Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report During the 15th Five - Year Plan period, the development of non - ferrous related industries will prioritize high - quality development, resolve supply - side involution, reduce ineffective supply, and control smelting - end production capacity. Copper, aluminum and other non - ferrous metals and new energy materials will continue to benefit from the optimization and upgrading of traditional industries and the booming development of emerging and future industries. The industrial pattern of non - ferrous and new energy varieties will be further improved and optimized, and price trends will be more boosted by the supply and demand sides [1][2]. 3. Summary by Directory 3.1 "Importance of the 15th Five - Year Plan Period" The 15th Five - Year Plan period is crucial for basically realizing socialist modernization, serving as a connecting link between the past and the future. It is necessary to consolidate advantages, break through bottlenecks, and strengthen weak points. Adhering to high - quality development is particularly important for the non - ferrous metal industry pattern [6]. 3.2 "Main Goals and Industrial System Planning of the 15th Five - Year Plan" - **Main Goals**: The main goals include significant achievements in high - quality development, a substantial increase in the level of scientific and technological self - reliance, new breakthroughs in further comprehensive deep - seated reforms, a notable improvement in social civilization, continuous improvement in people's living standards, new major progress in building a beautiful China, and a more solid national security barrier. High - quality development is prioritized, and the non - ferrous metal industry will focus on high - quality development, addressing supply - side issues and strengthening effective demand. The goal of a substantial increase in scientific and technological self - reliance highlights the importance of science and technology, which will drive the high - quality development of the non - ferrous new energy industry [8][11][12]. - **Industrial System Planning Clues for Non - Ferrous Metals**: In the industrial system planning, traditional industries such as mining and metallurgy related to non - ferrous metals will continue supply - side reforms. Emerging and future industries, such as new energy and quantum technology, will drive the demand for non - ferrous and new energy materials. Non - ferrous metals and new energy materials will benefit from the development of both traditional and emerging/future industries [14][15][16]. 3.3 "Prospects for Non - Ferrous Metal Terminal Industries in the 15th Five - Year Plan" - **Wind Power, Photovoltaic and Grid Energy Storage**: The 15th Five - Year Plan aims to accelerate the construction of a new energy system. The scale of new energy installations is expected to reach a new high, and the demand for energy storage and grid investment will increase to support the consumption and stable operation of new energy [17][20]. - **New Energy Vehicles**: The 15th Five - Year Plan emphasizes green development. The penetration rate of new energy vehicles in China is expected to further increase. Although the growth rate may decline, new energy vehicles will remain an important driver of the domestic economy [21][23]. - **AI Industry**: The 15th Five - Year Plan has higher requirements for scientific and technological self - reliance. The development of the AI industry will drive the growth of semiconductor chips and increase the demand for energy storage in AI data centers, becoming a new growth engine for non - ferrous and new energy materials [24].

Core Viewpoint - The non-ferrous metal sector is experiencing strong performance, driven by robust demand and favorable macroeconomic conditions, with significant price increases expected for various metals [3][4]. Group 1: Market Performance - As of the latest closing date, the non-ferrous metal sector has seen a year-to-date increase of 68.86%, leading among the Shenwan first-level industries [4]. - The mining ETF (159690) tracking the non-ferrous metal mining index has recorded a year-to-date increase of 78.50%, indicating better relative elasticity [4]. Group 2: Profitability and Growth - The non-ferrous metal industry reported a year-on-year net profit growth of 41.43% for the first three quarters of 2025, with the third quarter showing an even larger increase of 50.81% [4][5]. - The profitability metrics for the non-ferrous mining index indicate a net profit growth of 49.48% for the first three quarters and 55.62% for the third quarter, with an average ROE of 12.14% [5]. Group 3: Valuation and Investment Outlook - The current valuation of the non-ferrous metal mining index stands at 22.99 times PE-TTM, which is at the 37% historical percentile, reflecting a 24% expansion in valuation this year, primarily driven by profit growth rather than valuation expansion [5]. - The index covers various sub-sectors including industrial metals, precious metals, energy metals, and minor metals, providing a diversified investment approach that mitigates price volatility risks [8]. Group 4: Future Demand Drivers - The demand for copper in the new energy sector is expected to be supported by the development of wind and solar power, electric vehicles, and AI infrastructure, amidst a global energy structure adjustment [3]. - The long-term trend of "de-dollarization" and increased gold holdings by certain countries is anticipated to sustain demand for precious metals, further accelerated by the liquidity easing from the Federal Reserve's interest rate cuts [3]. - The rare earth sector is projected to benefit from stable traditional demand and emerging new demands from robotics and low-altitude economies, with domestic supply controls enhancing the industry's global position [3].

