Group 1 - The core viewpoint of the article is that the government has reiterated the importance of increasing the proportion of state-owned capital revenue remitted, marking the first time in 12 years this has been emphasized [1] - The Ministry of Finance has announced an increase in the revenue remittance ratio for various central enterprises by 10-15 percentage points, representing the largest adjustment in history [1] - This adjustment is expected to significantly boost the scale of the state-owned capital operating budget by over 100 billion yuan, effectively addressing the shortfall in the general public budget [1] Group 2 - The policy is anticipated to compel central enterprise listed companies to enhance their dividend payout ratios, with particular focus on industries such as petroleum, petrochemicals, electricity, and coal, which are expected to see significant budget increases [1] - Currently, the adjustments are focused on central enterprises regulated by the State-owned Assets Supervision and Administration Commission (SASAC), with future policies likely to extend to financial enterprises and local state-owned enterprises [1] - Attention is also drawn to state-owned banks and high-dividend securities as potential areas of interest due to the anticipated policy changes [1]

News Highlights - The National Energy Administration approved the cancellation of the safety registration certificate for the dam of the Liulangdong Hydropower Station in Yunnan [2] - Hangzhou, Sanya, and Suzhou have been selected for the United Nations' "Cities Towards Zero Waste" initiative, recognizing their efforts in waste reduction and promoting a circular economy [2] Domestic News - In January and February, the mining industry achieved a total profit of 155.61 billion yuan, a year-on-year increase of 9.9%. The total profit for industrial enterprises above designated size reached 1,024.56 billion yuan, up 15.2% [3] - The national electricity market trading volume in January and February increased by 25.5% year-on-year, totaling 11,925 billion kilowatt-hours [3] Technology and Infrastructure - The construction of the "Deep Sea Floating Island," a major national scientific infrastructure project, has commenced in Shanghai, designed to support various marine research needs [4] - The first domestic megawatt-level liquid hydrogen fuel aviation engine has achieved performance standards, marking a significant advancement in hydrogen turbine technology [4] Automotive Industry - Beijing has initiated the development and application of commercial insurance products for intelligent connected new energy vehicles, aiming to provide risk coverage for specific driving scenarios and hardware losses [5] International News - Russia plans to ban gasoline exports starting April 2026 to stabilize domestic prices amid global oil product price fluctuations [6] - Iran is considering withdrawing from the Treaty on the Non-Proliferation of Nuclear Weapons, citing its ineffectiveness in protecting its nuclear facilities [7] - Ukraine has secured a diesel supply agreement during President Zelensky's visit to the Middle East [7] - Over 600 water quality testing points in Japan have reported exceeding national guidelines for organic fluorine compounds [7] Corporate News - China's first commercial 12-megavolt series accelerator has successfully completed assembly and cold testing, marking a significant milestone in domestic high-end scientific equipment [8]

Group 1: Domestic Macroeconomic Outlook - The second quarter of 2026 is expected to be the peak for nominal GDP growth, with a forecasted GDP growth rate of 4.8% [9] - The first industry is anticipated to maintain stable growth due to policies supporting food security, while the second industry is expected to benefit from strong exports and industrial growth [11][10] - The service sector's growth may slow down, with production services likely outpacing consumer services due to the impact of new productivity drivers like artificial intelligence [12] Group 2: Investment Trends - Fixed asset investment is projected to stabilize, with a growth rate of approximately 2.6% in Q2, supported by manufacturing and infrastructure investments [14][20] - Manufacturing investment is expected to grow by 4.2% in the first half of 2026, driven by government support and improved export expectations [26][28] - The focus on high-quality investment in the energy sector is emphasized, with significant funding allocated for power infrastructure projects [22][24] Group 3: Export and Trade Dynamics - Exports are projected to grow by 13.1% in Q2, benefiting from order returns and tariff adjustments, contributing significantly to GDP growth [14][15] - The trade surplus is expected to increase by 34% year-on-year, reinforcing the positive contribution of external demand to GDP [14] Group 4: Price and Inflation Expectations - CPI is expected to rise to around 1.1% in Q2, driven by input costs and the impact of geopolitical tensions on oil prices [15] - The PPI is forecasted to reach approximately 1.4%, indicating a significant recovery in price levels due to external factors [15] Group 5: Asset Class Outlook - A-shares are anticipated to rebound from the bottom, benefiting from the resilient energy system amid high oil prices [2] - The US dollar index may remain strong, with 10-year Treasury yields potentially breaking above 4.5%, putting pressure on US equities [2]

