Last month's prediction stated: "It is expected that the Hong Kong stock market might mainly fluctuate throughout January," which indeed aligned with the actual market movement. The positive aspect was that the deadlock was broken with an upward breakout towards the end of the month. Although the process was challenging, the final outcome was favorable. The Hang Seng Index traded within a range of 25,717.42 to 28,056.10 points in January. The path was truly tortuous; at the beginning of the month, a US lightning raid on Venezuela and the forced removal of Maduro led to a market rebound after the negative news was digested. Subsequently, regulatory authorities tightened margin financing ratios, causing the Hong Kong market to cool down. This was followed by disturbances from Greenland and Iran impacting the market. Finally, a visit by the British Prime Minister to China, coupled with positive news related to property stocks, prompted the Hang Seng Index to decisively break upwards. January's market highlights were spectacular, primarily divided into two parts. The first part featured a concentrated and impressive rally in the commercial aerospace sector, led by this column's January stock pick, Junda Co., Ltd. (02865), which surged a maximum of 111.4%. The latter part was dominated by precious metals and general metals, again led by stocks covered in this column; Zhixiang's January pick, Zijin Gold International (02259), soared 83.6%. Uranium-related stocks benefiting from price increases, such as CGN Mining (01164), also rose over 80%. Beyond these two hot sectors, insurance stocks continued their strong upward trend, attracting funds diverted from banks due to the advantages of their dividend products. New China Life Insurance (01336) and China Pacific Insurance (02601) hit record highs. Hong Kong local property stocks, benefiting from expectations of Fed rate cuts, also performed vigorously. For instance, New World Development (00017), which has merger themes, rose over 71%, and Sun Hung Kai Properties (00016) reached a historical peak. The AI sector also rose strongly, influenced by US market trends. Fiber optic stocks like Changfei Optical Fiber & Cable (06869) gained over 68%, and chip stocks like Huahong Semiconductor (01347) increased over 66%. Engineering machinery stocks such as Sany International (00631), Weichai Power (02338), and the paper sector's Nine Dragons Paper (02689) all exhibited strong independent rallies.
Considering the Hang Seng Index's breakthrough at the end of January, investor expectations for February's performance are relatively higher. Historically, from 2000 to 2022, the Wind All-A Index has an 78% probability of rising in February, significantly higher than other months. This is because the Two Sessions follow closely in March each year, leading to relatively positive expectations. Furthermore, liquidity tends to be more ample around the Spring Festival, and economic data and corporate earnings reports are in a temporary lull, which is conducive to market performance. However, probabilities are based on historical data and do not fully represent the current reality, which is far more complex. Geopolitical tensions have not subsided; the Russia-Ukraine conflict remains intense, though news coverage has become desensitized. While situations in Venezuela and Greenland have somewhat de-escalated, Iran has now moved to the forefront. The biggest market concern for February is potential US military action against Iran. An attack seems almost certain, as Trump faces midterm elections, a critical hurdle. A loss would make the next two years very difficult for him. Current polls show his approval ratings have severely declined, especially after recent ICE "overreach" sparked strong dissatisfaction from both Democrats and some Republicans. Trump urgently needs to divert conflict and reverse the decline through a victory. Thus, the only uncertainties are the exact timing of the attack and its scale and intensity. Timing-wise, it should be imminent, with various deployments gradually falling into place. Based on past US military actions, this will likely involve airstrikes and lightning attacks, with a very low probability of a large-scale US ground invasion. However, if Israel initiates ground operations, the US might participate partially in coordination. The market has already priced in a US attack on Iran and does not appear particularly panicked, recognizing that Iran's military strength is not comparable to a country like Venezuela, making a repeat of Maduro's fate for its leader unlikely. The current market expectation mirrors past incidents: airstrikes followed by Iranian retaliation, with both sides claiming victory without significant escalation. The probability of the Strait of Hormuz being blocked is also low, as it is a global lifeline, and the consequences would be severe for all parties, making it a last resort. If a blockade occurs, it would signal an extremely dire situation. Capital markets typically price in such events in advance, and gold would likely become active again.
