Core Insights - The report indicates that the short-term adjustment in the technology sector is a preparatory phase for the next "spring rally" in the market [1] - The overall market remains in a slow bull pattern despite short-term corrections, with a focus on style rotation and opportunities for cyclical stocks [2][10] - The report highlights the importance of macro policy expectations and the performance of small-cap stocks during periods of volatility in large-cap technology stocks [10] Market Overview - In October, the Shanghai Composite Index rose by 1.85%, reaching a ten-year high, while the ChiNext and STAR 50 indices experienced fluctuations [10] - The market is entering an earnings window period in November, with mixed signals regarding domestic demand recovery [10] - The report notes that while corporate revenue and profits showed significant recovery in September, the October PMI indicated a marginal decline [2][10] Industry and Sector Analysis - The technology sector, particularly AI hardware, has faced adjustments due to underwhelming earnings reports from companies in the optical communication and PCB sectors [20][34] - Despite the adjustments, domestic computing and storage chip manufacturers have shown strong performance, with significant revenue growth reported [36] - The AI application sector is experiencing a reversal in performance, with increasing penetration rates and initial signs of commercialization in various vertical applications [37][38] Fund Allocation Insights - The report discusses the allocation of active equity funds to the pan-technology manufacturing sector, noting a high configuration ratio of 63.2% and an overweight ratio of 22.1% as of Q3 2025 [22][24] - Historical data suggests that once active equity funds show a significant bias towards a leading industry, this configuration tends to remain elevated for several quarters [29] - The report emphasizes the need to monitor the sustainability of these allocations in light of ongoing economic conditions and sector performance [28][29]

Report Industry Investment Rating - No industry investment rating is provided in the report [1][2] Core Viewpoints - The Fed cut interest rates by 25BP in October but gave a hawkish hint, with uncertainty about December rate - cut and the Fed's access to official data due to government shutdown and the expected announcement of the next Fed chair by Trump [2] - The 10 - year US Treasury yield rebounded after breaking below 4%, and caution is needed when it breaks below this level due to uncertainty in US tariff policy and fiscal balance [2] - The cooling trend in the US employment market is difficult to change, and high - interest rates may suppress the employment market and macro - economy, especially if it impacts the real estate market [2] - The US government shutdown may end in November. After that, the rate - cut process can continue, and November's consumption and inflation data may clarify the trend of the US Treasury market [2] - The producer price index has rebounded, with various commodity prices showing different trends in the week of November 1, 2025 [2] Summary by Directory High - Frequency Data Scanning - **Sino - US Leaders' Meeting**: On October 30, Sino - US leaders agreed to strengthen cooperation in economy, trade, energy and promote cultural exchanges [2] - **Fed's Interest - Rate Cut and Hints**: The Fed cut rates by 25BP in October. Powell said December rate - cut is not certain, and there is strong internal disagreement. Uncertainty exists in the amount of official data the Fed can receive due to government shutdown, and the market may have concerns about Powell's conservatism at the end of his term [2] - **US Treasury Yield Movement**: The 10 - year US Treasury yield rebounded after breaking below 4% following the Fed's hawkish rate - cut. Caution is needed when it breaks below 4% due to uncertainties in tariff policy and fiscal balance [2] - **US Employment Market Situation**: The cooling trend in the US employment market is difficult to change. The 9 - month non - farm employment data is not released, and the ADP private non - farm employment growth rate declined with a net loss of 32,000 jobs in September. The government shutdown impacts federal government employment, and it's hard to change the overall non - farm employment situation [2] - **US Government Shutdown Outlook**: The shutdown may end in November. After that, the rate - cut process can continue. November's consumption and inflation data may clarify the US Treasury market trend [2] - **Price Index Changes**: In the week of November 1, 2025, the average wholesale price of pork increased 1.46% week - on - week and decreased 27.10% year - on - year; the average wholesale price of 28 key monitored vegetables increased 8.09% week - on - week and 3.83% year - on - year. The producer price index increased 0.40% week - on - week and decreased 4.27% year - on - year [2] High - Frequency Data Panoramic Scanning - **High - Frequency Data and Key Macro - Indicator Trends Comparison**: Multiple charts show the relationship between high - frequency data such as copper prices, steel production, and key macro - indicators like industrial added value, PPI, and export volume [18][20][29] - **Important High - Frequency Indicators in the US and Europe**: Charts display the relationship between US weekly economic indicators, initial jobless claims, same - store sales growth, and economic growth, inflation, and financial conditions, as well as the implied interest - rate adjustment prospects of the US and the Eurozone [86][88][97] - **Seasonal Trends of High - Frequency Data**: Charts show the seasonal trends of high - frequency data such as steel production, producer price index, and real estate - related data [99][103][109] - **High - Frequency Traffic Data in Beijing, Shanghai, Guangzhou, and Shenzhen**: Charts present the year - on - year changes in subway passenger volume in these four cities [153][156]

