A：The four types of assets that performed well in 2025 are precious metals (such as gold and silver), base metals, emerging market stocks (such as Vietnam and South Korea markets excluding A-shares), and global technology assets (such as the Philadelphia Semiconductor Index and the Shanghai Stock Exchange Innovation 50 Index). The reason behind this is the rise of a series of macro narratives, including the weakening of the US dollar credit, expectations of a new round of monetary system, reshaping of the global industrial supply chain, and a new wave of technological revolution represented by artificial intelligence.

A：The weakening of the US dollar's credit is mainly due to the Federal Reserve's interest rate cuts leading to a decrease in interest rate differentials, outflows of funds; at the same time, the credit risk premium of US dollar assets is rising and is no longer seen as a safe asset. In addition, the policy framework of the Trump administration, including trade protection and fiscal expansion, also exacerbates the upward trend of the credit risk premium of US dollar assets.

A：With the weakening of the US dollar's credit, it is expected in the market that in the process of constructing a new currency system, gold, due to its scarcity and relatively safe properties, is considered a new pricing anchor. Global central banks continue to increase their holdings of gold, driving its price revaluation.

A：The industrial supply chain is undergoing a transformation towards near-shoring, fragmentation, and redundancy, which is leading to an increase in demand for equipment and raw materials, thereby driving up prices of related assets including non-ferrous metals. For example, the development of the new energy industry has increased the demand for non-ferrous metals such as copper and silver.

A：Representative technologies of this round of technological revolution are expected to include artificial intelligence, embodied intelligence, renewable energy, etc., among which AI computing power is considered one of the infrastructure and has become one of the core clues for pricing in the financial market.

A：The rise of this narrative is due to the disruption of continuity and stability, such as changes in the global financial environment, the restart of technological revolution, etc. According to the framework of narrative economics, the end of a narrative usually needs to meet three conditions: key premises being falsified, replaced by new popular narratives, or iconic narrative events reaching their peak. Currently, these conditions have not been met, so this round of narrative is not yet over.

A：Although geopolitical changes and short-term tight supply in the spot market may strengthen current trends, it is recommended to moderately pursue asset diversification when looking ahead to 2026, as USD liquidity may not remain as loose as in 2025, and precious metals and AI capital spending face higher base numbers and constraints. At the same time, attention should be paid to future potential narrative clues, such as the industrialization of southern countries, the second wave of globalization of Chinese companies, AI sceneization, and increased consumption rates.

A：In 2025, China's economic growth rate is expected to be around five percent, compared to the global average GDP growth rate of 2.3 percent and the developed countries' rate of 1.2 percent. China's growth rate is still impressive and has a catching-up effect.

A：In 2025, the shortcomings of China's economic growth are relatively obvious, mainly reflected in exports and some domestic demand, especially in equipment renewal, trade-in programs, etc., leading to overall growth not being ideal. In terms of policy, the Central Economic Work Conference proposed to fully tap economic potential, stabilize investment, especially emphasizing that economically strong provinces should take on a major role in investment. In addition, attention will also be paid to service consumption, deepening investment against internal competition, and improvement in PPI data.

A：It is expected that exports will continue to maintain a relatively high growth rate in 2026, as three conditions – the fiscal expansion in Europe and America, the increasing demand for industrialization in southern countries, and the high export growth brought about by industrial upgrading – remain unchanged.

A：In 2025, fixed asset investment showed negative growth, mainly due to investments in economically strong provinces being below the national average. The central government has recognized this issue and proposed at the Central Economic Work Conference to promote investment stabilization to prevent a decline. Therefore, it is estimated that the restoration of investment in economically strong provinces in 2026 will be a certainty.

A：In 2026, the policy focus will shift towards service consumption. With the slowdown in the growth of durable goods consumption, service consumption is expected to become a new consumption priority, and may receive more attention and policy support after the Two Sessions in March.

A：It is expected that the anti-hedonic policy will continue to deepen by 2026, accompanied by improvements in the PPI data. Prices in related industries will see incremental repairs, thereby driving overall price trends upward.

A：It is expected that the nominal GDP will recover by 2026, and nominal growth is expected to return to around 5.1%. There are favorable conditions for the second phase of asset sales, therefore it is optimistic about profitable industries asset allocation.

A：- Gold is seen as an important investment product for reducing the volatility of the overall asset portfolio. - The Renminbi is seen as a risk asset opportunity. - Continuously optimistic about the direction of exports and going global. - At the same time, the application of AI will further accelerate, providing China with advantages in application scenarios.

A：In a low interest rate environment and real estate downturn cycle, a large amount of deposits are about to mature. If a portion of these deposits enter the public fund industry, it will greatly enhance the allocation of equity assets, but will also face a situation of both opportunities and challenges coexisting.

A：Alipay users' asset allocation is relatively stable, mainly increasing fixed income and index funds, as well as passive products, while the scale of actively managed equity has not increased. The total net value growth relies on net value growth rather than share growth, showing the impact of deposit migration on the financial industry, but also facing challenges.

A：This type of enterprise can achieve investment by purchasing equity in the world's best listed companies. This method is fair-priced and liquid, only requiring the selection of the best companies for investment.

A：The Fourth Plenary Session proposed fifteen development goals, requiring that the economic growth rate of China should not be lower than 4.17% between 2025 and 2035.

A：In the first three quarters of the year, Guangdong's economic growth was 4.1%, lower than the national average but better than the same period last year. General Secretary emphasized that Guangdong should focus on studying new topics for economic and social development. For China's economy, maintaining a growth rate of over 4% in the next five years is a good target. Key points include the development of the real economy, especially the integration and innovation of manufacturing and technology innovation industries, as well as corporate profitability and residents' purchasing power. In addition, attention should be paid to the reasonable rise in interest rates, anti-internal circulation policies, the construction of a unified national market, and the role of the real estate market.

A：The growth rate of the Chinese economy in the first three quarters of this year was 4.8%, and is expected to be around 5% for the full year. As for 2026, on the basis that the level between Q4 and the first three quarters remains the same, the annual economic growth rate may be above 4.5%, still in a state of insufficient effective demand and low prices.

A：This means that economic growth should be based on actual demand and quality improvement, rather than relying on false data. The application space of AI is very large, reflected in policy adjustments after 2015, such as lowering economic growth targets, implementing supply-side structural reforms, and so on.