The Federal Reserve finally has a new leader. On January 30, 2026, Trump announced the nomination of former Fed Governor Kevin Warsh as the next candidate for Fed Chair. His policy stance presents a unique combination of "interest rate cuts parallel to balance sheet reduction," which is likely why Trump selected him—it's not entirely迎合 Trump but also addresses Wall Street's concerns. Currently, the probability of rate cuts before Powell's term ends is low, unless the US economy faces major problems; keeping inflation from accelerating rapidly is already an achievement. Great power competition has formally entered Trump's so-called "G2" era, though many countries have not fully grasped this reality. However, Trump's actions are increasingly moving in this direction, leading to the birth of the "Trump New Monroe Doctrine." This has two consequences: First, after being forced to contract, the US may further expand its sphere of influence, with South America, Greenland, and even Canada being potential targets. Second, wielding the tariff stick to force countries to choose sides. This is a double-edged sword that can easily lead to a backlash. Visits to China by the Prime Ministers of Ireland, South Korea, France, Canada, Finland, the UK, and the upcoming German Chancellor, while partly aimed at gaining leverage for negotiations with Trump, largely represent a desire for more options and opportunities.
Domestically, economic growth slowed further in December. The Chinese economy remains in the first half of its新旧动能转换: old drivers are contracting, while new drivers are growing noticeably but are not yet sufficient to支撑 macroeconomic growth. A relative bright spot is that foreign trade remains strong, leveraging China's immense advantage of a complete industrial chain, along with commendable cost and technological capabilities. The current lack is market demand. While new drivers cannot yet effectively counterbalance the slowdown, the role of real estate cannot be ignored. Policy is also beginning to loosen, with recent reports that many developers are no longer required to report monthly data related to the "three red lines." This is interpreted by the market as a precursor to new measures to stimulate the property sector. It is expected that policy departments will combine LPR cuts with fiscal subsidies to reduce new mortgage rates from the current 3.1% to around 2.5%. Central government finances and policy banks may support local governments in increasing acquisition and storage efforts. Hong Kong property stocks have already moved ahead in anticipation. Foreign capital attitudes are changing positively. In 2026, Goldman Sachs is "overweight" Chinese stocks within the Asia-Pacific region. Their chief China equity strategist stated that earnings growth is the main driver for Chinese stock gains this year and estimated that, excluding foreign capital, approximately 3.6 trillion yuan in incremental funds will flow into Chinese stock markets, with some entering the Hong Kong market via Stock Connect. According to Goldman Sachs estimates, domestic individual investors, seeking to increase equity allocation, will inject about 2 trillion yuan into the stock market in 2026. At the institutional level, led by insurance companies increasing allocations to equity assets, approximately 1.6 trillion yuan will flow into Chinese stocks. Regardless of foreign capital, domestic funds are already very active. Wind data shows southbound funds recorded a cumulative net inflow of about HK$68.971 billion in January, roughly three times the inflow of the previous month. If this pace continues, the momentum pushing the index higher will strengthen.
Overall, due to the Spring Festival holiday—Hong Kong markets are closed for 3 days (Feb 17-19), and A-shares are closed longer—caution may prevail before the holiday. Post-holiday, the combination of work resumption and positive consumption data catalysts could be stronger.
2026 February Investment Strategy: Focus on dimensions offering the least resistance. Zhixiang Financial's January stock picks significantly outperformed the market. The Hang Seng Index's maximum gain in January was 9.5%; the average maximum gain for the ten stock picks was 31.8%. The specific monthly maximum gains for the top ten picks were as follows: Junda Co., Ltd. (02865) +111.4%, Zijin Gold International (02259) +83.6%, Aluminum Corporation of China (02600) +27.8%, CIMC Enric (03899) +23%, Kingboard Laminates (01888) +18.9%, Sany Heavy Industry (06031) +14.1%, China Eastern Airlines (00670) +12.6%, SMIC (00981) +12.1%, Sanhua Intelligent Controls (02050) +7.9%, Sunny Optical (02382) +6.7%. Last month's performance is very satisfactory, capturing the leaders of the two strongest sectors, with other picks also performing well—eight stocks gained over 10%. The key was strategically focusing on the aerospace and AI directions, while also capturing the strongest hedges in gold and non-ferrous metals. Although the outlook for February is relatively optimistic, the overall trend is expected to be complex, making a smooth upward trajectory difficult. Choosing the wrong sectors could lead to passivity. At this stage, it's crucial first to avoid stocks that surged significantly in January and second, to consider sectors with lower resistance. Focus on simplification and reducing market noise. The February strategy integrates several dimensions: event-driven opportunities, policy impacts, earnings, and valuation.
