Happy Spring Festival.
As the old year makes way for the new with the sound of firecrackers, the spring breeze brings warmth. The bell tolls on the eve of the Year of the Horse, with brilliant lights across the land and the warmth of family reunions filling the streets. At this moment, we step away from our desks to embrace the future amidst the festive atmosphere of renewal. On behalf of the Research and Development Department of China Securities Co., Ltd. (CSC), I extend sincere New Year greetings and best wishes to the investors, clients, and friends from all sectors who have long supported us.
Looking back, the past year demonstrated the strong resilience of the Chinese economy within a complex and changing international environment, achieving high-quality development. In 2025, despite a complex and severe situation with rapid external changes and increased domestic challenges, China implemented more proactive and effective macroeconomic policies. These not only mitigated adverse impacts from external shifts but also stabilized and consolidated the foundation for development. Gross domestic product surpassed 140 trillion yuan for the first time, with continuous economic structural optimization and the cultivation of new growth drivers, showcasing a clear trend towards innovation and excellence.
Standing at the historical starting point of the 15th Five-Year Plan, the prospects for the new year are even more promising. The Chinese economy possesses strong resilience and vitality, a complete industrial system, a super-sized market advantage, and continuously improving technological innovation capabilities. These fundamental factors remain unchanged. As a vital platform for resource allocation and serving the real economy, the capital market will play an increasingly important role in supporting technological innovation, promoting industrial upgrading, and stimulating consumption upgrades. Based on the steady and improving macroeconomic fundamentals, the capital market in the new year is expected to continue its structural trends, with investment opportunities focusing more on new quality productive forces and the construction of a modern industrial system. In this grand process of reconstruction and re-anchoring, we anticipate the following:
Chinese A-shares and Hong Kong stocks will continue to anchor themselves to the "New Four Bulls" logic, advancing along three main tracks of the "New Four Bulls Ascending Corridor," which focus on technological self-reliance, industrial upgrading, and strategic resource security. Overall, as the market successfully progresses and increasingly supports elements of new quality productive forces, the market's center is expected to continue a slow bull ascent. Structurally, sector market capitalization will further concentrate along these three tracks, meaning capital and liquidity will increasingly flow towards the endogenous drivers of economic growth, resonating with them to form a powerful cycle of "finance, technology, industry, and security." In specific sectors, the new year is expected to be bright, including areas such as AI, semiconductors, computing, primary commodities, minor metals, new energy, high-end manufacturing, humanoid robots, low-altitude economy, defense, and pharmaceuticals.
In the Chinese bond market, the era of low interest rates is approaching, with yield declines remaining a long-term trend. However, influenced by multiple factors, the logic for declines in short to medium-term rates will be smoother. With expectations of further monetary policy easing in 2026 and a lower medium-to-long-term growth center, Chinese government bond yields are anticipated to continue declining, making the bond bull market a prolonged process for investors. The Renminbi exchange rate is expected to be stable and resilient, with a tendency to appreciate steadily in 2026, though the extent will depend on international trade and cross-border capital flows.
In commodities, 2026 remains an opportunity for gold, with both gold and silver presenting longer-term investment prospects. Recent significant price fluctuations in gold should not cause alarm, as the current upward logic differs from previous frameworks. Earlier drivers were interest rate changes, dollar pricing, and safe-haven demand, but the price increases over the past one to two years have been primarily driven by geopolitical logic. The increased holdings of gold and silver by central banks, institutions, and investors globally also reflect concerns over geopolitics, growing debt levels, and the weaponization of the US dollar.
As spring returns and all things are renewed, standing at the beginning of the 15th Five-Year Plan, we are confident in the economic development and capital market prospects for the new year. The CSC Research and Development Department will fully leverage its role as a think tank to better serve the national agenda, deeply implement the "Research+" initiative to support group and company business development, return to the essence of research to enhance investment research service quality, and accelerate the building of a first-class digital intelligent investment research platform for mutual empowerment.
A steed's single leap cannot cover ten steps, but a persistent horse can achieve much through continuous effort. The Year of the Horse symbolizes a spirit of galloping forward with courage. We wish all investors to lead the way, embody vitality, ride the spring breeze, achieve immediate success, and have a joyful New Year! May we join hands to ride the waves and create new glories in the coming year.