A：The main factors dragging down the economy include a decline in export growth, decrease in investment, and drop in consumption, among which policy retreat and economic transformation issues are main reasons.

A：This year, CPI has significantly rebounded, especially the core CPI; while PPI has shown structural differentiation, with good performance of assets such as equities in the color sector, PPI has not turned positive quickly. It is generally expected that PPI will be low before turning high in 2026, and will turn positive in the third quarter.

A：The current macro policy framework can be summarized as "fighting on one side, preparing for war on one side, and building on one side", involving the overall coordination of domestic economic development and international economic and trade struggles, as well as the relationship between national development and security, and emphasizing economic construction as the main focus, providing a basic logical starting point for understanding the future macro policy layout.

A：Although the current benchmark interest rate for loans is relatively high, considering the economic situation and the needs for future development, it is necessary to lower the interest rate. At the same time, fiscal policy needs to be strengthened to collaborate with monetary policy, take measures to boost market confidence and expectations, and quickly reverse the trend of declining growth in fiscal expenditures.

A：In 2025, the equity market, represented by science and technology innovation, increased by approximately 40 to 50% throughout the year, with the RMB appreciating by 4%. In terms of global markets, the best performers were Vietnam and Japan, followed by Hong Kong, Germany's DAX, NASDAQ, and the Shanghai stock market in India.

A：In 2025, there are two notable characteristics: first, the United States is experiencing a bull market in stocks and bonds; second, developed economies and some developing economies are seeing double-digit returns in the equity markets. In addition, this is the first time that China and the surrounding markets have seen a simultaneous increase in three years after the epidemic.

A：Although there is a trend towards decentralization, Chinese assets are also rising. To maintain this trend, it is necessary for Sino-US relations to remain good, and for the fundamental factors and policy expectations between different economies to continue to diverge.

A：In 2026, an important event is the midterm elections in the United States Congress, and the geopolitical landscape will affect the fundamental returns of risky assets, while considering the basic economic conditions of each economy.

A：Historical data shows that the US dollar has two possibilities: maintaining volatility or weakening. If the US dollar continues to fluctuate, the US stock market and gold will perform well; if the US dollar weakens, Hong Kong stocks and US stocks will have better performance, followed by gold.

A：In 2025, fixed income investment practitioners felt lukewarm, and the bond market performance was not as strong as the bull market of the previous two years. In 2026, facing a low interest rate environment, asset management products need to introduce diversified assets such as equity assets to increase returns and reduce volatility, and the development of fixed income plus products will be strengthened.

A：Low interest rates have led to lower returns and increased volatility in fixed-income asset management products. In order to maintain attractiveness and a good holding experience, the industry consensus is to introduce a variety of assets such as equities into the portfolio to achieve a balance between returns and risk.

A：Our previous macroeconomic policy control measures focused more on investment, continuously stimulating investment and increasing production of enterprises, which has resulted in a certain degree of structural overcapacity at present.

A：Overcapacity will reduce the demand for new fixed asset investments, even if interest rates, financing costs, and administrative costs are reduced, because if products cannot be sold, companies will not have the motivation to make new investments. At the same time, the relatively weak regulation of distribution rules in the past has led to insufficient disposable income in the wealth structure of residents, especially long-tail residents, thus unable to effectively stimulate consumption demand.

A：Oversupply of production capacity and structural changes in old and new kinetic energy have led to a steep IS curve, weakening the effects of traditional demand stimuli (such as interest rate cuts, subsidies, and relaxed real estate policies). In addition, multiple interest rate cuts have resulted in relatively low interest rates in China, approaching the Keynesian zone, which has discounted the effectiveness of monetary policy. Unequal distribution of income has left residents with insufficient disposable income, suppressing consumer demand and creating a low inflation and low interest rate environment. At the same time, old kinetic energy sectors have a high demand for funds but are constrained by policies, while new kinetic energy sectors rely more on equity financing, leading to overall weak financing demand; coupled with strict control on local government debt and platform company financing, this has resulted in reduced money demand.

A：Low interest rates have a trend, stemming from the expansion of production capacity in the industrialization process leading to a decrease in commodity prices, thereby prompting a downward trend in interest rates. In recent decades, interest rates in major global economies have also shown a downward trend. The domestic GDP growth rate also shows a downward trend, but a downward trend in interest rates does not necessarily mean that they will only decrease and not rise. At the same time, the low interest rate environment also has periodic characteristics, affected by economic cycles, monetary policy cycles, fiscal policy cycles, debt cycles, and inflation cycles. For example, despite the central bank implementing a loose monetary policy, considering the economic situation and risk prevention, the attitude is relatively cautious, known as the "hawkish" strategy. In addition, an increase in fiscal policy and changes in the inflation situation will also have an impact on the repricing of interest rates.

A：In a low interest rate environment, the bond market shows different experiences. The trend of low interest rates pushes the bond market higher, while periods of low interest rates can lead to weakness in the bond market, resulting in market volatility and poor investment experiences. In a low interest rate environment, bond price volatility increases, as investors may increase risk exposure in pursuit of high returns, such as by extending duration, using leverage, or sinking credit quality, which will further increase portfolio volatility. Therefore, successful investment should downplay timing and focus more on long-term cognition and strategic choices.

A：Our first core belief is that in order to succeed and achieve good performance, the primary task is to avoid failure and ensure survival. Therefore, in the market, we advocate for a neutral market beta participation approach and actively seek out the alpha in individual securities, industries, and curves, in order to construct a competitive investment portfolio in this way.

A：Although low interest rates are a trend, we believe it is not suitable for full-position operation. The reason is that the funds we manage are mostly fixed-income, and investors generally do not prefer volatile returns. Therefore, we tend to pursue moderate volatility with significant alpha, which better meets the needs of these types of investors.

A：Although interest rates may fluctuate periodically, we do not need to be overly pessimistic. In a low interest rate environment, the demand for stable income will continue to exist. For example, a bond yield of 1.5% has been able to demonstrate value in recent years. Therefore, as long as we respond appropriately, we can still create value for our clients.

A：We do not aim to meet all customers' needs around the clock with a single product. Instead, we design different products and strategies according to customers' different needs in order to achieve the goal of meeting customer needs.