Group 1 - The core theme of the 2026 investment strategy meeting held by CICC is "Seizing Opportunities and Planning for the Future," focusing on market themes and attracting over 4,500 participants [1] - CICC's Chief Strategy Analyst, Miao Yanliang, indicates that the US-China economic relationship has entered a "fragile balance," suggesting that while both countries have enough leverage for negotiations, tail risks still exist [2][3] - Miao believes that the current gold bull market may not be fully realized, presenting good medium to long-term allocation value, especially in light of the accelerating reconstruction of the international monetary order [2] Group 2 - Miao highlights that during technological revolutions, growth often outpaces value, but the current AI revolution may see more frequent style rotations in the stock market due to increased uncertainty in economic activities [3] - The analysis of market styles shows that since the launch of ChatGPT in November 2022, US stocks have consistently outperformed value stocks, while non-US markets have seen value outperform growth, indicating that not all economies will benefit equally from technological advancements [3] - CICC's Chief Analyst for Nonferrous Metals, Qi Ding, points out that the deepening trend of de-globalization and high US interest rates are leading to significant inflows into gold ETFs, reflecting a "de-dollarization" trend [4] Group 3 - Qi anticipates that basic metals like copper, aluminum, and tin will perform well in 2026 due to rising demand from AI, electricity, new energy, and high-end manufacturing, coupled with insufficient capital expenditure on the supply side [4] - The report suggests that strategic metals such as cobalt, natural uranium, tungsten, rare earths, and antimony will maintain a bull market due to increasing control and stockpiling by resource countries, leading to a systematic price increase [4] - Overall, the nonferrous metals sector is expected to experience significant development opportunities, driven by rising prices and supportive policies for critical mineral resources [4]

Group 1: Market Outlook - The current bull market is shaped by the "fragile balance" in US-China economic relations, which has evolved from a phase of symbiosis (2005-2016) to increased trade friction (2017-2024) and now to a new phase since 2025 [2][3] - The "fragile" aspect indicates potential tail risks, while the "balance" suggests both countries have sufficient leverage for negotiations, potentially leading to a reassessment of China's competitiveness and a new valuation recovery space [2][3] Group 2: Gold Market - The ongoing bull market for gold is expected to continue, with gold seen as a key hedging tool against tail risks in the current economic environment [2][4] - The influx of funds into gold ETFs in the US and Europe reflects a trend of "de-dollarization," indicating a detachment from US real interest rates [4] Group 3: Equity Market Dynamics - Historical trends show that during technological revolutions, growth often outpaces value; however, the current AI revolution may lead to more frequent style rotations between growth and value stocks [3] - Different markets exhibit varying performance; for instance, since the launch of ChatGPT in November 2022, US stocks have shown growth outperforming value, while non-US markets have seen value outperforming growth [3] Group 4: Non-Ferrous Metals Industry - The non-ferrous metals sector is poised for significant growth opportunities due to rising demand from AI, electricity, new energy, and high-end manufacturing, coupled with insufficient capital expenditure on the supply side [4] - Strategic metals like cobalt, natural uranium, tungsten, rare earths, and antimony are expected to maintain a bull market due to increasing control and stockpiling by resource countries, leading to a systemic price uplift [4]

Core Viewpoint - The article emphasizes the increasing risks to China's strategic mineral resource security and the need for domestic exploration and production to enhance the growth potential of Chinese mining companies, particularly in the non-ferrous metals sector, amid a favorable market outlook driven by monetary, demand, and supply factors [2][12]. Group 1: Strategic Mineral Resource Security - China's reliance on foreign sources for most strategic mineral resources is high, with projections indicating that by 2024, most resources will have an external dependency rate exceeding 50% [3][5]. - The domestic supply of strategic mineral resources in China has a weak cost competitiveness globally, with most