Investment Rating - The report maintains a "Buy" rating for the company [3][11] Core Views - The company is expected to achieve significant revenue growth, with projected revenues of 30,021 million yuan in 2024, increasing to 41,661 million yuan by 2026, reflecting a compound annual growth rate (CAGR) of approximately 12% [3] - The net profit attributable to the parent company is forecasted to rise from 858 million yuan in 2024 to 1,839 million yuan in 2026, indicating a strong growth trajectory [3] - The report highlights the successful completion of a major asset restructuring, which is anticipated to enhance the company's operational efficiency and profitability [7] Financial Summary - The company reported a revenue of 38,825 million yuan in 2025, a year-on-year decrease of 0.66%, with a net profit of 1,698 million yuan, down 5.33% from the previous year [5] - The company's power generation business saw a revenue increase of 108.04% in 2025, with total power generation reaching 371.11 billion kWh, up 11.64% year-on-year [7] - The average utilization hours of the thermal power units decreased by 13.76% to 4,260.50 hours [7] Earnings Forecast and Valuation - The earnings per share (EPS) is projected to grow from 0.24 yuan in 2025 to 0.35 yuan by 2028, with corresponding price-to-earnings (P/E) ratios decreasing from 17.0 to 11.4 [3] - The report anticipates that the company will maintain a high cash dividend payout ratio of 80.21%, with a projected dividend yield of 4.71% based on the current share price [7] - The company’s total assets are expected to grow from 50,563 million yuan in 2025 to 62,730 million yuan by 2028, reflecting a robust asset base [10]

Investment Rating - The report maintains a "Buy" rating for the public utility sector, indicating an expected investment return exceeding 15% over the next 6-12 months [5]. Core Insights - The public utility sector saw a 1.56% increase this week, ranking second among 31 sectors, while the Shanghai and Shenzhen 300 index fell by 1.41% [22]. - The report highlights significant growth in installed wind power capacity, with a year-on-year increase of 22.8% as of February [3]. - The report notes a rapid increase in domestic and imported thermal coal prices, with domestic prices rising by 25 CNY/ton and imported prices increasing by 10-20 CNY/ton [10][11]. - The report emphasizes the importance of nuclear power profitability amid declining long-term contract prices in several provinces [4]. Summary by Sections Market Overview - The public utility sector's performance this week was strong, with notable increases in thermal power (4.78%), wind power (4.33%), and solar power (1.61%) [22]. - The report indicates that the average clearing price for electricity in Shanxi decreased, while it increased in Guangdong [11]. Key Events - The National Energy Administration reported a total installed power generation capacity of 3.95 billion kW as of February, a 15.9% year-on-year increase [3]. - China National Power Investment Group plans to invest 200 billion CNY in 2026, a 17% increase from the previous year [3]. - Several power operators released their 2025 annual reports, showing varied revenue and profit trends [3]. Company Recommendations - The report suggests focusing on companies like China General Nuclear Power, China Nuclear Power, and those involved in data center power supply, such as Gansu Energy and Longyuan Power [4]. - It also recommends long-term investments in companies with stable demand, such as Yangtze Power and State Power Investment Corporation [4].