A：Fixed income investors tend to focus more on the certainty of returns in reality, while equity investors may prioritize potential dreams and imagination. We choose to endure loneliness, focus on reality, while also considering some dreams.

A：Our strategy is "saving as a shield, collecting as feathers", focusing on controlling drawdowns and pursuing stable returns, further exploring excess returns. Fixed income strategies focus on the aggressiveness of the product, balancing dreams, with each having its own emphasis.

A：We believe that with the decrease in residents' disposable income and the increase in investment willingness, the demand for assets containing rights will continue to grow in the future. At the same time, based on institutional data, although the proportion of fixed income plus investments has increased, there is still significant room for growth. Therefore, the fixed income plus strategy has great development prospects. The fixed income plus strategy aims to match investors' risk preferences, enhance the effectiveness of income generation, and optimize the risk-return characteristics of the portfolio in market fluctuations to provide a better holding experience. We hope to achieve a balance in these three directions through adjustments in the stock-bond ratio.

A：Investment styles rotate rapidly, requiring flexible application of top-down timing, industry cycle rotation, and bottom-up stock selection strategies. The challenge lies in maintaining the stability and accuracy of the long-term research framework. We hope to achieve long-term stable returns by focusing on industry structure driving and purchasing high-quality companies in growth industries.

A：In reviewing past excellent investment opportunities, we have found that whether it is in real estate cycles or industries such as technology and consumption, the underlying patterns mostly stem from changes in supply and demand leading to changes in economic cycles. When the supply and demand slope rises rapidly, industry profits will increase. With the release of production capacity and a slowdown in demand growth, the rebalancing of supply and demand brings new investment opportunities. This pattern not only applies to stocks but also to convertible bonds and industries with low correlation to macroeconomic trends, guiding us to make long-term sustainable investments based on fundamental research.

A：During the economic downturn phase, convertible bonds show stronger resilience, mainly due to their terms designed with pro-cyclical characteristics. For example, during a market downturn, the downgrade clauses gradually increase, protecting the value of convertible bonds; while in a market uptrend, the redemption mechanism may be triggered, leading investors to forced profit-taking. However, in the long run, profit-taking behavior actually enhances holding period returns and Sharpe ratio. Emphasizing convertible bonds in fixed-income plus strategies is not only based on term game, but also because when stocks and convertible bonds are invested together, convertible bonds provide better investment opportunities in the changing business cycle.

A：The performance of the convertible bond market inspires us to focus more on grasping the beginning and end points of the economic cycle in our investment research, especially the starting point of rapid demand growth and the end point where supply and demand changes lead to the rebalancing of supply and demand affecting the end of the economic cycle. At the same time, convertible bonds, as a refinancing tool, will increase in issuance volume when industry economic expectations are on the rise. This suggests that we can anticipate trends in economic structural changes by analyzing the pace of convertible bond issuance, and during the tenure of the convertible bond, we can search for profit-driven investment opportunities based on changes in company profits.

A：Based on historical data and the potential maturity of convertible bonds in the future, it is predicted that the main industries experiencing a decrease in convertible bonds in 2026 will be banking, non-banking financial institutions, pharmaceuticals, and public utilities, while the proportion of industries such as new energy, new materials, electronics, machinery, and automobiles will increase, reflecting the transformation of new economic drivers. Therefore, we will follow the direction of economic transmission, pay attention to the cyclical position of investment targets, and seize the investment opportunities of bottoming out, stabilizing, rebounding and continued economic expansion. In addition, we will also combine the structure of the convertible bond market, grasp the industrial opportunities in economic transformation, and leverage the profit-driven investment opportunities brought about by the combination of capital cycle and capacity cycle in the economic cycle upturn.

A：Fixed income strategy is not simply a combination of stocks and bonds, but rather an analysis of potential risk exposures based on the underlying asset pricing logic, and the flexible application of this analysis. By conducting in-depth research to improve investment efficiency, such as the significant changes in the correlation between dividend stocks and bonds in different market phases, we must consider the correlation of earnings and valuation when judging pricing transmission pathways, and thus apply industry hedging on the numerator end to avoid unexpected risk exposures brought about by hedging operations.

A：In terms of dynamic optimization of portfolio, besides the risk exposure of individual assets, the relative pricing performance of diversified asset combinations such as stocks, convertible bonds, and treasury bonds can help to identify potential risk exposures of the portfolio at an earlier stage. For example, convertible bonds may be more sensitive to changes in bond liquidity compared to stocks, or they may exhibit certain pricing characteristics of debt rights. This can help to assess market expectations and identify mispricing in order to optimize portfolio rebalancing during changes in economic conditions. By comprehensively considering profit drivers, changes in valuations, and correlations between different assets, a more refined risk management strategy can be constructed.

A：Private placements, compared to IPOs, have a more stable and advantageous performance in the market. In terms of financing ratio, private placements have clear ratio stages, such as 3:1, 8:1, etc., and play different roles in different market cycles. IPOs have been suspended before, but refinancing has never stopped, mainly because the total amount of refinancing market is far higher than IPOs, and its position in the overall financial market is crucial. The private placement market has gone through five development stages, from inception, start-up, eruption, growth, standardization and adjustment, to reboot and reshaping. It is currently in a stage of high-quality development, with each cycle lasting about four years on average. From 2012 to 2016, and from 2018 to the present, each recovery from the bottom takes about four years, showing strong vitality and continuity.

A：In the past two years, the country's policies on private placements and refinancing have been very restrained, reflecting a protection of the Chinese stock market. However, looking at the four-year cycle, with policies gradually relaxing and this year's news revealing, expansion of refinancing has become inevitable. This means that the stock market's feast may have just begun and is far from reaching its peak.

