Industrial: Hot topics such as AI injecting new vitality into the market. The value of China's capital market is being reevaluated for the year 2025.

Industrial released a research report stating that AI technology is changing the way macroeconomic operations are conducted, and the revolution has just begun. For China, the most important aspect may not be the short-term profit effect of AI "infrastructure" - compared to the United States, our AI usage rates are cheaper. In the long term, considering the huge scale effect of the Chinese market, if AI infrastructure can provide cheap and convenient support, it will be able to bring more landing scenarios for AI, provide massive training data, further support technological iterations, and expand future growth space. This different characteristic of AI implementation between China and the United States also brings different structural investment opportunities. Key points from Industrial are as follows: Since the Spring Festival, new technologies such as AI have injected a boost into the market and are causing a reevaluation of the value of China's capital market. AI is not only an industry issue, but also a macro issue. As a team of macro researchers who are more technical and have used AI, we deeply feel that new technologies like AI are changing our lives and work. As the first part of a series of studies, this report provides a preliminary discussion and analysis of the macro impact of AI: AI technology is changing the way macroeconomic operations are conducted, and the revolution has just begun. The fourth industrial revolution with artificial intelligence at its core is accelerating into the phase of large-scale application, displaying three main features: 1) doubling of technological iteration speed; 2) diffusion of technology surpassing historical levels; 3) rise of new production factors. Calculations from academic research indicate that the development of the AI industry is expected to promote a 1% annual increase in GDP and a 0.5% annual increase in productivity. From a macro perspective, the penetration rate of AI-related applications is rapidly increasing but is still in its early stages, with a significant gap compared to the penetration rate of smartphones and televisions. The combination and application of AI with Siasun Robot & Automation is still in its early stages and requires time, as innovation has just begun. In the competition that cannot be lost, AI "infrastructure" is rapidly advancing in China. Since DeepSeek became popular nationwide during the Spring Festival, but computational power was insufficient and there were always "system busy" messages, in just a few weeks, Alibaba, Tencent, and other major internet companies have announced the deployment of DeepSeek models. This rapid diffusion makes people feel that the power of China's "infrastructure mania" seems to have extended to the field of AI. In fact, apart from the open-source factor of DS, the construction of AI infrastructures and physical infrastructure investments such as road construction have significant similarities - both are short-term constructions that aim to drive long-term effects in the future, and both are actively promoted from top-down with government support, showing that this is a competition in the national game that cannot be lost. Short-term and long-term benefits, different AI implementation models between China and the United States. For China, the most important aspect may not be the short-term profit effect of AI "infrastructure" - our AI usage rates are cheaper compared to the United States. In the long term, considering the huge scale effect of the Chinese market, if AI infrastructure can provide cheap and convenient support, it will be able to bring more landing scenarios for AI, provide massive training data, further support technological iterations, and expand future growth space. This different characteristic of AI implementation between China and the United States also brings different structural investment opportunities. Hot topics such as AI have injected a boost into the market, and by 2025, the value of China's capital market is being reevaluated. Recently, hot topics such as DeepSeek (increasing opportunities to expand productivity boundaries, also catching up with the competition in the AI race between China and the United States), Siasun Robot & Automation (taking the lead in combining AI with areas where high-end manufacturing is facing external demand blockages and internal surpluses, and leveraging the advantage of Chinese manufacturing), and "Ne Zha" (a correction of pessimistic expectations regarding past consumer spending, dining, and travel intentions) have significantly boosted market confidence. Upon further consideration, the bank believes that 2025 may be a turning point for the capital market's narrative on China: whether it is the excess savings on residents' balance sheets or the innovative capabilities of Chinese engineers and industrial chains, the lack is not ability but confidence. Confidence will accompany industrial breakthroughs, policy support, increased vitality of private enterprises, and improvement in the property market drag. Risk warning: 1) Unexpected changes in global geopolitical situations; 2) Uncertainty in domestic and foreign economic policies.