Strategy Overview - The report indicates that the market is currently in a "slow bull" phase, with short-term corrections not altering the overall trend. Key policies and events impacting the market have been implemented, and November marks a performance gap period. Signals of domestic demand recovery show divergence, with significant recovery in corporate revenue and profits in September, but a weakening PMI in October. The focus will shift to the implementation of incremental macro policies as the year-end approaches [5][6][10]. November Stock Picks - The November stock picks from Zhongyin Securities include: China Eastern Airlines (transportation), COSCO Shipping Specialized (transportation), Hualu Hengsheng (chemicals), Yake Technology (chemicals), CATL (electricity), Bairen Medical (pharmaceuticals), Anjuke Food (food and beverage), Lingnan Holdings (social services), Shenghong Technology (electronics), Industrial Fulian (electronics), and iFlytek (computers) [10][12]. Transportation Industry: China Eastern Airlines - China Eastern Airlines is one of the three major state-owned airlines in China, with a focus on passenger transport, which constitutes over 90% of its revenue. The company is expected to achieve a revenue of 132.12 billion yuan in 2024, a year-on-year increase of 16.11%, with a gross profit margin of 4.26% [12][13]. Transportation Industry: COSCO Shipping Specialized - COSCO Shipping Specialized reported a revenue of 16.611 billion yuan in the first three quarters of 2025, a year-on-year increase of 37.92%. The net profit attributable to shareholders reached 1.329 billion yuan, up 10.54%. The company is expanding its fleet and has raised funds through a private placement to support its growth [15][16]. Chemical Industry: Hualu Hengsheng - Hualu Hengsheng's gross profit margin decreased to 18.01% in the first half of 2025, down 3.19 percentage points year-on-year, due to weak market demand. The company is focusing on cost reduction and efficiency improvement, with a significant increase in R&D expenses [17][18]. Chemical Industry: Yake Technology - Yake Technology's revenue grew due to increased sales in LNG and electronic materials. However, net profit growth lagged behind revenue growth due to foreign exchange losses and increased R&D expenses. The company is actively developing new technologies and products in the electronic materials sector [20][21]. Electric Industry: CATL - CATL reported a revenue of 283.072 billion yuan in the first three quarters of 2025, a year-on-year increase of 9.28%, with a profit growth of 36.20%. The company maintains a strong market position, with a global market share of 36.8% in battery installations [24][25]. Pharmaceutical Industry: Bairen Medical - Bairen Medical has seen rapid growth in its revenue and profits, particularly in its heart valve replacement and repair segment, which grew by 64.28% year-on-year. The company is expected to continue its growth trajectory with new product approvals [27][28]. Food and Beverage Industry: Anjuke Food - Anjuke Food's revenue for Q3 2024 was 3.53 billion yuan, a year-on-year increase of 4.6%. The company is focusing on promoting new products, particularly in the frozen food segment, which has shown significant growth [30][31]. Social Services Industry: Lingnan Holdings - Lingnan Holdings achieved a revenue of 2.09 billion yuan in the first half of 2025, a year-on-year increase of 8.52%. The company is expanding its travel agency and hotel operations, with a focus on enhancing its market presence [32][33]. Electronics Industry: Shenghong Technology - Shenghong Technology reported a revenue of 10.731 billion yuan in 2024, a year-on-year increase of 35.31%. The company is leveraging its technological advantages to expand its high-end product offerings [35][36]. Electronics Industry: Industrial Fulian - Industrial Fulian's revenue for the first half of 2025 was 360.76 billion yuan, a year-on-year increase of 35.58%. The company is expected to benefit from the growing demand for AI infrastructure and cloud services [39][40]. Computer Industry: iFlytek - iFlytek's revenue for Q1 2025 was 4.658 billion yuan, a year-on-year increase of 27.74%. The company is focusing on enhancing its cash flow and controlling expenses while investing in R&D for new technologies [42][43].

