Core Viewpoint - The Hong Kong stock market experienced volatility due to global risk asset fluctuations, with significant inflows from foreign and southbound investors driving traditional sectors like agriculture, food and beverage, and transportation to strengthen [1] Fundamental Analysis - Non-financial earnings expectations have been revised upwards, particularly in the semiconductor (4.8%/1.5%), pharmaceutical (1.9%/1.2%), and real estate (0.7%/0.9%) sectors over the past four weeks and one week respectively [2] - The toy sector saw a 1.0%/0.4% upward revision in earnings expectations, while the food and beverage sector experienced a downward revision of 0.4%/1.1% [2] Capital Flow - As of Wednesday, foreign net inflows into Hong Kong stocks amounted to $1.88 billion, down from $2.80 billion the previous week, with active foreign inflows at $420 million and passive inflows at $1.47 billion [3] - Southbound net inflows into Hong Kong stocks reached HKD 56 billion, significantly up from HKD 2.7 billion the prior week, with media, real estate, non-bank financials, transportation, and banking sectors seeing the highest net inflows [3] Market Sentiment - The Hong Kong stock sentiment index stood at 63.8, indicating an optimistic outlook, with net inflows from southbound funds and buying intensity showing further recovery [4] - Despite recent market volatility, there has been no significant adjustment in positions, suggesting that investor sentiment remains resilient [4] Investment Strategy - Short-term focus should be on semiconductor hardware and innovative pharmaceuticals, with a continued emphasis on resource stocks, insurance, and local Hong Kong stocks in the medium term [5]

Group 1 - The promotion of national standards for pre-prepared dishes is beneficial for further organizing the industry and standardizing corporate operations [1] - Leading companies are expected to enjoy dual benefits of compliance dividends and market share increases due to their comprehensive advantages in R&D, production, cold chain transportation, quality control, and capital [1] - The industry outlook remains positive for catering supply chain companies, with strong demand for inventory preparation during the Spring Festival and a recovery in channel confidence [1] Group 2 - The long-term logic of food industrialization is expected to continue unfolding [1]

Core Insights - The report from Huatai Securities highlights the acceleration of Agentic Coding products, represented by Claude Code, and Agent applications, represented by OpenClaw, indicating a potential restructuring of the software industry [1] - It is predicted that 2025 will be the "Year of Agents," with 2026 likely marking the period of accelerated implementation of Agent technologies [1] - The rapid iteration of Agentic Coding is expected to significantly lower software development costs, while the value of standalone software may decline due to the "Jevons Paradox" [1] Industry Trends - The competition among major domestic and international companies for the super entry point of personal Agent assistants is anticipated to drive the next wave of token acceleration [1] - The rapid iteration of Agentic Coding could lead to an explosion of personalized, AI-generated software in the market [1] - Continuous monitoring of Agent developments is recommended as the industry evolves [1]

Core Viewpoint - The report from Huatai Securities indicates that the Hong Kong stock market experienced increased volatility due to global risk asset fluctuations, a pullback in the global software industry, controversies surrounding subsidies for Hong Kong tech giants, a rebound in the US dollar, and ongoing impacts from the commodity market [1] Group 1: Market Dynamics - Despite the volatility, the liquidity in the market remains relatively abundant, with significant inflows from foreign and southbound investors driving strength in traditional sectors such as agriculture, food and beverage, and transportation [1] - The upcoming peak earnings season for US tech stocks and a potential decrease in precious metal volatility are anticipated, along with several catalysts in technology and consumer sectors around the Chinese New Year [1] Group 2: Investment Strategy - The recommendation is to maintain a balanced portfolio and hold stocks through the holiday period, with a focus on sectors that have seen concentrated negative pricing, such as semiconductors, and those with improving trends in consumer goods, real estate chains, and innovative pharmaceuticals [1] - The mid-term investment strategy remains unchanged, with a suggestion to accumulate resource stocks after stabilization and to overweight insurance and local Hong Kong stocks [1]