resources positioned above the 50th percentile on the global marginal cost curve [3][5]. Group 2: Policy Initiatives and Reforms - A new round of domestic exploration for strategic minerals was launched in early 2023, with significant reforms in mineral resource management being implemented [7][9]. - Key policy measures include the "10th Document" issued in March 2023, which aims to activate the development dynamics of the mining sector, and the ongoing revision of the Mineral Resources Law to enhance national resource security [7][9]. Group 3: Investment Trends in Non-Ferrous Metals - Since August 2023, fixed investment in China's non-ferrous metal mining sector has shown a significant increase, with a cumulative year-on-year growth exceeding 30%, reaching a record high of 208.9 billion yuan in 2024 [10][12]. - The investment momentum in the non-ferrous metal mining sector is expected to continue, with a cumulative year-on-year increase of 49% reported by September 2025 [10][12]. Group 4: Market Outlook - The non-ferrous metals industry is anticipated to enter a bullish market phase driven by a confluence of monetary easing, rising demand from emerging industries, and supply constraints due to insufficient capital expenditures over the past decade [12][13]. - Precious metals are expected to benefit from declining real interest rates and a shift away from the US dollar, with silver likely to gain from rising gold prices and improving demand [13].

Group 1: Outlook for Non-Ferrous Metals Industry - The non-ferrous metals industry is expected to experience a bullish market by 2026, driven by monetary policy, demand growth, and supply changes [1] - The Federal Reserve may restart interest rate cuts, and the trend of de-dollarization will increase global liquidity demand for non-ferrous metals, particularly physical assets [1] - Demand for non-ferrous metals will accelerate due to adjustments in U.S. tariff policies and the reshaping of global supply chains, especially in emerging industries like AI, electricity, new energy, and high-end equipment manufacturing [1] Group 2: Supply Challenges - The industry faces significant supply challenges due to insufficient capital expenditure over the past decade, leading to low supply elasticity [1] - Resource-rich countries are tightening control over key minerals, increasing supply uncertainty and presenting multiple challenges for the non-ferrous metals industry [1] Group 3: Precious Metals Market - The resonance of interest rate cuts and de-dollarization is expected to drive gold prices higher, with silver benefiting from rising gold prices and the restoration of the gold-silver ratio [2] - Basic metals like copper, aluminum, and tin are anticipated to perform well in 2026 due to the rise of emerging demands in AI, electricity, new energy, and high-end equipment manufacturing [2] Group 4: Strategic Metals and Market Dynamics - The supply-demand dynamics for strategic metals such as cobalt, natural uranium, tungsten, rare earths, and antimony are changing, with prices expected to rise overall, forming a bullish market [2] - The overall price increase in non-ferrous metals will enhance the allocation value of non-ferrous mining companies, prompting investors to focus on leading companies with strong resource expansion capabilities and potential for mergers and acquisitions [2] Group 5: Gold Market Trends - Gold prices are expected to remain in an upward trend through 2026, supported by a slowing U.S. economy and potential stagflation risks [2] - Central banks and financial institutions are likely to increase their allocation to physical gold, further boosting the gold market [3] - The net inflow of global gold ETFs reached 397 tons in the first half of 2025, the highest since 2020, indicating strong investor interest in gold assets [3] Group 6: Base Metals and New Energy Metals - Copper supply shortages are becoming clearer, with expectations for copper prices to enter a bull market by 2026 [3] - The demand for aluminum is expected to improve despite some policy impacts, with a growing supply-demand gap for electrolytic aluminum [3] - Cobalt's supply-demand tension is likely to push its price upward, while lithium market supply disruptions are gradually easing, which may affect lithium price trends [3]