The Spring Festival is a peak consumption season, making duty-free stocks容易引发追捧. Domestic tech giants also typically launch red envelope campaigns during this period to compete for traffic. This year is similar: Yuanbao announced a 10-billion-yuan Spring Festival red envelope campaign starting February 1, with individual red envelopes potentially reaching 10,000 yuan. Baidu's ERNIE: from January 26 to March 12, distributing 500 million yuan in cash red envelopes, also with a 10,000-yuan cap. Baidu APP will be the chief AI partner for the "2026 Beijing TV Spring Festival Gala." DeepSeek's new large model is expected to be released around the Spring Festival. Companies collaborating with these giants and major platforms are expected to benefit. Robots are also set to feature again in the Spring Festival Gala. OpenAI is reportedly launching a chat robot advertising service in February, charging per impression. For this industry, it's better to look for跨界 plays, as pure robot companies lack strong expectations for order implementation. The tense Middle East situation, particularly regarding Iran, has three key implications: oil, gold, and shipping are all sectors easily stimulated. Furthermore, with concentrated resumption of environmental projects and a peak in tendering in mid-to-late February, related environmental stocks are worth watching. Finally, from a valuation perspective, some quality auto stocks are nearing bottom, offering good性价比.
Specific Picks: Machinery: Zoomlion (000157.SZ) Platform: Kuaishou-W (01024) SaaS: Weimob Inc. (02013) Duty-Free: CTG Duty-Free (01880) Automotive: NIO-SW (09866) Environmental: Everbright Environment (00257) Investment Holding: Guangdong Investment (00270) Gold: Zijin Mining (02899) Ports: COSCO SHIPPING Ports (01199) Chemicals: Shanghai Petrochemical (00338)
Detailed List: 1. Zoomlion (000157.SZ) The company, formerly Changsha Construction Machinery Research Institute, was founded in 1992, listed on the A-share market in 2000, and completed an A+H share structure in 2010. Its core strengths lie in concrete machinery and hoisting machinery, with subsequent expansions into earthmoving machinery, agricultural machinery, aerial work platforms, mining machinery, and robotics. It has formed a "multi-faceted" business system centered on engineering machinery, with agricultural machinery and financial services协同发展. Its main products now cover 15 major categories, 75 product series, and 745 models, with 29 domestic industrial parks and 10 overseas R&D and manufacturing bases. Through整体上市, overseas plant establishment, and strategic acquisitions, the company has accelerated its globalization, becoming a pioneer and leader in the internationalization of Chinese engineering machinery. The company advances on both product and market fronts, aiming to create a third growth curve through embodied AI. 1) Products: The revenue share from cranes and concrete machinery has decreased from over 75% to around 50%, with earthmoving machinery, agricultural machinery, aerial platforms, and mining machinery continuously contributing incremental growth. 2) Market: Transitioning from export to a global presence, implementing an "end-to-end, digitalized, localized" overseas strategy. The company has established over 30 primary business "airports" and 430+ secondary/tertiary network points globally, with about 5,000 localized employees. 3) Future Industry: Leveraging general AI trends and its own industrial technology积累, the company is promoting the application of embodied AI in engineering machinery, agricultural machinery, and special equipment to build a third growth curve. Additionally, the domestic engineering machinery sector is experiencing a轮动复苏, while the overseas market holds great potential. 1) Domestic: Real estate new construction area has declined for 6 years, potentially nearing a bottom. Data from Pangyuan Tower Crane ton-meter utilization rates showed significant improvement in H2 2025, indicating recovering equipment utilization rates for ongoing projects. Considering the duration and extent of the decline, new construction area may be close to a bottom. 2026, as the start of the "15th Five-Year Plan," with policy support and concentrated落地 of "两重" projects, infrastructure investment growth may stabilize and rebound. 2) Overseas: North American engineering machinery is nearing the end of its destocking cycle, with new orders showing clear improvement. European demand is stable overall, with incremental demand coming from electrified products. Regions like Africa and Latin America show strong demand from mining, infrastructure, and real estate. In terms of product sales, after a year of improvement in excavator data, cranes are also showing复苏. 2026 might see共振 between excavators and non-excavator machinery, both domestically and internationally. Overall, the company's valuation appears significantly undervalued, and institutions maintain a "Buy" rating.