Key Insights - The report highlights a mixed performance in the macroeconomic environment, with manufacturing PMI at 49.0%, indicating a contraction, while non-manufacturing PMI slightly improved to 50.1% [5][6] - The semiconductor industry shows promising growth, particularly for companies like Jinghe Integrated, which reported a 20% year-on-year revenue increase in Q3 2025, driven by new product developments [9][10] - The defense and aerospace sector, represented by companies like Guangwei Composite, experienced a revenue increase of 4.4% year-on-year, although net profit decreased by 32.55% [18][19] Macroeconomic Overview - October's PMI data reflects a significant impact from holiday scheduling and international trade uncertainties, leading to weaker manufacturing supply and demand [5][6] - The manufacturing production index fell to 49.7%, down 2.2 percentage points from the previous month, while new orders also declined [5][6] - Non-manufacturing sectors showed slight improvement, with construction activity indicating a positive trend [5][6] Semiconductor Industry - Jinghe Integrated's Q3 2025 results show a revenue of 8.13 billion yuan, a 20% increase year-on-year, with a gross margin of 25.9% [10] - The company is actively developing OLED DDIC, CIS, automotive-grade chips, and PMICs, with a focus on process upgrades [9][10] - The transition to 4F2+CBA architecture in DRAM is expected to create outsourcing opportunities for peripheral circuits [12] Defense and Aerospace Sector - Guangwei Composite reported total revenue of 1.986 billion yuan for the first three quarters of 2025, a 4.4% increase, but net profit fell by 32.55% [18][19] - The company’s third-quarter revenue was 785 million yuan, reflecting a 5.24% year-on-year increase and a 23.58% quarter-on-quarter increase [18][19] - The energy new materials segment showed rapid growth, with a 58.95% increase in revenue, while the fiber expansion segment saw a decline [19][20]

Investment Rating - The report maintains a rating of "Outperform" for the industry [1][2]. Core Insights - The release of the "14th Five-Year Plan" provides direction for the development of the new energy industry and sets higher requirements, benefiting the entire industry chain [1]. - In the fourth quarter, domestic sales of new energy vehicles are expected to remain high, driving demand for batteries and materials [1]. - The solid-state battery industry is progressing, with a focus on the delivery of the first generation of sulfide solid-state batteries by Funeng Technology, achieving an energy density of 400Wh/kg [1]. - The photovoltaic sector is expected to see price increases driven by high power components, with a focus on the supply chain dynamics of materials like EVA and aluminum [1][22]. - Wind power demand is projected to grow, with a target of adding no less than 12 million kilowatts of new installations annually during the "14th Five-Year Plan" [1]. - The new energy storage capacity is expected to exceed 180 million kilowatts by 2027, indicating sustained high demand in the storage sector [1]. - The report highlights the importance of hydrogen energy and nuclear fusion as emerging growth points in the economy, with policy support expected to accelerate project advancements [1]. Summary by Sections Industry Dynamics - The report notes that the new energy vehicle retail sales in October are expected to reach around 1.32 million units, with a penetration rate of approximately 60% [24]. - Funeng Technology is set to deliver its first generation of sulfide solid-state batteries, which have an energy density of 400Wh/kg [24]. - The report emphasizes the need for the photovoltaic industry to maintain a focus on avoiding excessive competition and ensuring profitability through effective price transmission [1][24]. Company Performance - The report provides insights into the financial performance of various companies, noting that Xinyuan Materials reported a net profit of 114 million yuan, a year-on-year decline of 67.25% [2]. - Other companies like Tiansheng Technology and Keda Li reported net profits of 503 million yuan and 1.185 billion yuan, reflecting year-on-year growth of 8.30% and 16.55% respectively [2]. - The report highlights the financial struggles of companies like Longi Green Energy, which reported a net loss of 3.403 billion yuan [2].

