Market Overview - On March 30, 2026, the market closed higher with a trading volume of 1.86 trillion, a decrease of approximately 100 billion from the previous trading day[1] - The Shanghai Composite Index fluctuated near the 5-day moving average for three consecutive days, indicating a lack of confidence despite the market rebound[1] - The rise in the innovative drug sector, which had previously seen significant declines, suggests a defensive market sentiment[1] Sector Performance - The pharmaceutical, non-ferrous metals, and chemical industries led the market gains, while utilities, banks, telecommunications, and coal sectors experienced declines[1] - The lithium battery sector showed strong upward momentum, with several stocks reaching historical highs, driven by increased demand due to high oil prices[1] Fund Flow - On March 27, 2026, net inflows into the Shanghai Stock Exchange amounted to 25.574 billion, while the Shenzhen Stock Exchange saw net inflows of 32.41 billion[3] - The top three sectors for fund inflows were chemical pharmaceuticals, energy metals, and batteries, while the top outflow sectors included electricity, commercial banks, and railways[3] Economic Indicators - The Ministry of Commerce reported that by 2025, China's digital consumer spending is expected to reach 25.3 trillion, a year-on-year increase of 8.7%[6] - The growth in digital service consumption is projected at 12.5%, becoming a key driver of overall digital consumption growth[6] Industry Insights - The China Securities Regulatory Commission (CSRC) anticipates that by 2025, the net inflow of long-term funds into the market will exceed 1 trillion, with significant contributions from social security funds and public funds[7] - In the first two months of 2026, profits in the electronics, railway, shipping, aerospace, and electrical machinery sectors increased by 203.5%, 11.4%, and 6.2% respectively[8]

Group 1 - The fixed asset investment growth rate rebounded significantly in early 2026, with a notable increase of 16.9 percentage points from December 2025, reaching 1.8% [5][13][127] - All four major investment categories—real estate, service industry, broad infrastructure, and manufacturing—showed substantial recovery, each rising by over 10 percentage points compared to December 2025 [5][13][127] - The construction and installation investment, which had previously declined sharply, rebounded by 28.6 percentage points to 0.6%, significantly contributing to the overall fixed asset investment growth [5][18][127] Group 2 - The rebound in investment is attributed to improved conditions regarding previous issues of "lack of funds" and "lack of projects," aided by policy support [6][9][129] - The easing of the "broad debt" effect at the end of 2025 reduced the constraints on investment, leading to a significant rebound in construction and installation investment [6][36][129] - In early 2026, policies supporting private financing were implemented, including a special quota of 1 trillion yuan for small and micro enterprises, which helped alleviate loan pressures and boosted investment [6][55][129] Group 3 - The investment rebound is expected to continue, with incremental funds capable of covering the investment gaps in manufacturing and infrastructure [8][72][82] - The estimated gap in fixed asset investment compared to historical trends is approximately 4 trillion yuan, with specific gaps in manufacturing, broad infrastructure, and real estate investments being 1.3 trillion, 1.2 trillion, and 0.7 trillion yuan, respectively [8][72][82] - Increased fiscal spending and new policy financial tools are anticipated to support the recovery of broad infrastructure investments, particularly in new infrastructure projects [8][82][91]