2. Kuaishou-W (01024) Listed in 2021 as the "first short-video stock," Kuaishou garnered significant market attention due to the scarcity of its short-video platform advertising/e-commerce/live streaming monetization model. In 2025, with the release of liquidity in the Hong Kong market and the acceleration of AI commercialization, Kuaishou's inherent uniqueness is undergoing a value reassessment. Under the AI revolution, Kuaishou's future development holds limitless possibilities, with investment opportunities not yet fully tapped. Kling rides the wind, leading the AI video track. The Kling model's performance and product strength lead the industry, with commercialization scaling rapidly. As a scarce native AI product, the market continuously trades on its model innovation iterations and accelerating commercialization. The vast scale of the video industry + the DiT architecture, which allows for editable and consistent AI-generated video, is making AI video the future trend in video production, with an estimated future market space exceeding hundreds of billions of USD. Based on current leading product characteristics, model performance and product strength are the two core competencies of AI video tools. Kling AI is among the world's top tier in model performance. In terms of product strength, Kling can quickly bridge functional gaps with competitors through imitation, while also innovating features focused on "model controllability." Therefore, Kling's commercialization is leading, with current monthly revenue稳定超过 100 million yuan and quarterly revenue growth exceeding 20% sequentially. Future commercialization is expected to accelerate. Furthermore, for its main business, AI is leading a comprehensive revitalization and反弹. Kuaishou's core short-video business is undergoing a full重塑 empowered by AI, with performance触底反弹 in Q1 2025. 1) Traffic Review: The short-video market traffic competition has shifted to a "tripartite stalemate,存量博弈," placing higher demands on algorithms. Kuaishou, with its unique "laotie culture" ecosystem, can stabilize its existing traffic pool. It also pioneered the OneRec end-to-end recommendation system, balancing efficiency and cost reduction. 2) Commercialization Review: The short-video industry's business models are mature, with advertising dominating among the three main monetization methods. Future refinement of operations combined with AI empowerment is expected to enhance commercialization efficiency: a) In advertising, Kuaishou is a top-3 platform for short drama traffic allocation, benefiting from off-platform short drama ad spending and the accelerated development of AI across industries. Future外循环 advertising is expected to be a major contributor to revenue growth. AI+advertising has been validated overseas; Kuaishou, leveraging AI technologies like UAX and Agent4.0, supports an expected eCPM increase in 2026. b) In e-commerce, Kuaishou's keywords are "multi-scenario operation" + "SME brands and merchants." Future e-commerce revenue is expected to grow with increasing monetization rates, which should also benefit from AI empowerment.
