Core Viewpoint - The outlook for the Hong Kong stock market in 2026 is optimistic, with 2025 being characterized as a bull market driven by various factors including industry trends, fundamental improvements, and liquidity narratives [1] Market Trends - The Chinese market in 2025 is expected to exceed expectations across multiple dimensions, supported by trends in AI and improvements in fundamentals due to fiscal stimulus and private credit recovery [1] - The Hang Seng Tech Index has seen a 30% increase, primarily driven by risk premium contributions [1] Market Phenomena - Notable market phenomena in 2025 include: 1. Assets with differing underlying logic, such as gold, dividends, and growth stocks, often rising together [1] 2. A concentrated market structure where 15 stocks contributed to 70% of the index's gains, while half of the stocks underperformed the index [1] 3. Significant rotation among sectors, with internet stocks leading in Q1, new consumption in Q2, innovative pharmaceuticals in Q3, and a return to internet stocks in Q4 [1] Key Drivers for 2026 - The core drivers for the market's upward movement in 2026 include liquidity narratives, fundamental improvements, and technological trends [1] - Distinguishing between temporary recoveries and sustainable trends will be crucial for assessing the next steps in the bull market [1] Industry Trend Portfolio - The report includes a list of industry trend stocks with various metrics such as market capitalization, dividend yield, and price-to-earnings ratios for 2025 and 2026, highlighting key players in sectors like information technology and healthcare [1]

Core Viewpoint - The Hong Kong stock market, particularly the technology sector, is experiencing a strong rebound, with the Hong Kong Technology ETF (513020) rising over 1% [1]. Group 1: Market Sentiment - The U.S. Senate has reached an agreement to end the federal government "shutdown," leading to a gradual release of risks in the external market [2]. - The upcoming earnings reports from major internet companies like Tencent and Meituan are expected to catalyze the Hong Kong technology market [2]. Group 2: Sector Analysis - Huayuan Securities highlights that the earnings reports of leading internet companies will showcase the resilience of their fundamental performance, driven by platform advantages [2]. - The core of industry development and market transactions remains focused on the research and investment in AI foundational technologies, as well as the implementation of AI application products [2]. Group 3: Investment Opportunities - The Hong Kong Technology ETF (513020) tracks the CSI Hong Kong Stock Connect Technology Index, which includes leading stocks in the internet, new energy, and innovative pharmaceuticals sectors, featuring popular companies like Alibaba, Xiaomi, Tencent, Meituan, Lenovo, BYD, and SMIC [2]. - According to Guotai Haitong Securities, the combination of improving fundamental expectations and a continuously improving capital environment suggests that the Hong Kong stock market may reach new highs in the fourth quarter [2]. Group 4: Future Outlook - The narrative around the internet is shifting towards "AI empowerment," coupled with increased policy support, which is expected to enhance fundamental expectations for the Hong Kong market [2]. - The influx of foreign capital and sustained southbound fund inflows are strengthening the incremental capital market in Hong Kong [2]. - Under the influence of AI, the technology sector in Hong Kong remains the main line of the market trend [2].

Core Viewpoint - The Chip ETF Fund (159599) opened with a slight increase of 0.14%, indicating a stable market performance for the fund and its holdings [1] Group 1: Fund Performance - The Chip ETF Fund (159599) opened at 2.079 yuan [1] - Since its establishment on April 19, 2024, the fund has achieved a return of 107.62% [1] - The fund's performance over the past month has seen a decline of 6.84% [1] Group 2: Major Holdings - Key stocks in the Chip ETF Fund include: - SMIC (中芯国际) opened up by 0.02% [1] - Cambricon (寒武纪) decreased by 0.17% [1] - Haiguang Information (海光信息) fell by 0.29% [1] - Northern Huachuang (北方华创) remained unchanged [1] - Lattice Semiconductor (澜起科技) increased by 1.48% [1] - Zhaoyi Innovation (兆易创新) rose by 3.41% [1] - Zhongwei Company (中微公司) gained 1.28% [1] - OmniVision (豪威集团) increased by 0.10% [1] - Chipone (芯原股份) remained unchanged [1] - Changdian Technology (长电科技) rose by 0.59% [1] Group 3: Management Information - The fund is managed by Dongcai Fund Management Co., Ltd. [1] - The fund manager is Wu Yi [1] - The performance benchmark for the fund is the CSI Chip Industry Index return [1]

