Zhitong Finance's investment strategy for Hong Kong stocks in January and the top ten gold stocks

It's been another volatile month. Let's review the previous forecast: “As for the December market, the overall view is not pessimistic. At least, the 25,000 point lower limit will not easily fall, unless some extreme conditions occur.” The Hang Seng Index's operating space for December was 25086.54-26264.13 points. It is true that it did not fall below 25,000 points, because extreme circumstances did not occur, and the US did not take direct action against Venezuela.

However, the market is not good either. It fluctuated in a narrow range around the half-year line for almost a month, and there was no fluctuation. The key reason is that the two major conferences expected by the market did not bring policy benefits that exceeded expectations; they basically revolved around stable development. At the same time, the subsidy policy to stimulate consumption was also lower than market expectations. For example, the subsidy ratio was cut in half in 2026: the subsidy ratio was cut from 20% to 15%, the maximum single item limit was 2000→1500 yuan, and the categories were cut from 12 categories to 6 categories (kitchen appliances/dishwashers, etc.), and the first batch of 62.5 billion yuan was 23% lower than the previous year. Looking from the outside, various geopolitical issues are frequent. The Federal Reserve's interest rate cut in December is also quite complicated, and there are still quite a few internal objections. Therefore, in this state of affairs, capital cannot find a direction; it can only follow a path of sideways tug-of-war.

Therefore, in this state of affairs, capital cannot find a direction; it can only follow a path of sideways tug-of-war. If the market fluctuates sideways, it is difficult to do it, because both parties are very tangled between long and short, so they don't dare to work hard, and those that go short don't dare to go short. The stability index is mainly in the insurance category, and the trend is very strong, such as Ping An of China (02318), China Taibao (02601), and Xinhua Insurance (01336). The offensive side continues to be in the technology sector, such as AI, mainly in the AI category of long-flying optical fiber cables (06869); robots also have quite a bit of catalysis, and the leading one is the best choice (00980). The company made up for shortcomings in its industrial chain after acquiring A-share Fenglong shares (002931.SZ), laying the foundation for later expansion and strengthening, and is still worth continuing attention. This variety is also one of Zhitong's December gold stocks; the driverless L3 has been tested and operated directly in various places, Zhejiang Shibao (0 Shibao). 1057), Joyson Electronics ( 00699) all showed strong performance; there are also metals showing strong performance as a whole. In particular, AI-related copper is more aggressive, such as Jiangxi Copper Co., Ltd. (00358); others also benefited from the EU's anti-dumping dairy industry, Upstream Yuran Animal Husbandry (09858) and Modern Animal Husbandry (01117).

Hong Kong stocks have been fluctuating continuously for three months since October of last year, and there is no clear direction.

Will this situation be broken in January 2026? I feel that breaking the impasse requires a strong catalyst for events. This is true both up and down. It is expected that Hong Kong stocks will probably be dominated by shocks for most of the time in January.

The current market has fallen into a rather embarrassing situation. The main thing is that the external environment is too complicated, and any kind of turbulence will cause capital turmoil. In the case of the Russian-Ukrainian conflict, this incident has been going on for several years. Everyone is very tired and they all want it to end, but they also face many difficulties in reaching a cease-fire. The reason is that it is difficult to reach agreement on the demands of all parties. Ukrainian President Zelensky said that he asked the US to provide Ukraine with security guarantees for up to 50 years, but what was finally implemented in the “peace agreement” was for the US to provide 15 years of security guarantees to Ukraine. European leaders said earlier this month that Europe is ready to lead a “multinational force” in Ukraine as part of the “peace agreement” proposed by the US. However, Russian Foreign Minister Lavrov said on the 28th that any European forces sent to Ukraine will be regarded by the Russian military as a legitimate military target. There is also the question of control over the territory of the eastern region of Ukraine and the Zaporozhye nuclear power plant. In response to these issues, the leaders of the US, Europe, and Ukraine will meet in the US in January to continue discussions. If the deal is settled, it will positively boost the market, but if there is no progress, capital will be relatively disappointing.

Currently, Venezuela in South America bears the brunt of geopolitics. The United States has adopted a strategy of sea surface blockade and containment. The purpose is to cut off its maritime export channel, making it difficult to export its oil, causing economic difficulties, causing unrest to support the pro-American opposition to come to power, and ultimately control Venezuelan oil. At the same time, it forms a kind of strategic deterrent to the whole of South America and solidifies its back garden. The question now is to see if there will be any upgrade later. In particular, whether action will be taken against mainland Venezuela, and how exactly the supporting forces behind Venezuela will compete is a direction that needs to be observed. In short, Venezuela is not only about oil, but also about our interests in South America as a whole.

