- The automotive parts ETF (562700.SH) tracks the CSI Automotive Parts Index (931230.CSI), with a single-day increase of 4.2% on October 15, 2025, and a cumulative return from January 1, 2025, to October 15, 2025, showing strong performance[1][8] - The optimal convergent stock for the ETF is Huichuan Technology (300124.SZ), selected based on the deviation between component stocks and the CSI Automotive Parts Index, as well as research coverage[1][8] - Huichuan Technology's stock price at its bottom on August 23, 2024, was valued at 3.5x PS based on its 2023 revenue per share, and its price fluctuated below the T+2 year consensus fundamental value from January 1, 2024, to October 15, 2025[1][8] - The fundamental value for 2027 is calculated as the consensus 2027 revenue per share multiplied by 3.5x PS, and the ETF's allocation is measured based on the relative position of the stock price within the T-1 to T+2 year fundamental value range[8] - Huichuan Technology's 2025 earnings forecast remains stable, with the highest closing price of 88.91 yuan on October 9, 2025, approaching the expected fundamental value for 2027, while the October 15 closing price exceeded the expected fundamental value for 2026 but remained below the 2027 value[9] - From July 1, 2025, to October 15, 2025, the dynamic allocation strategy for the ETF based on Huichuan Technology achieved a Sharpe ratio and return drawdown ratio better than the buy-and-hold strategy, with a terminal return of 20% and a maximum drawdown of 2.56%, compared to the buy-and-hold strategy's terminal return of 28.53% and maximum drawdown of 9.65%[2][9][20]

Investment Rating - The industry investment rating is "Overweight" (maintained) [1] Core Viewpoints - The demand for gold and jewelry is expected to continue growing due to the long-term investment advantages of gold, rising gold prices driven by Federal Reserve interest rate cut expectations, and trade tensions [2] - The retail sales of gold and jewelry in the first three quarters of 2025 increased by 11.5% year-on-year, with a focus on the sales performance during the Double Eleven shopping festival [2] - The sports and outdoor industry is seen as a significant contributor to economic growth, with sustained consumer activity in sports apparel expected [4] - The beauty and personal care sector is recommended to focus on four main lines: essential self-care, domestic product substitution, technological advantages, and channel evolution [10] Summary by Relevant Sections Gold and Jewelry - Retail sales for gold and jewelry reached 276.8 billion yuan in the first nine months of 2025, up 11.5% year-on-year, with September sales at 29.3 billion yuan, a 9.7% increase [2] - The London spot gold price hit a historical high of $4,380.79 per ounce on October 17, 2025, with a year-to-date increase of nearly 65% [2] - Recommended companies include Lao Pu Gold, Lao Feng Xiang, and Chao Hong Ji [11] Trendy Toys - The trendy toy industry is experiencing rapid growth, driven by Generation Z and products like blind boxes that meet deep emotional needs [3] - MINISO LAND, a strategic store format by MINISO, opened its first two locations in Wuhan, enhancing its IP strategy and targeting young consumers [3] - Recommended companies include Pop Mart, Blokus, TOPTOY, and Lezi Tianceng [11] Sports and Outdoor - The retail sales of clothing, shoes, and textiles reached 1.06 trillion yuan in the first nine months of 2025, with a year-on-year increase of 3.1% [4] - The sports apparel sector is expected to maintain high demand due to government support for the sports industry [4] - Recommended companies include Anta, Li Ning, 361 Degrees, and Bosideng [11] Beauty and Personal Care - Retail sales of cosmetics reached 328.8 billion yuan in the first nine months of 2025, with a year-on-year increase of 3.9% [10] - The growth rate for cosmetics in September was 8.6%, indicating strong consumer interest [10] - Recommended companies include L'Oréal, Mao Ge Ping, Jin Bo Biological, Runben Co., and Bai Ya Co. [11]