Core Insights - SMIC's stock price decreased by 2.19% on November 7, with a trading volume of 4.694 billion yuan, indicating market volatility [1] - The financing data shows a net financing outflow of 209 million yuan on the same day, with a total financing and securities balance of 13.968 billion yuan [1] - The company reported a significant increase in revenue and net profit for the first half of 2025, with revenue reaching 32.348 billion yuan, a year-on-year growth of 23.14%, and net profit of 2.301 billion yuan, up 39.76% [2] Financing and Margin Trading - On November 7, SMIC had a financing buy-in of 590 million yuan, with a total financing balance of 13.938 billion yuan, accounting for 5.71% of its market capitalization [1] - The financing balance is above the 80th percentile of the past year, indicating a high level of investor engagement [1] - The short selling data shows a repayment of 19,800 shares and a short selling amount of 48,370 yuan, with a short selling balance of 3.0045 million yuan, also above the 80th percentile of the past year [1] Shareholder Structure - As of June 30, 2025, SMIC had 252,300 shareholders, a decrease of 2.20% from the previous period, while the average number of circulating shares per person increased by 2.26% to 8,223 shares [2] - Major institutional shareholders include various ETFs, with notable increases in holdings, indicating growing institutional interest [2] - The top five shareholders include 华夏上证科创板50成份ETF and 易方达上证科创板50ETF, reflecting a trend of increasing institutional investment in SMIC [2]

Group 1 - The Hang Seng Technology Index experienced fluctuations, with semiconductor stocks weakening and tech stocks showing mixed performance [1] - The largest A-share ETF in the same sector, the Hang Seng Technology Index ETF (513180), followed the index's movements, with leading stocks including Tongcheng Travel, BYD, Kingsoft, Tencent, and Kingdee, while SMIC, Hua Hong Semiconductor, Xpeng Motors, and Horizon Robotics lagged [1] - According to Zhongtai Securities, the current investment focus in A-shares may shift towards strategic upstream industries and the expansion of technology applications under the "anti-involution" theme, with short-term attention on consumption-boosting policies leading to structural rebounds [1] Group 2 - As of November 7, the latest valuation (PETTM) of the Hang Seng Technology Index ETF (513180) was 22.69 times, which is in the historical low valuation range, being below 72% of the time since the index was launched [2] - The Hong Kong tech sector is expected to benefit from the current trends represented by AI, with potential foreign capital inflow exceeding expectations due to the backdrop of Federal Reserve interest rate cuts, alongside continuous increases in southbound capital [2] - Investors without a Hong Kong Stock Connect account may consider the Hang Seng Technology Index ETF (513180) for exposure to core Chinese AI assets [2]

Core Viewpoint - The consumer electronics sector is experiencing a decline, with significant drops in key stocks and ETFs tracking the sector, despite a long-term growth outlook driven by AI innovations [1][2]. Group 1: Stock Performance - Major consumer electronics stocks such as Cambrian-U, Industrial Fulian, and Luxshare Precision have fallen over 5%, while SMIC and Huagong Technology have decreased by more than 2% [1]. - ETFs tracking the CSI Consumer Electronics Theme Index have also seen declines, with the Consumer Electronics ETF down by over 2% [1]. Group 2: ETF Details - The following ETFs have reported declines: - Consumer Electronics ETF (561310): 1.178, down 2.56% - Consumer Electronics ETF Fortune (561100): 1.304, down 2.40% - Consumer Electronics ETF (561600): 1.216, down 2.33% - Consumer Electronics 50 ETF (159779): 1.154, down 2.20% - Consumer Electronics ETF E Fund (562950): 1.245, down 2.12% [2]. Group 3: Market Outlook - Analysts suggest that the long-term growth logic of the consumer electronics sector remains solid, with clear trends in AI innovation. Leading companies in the domestic supply chain, characterized by strong R&D capabilities and a solid fundamental base, are expected to benefit significantly from the AI terminal innovation wave [2].

Core Insights - The total margin financing balance on the STAR Market decreased by 3.86 billion yuan, while the margin short selling balance decreased by 31.21 million yuan, indicating a reduction in overall trading activity [1] - As of November 7, the total margin balance reached 260.39 billion yuan, with financing balance at 259.47 billion yuan and short selling balance at 0.92 billion yuan [1] - A total of 278 stocks saw an increase in financing balance, while 102 stocks experienced an increase in short selling balance [1] Financing Balance Summary - The stock with the highest financing balance is Cambrian (寒武纪) at 15.192 billion yuan, followed by SMIC (中芯国际) at 13.938 billion yuan and Haiguang Information (海光信息) at 8.860 billion yuan [1] - Notable increases in financing balance include Wanrun New Energy (万润新能) with a 59.61% increase, Zhuoyue New Energy (卓越新能) with a 25.85% increase, and Huasheng Lithium Battery (华盛锂电) with a 25.03% increase [1] - Significant decreases in financing balance were observed in Foxit Software (福昕软件) with a 23.56% decrease, Jepter (杰普特) with a 14.22% decrease, and Jiehuate (杰华特) with an 11.90% decrease [1] Short Selling Balance Summary - The stock with the highest short selling balance is Haiguang Information (海光信息) at 4.3 million yuan, followed by Cambrian (寒武纪) at 3.9 million yuan and SMIC (中芯国际) at 3.0 million yuan [2] - A total of 102 stocks saw an increase in short selling balance, while 175 stocks experienced a decrease [2] - Notable increases in short selling balance include Yuekang Pharmaceutical (悦康药业) with a 90.77% increase, Dongwei Semiconductor (东微半导) with a 64.43% increase, and Bolite (铂力特) with a 53.67% increase [2] - Significant decreases in short selling balance were observed in Weijie Chuangxin (唯捷创芯) with a 61.44% decrease, Liyuanheng (利元亨) with a 58.71% decrease, and Fangbang Co. (方邦股份) with a 50.48% decrease [2]

