Core Viewpoint - The article discusses the performance of the Kexin 50 ETF (588940) and its major holdings, highlighting a decline in the ETF's opening price and the performance of its constituent stocks [1]. Group 1: ETF Performance - Kexin 50 ETF (588940) opened down by 1.79%, priced at 1.423 yuan [1]. - Since its establishment on May 21, 2025, the fund has achieved a return of 44.60%, while its return over the past month has been -5.12% [1]. Group 2: Major Holdings Performance - Major holdings in the ETF include: - SMIC (中芯国际) down by 1.76% - Haiguang Information (海光信息) down by 1.46% - Cambrian (寒武纪) down by 2.91% - Lanke Technology (澜起科技) down by 1.69% - Zhongwei Company (中微公司) down by 2.28% - United Imaging (联影医疗) down by 0.09% - Kingsoft Office (金山办公) up by 1.12% - Chipone (芯原股份) down by 0.56% - Stone Technology (石头科技) down by 0.01% - Transsion Holdings (传音控股) down by 0.12% [1].

Core Insights - A significant price increase trend for software subscriptions has emerged across various sectors, driven by the integration of AI functionalities and rising operational costs [2][6][24] - Chinese users are increasingly willing to pay for software that enhances efficiency, marking a shift in consumer attitudes towards software subscriptions [3][19][23] - The rise in software prices is not merely a profit-driven strategy but reflects a broader transformation in the industry, moving from a free model to a value-based pricing approach [23][24][25] Price Increase Trends - From 2024 onwards, software membership fees in China have seen an average increase of 20-30%, with some applications experiencing even higher rates [2][8] - Specific examples include Tencent Meeting's membership fee rising from 25 yuan/month to 49 yuan/month, a 96% increase, and WPS's AI membership priced at approximately 930 yuan/year [12][13] User Acceptance and Behavior - Despite complaints on social media, many users are opting to renew their subscriptions, recognizing the value added by AI features [5][19][20] - A survey indicated that 56.1% of professionals are willing to pay for AI services, with 23.4% having already made such payments [3][6] AI as a Value Driver - AI functionalities are becoming central to the pricing strategies of software companies, with many integrating AI features to justify higher subscription costs [7][14][24] - The operational costs associated with AI, such as server and bandwidth expenses, are significant factors driving the need for price increases [18][24] Market Dynamics - The competitive landscape is shifting, with leading companies investing heavily in AI to create barriers to entry, while smaller firms must adapt or risk obsolescence [24][25] - The transition from a free to a paid model is seen as a necessary evolution for the software industry in China, moving towards sustainable business practices [23][24]

Group 1 - The computer index has outperformed the CSI 300 index, with a year-to-date increase of 25.12% as of October 31, 2025, ranking ninth among all primary industries [3][10] - Fund holdings in the computer sector remain low, with a percentage of 2.92% as of September 30, 2025, indicating a stable but historically low level of investment [3][19] - The computer sector has shown signs of performance recovery, with a median revenue growth of 3.10% and a net profit growth of 3.93% year-on-year for the first three quarters of 2025 [3][15] Group 2 - Two core trends are emphasized: rapid advancements in AI and the acceleration of domestic security initiatives [4] - AI innovation is ongoing, with significant developments in model capabilities, cost reductions, and the emergence of Chinese open-source models like Deepseek and Qwen gaining global recognition [4][27] - The domestic software and hardware sectors are entering a "usable" phase, with policies promoting technological self-reliance leading to a golden development period for domestic computing power and AI chips [4][99] Group 3 - Investment recommendations include companies benefiting from AI applications such as Kingsoft Office, Hohhot Information, and Dingjie Zhizhi, among others [5] - For AI computing power, recommended companies include Haiguang Information, Sugon, and Inspur Information, with beneficiaries like Cambricon and Jingjia Micro [5] - In the context of domestic innovation, companies like Dameng Data and Taiji Co., Ltd. are highlighted as key players in the software and hardware sectors [5]