The second is the direction of the Taiwan Strait, mainly military exercises. Judging from Trump's statement, it can be seen that the US has no particular reaction to this, indicating that its focus is already shrinking. It's not that they don't want to care, but rather that they have no intention or strength. Therefore, the Japanese side's reaction is the focus of observation. Including its economic policies, such as interest rate hikes. This also needs to be viewed in conjunction with South Korea. On the positive side, South Korean President Lee Jae-myung will pay a state visit to China from January 4 to 7, 2026 at the invitation of President Xi Jinping. Yonhap reported on the 30th that this will be Lee Jae-myung's first visit to China since taking office as president. Yonhap quoted business sources as saying that more than 200 Korean entrepreneurs, including Samsung Electronics Chairman Lee Jae-hyeong, SK Group Chairman Choi Tae-won, Hyundai Motor Group Chairman Jeong Ui-seon, and LG Group Chairman Gu Kwang-mo, will form an economic delegation to visit China with Lee Jae-myung. The relationship between South Korea and China, which had been at a low point for a long time, is being restarted.

As for the conflict between Thailand and Cambodia, this direction is unlikely to cause any waves; it is likely that they will move towards peaceful coexistence under our active mediation. The stability of the Southeast Asia region is critical to the stability of capital.

January 27-28 at the end of the month: The Federal Reserve's first interest rate meeting in 2026 will announce the interest rate decision and press conference at 03:00 Beijing time on January 29. Market expectations: There is an 80% chance that interest rates will remain unchanged, and some institutions (J.P. Morgan Chase, UBS) predict that interest rates may be cut by 25 basis points. The overall judgment should be to stand still; interest rate cuts this year are expected to begin again in March. The focus is on observing Federal Reserve Chairman Powell's outlook for future interest rate cuts and his views on the economy.

Currently, the most favorable aspect is the strong trend of the exchange rate. Judging from this trend, the exchange rate is expected to enter a cycle of appreciation. Once the Federal Reserve starts QE, it is likely that the central bank of China will also convert QE into debt. At that time, it will repair the balance sheet of the real sector. China 2026 is expected to witness the economy emerge from 22-24 years of “deflation.” In the short term, large amounts of capital to be settled and cross-border capital are expected to accelerate settlement and return as the RMB appreciates, strengthening the trend of exchange rate appreciation. In the medium to long term, export competitiveness brought about by China's strong industrial strength is the fundamental driving force behind RMB appreciation.

Furthermore, according to the tone set by the Central Economic Work Conference in December 2025, 2026 is the year the “15th Five-Year Plan” begins, and monetary policy is expected to “move forward” to ensure a “good start” for the economy. Therefore, January is a critical window for observing whether the central bank will implement expressions such as “flexible and efficient use of interest rate cuts.” The focus is on whether the LPR was lowered in January. This is an important policy signal.

In 2025, Hong Kong stocks raised more than HK$285.8 billion in annual IPOs, returning to the top position of global exchanges, marking a significant recovery in the attractiveness of Hong Kong as an international financial center. Deloitte predicts that with the support of more than 300 listing applications, the amount raised in the Hong Kong IPO market is expected to reach at least HK$300 billion in 2026.

2026/01 Investment Strategy: Seize the mainstream direction of technology

Zhitong Finance's gold stocks slightly outperformed the market in December. The biggest increase of the Hang Seng Index in the same period in December was 1.6%; the average biggest increase of the top ten gold stocks in December was 6.3%. The biggest monthly gains of the top ten gold stocks are as follows: Premium Choice (09880) rose 16.8%, China Gold International (02099) rose 15.7%, TCL Electronics (01070) rose 13.1%, China Tower (00788) rose 4.4%, MGM China (02282) rose 3.6%, China Communications Services (00552) rose 2.3%, Zero Sports Auto (09863) rose 1.8%, Yibi (02402) rose 1.8%, Rongchang Biotech (09995) 1.6%, Bubble Mart (09992) rose 1.4%.

Overall, the four stocks increased by more than 10%. Other performance was average. Indeed, there were not many opportunities in the Hong Kong stock market in December; only a few individual stocks would surpass their earnings.

Looking at the January market, expectations are not too high. Judging from the performance of the vast majority of individual stocks, there are too many varieties that have broken positions, and there are relatively few active offensives. Therefore, from an investment perspective, only a few varieties have opportunities. Therefore, the strategy is to grasp the core direction; currently, technology is the mainstream.