3. Weimob Inc. (02013) The company is a leading AI+SaaS service provider in China. In H1 2025, it achieved total revenue of 775 million yuan, with adjusted total revenue increasing by 7.8%. AI-related revenue reached 34 million yuan in H1 2025. Currently, the company's Starry GEO product has achieved commercial落地 and is expected to contribute to performance growth in 2026. According to Miaozhen Marketing Science Institute forecasts, the global GEO market size will be approximately $11.2 billion in 2025, reaching $100.7 billion by 2030. In China, the GEO market size is estimated at 2.9 billion yuan in 2025, growing to 24 billion yuan by 2030, indicating high growth. To date, at least 420 million people are using AI for search and Q&A, accounting for half of the 878 million search engine users. Based on current user estimates, GEO market penetration could reach 50% of SEO's. Compared to search engines, AI interaction focuses more on user intent, model training data, and model-searched information. Therefore, unlike SEO's optimization for high-frequency keywords, GEO will focus more on AI citation efficiency, including AI source analysis, logical improvement of expression methods, and authoritative sourcing. From an application scenario perspective, Starry has achieved full coverage of key AI concerns. Its main applications include AI visibility monitoring, AI citation source analysis, AI sentiment analysis, content creation optimization, and content distribution, building a GEO marketing闭环 to enhance brand exposure in AI. Client-wise, Starry currently serves customers across various industries, including traditional manufacturing, automotive, education and training, home furnishing, enterprise services, digital appliances, and skincare/makeup. In terms of effectiveness, after partnering with WIME, one brand's AI visibility increased by 72.8%, promotional ad effectiveness improved by 11.81%, and registration/payment conversion rates surged over 500%. Most partner enterprises achieved AI visibility above 50%, with some exceeding 90% post-collaboration. Due to increasing GEO penetration + AI providing a natural traffic entry point, GEO possesses inherent coverage and traffic advantages. The ultimate market size for GEO is expected to be larger than SEO's. As an early-mover leader in this space, Weimob is poised to benefit first. In summary, as a leading AI+SaaS service provider within the WeChat ecosystem in China, with its AI product launched and GEO upgrades, the company has room for growth in customer numbers, customer stickiness, and ARPU. The early落地 of GEO is expected to open new growth avenues.
4. CTG Duty-Free (01880) The company previously announced its intention to subscribe for up to $395 million to acquire DFS's core business in Greater China and related intangible assets including brand ownership and IP. Upon completion, it plans a定向增发 to LVMH's间接全资附属公司 Delphine SAS and the Miller family trust, Shoppers Holdings HK Limited, of up to 7.33 million and 4.64 million H-shares, respectively. The acquisition targets DFS's core store assets in Greater China, primarily including 2 prime location stores in Tsim Sha Tsui and Causeway Bay, Hong Kong, and 7 stores in Macau's core casino resort areas, covering Sands Londoner, Galaxy Macau, MGM Cotai, etc. Financially, alongside the recovery in Greater China's high-end consumption, the target assets showed continuous improvement in the first three quarters of 2024-2025, with net profits of 127 million and 133 million RMB, respectively, with Macau stores contributing the majority of revenue and profit. As Hong Kong and Macau are core regions for global tourist luxury consumption and services in Greater China, and with the deep绑定 to LVMH group, this acquisition will further strengthen the company's high-end attributes in the duty-free shopping sector. While benefiting from the high-end consumption recovery红利, it also positions the company as a key window for Mainland China's opening to the world,有利于 attracting domestic brands and promoting the出海 of premium Chinese goods. The transaction pricing, based on EV/EBITDA and EV/Sales multiples, is below comparable and median levels. However, given the current losses at the Hong Kong stores, assuming annualized 2025 profits of 150 million RMB for DFS Hong Kong and Macau, the PE valuation implied by the maximum $395 million price is about 18.3x, slightly higher than previous A-share duty-free重组案例 valuations. In conclusion, with upside potential from the recovery in high-end consumption boosting Hainan duty-free sales, and clear policy support positioning the duty-free industry as a vital channel for stimulating consumption and expanding domestic demand, the company, as the industry leader, is well-positioned to benefit. Institutions maintain a "Recommend" rating.