A：Caitong Fund has had landmark events at every stage. For example, in 2013, it completed its first private placement product - an investment in Baosteel Group - and achieved a 10% return during the subsequent market recovery. In 2015, it issued the first batch of private placement public funds, which, despite being issued at the market's peak, maintained a positive growth in net asset value a year and a half later. In addition, in the innovation stage, Caitong Fund was the first to propose and implement the application of quantitative investment technology and financial derivatives, as well as introduce valuation guidelines for illiquid assets, leading in the industry. Having undergone years of development, Caitong Fund now has a mature service system from 1.0 to 8.0, capable of meeting the needs of clients at different levels. In terms of products, it not only has traditional private placement investment strategies but also developed various strategies such as long selection, long combination, ETF private placement, and private placement quantitative hedging. Moreover, Caitong Fund focuses on prudent operations, has rich market experience and crisis response capabilities, seeks excellence, is willing to share research results, strives to improve the overall level of the private placement investment market, and has a professional project management team and gold medal service, ensuring precision in investment operations and service in any market environment.

A：In 2025, the difficulty of the placement market is relatively high, with an average ROI of over 30%, but the discount is low, only around 86 to 87%. This is mainly due to the low supply and strong demand, especially from state-owned assets, bank wealth management subsidiaries, and insurance funds, which increases the tension in supply and demand. In addition, policy changes and fluctuations in the equity market are also important factors affecting the placement market. Policy adjustments can affect the size of the placement, and periods of weakness in the equity market are usually accompanied by regulatory restrictions on IPOs and refinancing, which in turn affect the issuance of placements.

A：The difference between price inquiries and private placements lies in the nature of the shares (transfer of existing shares vs issuance of new shares), the size of the issuance (median of 1.5 billion vs 7.25 billion), and the impact. Although there are differences between the two, the key similarities lie in the similar discount levels (around 8-9% off) and lock-up periods (usually six months). In the past year, the number and size of price inquiries have grown rapidly, approaching or even surpassing private placements, making them a good supplement to private placement investments.

A：It is expected that there will be a recovery in the issuance of additional shares in 2026, with the number of pre-disclosure and approval cases doubling compared to 2024, indicating that about 150 to 200 additional share projects may be issued. As for the transfer of inquiries, due to its close relationship with new share supply, it is expected that in the next 1 to 2 years, there will be a large expansion phase of the Sci-Tech Innovation Board and the Growth Enterprise Board, releasing a large amount of rotational supply. At the same time, factors such as a positive industry outlook, improved household income expectations, and increased financing needs of core enterprises may also drive rotational market supply to remain at a good level.

A：The main changes in a bull market or a structural bull market are primarily reflected in two aspects: first, changes in the profit end, driven by the AI industrial revolution; second, changes in the valuation end, including support from higher levels for liquidity, a shift in expectations for long-term economic deflationary spiral, and the restoration of Sino-US relations. These factors together have boosted market-wide risk appetite.

A：The core of the Cathay Funds' asset investment framework is equity assets, especially in years when equity assets perform well, there will be higher returns. At the same time, due to the presence of discounts, it provides a strong safety margin. In the investment process, we will comprehensively consider the three elements of discounts, market timing, and stock selection, dynamically adjust, and focus on combining discounts and safety margins, as well as factors such as issuance points. In terms of market timing, we adhere to the contrarian investment principle, focus on industry selection based on economic reversal and cyclical changes, and select individual stocks based on popularity and safety margin.

A：When making long-term timing investments in fixed increase, we need to pay attention to the position of the market in the center of volatility, that is, the area below the slope formed by the long-term GDP growth rate or the EPS growth rate of Wind A. These positions are usually better timing for fixed increase investments. Through quantitative data backtesting, it was found that in the 1-2 years after these periods, the annualized return on fixed increase investments is often 5-10 percentage points higher than the market average return. However, in the later stages of a bull market or when the market is extremely hot, it is advisable to moderately avoid risks or adopt hedging strategies.

A：定增是一种适合长期投资、分散投资和滚动投资的重要工具，尤其对于特色资产而言，其存在一定的长期投资价值。虽然从短期考核周期看，可能需要做一些风险规避措施，但在市场犹豫不决时坚持做多，在人声鼎沸时保持清醒。此外，财通基金每年会发布定增市场全景报告，为市场参与者提供决策参考。 Rights issues are an important tool for long-term investment, diversified investment, and rolling investment, especially for unique assets, which have certain long-term investment value. Although some risk mitigation measures may be necessary from the perspective of short-term assessment periods, it is important to stay long when the market is indecisive and stay clear-headed when there is a lot of buzz. Additionally, Caifeng Fund publishes an annual overview of the rights issue market, providing decision-making references for market participants.

A：Since the new refinancing policy in 2020, Caitong Fund has released an annual comprehensive report on the private placement market, which has become an important decision-making tool in the domestic private placement market. With 15 years of development, the company has accumulated rich practical experience and deep thinking. In the future, Caitong Fund will continue to focus on characteristic asset areas, seize core opportunities, provide warm financial services, and strive to build a distinctive, diverse, and trusted first-class asset management company.

A：This is because business owners feel that business is very good, so they have increased capacity and production, improving capacity utilization, resulting in an increase in inventory. At the same time, during this process, the price increase also reflects that inventory accumulation is a benign, positive feedback process, that is, as quantity and price both rise together, corresponding to the main uptrend stage of cyclical stocks.

A：At that time, the business owner was still optimistic and continued to expand production, but demand did not grow in sync. As a result, a situation of passive inventory replenishment occurred, with inventory rising but prices not increasing.

A：Once all the production capacity is put into the market, the products cannot be sold, so the company can only sell at a discount, forming a phase of actively reducing inventory. This process goes through a process of price decline and inventory reduction, which is particularly evident in the Chinese economy and has lasted for three years.

A：After three years of actively destocking, the inventory cycle is now approaching its bottom, and much of the production capacity has been fully released. If there is a slight recovery in demand, the tight situation brought about by supply-side reforms may lead to a possibility of rising commodity prices, so next year could be the starting point of a new cycle.

A：Since 2016, the changes in supply side have had a significant impact on China's cyclical industries, such as supply side reforms, monetization policies for shantytown renovation, and dual-carbon policies, all of which have had a major impact on commodity prices. The current anti-"involution" policies may also become a new supply side logic, as long as demand gradually recovers, the tight supply situation will be conducive to price increases. Looking at the upstream, middle, and downstream sectors separately, the supply of upstream resource products is already very tight, and the growth rates of capital expenditure, construction in progress, and fixed assets all indicate that the manufacturing capacity of the middle stream may currently be at a low point. Comparing horizontally, the current supply and demand situation is better than it was ten years ago, laying the foundation for price increases next year.