First and foremost is the commercial space direction. This year will be a major space year. China's commercial aerospace competition for capital markets is accelerating. Along with the completion of the landmark launch of the Suzake-3 launch vehicle and recycling verification, Blue Rocket Aerospace Technology Co., Ltd. officially launched an attack on the Science and Technology Innovation Board. On December 31, according to the latest information on the official website of the Shanghai Stock Exchange, the Blue Rocket Aerospace Science and Technology Innovation Board IPO review status was changed to “accepted.” Related individual stocks will continue to catalyze; the AI direction is still booming. Samsung Electronics announced in November that it will add a new chip production line to its Korean factory; SK Hynix is advancing the construction of its chip manufacturing cluster announced in 2024 with a total investment of 91 billion US dollars. On January 8, Zhipu Huazhang (02513), the “first share of the world's big model”, sold at HK$116.2 and raised about HK$4.35 billion; on January 8, Tianshu Zhixin (09903), a domestic GPU leader, sold at HK$144.6, raised about HK$3.7 billion; mid-January: Wall Technology (one of the “Four Little Dragons” of domestic GPUs) is expected to be listed, further catalyzing the popularity of the AI industry chain. Key catalytic directions include chips, PCBs, etc.; robotics will also have many catalysts one after another, focusing on opportunities in the Trass Robotics industry chain.

In terms of consumption, the annual Consumer Electronics Show (CES) will kick off in Las Vegas next week. This year's exhibition will focus on showcasing hardware products such as AI smart glasses, humanoid robots, and wearable devices. The focus here is on optical opportunities. Aviation has also been catalyzed quite a bit. Over the past year, we have welcomed visitors from all over the world and continued to expand our visa-free “circle of friends”. So far, 48 countries have been unilaterally visa-free and visa-free transit has been implemented for 55 countries. In the first three quarters of this year, there were more than 20 million visa-free immigrants, an increase of more than 50% over the previous year. The peak season from New Year's Day to the Spring Festival is also benefiting from the appreciation of the RMB. Finally, there are performance-class non-ferrous metals and gold safe-haven.

Specific varieties

Aerospace: CIMC Enric (03899), Junda Co., Ltd. (02865)

Chip: SMIC (00981)

PCB: Jiantao laminated board (01888)

Robot: Sanhua Intelligent Control (02050)

Machinery: Sany Heavy Industries (06031)

Aluminum: China Aluminum (02600)

Optics: Shunyu Optics (02382)

Airlines: China Eastern Airlines (00670)

Gold: Zijin Gold International (02259)

The detailed list is as follows:

1. CIMC Enric (03899)

In the first three quarters of 25 years, the company achieved revenue of 19.348 billion yuan, +7.7% year-on-year; net profit to mother was 777 million yuan, +12.9% year-on-year. 25Q3 achieved revenue of 6.734 billion yuan, +3.8% year over year; net profit to mother was 204 million yuan, +6.2% year over year. 25Q3's revenue and profit grew steadily year over year, mainly due to the release of profits from the clean water energy business, the incremental profit contribution of the coke oven gas to hydrogen LNG project, and the steady delivery of high-end cryogenic tanks overseas. By business, 25Q3 benefited from a recovery in domestic natural gas consumption and strong growth in clean water energy. The clean energy segment's revenue was +14.6% year-on-year to 5.412 billion yuan. Among them, the Clean Water Energy section successfully delivered 5 ships and batch delivery of overseas high-end cryogenic tanks, driving this segment's revenue +51.7% year-on-year to 1,747 billion yuan, maintaining a rapid growth trend. Meanwhile, the Chemical Environment Division was affected by pressure from the downstream chemical industry and falling demand for tank containers. Q3 revenue was 461 million yuan, or -48.4% over the same period last year. Furthermore, due to macroeconomic factors such as disturbances in the US tariff policy, the Q3 liquid food division's revenue fell slightly by 1.4% year over year to 861 million yuan. The company signed a total of 19.64 billion yuan in new orders from 25Q1 to Q3, including 8.90 billion yuan in Q3, a rapid increase of +104% over the previous year, driving active orders to a new high of 30.76 billion yuan. Among them, the Clean Energy Division signed new orders of 16.99 billion yuan from Q1 to Q3, and 8.02 billion yuan in Q3 in a single quarter, +148% over the same period last year, which is the core driving force for order growth. The company Q3 signed a contract with Singaporean shipowner Purus for 2 18,900 cubic meter LNG filling vessels, signed a 2+2 20,000 cubic meter LNG tanker construction contract with GSXEnergy, and signed a 2+2 51,000 cubic meter ammonia-fueled MGC construction contract order with a Norwegian company; driving clean water energy Q3 signed a new order of 5.41 billion yuan, +833% over the same period. At the end of Q3, an order of 19.50 billion yuan was placed. The shipbuilding order has already been scheduled to be produced 2028. In the future, in the context of global green shipping transformation, the company's products such as LNG transport refueling vessels and LNG marine fuel tanks are expected to continue to benefit, and the order scale may increase further. The company's first green methanol project landed in Zhanjiang, Guangdong. The first phase had an annual production capacity of 50,000 tons. The project was successfully handed over in August '25 and has now entered the commissioning stage. According to the company's forecast, it will be put into operation in 25Q4, and the second phase has an annual production capacity of 200,000 tons. According to the company's forecast, it will be put into operation in 2027. Green methanol has significant advantages in terms of raw material sustainability, full-life cycle emissions, infrastructure compatibility and long-term costs. It is more suitable as an alternative fuel in the context of green shipping, and has a wide range of application scenarios. According to DNV data, at the end of August 2025, 70 methanol-fueled vessels were in operation worldwide, and 336 were ordered. 2026-27 may become a centralized delivery period for methanol vessels. In '25, the company has signed strategic cooperation agreements with important partners such as Huaguang Shipping, China Shipbuilding, Sinopec Offshore, and the Hong Kong Transportation and Logistics Bureau to jointly promote the application of green methanol. The company continues to benefit from the global green shipping transformation, and green alcohol is expected to become a new performance growth point for the company in addition to LNG equipment. Looking forward to the future, the company's current orders reached a record high, and the green methanol project is about to be put into operation. It is expected that it will continue to benefit from the global green shipping transformation, and the agency will maintain a “buy” rating.