Profit Recovery Insights - In January-February 2026, the cumulative year-on-year growth rate of industrial enterprises' profits was 15.2%, up from 5.3% in December 2025, indicating a significant recovery trend[5] - The profit recovery was driven by accelerated production, stabilized industrial prices, and alleviated cost pressures, with the late Spring Festival contributing to the high year-on-year growth[5][17] - The profit margin for industrial enterprises improved to 4.92%, marking a year-on-year increase of 0.39 percentage points, the first positive change since September 2024[7] Structural Changes in Profit Distribution - The profit distribution among upstream, midstream, and downstream sectors has become more balanced, with downstream sectors showing significant improvement in profit margins[8][17] - Upstream sectors experienced notable differentiation, with coal profit growth slowing, while chemicals rebounded significantly, and non-ferrous metals and construction materials maintained high growth rates[10][12] - Midstream equipment manufacturing remains the core driver of profit growth, particularly in the electronics sector, which saw profit growth surge from 54.1% to 203.5%[10] Economic Outlook and Risks - The industrial economy is transitioning from passive destocking to active restocking, with finished goods inventory growth rising from 3.9% in December 2025 to 6.3% in February 2026[13] - Despite the positive trends, external demand fluctuations, overcapacity in certain industries, and cost pressures remain concerns, alongside the potential short-term disruptions following the Spring Festival[17][18] - The sustainability of profit recovery and inventory improvements will require close monitoring of the effectiveness of growth stabilization policies and the resilience of domestic demand[17]

Profit Growth Overview - In January-February 2026, industrial enterprises achieved a total profit of 10,245.6 billion yuan, marking a year-on-year increase of 15.2%[6] - The profit growth rate surged from 5.3% in December 2025 to 15.2% in the first two months of 2026, indicating a significant improvement in industrial profitability[6] Industry Performance - Profit recovery showed clear industry differentiation: upstream industries saw a profit increase of 34.3%, midstream industries 26.4%, while downstream industries faced a decline of 11.4%[3] - Upstream profit improvements were primarily driven by price support, particularly in non-ferrous metal smelting and mining, which experienced nearly triple-digit growth[3][4] Midstream and Downstream Insights - Midstream profit growth was attributed to accelerated production, with the electronics manufacturing sector seeing a remarkable profit increase of 203.5% year-on-year[4] - Downstream industries, particularly furniture manufacturing (-40.0%) and automotive manufacturing (-30.2%), showed significant profit declines, reflecting consumer caution towards durable goods and large expenditures[4][7] Cost and Efficiency Factors - The revenue profit margin for enterprises improved significantly, with a notable decrease in the cost-to-revenue ratio, likely due to equipment upgrades and ongoing tax reductions[3] - The increase in finished goods inventory growth in January-February indicated early signs of proactive restocking, although sustainability depends on demand recovery[4][7] Risk Considerations - Future profit sustainability is contingent on the recovery pace of end-user demand, with current downstream profits indicating that demand has not fully stabilized[7] - Potential risks include policy outcomes not meeting expectations, unexpected changes in the domestic economic landscape, and fluctuations in export dynamics[7]

Report Summary 1. Industry Investment Rating - The investment rating for the steel and ore industry is "Oscillating, Slightly Bullish" [1] 2. Core Viewpoints - The steel and ore market is expected to oscillate. For specific varieties, the support and pressure levels are as follows: the support level for rebar is 3000, and the pressure level is 3200; for hot - rolled coils, the support level is 3180, and the pressure level is 3350; for iron ore, the support level is 750, and the pressure level is 840 [1] 3. Summary by Directory 3.1 Market Review - On Wednesday, rebar and hot - rolled coils rose first and then fell. Both steel and ore closed down at night [1] 3.2 Important News - The National Development and Reform Commission has launched a new batch of 13 landmark major foreign - funded projects with a planned investment of $13.4 billion, focusing on manufacturing and increasing support for the service industry [1] - In January - February 2026, China's cumulative steel exports were 15.591 million tons, a year - on - year decrease of 8.1%; cumulative steel imports were 0.827 million tons, a year - on - year decrease of 21.7%; cumulative imports of iron ore and its concentrates were 210.023 million tons, a year - on - year increase of 10.0%; cumulative imports of coal and lignite were 77.222 million tons, a year - on - year increase