Core Viewpoint - The investment by the company in the China Nuclear Clean Energy REIT is a significant step towards the revaluation and revitalization of high-quality clean energy infrastructure assets, contributing to the high-quality development of the clean energy industry and the improvement of the green finance system [1] Group 1: Investment Details - The company’s subsidiary, Shoucheng Jicheng, has participated in the investment of the China Nuclear Clean Energy Closed-End Infrastructure Securities Investment Fund [1] - The underlying asset of the REIT is the Bopona Hydropower Station in Xinjiang, which is the largest operational hydropower project in the Hotan region in terms of installed capacity and annual power generation [1] Group 2: Strategic Importance - The successful listing of the China Nuclear Clean Energy REIT represents an innovative practice in implementing the national REITs strategy and the "dual carbon" policy, serving as a model for market mechanisms that allow social capital to participate in green energy infrastructure construction [1] - The company plans to continue increasing its investment in China's smart infrastructure asset sector, leveraging its first-mover advantage in the REITs field and collaborating with leading industry players to create a closed-loop management service for the entire lifecycle of smart infrastructure assets [1]

Core Viewpoint - The investment by the company in the 华夏中核清洁能源 REIT represents a significant step towards the valuation reassessment and revitalization of high-quality clean energy infrastructure assets, contributing to the high-quality development of the clean energy industry and the improvement of the green financial system [1] Group 1 - The investment is made through the company's wholly-owned subsidiary, 首程基石, in the 华夏中核清洁能源 REIT, which is backed by the Xinjiang 波波娜 Hydropower Station, the largest operational hydropower project in the region [1] - The successful listing of the 华夏中核清洁能源 REIT aligns with national REITs strategic deployment and "dual carbon" policy goals, serving as an innovative practice for social capital participation in green energy infrastructure construction [1] - The company plans to continue increasing its investment in China's smart infrastructure asset sector, leveraging its first-mover advantage in the REITs field and collaborating with leading industry players to create a closed-loop management service for the entire lifecycle of smart infrastructure assets [1]

Market Performance - The public REITs secondary market experienced an overall upward trend this week, with a slight decrease in trading activity compared to the previous week [1] - The CSI REITs total return index increased by 0.47% this week, while the CSI REITs index rose by 0.35%, outperforming the CSI 300 index [1][2] - As of January 30, the CSI REITs total return index closed at 1052.42 points, marking a positive weekly growth for two consecutive weeks [2] Individual REITs Performance - Among the 78 listed public REITs, 41 saw an increase in their prices this week, with the top performers being focused on sectors such as parks, energy, consumption, and transportation [2] - The best-performing REIT this week was Bosera Jinkai Industrial Park REIT, which had a weekly increase of 4.94% [3] - Other notable gainers included ICBC Mengneng Clean Energy REIT and Huaxia Zhonghai Commercial REIT, with weekly increases of 4.64% and 4.52%, respectively [3] New Listings and Applications - Huaxia Zhongke Clean Energy REIT is set to be listed on the Shanghai Stock Exchange on February 2, becoming the 79th public REIT in the market [5] - Five commercial real estate REITs have been reported and accepted for review, with the first three submitted on January 29 [6][7] - The submitted commercial REITs include products from Huaxia Fund, Huitianfu Fund, and CICC Fund, expanding the total number of reported commercial REITs to eight [9]

Core Viewpoint - The public REITs market in China is expected to experience a "high-quality development opportunity" in 2026, driven by policy benefits and improved market ecology, balancing "stock activation" and "high-quality development" [2][4]. Group 1: Market Performance and Developments - The public REITs market started 2026 with a strong performance, with several products showing significant weekly gains, such as E Fund Huawai Market REIT leading with a 7.84% increase [4]. - Multiple public REITs products have made progress, including the acceptance of China Aviation Beijing Changbao Rental Housing REIT by the CSRC and updates on other REITs' statuses [4]. - By the end of 2025, the public REITs market had 79 products with a total issuance scale exceeding 210 billion yuan, making it the largest REITs market in Asia and the second largest globally [5]. Group 2: Investment Opportunities - The macroeconomic recovery and expectations of declining interest rates are expected to enhance the attractiveness of REITs as high-dividend assets for long-term funds like insurance and social security [5]. - The market is anticipated to show differentiation, with high-quality assets and strong operational capabilities receiving valuation premiums, while single assets facing operational pressures may experience volatility [5]. - New growth points are expected from categories like data centers, cultural tourism, and elderly care, with a normalization of the expansion mechanism allowing REITs to evolve from single projects to asset platforms [5]. Group 3: Investment Focus Areas - In 2026, three main investment lines are highlighted: 1. Anti-cyclical stable cash flow assets, such as consumer infrastructure and policy-based rental housing, which are less affected by economic cycles [8]. 2. High-prosperity policy-driven assets, like data centers benefiting from the digital economy, and logistics sectors expected to recover as demand increases [8]. 3. Strong expansion asset platforms, where commercial real estate pilot projects may achieve scale effects and enhanced dividends through asset injections [9]. - The REITs market is expected to balance "stock activation" and "high-quality development," with a focus on core consumer assets, new policy-supported assets, and potential assets with improved operational efficiency [9].