5. NIO-SW (09866) In Q3 2025, the company achieved revenue of 21.79 billion yuan, up 17% YoY and 15% QoQ. Vehicle sales revenue was 19.20 billion yuan, up 15% YoY and 19% QoQ. Q3 deliveries reached 87,000 vehicles, a 41% YoY and 21% QoQ increase, setting a new quarterly record. Gross margin was 13.9%, up 3.2 ppts YoY and 3.9 ppts QoQ; vehicle margin was 14.7%, up 1.6 ppts YoY and 4.4 ppts QoQ, indicating significant profit improvement from cost optimization and a higher mix of high-margin models. Q4 revenue guidance is 32.76–34.04 billion yuan, representing 66% to 73% YoY growth. Management expressed confidence in Q4 profitability due to strong orders and accelerated deliveries for the new ES8. Vehicle gross margin is expected to rise to around 18%, with the new ES8 exceeding 20%. Q3 margin improvement stemmed from scale expansion and supply chain cost reductions, with contributions from models like the L90. By model, the new ES8 is around 20%, ES6/EC6 over 25%, and ET5/ET5T and L90 around 15–20%. NIO has outlined its core plan for 2026: For the NIO brand, it aims to achieve monthly sales of 50,000 vehicles in a certain month in the first half of the year, will launch three large-sized models (two in Q2, one in Q3), and continues its self-developed chip strategy, exploring opening its ADAS chips to non-automotive sectors like industry and robotics through Tier 1 partnerships, creating new technical service revenue. The Onvo brand will target the mainstream family market, covering the 100,000-300,000 yuan price range, and has started developing a sub-200,000 yuan platform for launch at an appropriate time to further expand coverage. For overseas expansion, the company has partnered with dozens of local dealers; the Firefly model will be the近期重点 export model, followed by Onvo and the NIO brand entering global markets. The overseas rollout sequence will be opposite to China's: Firefly first, then Onvo and NIO, building a path from entry-level to premium and driving overall scale growth. Combined with Q4 2024 guidance and the delivery pace, with 5 new SUV models slated for next year, a strong product cycle appears imminent.
6. Everbright Environment (00257) Everbright Environment recently announced that its board has approved a preliminary proposal for a potential issuance of RMB-denominated shares and their listing on the Shenzhen Stock Exchange. The proposed issuance is subject to market conditions, shareholder approval, and necessary regulatory approvals. According to the announcement, the preliminary plan involves issuing up to 800 million RMB shares. The company currently has 6.14 billion issued shares; the proposed RMB shares would represent up to 11.52% of the enlarged share capital. A successful "A-share listing" would be another example of a red chip returning to the A-share market. This would further broaden the company's financing channels and optimize its capital structure. Additionally, environmental protection listed companies generally command higher valuations on the A-share market compared to Hong Kong. Data shows A-share environmental - waste-to-energy listed companies trade at an average forward PE of 13.4x for 2025, while their HK-listed counterparts average 9.2x, representing a 46% A-share valuation premium. As a high-quality leader in the environmental sector, a successful A-share listing would help enhance the company's valuation and unlock value. In H1 2025, the company had 159 operational waste-to-energy projects, with a designed processing capacity exceeding 50 million tons/year. Waste processing volume and power generation continued to grow, while heat and steam supply increased significantly. Subsidy回收 has accelerated this year. Since 2024, the company's free cash flow has turned positive,初步显现 the effects of refined operations, increasing the share of faster-cash-flow businesses like heat/steam supply, and reducing capital expenditure. Project returns and accelerated cash flow are expected. During the period, the company secured 2 waste-to-energy projects in Uzbekistan, Central Asia, with a total designed capacity of 3,000 tons/day. The company is actively exploring solid waste and water markets in Central Asia and will focus on markets like Indonesia, Vietnam, and Central Asia to build its overseas project pipeline. In summary, a successful "A-share listing" would help widen financing channels, optimize the capital structure, and提升 the company's valuation level.
7. Guangdong Investment (00270) The company released its 2025 earnings forecast, expecting attributable net profit to increase by 43% YoY. Based on the 2024 figure of HK$3.142 billion, the estimated 2025 attributable net profit is close to HK$4.5 billion. The rapid profit growth is mainly due to reduced losses and lower financial expenses following the disposal of GD Land on January 21. After the disposal, the H1 2025 asset-liability ratio decreased significantly by 15.1 percentage points YoY to 42.5%, and the interest-bearing liability ratio fell by 8 percentage points to 21.8%. As of H1 2025, accounts receivable were HK$4.81 billion, up 25.4% from end-2024, but 78.4% were within one year, indicating low receivable risk. In Q1-Q3 2025, the DongShen Water Supply Project supplied 1.67 billion tons of water (up 1.5% YoY), with revenue from Hong Kong at HK$4.303 billion (up 2.6% YoY) and from the Mainland at 939 million yuan (down 2.5% YoY). Pre-tax profit for the DongShen project was HK$3.596 billion (up 3.9% YoY). Other water resource projects generated revenue of HK$5.611 billion (up 5.8% YoY) and pre-tax profit of HK$1.601 billion (down 2.6% YoY). Additionally, in Q1-Q3 2025, pre-tax profit for GD Teemall's property investment and department store operations grew 11.3% and 37.3% YoY, respectively, showing recovery. The company maintains a high dividend payout, with the payout ratio staying at 65% from 2023 to H1 2025. Based on the estimated 2025 attributable net profit of HK$4.493 billion and a 65% payout ratio, the dividend yield would be 6.3%. Furthermore, with the start of a new national pricing adjustment cycle and the shift of sewage fees to end-users, a overall valuation repair for the water sector is anticipated. In summary, holding the稀缺 resource of the DongShen project, and with improving performance, cash flow, and dividends post the GD Land disposal, institutions maintain a "Buy" rating.
