- The report highlights the performance of the index enhancement portfolios, where the CSI 500 enhancement portfolio outperformed the benchmark by 1.19% this week, while the CSI 300 enhancement portfolio underperformed the benchmark by 0.52% [2][46][52] - The CSI 500 enhancement portfolio has achieved a cumulative excess return of 53.08% relative to the CSI 500 index since 2020, with a maximum drawdown of -5.73% [46] - The CSI 300 enhancement portfolio has achieved a cumulative excess return of 37.09% relative to the CSI 300 index since 2020, with a maximum drawdown of -5.86% [52] - The report identifies momentum factor as the dominant style factor this week, delivering high excess returns, while beta factor showed significant negative excess returns. High-leverage stocks performed well, whereas residual volatility and non-linear size factors underperformed [2][57][56] - The report mentions the construction of the A-share sentiment index, which is based on market volatility and trading volume changes. The sentiment index includes bottom warning and top warning signals. Currently, the bottom signal indicates bearish sentiment, and the top signal also points to bearish sentiment [32][37][35] - The A-share prosperity index was constructed using the YoY growth of net profit attributable to the parent company of the Shanghai Composite Index as the Nowcasting target. As of October 17, 2025, the index stands at 21.71, up 16.28 compared to the end of 2023, indicating an upward cycle [29][30][31]

Investment Rating - The report recommends a "Buy" rating for several key companies in the construction and infrastructure sectors, including 精工钢构 (Jinggong Steel Structure), 鸿路钢构 (Honglu Steel Structure), 国检集团 (Guojian Group), and others [14]. Core Insights - The construction industry is entering a "stock era," focusing on urban renewal and high-quality construction, driven by the need for green, low-carbon, and smart living environments [1][18]. - Prefabricated construction is identified as a long-term trend, with steel structures expected to show high prosperity due to labor shortages and sustainability requirements [2][21]. - The demand for inspection and testing services is anticipated to peak as the existing building stock ages, with significant market potential estimated at over 20 billion yuan [3][24]. - New infrastructure initiatives, particularly in low-altitude economy and energy sectors, are expected to see rapid growth supported by government policies [4][31]. - The report highlights the strategic importance of regions like Xinjiang and Sichuan, which are set to benefit from increased investment and infrastructure development [10][12][39]. Summary by Sections Construction and Decoration - The construction industry is transitioning from extensive expansion to intensive development, focusing on urban renewal and infrastructure maintenance [1][18]. - The urbanization rate is projected to reach 67% by the end of 2024, indicating a shift in investment focus [1][18]. Prefabricated Construction - The labor force in construction is declining, with the number of construction workers dropping to 42.86 million in 2024, a significant decrease from previous years [2][21]. - The average monthly salary for construction workers is expected to rise to 5,743 yuan in 2024, reflecting a 26% increase since 2019 [2][26]. - The report sets targets for the penetration rate of prefabricated construction at 30% by 2025 and 40% by 2030 [2][21]. Inspection and Testing - The existing building area is projected to reach approximately 38.4 billion square meters by the end of 2024, leading to a surge in demand for building inspections [3][24]. - The establishment of a housing pension system and regular inspection policies in various cities is expected to drive the inspection market [3][24]. New Infrastructure - The low-altitude economy is projected to grow to 2 trillion yuan by 2030, with related infrastructure investments estimated at 300-400 billion yuan [4][31]. - Government policies are increasingly supporting the development of low-altitude infrastructure, with significant funding expected [4][31]. Strategic Regions - Xinjiang is highlighted for its robust economic growth and infrastructure investment, with over 800 billion yuan allocated for coal chemical projects by 2025 [12][41]. - Sichuan is identified as a strategic region for national development, with ongoing support for infrastructure projects [10][39].

Investment Rating - The report maintains a "Buy" rating for several companies in the non-ferrous metals sector, including Shanjin International, Chifeng Jilong Gold Mining, and Luoyang Molybdenum [5][6]. Core Views - The report highlights that the precious metals market is experiencing price fluctuations due to tariff disturbances, but the long-term bullish trend remains intact. The U.S. government shutdown and increased tariffs on China are expected to boost gold's safe-haven demand [1]. - For industrial metals, copper prices are supported by supply disruptions, while macroeconomic uncertainties may cause short-term volatility. The aluminum market is expected to see high price fluctuations due to rising interest rate expectations and inventory reductions [2]. - In the energy metals sector, lithium prices are projected to remain strong due to increased supply and demand, particularly in the electric vehicle market. However, the silicon market is facing oversupply issues, leading to price fluctuations [3]. Summary by Sections Precious Metals - Tariff disturbances have led to price volatility in gold and silver, but the long-term bullish trend is expected to continue. The report suggests strategic allocation in precious metals [1]. - Recommended companies include: Xinyi Silver, Shengda Resources, and Zijin Mining [1]. Industrial Metals - **Copper**: Prices are supported by supply disruptions from major mines, with a projected increase in price center due to mid-term supply constraints. However, short-term fluctuations may occur due to trade tensions [2]. - **Aluminum**: The market is experiencing high price volatility, influenced by interest rate expectations and inventory levels. The report suggests monitoring inventory accumulation [2]. Energy Metals - **Lithium**: The market is showing strong performance with supply and demand both increasing. The report indicates that lithium prices are likely to remain strong in the short term [3]. - **Silicon**: The market is facing oversupply, leading to price fluctuations despite being in a traditional demand season [3]. Key Companies - The report identifies key companies to watch, including: Luoyang Molybdenum, China Hongqiao, and Tianqi Lithium [5][6].

