Core Insights - The A-share market experienced a strong upward trend, with the Shanghai Composite Index breaking through 3900 points, indicating a recovery in market volume [2][5][13] - Key sectors leading the market include metals and mining (+6.96%), coal (+3.00%), public utilities (+2.65%), and electronics (+2.21%), while sectors such as social services (-1.67%) and media internet (-1.23%) saw declines [2][8][14] - The overall market performance showed the Shanghai Composite Index up by 1.32%, Shenzhen Component Index up by 1.47%, and the ChiNext Index up by 0.73%, with total market turnover around 2.67 trillion yuan [2][8][14] Market Analysis - The market sentiment is strong as it is the first trading day after the National Day holiday, with upstream cyclical sectors like non-ferrous metals, steel, and coal leading the gains [8][14] - The technology sector, including solid-state batteries, humanoid robots, and semiconductors, also showed overall growth, driven by breakthroughs in controllable nuclear fusion technology [8][14] - The report highlights that the market is expected to maintain a "slow bull" trend, supported by ample micro liquidity and the influx of long-term capital [13][14] Sector Performance - The report identifies that the AI and robotics sectors are at a critical commercialization window, while traditional sectors face supply surplus issues, necessitating policy support for recovery [14] - The focus on technology growth includes attention to the "Double Innovation" and Hang Seng Technology Index, as well as sectors like lithium batteries, military industry, and chemicals [14] - Value sectors showing improving conditions include metals, gaming, and Hong Kong internet, with a focus on industries with rising revenue growth and gross margins [14]

Core Insights - The Hong Kong stock market experienced a mixed performance on October 9, 2025, with the Hang Seng Index declining by 0.29% to 26,752.59, while the Hang Seng China Enterprises Index rose by 0.07% to 9,530.13, indicating a divergence in index movements [2][7][11] - The overall market turnover reached HKD 386.82 billion, with net inflows from southbound funds amounting to HKD 3.043 billion, reflecting continued interest from mainland investors [2][11] - Sector performance showed a rotation, with the Wind Hong Kong non-ferrous metals sector gaining strength due to rising overseas risk aversion and domestic policy support, while previously high-performing sectors like pharmaceuticals and semiconductors faced profit-taking and declined [2][11] Market Performance - The Hang Seng Technology Index fell by 0.66% to 6,471.34, contributing to the overall market's downward pressure [7][11] - In the A-share market, the Shanghai Composite Index increased by 1.32%, and the CSI 300 rose by 1.48%, indicating a stronger performance compared to the Hong Kong market [7][11] - Among the major sectors, the composite sector (+4.01%), non-ferrous metals (+3.77%), and coal (+2.81%) led the gains, while pharmaceuticals (-5.23%), light industry manufacturing (-5.00%), and electronics (-2.30%) lagged [7][11] Sector Analysis - The non-ferrous metals sector's rise was attributed to increased gold reserves in China and export controls on rare earth technologies, which positively influenced market expectations for supply and demand dynamics [11] - The construction sector saw increased interest due to expectations of accelerated infrastructure investment, leading to a shift in capital from previously high-flying sectors like semiconductors [11] - The report highlights three potential directions for future growth in the Hong Kong market: AI technology and new consumption, sustained inflows from southbound funds, and the impact of monetary policy changes in the U.S. and China [11]

Investment Rating - The report maintains a "Positive" investment rating for the construction and engineering sector [8]. Core Insights - The nuclear power and fusion sectors are experiencing multiple catalysts that have driven recent market gains, with a focus on companies like China Nuclear Engineering and Liebherr for investment opportunities [11]. - Significant developments in nuclear fusion technology include the successful performance testing of the TF magnet by Commonwealth Fusion Systems, which received an $8 million grant from the U.S. Department of Energy, marking a milestone in fusion development [11]. - The demand for electricity is expected to rise due to advancements in AI technology, positioning nuclear power as a stable energy source to meet this growing demand [11]. - China Nuclear Engineering has signed new contracts worth 55.144 billion yuan in nuclear power projects for 2024, reflecting a year-on-year growth of 43.61% [11]. - Liebherr, a high-tech enterprise, has secured a contract worth 226 million yuan for modular construction in nuclear power projects, showcasing the application of modular technology in the industry [11]. Summary by Sections Market Performance - The report highlights a significant increase in Hong Kong nuclear power stocks, with China Nuclear International rising by 22.4% and China General Nuclear Power Mining increasing by 7.82% [6]. Future Outlook - The upcoming 30th IAEA Fusion Energy Conference in Chengdu aims to promote global collaboration in fusion energy research and development [11].