of 1.5% [1] - In February 2026, China's steel plate exports were 4.63 million tons, a year - on - year decrease of 12.6%; cumulative exports from January - February were 9.33 million tons, a year - on - year decrease of 14.5%. In February, China's steel bar exports were 1.19 million tons, a year - on - year decrease of 7.7%; cumulative exports from January - February were 2.32 million tons, a year - on - year decrease of 5.9% [1] - Iran's largest natural gas field and some petrochemical facilities were attacked by the US and Israel, and Iran vowed to retaliate by attacking oil facilities in three Middle - Eastern countries. Qatar reported that an Iranian missile hit a natural gas hub, causing serious damage, and Iran also attacked a US - exclusive area of a refinery in Riyadh, causing a fire [1] - The Federal Reserve announced that it would maintain the federal funds rate target range between 3.5% and 3.75%, holding steady for the second consecutive time, in line with market expectations [1] 3.3 Market Logic - On the 18th, the market prices of mainstream imported iron ore varieties at Qingdao Port remained stable. For example, 60.8% PB powder was 794 (unchanged), Super Special powder was 675 (unchanged), 61.6% PB lump was 905 (unchanged), Carajas powder was 953 (unchanged), and SPGF mixed powder was 764 (unchanged) [1] - On the 17th, Shanghai Zhongtian rebar was 3260, up 10; Shanghai Angang/Benxi hot - rolled coils were 3310, up 20 [1] - On the 18th, the spot market for port coke remained stable. The trading atmosphere in the domestic spot market was average. The volume of trade shipments at the two ports was stable compared to the previous working day, and the total inventory at the two ports was stable compared to the previous working day. Rizhao Port had 43 (unchanged), Qingdao Port had 69 (unchanged), and the total inventory was 112, a decrease of 2.3 compared to last week [1] 3.4 Trading Strategies - Unilateral trading: Gradually reduce long positions in steel and ore [1] - Arbitrage trading: Continue to hold the strategy of going long on the spread between hot - rolled coils and rebar. As of the night session on Wednesday, the spread was 173. It is recommended to raise the stop - loss level to a spread of 130 and set the take - profit level at around 200 [2] - For the ratio of rebar to iron ore, which was 3.87, it is recommended to opportunistically go long on the ratio (go long on rebar and short on iron ore), with the target of raising the ratio above 4. At the same time, pay attention to the possible impact of the later main contract roll - over [2]

Group 1: Domestic News - The National Development and Reform Commission has launched a new batch of 13 major foreign investment projects with a planned investment of $13.4 billion, focusing on manufacturing sectors such as electronics, chemicals, automotive, and electrical machinery [2] - Shanghai has recognized 30 new regional headquarters of multinational companies and 15 foreign research and development centers, primarily in key industries like biomedicine, integrated circuits, high-end equipment, automotive, and fashion consumer goods [3] - Chongqing has established the first mandatory insurance mechanism for low-altitude economy, providing risk coverage of 42.6 million yuan for 194 drones operated by Aerospace Technology Group [4] Group 2: Automotive Industry - The China Passenger Car Association reported that from March 1 to 15, retail sales of passenger cars in China reached 561,000 units, a year-on-year decline of 21%, while retail sales of new energy vehicles during the same period were 285,000 units, down 28% year-on-year [5] - Chery Automobile announced a total revenue of 300.29 billion yuan for 2025, with a year-on-year growth of 11.3% and a net profit of 19.51 billion yuan, reflecting a net profit margin increase from 5.3% to 6.5% [12] - Geely Automobile reported a total revenue of 345.2 billion yuan for 2025, a year-on-year increase of 25%, with a core net profit of 14.41 billion yuan, marking a 36% growth [13] - Zotye Automobile's wholly-owned subsidiary, Zhejiang Shenkang Automotive Body Mould Co., has resumed production, although the company faces significant financial pressure and uncertainty regarding the full recovery of its vehicle business [11] Group 3: Technology and Innovation - Xiaomi's ultra-strong steel, with a strength of 2200 MPa, has won the "Science and Technology Innovation Achievement First Prize" from the China Association for the Promotion of Industry-Academia-Research Cooperation, and is now in mass production for new models [14] - GAC Toyota has initiated its first large-scale OTA upgrade for the Platinum 3X model, available for all owners free of charge [15] - The new automotive brand AISTALAND, created by Huawei and GAC, was officially announced, emphasizing the integration of AI in automotive travel [16]