A：The manufacturing sector in the United States is picking up, with increased investment in AI contributing to GDP growth and driving demand in related manufacturing industries. The weak infrastructure in emerging countries, coupled with the transfer of production capacity, presents opportunities for Chinese infrastructure and manufacturing exports. Both domestic and international demand are expected to increase next year.

A：Next year is the year for the beginning of the 15th Five-Year Plan in the country. Historically, in years ending with "6" and "1", there is a phenomenon of upward pulse in infrastructure and fixed asset investment. This is because there are many new projects and sufficient funds at the beginning of the plan, leading to increased speed and probability of project implementation. This will have a positive impact on domestic fixed asset investment and manufacturing industry recovery.

A：After the global entering the interest rate cutting cycle, besides the United States and China, other countries also followed suit in cutting interest rates. This will drive up the global manufacturing PMI and the entire cycle will face a recovery process, so there is no need to worry about the cyclical market trend for next year.

A：The colored industry will benefit from the development of AI technology, especially with a significant boost in demand for copper. Calculations show that AI will increase the demand for copper by approximately 60,000 tons for power system construction and 0.3 tons for server requirements. This will contribute to a 0.7 percentage point increase in copper demand from 2026 to 2030, with a cumulative growth of 3.8 percentage points.

A：Similarly, AI technology will also have a positive impact on the demand for aluminum. The demand for aluminum will increase by about 70,000 tons due to the transformation of a single gigawatt power grid, contributing nearly 0.2 percentage points to the compound annual growth rate of aluminum.

A：Due to strict control over production capacity in China and limitations on overseas construction due to insufficient electricity supply, the overall supply of electrolytic aluminum has significantly decreased. This has led to an excess of 110,000 tons by 2024. However, considering the demand for artificial intelligence, the supply-demand gap is expected to further widen, and the price of aluminum is likely to continue to rise.

A：The rapid development of the energy storage industry will drive the demand for lithium carbonate to grow rapidly. However, considering the decline in capital spending on lithium carbonate and the long production expansion cycle, there may be a supply shortage by 2028. At that time, the price of lithium carbonate is expected to show a significant upward trend.

A：The price of organosilicon has fallen to a low level. Although the proportion of real estate demand has decreased, the demand in areas such as new energy vehicles, robotics, and AIDC is growing rapidly, with organosilicon demand expected to increase by 20%. At the same time, due to high costs and factors such as the withdrawal of capacity in Europe, there is a high chance of a price increase in organosilicon.

A：The production capacity cycle has bottomed out, with low willingness among enterprises to expand production, coupled with the impact of anti-internal competition policies, leading to stable production capacity. Next year, overseas interest rates will decline, and both the inventory cycle of China and the United States will rise simultaneously, along with increased infrastructure demand in emerging countries, collectively driving global demand growth. Therefore, the combination of supply and demand factors indicates a relatively certain price increase trend next year, with favorable opportunities in sub-sectors such as non-ferrous metals and chemicals.

A：In the new era of consumption, the focus is on three types of consumer stock investment opportunities: first, those that meet the new consumption demands brought about by changes in the Chinese population, such as silver hair consumption and quality consumption that have emerged under the aging and declining birth rate backgrounds; second, focusing on the changes in the main consumer demographics, paying attention to the consumption trends and preferences of post-90s and post-00s generations; third, tapping into overseas markets and focusing on companies with high added value, branding capabilities, and global competitiveness.

A：We should pay attention to companies that have the ability to export production capacity, technology and brand, as well as cultural export capabilities. These companies not only need to have infrastructure to build international production capacity, but also to transfer the smile curve from low value-added production to high value-added research and design, brand operation and sales. At the same time, they should engage in cultural exports through high-quality content supply such as trendy IP, game short films, etc.

A：Firstly, classify according to different market demands, such as consumer downgrading in the European and American markets, consumer upgrading in the Southeast Asian market, and consumer popularization in the Middle East and North African markets, and choose corresponding brands and companies for different markets. Secondly, look for Chinese enterprises with advantageous supply on the supply side, especially in industries such as consumer electronics and new energy, and pay attention to their business models of platform, brand, or supply chain going global and the economic, functional, and emotional value they bring to local markets. In addition, also focus on new supplies brought by new technologies such as AI, especially the development trends of AI terminal devices with cognitive capabilities.

A：In the past few years, the pharmaceutical industry has experienced the previous round of growth cycle (2019-2021), mainly benefiting from the policy immunity track and the high prosperity of the industry. The outbreak in 2020 further pushed the demand for related anti-epidemic supplies, driving a significant increase in the pharmaceutical sector. However, from 2022 to 2024, the market entered a downward cycle, mainly due to the bursting of valuation bubbles, digestion of anti-epidemic demand, medical anti-corruption, and tightening of medical insurance payments. Since 2025, with the implementation of domestic centralized procurement, innovation and overseas expansion driving forces, the pharmaceutical industry has re-entered a new cycle of growth.

A：The field of innovative drugs has undergone a revaluation of overseas value brought about by the hot trend of BD transactions. China's research and development capabilities in innovative drugs have been strengthened, with a significant increase in BD transactions. China's global market share is close to half and exceeds that of the United States. Innovative drugs are entering the BD 2.0 era, which requires more certainty in driving factors, such as the release of Phase III clinical trial data, which will increase the certainty of market approval and serve as a catalyst for stock price growth. In the future, there will also be the BD 3.0 era, where drugs will be marketed overseas and generate sales, with companies receiving a share of the sales and the potential emergence of global pharmaceutical giants. At the same time, oligonucleotide drugs, as part of the third wave of drug revolution, have characteristics such as precision, minimal side effects, and long-lasting effects. The market space is expected to grow from less than $10 billion to $50 billion within the next five years. Chinese companies are expected to be recognized by overseas pharmaceutical giants in this field, bringing important BD opportunities.

A：After group purchases, leading Chinese high-consumption material companies such as Shenzhen and Peripheral saw a significant increase in revenue and profit growth, and their performance entered a high growth stage. This indicates that for these high-consumption material companies that rely on imports, the previous negative factors have actually been fully released, and the benefits brought by group purchases are beginning to show.