Core Insights - The report anticipates a large-cap style preference for April, with a balanced valuation style and a focus on traditional industries [1][2][3] - Key sectors to focus on include transportation, power equipment and new energy, coal, utilities, banking, pharmaceuticals, basic chemicals, and agriculture, forestry, animal husbandry, and fishery, particularly those that are not adversely affected by rising energy prices or are relatively undervalued [1][2][3] Style Rotation - The style rotation indicates a preference for large-cap stocks, with a balanced valuation style and a focus on traditional industries [2][12] - The report highlights that the performance of large-cap stocks is expected to be resilient due to improving PPI trends, which support earnings growth, particularly in traditional sectors [29][31] - April is historically a strong month for the correlation between stock prices and earnings, suggesting that large-cap stocks with strong earnings certainty may outperform [31][45] Industry Allocation - The report emphasizes two principles for industry allocation: sectors that are not adversely affected by rising energy prices and those that are relatively undervalued [2][3] - The top ten attractive sectors based on the industry scoring table include transportation, coal, utilities, banking, pharmaceuticals, agriculture, power equipment, telecommunications, basic chemicals, and electronics [2][3] - Specific focus areas include transportation benefiting from Middle Eastern conflicts, banks with lower sensitivity to geopolitical and oil price fluctuations, and pharmaceuticals experiencing upward trends in innovation [2][3][12] Sector Recommendations - The report suggests focusing on sectors that meet at least one of the criteria of being unaffected by rising energy prices or being relatively undervalued [3][12] - The report identifies transportation (oil shipping), new energy, and traditional energy sectors as key areas of interest, particularly in the context of rising oil prices and energy security [2][3][12] - The report also highlights the potential for cyclical commodities, particularly basic chemicals and agriculture, to experience upward momentum [2][3][12]