Group 1 - The core viewpoint of the report highlights the performance of major US stock indices during the National Day holiday, with all three indices rising, particularly the Nasdaq, which led the gains [1][3] - In terms of sector performance, healthcare, utilities, and information technology sectors showed strong growth, with healthcare leading at 3.73% [3][4] - The report notes a significant rise in basic metal prices, while international oil prices fell sharply due to expectations of increased supply [1][3] Group 2 - The report discusses the impact of the US government shutdown that began on October 1, which has led to increased market risk aversion and a historical high in gold prices [4][5] - OpenAI's release of its advanced video generation model Sora 2.0 and new partnerships with South Korean companies are expected to boost the technology sector, particularly chip stocks [5] - The pharmaceutical sector is also highlighted, with major US pharmaceutical companies agreeing to lower drug prices, which is anticipated to significantly increase stock prices in the pharmaceutical and biotech sectors [5] Group 3 - The report expresses a bullish outlook for the Chinese stock market, particularly in October, anticipating favorable policies from the upcoming 20th Central Committee meeting [6] - It emphasizes the importance of liquidity in the macroeconomic environment, suggesting that a gradual recovery in fundamentals will likely lead to a bullish stock market [6]

Group 1: Report Summary - The report focuses on the key events during the National Day holiday and the outlook for the bond market. It points out that consumption showed a characteristic of "increasing quantity but decreasing price" during the holiday, with tourism and travel recovering steadily. However, the prices of air tickets and hotels declined year-on-year, and the performance of urban travel, box office, and real estate was weak. The sustainability of consumer recovery and the strength of corporate profit repair remain to be seen. The bond market is likely to have a repair opportunity in the fourth quarter as the fundamentals gradually gain more pricing power [2][6]. Group 2: Holiday Consumption and Travel - **Travel Volume Increase**: From October 1 to 8, the daily average cross - regional population flow reached 304 million person - times, a 6.2% year - on - year increase compared to the 7 - day average of the 2024 National Day holiday, hitting a record high. The international passenger flow from September 30 to October 6 increased by 15.3% year - on - year [5][6]. - **Price Decline**: As of October 7, the 7 - day moving average of domestic aviation fuel - included ticket prices decreased by 3.8% year - on - year, and business route ticket prices generally declined. The RevPAR of domestic hotels from September 22 to 28 decreased by 4% year - on - year, indicating that profitability has not significantly recovered. The box office revenue and average ticket price from October 1 to 7 decreased by 18% and 10% respectively [6]. Group 3: Global Capital Market Performance - **Stock Market**: During the National Day holiday (October 1 - 7), major developed countries' and Hong Kong stock indices strengthened. The Nikkei 225 led the gains, with the Nasdaq and Hang Seng Tech rising by 0.6% and 1.3% respectively. The healthcare and information technology sectors in both US and Hong Kong markets rose significantly [6]. - **Commodities**: Precious metals and non - ferrous metals performed well. London gold and silver rose by 4.0% and 4.9% respectively, and LME copper, zinc, and aluminum rose by 3.5%, 2.5%, and 1.5% respectively [6]. - **Bond Yields**: Most major countries' long - term bond yields rose, while the 10Y US Treasury yield dropped 2BP to 4.14%, mainly due to the expected weakening of employment data and the "shutdown" of the US government [6]. - **Exchange Rates**: The US dollar index rose by 0.8%, the Japanese yen depreciated by 2.7% against the US dollar, and the offshore RMB against the US dollar depreciated slightly by 0.2% [6]. Group 4: Market Transaction Themes - **Interest Rate Cut Expectations**: The unexpected decline in ADP employment data led to increased expectations of an interest rate cut, and concerns about debt sustainability due to the US government "shutdown" caused gold prices to rise and the US stock market to fluctuate. However, it is expected that the debt ceiling issue will be resolved and will not cause continuous market disturbances [6]. - **Japanese Market Outlook**: With the likely victory of Kōichi Tashiro in the Japanese prime ministerial election, the expectation of a Japanese yen interest rate hike has been postponed. The implementation of active fiscal and monetary policies may lead to a market pattern of a strong Japanese stock market, a weak yen, and weak Japanese bonds [6]. Group 5: Bond Market Outlook - As the fundamentals gradually gain more pricing power in the bond market in the fourth quarter, the bond market is likely to have a repair opportunity. However, the sustainability of consumer recovery and the strength of corporate profit repair need further observation as prices have not fully stabilized [2][6].