A：The global market size of surgical robots is expected to reach $23.5 billion in 2024, with the entire market at a high growth stage and a compound annual growth rate of around 25%. Among them, the United States has the largest market share (55%), while China has a smaller market share (5%). After the leading Chinese surgical robot company implemented a go-global strategy, its new orders have ranked second globally, with its market value far lower than that of the leading company in the United States, but showing strong momentum.

A：AI technology can deeply integrate into the medical and health field, solving many pain points such as achieving more accurate diagnosis through AI-assisted ultrasound, or improving tumor diagnosis efficiency by combining digital pathology slices. In addition, the combination of AI and surgical robots is expected to significantly improve surgical precision and safety, with great potential for the future. Meanwhile, AI smart wearables products will also continue to grow rapidly under the trend of an aging population.

A：Brain-computer interface technology is divided into three categories: non-invasive, semi-invasive, and invasive, each with different applications. These applications range from consumer-level applications such as controlling household appliances and gaming devices through thoughts, to medical-level applications such as treating epilepsy, Parkinson's disease, and restoring the motor function of high-level paraplegic patients. Different types of brain-computer interface technologies are expected to gradually achieve commercialization and implementation in the future. New technologies in the medical device field, such as PFA technology and RDN surgery, are receiving increasing attention. PFA technology has extremely high safety in the treatment of atrial fibrillation, with short operating times and low anesthesia requirements. It is experiencing explosive growth in overseas markets, with several medical device companies in China already approved and capturing market share, possibly expanding internationally in the future. On the other hand, RDN surgery is a minimally invasive treatment for hypertension that does not require surgery or lifelong medication. It provides long-term benefits after just one operation and has received support from American health insurance. China also has domestic products following suit, with the potential to export to the European and American markets.

A：The performance of the technology sector is better than the overall market, mainly due to a significant improvement in the ROE (return on equity) of the technology sector. This improvement has not only led to an increase in high-growth companies within the technology sector, but also, according to consensus expectations, the number of high-growth sectors in 26th year may be higher than in the 25th year, indicating that the market will continue its good fundamentals for the next 25 years.

A：The current market valuation level is relatively reasonable and slightly low. From the perspective of the stock-bond yield ratio, although the value at the end of 25 years is at a historical high, the overall decline in profit environment has kept the valuation level at a reasonable level. Compared to global market valuations, the valuation of the Chinese market is also positioned below historical average levels.

A：Foreign investment began gradually flowing into A shares in the second half of the 25th year, ending the continuous outflow situation of the past three years. The inflow of foreign capital reflects a strengthening of confidence in the improvement of the basic economic fundamentals of our country, and also confirms the strengthening of confidence in the market's assessment of China's economic situation and development trends.

A：According to the tone set at last month's economic work conference, it is expected that future policies will maintain a similar attitude as in the past 25 years, without strong stimulation, but adjustments will be made in terms of structure, with a greater focus on technology-related investments, while attention to real estate will be relatively low.

A：In terms of fiscal policy, subsidies for upgrading old products with new ones are showing a downward trend but still have a certain bottoming effect, and the deficit rate is not expected to be too high next year after rising. The government's leverage ratio will not increase significantly. Anti-"involution" policies are expected to stabilize the Producer Price Index (PPI), thereby promoting stable or even increased profits in traditional industries.

A：The enthusiasm for technology investment remains high, and there has been some improvement in the negative range of capital expenditure. Supply constraints have laid the foundation for future improvement in the Producer Price Index (PPI). At the same time, investments in technology and domestic substitution have achieved significant results, not only performing strongly in the domestic market but also participating in fierce competition in the international market. Going global has become a necessary direction for traditional industries, and overseas expansion will help enhance corporate profits. The trend of going global is expected to continue in the near future.

A：Next, we will invite Mr. Jin Zicai, Deputy General Manager and Director of Equity Investments of Caitong Fund, to share the theme "AI Tide Rising, the Time is Just Right". Based on the opportunities presented by the changes in the A-share industry, he will provide a in-depth analysis and guide us on how to grasp future investment directions.

A：We have been highly focused on the AI field since 2023, and the term "AI tide rising" is no longer in line with current trends. Therefore, we emphasize that "long-term investment is just in time", focusing on sharing the long-term investment value and opportunities in the AI field.

A：The report will be divided into four parts: first, a review and outlook of the domestic economic situation; second, updates on the latest developments of AI in the United States; third, analysis of the current market structure and our perspectives; and finally, outlook on the long-term development space in the field of AI.

A：Currently, the role of real estate and infrastructure in driving economic growth is relatively weak, while fiscal spending has increased. The sales volume and prices of real estate show a slowing growth rate in the past few years, but it is expected that the drag on the economy from real estate will gradually decrease in the future. At the same time, export growth is also declining, and although there are policies to boost consumption, the effect is moderate. The destocking in the manufacturing industry is coming to an end, and it is expected to perform better in 2026. The deflation of the Producer Price Index (PPI) is expected to narrow or even turn positive.

A：The application of AI in the United States is leading to structural imbalances in the employment market. The growth in non-farm employment is weakening, partly due to the substitution effect caused by the accelerated penetration of AI technology. This not only results in an increase in unemployment rates and a decline in wage growth, but also affects the U.S. service industry, especially the consumer service industry, leading to a slowdown in personal goods and services consumption expenditure growth, thereby alleviating inflationary pressure.

A：Despite facing the pain of transition, we are not pessimistic, because in history, every early stage of technological revolution has been accompanied by similar challenges. As AI emerges as an efficient productivity tool, its investment penetration will gradually expand into other manufacturing sectors, such as data centers, construction, etc., which is expected to drive North American GDP growth and present a phase of switching between old and new growth drivers. This trend may continue for three to five years or even longer.

A：In this round of bull market, we have been bullish on the overall market since 2024. Despite the fact that the valuation of the AI industry has not quickly reached the expected high levels, instead remaining within a reasonable range, this has exceeded our expectations. This unexpected situation has presented challenges for us in adjusting our portfolio, but it also means that there are more opportunities waiting to be discovered.

A：The main reason is that the A-share market has never experienced a fundamental news-driven market like the current one, where companies are able to meet high growth expectations every year. Traditionally, there has been a phenomenon in the A-share market known as "three years on and three years off," meaning that if the market performs well in the first two years, it may decline in the third year, causing investors to worry about the future outlook.