2. Junda Co., Ltd. (02865)

On December 22, 2025, the company announced the official signing of the “Strategic Cooperation Framework Agreement” with Shangyi Optoelectronics. The company will invest in shares in Sunyi Optoelectronics as a strategic shareholder. The two sides will deeply integrate industry and scenario resources, cooperate on the application of perovskite battery technology in space energy, and establish a coordination mechanism in technology research and development, in-orbit verification, industrialization implementation and application scenario expansion. The International Telecommunication Union's “first come, first served” rule has further amplified the urgency of competition among major countries in the commercial satellite field, and the global low-orbit satellite networking and space computing power industry have entered a cycle of explosive growth. As the only energy solution for the current commercial space scene, the market's core demand is evolving from a single “reliability and efficiency” to “efficient, lightweight, low-cost, and flexible” integrated system capabilities. According to estimates, the global space photovoltaic market is expected to reach a trillion by 2030. The company has been deeply involved in photovoltaic cell technology for nearly 20 years, and has experienced a series of battery technology iterations; in terms of new technology reserves, the efficiency of the perovskite laminated battery laboratory developed by the company and external institutions reached 32.08%, which is at the leading level in the industry. At the technical level, this cooperation with Shangyi Optoelectronics will deepen the company's R&D accumulation of perovskite and laminated batteries in different spatial scenarios. From the perspective of industrialization promotion, it is expected that the two sides will reverse empower the mass production and operation level. In May 2025, the company's H shares were listed on the main board of the Stock Exchange, becoming the first A+H listed company in the industry. Considering the broad prospects of space photovoltaic projects, the company can make full use of the advantages of the dual capital market to provide strong long-term financial support for R&D and industrialization of the project to accelerate technology implementation and scale expansion; at the same time, the company actively promotes the global production capacity layout. It is expected that the subsequent release of high-profit battery production capacity in Turkey will contribute significantly to the company's performance increase. In summary, prices and profits in the industrial chain are gradually being restored under the promotion of domestic “anti-domestic sales”. At the same time, overseas production capacity is expected to increase one after another next year. The company's profit is expected to improve, and the institution maintains a “buy” rating.