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In September 2025, the manufacturing PMI increased by 0.4 pct month - on - month to 49.8%, slightly exceeding expectations but still below the boom - bust line, while the non - manufacturing PMI dropped by 0.3 pct to 50.0%. The supply - demand relationship needs optimization, and whether production is "front - loaded" remains to be seen. External demand is stable, domestic demand recovers slowly, and the gap between the "purchase price of major raw materials - ex - factory price" continues to widen, putting pressure on enterprise profit restoration. Small - scale enterprise sentiment has significantly improved, and the sentiment of emerging manufacturing industries has also improved. Service industry sentiment has declined, and the construction industry has improved but is still at a relatively low level. The sustainability of PMI restoration needs to be observed. The bond market priced the fundamentals further on the day the data was released, and it is expected that as the pricing power of fundamentals on the bond market gradually increases, the bond market performance in the fourth quarter may be better than that in the third quarter [2][7]. 3. Summary by Related Catalogs 3.1 Event Description - In September 2025, the manufacturing PMI was slightly better than expected but below the boom - bust line, rising 0.4 pct month - on - month to 49.8% (Bloomberg consensus forecast: 49.6%), basically in line with seasonality. The non - manufacturing PMI dropped 0.3 pct to 50.0% (Bloomberg consensus forecast: 50.2%), remaining at a seasonal low. Among them, the service industry PMI dropped 0.4 pct to 50.1%, and the construction industry PMI rose slightly by 0.2 pct to 49.3%, both weaker than seasonality [5]. 3.2 Event Comment - **Manufacturing Industry** - Manufacturing sentiment has moderately recovered, but the supply - demand relationship needs optimization, and whether production is "front - loaded" remains to be seen. In September, the manufacturing PMI improved more than expected, rising 0.4 pct to 49.8%. The production index rose 1.1 pct to 51.9%, reaching a new high since Q2 this year, while the new order index only increased 0.2 pct to 49.7%. The gap between the "production - new order" index widened to 2.2 pct, indicating that the supply recovery intensity may be greater than the demand improvement. Enterprises' willingness to replenish inventory has increased, but there are signs of inventory accumulation, and production may be "front - loaded" [7]. - There are differentiations in external and internal demand and price structure. External demand is stable, domestic demand recovers slowly, and the price indicators have generally improved, but the gap between the "purchase price of major raw materials - ex - factory price" continues to widen, which may still restrict enterprise profit restoration. In September, the purchase price index of major raw materials remained in the expansion range of 53.2%, while the ex - factory price index dropped to 48.2%, and the gap between the two widened to 5.0 pct. External demand remained resilient, with the new export order index rising to 47.8%, while domestic demand recovery was still relatively slow, with the new order index only increasing 0.2 pct to 49.7% [7]. - Small - scale enterprise sentiment has significantly improved, and the sentiment of emerging manufacturing industries has also improved. In September, the PMI of large - scale enterprises reached 51.0%, remaining in the expansion range. Small - scale enterprises improved significantly, with the PMI rising 1.6 pct month - on - month, while the sentiment of medium - scale enterprises declined. In terms of industries, the PMI of the equipment manufacturing and high - tech manufacturing industries remained in the high - sentiment range above 51%, with significant improvements in industries such as automobiles and railway, ship, and aerospace equipment. The PMI of the consumer goods industry also rose to 50.6% [7]. - **Non - manufacturing Industry** - Service industry sentiment has declined, and the construction industry has improved but is still at a seasonal low. In September, the non - manufacturing business activity index dropped 0.3 pct to 50.0%, and the service industry index dropped 0.4 pct to 50.1%. The end of the summer vacation effect is an important factor, with the sentiment of consumer - related industries such as catering and cultural and entertainment significantly declining, while modern service industries such as finance and telecommunications maintained high sentiment. The business activity index of the construction industry rose slightly by 0.2 pct, but the absolute level of 49.3% was still below the boom - bust line, indicating that real estate and infrastructure investment may continue to be under pressure [7]. - **Bond Market Outlook** - The sustainability of PMI restoration needs to be observed. On the day the data was released, the bond market priced the fundamentals further, with the yield of the 10 - year active treasury bond dropping 2 BP. A series of growth - stabilizing policies have been implemented recently, and the investment of 500 billion yuan in new policy - based financial instruments may support infrastructure investment. The expectation of optimizing real estate market regulation policies in many places has increased, but whether the economy will continue to improve in an environment of weak domestic demand and prices remains to be seen. It is expected that as the pricing power of fundamentals on the bond market gradually increases, the bond market performance in the fourth quarter may be better than that in the third quarter [7].