Core Viewpoint - The non-ferrous metal industry is expected to enter a bull market by 2026, driven by a combination of monetary easing, increasing demand, and supply constraints. The Federal Reserve's potential interest rate cuts and the trend of de-dollarization are likely to enhance global liquidity and demand for physical assets like non-ferrous metals [2][4]. Monetary Factors - The Federal Reserve is anticipated to have significant room for interest rate cuts as the U.S. economy cools down, which may lead to a decline in real interest rates. This environment could foster inflationary pressures, supporting the bull market for gold [4][5]. - The trend of de-dollarization is expected to increase the demand for gold as a stable asset amid global monetary system uncertainties, potentially leading to unpredictable price movements for gold [4][5]. Demand Factors - The demand for non-ferrous metals is projected to accelerate due to the restructuring of global supply chains, the rise of emerging industries such as AI, electric power, and renewable energy, and the re-industrialization efforts in the U.S. and Europe [2][3]. - Specific sectors like clean energy, electric vehicles, and high-end manufacturing are expected to drive significant demand for metals like copper, aluminum, and tin [3][8]. Supply Factors - The non-ferrous metal industry faces supply constraints due to insufficient capital expenditure over the past decade, leading to low supply elasticity. Additionally, geopolitical factors are increasing the control of resource-rich countries over strategic minerals, adding uncertainty to supply [2][3]. - The copper market is expected to experience a clear supply-demand shortage by 2026, driven by frequent supply disruptions and a decline in new production capacity [7][9]. Specific Metal Insights - **Gold**: The decline in real interest rates and de-dollarization trends are expected to drive gold prices higher, with central banks and financial institutions increasing their physical gold holdings [4][5]. - **Copper**: The copper market is projected to face a significant supply-demand gap, with demand from clean energy and electric power sectors expected to grow substantially [7][9]. - **Aluminum**: The aluminum sector is likely to enter a bull market due to tightening supply and recovering demand from various industries, including construction and electric vehicles [10]. - **Tin**: The tin market is expected to benefit from rising demand in the semiconductor industry and supply disruptions in key producing regions [11]. - **Cobalt**: Cobalt prices are anticipated to rise due to tightening supply from the Democratic Republic of Congo and increasing demand from battery technologies [13][14]. - **Lithium**: The lithium market may experience a downward trend in prices due to oversupply, despite short-term demand support from the battery sector [15][16]. - **Uranium**: Uranium prices are expected to recover due to limited supply and increased interest from investment funds [17]. - **Tungsten**: The tungsten market is likely to remain tight, supporting higher prices due to strong demand from emerging industries [18][19]. - **Rare Earths**: The demand for rare earth elements is projected to grow significantly, driven by advancements in technology and the need for high-performance materials [20][21].

Overview of Nonferrous Metals Industry - The nonferrous metals sector achieved revenue of 24,380.50 billion yuan in Q3 2025, representing a year-on-year growth of 9.33% [1] - The net profit attributable to shareholders reached 1,337.48 billion yuan, with a year-on-year increase of 41.88% [1] Market Performance - The CSI 300 Index rose by 17.9% in Q3 2025, while the CSI Nonferrous Metals Mining Theme Index surged by 50.20% [2] - The nonferrous metals index increased by 43.95% during the same period [2] - The Federal Reserve resumed interest rate cuts, leading to a rise in gold prices, which broke through previous resistance levels [2] - Industrial metals benefited from ongoing supply disruptions, with copper and aluminum prices trending upward [2] - Lithium prices increased due to expectations of supply-side reforms, while rare earth prices were supported by tightened supply and increased exports [2] Segment Performance and Outlook Precious Metals - The precious metals sector generated revenue of 1,342.10 billion yuan in Q3 2025, with a quarter-on-quarter increase of 6.03% [3] - Net profit was 67.39 billion yuan, showing a quarter-on-quarter decrease of 1.70% [3] - The gross margin was 25.92%, down by 0.61 percentage points, while the net margin increased by 5.50 percentage points to 19.82% [3] - Gold prices reached new highs due to global central bank purchases and geopolitical tensions [3] Industrial Metals - Copper mining and smelting companies reported revenue of 4,281.00 billion yuan, with a quarter-on-quarter increase of 0.14% [4] - Net profit for