8. Zijin Mining (02899) On January 26, Zijin Mining announced that its controlled listed subsidiary, Zijin Gold International, intends to acquire all issued common shares of Canada's Allied Gold Corporation for a total transaction value of C$5.5 billion (approximately RMB 28 billion). The core assets are three large gold mines in Africa. Ample resource reserves + a clear production growth path highlight the asset quality. 1) Resources: Allied Gold's core assets focus on gold-rich regions in Africa, with three well-infrastructured projects: The Sadiola mine in Mali and the Côte d'Ivoire gold complex are operational open-pit mines with solid infrastructure; the Kurmuk mine in Ethiopia is scheduled for H2 2026 production with supporting plans. As of end-2024, the three projects held gold resources of 533 tons (avg. grade 1.48 g/t) and reserves of 337 tons (avg. grade 1.42 g/t), with significant potential for resource addition amid rising gold prices. 2) Production: Allied Gold produced 10.7t and 11.1t of gold in 2023 and 2024, respectively, with 2025 guidance of 11.7-12.4t. Future growth drivers are ample: Phase I technical transformation at Sadiola is complete; Phase II plans to expand to 10 Mtpa by 2028, reducing AISC to $1200/oz; Kurmuk has a mining and processing scale of 6.4 Mtpa, with projected average annual production of 7.5t post-commissioning at costs below $950/oz; the Côte d'Ivoire complex will be integrated for operational efficiency and production increases. Combined with output from various projects, gold production could reach 25t by 2029, indicating strong long-term growth visibility. The acquisition is expected to enhance Zijin's industry standing by releasing short-term profit elasticity and deepening its global footprint long-term. Short-term, the targets are either operational or nearing production, contributing immediately upon acquisition, with significant profit potential amplified by Zijin's technical expertise. Long-term, the assets create regional synergy with Zijin's existing African mines,完善布局 in West and East Africa, and propel Zijin Gold International into the ranks of top-tier global gold producers. This move will significantly boost the company's gold production, strengthen its gold segment, and create synergy with its copper business, laying a solid foundation for becoming a "world-class mining group."
9. COSCO SHIPPING Ports (01199) As a globally leading port logistics service provider, the company has a domestic布局 in the Yangtze River Delta, Pearl River Delta, Bohai Rim, and Southeast coastal port areas, and a strategic overseas布局 in Europe, Southeast Asia, the Middle East, Latin America, etc., forming an extensive international shipping hub matrix. As of 2024, COSCO SHIPPING Ports operated and managed 375 berths at 39 ports worldwide. Total throughput in 2024 reached 140 million TEU, up 6.1% YoY, while equity throughput reached 50 million TEU, up 4.5% YoY, maintaining its position among the top global port operators. Key domestic controlled terminals include Tianjin Container Terminal, Xiamen Yuanhai, and Guangzhou Nansha Terminal. Key overseas controlled terminals include Greece's PCT (Piraeus), CSP Abu Dhabi, and related CSP Spain companies. From 2016-2024, the compound annual growth rate (CAGR) for total equity throughput was 5.5%. From 2017-2024, the profit CAGR for domestic terminal assets was 6.6%, and for overseas terminal assets was 7.7%, indicating steady growth in throughput and core profit. Since its 2016 restructuring, the company has focused on its core business, with all revenue derived from terminal operations. In 2024, domestic operations contributed 47.8% of revenue, while overseas operations contributed 52.2%. Profitability-wise, domestic assets have higher毛利率 than overseas; in Q1 2025,毛利率 for domestic and overseas controlled terminals were 35.8% and 20.7%, respectively. Profit structure-wise, domestic terminals contribute over 80% of profit. In terms of ownership structure, equity-accounted terminals contribute the majority of profit; the company holds stakes in global quality assets, with investment income accounting for nearly 70% of pre-tax profit in 2024. Support