Group 1 - The report emphasizes a strategic focus on the "15th Five-Year Plan," indicating that the most significant overseas disturbances may be gradually passing, with domestic factors such as the Fourth Plenary Session and third-quarter report verification likely to boost market risk appetite [3][9][11] - The report highlights the importance of technology growth sectors, particularly AI, military industry, and innovative pharmaceuticals, as key areas for investment opportunities [2][12][13] - The AI sector is identified as a focal point, with a focus on the global computing power supply chain and domestic innovation, particularly in GPU and semiconductor equipment [12][13] Group 2 - The military industry is expected to enter a new cycle of prosperity, supported by the "15th Five-Year Plan," which emphasizes national strategic deployment and the release of new orders [12][13] - The innovative pharmaceutical sector has seen sufficient emotional digestion, with expectations for revaluation driven by business development and global monetary easing [12][13] - The report includes a selection of "golden stocks" for November, including Tianshan Aluminum, Weiming Environmental Protection, and Sany Heavy Industry, among others, with a focus on their growth and value potential [4][8][19][22][33] Group 3 - Tianshan Aluminum reported a revenue of 22.32 billion yuan for the first three quarters of 2025, with a year-on-year growth of 7.3%, and a net profit of 3.34 billion yuan, reflecting an increase of 8.3% [15][16] - Weiming Environmental Protection achieved a revenue of 5.88 billion yuan in the first three quarters of 2025, with a net profit of 2.14 billion yuan, marking a year-on-year increase of 1.14% [22][23] - Sany Heavy Industry's revenue for 2024 was reported at 77.77 billion yuan, with a year-on-year increase of 6.22%, and a net profit of 5.98 billion yuan, reflecting a growth of 31.98% [33][35] Group 4 - The report outlines a growth strategy for Tianshan Aluminum, focusing on its integrated aluminum industry chain and cost advantages from self-supplied power generation [15][19] - Weiming Environmental Protection's new material business has begun to generate revenue and profit, indicating a potential second growth curve for the company [22][25] - Sany Heavy Industry's global strategy has shown significant results, with international revenue accounting for 63.98% of total revenue, reflecting a strong performance in overseas markets [33][35] Group 5 - The report provides a detailed earnings forecast for the selected stocks, indicating expected growth rates and profitability for the upcoming years [8][19][22] - The growth and value portfolios have been adjusted for November, highlighting companies with strong fundamentals and market positions [4][8][19][22] - The report emphasizes the importance of monitoring market conditions and company performance to identify potential investment opportunities [3][9][11]

Group 1 - The A-share market saw all three major indices turn positive in the afternoon, with the storage chip sector experiencing a sustained rebound [1] - Nvidia has reached a milestone collaboration with the South Korean government and four major corporate groups to supply approximately 260,000 latest Blackwell architecture GPUs to enhance South Korea's AI infrastructure [1] - The agreement includes the South Korean government receiving 50,000 GPUs for a national AI computing center, while Samsung, SK Group, and Hyundai Motor Group will each receive 50,000 GPUs for AI factory construction, and NAVER Cloud will obtain 60,000 GPUs to strengthen cloud service capabilities [1] Group 2 - CICC analysis indicates that the continuous advancement of AI technology is driving the semiconductor industry into a new cycle characterized by "going abroad" and "upgrading" [2] - Despite the end of the domestic substitution dividend period for mature products, high growth in AI-related demand and the backdrop of trade friction present commercialization opportunities for domestic computing chip companies [2] - The demand for cloud computing driven by AI applications and the upgrade of terminal hardware such as AI phones and AR/VR will jointly constitute the core driving force for industry development [2]