Investment Rating - The report maintains an "Accumulate" rating for the company [1][4][6] Core Views - The company reported a year-on-year loss in the first three quarters of 2025, but the loss narrowed in the third quarter compared to the previous quarter. The company's component shipment volume remained stable, and both gross margin and cash flow improved sequentially [4][9] - The ongoing "anti-involution" measures in China are expected to drive price increases in the photovoltaic industry chain, which may lead to a recovery in profitability [9] Financial Summary - The company’s revenue for the first three quarters of 2025 was RMB 47,986.04 million, a decrease of 33.14% year-on-year. The net profit attributable to the parent company was -RMB 3,920.34 million, a significant decline from the previous year [10] - The gross margin for Q3 2025 was 3.76%, showing a recovery from negative to positive. The operating cash flow for Q3 2025 was RMB 2,471 million, indicating a positive cash flow trend [9][10] - The forecasted earnings per share (EPS) for 2025 is -RMB 0.38, with subsequent years projected at RMB 0.22 and RMB 0.36 for 2026 and 2027, respectively [6][8] Valuation Metrics - The report adjusts the earnings forecast for 2025-2027 to -RMB 0.38, RMB 0.22, and RMB 0.36, respectively, with corresponding price-to-earnings ratios of 26.2 and 16.3 for 2026 and 2027 [6][8] - The company’s total market capitalization is approximately RMB 58,130.23 million, with a circulating share count of 10,005.20 million shares [3]

Investment Rating - The report maintains a "Buy" rating for the company, with a market price of RMB 50.30 and a sector rating of "Outperform" [2][4]. Core Insights - The company has shown significant growth in revenue and net profit, with a 99.25% year-on-year increase in revenue to RMB 45.95 billion and a 214.63% increase in net profit to RMB 8.87 billion for the first three quarters of 2025 [4][9]. - The company is a leading manufacturer of wind power towers globally and is expected to benefit from the increasing demand for offshore wind installations, particularly in Europe [4][9]. - The company's strategy focuses on reducing domestic business with lower profitability and higher payment risks, leading to a substantial increase in export revenue, which accounted for nearly 80% of total wind power product revenue in 2025 [9][10]. Financial Performance Summary - For the first three quarters of 2025, the company achieved a revenue of RMB 45.95 billion, with a gross margin of 31.12% and a net margin of 19.31%, reflecting improvements of 3.93 percentage points and 7.08 percentage points year-on-year, respectively [10][11]. - The company expects to achieve revenues of RMB 60.82 billion, RMB 81.06 billion, and RMB 101.64 billion for the years 2025, 2026, and 2027, respectively, with corresponding net profits of RMB 10.49 billion, RMB 15.50 billion, and RMB 20.23 billion [6][8]. - The earnings per share (EPS) are projected to be RMB 1.65, RMB 2.43, and RMB 3.17 for 2025, 2026, and 2027, respectively, with a current price-to-earnings (PE) ratio of 30.6 for 2025 [6][8]. Market Position and Strategy - The company has established a strong presence in the European offshore wind market, with a market share of 29.1% and over 200 units supplied to the region [9]. - The company is also expanding its shipbuilding business, having designed and launched specialized vessels for offshore wind equipment transport, with contracts already signed for future deliveries [9][10].