Core Insights - By the end of 2025, China's public REITs market is projected to reach a total issuance of 79 products and a total issuance scale exceeding 210 billion yuan, establishing itself as the largest REITs market in Asia and the second largest globally [1][5] - The rapid growth of the market is driven by policy support and significant capital inflow, with institutional investors holding over 97% of the market [2] - The first half of 2025 saw a surge in subscription rates for new REITs, with some products experiencing subscription multiples exceeding 1,000 times, indicating strong market demand [3][5] Market Dynamics - The REITs market in 2025 is characterized by strong expansion, with 20 new products and 5 expansions, raising a total of 47.335 billion yuan [1] - The National Development and Reform Commission's policy changes have broadened the asset types eligible for REITs, enhancing market growth potential [2] - The market has diversified its underlying assets, covering ten categories including infrastructure, energy, and data centers, with new types of REITs being introduced [6] Performance and Trends - Consumer REITs have led the market with an average increase of over 30% in 2025, while industrial park REITs have faced negative returns due to underperforming underlying assets [8] - The market has shown significant differentiation, with the CSI REITs total return index rising nearly 10% in the first half of 2025 before experiencing a correction [8] Management Landscape - A concentration of management firms has emerged, with 26 institutions dominating the market, led by Huaxia Fund with nearly 49.5 billion yuan in managed assets, accounting for over 20% market share [10][11] - The trend of diversified management is evident, with nine managers covering both property and concession projects, indicating a shift towards more sophisticated asset management practices [10] Innovations in Fundraising - The expansion process of public REITs in 2025 has seen innovative breakthroughs, with new asset types and improved pricing mechanisms enhancing market efficiency [12] - The successful subscription of the Huaxia Fund's REIT, which achieved a 99.51% subscription rate, reflects strong market confidence in the value of expanded assets [12] Future Outlook - The public REITs market is expected to continue evolving, with anticipated improvements in liquidity, the introduction of REITs index funds, and further institutional participation [13] - The ongoing optimization of the regulatory framework, including the exploration of delisting mechanisms, is crucial for the sustainable development of the market [13]

Core Insights - The public REITs market in China is thriving, with 20 new products and 5 expansions issued in 2025, raising a total of 47.335 billion yuan, leading to a total issuance of 79 products and a market size exceeding 210 billion yuan by the end of the year [1][4][5] Market Development - Over five years, China's REITs market has evolved from a nascent stage to becoming the largest in Asia and the second largest globally, transitioning from a financing tool to a significant mechanism for revitalizing existing assets [5][6] - The market has seen a shift from institutional dominance to increased participation from individual investors, indicating a broader acceptance of REITs as a viable investment option [5] Primary Market Activity - The primary market has experienced unprecedented subscription rates, with some products seeing subscription multiples in the hundreds, such as 320 times for the Huaxia Zhonghai Commercial REIT and 340 times for the Huaxia Zhonghe Clean Energy REIT [2][5] - This surge in interest reflects a growing recognition of the long-term investment value of public REITs [5] Secondary Market Performance - In the secondary market, public REITs showed a generally positive trend in 2025, with consumer REITs leading the market with an average increase of over 30% [2][6] - As of December 30, 2025, 58 out of 78 listed REITs had increased in value, highlighting the differentiation in asset quality and operational capabilities among public REITs [6] Fund Management and Market Position - Huaxia Fund has issued 19 public REIT products, raising a total of 45.4 billion yuan (excluding expansions), which accounts for 20% of the total issued public REITs in China, positioning it as the market leader [6] - The pricing of different asset types has begun to show reasonable differentiation, establishing a "value anchor" for public REITs based on the ability to generate stable cash flows and enhance asset potential through active management [6] Diversification and Record Fundraising - The market has seen diversification in asset types and issuers, with high-quality consumer assets becoming the main attraction for investors [3][6] - The Huaxia Kaide Commercial REIT, initiated by a well-known international asset management firm, set a record with a proposed fundraising of 2.2872 billion yuan and over 309.17 billion yuan in subscription funds, indicating strong market demand for well-managed assets [3][7]