Core Insights - The report highlights the ongoing adjustments in various industries, particularly in the semiconductor and photovoltaic sectors, driven by geopolitical tensions and domestic policy shifts [5][9][23]. Domestic Market Performance - The Shanghai Composite Index closed at 4,062.98, with a slight increase of 0.32%, while the Shenzhen Component Index rose by 1.05% to 14,187.80 [4]. - The average price-to-earnings ratios for the Shanghai Composite and ChiNext are 16.74 and 47.98, respectively, indicating a favorable long-term investment environment [11][12]. International Market Performance - The Dow Jones Industrial Average fell by 0.67% to 30,772.79, while the S&P 500 and Nasdaq also experienced declines of 0.45% and 0.15%, respectively [5]. - The report notes that global semiconductor sales continue to grow, with a year-on-year increase of 46.1% in January 2026, indicating strong demand in the sector [18]. Industry Analysis - The semiconductor industry is experiencing a recovery, with domestic storage module manufacturers exceeding expectations in Q1 2026, driven by rising prices in the global market [17]. - The photovoltaic industry is undergoing a significant adjustment phase, with a focus on reducing internal competition and enhancing value through technological advancements [34][36]. Investment Recommendations - The report suggests focusing on sectors such as communication equipment, semiconductors, and IT services for short-term investment opportunities, given their current performance and market conditions [10][11]. - In the food and beverage sector, investment opportunities are identified in upstream raw material companies, particularly as inflationary pressures shift investment focus from oil and chemicals to agricultural products [28][30].

Core Viewpoint - The National Development and Reform Commission (NDRC) has launched a new batch of 13 significant foreign investment projects with a planned investment of $13.4 billion, focusing on manufacturing and increasing support for the service sector, including logistics for the first time [3][5]. Group 1: Investment Projects - The newly selected projects are primarily concentrated in manufacturing sectors such as electronics, chemicals, automotive, and electrical machinery, promoting the accelerated development of industrial clusters [5]. - The cumulative investment in significant foreign investment projects has reached $108 billion, demonstrating a notable demonstration effect in attracting foreign capital [3]. Group 2: Policy and Market Environment - The NDRC aims to expand market access and open fields with a focus on the service sector, enhancing the attractiveness of foreign investment in advanced manufacturing, modern services, high-tech, and energy-saving sectors [3][9]. - The government work report for this year emphasizes the need to deepen reforms in the foreign investment promotion system, ensuring national treatment for foreign enterprises and promoting local production [9][11]. Group 3: Foreign Investment Trends - Recent data indicates that nearly 60% of surveyed U.S. companies plan to increase their investment in China, reflecting China's long-term attractiveness as a fertile ground for foreign investment [6]. - The NDRC and the Ministry of Commerce have released the "Encouragement Directory for Foreign Investment (2025 Edition)," effective from February 1, 2026, to guide foreign investment towards advanced manufacturing and modern services [10]. Group 4: Regional Initiatives - Various regions, including Shanghai, Shandong, and Jiangsu, are actively deploying strategies to stabilize foreign investment, focusing on project implementation and enhancing service guarantees for foreign enterprises [12][13]. - Shanghai has prioritized manufacturing investment, aiming to build a modern industrial system around advanced manufacturing, with ongoing efforts to attract global resources and enhance project landing [13].