1. Report Industry Investment Rating No information regarding the report's industry investment rating is provided in the text. 2. Core Viewpoints of the Report - As the annual report season approaches, the focus shifts to trading based on performance. With the approaching April performance disclosure period, despite high overseas uncertainties, domestic incremental funds are entering the market, and the focus may gradually shift to trading performance. Historically, April often faces correction pressure, especially for small - cap stocks, and high - expectation individual bonds with high performance certainty may become dominant [2][9]. - Trading based on performance expectations can focus on forecasts and expected differences. This April still faces pressure, with a relatively high proportion of negative performance forecasts. The probability of consecutive losses has increased, and the frequency and probability of both revenue and net profit growth have declined. Enterprise profitability is still under slight pressure [2][12]. - High - performing convertible bonds may be disclosed earlier. Most of the disclosed annual reports show that the net profit performance exceeds the performance forecast or expectations, and issuers with optimistic performance may disclose their annual reports earlier [18]. - The key time points in April are the first and middle ten - days. The performance of net profit disclosed at the end of the month weakens. It is advisable to focus on high - expectation convertible bonds with early - scheduled disclosure dates [22]. - The convertible bond strategy is to maintain a neutral position and be vigilant against the supplementary decline of low - parity bonds. Currently, the convertible bond valuation is in a neutral position, and the valuation correction of new - issue bonds is not yet complete. It is necessary to be cautious about individual bonds with a certain distance from a 0% conversion premium rate or pure bond premium rate. It is also necessary to avoid some high - risk convertible bonds and be vigilant against the supplementary decline risk of debt - oriented and balanced convertible bonds [3][30]. 3. Summary According to the Table of Contents 3.1 4 - month Performance Expectation Trading - **Market Environment**: Overseas risk events continue to unfold. After the correction caused by the geopolitical conflict, the Shanghai Composite Index oscillated after returning to 3800 points. With the approaching performance disclosure period in April, the focus may shift to trading performance. Historically, April often faces correction pressure, especially for small - cap stocks [2][9]. - **Performance Forecast Analysis**: This year, 176 convertible bond issuers disclosed 2025 performance forecasts, with 121 negative forecasts, accounting for 68.75%, a slight increase compared to the same period in 2025. The frequency and probability of consecutive losses have increased, and the pre - increase proportion has decreased. Among the 67 convertible bonds that disclosed performance reports, the frequency and probability of both revenue and net profit growth have declined. Although the year - on - year revenue performance in the annual report has improved due to the low - base effect in 2025, the net profit has turned negative, and enterprise profitability is still under slight pressure [12]. - **Early Disclosure of High - performing Bonds**: Among the 28 convertible bonds whose underlying stocks have disclosed annual reports, 21 have institutional profit forecasts. 8 bonds' disclosed net profit exceeds the consensus expectation, and 9 bonds' underlying stocks' year - on - year net profit growth rate exceeds the forecast upper limit. Among the 11 companies without forecasts and institutional coverage, only 3 have a negative year - on - year net profit increase. Overall, most net profit performances exceed the performance forecast or expectations, and issuers with good performance may disclose their annual reports earlier [18]. - **Key Time Points in April**: Reviewing the disclosure time and performance of convertible bond underlying stocks from 2022 - 2024, it is found that high - performing bonds are disclosed earlier. The performance of net profit disclosed at the end of the month weakens. It is advisable to focus on high - expectation convertible bonds with early - scheduled disclosure dates, such as Dingjie, Yunji, Julong, Ruichuang, and Aiwei convertible bonds [22]. 3.2 Convertible Bond Strategy: Neutral Position and Caution Against Low - Parity Supplementary Decline - **Market Situation**: The equity market lacks a clear trading mainline under high macro - uncertainty. After a rapid and comprehensive adjustment on Monday, the market entered a wide - range oscillation from Tuesday to Friday. The technology sector fluctuated significantly, and the new energy and chemical sectors performed prominently [28]. - **Valuation and Strategy**: The convertible bond valuation has reached a short - term anchor point. The average price of convertible bonds increased by 1.19% to 136.84 yuan, and the 100 - yuan premium rate increased by 2.13 percentage points to 35.97%. It is recommended to maintain a neutral position. The valuation correction of new - issue bonds is not yet complete, and it is necessary to be cautious about individual bonds with a certain distance from a 0% conversion premium rate or pure bond premium rate. It is also necessary to avoid some high - risk convertible bonds and be vigilant against the supplementary decline risk of debt - oriented and balanced convertible bonds [30]. 3.3 Market Review: Convertible Bonds Rose Weekly, and Valuation Increased - **Weekly Market Performance**: Most major stock indices declined last week. The CSI 300 index fell by 1.41%, the CSI 500 fell by 0.29%, the CSI 1000 fell by 0.48%, the CSI 2000 rose by 0.35%, and the CSI Convertible Bond Index rose by 1.28%. The convertible bonds performed relatively well. The performance of popular concepts was divergent [36]. - **Valuation Performance**: The closing prices of equity - oriented, debt - oriented, and balanced convertible bonds all increased. The proportion of convertible bonds in the range above 150 yuan increased significantly. The median price increased by 1.21%. The average premium rate of low - rated and small - scale convertible bonds increased significantly. The conversion premium rate of convertible bonds in the parity range below 80 (inclusive) increased by 5.81 percentage points [43]. 3.4 Terms and Supply: No Convertible Bonds Announced Forced Redemption, and the Total Newly Promoted Scale was Approximately 7.248 billion - **Terms**: As of March 27, no convertible bonds announced early redemption. Huamao Convertible Bond announced not to redeem early. Several convertible bonds, such as Yiwei, Jinhong, Zhenhua, Tianhao, Jieneng, Tongyu, and Jinji, announced that they were expected to meet the forced - redemption conditions. No convertible bonds proposed a downward - revision plan. Weining Convertible Bond announced the downward - revision result, and several convertible bonds announced not to revise downward. Some convertible bonds were expected to trigger downward revision [61]. - **Primary Market**: Last week, Xianghe Convertible Bond was listed, with a scale of 400 million yuan. There were 361 issued and unexpired convertible bonds, with a balance of 50.3643 billion yuan. Some convertible bonds, such as Shang 26, Boshi, and Changgao, have not been listed yet, and Changgao Convertible Bond will be listed on March 30. There are currently no convertible bonds to be issued. Last week, 2 companies had new board proposals, 3 companies passed the general meeting, and there were no new approvals from the issuing review committee or the CSRC. Compared with the same period last year, the numbers were - 1, +3, - 1, and +0 respectively [64][65].