Core Insights - The public fund issuance market in 2025 experienced significant growth, with a total of 1,552 new public fund products established, marking a 35.87% increase from 2024 and reaching a four-year high in issuance numbers [1] - The average subscription period for new funds decreased to 16.41 days from 22.61 days in the previous year, indicating heightened market enthusiasm [1] - The equity market's favorable conditions laid a solid foundation for this growth, with 1,109 new equity funds accounting for 71.41% of the total new funds [1] Fund Types - Among the new funds, stock funds were the primary contributors, with 835 stock funds issued, representing 53.77% of the total, while 274 mixed equity funds accounted for 17.64% [1] - The trend towards passive investment has become a core driver, with the introduction of a fast-track approval process for ETFs, allowing for registration within five working days [1] ETF Market - A total of 358 new ETFs were established in 2025, with an issuance volume of 2,581.66 billion units, both figures setting historical records and surpassing the total issuance of the previous two years [1] - Stock ETFs were the mainstay, with 319 stock ETFs issued, totaling 1,629.16 billion units, which constituted 89.1% of the total ETF issuance [2] Institutional Participation - The market concentration for new fund issuance was high, with 133 institutions participating, and 24 of them issuing more than 20 products each [2] - Leading institutions included E Fund with 69 new products, followed by China Universal Fund and Huaxia Fund with 64 and 61 products respectively, focusing on equity and index sectors [2] Market Dynamics - The continuous allocation of long-term funds has strengthened the liquidity and scale advantages of leading ETFs, creating a "Matthew Effect" that attracts more follow-on investments [2] - The introduction of innovative products, such as FOFs, saw explosive growth with 88 new issuances, more than doubling from 2024, and various innovative ETFs catering to diverse investor needs [2] REITs Market - The public REITs market in 2025 witnessed a surge in subscription enthusiasm, with some offerings experiencing subscription multiples in the hundreds, such as 320 times for a commercial REIT and 340 times for a clean energy REIT [3] - By the end of 2025, the domestic public REITs market had 79 products with a total issuance scale exceeding 210 billion yuan, establishing itself as the largest REITs market in Asia and the second largest globally [3] Future Outlook - The fund issuance market for 2026 is set to commence, with 39 new funds expected in the first week, predominantly focusing on equity and FOF funds, with technology sectors being a key area of interest [4]

Core Insights - The public REITs market in China has shown significant growth in 2025, with a total issuance of 20 new products and 5 expansions, raising a total of 473.35 billion yuan, leading to a cumulative issuance scale exceeding 2.1 trillion yuan by the end of the year [1][15][29] - The market has become the largest REITs market in Asia and the second largest globally, reflecting a robust development trajectory over the past five years [1][15] - The first market has experienced record-high subscription multiples, with the 华夏中海商业REIT and 华夏中核清洁能源REIT achieving effective subscription multiples of 320 times and 340 times, respectively [1][4][15] - Consumer REITs have led the secondary market with an average increase of over 30% in 2025, attracting more investors to consider the allocation value of public REITs [1][15] Group 1: Primary Market Highlights - The public REITs market in 2025 witnessed a "new issue" frenzy, with subscription multiples often reaching several hundred times, indicating a growing recognition of long-term investment value [2][16] - The 华夏凯德商业REIT set a record with over 3.09 billion yuan in subscription funds, far exceeding previous records, showcasing the market's capacity to handle large and complex core assets [4][18] - The diversification of asset types and issuers has been a key trend, with high-quality consumer assets becoming the main attraction for investors [4][18] Group 2: Secondary Market Developments - The secondary market for public REITs has shown a generally positive trend, although it has experienced rational adjustments after an initial surge in the first half of the year [5][21] - The 中证REITs total return index rose nearly 10% from the beginning of the year to August, followed by a correction due to disappointing macroeconomic data [5][21] - By December 30, 2025, among 78 listed REITs, 58 saw price increases while 20 experienced declines, highlighting the differentiation in asset quality and operational capabilities [5][21] Group 3: Innovations and Future Outlook - The expansion of public REITs in 2025 has shown strong innovation and high market recognition, with diverse asset types and improved pricing mechanisms [6][20] - The 华夏华润有巢 REIT achieved a high subscription rate of 99.51% through a unique method of offering shares to existing holders, indicating a shift towards long-term asset value management [6][20] - The market is expected to evolve into a multi-layered, high-quality public REITs ecosystem, with ongoing collaboration among market participants [5][20] Group 4: Industry Leadership and ESG Initiatives - 华夏基金 has emerged as a leader in the public REITs sector, having issued 19 products with a total issuance of 45.4 billion yuan, accounting for 20% of the total market [9][24] - The company has implemented a proactive dividend strategy, distributing over 3.9 billion yuan to investors through 97 dividend payments by the end of 2025 [9][24] - In March 2025, 华夏基金 led the first simultaneous release of ESG reports for multiple REITs, marking a significant milestone in the domestic REITs market [11][26]