3. SMIC (00981)

In the first three quarters of 2025, the company achieved revenue of 49.510 billion yuan, +18.22% year on year; net profit of 38.18 billion yuan, +41.09% year on year; net profit without return to mother of 3.177 billion yuan, +44.40% year on year; in the third quarter of 2025, the company achieved revenue of 17.162 billion yuan, +9.95% year on month; net profit to mother of 1,517 billion yuan, +60.64% year on year; net profit without return to mother. YoY +39.74%, month-on-month +73.52%. Due to the accelerated transformation of the industrial chain and the fact that channels are still preparing and replenishing inventory, the company actively cooperated with customers to guarantee delivery, resulting in a 4.6% month-on-month increase in the number of 25Q3 wafers sold to 2.499 million pieces (equivalent to eight inches); at the same time, due to changes in product portfolio and increased shipments of products with complex processes, the average sales unit price of the company's 25Q3 wafers increased 3.8% month-on-month, and the sharp rise in volume and price drove the company's 25Q3 revenue growth year-on-month. Due to the increase in production capacity utilization, the increase in output offset the impact of rising depreciation, so that the company's 25Q3 gross margin exceeded expectations. The company's 25Q3 gross margin was 25.49%, up 1.57% year on year, up 4.79% month on month; the company's 25Q3 net margin was 14.00%, up 3.81% year on year and 7.48% month on month. The company's 25Q3 capacity utilization rate was 95.8%, an increase of 3.3% over the previous month. The company has a rich process technology platform. Currently, it has mass production capabilities for various technology platforms such as logic circuits, power supply/simulation, high-voltage drives, embedded non-volatile storage, non-volatile storage, mixed signals/RF, and image sensors, and continues to promote process iteration and product performance upgrades. In the first three quarters of 2025, the development of the company's characteristic processes increased steadily on multiple technology platforms; the ultra-low power 28 nm logic process entered the mass production stage, providing customers with lower power consumption and higher quality solutions; the image sensor CIS and signal processing ISP processes continued to iterate technology to improve sensitivity, picture quality, and signal-to-noise ratio, while developing optical process platforms covering more bands; embedded storage platforms expanded from the consumer market to vehicle specifications and industrial MCU fields; in terms of characteristic storage, NorFlash, The NandFlash process provides a high-reliability storage platform with higher density, smaller size, and lower power consumption; in addition, the company seized the growth opportunities of the automotive chip market and launched various special processes such as automotive-grade sensors, BCD, MCU, RF, storage, and display to provide customers with system-level solutions. In summary, the company is a leading foundry enterprise in mainland China. It has a rich process technology platform and continues to promote process iteration and product performance upgrades. Against the backdrop of intensifying international geopolitical conflicts, the demand for autonomous and controllable wafer manufacturing is urgent. The company's consumer electronics products are being replaced domestically, and demand for AI computing power is strong. The company has the most advanced process technology in mainland China, and is expected to fully benefit from the wave of AI chip localization.

4. Jiantao laminate board (01888)

As a leader in traditional copper-clad plate integration, the company has a high-end layout, and is the most advanced in material-side special electronic cloth. The company's first low dielectric electronic yarn kiln has been announced to be put into operation, and the progress of the technology path step one step method is relatively leading in China. Along with downstream customer certification, the company announced that production capacity for second-generation low-dielectric, low-expansion fiber cloth, quartz cloth, etc. is expected to be gradually launched in 25H2 and '26. Special electronic cloth is in a boom phase where supply and demand are tight along with the upgrade of copper-clad panels. The company's traditional electronic cloth production capacity is also in a leading position. It has a production capacity of 200,000 tons of electronic yarn. It is estimated to correspond to 7-800 million meters/year of traditional electronic cloth production capacity. The price trend of traditional electronic cloth is also currently in an upward cycle. In the long run, the company's high-end core advantage lies in the material stability of industrial integration. In the field of copper foil, the company's HVLP-3 copper foil has announced that the product has been launched and has entered the verification cycle, and further upgrades are in progress. Electronic cloth and copper foil are the first, and it is expected that the company's M6 grade or higher copper-clad plate products and production capacity will gradually be introduced. In the process of high-end PCBs, the stability of material supply may become more and more important for terminal product performance insurance. Although the company's high-end progress is not the first in the industry, the advantages of integration are quite unique. The advantage of material integration may have certain advantages in terms of material tension, processability and stability of copper-clad plates. In the historical upward cycle of copper prices and glass fiber cloth, the price cycle of traditional copper-clad panels is also quite optimistic. 25H2 The industry is experimenting with a new round of price increases. Judging from the supply and demand pattern, the overall demand in the copper-clad plate industry has good growth expectations along with the improvement in AI demand. Major companies' production expansion plans are also mainly focused on high-end boards, and even some of the industry's mid-tier production capacity will be converted to high-end production. Therefore, the supply and demand pattern of traditional mid-range copper-clad panels is also relatively good. Since the industry's bottom of profit in 2023, mid-tier production capacity expansion has been relatively limited, while the global demand side can assume a moderate upward trend, so the boom and price trends of traditional copper-clad panels may be quite optimistic. In summary, the company is one of the leading companies in the copper-clad plate industry. The integrated layout of upstream materials creates differentiated barriers, the electronic copper foil copper clad plate is upgraded simultaneously, and the supply and demand pattern of traditional copper-clad plates and new price trends are optimistic. Product upgrades and price increases for copper clad plates are expected to contribute to the company's performance growth potential, and the agency gave a target price of HK$20.