copper mining was 247.91 billion yuan, up by 7.92% [4] - The aluminum sector saw revenue of 1,139.26 billion yuan, with a quarter-on-quarter increase of 0.19% and net profit of 104.01 billion yuan, up by 8.33% [4] Minor Metals - The rare earth sector experienced a revenue increase of 21.18% quarter-on-quarter, with net profit rising by 34.32% [5] - The average price of praseodymium and neodymium oxide was 540,300 yuan/ton, up by 25.07% [5] - The small metals sector saw a revenue increase of 9.16% and net profit growth of 24.62% [5] Energy Metals - Lithium prices rebounded, with an average price increase of 11.91% quarter-on-quarter [6] - The lithium sector generated revenue of 28.6 billion yuan, a year-on-year increase of 23.2%, with net profit soaring by 208% to 4.78 billion yuan [6] - Cobalt prices rose by 10.88% due to ongoing export restrictions from the Democratic Republic of Congo [6] Future Focus Areas - Industrial metals (copper, aluminum) are expected to benefit from improving macroeconomic conditions and supply adjustments [7] - Gold prices are likely to remain supported in the early stages of the interest rate cut cycle [8] - The lithium sector is anticipated to see a clearer trend of improving supply-demand fundamentals [9] Investment Participation in Nonferrous Sector - Mining ETF (561330) has outperformed the nonferrous sector by over 10% this year [10] - Nonferrous 60 ETF (159881) provides comprehensive coverage of the sector [11] - As of October 31, 2025, the CSI Nonferrous Metals Mining Theme Index PB ratio is at 3.45, in the 92.16 percentile over the past decade [11]

Core Insights - The article discusses the ongoing trends in the ETF market, particularly focusing on the performance of various metals, including gold, rare earths, copper, aluminum, lithium, and cobalt, influenced by factors such as Federal Reserve interest rate policies and geopolitical tensions [1][3][4]. ETF Market and Investment Opportunities - The "Zhaocai Cup" ETF live competition aims to educate investors on asset allocation and risk management, promoting the healthy development of the ETF market [1]. - The China Securities Rare Earth Mining Index is highlighted as a potential investment target due to its focus on leading companies in the non-ferrous sector, benefiting from metal price performance [2]. Federal Reserve Policies and Market Impact - The Federal Reserve's expected interest rate cuts are seen as a significant driver for the non-ferrous mining sector, with a high likelihood of a 25 basis point cut in the upcoming meetings [3][4]. - The Fed's shift from a tightening to a loosening monetary policy is expected to support the performance of the non-ferrous mining industry [4]. Gold Market Dynamics - Gold prices have shown a significant upward trend, driven by expectations of Fed rate cuts and increased central bank purchases, with global central bank gold purchases exceeding 1,000 tons since 2022 [6][7]. - The geopolitical landscape, including conflicts and trade disputes, has heightened global demand for gold as a safe-haven asset [6][8]. Rare Earth Market Insights - Rare earth prices have surged due to supply constraints from China's export controls and high demand from the renewable energy sector [9][10]. - China dominates the global rare earth market, holding approximately 44 billion tons of the total 90 billion tons of rare earth oxides [9]. Copper and Aluminum Market Trends - Copper prices are expected to remain strong due to a supply gap exacerbated by production cuts from major mines and increasing demand from AI and renewable energy sectors [12][13]. - Aluminum prices are anticipated to show strong performance due to low valuations and potential demand increases, with current PE ratios for aluminum companies being lower than those for copper [14][15]. Lithium and Cobalt Market Outlook - The lithium market is currently influenced by supply-side reforms, with expectations of a significant supply increase post-2027 [16]. - Cobalt prices are expected to remain strong due to reduced export quotas from the Democratic Republic of Congo, which is a major supplier [16]. Overall Market Perspective - The non-ferrous metals sector, including industrial metals, gold, rare earths, and energy metals, is projected to experience tight supply conditions, supported by recovering domestic macroeconomic demand and ongoing trends in renewable energy [17]. - Investors are encouraged to focus on the China Securities Rare Earth Mining Index for potential opportunities, as it includes leading companies that are more likely to benefit from rising metal prices [17].