Investment Rating - The report maintains an "Overweight" rating for the electronics industry [1] Core Viewpoints - The storage industry is expected to enter a super cycle driven by price increases and AI demand, with a significant mismatch between supply and demand leading to shortages [4] - Major manufacturers like Samsung, SK Hynix, and Micron are shifting production from traditional DDR4 products to higher-margin DDR5 and HBM products, while AI server demand is driving a surge in storage needs [4] - OpenAI's recent agreement with Samsung and SK Hynix for a monthly supply of 900,000 wafers represents about 40% of global DRAM production, indicating strong demand [4] - The chairman of ADATA anticipates that the fourth quarter will mark the beginning of severe storage shortages, with major cloud service providers driving up DRAM and NAND Flash contract prices [4] Summary by Sections Market Dynamics - Global storage chip prices are continuously rising, with recent price increases in Flash Wafer exceeding 10% [7] - Samsung plans to raise DRAM prices by 15%-30% and NAND flash prices by 5%-10% in Q4, while Micron has increased prices by approximately 20% [7] - Samsung's Q3 performance showed a 32% year-on-year increase in operating profit, reaching 12.1 trillion KRW (approximately 8.5 billion USD), driven by strong DRAM and NAND flash demand [7] Investment Recommendations - The report suggests maintaining an "Overweight" rating for the electronics industry and recommends focusing on the storage supply chain, highlighting companies such as Zhaoyi Innovation, Jiangbo Long, Demingli, Shannon Semiconductor, and Baiwei Storage [5] - Other beneficial stocks include Lianyun Technology, Saiteng Co., and Huahai Chengke [5]

Investment Rating - The industry investment rating is "Overweight (Maintain)" [1] Core Viewpoints - The report highlights the continuous expansion of brain-computer interface (BCI) application scenarios, with various regions intensifying their layouts and significant clinical and technological advancements emerging. The Ministry of Industry and Information Technology and six other departments jointly issued the "Implementation Opinions on Promoting the Innovative Development of the BCI Industry," outlining a specific path for industrialization [4] Summary by Relevant Sections Industry Overview - The report focuses on the pharmaceutical and biotechnology industry, particularly the advancements in brain-computer interface technology and its clinical applications [1][3] Recent Developments - A series of initiatives have been launched in Beijing and Hubei to support the innovation and development of the BCI industry, including the establishment of industry alliances, special policies, and funding mechanisms. Notably, a 300 million yuan fund has been set up to inject financial resources into the BCI sector [3][4] Investment Recommendations - The report suggests paying attention to companies such as Innovative Medical, Sanbo Brain Science, Apong Medical, and Xiangyu Medical, which are positioned to benefit from the expanding BCI market [4]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company has shown significant growth in revenue and net profit, with a year-on-year revenue increase of 113.96% to 1.56 billion yuan and a net profit increase of 727.74% to 300 million yuan for the first three quarters of 2025 [4] - The company is positioned as a leading player in the optical communication device sector, benefiting from the long-term growth of downstream optical modules [7] - The company is expected to achieve revenues of 2.14 billion, 3.04 billion, and 3.79 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 571 million, 835 million, and 1.06 billion yuan, indicating substantial growth rates [7][9] Summary by Sections Company Overview - The latest closing price of the company's stock is 58.88 yuan, with a market capitalization of 26.72 billion yuan [2] - The total share capital is 458.80 million shares, with 98.91% being tradable A-shares [2] Financial Performance - The company reported a significant increase in revenue and net profit for Q3 2025, with revenue of 568 million yuan and net profit of 83.07 million yuan, reflecting year-on-year growth of 102.50% and 242.52% respectively [4] - The company's gross profit margin is projected to improve, with net profit margin reaching 19.21% for the first three quarters of 2025, up from 6.04% for the entire year of 2024 [5] Business Segments - The company is focusing on three main business areas: optical chips, AWG passive devices, and CPO, which are expected to drive long-term growth [6] - The demand for optical chips is anticipated to rise due to increased capital expenditure from North American cloud providers [6] Cost Management - The company has improved its cost management capabilities, with a reduction in the expense ratios for sales, management, and R&D compared to the end of 2024 [5]

Investment Rating - The report maintains an "Overweight" rating for the storage industry [2] Core Views - The demand for storage is expected to grow due to AI-driven needs, with a continuation of the current storage cycle [4] - Prices for DRAM and NAND are projected to rise, with significant increases announced by major manufacturers [2] - Supply constraints are evident as overseas manufacturers adjust production capacity, leading to potential shortages [3] Summary by Sections Price Outlook - Since September, a new round of price increases has been initiated in the storage sector, with SanDisk raising NAND product prices by over 10% and Western Digital planning to increase HDD prices [2] - For Q4 2025, DRAM prices are expected to rise by 15% to 30%, while NAND prices are projected to increase by 5% to 10% [2] Supply Dynamics - Major manufacturers like Micron, Samsung, and SK Hynix are implementing production cuts due to weak NAND demand and price pressures [3] - There is a shift in production focus from traditional DRAM to higher-margin products like DDR5 and HBM, indicating a strategic realignment in response to market conditions [3] Demand Drivers - The demand for SSDs is increasing due to a shortage of HDDs, driven by AI applications requiring high-speed data processing [4] - The North American market is experiencing a significant increase in server NAND demand as HDD supply tightens [4] - Server DRAM demand is expected to grow rapidly, particularly for DDR5 products, with CSPs projected to significantly increase their DRAM procurement by 2026 [4] - The HBM market is forecasted to maintain a compound annual growth rate of 33% until 2030, potentially surpassing DRAM revenue [4] Investment Recommendations - The report suggests focusing on companies such as Zhaoyi Innovation, Demingli, Baiwei Storage, and Purun Co., as they are well-positioned to benefit from the ongoing trends in the storage industry [6]

