced their holdings in regions such as Guangdong and Sichuan [35]. - **Heavy - Held Subject Analysis**: At the end of Q3 2025, active bond funds mainly held high - rated urban investment subjects such as Hunan Expressway, Hanjiang State - owned Assets, and Tianjin Urban Construction. Subjects such as Jiangxi Communications Investment and Hanjiang State - owned Assets had leading increases in holdings [39]. 3.2 Industrial Bonds: Increasing Holdings in Transportation and Real Estate, Reducing Holdings in Petroleum and Petrochemicals and Non - bank Finance - **Heavy - Held Industry Analysis**: At the end of Q3 2025, the market value of heavy - held industrial bonds by active bond funds was 129.823 billion yuan, a quarter - on - quarter increase of 8.719 billion yuan. Industries such as non - bank finance, public utilities, and transportation had large holding scales. Active bond funds increased their holdings in industries such as transportation and real estate and reduced their holdings in industries such as petroleum and petrochemicals and non - bank finance [41]. - **Heavy - Held Subject Analysis**: At the end of Q3 2025, active bond funds mainly held AAA - rated central and state - owned enterprises such as Central Huijin, State Grid, and China Guoxin. Subjects such as State Power Investment, China Chengtong, and Beijing Capital Tourism Group had leading increases in holdings [44]. 3.3 Financial Bonds: Leading Reduction in Holdings of Commercial Bank Tier 2 Capital Bonds - **Heavy - Held Variety Analysis**: At the end of Q3 2025, the market value of heavy - held financial bonds by active bond funds was 553.951 billion yuan, a quarter - on - quarter decrease of 21.666 billion yuan. Ordinary commercial financial bonds and commercial bank tier 2 capital bonds accounted for the main scale. Active bond funds increased their holdings of ordinary commercial financial bonds and TLAC bonds and reduced their holdings of sub - debt, perpetual bonds, and tier 2 capital bonds [46]. - **Heavy - Held Subject Analysis**: At the end of Q3 2025, active bond funds mainly held large state - owned banks and joint - stock banks such as Bank of China, China Construction Bank, and China Everbright Bank. Subjects such as Shanghai Bank, Huatai Securities, and Ping An Bank had leading increases in holdings [49].

Investment Rating - The investment rating for the company is "Accumulate" with a target price of 8.13 CNY [6][11]. Core Insights - The report highlights that the retail loan growth for the company has shown a continuous upward trend, while the decline in net interest margin and net profit margin is slowing down each quarter. Core revenue growth is accelerating, supported by the progress in the transformation of village banks into branches, which further expands the company's development footprint [2][11]. Financial Summary - The company's projected financials are as follows (in million CNY): - Revenue: 9,870 in 2023, expected to grow to 15,060 by 2027, with a CAGR of 12.1% [4]. - Net profit attributable to the parent company: 3,282 in 2023, expected to reach 5,751 by 2027, reflecting a CAGR of 15.9% [4]. - Book value per share (BVPS): Expected to increase from 8.99 in 2023 to 12.15 by 2027 [4]. - Return on equity (ROE): Projected to rise from 12.8% in 2023 to 13.8% by 2027 [4]. Performance Metrics - The company reported a year-on-year growth in total assets, loans, and deposits of 10.89%, 7.13%, and 9.69% respectively as of Q3 2025, with a significant loan increment of 5.3 billion CNY in the quarter [11]. - The non-performing loan (NPL) ratio remained stable at 0.76%, with a provision coverage ratio of 462.95% [11]. Growth Drivers - The ongoing transformation of village banks into branches is expected to accelerate, with the company having announced the absorption of eight village banks since October 2024, enhancing its market share in Jiangsu province [11]. - The report indicates that the company has successfully optimized its deposit pricing strategy, leading to a slight increase in the proportion of demand deposits [11].

