China Securities Co., Ltd.: Industrial metal profit forecast significantly adjusted upwards, Siasun Robot&Automation, AI+ in high demand.

China Securities Co.,Ltd. released a research report on the securities market, stating that in terms of market performance, from January 6th to 10th, high P/E ratios, small-cap, and technology stocks performed relatively well, with household appliances, non-ferrous metals, and electronics leading the way. In terms of profitability, computer, automotive, and communication sectors have been adjusted upwards, with industrial metals showing a significant recent increase. On the economic front, real estate transactions continued to decline; the policy of 2025 to replace old cars with new ones continues and expands, with expectations for significant growth; price increases in silicon wafers are driving the industry chain upwards, but downstream demand remains weak; supply is increasing as expected, with limited demand expected due to weak pig prices; the liquor industry is gradually starting the year, but Q1 sales are expected to face pressure. In terms of valuation and trading activity, Siasun Robot&Automation, and the AI+ sector are in high demand. The main points of China Securities Co.,Ltd. are as follows: Market performance: From January 6th to 10th, high P/E ratios, small-cap, and technology stocks performed relatively well; low P/E ratios, large-cap, and pharmaceuticals lagged behind. Among the main indexes, the technology innovation 50, Zhongzheng 2000, and Wend a full A performed relatively well; while China Dividend Full Income, Ning Combination, and the Growth Enterprise Market Index performed poorly. Household appliances, non-ferrous metals, and electronics performed relatively well, while commercial retail, coal, and food and beverage performance was weaker. In terms of hot concepts, Siasun Robot&Automation, and inverter technologies saw the most growth. Profit forecast changes: In January, computer, automotive, and communication sectors saw upward adjustments, while the industrial metals sector showed a significant recent increase; the industries with the largest downward adjustments in January were agriculture, forestry, animal husbandry, fisheries, real estate, and commercial retail. In terms of the digital economy industry chain, according to Wind's consistent expectations, the order of profit forecasts for 2025 is as follows: semiconductor materials (184%) > AIGC (75%) > network security (54%) > semiconductor packaging and testing (44%) > industry application software (41%) > optical components (40%) > PCB (36%) > games (34%) . Changes in core industry business indicators: 1) Cyclicals: Price increases in thermal coal, copper, aluminum, crude oil, etc.; Price declines in coking coal/coke, rebar, cement, glass, etc.; 2) Major finance: In terms of real estate, transactions continued to decline. From January 5th, 2024 to January 11th, 2025, the sales area of commercial housing in 30 cities declined by 35.8% month-on-month, possibly due to reduced activity after year-end promotions by real estate companies, but the month-on-month decline was significantly higher than seasonal expectations, with the annual increase narrowing to less than 10%. In terms of banking, credit growth continued to be under pressure, but M1 continued to rise. 3) High-end manufacturing: In terms of automobiles, the policy of replacing old cars with new ones will continue and expand in 2025, with significant expectations for industry growth. This policy will include fuel vehicles that meet the national fourth emission standard in the scrappage subsidy range (previously limited to below national third standard). In terms of photovoltaics, price hikes in silicon wafers are driving the industry chain upwards, but downstream demand remains weak. If silicon wafer prices continue to rise and drive the industry chain up the production ladder, industry chain prices may come under pressure again. 4) Consumption: In terms of necessity, supply is increasing as expected, with limited demand expected due to weak expectations for pig prices. In terms of optional consumption, the year has started gradually, but Q1 sales are expected to face pressure. Valuation levels and trading activity: The risk premium of major broad-based index stocks is above the 90th percentile for the past 10 years, but with the rapid decline in central government bond yields, the effectiveness of the indicators is limited; A shares/non-financial A shares/Shanghai index valuations are around the 39.5%/40.6%/67.6% percentile for the past 5 years; the Growth Enterprise Market Index/Ning Combination are around the 21.1%/19.5% percentile for the P/E ratio over the past 5 years. In terms of trading activity, Siasun Robot&Automation and the AI+ sector are highly in demand.