Core Viewpoint - The Hong Kong stock market saw a surge in gold stocks, with notable increases in companies such as Zhaojin Mining, Zijin Mining, Lingbao Gold, and Shandong Gold [1] Group 1: Company Performance - Zhaojin Mining experienced a nearly 5% increase in its stock price [1] - Zijin Mining, Lingbao Gold, and Shandong Gold also followed suit with upward movements in their stock prices [1]

Group 1 - COMEX silver futures dropped over 5% and spot silver fell more than 6%, marking the largest decline in six months [1] - Following the drop in gold and silver prices, the A-share gold sector experienced a significant decline on October 20, with an overall drop of 7.09% [1] - Specific stocks such as Hunan Silver (002716) hit the daily limit down, while Western Gold (601069) fell by 9.8%, and other companies like Xiaocheng Technology (300139) and Zhaojin Gold saw declines of 8.86% and 7.03% respectively [1] Group 2 - After reaching historical highs of $4000, $4100, $4200, and $4300 per ounce, international gold prices experienced a sharp decline, dropping below $4200 per ounce on October 17 [2] - As of October 20, international gold prices rebounded slightly, with COMEX gold reported at $4269.8 per ounce [2]

Market Performance - The three major indices opened high and fluctuated, with the Shanghai Composite Index rising by 0.63%, the Shenzhen Component Index by 0.98%, the ChiNext Index by 1.98%, and the STAR Market 50 Index by 0.35% [2] - Over 3,800 stocks in the two markets rose, with a total trading volume of approximately 1.74 trillion yuan [2] Industry Highlights - The cultivated diamond and superhard materials sectors showed strong performance, with Huifeng Diamond rising by 29.98%, Sifangda by 19.98%, and Power Diamond by over 18% [2] - The Ministry of Commerce and the General Administration of Customs announced export controls on superhard materials, effective November 8, which is expected to enhance the supply protection for the domestic superhard materials industry and strengthen market expectations for the sector's scarcity and performance certainty [2] Coal Sector - The coal sector experienced a collective surge, with major companies like Dayou Energy, Yunmei Energy, and Shanxi Black Cat all rising by 10% [2] - The cold air mass affecting the northern regions is expected to increase coal demand during the winter, as a double La Niña weather pattern may lead to a colder winter in China [3] Technology and Robotics - The CPO and computing power sectors were active, with Cambridge Technology rising by 10% and other companies like Zhongji Xuchuang and Tianfu Communication increasing by over 7% [3] - Citibank indicated potential upward demand in the optical module industry, suggesting buying opportunities after recent stock price adjustments [3] - Robotics leader UBTECH won a project for the procurement and installation of intelligent data collection and testing center equipment in Guangxi, with an order amounting to 126 million yuan [4] - UBTECH's Walker series humanoid robots have secured over 630 million yuan in orders this year, excluding a joint development project with Beijing Guodi [4] Declines in Other Sectors - The precious metals sector saw significant declines, with Hunan Silver hitting a 10% limit down, alongside other companies like Xiaocheng Technology and Western Gold experiencing heavy losses [4] - New energy-related stocks also showed weakness, with Shengxin Lithium Energy and Tianqi Lithium experiencing declines [4]

Group 1 - International gold prices experienced a significant drop after reaching record highs of $4,300 per ounce, falling below $4,200 on October 17, with a rebound to $4,269.8 by October 20 [1] - COMEX silver futures also saw a sharp decline, dropping over 5%, while spot silver fell more than 6%, marking the largest drop in six months [1] - The gold sector in the A-share market reacted negatively, with the precious metals sector overall declining by 7.09% on October 20, and several individual stocks, such as Hunan Silver and Western Gold, hitting their daily limit down [1] Group 2 - The recent drop in gold prices is attributed to multiple factors, including a technical correction after a significant price increase and a decrease in geopolitical risk sentiment, which reduced gold's short-term appeal [2] - The correlation between gold prices and gold stocks is highlighted, indicating that when gold price trends are disrupted, investors reassess the valuations of gold companies, often leading to larger declines in stock prices compared to gold itself [2] - Risk warnings have been issued by various banks, including Industrial and Commercial Bank of China, emphasizing the need for investors to be aware of market changes and to manage their gold asset allocations prudently [3][4] Group 3 - Several banks, including Everbright Bank and Industrial Bank, have issued multiple risk alerts regarding the volatility in precious metals prices, advising investors to control their positions and invest rationally [3][4] - Despite the increased volatility and risk warnings, gold is still considered to hold unique value in asset allocation, with recommendations for investors to adopt a strategy of gradual investment rather than chasing price spikes [4] - The core purpose of gold allocation for ordinary investors should be to hedge against macroeconomic uncertainties and inflation risks, suggesting that gold holdings should be maintained at a reasonable proportion of total assets for long-term investment [4]