from its parent company's shipping resources effectively aids overseas expansion. As the company initially focused on acquiring assets in Europe等地, its overseas controlled assets are primarily European hub terminals and Middle East greenfield projects, with overall毛利率 lower than domestic terminals. Going forward, the company will increase its presence in emerging markets, gradually entering South America, Southeast Asia, etc., expecting continuous optimization of its overseas asset portfolio. The Chancay Port in Peru commenced operation in November 2024, with throughput gradually ramping up. Leveraging its parent's shipping resources, the company has established long-term partnerships with Ocean Alliance customers. The share of Ocean Alliance customer volume at 8 key controlled terminals increased from 51.8% in 2017 to 54.6% in 2024. With the advantage of shipping routes, its global布局 is expected to deepen further. In summary, as a globally leading port logistics service provider, COSCO SHIPPING Ports possesses strong advantages from its major shareholder's shipping resources and global footprint. Key domestic controlled terminals maintain毛利率 above 40%, indicating mature assets. Overseas controlled terminals are widely distributed; initial focus was on harder-to-acquire regions like Europe, resulting in higher costs. Subsequent expansion into emerging markets like South America and Southeast Asia, leveraging shipping resources, is expected to optimize the overseas asset structure and improve overseas毛利率. Meanwhile, previously established greenfield terminal projects have commenced operation, offering significant long-term profit potential. Empowered by its major shareholder's shipping resources and increasing Ocean Alliance customer volume share, the company has a solid foundation for its global strategy.
10. Shanghai Petrochemical (00338) The company's Q3 2025 revenue was 19.36 billion yuan, down 14% YoY; attributable net profit was 30 million yuan, up 362% YoY, turning QoQ from a loss, broadly meeting expectations; non-GAAP net profit was 50 million yuan. 9M 2025 revenue was 58.9 billion yuan, with an attributable net loss of 430 million yuan. The company recognized 417 million yuan in asset impairment losses in 9M 2025, related to H1 inventory write-downs; financial expenses decreased by 40 million yuan YoY to 85 million yuan. The company has scheduled major maintenance for the No. 2 catalytic cracker and No. 2 crude distillation unit in Q4 2025, expected to impact operating rates for about one month. In terms of development trends, the chemical cycle still awaits recovery. 9M 2025 sales of polyethylene/polypropylene increased 5% YoY to 710k tons, with Q3 sales up 9% YoY to 250k tons. Olefin plant operating rates improved slightly, but industry spreads remain weak. According to Wind data, the naphtha cracking spread in Q3 2025 fell 15% YoY to $221/ton, and ethylene prices dropped 4% YoY to $831/ton, suggesting product毛利可能需要 more time to recover. Refined product structure adjustments show diesel可能略有回暖. 9M 2025 sales of diesel/gasoline/jet fuel were 1.79/2.47/1.03 million tons, down 12%/-5%/-5% YoY; Q3 sales were 600k/800k/340k tons, up 6%/-4%/-12% YoY, primarily due to improved global diesel cracks, with the company flexibly adjusting its product mix, leading to potential slight毛利修复. The ethylene upgrade project is progressing smoothly. The 1.2 million ton ethylene quality upgrade project is expected to commence operation in 2028. 1) Post-2027, investment in similar ethylene capacity may slow, and approvals could be relatively restricted, potentially leading to an industry inflection point. 2) As a brownfield project with established utilities, the project's unit investment is relatively low within the Sinopec system, offering economic advantages. 3) Connection to high-end, special-grade polyolefins may enhance product value-added.
By Wan Yongqiang (Director, Zhixiang Financial Research Center) Disclaimer: The mentioned stocks are for discussion purposes only and do not constitute investment advice. The stock market involves risks; investment requires caution.
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