5. Sanhua Intelligent Control (02050)

The company announced its 2025 results forecast. Traditional refrigeration and automotive thermal management are collaborating, and the company's 25-year performance is expected to increase. It is estimated to achieve net profit of 38.7 to 4.65 billion yuan, +25% ~ 50% year over year; net profit after deducting non-return to mother of 36.8 billion yuan to 4.61 billion yuan, +18% ~ 48% year over year. On the one hand, governments around the world have introduced low-carbon energy saving policies to accelerate the green transformation of economic development. Demand for refrigeration and air conditioning control components in overseas markets continues to expand, driving steady growth in refrigeration product exports; on the other hand, benefiting from the explosion in demand for liquid cooling in data centers driven by AI computing power, the company provides core components such as valves, pumps, and heat exchangers for liquid cooling systems. 25H1's traditional refrigeration business achieved revenue of 10.39 billion yuan, +25.5% year over year; achieved gross profit margin of 28.2%, +0.65pct year over year. Affected by the production and sales of Tesla, a major core customer, 25H1 Auto Zero's revenue was 5.87 billion yuan, an increase of only 8.8% over the previous year. Benefiting from Tesla's production and sales improvements, Tesla delivered 497,000 vehicles worldwide in Q3 (+7.4% year over year), and the company's auto zero business picked up at an accelerated pace. Furthermore, the company's dependence on Tesla has gradually declined, international giants such as GM, and new domestic OEMs such as Xiaomi, Ideal, and Xiaopeng have begun to contribute significant increases, and the company has also successively broken through European customers such as Mercedes-Benz, Volkswagen, and Strantis, where progress had been slow before. The company is deeply bound to Tesla and is the core supplier of electromechanical actuators for Tesla humanoid robots, providing integrated products including rotary and linear actuators. At present, the company has set up a dedicated humanoid robot division and established a production base in Thailand to support the mass production needs of customers. It is expected to contribute an important revenue increase to the company starting in '26.

6. Sany Heavy Industries (06031)

The first three quarters of 2025 achieved operating income of 66.104 billion yuan, +13.27% year over year; net profit to mother of 7.136 billion yuan, +46.58% year over year; net profit after deducting non-return to mother of 7.106 billion yuan, +53.55% year over year. Looking at a single quarter, the company achieved revenue of 21.324 billion yuan, +10.48% year over year; net profit to mother of 1.919 billion yuan, +48.18% year over year; net profit after deducting non-return to mother of 1,697 billion yuan, +12.97% year over year. The company's gross sales margin for the first three quarters of 2025 was 27.62%, -0.65pcts; the net sales margin was 11.01%, +2.41pcts; the sales/management/R&D/finance expense ratios were 6.83%/2.87%/5.12%/-0.94%, respectively, -1.20/-0.52/-1.48/ -1.42pcts. The increase in the company's profitability is mainly due to the company actively promoting digital transformation to achieve fine management of the manufacturing process and fine control of costs. The quality of the company's cash flow is good. The net operating cash flow for the first three quarters was 14.547 billion yuan, +17.55% year-on-year, providing a strong guarantee for business expansion. On October 28, the company was officially listed on the main board of the Hong Kong Stock Exchange, successfully constructing an A+H dual-platform listing pattern. According to Frost & Sullivan's report, the cumulative revenue of the company's core construction machinery products ranked third in the world and first in China in 2020-2024. The cumulative sales volume of excavators and the cumulative revenue of concrete machinery both reached the top of the world. The products were exported to more than 150 countries and regions. The compound growth rate of overseas revenue reached 15.2% in 2024, leading the industry in global operation capacity. Relying on the opportunity of the Hong Kong stock listing, the company plans to further expand sales channels in Europe, Asia and Africa, and plans to lay out production bases in emerging markets. It is expected that the synergy between global production capacity and channels will continue to be unleashed. Looking forward to the future, the company will use the A+H dual platform as support to deepen the collaborative promotion of the three core strategies of globalization, digital intelligence, and low carbon reduction. In summary, I am optimistic about the company's long-term development, and the institution maintains a “buy” investment rating.