Core Insights - The report highlights a net inflow of 145.4 billion HKD from southbound funds during September 2025, primarily directed towards sectors such as consumer discretionary retail, software services, non-ferrous metals, biopharmaceuticals, and non-bank financials [2][5][14] - The top five sectors receiving the most inflow were: consumer discretionary retail (77.3 billion HKD), software services (11.5 billion HKD), non-ferrous metals (9.3 billion HKD), biopharmaceuticals (8.6 billion HKD), and non-bank financials (8.5 billion HKD) [2][5][14] - Conversely, sectors experiencing the largest outflows included telecommunications services (-3.7 billion HKD), durable consumer goods (-3.7 billion HKD), hardware equipment (-2.8 billion HKD), daily consumer retail (-0.9 billion HKD), and semiconductors (-0.9 billion HKD) [2][5][14] Southbound Fund Inflows - From September 1 to 30, 2025, the net inflow of southbound funds totaled 145.4 billion HKD, with significant contributions from consumer discretionary retail, software services, non-ferrous metals, biopharmaceuticals, and non-bank financials [2][5][14] - The report indicates that the total net inflow for the top five sectors was 115.2 billion HKD, showcasing a strong preference for these industries [2][5][14] Foreign Institutional Fund Flows - During the same period, foreign institutional funds saw a net outflow of 77.1 billion HKD, with notable inflows into hardware equipment, consumer services, media, biopharmaceuticals, and durable consumer goods, totaling 35.6 billion HKD [6][25] - The sectors with the highest inflows from foreign institutions included hardware equipment (16.7 billion HKD), consumer services (12.1 billion HKD), and media (2.8 billion HKD) [6][25] Comparative Analysis - The report also compares the inflow trends of southbound funds and foreign institutional funds, indicating a divergence in sector preferences, with southbound funds favoring consumer discretionary sectors while foreign institutions leaned towards hardware and automotive sectors [6][25][45] - The analysis of the changes in the proportion of holdings in the market capitalization reveals significant shifts in sectors such as media, consumer services, and hardware equipment, indicating evolving investment strategies [25][30]

Group 1 - The Hong Kong stock market showed positive performance during the National Day holiday, with the Hang Seng Index rising by 0.4%, the Hang Seng Tech Index increasing by 1.3%, and the Hang Seng China Enterprises Index up by 0.2% from October 1 to October 6, 2025. The gains were primarily driven by October 2 [2][5][6] - The MSCI Hong Kong Growth Index fell by 0.3%, while the MSCI Hong Kong Value Index decreased by 0.1% during the same period [5][6] - Key sectors that performed well included steel (+5.60%), electronics (+3.90%), non-ferrous metals (+3.78%), and power equipment and new energy (+3.43%), while agriculture, real estate, food and beverage, and consumer services sectors lagged [5][6] Group 2 - Gold and AI narratives emerged as leading themes during the holiday period, with the U.S. government shutdown impacting market sentiment and driving up COMEX gold and silver prices, benefiting the non-ferrous metals sector in Hong Kong [6][7] - The release of the experimental version DeepSeek-V3.2-Exp on September 29, 2025, contributed to the growth of the AI industry chain in China, leading to significant gains for semiconductor leaders and major internet companies in the Hong Kong market [6][7] Group 3 - As of October 6, 2025, the AH premium rate stood at 129.6%, close to the historical average of 127.1% since 2009, showing a significant decline from over 140% in May [7] - The VHSI index remained stable around 21, indicating a steady market environment, while the average daily trading volume in Hong Kong stocks showed an upward trend [7][8] - Short-term liquidity tightened slightly during the holiday period, as indicated by the 3-month HIBOR and overnight HIBOR rates [7][8] Group 4 - Future prospects for the Hong Kong stock market suggest potential for new highs, contingent on three assumptions: continued inflow of southbound capital, the performance of AI technology and new consumption sectors, and the transmission of monetary policy from broad money to broad credit [8] - The report emphasizes that if these conditions are met, the Hong Kong market could see further upward momentum, supported by a rebound in related industries [8]

Investment Rating - The industry investment rating is "Positive" and is maintained [11] Core Viewpoints - The report indicates that while electricity prices and volumes continued to decline in the third quarter, the significant drop in coal prices is expected to lead to positive performance for thermal power operators in northern and parts of eastern and central China [2][6] - Hydropower performance is anticipated to be limited due to weak electricity generation during the main flood season, with a year-on-year decrease of 9.95% in hydropower generation from July to August [7][35] - Nuclear power generation is expected to grow steadily, but performance may vary by province due to differing impacts from declining electricity prices [7][36] - Clean energy utilization hours have decreased nationally, but regions like Fujian, Shanghai, and Guangdong have