Manufacturing Sector - The October Manufacturing PMI index is at 49.0%, a decrease of 0.8 percentage points from September[2] - The production index for October is 49.7%, down 2.2 percentage points month-on-month[2] - The new orders index stands at 48.8%, reflecting a decline of 0.9 percentage points, with new export orders at 45.9%, down 1.9 percentage points[2] - The raw material inventory index is at 47.3%, a decrease of 1.2 percentage points[2] Non-Manufacturing Sector - The October Non-Manufacturing PMI index is at 50.1%, a slight increase of 0.1 percentage points, remaining above the threshold[10] - The new orders index for non-manufacturing is at 46.0%, unchanged from September, while the new export orders index is at 46.2%, down 3.6 percentage points[10] - The construction sector's PMI index is at 49.1%, a decrease of 0.2 percentage points, indicating continued contraction[13] Economic Outlook - The report emphasizes the importance of macroeconomic policies for counter-cyclical adjustment and cross-cycle deployment as the "14th Five-Year Plan" concludes[1] - A total of 500 billion yuan has been allocated for local government debt to support effective investment, indicating ongoing efforts to stabilize growth[1] - The business activity expectation index for the service sector is at 56.1%, indicating strong confidence among service enterprises[15]

Investment Rating - The report maintains a "Buy" rating for the company [1][5]. Core Views - The company has shown robust growth in revenue and net profit for the first three quarters of 2025, driven by the AI PCB and storage sectors, with a positive outlook for the packaging substrate market [3][8]. - The report highlights the company's strategic investments in high-end PCB capacity and the expected benefits from rising BT substrate prices due to material supply constraints [8]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved revenue of RMB 167.54 billion, a year-on-year increase of 28.39%, and a net profit of RMB 23.26 billion, up 56.30% year-on-year [8]. - The gross margin for the first three quarters of 2025 was 28.20%, an increase of 2.30 percentage points year-on-year [8]. Revenue and Profit Forecast - The company is projected to achieve revenues of RMB 230.02 billion, RMB 321.10 billion, and RMB 419.23 billion for the years 2025, 2026, and 2027, respectively [5]. - The expected net profits for the same years are RMB 33.41 billion, RMB 58.16 billion, and RMB 76.43 billion, respectively [5]. Valuation Metrics - The report provides earnings per share (EPS) estimates of RMB 5.01, RMB 8.72, and RMB 11.46 for 2025, 2026, and 2027, respectively, with corresponding price-to-earnings (PE) ratios of 46.6, 26.8, and 20.4 [5][7]. - The company’s market capitalization is approximately RMB 155.64 billion [3]. Market Trends - The report notes a significant increase in demand for high-speed PCBs in communication and data center sectors, particularly for products related to AI and high-performance computing [8]. - The tightening supply of T-Glass fiberglass materials is expected to lead to price increases for BT substrates, benefiting the company's operations [8].

Index Performance - The Hang Seng Index (HSI) closed at 26,283, down 0.2% for the day but up 31.0% year-to-date (YTD) [2] - The MSCI China index increased by 36.2% YTD, despite a 0.2% decline on the last day [2] - The CSI 300 index showed a YTD increase of 19.7%, with a 0.8% drop on the last day [2] Commodity Price Performance - Brent Crude oil prices fell by 0.3% to $65 per barrel, down 9.9% YTD [3] - Gold prices rose by 2.4% to $4,025 per ounce, reflecting a significant YTD increase of 53.3% [3] - Copper prices increased by 1.3% to $11,184 per ton, with a YTD rise of 27.5% [3] Macro and Earnings Releases - The Core PCE Index in the US remained stable at 2.9% YoY as of October 31 [4] - US Personal Income increased by 0.4% MoM, consistent with expectations [4] - US Auto Sales were reported at an annualized rate of 16.4 million units, exceeding the consensus of 15.5 million [4] Corporate Earnings Insights - Sinopec's net profit dropped 15% QoQ to RMB 8.3 billion, 26% below forecasts, with a projected 22% decline in Q4 earnings [10] - China Oilfield Services (COSL) reported a 16% QoQ earnings growth to RMB 1.25 billion, but expects a 17% decline in Q4 [13] - CNOOC Limited's net profit fell 12% YoY to RMB 32.4 billion, but was 6% above forecasts, with a projected 21% decline in Q4 earnings [17]