Market Overview - The Shandong state-owned enterprise reform sector experienced a decline of 0.42% on October 20, with Baoding Technology leading the drop [1] - The Shanghai Composite Index closed at 3863.89, up 0.63%, while the Shenzhen Component Index closed at 12813.21, up 0.98% [1] Top Performers in Shandong State-Owned Enterprises - Chui Mu Co., Ltd. (002083) saw a significant increase of 10.00%, closing at 6.16 with a trading volume of 481,000 shares and a transaction value of 296 million [1] - Lu Xin Investment (600783) rose by 6.25%, closing at 14.10 with a trading volume of 226,200 shares and a transaction value of 314 million [1] - Bo Shen Co., Ltd. (002282) increased by 4.31%, closing at 7.50 with a trading volume of 152,800 shares and a transaction value of 113 million [1] Underperformers in Shandong State-Owned Enterprises - Baoding Technology (002552) experienced a decline of 8.88%, closing at 17.04 with a trading volume of 381,600 shares and a transaction value of 659 million [2] - Shandong Gold (600547) fell by 6.34%, closing at 37.94 with a trading volume of 816,300 shares and a transaction value of 3.132 billion [2] - Dongjie Intelligent (300486) decreased by 3.48%, closing at 20.27 with a trading volume of 257,000 shares and a transaction value of 526 million [2] Capital Flow Analysis - The Shandong state-owned enterprise reform sector saw a net outflow of 543 million from institutional investors, while retail investors contributed a net inflow of 770 million [2][3] - Notable net inflows from retail investors were observed in several stocks, including Chui Mu Co., Ltd. (002083) with a net inflow of 72.05 million [3] - Conversely, significant net outflows from institutional investors were noted in stocks like Langxin Information (000977) with a net outflow of 61.54 million [3]

Market Overview - The A-share market experienced fluctuations last week, with the margin balance reaching 24,293.85 billion yuan as of October 17, marking a decrease of 12.82 billion yuan in financing balance over the week [1] - On October 16, both the margin balance and financing balance hit historical highs [1] Financing Balance Changes - During the last week, the financing balance increased on four days: October 13 (+2.24 billion yuan), October 14 (+2.34 billion yuan), October 15 (+2.31 billion yuan), and October 16 (+7.59 billion yuan), while it decreased significantly on October 17 (-27.30 billion yuan) [1] - Out of 31 industries, 13 saw an increase in financing balance, with the non-ferrous metals, basic chemicals, and defense industries leading in net buying amounts of 6.15 billion yuan, 1.29 billion yuan, and 0.85 billion yuan respectively [1][3] Industry Performance - The industries with the largest net selling amounts included electronics (-7.05 billion yuan), communications (-5.03 billion yuan), and electric power equipment (-2.87 billion yuan) [1][3] - The detailed financing balance for selected industries shows significant variations, with the non-ferrous metals industry having a total margin balance of 120.71 billion yuan and a financing balance of 120.09 billion yuan [3] Individual Stock Activity - A total of 104 stocks saw an increase in financing amounts exceeding 1 billion yuan, with the top ten stocks being Zijin Mining, Zhongjin Gold, and Beijing Junzheng, among others [4] - The largest net buying stock was Zijin Mining with a net purchase of 1.58 billion yuan, despite a price drop of 2.27% [5] - The stock with the highest increase in price was Antai Technology, which rose over 19% [4]

Group 1 - The Hong Kong gold stocks collectively declined, with China Silver Group falling over 6%, Everest Gold and Zijin Gold International dropping over 5%, and Chifeng Gold, Tongguan Gold falling over 4%, while Shandong Gold decreased over 3%, and Zhaojin Mining and Lingbao Gold fell over 2% [2] - Last Friday, international gold prices retreated, closing down 1.76% at $4,252.98 per ounce, a significant drop of $127 from the intraday peak [3] - Ray Dalio, founder of Bridgewater Associates, stated that there has been a fundamental shift in the supply-demand relationship between debt currencies and gold currencies, advocating for a strong position in gold within investment portfolios [3]