Key Insights - The total financing amount raised by companies in mainland China in the global capital markets reached $92.62 billion in the first three quarters of 2025, representing a year-on-year increase of 120% and a quarter-on-quarter increase of 11% [1] - The number of issuances increased by 42% compared to the same period in 2024, totaling 404 transactions, with a quarter-on-quarter growth of 16% in Q3 2025 [1] - The total amount raised from Initial Public Offerings (IPOs) was $15.5 billion, marking an 83% year-on-year increase and a 47% quarter-on-quarter increase [1] - The total amount raised from follow-on offerings reached $55.32 billion, showing a significant year-on-year increase of 250%, although it decreased by 6% quarter-on-quarter [1] - The issuance of convertible bonds and equity-linked securities totaled $21.8 billion, reflecting a 23% year-on-year increase and a 39% quarter-on-quarter increase [1] Industry Performance - The industrial sector led the market with a 23% share, raising a total of $21.09 billion, which is a 98% increase compared to the same period last year [3] - Following the industrial sector, the high-tech, energy and power, healthcare, and telecommunications sectors also contributed significantly to the capital raised [3] Underwriter Rankings - Morgan Stanley ranked first among underwriters for Chinese stocks and equity-linked securities in 2025 [4] - CITIC Securities and Gao Hua ranked second and third, respectively, with total underwriting amounts of $10.43 billion and $9.47 billion [5] Legal Advisory Rankings - Jingtian & Gongcheng ranked first among legal advisors for Chinese stock and equity-linked issuers [5] - In the underwriting legal advisor rankings, Jingtian & Gongcheng also held the top position [6] Bond Market Insights - The issuance of RMB bonds increased by 23% year-on-year, while the issuance of Panda bonds decreased by 18% compared to 2024 [8] - Government and institutional bond issuances accounted for approximately 12.1 trillion RMB, representing 52% of the market share, with a year-on-year growth of 32% [10] - CITIC led the RMB bond underwriting rankings, while the Bank of China ranked first in Panda bond underwriting [12] Syndicated Loan Market - The Bank of China led the syndicated and club loan rankings across all currencies, with a total amount of 22.065 billion RMB, holding a market share of 43.3% [16] - The overall syndicated loan market saw a significant decline, with a 51% decrease in loan amounts compared to the previous year [16]

Core Insights - Extreme weather events, including heatwaves, heavy rainfall, floods, and droughts, are becoming the new normal globally, significantly threatening human health and well-being [2] - The 2025 report from UCL and WHO indicates that global temperature rise leads to approximately one death per minute from heat-related diseases, with an average of 546,000 deaths annually from 2012 to 2021 [2] - The report criticizes the U.S. for its climate commitments, particularly after former President Trump withdrew from climate agreements, exacerbating the health impacts of climate change [2] Group 1 - The top 100 fossil fuel companies have raised their production forecasts, potentially tripling CO2 emissions beyond the Paris Agreement's 1.5°C target [3] - In 2024, commercial banks are projected to invest a record $611 billion in the fossil fuel sector, compared to $532 billion in green sectors [3] - Governments are providing $2.5 billion daily in direct subsidies to fossil fuel companies, while extreme heat is causing significant economic losses due to reduced labor capacity [3] Group 2 - The average global exposure to lethal heat has increased, with individuals facing 19 days per year of extreme heat, 16 of which are attributed to human-induced climate change [3] - In 2024, extreme heat is expected to result in a loss of 639 billion hours of labor, with the least developed countries experiencing economic losses equivalent to 6% of their GDP [3] - Air pollution from fossil fuel combustion is responsible for millions of deaths annually, and the dry climate is contributing to wildfires, with smoke-related deaths projected to reach 154,000 in 2024 [3] Group 3 - The CEO of ClientEarth emphasizes that humanity is in an era of "climate consequences," shifting the focus from "if" to "when" accountability for climate impacts will occur [4] - There is a call for an immediate end to fossil fuel subsidies and increased investment in clean energy to safeguard future health [5]

Investment Rating - The report maintains a "Buy" rating for Nanjing Bank with a target price of 13.40 CNY [2][6]. Core Insights - Nanjing Bank is experiencing strong asset expansion and improved interest margins, which significantly support its performance. The volatility in the bond market has limited impact, and profitability continues to enhance [2]. - The bank's net interest income has increased by 29%, and the non-performing loan ratio for personal loans has decreased by 10 basis points [1]. Financial Summary - **Revenue and Profit Forecasts**: - Revenue is projected to grow from 45,160 million CNY in 2023 to 61,488 million CNY by 2027, with a CAGR of approximately 7.9% [4]. - Net profit attributable to the parent company is expected to rise from 18,502 million CNY in 2023 to 27,456 million CNY in 2027, reflecting a CAGR of about 11.5% [4]. - **Key Financial Ratios**: - The bank's net asset value per share is forecasted to increase from 13.34 CNY in 2023 to 17.81 CNY in 2027 [4]. - The return on equity (ROE) is expected to stabilize around 11.2% by 2027 [4]. Performance Metrics - **Interest Income**: - Net interest income growth is projected at 28.52%, significantly supporting overall performance [12]. - **Fee Income**: - Net fee and commission income is expected to grow by 8.52%, with notable performance in agency commissions, which increased by 47.2% year-on-year [12]. - **Cost Efficiency**: - The cost-to-income ratio has improved, decreasing by 2.0 percentage points to 23.27% [12]. Asset Quality - As of Q3 2025, the non-performing loan ratio stands at 0.83%, with a marginal improvement in retail asset quality [12]. - The bank's provisioning coverage ratio is reported at 313.22%, indicating a strong buffer against potential loan losses [12].

