投资者-亚太地区：开门红能否延续？-Investor Presentation Asia Pacific-Can The Strong Opening Be Sustained

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the infrastructure and consumer goods sectors in China, focusing on recent policy measures and economic indicators. Core Insights and Arguments 1. Infrastructure Investment: - The central government has increased the pre-approved budget for major infrastructure projects to RMB 295 billion, up from RMB 200 billion in 2025 [3][4] - Local government bond issuance plans for Q1 2026 are more aggressive, with a target of RMB 665 billion, compared to RMB 422 billion in 2025 [3][4] - A national VC Guidance Fund for emerging sectors has been launched with an allocation of RMB 100 billion, aiming to mobilize over RMB 1 trillion [3] 2. Construction Sector Performance: - There is an improvement in construction momentum, indicated by a rebound in cement shipments and a strong construction PMI in December 2025 [7][8] 3. External Demand Resilience: - Exports remained resilient in December 2025, with stable shipments to the US and robust trade performance with Korea [9][11] 4. Weak Household Consumption: - Household consumption growth has weakened, attributed to fading trade-in effectiveness and a negative wealth effect from declining property prices [13][18] 5. 2026 Trade-in Scheme: - The new trade-in scheme for consumer goods has less subsidy per vehicle on average, with narrowed coverage from 12 categories in 2025 to 6 in 2026 [19] 6. Inflation Trends: - Headline CPI has risen due to increases in gold and food prices, while core CPI has softened [20][21] - The recent uptick in inflation data may be short-lived, with expectations of managed volatility in the currency [21][25] 7. RMB Forecasts: - RMB forecasts have been revised upward due to mark-to-market adjustments and robust export performance, although they remain slightly below consensus due to potential dollar strength and persistent domestic deflation [23][25] 8. Economic Growth Projections: - Strong export momentum is expected to provide a steady tailwind to the RMB, supported by easing trade tensions and a broadening global demand recovery [28] 9. Domestic Economic Challenges: - The domestic economy remains soft, with a strong current account surplus but weak capital flows amid ongoing deflation [33] Additional Important Insights - The pace of infrastructure bond issuance and local government debt swaps in Q1 2026 will be critical to watch [22] - The rollout of the consumer goods trade-in program and consumption momentum during the Lunar New Year holidays are also key indicators for the upcoming months [22] This summary encapsulates the essential points discussed in the conference call, highlighting the current state and outlook of the infrastructure and consumer goods sectors in China.