shown recovery in wind energy utilization hours, leading to strong performance from certain regional new energy operators [8][43] Summary by Sections Thermal Power - The three core factors affecting thermal power profitability are coal prices, electricity prices, and utilization hours. Despite a general decline in electricity prices across provinces, coal prices have significantly decreased, with the average coal price in Qinhuangdao dropping by 175.63 yuan/ton year-on-year [6][20] - The comprehensive coal price drop is expected to reduce thermal power fuel costs by approximately 0.035 yuan/kWh year-on-year, supporting continued improvement in thermal power operations, especially in northern and eastern provinces [6][32] Hydropower - Hydropower generation faced a year-on-year decline of 9.95% due to high base effects and uneven rainfall distribution. However, improved water inflow in September is expected to alleviate some pressure on hydropower performance [7][35] - Major hydropower companies are expected to manage water reservoir operations effectively to mitigate fluctuations in water inflow [35] Nuclear Power - Nuclear power generation is projected to grow by 7.09% year-on-year, supported by increased installed capacity and stable maintenance schedules. However, market price fluctuations may impact performance differently across operators [36][7] Clean Energy - Wind and solar power generation saw significant year-on-year growth of 11.85% and 22.09%, respectively, but utilization hours have decreased. Regional disparities exist, with eastern coastal provinces showing improved wind energy utilization [8][43] - Despite high growth in installed capacity, the overall performance of new energy operators may face pressure due to rising costs and weak electricity prices, although some regional operators are expected to perform well [8][43] Investment Recommendations - The report recommends focusing on quality thermal power operators such as Huaneng International, Datang Power, and Guodian Power, as well as major hydropower companies like Yangtze Power and State Power Investment Corporation. For new energy, it suggests companies like Longyuan Power and China Nuclear Power [9][54]

Investment Rating - The report maintains a "Buy" rating for several key stocks in the financial and manufacturing sectors, including Yuexiu Property, New China Life Insurance, Nanjing Bank, and others [13][18][19][25][35][42]. Core Insights - The report highlights a recovery in industrial profits, with August showing a significant year-on-year profit growth of 20.4%, although revenue growth remains modest at 1.9% [10]. - The real estate sector is under pressure, but there is potential for policy easing to create trading opportunities, particularly for quality developers with low inventory [11]. - Non-bank financials are expected to maintain high growth in Q3, driven by market enthusiasm and performance of leading stocks [14]. - The banking sector is viewed positively, especially for quality city commercial banks, which are expected to offer stable dividends and growth [17]. - The new energy sector is identified as having established a bottom, with a focus on technological advancements and market demand recovery [20]. - The machinery sector is transitioning from traditional industries to growth segments, with a focus on companies with dual growth curves [27]. - The military industry is seen as promising, with investment opportunities in military trade, internal equipment, and civilian conversion [33]. - The light industry is expected to benefit from new consumption trends and overseas growth, with an emphasis on high dividend and low valuation stocks [36]. - The environmental sector presents various investment opportunities across absolute returns, growth, and aggressive strategies [43]. Summary by Sections Macro Overview - The report emphasizes the resilience of demand in Q4, with industrial profit growth driven by state-owned enterprise investment returns [10]. Real Estate - The report notes increasing downward pressure on housing prices in core cities, but anticipates potential policy support for quality developers [11][12]. Non-Bank Financials - The sector is expected to continue its high growth trend, with a focus on leading stocks and insurance companies benefiting from improved return on equity [14][16]. Banking - Quality city commercial banks are highlighted as attractive investments due to their stable earnings and dividend yields [17][18][19]. New Energy - The report identifies a stable outlook for the new energy sector, particularly in solar and storage technologies, with a focus on leading companies [20][23][25][26]. Machinery - The machinery sector is transitioning to growth areas, with recommendations for companies that show strong growth potential [27][30][31]. Military - Investment opportunities are identified in military trade and technology, with a focus on companies leading in military aircraft and related technologies [33][34]. Light Industry - The report highlights growth potential in new consumption and overseas markets, with a focus on companies with strong operational capabilities [36][38][39]. Environmental - The environmental sector is seen as having multiple investment opportunities, particularly in waste management and water services [43][44][50].