CICC: Rate hike cycle begins amid capital return recovery.

The research report from CITIC Securities pointed out that innovatively constructing an analysis framework for the entire society's ROIC and long-term interest rates, data shows that there is a 2:1 relationship between the entire society's ROIC and long-term interest rates. This anchored relationship is not just a figment of imagination, but also has market arbitrage support, and is a long-term interest rate central analysis framework that is universally applicable globally. The research report pointed out that the modeling calculation of the entire society's ROIC uses the "industry weighted method" to calculate the entire society's ROIC. By calculating the ROIC of each industry based on the financial data of listed companies, considering that the industry structure of listed companies in China is inconsistent with the macroeconomic industry structure, we estimate the capital scale of each industry based on the fixed investment data published monthly by the National Bureau of Statistics, in order to confirm the industry weights, and finally calculate the entire society's ROIC through weighting. The report stated that during the "13th Five-Year Plan" period, China's capital return level is expected to bottom out and move upward, thereby pulling up the central long-term interest rate. Looking to the future, even if the actual economic growth rate of China continues to decline during the "13th Five-Year Plan" period, the country's capital return level is expected to bottom out and move upward, thereby pulling up the central long-term interest rate, specifically due to the common driving forces of manufacturing and real estate.