7. China Aluminum (02600)

In Q3 2025, we achieved operating income of 60.124 billion yuan, a year-on-year decrease of 4.66%, and net profit to mother of 3.801 billion yuan, an increase of 90.31% over the previous year; net profit after deduction reached 3.75 billion yuan, an increase of 103.37%. In the first three quarters of 2025, the company achieved operating income of 176.515 billion yuan, a year-on-year increase of 1.57%, net profit of 10.872 billion yuan, a year-on-year increase of 20.65%, and net profit after deducting 10.716 billion yuan, an increase of 23.03% over the previous year. Profit growth is mainly due to the company's continuous strengthening of cost control, optimization of resource guarantees, and increased production and sales. The company's main business includes exploration and mining of resources such as bauxite and coal, production, sales, technology research and development of alumina, raw aluminum, aluminum alloy and carbon products, international trade, logistics industry, thermal power and new energy power generation. The company's production capacity of alumina, fine alumina, electrolytic aluminum, high-purity aluminum and gallium metal all rank first in the world. In the first three quarters of 2025, the company produced 1.34 million tons of metallurgical grade alumina, 3.27 million tons of fine alumina, and sold 4.91 million tons of self-produced metallurgical alumina. The production volume of primary aluminum (including alloy) is 6 million tons, and the export sales volume of self-produced raw aluminum (including alloy) is 5.99 million tons. Coal production is 9.85 million tons, and outsourced power plants generate 12.8 billion kwh. In the first half of 2025, the self-sufficiency rate for alumina ore increased by 6 percentage points from the beginning of the year, to a nearly five-year high. At the same time, the company has outstanding competitive advantages in the entire industry chain, and the cost of purchasing bulk materials has been reduced by nearly 10%. Continuous business growth and operational improvements have greatly increased the company's profits. The supply of electrolytic aluminum is limited, demand is increasing steadily, and prices are running high. In 2024, the global production volume of electrolytic aluminum was 72 million tons, and China's annual output was 43 million tons. The total domestic production capacity of electrolytic aluminum was limited, new and old overseas production capacity increased or decreased, and the total global supply did not change much. On the demand side, electrolytic aluminum is widely used in construction, transportation, electricity and new energy. In recent years, in the face of the downturn in traditional markets, the rapid development of new energy vehicles and new energy power has greatly boosted the demand for electrolytic aluminum, making the supply and demand for electrolytic aluminum in a balanced state. The cost of electrolytic aluminum mainly includes alumina, pre-cultivated anodes, electricity, and manufacturing. With no significant changes on the cost side, the price of electrolytic aluminum is running high. According to the company's business plan, the world is expected to produce 7.8 million tons of electrolytic aluminum in 2025, and the company will continue to benefit. In summary, the company has a complete industrial chain for aluminum products. From resources to electrolytic aluminum to finishing, etc., there has been no significant increase in global electrolytic aluminum production capacity, and the price of electrolytic aluminum is expected to operate at a high level. Optimistic about the company's development prospects.

8. Shunyu Optical Technology (02382)

In October 2025, the company shipped 122 million pieces of mobile lenses, +4.0% month-on-month, +5.7%; mobile phone camera module shipments were 45 million pieces, +33.2% year-on-year; vehicle lens shipments were 12 million pieces, +4.8% month-on-month, and +40.3% year-on-year. The shipment volume of glass spherical lenses was 2.344 million pieces. As the world's leading manufacturer of integrated optical components and products, it continues to benefit from smartphone optical innovation, the decline in intelligent driving, and the development of the XR and pan-IoT industries. The company's products mainly include: 1) optical parts: automotive lenses, automotive lidar optical components, XR optical components, mobile phone lenses, spherical and aspherical glass lenses and other optical parts; 2) optoelectronic products: vehicle modules, XR vision modules, smart glasses camera modules, robot vision modules, mobile camera modules and other optoelectronic products; 3) optical instruments: intelligent equipment and microscopes, etc. The application areas mainly cover automobiles, extended reality XR, pan-IoT, smart phones and optical instruments. The company's automotive lens shipments exceeded 100 million pieces in 2024, and vehicle lens shipments increased by 40.3% year-on-year in October 2025. At the same time, in-vehicle modules are further deepening technical cooperation with mainstream autonomous driving platforms and continuing to develop new products and processes. Judging from market trends, intelligent driving technology is sinking from high-end cars to mid-range and low-end cars; from a technical perspective, the application of multi-modal large model technology will require vehicle lenses to have higher resolution 8M → 12M → 18M, better image quality performance (wide dynamic, high sensitivity, low noise, high sharpness), and an all-weather operating environment (high and low temperature, anti-fog, rapid icing). The company and leading global manufacturers actively develop and iterate display, interactive products and new technologies, and occupy a key position in the supply chain. With full-link vertical integration capabilities covering optical components, sensory interaction modules, optoelectronic systems, complete machine design and self-developed testing equipment, the company provides diversified solutions for the XR industry to systematically overcome the problems of AR smart glasses in terms of light efficiency, volume, and assembly accuracy. In summary, I am optimistic that the company will benefit from the investment opportunities brought by smartphone optical innovation, the decline in intelligent driving models, and the development of the XR business.

