From charging up to powering forward, reevaluating the investment value of the "all-around" Sunac China Holdings Limited (01907).

Recent signs indicate that the Fed's continued asset reduction plan for several years is about to turn around, and a new round of quantitative easing is expected to have a significant impact on the macro economy. As a result, the investment style and preferences of active funds in the global capital markets are likely to change simultaneously. Based on historical experience, after the Fed starts a rate-cutting cycle, global manufacturing will tend to recover, leading to an increase in physical consumption. As a result, demand for commodities such as coal in the black series and midstream raw materials represented by chemicals is expected to experience positive changes. With this logic in mind, China Risun GP (01907), which is highly competitive in the fields of fine chemicals and coke, is considered a stock worth paying attention to. For example, in the traditional advantage of coke, against the backdrop of continued low demand for coke in China in recent years, Xuyang Group has taken the initiative to consolidate its long-term competitiveness through various measures and steadily prepare for the new industry cycle. On one hand, Xuyang Group has vigorously developed its operational management service model to achieve high-quality scale expansion in a light-asset manner. Leveraging its deep industry experience, Xuyang has refined, integrated, and precipitated its experience and technology in the coke industry, outputting a replicable operational management service to empower the entire industry. In the first half of this year, Xuyang Group added a new project of 2.6 million tons/year in Shanxi and Jilin, bringing the total operating projects to 8, with a total scale of 7 million tons/year of coke and 660,000 tons/year of chemicals. The business volume reached 4.5 million tons, with operating management service segment revenue of 5.095 billion yuan in the first half of 2025, a year-on-year increase of 2.01%. On the other hand, Xuyang Group continues to accelerate the implementation of the dual-cycle development pattern for coke business domestically and internationally. Since setting up its first overseas production base in Sulawesi, Indonesia in 2021, Xuyang Group has successively established offices in Australia, Japan, Vietnam, Singapore, India, and other places to develop a global supply chain system and has formed an international strategic layout radiating the global coking industry with Indonesia's Xuyang Weishan as the core. Currently, Xuyang's Sulawesi Park has a total production capacity of 3.2 million tons/year, with coke sales in 2024 reaching 2.22 million tons, covering 51 customers in 17 countries in Europe and Southeast Asia, with last year's annual revenue of 730 million US dollars, a net profit of 15 million US dollars, ROE of 5.7%, and ROA of 1.4%. Xuyang Group, which has fully accumulated energy during the industry adjustment period, is now expected to show even stronger upward resilience during the stable phase of industry recovery. First of all, looking at the overall market, the investment value of pro-cyclical sectors may already need to be reassessed. High-frequency data shows that in September, domestic PPI decreased year-on-year but remained stable on a monthly basis. Among priced commodities, coal, a variety that has benefited from effective capacity regulation and market competition optimization, has shown preliminary improvement in prices. For example, in the case of coke, before the National Day holiday, the expected start of stocking, coupled with high iron prices providing strong support and the increase in raw material coke prices, has boosted the coke market. In late September, coke companies initiated the first round of price increases, with an increase of 50-75 yuan/ton before the National Day holiday. According to market news, in the past two days, some coke companies have initiated a new round of price increases for coke. Currently, the market generally expects that there is still room for one or two more rounds of price hikes. After the improvement in coking profits, the coke market is expected to maintain a relatively loose supply situation. On the demand side, considering the "anti-involution" stance that covers a wider range and has stronger synergy from top to bottom in the current cycle, the high certainty of the bottoming out and recovery of domestic demand should be given significant attention. Under the drive of "anti-involution," the certainty of the bottoming out and rebound of domestic demand is high. The expected improvement in downstream demand is predicted to continue to drive to the middle and upstream sectors and ultimately reflect on corporate financial statements. In this context, Xuyang Group's turning point in performance is likely to come earlier. Additionally, it can be anticipated that recent high-level meetings will introduce structural and industry-specific incremental policies, together with policy financial instruments, which are expected to have positive effects on pro-cyclical sectors. Unfortunately, looking at the stock price trends of top companies in industries such as Xuyang Group, it is evident that the market has not fully priced in these potential benefits so far. Looking further ahead, with the high probability of the Fed restarting the rate-cutting cycle, a new round of global monetary easing is of profound significance for substantive improvement expectations and stimulating effective demand. In this context, the prosperity of pro-cyclical industries such as coke, coking, and chemicals is expected to continue to rise. The investment value of these industries should be given due attention. Looking at Xuyang Group, in the first six months of this year, both its coke and chemical materials businesses achieved historical highs in terms of business volume, indicating that the company's high-quality expansion has not only affirmed its achievements in transformation and upgrading towards a service-oriented manufacturing industry but also demonstrated the continued deepening of its global strategy. From this perspective, GMTEight believes that Xuyang Group has clearly undergone comprehensive evolution. In the future, as the Fed initiates its rate-cutting cycle, more incremental policies are introduced domestically, and the prolonged interpretation of "anti-involution" takes place, the fundamental prospects of related companies will improve, and the capital market style may also switch accordingly. At that time, companies like Xuyang Group, which have strong fundamentals and ample development potential, are likely to experience a "clockwise swing" in investment opportunities.