Core Viewpoint - The National Development and Reform Commission has launched a new batch of 13 significant foreign investment projects with a planned investment of $13.4 billion, primarily focusing on the manufacturing sector and modern service industries [1][2] Group 1: Investment Projects - The new projects are concentrated in manufacturing, including electronic manufacturing, chemicals, automotive, and electrical machinery, aimed at accelerating the development of industrial clusters [1] - For the first time, logistics projects have been included in the list, alongside continued support for research and development centers in the biopharmaceutical sector [1] Group 2: Investment Impact - To date, the cumulative investment in significant foreign investment projects has reached $108 billion, demonstrating a notable引资示范带动效应 [2]

1. Report Industry Investment Rating No information provided. 2. Core Viewpoints of the Report - The short - term economy is in an upward repair phase in terms of both quantity and price, but the bond market has a low winning rate and reduced odds compared to January - February, with limited adjustment space. It is recommended to focus on 1 - 3 - year short - to - medium - term credit bonds and moderately increase leverage [33]. - Against the backdrop of low domestic bond yields, the demand for "fixed - income plus" strategies and multi - asset allocation is rising, and overseas bond assets may fill the "yield gap". The channels for domestic investors to invest in overseas bonds are diversifying [33]. - Chinese government policies related to the banking industry are tilting towards the market, reducing government intervention in bank risk pricing, which is expected to ease bank profit pressure and support credit growth [34]. 3. Summary by Directory 3.1 Macro Data Quick View - GDP growth rate in Q4 2025 was 4.5%, down from 4.8% in the previous quarter and 5.4% in the same period last year [1]. - In February 2026, the manufacturing PMI was 49.0%, down from 49.2% in the previous month and 50.2% in the same period last year; the non - manufacturing PMI for business activities was 49.5%, unchanged from the previous month but down from 50.4% in the same period last year [1]. - In February 2026, the monthly value of social financing scale was 2385.5 billion yuan, down from 2492.6 billion yuan in the previous month but up from 2233.1 billion yuan in the same period last year [1]. - In February 2026, M0, M1, and M2 year - on - year growth rates were 14.1%, 5.9%, and 9.0% respectively, all higher than the previous month and the same period last year [1]. - In February 2026, the monthly value of new RMB loans from financial institutions was 900 billion yuan, up from 390 billion yuan in the previous month but down from 1010 billion yuan in the same period last year [1]. - In February 2026, CPI and PPI year - on - year growth rates were 1.3% and - 0.9% respectively, showing an improvement compared to the previous month and the same period last year [1]. - In February 2026, the cumulative year - on - year growth rates of fixed - asset investment and total retail sales of consumer goods were 1.8% and 2.8% respectively, with the former turning positive from negative and the latter showing a slowdown [1]. - In February 2026, the year - on - year growth rates of export and import amounts were 39.6% and 13.8% respectively, showing significant growth compared to the previous month and the same period last year [1]. 3.2 Commodity Investment Reference 3.2.1 Comprehensive - The Ministry of Finance will continue to implement a more proactive fiscal policy in 2026 to promote economic growth and social stability [2]. - The National Development and Reform Commission has launched a new batch of 13 landmark major foreign - funded projects with a planned investment of $13.4 billion, mainly in manufacturing and also including logistics and R & D center projects in the service industry [2]. - The Fed's March 17 - 18 meeting is expected to keep the interest rate unchanged at 3.50% - 3.75%, with a nearly 100% probability of a pause, and there are internal differences and increased policy uncertainty [3][4]. 3.2.2 Metals - On March 16, zinc and copper inventories reached new highs, while aluminum, lead, and nickel inventories reached new lows. Gold production of Polyus in 2025 decreased by 16% and is expected to be 2.5 - 2.6 million ounces in 2026 [5]. - As of March 17, the gold holding of SPDR Gold Trust decreased by 1.15 tons (0.11%) compared to the previous trading day [6]. 3.2.3 Coal, Coke, Steel, and Minerals - Japan and the US will reach an agreement on the joint development of rare earth elements, lithium, and copper [7]. 3.2.4 Energy and Chemicals - From January to February, the total social electricity consumption was 1654.6 billion kWh, a year - on - year increase of 6.1%. The electricity consumption of the three industries all increased [8]. - The natural gas consumption during the heating season reached 180 billion cubic meters, a year - on - year increase of over 2% [8]. - The US government plans to further relax sanctions on Venezuela's oil industry to increase crude oil production [9]. - The main port in the UAE, Fujairah, has suspended oil loading [9]. - The IEA member countries agreed to release 400 million barrels of strategic oil reserves [9]. - The US diesel retail price has exceeded $5 per gallon for the second time in history [9]. - The EU should prepare for dialogue with Russia in the future, focusing on European security and the Ukraine peace issue [10]. - The US API crude oil inventory last week was 6.556 million barrels, higher than the expected 730,000 barrels [11]. 