Core Insights - The successful issuance of the first water power REIT in Xinjiang, the Huaxia CNNC Clean Energy REIT, has garnered significant attention, with total subscription funds reaching 161.69 billion yuan, indicating a strong market recognition of the fund's quality underlying assets and management capabilities [1][2] Group 1: Fund Performance - The public offering attracted an effective subscription multiple of approximately 392 times, while the offline investors saw a subscription multiple exceeding 340 times, showcasing the high demand for the fund [1] - The effective subscription amount for public investors was about 10.582 billion units, with a confirmation ratio of 0.2552%, while offline investors had an effective subscription of 21.449 billion units and a confirmation ratio of 0.2937% [1] - The total subscription funds before proportional allocation reached 161.689 billion yuan, which is 107.47 times the intended fundraising scale [1] Group 2: Underlying Assets and Management - The underlying asset, the Bopona Hydropower Station, is the largest in the Hotan region and has been operational for over 14 years, providing stable and clean electricity supply [2] - The project benefits from a clear benchmark pricing mechanism and stable power purchase agreements, ensuring a reliable cash flow for the fund [2] - The original rights holder and operational management, Xinjiang Xinhua Hydropower Investment Co., Ltd., along with the project initiator, Xinhua Hydropower Co., Ltd., are part of the CNNC Group, which has a strong asset reserve in the clean energy sector [2] Group 3: Market Impact - The successful issuance of the Huaxia CNNC Clean Energy REIT sets a new benchmark for state-owned enterprises in the non-nuclear green energy sector within the capital market [2] - This issuance facilitates a market-oriented operation loop for the investment, financing, management, and exit of clean energy assets, providing a replicable model for similar green asset securitization practices by state-owned enterprises [2]