Investment Rating - The report maintains an "Overweight" rating for the industry [2][56]. Core Insights - The computer sector is currently in a low allocation state, with a heavy stock allocation ratio of only 2.76%, significantly lower than the 8.6% peak in 2023, indicating substantial room for recovery [7][10]. - The performance of the computer sector has improved significantly in Q3 2025, with notable revenue and profit growth in the domestic AI application and innovation sectors, suggesting a turning point in the industry [7][22]. - The domestic AI application market is on the verge of a large-scale commercial explosion, with leading companies showing impressive revenue and profit growth in Q3 2025, reinforcing the certainty of their performance [7][43]. Summary by Sections 1. Low Allocation: The Value of Computer Sector Configuration is Highlighted - The computer sector's heavy stock allocation ratio is at 2.76%, remaining in the 2%-3% range since Q2 2024, with significant recovery potential compared to 8.6% in Q1 2023 [10]. - The sector's ranking has dropped to 11th among TMT sectors, indicating a low allocation compared to others [10]. - The software segment's allocation has decreased, contrasting with increases in the electronics and communications sectors [10][16]. 2. Performance Resonance: Q3 2025 Performance of Innovation and Application Sectors is Impressive - The innovation sector's revenue and profit have shown strong recovery, with notable performances from companies like Zhongke Shuguang and Damo Data [22]. - The average gross margin for the innovation sector is approximately 44.47%, with a year-on-year increase of 0.91 percentage points [22]. - The SaaS and enterprise service sectors have also seen significant revenue growth, with companies like Foxit Software and Hehe Information leading the way [33]. 3. Focus on AI Applications: Domestic Companies' Performance Reinforces Certainty - The trend of AI application commercialization is becoming clearer, with domestic companies showing significant revenue and profit growth in Q3 2025 [43]. - Hehe Information reported revenue of 460 million yuan, a year-on-year increase of 27.49%, and a net profit of 116 million yuan, up 34.93% [43][44]. - Kingsoft Office achieved revenue of 1.521 billion yuan, a 25.33% increase year-on-year, with a net profit of 431 million yuan, up 35.42% [44][46]. - Foxit Software's revenue reached 254 million yuan, a 47.80% increase year-on-year, with a net profit of 6.2848 million yuan, up 126.36% [46][51]. Investment Recommendations - The report suggests focusing on investment opportunities in the application layer, particularly in companies with strong data barriers, customer resources, and technological investments, such as Tuolisi, Hehe Information, Tonghuashun, and Kingsoft Office [52].

Stock Recommendations - Jerry Holdings (002353.SZ) shows strong overseas market expansion and robust order support for performance growth, with an EPS forecast of 2.99 in 2025 and a PE ratio of 18.05[3] - Kingsoft Office (688111.SH) has demonstrated rapid growth in Q3, with an EPS of 3.91 expected in 2025, driven by strong performance in WPS personal business and AI capabilities[3] - Double Ring Transmission (002472.SZ) is positioned as a leading supplier for Tesla, with an EPS forecast of 1.51 in 2025, indicating strong growth potential in humanoid robotics[3] - Zhongji Xuchuang (300308.SZ) benefits from increased overseas CAPEX and is expected to see significant growth, with an EPS of 10.23 in 2025 and a high PE ratio of 61.46[3] - Shangmei Co., Ltd. (2145.HK) has a clear growth path with strong sales performance, expecting an EPS of 2.58 in 2025[4] - Giant Network (002558.SZ) reported a net profit of 1.416 billion yuan in Q3 2025, a year-on-year increase of 32.31%, with an EPS forecast of 1.16 in 2025[4] Market Performance - The weighted return of the October stock portfolio was 7.41%, outperforming the Shanghai Composite Index, which rose by 1.85%[9] - Zhongji Xuchuang had the highest increase in the portfolio at 17.29%, while the overall equal-weighted return was -0.20%[10] - The market capitalization of Zhongji Xuchuang reached 525.57 billion yuan, the highest among the recommended stocks, with a significant increase in institutional holdings[16] Risk Factors - Economic recovery and policy support may fall short of expectations, posing risks to industry and individual stock performance[6]