3.2.5 Agricultural Products - The tariff - rate quota for cotton imports in 2026 is 300,000 tons, with a contract - based application method [12]. - Zhejiang Province aims to improve the fertilizer utilization rate of grain and oil crops and increase yields [12][13]. - Since the Spring Festival, domestic hog prices have been falling, and the current price is close to the historical low. Hog farming is in a loss - making state [13]. - The European Grain Association predicts that the corn and rapeseed yields in the EU and the UK in 2026 will be 60.7 million tons and 21.1 million tons respectively [13]. - The blockade of the Strait of Hormuz has affected the global fertilizer supply chain, leading to a 30% increase in urea prices and potential food crises in some regions [14]. 3.3 Financial News Compilation 3.3.1 Open Market - On March 17, the central bank conducted 51 billion yuan of 7 - day reverse repurchase operations, with a net investment of 11.5 billion yuan [15]. 3.3.2 Important News and Information - The Ministry of Finance will support the construction of a strong domestic market in 2026 and implement a more proactive fiscal policy in five aspects [16][17]. - The National Development and Reform Commission is organizing the application for national - level landmark major application scenario projects and has launched a new batch of 13 landmark major foreign - funded projects [18]. - The State - owned Assets Supervision and Administration Commission of the State Council will promote the implementation of major projects and the transformation of central enterprises [18]. - From January to February, the total social electricity consumption increased by 6.1% year - on - year, with high - growth rates in some industries [18]. - The property market in core cities is showing a "small spring" in March [19]. - Some city - commercial banks' wealth management products may continue to operate, and the application path for wealth management subsidiaries has changed [19]. - The financial regulatory authority has issued a new regulation on the supervision and rating of wealth management companies, excluding the scale indicator [20]. - The convertible bond market has shown an indexation trend this year, with a significant increase in the scale of convertible bond ETFs [20]. - Tianneng Power's green technology innovation bond was successfully issued, with a scale of 500 million yuan and a low interest rate [21][22]. - The Ministry of Finance plans to issue 175 billion yuan of 7 - year book - entry interest - bearing treasury bonds on March 24 [22]. - The Fed will discuss the impact of the energy shock on inflation and economic growth, and the market's expectation of a rate cut this year has decreased [24]. - The Bank of Japan will flexibly operate the bond market under certain conditions, and potential inflation is rising [25]. 3.3.3 Bond Market Summary - The inter - bank bond market in China is warming up, with the yields of major interest - rate bonds generally falling, and the bond futures closing higher. The money market is stable [26]. - The exchange - traded bond market has mixed performance, with some bonds rising and some falling [26]. - The convertible bond index has fallen, with some bonds having significant price changes [27]. - The money market interest rates are mostly down, and the yields of some financial bonds and government bonds have changed [27][28][29][30]. 3.3.4 Foreign Exchange Market Express - The on - shore RMB against the US dollar rose on March 17, and the US dollar index fell, with non - US currencies generally rising [31][32]. 3.3.5 Research Report Highlights - Huatai Fixed - Income comments that the short - term economy is in an upward repair phase, and the bond market has limited adjustment space. It is recommended to focus on short - to - medium - term credit bonds [33]. - CITIC Securities believes that overseas bond assets can fill the "yield gap", and the channels for domestic investors to invest overseas are diversifying [33]. - S&P Global Ratings says that Chinese government policies related to the banking industry are more market - oriented, which is beneficial to banks [34]. 3.3.6 Today's Reminders - On March 18, 216 bonds will be listed, 158 bonds will be issued, 161 bonds will be paid, and 278 bonds will pay principal and interest [35][36]. 3.4 Stock Market Important News - The A - share market fell, with the Shanghai Composite Index down 0.85%, and sectors such as computing power hardware and super - hard materials leading the decline [37]. - The Hang Seng Index rose 0.13%, with semiconductor and other sectors falling and real estate and financial stocks rising. Southbound funds had a net selling of over HK$11 billion [37].