A：In the past, these industries were mainly driven by future expectations in the early stages (such as the first year of the photovoltaic industry in 2020), and stock prices were easily inflated, forming the "first year of speculation". In the following year (2021), they enjoyed a market where both volume and price rose together, that is, the "second year of realizing performances" period. However, after a significant increase in production capacity in the second year, market prices began to fall, and the capital market usually chooses to kill valuations at this time.

A：The upper limit of growth in the computing power industry is currently unclear, especially in the field of AI, where the long-term growth potential may be much larger than that of traditional industries. In terms of overseas supply chain relationships, the industry currently exhibits high certainty and low price sensitivity, mainly due to the strict requirements for product quality and stability in overseas supply chains, as well as rapid technological iteration. New suppliers find it difficult to keep pace with existing suppliers, thus forming certain barriers and a stable supply chain structure.

A：There are two main reasons: first, overseas supply chains have extremely high requirements for the quality and technical stability of suppliers' products, and a relatively low sensitivity to price; second, due to rapid technological iteration, there are fewer suppliers who can keep up with innovation, ensuring the stability of the supply chain. In the current high-growth phase, manufacturers with stable supply chains are not easily replaced.

A：Companies with a higher proportion of overseas income usually demonstrate stronger fundamental resilience. As the process of globalization deepens, the strategy of going abroad has become one of the key variables determining the profit growth and fundamental resilience of listed companies. In terms of investment layout, it is advisable to look for companies with long-term growth potential in overseas markets, and emphasize examining the investment value of technology stocks or growth stocks from the perspective of the next three to five years.

A：When an application's user base grows rapidly and revenue expectations continue to increase, it is meaningless to worry about whether it is currently profitable. For example, a top overseas company had less than 300 million weekly active users at the beginning of 2025, growing to 8 to 9 billion by the end of the year. At the same time, its revenue expectations increased from B0 in 2023 to 4B0 in 2024, and then to 13B0 in 2025, reaching 30B0 by 2026. In such a growth trend, focusing on balancing profits and losses is not important, as the application may achieve profitability in the coming years through traffic and platform entry points.

A：Investors should not focus on short-term profit and loss balance, but should pay attention to the growth trend of user numbers to ensure that the bar chart continues to grow upwards. Especially for top AI companies, subscription revenue is an important growth point, and in the future, business models and profits can be realized through agent, e-commerce shopping integration, and other means.

A：In the future, AI model manufacturers will expand into multiple areas such as short videos, search engines, and interactive AI-assisted content, and with the advancement of integration with e-commerce, they will obtain revenue through commissions and advertising. In addition, as the paradigm of models changes (from pre-training to post-training, post-training with a chain of thought), the demand for tokens will significantly increase, leading to growth in computational power requirements.

A：As AI models transition from pre-training to post-training, the demand for computing power significantly increases. For example, in post-training, models not only need to provide answers but also need to explain the logic behind them, resulting in the need to handle more tokens during the training process and leading to a substantial increase in computing power requirements. In the future era of intelligent agents, such as in the era of intelligent agents, the demand for computing power may be 10 to 15 times higher or even higher than the current level.

A：In the current complex macro environment, the transition of asset allocation from one to N is especially important. Farewell to the traditional binary stock and bond allocation methodology, and turn to multi-asset allocation to cope with future uncertainties. In 2026, there may be a greater emphasis on risk budget considerations, and more and more high net worth clients and institutional clients are seeking diversified asset allocation to withstand changes.

A：Our current investment strategy focuses on factor resonance, especially capturing the resonance factors in cyclical goods and technology sectors. In addition, we will also pay attention to factor resonance in different categories of metals, from precious metals, industrial metals to rare metals and minor metals. At the same time, in terms of factor allocation, we will engage in some right side trading and consider cash flow contributions to enhance portfolio stability. For example, in the fixed income sector, we will focus on possible improvements in fixed income assets by 2026, as well as Hong Kong and mainland dividends. In terms of volatility, we will engage in symmetric special allocations to ensure effective management of volatility while positioning in volatility assets.

A：The Caitong FOF product started issuing in the second quarter of 2023, starting relatively late. Initially, the investment strategy mainly focused on selecting fixed-income funds or trying to combine stock funds with bond funds, but it was found in practice that this was not the best strategy. We realized that the greatest advantage of FOF products lies in asset allocation, so we started researching asset allocation from the second half of 2023, and it has gradually been accepted by more and more investors. Our goal is to achieve absolute returns, especially in a quantitative background, by building a portfolio that is long exposed to economic growth and inflation-related factors and finding ways and paths to achieve absolute returns.

A：In the entire year of 2026, we tend to believe that the overall price of commodities has a chance to continue rising, with some varieties possibly experiencing significant fluctuations and upward potential. As physical assets, commodity prices are closely related to the global economic situation. If the global economy recovers and the manufacturing industry enters an upturn, commodities will benefit from a globally loose environment. At the same time, certain varieties such as precious metals may be sought after due to narrative factors (such as the decline of the US dollar and inflation concerns). Furthermore, geopolitical uncertainties (such as changes in US tariff policies and supply disruptions in resource-rich countries) may also cause significant fluctuations in commodity prices. Therefore, commodities may play the role of both a defensive force and a vanguard in asset classes.

A：In the past long bull market, bonds did play a ballast role, providing stable returns and lower volatility. However, this situation changed after the national bond yield rate fell below 2% in the third quarter of 2024. At that time, the market widely accepted bonds as low risk, high return assets, but as interest rates declined, volatility increased, breaking this view. The bond market underwent a significant adjustment and entered a volatile state.

A：Fixed income or pure bond assets are not only necessary but also play an important role globally. From the perspective of a mature asset management framework, fixed income assets typically need to account for half or more of asset allocation. In China, despite facing redemption pressure, funds have not all shifted to equity funds, but instead have flowed into fixed income funds (such as secondary bond funds), showing strong growth momentum and indicating a gradual transition in risk appetite.

A：This year, the overall feeling about the fixed income market may be better than last year, especially in terms of absolute returns. Currently, interest rates have returned to a reasonable range, and short- to medium-term credit bonds can provide clients with certainty and enhanced returns. Compared to money market funds, fixed income products can provide both liquidity and enhanced returns, playing a certain role in asset allocation.

