The People's Bank of China released its Monetary Policy Execution Report for the fourth quarter of 2025. The report indicates that the moderately accommodative monetary policy will continue to be implemented effectively. Stabilizing economic growth and fostering a reasonable rebound in price levels are key considerations for monetary policy. The central bank will calibrate the intensity, pace, and timing of policy measures based on domestic and international economic and financial conditions and market operations. It will flexibly and efficiently utilize various policy tools, including reserve requirement ratio cuts and interest rate reductions, to maintain ample liquidity and relatively loose social financing conditions. This aims to guide reasonable growth in financial aggregates and balanced credit extension, ensuring that the expansion of total social financing and money supply aligns with economic growth and inflation targets.
In other significant developments, five government departments jointly issued an implementation opinion on strengthening information and communication capabilities to support low-altitude infrastructure development. The document emphasizes enhancing technical foundations, industrial supply capacity, network support, and security safeguards. It outlines plans to advance the construction of communication networks for low-altitude applications, enrich sensing technologies, improve navigation and positioning accuracy, and support the development of intelligent low-altitude networked systems. Southwest Securities noted that national strategies are focusing on the low-altitude economy, with various regions introducing guiding policies and state-owned enterprises establishing related companies. Applications such as low-altitude logistics and tourism are leading the way, with major eVTOL manufacturers securing orders and expanding overseas, indicating clear momentum for scaled industrial development.
SMIC reported its fourth-quarter results, with net profit attributable to shareholders reaching 1.223 billion yuan, a year-on-year increase of 23.2%. Revenue for the period was 17.813 billion yuan, up 11.9% year-on-year. Basic earnings per share were 0.15 yuan. The company expects first-quarter 2026 revenue to be flat sequentially, with a gross margin between 18% and 20%. The performance improvement was attributed to increased wafer sales, higher capacity utilization, and changes in product mix. Looking ahead to 2026, SMIC anticipates both opportunities from industrial chain relocation and challenges from the memory cycle. Barring significant external changes, the company forecasts 2026 revenue growth to exceed the industry average, with capital expenditure roughly unchanged from 2025.
Several top-performing stocks issued risk warnings. Hengdian Entertainment disclosed that its stock price had doubled over ten consecutive trading days. If the price rises further abnormally, the company may apply for a trading suspension. The company has invested in three Spring Festival films, but holds minor stakes and box office performance remains uncertain. Jiamei Packaging announced a price surge of 567.11% over a specific period, with multiple instances of abnormal trading volatility. The stock has been suspended twice for review and is under close monitoring by the Shenzhen Stock Exchange. If prices continue to rise abnormally, another trading halt may be requested.
ByteDance addressed privacy concerns related to its new video generation model, Seedance 2.0, by restricting the upload of real human faces. The model, currently in internal testing, has gained significant attention but also raised worries about potential privacy infringement.
In corporate funding news, Jianghuai Automobile disclosed a private placement raising approximately 3.5 billion yuan by issuing shares to eight investors, including well-known investor Ge Huidong, who subscribed to shares worth about 1 billion yuan. These shares are locked up for six months post-issuance.
BYD's U.S. subsidiary has filed a lawsuit against the U.S. government, seeking a refund of tariffs paid. The company argues that the tariff policy is unlawful and highlights that it has paid substantial duties on imported materials for its U.S. operations. Over 1,000 companies, including Costco and Toyota, have filed similar suits.
Regarding investment opportunities, artificial intelligence remains a focus. Eight departments, including the National Development and Reform Commission, issued an opinion to accelerate AI application in bidding processes. Targets include full coverage of key scenarios like bid document review and intelligent evaluation in some regions by end-2026, and nationwide promotion by end-2027. Dongxing Securities believes the AI sector benefits from policy, technological, and demand synergies, with supportive actions and sustained capital expenditure boosting development certainty.
Other sectors worth monitoring include autonomous driving, with Shanghai opening over 5,200 kilometers of test roads and planning further expansions; film, as authorities launch a copyright protection campaign to boost IP value and industry integration; consumer spending, amid new year voucher distributions in multiple regions; and computing power, with Zhejiang exploring an integrated system for general, intelligent, super, and quantum computing.
On corporate announcements, China Railway Construction reported new project wins totaling over 45.142 billion yuan, classified as positive. Conversely, Hunan Silver disclosed a reduction in holdings of 28.23 million shares, representing 1% of its total equity, categorized as negative.
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