Core Points - The U.S. stock market opened with all three major indices rising, with the Dow Jones up 0.4%, S&P 500 up 0.7%, and Nasdaq up 1.0% [1] Company Performance - Morgan Stanley's Q3 net revenue exceeded expectations, resulting in a 4.4% increase in stock price [1] - Bank of America's Q3 performance also surpassed expectations, leading to a 4.1% rise in its stock [1] - Dollar Tree's stock rose by 4.9%, with a forecast of 12-15% annual growth in earnings per share over the next three years [1] - ASML's stock increased by 5.0% after reporting Q3 net profit above expectations and forecasting strong performance for the next year [1]

Core Viewpoint - UBS Wealth Management emphasizes the importance of being a "super connector" between Chinese and global entrepreneurs, leveraging its extensive experience and network to facilitate wealth management and investment opportunities [1][4]. Group 1: Wealth Management Strategy - UBS has over 160 years of history, focusing on wealth management, which accounts for over 50% of its total revenue [3]. - The firm adopts a "banking integration" strategy, where it first establishes long-term relationships with entrepreneurs, then extends services to investment banking and asset management as their needs grow [3][4]. - UBS has been active in the Chinese market for over 35 years, with a strong presence in Hong Kong and the broader Asia-Pacific region for over 60 years [3]. Group 2: Family Wealth Management - Many overseas families view family offices as a "school" for nurturing the next generation, with younger family members increasingly interested in entrepreneurship rather than traditional family businesses [6]. - Family offices are also seen as platforms for social impact, with younger generations preferring to invest in socially valuable projects rather than merely donating [6]. - The core demand from high-net-worth clients in China is shifting towards stability and diversification, with a growing interest in alternative investments such as private equity and hedge funds [6]. Group 3: Opportunities in the Greater Bay Area - UBS manages one-third of its assets in the Greater Bay Area, highlighting its significance to the firm [8]. - The number of trips between Hong Kong and cities in the Greater Bay Area has increased by 25% compared to last year, with related meetings rising by over 20% [8]. - The firm plans to relocate its Hong Kong office to a more efficient location by the end of 2026, enhancing its service capabilities for clients in the Greater Bay Area [9].

Core Insights - UBS Wealth Management emphasizes the importance of being a "super connector" between Chinese and global entrepreneurs, leveraging its extensive experience and network to facilitate wealth management and investment opportunities [2][7]. Group 1: Wealth Management Strategy - UBS has over 160 years of history, focusing on wealth management, which constitutes over 50% of its total revenue [6]. - The firm adopts a "banking integration" strategy, where it first establishes long-term relationships with entrepreneurs, then extends services to investment banking and asset management as their needs evolve [6][7]. - UBS has been active in the Chinese market for over 35 years, with a strong presence in Hong Kong and the broader Asia-Pacific region [6]. Group 2: Family Wealth Management - Many overseas families view family offices as a "school" for nurturing the next generation, with younger family members increasingly interested in entrepreneurship rather than traditional family businesses [9]. - Family offices are also seen as platforms for social impact, with younger generations preferring to invest in projects that create social value rather than merely donating [9]. - Current high-net-worth clients in China are maturing and becoming more rational, focusing on "stability" and diversifying investments into alternatives like private equity and hedge funds [9]. Group 3: Opportunities in the Greater Bay Area - UBS manages one-third of its assets in the Greater Bay Area, highlighting its significance to the firm [11]. - The number of trips between Hong Kong and cities in the Greater Bay Area has increased by 25% compared to last year, with related meetings up by over 20% [12]. - UBS plans to relocate its Hong Kong office to a more strategic location by the end of 2026, enhancing its ability to serve clients in the Greater Bay Area [12].