A：I do not believe that the bond market will continue to be bearish, as bond valuations have returned to a relatively acceptable level. At the same time, the macro economy is transitioning from investment-led to consumption-led, supported by factors such as industrial cycles, export resilience, and consumer recovery, which present structural opportunities in the bond market. In the current market environment, it is possible to conduct swing trading and risk management by combining short cycles and risk events.

A：Firstly, transform the products within Caitong Fund into portfolios held by individual investors, focusing on cycles and technology themes, and paying attention to dividends, new consumption, innovative medicine, and other directions. In addition, we will also dig deep into the entire market assets, looking for targets that can resonate with existing products to meet the needs of different investors.

A：In various equity markets around the world, stocks are primarily selected by looking for proxy variables for economic growth, such as the United States, China, Japan, Germany, India, and Hong Kong, which cover nearly 70% of global GDP. By conducting in-depth research on the economic data and fundamental company profiles of these countries, excellent equity assets are discovered and strict risk assessment and management measures are taken.

A：This is a problem that all asset allocation personnel will face. We tend to abandon traditional quantitative methods and instead focus on temporal comparisons, building some effective time series factors, similar to CTA strategies, measuring these factors through price and volume indicators, and allocating equity and weightings among different countries based on this.

A：Starting from the demand-driven products in the fixed income plus products, we will customize products that can provide a certain risk-return ratio based on different liability ends. In terms of asset allocation, we adopt an investment framework from top-down to bottom-up. The fixed income portion seeks certainty in returns, with a focus on A-shares for the equity portion. We will clearly define the roles of these two asset classes and enhance and hedge interest rate risk and industry exposure through duration allocation and other fixed income strategies.

A：We are committed to estimating the potential impact of market trends on targeted assets before investing, setting reasonable drawdown thresholds. At the same time, we conduct in-depth research on each asset to find key points of economic growth, ensuring that there is a clear asymmetry between drawdown and upside potential, allowing us to overlay various assets in our products so that clients understand the recovery potential they can gain after enduring drawdowns.

A：We believe that the current growth style market is a continuation of last year's style, but overall market activity is high, and style rotation may occur after the Spring Festival. In 2024, the focus may be on medium-sized industry leaders with good profitability. It is recommended to actively allocate equity assets, adopt a relatively balanced allocation strategy, and avoid pursuing excess returns in a single track.

A：In 2026, insurance companies face two main policy constraints. Firstly, there is the solvency regulatory system, especially for life insurance companies, where solvency may decrease as premiums grow rapidly. Increasing the proportion of equity investments at this time will require greater capital utilization. Secondly, there are requirements for asset-liability management, including cost-income matching, term matching, and cash flow matching. In the current low-interest rate environment, the solvency of life insurance companies faces challenges, requiring capital supplementation to cope, and considering the pressure of cash flow matching in asset allocation.

A：According to the requirements of the Ministry of Finance, the insurance industry will implement the new accounting standard (IFRS9) in 2026. This will redefine the pricing, impairment, and classification of available-for-sale assets, emphasizing the importance of high-dividend equities and stable income government bonds. Therefore, insurance companies may continue to allocate high-dividend assets to balance their financial statements, but they are also constrained by the regulatory long-term assessment mechanism, which may limit the increase in allocation of equity assets.

A：On a global scale, resources and technology in the field of AI are the main leading sectors, reflecting the overall environment of low growth. In this context, scarce high-growth assets have received higher pricing. For the market trend in 2026, it is expected that scarce high-growth assets will continue to be favored, while low-growth assets may have difficulty finding broader high-growth opportunities. However, it remains to be seen whether low-growth assets can potentially convert into high-growth assets, which will require further monitoring and observation.

A：The bull market cycle in the A-share market does not strictly follow the rule of a ten-year cycle. The duration and driving factors of bull markets are diverse, sometimes driven by valuation and sometimes by supply and demand. When investing, one should pay attention to changes in fundamentals, rather than being limited to fixed time cycles. Whether this current bull market can last longer depends on the level of fundamental support, and A-shares usually lead changes in fundamentals, with stock price adjustments often occurring earlier than fundamental confirmations. Therefore, market performance is complex and variable, and it is not advisable to simply apply fixed cycle models.

A：In this round of bull market, the maintenance time of the main line is longer, and the regulatory authorities play a key role in protecting the market. When there are signs of overheating in the market, timely cooling measures by the regulators help prevent the market from irrationally rising beyond the fundamentals, and contribute to the market entering a slow bull phase. In addition, compared to the comprehensive bull market in 2020, although the sales heat and channel activity in the equity market in this round of bull market are not as strong as in the previous two years, the proportion of overseas income has increased. Especially in emerging industries such as AI resonating globally, the profit structure and income structure have undergone revolutionary changes.

A：In the past bull market, the profit structure was mainly focused on domestic demand, such as real estate, infrastructure consumption, or internet and start-up boards. However, in the current bull market, the proportion of overseas income has significantly increased, with approximately one-fourth of income now coming from overseas, and the gross profit margin of overseas income is higher. At the same time, the profit contribution of emerging industries has increased significantly, shifting from a 20-80 ratio ten years ago to a 40-60 ratio today, or even further. The profit share of traditional domestic demand industries has decreased to around 40%, while the share of emerging industries has reached 60%, with many of them relying on advanced manufacturing industries with global resonance.

A：It is predicted that the profits of A-share listed companies will rebound in 2026, after undergoing a process of changing profit contributions from real estate, consumption, infrastructure to emerging industries. At the same time, for the allocation strategy of bonds and stock markets, it is necessary to flexibly respond to market rhythms, seize opportunities for asset layout in major categories, achieve excess returns, and maintain a positive bullish attitude towards the stock market.

A：The core word is "slow bull with hope." With changes in regulatory policies, market behavior, and fund behavior, especially timely and appropriate cooling measures, it is expected that the slow bull market can be walked out in 2026.

A：The current market is showing characteristics of being faster, better, and stronger, with increasing transaction volumes, higher risk appetite, and greater acceptance of equity markets by capital. All of these indicate that the market is entering a faster and more comprehensive structural bull market, and prospects for the future are expected to further improve in terms of market levels.