1. Report Industry Investment Rating The document does not mention the industry investment rating. 2. Core Views of the Report - The Huaxia CNNC Clean Energy REIT project has certain new - share subscription cost - effectiveness. Its underlying asset, the Popona Hydropower Station, is a mature clean - energy infrastructure with stable operation history and good cash - flow sustainability. The short - term and long - term revenue paths are clear, and it is supported by the regional power supply - demand environment [5]. - The competition risk is controllable in the short term, and in the long term, it is expected to benefit from the synergistic effect of upstream reservoirs. The original equity holder has strong strength, which provides a solid guarantee for the project operation. The valuation and distribution of this project are higher than comparable projects [5]. - In the current REITs market after adjustment, the project's new - share subscription is expected to attract investors who focus on stable returns and the energy infrastructure sector. Its listing performance may be promoted by both the support of asset fundamentals and the marginal improvement of market sentiment [5]. 3. Summary According to the Directory 3.1 Project Basic Situation - The Huaxia CNNC Clean Energy Closed - end Infrastructure Securities Investment Fund was registered by the China Securities Regulatory Commission on December 9, 2025. The underlying asset is the Popona Hydropower Station in Xinjiang, and the main source of cash - flow is electricity sales revenue [8]. - The project was completed in 2016, with a total installed capacity of 150,000 kilowatts and a designed annual power generation of 666 million kWh. From 2022 to 2025 H1, the company's gross profit margin maintained a good level, with fluctuations mainly due to equipment maintenance,停机避沙, and changes in power generation and electricity price structure [9]. - Except for 2024, the project's water abandonment rate remained at a relatively low level. In 2024, the water - available power generation and actual power generation reached 785 million kWh and 679 million kWh respectively [12]. 3.2 Hydropower Industry Pattern Analysis - Hydropower is an important part of the clean - energy system, currently accounting for about 15% of the national power supply. China's hydropower resources are becoming scarcer, with the installed capacity of conventional hydropower reaching 436 million kilowatts by the end of 2024 [15]. - In 2024, China's power supply - demand was in a "tight balance" state, with the highest power consumption load hitting a record high. The power consumption demand continued to grow steadily, while the new - energy installed capacity expanded rapidly, but its output was volatile [16]. - In Xinjiang, the hydropower operation environment has certain support. The power - market reform is advancing, and the water abandonment situation has improved. The Karakash River Basin has a clear hydropower development plan, and the planned new projects are progressing slowly in the short term, with uncertain long - term impacts [17][18][19]. - In the long - term, the hydropower industry has stable development potential. Pumped - storage power is expected to become a main regulating power source, and hydropower can play a greater role in promoting the "integration of wind, solar and hydropower" [20]. 3.3 Project Stability 3.3.1 Hydrological Conditions and Operation Basis - The hydrological conditions of the Karakash River are stable in the long term. The project can rely on the upstream Wuluwati Water Conservancy Project and its own facilities to adjust operation, which helps to stabilize power generation [22]. 3.3.2 Power Consumption and Dispatching Environment - The Hotan region has long - term power consumption capacity, and the "Power Transmission from Xinjiang" project provides stable support. Hydropower is in the priority dispatching sequence in the local power grid and is less affected by the rapid growth of photovoltaic installation [23]. 3.3.3 Upstream Reservoir and Power Grid Dispatching Synergy Relationship - The project can benefit from the regulation of upstream reservoirs and the "solar - hydro complementarity" dispatching mode. The future upstream reservoir is expected to increase the annual power generation of the Popona Hydropower Station by 5% [24]. 3.3.4 Electricity Price Mechanism and Water Abandonment Situation - In 2025, the power generation of the Popona Hydropower Station is fully included in the priority power - generation plan. From 2026, it will gradually participate in the market - oriented transaction, and the predicted market - oriented electricity price is about 0.25 yuan/kWh (tax - included) [25][26]. - The proportion of market - oriented transactions has been increasing. In 2024, the water - abandonment rate increased significantly due to insufficient grid consumption capacity. In the long - term, the water - abandonment pressure is expected to be alleviated with the improvement of demand and grid capacity [27][30]. 3.4 Original Equity Holder - The original equity holder is Xinjiang Xinhua Hydropower Investment Co., Ltd., which is controlled by the State - owned Assets Supervision and Administration Commission of the State Council. It is the largest hydropower operator in Xinjiang, with stable operation and profitability [31][33][34]. - After the fund issuance, the wholly - owned subsidiary Yulong Company will be responsible for project operation management, with more than 10 years of operation experience in the Popona Hydropower Station, providing a guarantee for stable project operation [40]. 3.5 Valuation and Distribution Rate 3.5.1 Historical Review of Energy Infrastructure - related REITs - REITs have certain "convertible - bond - like" attributes, related to interest - rate trends and the equity market. Energy infrastructure - related REITs have seen weakening performance since July 2025, but the new - share subscription income of new - issued REITs is still expected to be at a relatively ideal level [41]. 3.5.2 Valuation Analysis - The estimated value of the project's asset group is 1.253 billion yuan (as of June 30, 2025). The estimated annual power generation is 658 million kWh, which is a conservative assumption. The net cash - flow distribution rates for July - December 2025 and 2026 are 6.03% (annualized) and 5.64% respectively, and the IRR for fund investors during the fund's duration is 6.10% [44][45]. - Compared with the only comparable listed hydropower REIT (China Asset Management China Power Construction Clean Energy REIT), the Huaxia CNNC Clean Energy REIT is superior in asset value and cash - flow distribution ability, with more advantages in cash - flow return and distribution stability [46][49].