Core Viewpoint - China's export control on rare earths has become a significant tool in the ongoing US-China rivalry, marking a shift from passive to active defense strategies [1] Group 1: Export Control and Economic Warfare - The recent export control measures on rare earths are seen as a direct response to aggressive US policies, including the "50% ownership penetration" rule and exorbitant fees for Chinese ships entering US ports [1] - The "long-arm jurisdiction" policy not only restricts the export of raw materials but also applies to processed rare earth products that utilize Chinese technology, effectively controlling global supply chains [1] Group 2: Dependency on Chinese Supply Chains - The US estimates that it will take at least seven to eight years to completely eliminate dependence on Chinese rare earths, requiring hundreds of billions in federal investment annually [4] - Key industries such as lithium batteries, semiconductors, and pharmaceuticals are heavily reliant on Chinese materials, with over 70% of basic pharmaceutical raw materials sourced from China [7][8] Group 3: Challenges in Alternative Supply Chains - The US attempts to build alternative supply chains for rare earths face significant challenges, particularly in refining capabilities, where China holds a monopoly on advanced processing techniques [1][4] - The semiconductor industry is also at risk, with China capturing 31% of the market share in mature processes, and US manufacturers relying on Chinese firms for critical components [5] Group 4: Broader Implications of the US-China Rivalry - The geopolitical landscape is shifting, with the potential for resource management strategies extending beyond rare earths to include nickel, cobalt, and lithium [10] - The competition is not just about technology but also about systemic resilience, with China demonstrating a strong ability to adapt and innovate under pressure [15]

Group 1: Economic Indicators - China's industrial output for October is expected to show a year-on-year increase of 6.5%, while retail sales are projected to grow by 3% [4][6] - Real estate development investment in China is anticipated to decline by 13.9% for the first ten months of the year [4][6] - The overall economic activity in China is showing signs of stabilization due to government policies aimed at growth [6][7] Group 2: U.S. Economic Data - The U.S. Consumer Price Index (CPI) for October is expected to show a year-on-year increase of 3.1%, compared to a previous expectation of 3% [4][8] - The U.S. Producer Price Index (PPI) data is also anticipated to be released, with market expectations indicating a potential for a 0.2% month-on-month increase [8][9] Group 3: Corporate Earnings Reports - Major companies such as Tencent, JD.com, and Bilibili are set to release their earnings reports next week, with Tencent expected to see a revenue increase of approximately 14% year-on-year [4][14] - CoreWeave, Circle, and Cisco are among other companies expected to report earnings, with CoreWeave anticipated to continue its explosive growth [14] Group 4: Key Events - The G7 Foreign Ministers' meeting is scheduled for November 11-12 in Canada [12] - The eighth China International Import Expo concluded on November 10, showcasing international trade opportunities [13] - AMD's annual Analyst Day is set for November 11, where significant announcements regarding future growth and technology are expected [10]

Market Overview - The market has shown alternating activity between A-shares and Hong Kong stocks this year, with Hong Kong's new consumption, technology, and innovative pharmaceutical sectors performing well in the first half, while A-shares' ChiNext and STAR Market technology sectors gained strength in the second half [1] - There is a growing sentiment in the market regarding a potential "high cut low" return to Hong Kong stocks, with several well-known fund managers increasing their positions in Hong Kong stocks in the third quarter [1] Fund Manager Actions - Notable fund managers have significantly increased their Hong Kong stock allocations, such as Jiao Wei's Silver Hua Fu selected mixed fund, which raised its Hong Kong stock allocation from 11.38% to 39.66%, an increase of approximately 28 percentage points [2] - Wu Hao and Jinshan's CITIC Prudential New Blue Chip fund increased its Hong Kong stock allocation from 4.87% to 26.66%, a rise of about 22 percentage points [2] - Yang Ruiwen's Invesco Great Wall Growth fund raised its Hong Kong stock allocation from 6.09% to 22.34%, an increase of approximately 16 percentage points [3] Sector Preferences - The technology sector remains the most heavily weighted sector in Hong Kong stock funds, although its share slightly decreased to 37%, while the consumer sector maintained a 25.16% share, and the pharmaceutical sector accounted for 15.52% [4] - The pharmaceutical sector saw the largest increase in holdings, rising by 3.09 percentage points, while the technology sector experienced a decrease of 1.95 percentage points due to limited opportunities in Hong Kong tech stocks [4] Investment Trends - AI and innovative pharmaceuticals are key investment themes, with Alibaba's cloud services showing strong performance driven by AI, leading to a 3.25 percentage point increase in fund holdings [4] - The trend of "Hong Kong premium" is emerging, where certain high-quality assets in Hong Kong are trading at a premium compared to their A-share counterparts, indicating a structural shift in market perception [6][7]