Group 1: Metal Sector Insights - Major profit forecasts for Zijin Mining show a net profit of CNY 823.16 million in 2026, with a PE ratio of 10.31[10] - China Hongqiao is expected to achieve a net profit of CNY 324.61 million in 2026, with a PE ratio of 9.37[10] - Dazhong Mining's projected net profit for 2026 is CNY 17.07 million, with a significantly high PE ratio of 38.50[10] Group 2: Lithium Industry Outlook - The lithium industry is expected to see a supply-demand turning point between 2026 and 2027, driven by a decline in supply growth and increased demand from energy storage[15] - Domestic lithium demand is projected to reach 131.10 million tons LCE by 2030, reflecting a year-on-year growth of 23%[15] - The total lithium industry demand is forecasted to be 412.99 million tons LCE by 2030, with a compound annual growth rate of 18%[15] Group 3: Transportation Sector Analysis - The oil transportation sector is anticipated to experience a "spring effect" due to inventory replenishment needs, requiring an additional 57 VLCCs over the next year[41] - The effective supply of VLCCs is projected to be 54 by 2027, which may lead to increased prices once the Strait of Hormuz is navigable again[41] Group 4: Chemical and Power Sector Projections - Wanhua Chemical is expected to generate a net profit of CNY 186.92 million in 2026, with a PE ratio of 13.40[10] - Longyuan Power's projected net profit for 2026 is CNY 61.52 million, with a PE ratio of 18.68[10]

Investment Rating - The report maintains an "Overweight" rating for the power sector [4] Core Viewpoints - Multiple provinces are improving energy storage mechanisms, establishing a stable profit model through spot market, auxiliary services, and capacity compensation [3][15] - The user-side energy storage installation plan is set at 8 million kilowatts, becoming a significant growth driver, covering industries such as chemicals, steel, manufacturing, and data centers [3][16] - The report emphasizes the importance of a market-oriented approach, allowing energy storage to fully participate in the market while exempting it from transmission and distribution fees, thus ensuring reliable returns on investment [3][7] Summary by Sections Industry Insights - The report highlights the establishment of a three-pronged profit model for energy storage, combining pricing mechanisms, market mechanisms, and capacity compensation [3][16] - Jilin Province has detailed rules for independent energy storage market participation, creating a revenue framework that includes energy trading, auxiliary services, and capacity compensation [3][7] - Henan Province aims for an energy storage installation capacity of 23 GW by 2030, with direct project investments of 40 billion yuan, enhancing market mechanisms and commercial models [7][17] - Shaanxi Province is exploring flexible participation mechanisms for independent energy storage, allowing for dual revenue streams from both spot and auxiliary service markets [8][18] Market Performance - The report notes that the power and public utilities index rose by 2.01%, outperforming the CSI 300 index by 3.42 percentage points [63][64] - The overall market performance indicates a positive trend for the power sector, with most listed companies in the sector experiencing gains [64][68] Key Companies - The report suggests focusing on companies involved in energy storage and power generation, including Fuling Power, Jinkai New Energy, and Gansu Energy [9] - It also highlights companies with significant potential in flexible coal power transformation, such as Huaneng International and Huadian International [9]

- The report introduces a timing model based on the distance between the short-term moving average (20-day) and the long-term moving average (120-day) of the Wind All A Index. The model identifies market conditions by observing the difference between these two averages. The latest data shows the 20-day moving average at 6633 and the 120-day moving average at 6485, with a difference of 2.28%, indicating a typical consolidation phase[3][7][12] - The mid-term industry allocation model highlights sectors with strong performance trends. It suggests focusing on industries related to computing power (e.g., semiconductor equipment ETF 159516.SZ, communication ETF 515880.SH), cyclical sectors (e.g., oil and gas ETF, energy chemical ETF 159981.SH), and the new energy sector. If a volume contraction signal appears, attention should shift to non-ferrous metals and military industries[3][6][8] - The report evaluates the market's valuation levels using PE and PB metrics. The Wind All A Index PE is positioned near the 90th percentile, indicating a relatively high valuation, while the PB is at the 50th percentile, reflecting a moderate valuation level[8][12] - The timing model suggests maintaining a 50% equity allocation for absolute return products based on the Wind All A Index, considering the current market environment and valuation levels[6][8][12]