Investment Rating - The report maintains an "Overweight" rating for the industry [1] Core Viewpoints - The global edge AI market is expected to continue growing, with AI glasses being one of the best hardware carriers for edge AI, indicating a promising industrial trend [1][12] - Luxshare Precision's "Cloud Sparrow 2nd Generation" AR glasses are leading a new era of AR glasses industrialization, showcasing significant technological advancements at the 26th China International Optoelectronic Expo [1][12] - The report identifies three growth logics for AI smart glasses: imminent industry explosion, accelerated layout by leading companies, and the transformative potential of AI glasses in consumer electronics [2][16] Summary by Sections Industry Overview - The report highlights that global AI glasses sales are projected to reach 1.52 million units in 2024, 3.5 million in 2025, 60 million by 2029, and potentially 1.4 billion by 2035, indicating substantial room for penetration compared to traditional glasses [2][16] Company Developments - Luxshare Precision is actively positioning itself in the smart glasses sector, providing assembly services for various brands and evolving into a more comprehensive ODM service provider [1][12] - The report notes that leading companies like Meta and Apple are accelerating their entry into the market, with Meta launching the Meta Celeste AR glasses and Apple expected to release Apple Glass in 2026 [2][16] Investment Recommendations - The report suggests focusing on companies such as Luxshare Precision, Lens Technology, Linyang Technology, GoerTek, and others as potential investment opportunities in the AI consumer electronics sector [4][16]

Report Information - Report Date: October 20, 2025 [1] - Analyst: Zhang Hesheng [1] - Tel: 021 - 53686158 [1] - E - mail: zhanghesheng@shzq.com [1] - SAC Number: S0870523100004 [1] - Report Title: Sino - US Economic and Trade Relations Ease, Important Meetings Provide Support — Fixed Income & Macroeconomic Weekly Report (20251013 - 20251019) [3] Market Performance Summary Stock Market - US stock market: The Nasdaq, S&P 500, and Dow Jones Industrial Average increased by 2.14%, 1.70%, and 1.56% respectively, while the Nasdaq China Technology Index decreased by 7.27% from October 13 - 19, 2025 [3]. - Hong Kong stock market: The Hang Seng Index decreased by 3.97% from October 13 - 19, 2025 [3]. - A - share market: The wind All - A Index decreased by 3.45%. Among different indices, the CSI A100, CSI 300, CSI 500, CSI 1000, CSI 2000, and wind Micro - cap stocks changed by - 2.44%, - 2.22%, - 5.17%, - 4.62%, - 4.15%, and - 1.61% respectively. From a sector style perspective, both blue - chip and growth stocks in the Shanghai and Shenzhen markets declined, and the Beijing Stock Exchange 50 Index decreased by 4.91%. Among 30 CITIC industries, 4 rose and 26 fell, with banks and coal leading the gainers with over 4.0% increase. Gold, bank, and coal ETFs also performed well with weekly gains over 4% [4]. Bond Market - Chinese bond market: The 10 - year Treasury futures contract increased by 0.29% compared to October 10, 2025. The yield of the 10 - year active Treasury bond increased by 0.40 BP to 1.8246% compared to October 11, 2025. Yields of different - term bonds had mixed changes. The bond market leverage level increased, with the 5 - day average of inter - bank pledged repo volume rising from 5.61 trillion yuan on October 11 to 8.04 trillion yuan on October 17, 2025 [5][6][7]. - US bond market: US Treasury yields decreased. As of October 17, 2025, the 10 - year US Treasury yield decreased by 3 BP to 4.02% compared to October 10, 2025. Yields of all terms decreased, and the yield curve shifted downward [8]. Currency and Commodity Market - Currency market: The US dollar index decreased by 0.27%. The US dollar depreciated against the euro, pound, and yen, with changes of - 0.29%, - 0.55%, and - 0.39% respectively. The US dollar had mixed performance against the offshore and onshore RMB, with the exchange rate against the offshore RMB decreasing by 0.29% to 7.1269 and against the onshore RMB increasing by 0.05% to 7.1265 [9]. - Commodity market: Gold prices increased. The London gold spot price rose by 6.30% to $4224.75 per ounce, and the COMEX gold futures price rose by 6.24% to $4234.90 per ounce. In the domestic market, the Shanghai gold spot price rose by 11.09% to 997.17 yuan per gram, and the futures price rose by 10.91% to 998.20 yuan per gram [9]. Market Outlook and Recommendations - The new round of Sino - US economic and trade consultations is expected to ease Sino - US economic and trade relations and boost investors' risk appetite [10]. - With the easing of Sino - US economic and trade relations and the convening of the Fourth Plenary Session of the 20th Central Committee, investors' risk appetite is expected to recover, A - shares are expected to stabilize, and structural opportunities in sectors such as gold, rare earths, AI, computing power, energy storage, solid - state batteries, and innovative drugs are worth exploring [11]. - The short - term volatility of gold may increase, but the long - term upward trend remains unchanged [12]. - The bond market has investment value as the current absolute yield is at a recent high, such as the 10 - year Treasury yield above 1.80% [13].