Investment Rating - Industry Rating: Outperform the market (maintained rating) [6] Core Views - Precious metals are experiencing strong demand due to geopolitical risks and expectations of interest rate cuts, leading to significant price increases for gold and silver [2][27][30] - Base metals, particularly copper, are facing price volatility with limited fundamental support, as domestic consumption remains weak and supply disruptions are easing [1][13][14] - The tungsten industry is seeing price fluctuations with a divergence in the supply chain, while the molybdenum market is experiencing price increases due to higher output from mines [3][71] Summary by Sections Base Metals & Precious Metals - Copper prices have retreated from highs, with domestic inventories increasing due to limited downstream demand and ongoing maintenance at smelters [1][13] - Aluminum prices have risen slightly, supported by stable supply and improved demand, with a decrease in social inventories [1][21][22][23] - Gold and silver prices have surged, driven by heightened geopolitical tensions and expectations of a 25 basis point rate cut by the Federal Reserve [2][27][29] Minor Metals - The tungsten market is experiencing mixed price movements, with some products increasing while others remain stable or decline due to weak downstream demand [3][66][67] - Molybdenum prices are on the rise, supported by increased output from mines and stable demand from steel manufacturers [71][73] Rare Earths - Recent export control policies are expected to strengthen China's position in the rare earth industry, with price fluctuations observed in various rare earth products [4]

Investment Rating - The report maintains a positive outlook on the metals and new materials industry, indicating a favorable investment rating [4]. Core Insights - The report highlights the volatility in metal prices due to fluctuating tariff expectations and geopolitical factors, particularly affecting copper and aluminum prices [4][30]. - The precious metals sector is expected to benefit from increased central bank purchases, particularly gold, as the current pricing environment favors safety over yield [22]. - Industrial metals like copper are projected to see price increases due to stable demand from infrastructure investments and AI data centers, despite short-term tariff impacts [4][30]. Weekly Market Review - The Shanghai Composite Index fell by 1.47%, while the Shenzhen Component Index dropped by 4.99% [5]. - The non-ferrous metals index decreased by 3.07%, underperforming the CSI 300 Index by 0.85 percentage points [5]. - Year-to-date, the non-ferrous metals index has risen by 69.59%, outperforming the CSI 300 Index by 54.87 percentage points [5][8]. Price Changes - Precious metals saw significant price increases, with COMEX gold rising by 5.76% and silver by 6.55% [4]. - Industrial metals experienced mixed results, with copper prices decreasing by 4.34% and aluminum by 1.19% [4][9]. - Lithium prices showed slight increases, while cobalt prices surged by 10.33% [4][14]. Supply and Demand Dynamics - Copper supply is expected to tighten due to production disruptions from incidents at major mines, with a projected 2.2% decrease in global copper supply [4][30]. - The aluminum sector is witnessing stable demand, with a shift towards peak consumption season anticipated [4][44]. - The steel industry is experiencing a decrease in production, while downstream demand is increasing, leading to a reduction in steel inventory [4][20]. Key Company Valuations - Notable companies in the precious metals sector include Zijin Mining, Shandong Gold, and Zhongjin Gold, with varying price-to-earnings (PE) ratios indicating differing market expectations [19]. - In the industrial metals sector, companies like Zijin Mining and Luoyang Molybdenum are highlighted for their growth potential, with projected earnings per share (EPS) growth [19][20].

Investment Rating - The report maintains a "Buy" rating for the industry, highlighting several key companies as investment opportunities [4]. Core Views - The report emphasizes that tariff uncertainties continue to disrupt the market, leading to increased demand for safe-haven assets like gold and silver, which have reached new highs [1][2]. - Industrial metal prices are expected to remain strong due to supply disruptions and optimistic macroeconomic forecasts, despite short-term volatility caused by tariffs [2][3]. - Energy metals, particularly lithium and cobalt, are projected to perform well due to strong demand from the electric vehicle and energy storage sectors [3]. - Precious metals are benefiting from strong central bank purchases and high expectations for interest rate cuts, which are expected to support gold prices in the medium to long term [3]. Summary by Sections Industrial Metals - Tariff-induced short-term volatility is affecting copper prices, but supply disruptions are expected to support prices [2]. - Aluminum demand remains resilient, with a decrease in social inventory indicating a potential price stabilization [2][19]. - The report highlights key companies in the industrial metals sector, including Luoyang Molybdenum, Zijin Mining, and China Aluminum [2]. Energy Metals - Cobalt prices are rising due to new export quota regulations from the Democratic Republic of Congo, while lithium demand remains strong due to the growth of the electric vehicle market [3]. - Key companies recommended in this sector include Huayou Cobalt and Tianqi Lithium [3]. Precious Metals - Gold prices are expected to continue rising due to strong demand from central banks and geopolitical uncertainties [3]. - Recommended companies in the precious metals sector include Western Gold, Shandong Gold, and Zijin Gold [3].