Investment Rating - The report maintains a "Buy" rating for Kingsoft Office (688111) with a target price based on the last closing price of 358.99 [1] Core Insights - Kingsoft Office's Q3 performance exceeded expectations, benefiting from accelerated digital transformation initiatives, with a revenue of 15.21 billion yuan, a year-on-year increase of 25.33%, and a net profit of 4.31 billion yuan, up 35.42% year-on-year [5][6] - The company reported a total revenue of 41.78 billion yuan for the first three quarters, reflecting a 15.21% year-on-year growth, and a net profit of 11.78 billion yuan, which is a 13.32% increase year-on-year [4][5] - The growth in revenue and profit is attributed to the rapid expansion of institutional business and the strong performance of WPS 365 and WPS software segments [5][6] Financial Performance Summary - For Q3, the gross margin was 86.46%, with sales, management, and R&D expense ratios at 19.09%, 8.04%, and 35.24% respectively [5] - WPS personal business revenue reached 8.99 billion yuan, growing 11.18% year-on-year, while WPS 365 revenue surged by 71.61% to 2.01 billion yuan, driven by an expanded customer base [5] - The company has launched WPS AI 3.0, enhancing its product offerings and aiming for long-term growth through increased subscription users and average revenue per user (ARPU) [6] Earnings Forecast and Financial Metrics - Projected revenues for 2025, 2026, and 2027 are 59.94 billion yuan, 70.11 billion yuan, and 81.45 billion yuan respectively, with net profits expected to be 19.82 billion yuan, 23.88 billion yuan, and 27.84 billion yuan [6][7] - The report anticipates a net profit growth rate of 20.48% for 2025 and 20.71% for 2026, with a diluted earnings per share (EPS) forecast of 4.28 yuan for 2025 [7][11]

- The report analyzes the performance of broker-recommended "gold stocks" for November, highlighting top recommendations such as Kingsoft Office, Zijin Mining, and Haier Smart Home, among others [2][14][15] - November's "gold stocks" are categorized into new entries and repeated recommendations, with repeated stocks like Kingsoft Office and Zijin Mining being recommended multiple times, while new entries include Haier Smart Home and China Ping An [2][14][15] - Industry-wise, November's "gold stocks" are concentrated in sectors like electronics (15.1%), power equipment (10.8%), non-ferrous metals (7.8%), and automobiles (6.2%) [2][15][18] - The weighted market capitalization and valuation levels of November's "gold stocks" have decreased, indicating a shift towards value-oriented stocks [3][19][20] - October's "gold stocks" portfolio had an overall return of -2.5%, with new entries outperforming repeated recommendations. The annualized return for all "gold stocks" was 13.8%, higher than the CSI 300 and CSI 500 indices [4][23][20] - The "Open Source Quantitative Preferred Gold Stock Portfolio" for October achieved a return of 2.2%, with an annualized return of 22.9%, outperforming the overall "gold stocks" portfolio and benchmark indices [5][26][28] - The preferred portfolio for November includes stocks like Salt Lake Co., China Life Insurance, and Shanghai Lingang, with a focus on industries such as non-bank finance, machinery, and pharmaceuticals [5][29][30]

Group 1: Liquidity and Scale of Software ETF - The software ETF had an intraday turnover of 6.26% and a transaction volume of 366 million yuan [1] - Over the past month, the software ETF's average daily transaction volume reached 569 million yuan, ranking first among comparable funds [1] - In the past week, the software ETF's scale increased by 19.89 million yuan, also ranking first among comparable funds [1] - Over the last 17 trading days, the software ETF attracted a total of 827 million yuan in inflows [1] Group 2: Performance and Returns - As of October 31, the software ETF's net value has increased by 10.46% over the past three years [1] - The highest monthly return since inception was 39.35%, with the longest consecutive monthly gains being three months and the longest cumulative gain reaching 69.40% [1] - The average return during the months of increase was 10.06% [1] Group 3: Policy and Industry Outlook - The 20th Central Committee's Fourth Plenary Session emphasized high-level technological self-reliance as a key development goal [1] - In the context of major power technology competition, the trend towards domestic core software and hardware is expected to accelerate [1] - The "Suggestions" highlight the need for "extraordinary measures" to promote breakthroughs in key areas such as integrated circuits and foundational software [1] - Collaborative innovation between emerging technologies and foundational software is anticipated to be a significant driver of high-quality technological development during the 14th Five-Year Plan period [1] Group 4: Major Stocks in Software Service Index - As of October 31, 2025, the top ten weighted stocks in the CSI Software Service Index include iFlytek, Kingsoft Office, and Tonghuashun, collectively accounting for 63.09% of the index [2] - The weightings of the top stocks are as follows: iFlytek (13.80%), Tonghuashun (8.49%), Kingsoft Office (7.78%), and others [4] - Investors can also access AI software investment opportunities through the software ETF linked fund (012620) [4]