Group 1 - The core viewpoint of the report indicates that the Hong Kong stock market experienced increased volatility due to global risk asset fluctuations, a pullback in the global software industry, and controversies surrounding subsidies for tech giants [1] - Despite the volatility, the liquidity remains relatively abundant, with significant inflows from foreign and southbound investors driving strength in traditional sectors such as agriculture, food and beverage, and transportation [1] - Looking ahead, the peak earnings season for US tech stocks is nearing its end, and a decrease in precious metal volatility is anticipated, with potential catalysts in technology and consumer sectors around the Chinese New Year [1] Group 2 - The report suggests a balanced allocation strategy, recommending holding stocks through the holiday period while focusing on semiconductor stocks, specialty consumer sectors with improving trends, real estate chains, and innovative pharmaceuticals [1] - The mid-term allocation view remains unchanged, with a recommendation to accumulate resource stocks after stabilization and to overweight insurance and local Hong Kong stocks [1]

Core Viewpoint - The report from Huatai Fixed Income indicates that the bond market is likely to experience an upward trend before the Spring Festival due to a stable funding environment and a "hold bonds for coupon" mentality, while post-festival market performance is expected to be more differentiated [1] Group 1: Market Trends - The Spring Festival calendar effect suggests a higher probability of bond market gains before the festival, with limited increases in positions due to high institutional holdings [1] - The basic economic fundamentals are significantly influenced by base effects, with policy signals and technology narratives being key areas of focus [1] Group 2: Short-term Outlook - Short-term fluctuations in commodities and stock markets remain unsettled, with risk aversion combined with seasonal patterns of the Spring Festival leading to stable bond market performance before the festival [1] - Mid to short-duration coupon-bearing bonds are expected to outperform, although trading momentum is insufficient [1] Group 3: Post-Festival Expectations - The bond market's trajectory after the festival will depend on economic fundamentals, policy signals, and stock market performance, with a forecast of narrow fluctuations [1] - The attractiveness of the 10-year government bond at 1.8% is decreasing, but risks remain limited [1] Group 4: Investment Opportunities - There may be structural opportunities in ultra-long bonds, perpetual bonds, and mid to short-term varieties, while the experience of convertible bond investments is deteriorating, leading to smaller speculative opportunities [1]

Group 1 - The announcement states that from February 9, 2026, China Galaxy Securities will begin selling certain funds managed by the company [1] - The announcement also mentions that Huatai Securities will start selling some of the company's funds from the same date [2] - Investors can consult details through the respective websites and customer service numbers of China Galaxy Securities and the company [1][2] Group 2 - The sales agreements with both securities firms are subject to compliance with fund contracts, prospectuses, and related business announcements [1][2] - Specific details regarding the sales process, types of business, and any fee discount activities will be determined by the sales institutions [1][2]

Core Viewpoint - The report from Huatai Securities indicates that the A-share market experienced a decline this week, driven primarily by a decrease in risk appetite, with a notable shift between high and low-performing stocks [1] Summary by Categories Market Overview - The overall external macro risks have been initially priced in, with a cooling of financing funds and a narrowing of net outflows from ETFs, while both domestic and foreign institutional investors have shown a net inflow against the trend [1] Structural Analysis - The report suggests that segments with floating profits, crowded trading, and significant performance verification pressures have largely completed their initial pricing, indicating that the adjustment phase may be nearing its end [1] Calendar Effect - The report notes that the calendar effect for February in the A-share market is relatively positive, recommending a gradual increase in portfolio flexibility [1] Investment Strategy - The focus should be on selecting high-beta and relatively high valuation-cost performance segments within industries experiencing a reversal in prosperity or a continuation of improvement trends, particularly in lithium battery chains, communication equipment, semiconductors, certain building materials, and chemicals [1] - For low-beta segments, attention should be given to agriculture [1] - From a mid-term perspective, it is advised to overweight the upstream sectors of the power chain, insurance, and the aerospace industry chain [1]