- The report introduces a "Three-dimensional Timing Framework" model, which is based on liquidity, divergence, and prosperity indicators. The model suggests that the market is in a consolidation phase, with liquidity trending downward, divergence trending upward, and prosperity remaining stable. The framework indicates a continued oscillating downward trend[7][12][14] - The "ETF Hotspot Trend Strategy" is constructed by selecting ETFs with both the highest and lowest price trends in an upward direction. The strategy further incorporates a support-resistance factor based on the steepness of the regression coefficients of the highest and lowest prices over the past 20 days. The top 10 ETFs with the highest turnover rate in the last 5 days relative to the last 20 days are selected to form a risk parity portfolio[28][31] - The "Capital Flow Resonance Strategy" is built using two factors: the financing margin factor and the active large-order capital factor. The financing margin factor is defined as the two-week rate of change of the 50-day average of the market-neutralized financing net buy minus the margin net buy (aggregated by individual stocks). The active large-order capital factor is defined as the net inflow ranking of the time-neutralized industry transaction volume over the past year, taking the 10-day average. The strategy excludes extreme head industries from the active large-order factor and applies a negative exclusion for the top industries in the financing margin factor. This adjustment improves the strategy's stability. Since 2018, the strategy has achieved an annualized excess return of 13.5% after fees, with an IR of 1.7. Last week, the strategy recorded a positive excess return of 4.96% relative to industry equal weight, with an absolute return of 2.37%[37][40] Model Backtesting Results - Three-dimensional Timing Framework: Historical performance indicates oscillating downward trends during periods of low liquidity and high divergence[14] - ETF Hotspot Trend Strategy: The strategy has achieved cumulative excess returns over the CSI 300 index this year[29][30] - Capital Flow Resonance Strategy: Since 2018, the strategy has achieved an annualized excess return of 13.5% after fees, with an IR of 1.7. Last week, it recorded a positive excess return of 4.96% relative to industry equal weight, with an absolute return of 2.37%[37][40] Factor Construction and Evaluation - **Beta Factor**: Constructed to measure the sensitivity of a stock's returns to market returns. It recorded a positive return of 2.63% last week, indicating that high-beta portfolios outperformed low-beta portfolios[41][42] - **Growth Factor**: Reflects high-growth stocks favored by the market. It achieved a return of 1.51% last week[41][42] - **Size Factor**: Measures the performance of large-cap versus small-cap stocks. It recorded a positive return of 1.39% last week, with large-cap stocks outperforming small-cap stocks[41][42] - **Alpha Factors**: Includes institutional holdings and momentum factors. Notable factors include "Fund Holdings to Float Share Ratio" (1.33% weekly excess return), "Top Ten Mean Stock Value to NAV" (1.00% weekly excess return), and "1-Year-1-Month Momentum" (0.94% weekly excess return)[44][46] - **Growth and R&D Factors**: Factors such as "R&D Total Assets Ratio" (22.36% weekly excess return in CSI 300), "R&D Sales Revenue Ratio" (19.32% weekly excess return in CSI 300), and "Quarterly ROE YoY Difference" (19.43% weekly excess return in CSI 300) performed well across different indices, with stronger results in small-cap indices like CSI 1000[47][48] Factor Backtesting Results - **Beta Factor**: Annual return of 27.16%, monthly return of 2.83%, weekly return of 2.63%[42] - **Growth Factor**: Annual return of -0.45%, monthly return of 4.73%, weekly return of 1.51%[42] - **Size Factor**: Annual return of -23.40%, monthly return of 4.72%, weekly return of 1.39%[42] - **Alpha Factors**: Weekly excess returns range from 0.56% to 1.33%, with monthly excess returns ranging from 1.79% to 3.68%[44][46] - **Growth and R&D Factors**: Weekly excess returns in CSI 300 range from 13.71% to 22.36%, with higher returns observed in smaller-cap indices like CSI 1000[47][48]