**Market Overview** As predicted, markets have largely shrugged off concerns over Trump’s recent remarks, freeing up capital flows. Mainland A-shares outperformed today, lifting the Hong Kong market, which closed 0.58% higher.
Reports on December 3 indicated delays in the release of the U.S. *National Security Strategy* and *National Defense Strategy* due to revisions. While the Biden administration focused on the Middle East, counterterrorism, China, and Russia, Trump’s approach is expected to prioritize the Western Hemisphere, immigration, drug cartels, and Latin American relations—all framed as safeguarding U.S. interests. This pragmatic shift aligns with Trump’s "G2" worldview of "competition and cooperation."
French President Macron’s China visit, hosted at Dujiangyan in Chengdu, showcased cultural heritage and yielded a joint statement on climate, nuclear energy, and agriculture. Nuclear-related stocks like CGN Mining (01164) surged over 7%, while wind energy player Goldwind (02208) rose 6%.
**Insurance Sector Rally** A major catalyst today was regulatory easing for insurers. The National Financial Regulatory Administration adjusted risk factors for insurers’ holdings: - **CSI 300 and CSI Dividend Low Volatility 100 stocks** held over three years: Risk factor cut from 0.3 to 0.27. - **STAR Market stocks** held over two years: Reduced from 0.4 to 0.36. - **Export credit insurance premiums**: Lowered from 0.467 to 0.42; reserve risk factor down to 0.545 from 0.605.
This change lowers capital requirements, freeing up funds for reinvestment or solvency boosts. Analysts estimate core solvency ratios for Ping An (02318), CPIC (02601), China Life (02628), and NCI (01336) could rise ~4.4%. These stocks gained over 5%, with China Taiping (00966) leading.
Brokerages also rose, supported by merger talks involving CICC and others. East Money (300059.SZ) jumped 4%, while HTSC (06886) and Holly Futures (03678) climbed 3%.
**IPO Spotlight** Moore Threads’ STAR Market debut at ¥650/share peaked at ¥688, making it 2025’s most profitable IPO. However, DZUG (01635) plunged 9% as traders locked in gains.
**Commodities Rebound** Copper stocks like Jiangxi Copper (00358) rose 6%, while CMOC (03993) gained 5% after FTSE A50 inclusion. Aluminum players Chalco (02600) and China Hongqiao (01378) defied bearish calls, rising 5% and 2%, respectively.
**Strategic Moves** Qunabox (00917) surged 8% after partnering with Dubai’s ruling family on AI-driven entertainment project HOLOX, aligning with the UAE’s 2031 AI strategy.
Rare earth magnet firms, including JL MAG (06680), rallied 4% on export license approvals, streamlining shipments.
**Sector Focus: Policy Expectations** Upcoming Central Economic Work Conference (mid-December) may feature: - **Fiscal expansion**: Deficit ratio hike to 3.5%+. - **Special bonds**: ~¥1.5 trillion for infrastructure, boosting machinery demand. - **Equipment subsidies**: Up to 30% for replacements, potentially driving 60% of 2026 demand. - **Export tax rebates**: Raised to 17% for machinery.
Key beneficiaries: Zoomlion (01157), Sany Int’l (00631), Lonking (03339), Sinotruk (03808).
**Stock Pick: Sinotruk (03808)** - **Performance**: Jan-Oct revenue up 17.2% to ¥185.9B; heavy-truck exports rose 29.1%. - **Outlook**: Focus on overseas production (Kazakhstan, Brazil, Indonesia); NEV segment thriving. - **Dividends**: 55% payout ratio. - **2026 catalysts**: Domestic replacement demand and export growth.
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