Investment Rating - The investment rating for the non-bank financial sector is "Positive" (maintained) [1] Core Views - The insurance sector is showing signs of improvement, with increased recognition of the industry's fundamentals by insurance companies, as evidenced by China Ping An's continued stake increase in China Life [4] - The brokerage and margin trading businesses maintain a high level of activity, with significant growth in new account openings and trading volumes in January 2026 [5][32] - The asset management and fund distribution businesses are expected to recover, supported by new regulations that have been implemented [5] - Huatai Securities has announced a plan to issue HKD 10 billion in convertible bonds, which is expected to enhance its operational capabilities [6] - The overall performance of brokerage firms is optimistic, with many firms reporting substantial profit growth [6] Data Tracking Insurance Industry Data - As of December 2025, the insurance industry's original premium income reached CNY 61,194 billion, a year-on-year increase of 7.43% [10] - The life insurance premium income was CNY 46,491 billion, up 9.05% year-on-year, while property insurance premium income was CNY 14,703 billion, an increase of 2.60% [10] Securities Industry Data - In January 2026, the average daily trading volume of A-shares was CNY 36.5 trillion, a year-on-year increase of 156.58% [13] - The margin trading balance at the end of January 2026 was CNY 2.72 trillion, up 53.06% year-on-year [13] - New public fund issuance reached 1,094.51 billion units in January 2026, with stock and mixed funds seeing significant growth [13] Industry Dynamics - Insurance capital is increasingly active in equity markets, participating in cornerstone investments in Hong Kong stocks [27] - China Insurance Group reported premium income exceeding CNY 730 billion for 2025, indicating strong operational performance [28] - China Life Group's consolidated investment income grew by double digits in 2025, reflecting robust financial health [29] - China Ping An increased its stake in China Life by 10.12%, demonstrating confidence in the sector [30] - Several automotive service providers have withdrawn from the insurance agency business, indicating competitive pressures in the market [31]

Investment Rating - The report maintains a positive outlook on the non-bank financial sector, indicating an "Overweight" rating for the industry [4][48]. Core Insights - The report highlights a significant increase in new account openings, with 4.9158 million new accounts in January 2026, representing a year-over-year increase of 213% and a quarter-over-quarter increase of 89% [4]. - The report emphasizes the ongoing shift of funds from traditional banks to capital markets and non-bank financial institutions, driven by the expiration of 70 trillion yuan in one-year or longer deposits and a decline in net interest margins [4]. - The report discusses the need for China's financial sector to transition from being large to strong, focusing on mergers and acquisitions as a core growth engine for brokerages [4]. - The report notes that the international business landscape for brokerages is expanding due to the deepening process of RMB internationalization and the demand for cross-border wealth management and investment banking services [4]. - The report mentions that Ping An Group has increased its stake in China Life (H) multiple times, reflecting a strong confidence in the insurance sector [4][12]. Summary by Sections Market Review - The Shanghai Composite Index closed at 4,643.60 with a decline of 1.33%, while the non-bank index closed at 2,030.92 with a decline of 0.60% [8]. - The brokerage, insurance, and diversified financial indices reported declines of 0.65%, 0.71%, and an increase of 0.43%, respectively [8]. Non-Bank Industry News and Key Announcements - The report outlines regulatory updates regarding virtual currencies and asset tokenization, indicating a tightening of oversight in these areas [10]. - Ping An Group's recent acquisitions of shares in China Life (H) are detailed, showcasing a strategic investment approach [12]. - Huatai Securities plans to issue 10 billion HKD in zero-coupon convertible bonds to support overseas business development [14]. Investment Analysis Recommendations - The report suggests focusing on brokerages with strong comprehensive capabilities, recommending stocks such as Guotai Junan A+H, GF Securities A+H, and CITIC Securities A+H [4]. - For insurance, the report recommends China Life (H), New China Life, Ping An, China Pacific Insurance, and China Property & Casualty Insurance, highlighting the systemic value reassessment opportunities in the insurance sector [4].