Quantitative Models and Construction Methods - **Model Name**: Expected High Dividend Portfolio **Model Construction Idea**: The model aims to construct a portfolio with high expected dividend yield by leveraging historical dividend data, fundamental indicators, and short-term factors like reversal and profitability[5][10][16] **Model Construction Process**: 1. **Dividend Yield Calculation**: - Phase 1: Calculate dividend yield based on annual report profit distribution announcements - Phase 2: Predict and calculate dividend yield using historical dividend data and fundamental indicators[5][10] 2. **Screening Process**: - Exclude suspended and limit-up stocks from the CSI 300 constituents[15] - Remove the top 20% of stocks with the highest short-term momentum (21-day cumulative return)[15] - Exclude stocks with declining profitability (quarterly net profit YoY growth < 0)[15] 3. **Final Selection**: - Rank the remaining stocks by expected dividend yield - Select the top 30 stocks with the highest expected dividend yield and construct an equally weighted portfolio[11] **Model Evaluation**: The model demonstrates strong historical performance with significant excess returns and controlled drawdowns, making it a robust strategy for high-dividend stock selection[13] Model Backtesting Results - **Expected High Dividend Portfolio**: - Cumulative Return: 358.90% - Cumulative Excess Return (vs CSI 300 Total Return Index): 107.44% - Annualized Excess Return: 8.87% - Maximum Rolling 1-Year Drawdown of Excess Return: 12.26% - Monthly Excess Win Rate: 60.19%[13] Quantitative Factors and Construction Methods - **Factor Name**: Expected Dividend Yield Factor **Factor Construction Idea**: Predict future dividend yield by combining historical dividend data, fundamental indicators, and short-term influencing factors[5][16] **Factor Construction Process**: 1. Calculate historical dividend yield based on profit distribution announcements[5][10] 2. Predict future dividend yield using fundamental indicators and historical dividend patterns[5][10] 3. Incorporate two short-term factors: - **Reversal Factor**: Accounts for short-term price reversals - **Profitability Factor**: Reflects the company's earnings performance[5][16] **Factor Evaluation**: The factor effectively identifies high-dividend stocks and serves as a reliable input for portfolio construction[16] - **Factor Name**: Red Dividend Timing Framework (Composite Signal) **Factor Construction Idea**: Combines multiple single-factor signals to assess the market's outlook on dividend stocks[25][28] **Factor Construction Process**: 1. Evaluate five single-factor signals: - **Inflation**: PPI YoY (High/Low) - **Liquidity**: M2 YoY (High/Low) - **M1-M2 Gap**: Scissors Difference (High/Low) - **Interest Rate**: US 10-Year Treasury Yield (High/Low) - **Market Sentiment**: Dividend Stock Turnover Ratio (Up/Down)[28] 2. Assign binary signals (1 for bullish, 0 for bearish) to each factor 3. Aggregate the signals into a composite indicator[28] **Factor Evaluation**: The framework provides a systematic approach to timing dividend stock investments, though the September 2025 signal suggests a cautious stance[25][28] Factor Backtesting Results - **Expected Dividend Yield Factor**: - August 2025 Portfolio Average Return: 5.69% - Excess Return (vs CSI 300 Index): -4.80% - Excess Return (vs CSI Dividend Index): +4.70%[5][16] - **Red Dividend Timing Framework (Composite Signal)**: - Latest Signal (September 2025): 0 (Neutral)[25][28]

Core Viewpoint - The dismissal of Federal Reserve Board member Lisa Cook by President Trump marks an unprecedented attack on the independence of the Federal Reserve, escalating pressure on monetary policy decisions [1][2]. Group 1: Impact on Federal Reserve Independence - Trump's action is seen as a direct assault on the Federal Reserve's independence, with market analysts suggesting it could increase uncertainty regarding future policy directions [1]. - Edward Mills from Raymond James highlighted that this move signifies the White House's growing pressure on monetary policy [1]. - David Zervos from Jefferies Group argued that the Federal Reserve has never been truly independent and has faced increasing political pressure over the years [1]. Group 2: Market Reactions - Following the news of Cook's dismissal, spot gold prices reached a two-week high, while the U.S. dollar index experienced a temporary decline [1]. Group 3: Responses from Key Figures - Lisa Cook responded to her dismissal by stating that there was no legal basis for Trump's claims and that she would continue her role in supporting the U.S. economy [3]. - Zervos noted that Fed Chair Jerome Powell has resisted many "outrageous" policy calls during Biden's presidency but failed to address fiscal issues during a critical period of rising government spending [2].