9. China Eastern Airlines (00670)

In the first three quarters of 2025, China Eastern Airlines' revenue was 106.414 billion yuan, up 3.73% year on year; gross profit margin was 7.762 billion yuan, up 19.69% year on year; gross profit margin was 7.29%, up 0.97 pct year on year; total profit increased sharply from 51 million yuan last year to 2,347 billion yuan; net profit to mother increased sharply from -138 million yuan in the same period last year to 2.03 billion yuan. The high growth in business performance has mainly benefited from the sharp increase in international route business brought about by the expansion of visa-free visas. 2025H1 accounted for 16% of the revenue of international routes, an increase of 3 pct over the previous year, and the revenue of international routes increased sharply by 22% year on year. From January to September 2025, China Eastern Airlines' international flight RPK increased 24.16% year on year, and ASK increased 20.08% year on year; during the same period, the number of visa-free entry foreigners increased 52% year on year. If 50% of the visa-free entry/exit foreigners use China Airlines international flights and the growth rate remains around 40%, the growth rate of international flight passenger traffic is expected to remain around 15%. In September, China Eastern Airlines' international routes accounted for 32.3% of the RPK, which is higher than that of other listed airlines, benefiting even more from the high growth in international passenger traffic. If China Eastern Airlines maintains an RPK growth rate of around 15%, which exceeds the growth rate of the number of wide-body aircraft, and there is limited room for increase in aircraft utilization and passenger occupancy, then international flight ticket prices are expected to rise and revenue is expected to grow at a high rate. In September 2025, listed airline ASK grew 4.0%, international flights ASK grew 9.4%, RPK grew 14.3%, domestic flights ASK grew 2.2%, and RPK grew 4.7%. The listed airline ASK is close to the growth rate of RPK for domestic flights, while the high growth rate of RPK for international flights absorbs most of the increase in capacity, making the growth rate of ASK for domestic flights lower than the RPK growth rate. Therefore, passenger occupancy rates for domestic flights are expected to rise and ticket prices are expected to rise. High growth in inbound tourism is expected to drive the recovery of the aviation industry, the volume and price of China Eastern Airlines international routes is expected to increase, domestic flight revenue is expected to increase, and the profit growth center is expected to rise. In summary, considering that demand for international routes is expected to grow rapidly, leading to rapid profit growth, the agency maintains a “buy” rating.

10. Zijin Gold International (02259)

Zijin Gold International was spun off from Zijin Mining's overseas gold mines. It has a total of 8 gold mines, distributed in South America, Africa, Central Asia, Oceania, etc., accounting for more than 95% of the gold business, which is a pure gold standard. The company currently has equity gold resources of 1812.7 tons and equity gold reserves of 851.9 tons (including the RG gold mine in Kazakhstan). By the end of 2024, reserves/production ranked around 10th in the world. Most of the management team are former employees of Zijin Mining, with professional mining background and first-line work experience. Where is Zijin Gold International's α? 1) Resource acquisition capacity: Lower acquisition costs. The average acquisition cost of the company's gold mine in 2019-2024 is 61.3 US dollars/ounce, which is lower than the industry average of 92.9 US dollars/ounce, and the acquired mines can continue to increase storage. For example, by the end of 2024, the resources of Rosbell Gold Mine and Akim Gold Mine both increased 70% + compared to the time of acquisition. 2) Mine operation capacity: By improving the extraction ratio and depletion rate, and increasing the recovery rate, etc., the original loss mine can be made profitable; the average grade of the company's mining production is only about 1.4 g/t, but the AISC cost is about 1,400-1500 US dollars/ounce, ranking 6th among TOP15 gold mine producers, and the cost of the 2024-2025H1 company is stabilizing. 3) Production delivery capacity: The company's production growth rate of 21% in the past three years was the fastest among large gold stocks, and in hindsight, the degree of implementation of the guidelines at the beginning of the year was high (99%/101%/103% for the 6 mines in production in 2024). The future depends on endogenous growth+epitaxial mergers and acquisitions, and the company's gold production CAGR is expected to continue to maintain a high growth rate of 15% +. Gold prices are expected to remain strong: 1) Looking at the medium term: Global central banks maintain 1,000 tons+ of gold purchases every year, leaving the price of gold out of the traditional framework, and against the backdrop of the Federal Reserve maintaining a cycle of interest rate cuts and stagnation in the US economy, European and American capital will also shift drastically to gold starting this year. Diversified purchases will continue to support the bullish gold price market; 2) In the long run: the devaluation of the fiat currency and geographical opposition to the general trend has formed the basic background of this round of the gold price super bullish market. On the one hand, the US fiscal year is expanding in a procyclical manner, and the size of government debt continues to expand; on the other hand, the independence of the Federal Reserve is being challenged. In particular, the Trump administration will select a new chairman of the Federal Reserve and move forward with fiscal policy or kidnapping monetary policy. This is also expected to continue to open up room for gold prices to rise. Meanwhile, the geopolitical confrontation is also expected to continue to attract various buyers to cut allocations of some dollar assets from their asset portfolios and switch to gold. In summary, considering that the price of gold is expected to maintain a bullish trend, compounding the strong alpha attributes of the company, such as its ability to obtain resources, the ability to operate a mine, and the ability to deliver on production, it is worth a higher valuation, and the agency gives the company a buying rating.

By Wan Yongqiang (Director of Zhitong Finance Research Center)

Disclaimer: The stock in this article is for shareholder discussion only and must not constitute investment advice. The stock market is risky, so you need to be careful when investing