Investment Rating - The industry investment rating is "Overweight (Maintain)" [1] Core Viewpoints - The report highlights the long-term investment advantages of gold, driven by expectations of interest rate cuts by the Federal Reserve and trade tensions, leading to increased demand for gold jewelry [5][6] - The report notes a significant increase in gold prices, with the spot price reaching $4,140 per ounce, and domestic gold jewelry prices rising above 1,200 RMB per gram, reflecting a 41.1% year-on-year increase in jewelry sales during the holiday season [6] - The report emphasizes the rapid growth of the trendy toy industry, driven by Generation Z, with products like blind boxes tapping into deep emotional needs [7] - The sports and outdoor sector is identified as a key driver of economic growth, with strong retail performance reported by companies like 361 Degrees, which saw approximately 10% growth in retail sales [8][9] - The beauty and personal care industry is transitioning from penetration expansion to quality upgrades, with significant sales growth observed during the holiday season [10] Summary by Relevant Sections Gold and Jewelry - The demand for gold jewelry is expected to continue growing due to rising gold prices and favorable market conditions, with specific companies like Lao Pu Gold and Lao Feng Xiang recommended for investment [11] Trendy Toys - The trendy toy sector is experiencing rapid growth, with companies like Pop Mart and TOPTOY highlighted as potential investment opportunities [11] Sports and Outdoor - The sports and outdoor industry is benefiting from government support and consumer confidence, with brands like Anta and Li Ning recommended for their strong market performance [11] Beauty and Personal Care - The beauty sector is seeing a shift towards quality and domestic brands, with companies like Proya and MAOGEPING suggested for investment due to their strong sales performance [11]

Group 1: CPI Analysis - In September 2025, the national consumer price index (CPI) decreased by 0.3% year-on-year, a reduction of 0.1 percentage points compared to the previous month[11] - Food prices fell by 4.4% year-on-year, contributing approximately 0.83 percentage points to the CPI decline, making it the primary factor affecting the CPI[12] - Core CPI, excluding food and energy, increased by 1.0%, with the growth rate expanding by 0.1 percentage points, indicating stable demand[14] Group 2: PPI Analysis - The producer price index (PPI) decreased by 2.3% year-on-year in September 2025, with the decline narrowing by 0.6 percentage points from the previous month[13] - PPI remained stable month-on-month, showing no change, while the year-on-year decline was influenced by a low base from the previous year[19] - Key industries such as coal processing and black metal smelting saw a reduction in their negative impact on PPI, decreasing by approximately 0.34 percentage points compared to the previous month[21] Group 3: Policy Implications - The low CPI and PPI levels create room for policy adjustments, suggesting the need for more proactive fiscal policies and moderately loose monetary policies to support economic recovery[30] - The report emphasizes the importance of timely and effective policy measures to enhance economic momentum and fully leverage policy effects[30] Group 4: Risks - Potential risks include worsening geopolitical events, changes in international financial conditions, and unexpected shifts in China-US policies[31]