Investment Rating - The report maintains a "Buy" rating for several companies in the textile and apparel industry, including Shenzhou International, Huayi Group, and Anta Sports [9][27]. Core Insights - Fast Retailing reported strong performance for FY2025, with revenue increasing by 9.6% to 3,400.5 billion JPY, operating profit rising by 13.6% to 551.1 billion JPY, and net profit growing by 16.4% to 433.0 billion JPY [1][14]. - The company anticipates a revenue growth of 10.3% for FY2026, projecting revenue to reach 3,750.0 billion JPY and operating profit to increase by 10.7% to 610.0 billion JPY [1][14]. - Inventory levels increased by 8% to 510.9 billion JPY, attributed to higher stock of core items and expansion efforts in North America, Europe, and Southeast Asia [1][14]. Summary by Sections Business Performance - Uniqlo Japan's revenue grew by 10.1% to 1,026.0 billion JPY, with operating profit up by 17.5% to 181.3 billion JPY, and same-store sales increasing by 8.1% [20]. - Overseas Uniqlo business saw a revenue increase of 11.6% to 1,910.2 billion JPY, with operating profit rising by 10.6% to 305.3 billion JPY, despite a 4% decline in Greater China [20]. - GU business revenue grew by 3.6% to 330.7 billion JPY, but operating profit decreased by 12.6% to 28.3 billion JPY due to rising personnel costs [21]. Market Trends - The textile and apparel sector outperformed the market, with the textile manufacturing sector down by 1.46% and brand apparel down by 0.11% [32]. - Key stocks such as Shenzhou International and Anta Sports are highlighted for their strong fundamentals and growth potential [25][27]. Recommendations - The report recommends focusing on companies with strong performance and growth potential, such as Anta Sports, Li Ning, and Xtep International, with respective PE ratios of 16x, 17x, and 11x for 2025 [25][26]. - It also suggests monitoring companies like Hailan Home and Luolai Lifestyle for their business expansion and resilience in the current market environment [26].

Investment Rating - The report maintains a "Buy" rating for the power sector, emphasizing the potential for upward performance in specific stocks [5][9]. Core Insights - The report highlights that Q3 performance for thermal power is improving, with coal prices rebounding, which enhances expectations for stable electricity prices. The average coal price at ports was 673 RMB/ton in Q3, down 180 RMB/ton year-on-year, but has recently increased to 739 RMB/ton [5][14]. - Hydropower is expected to benefit from improved autumn rainfall, with significant increases in inflow and outflow at the Three Gorges Dam, showing a 48.15% and 102.78% year-on-year increase respectively [5][14]. - Adjustments in tax policies for wind and nuclear power are noted, with offshore wind power receiving a 50% VAT refund policy from November 1, 2025, while onshore wind will no longer enjoy VAT refunds [3][4][14]. Summary by Sections Industry Overview - The Shanghai Composite Index fell by 1.47% and the CSI 300 Index decreased by 2.22% during the week of October 13-17, 2025. The CITIC Power and Utilities Index decreased by 0.43%, outperforming the CSI 300 by 1.79 percentage points [5][63]. Thermal Power - Q3 results for thermal power are on an upward trend, with a notable increase in expected profits for companies like Jiantou Energy, which anticipates a 232% increase in net profit [5][14]. - The report emphasizes the importance of coal price stability for maintaining electricity price expectations for 2026 [5][14]. Hydropower - The report notes significant improvements in hydropower due to favorable autumn rainfall, with a focus on the increased inflow and outflow at the Three Gorges Dam [5][14]. Wind and Nuclear Power - The report discusses the new tax policies affecting wind and nuclear power, highlighting the competitive advantage of offshore wind power due to the new VAT refund policy [3][4][14]. Key Stocks - The report recommends focusing on specific stocks within the thermal power sector, including Huaneng International, Huadian International, and others, as well as emphasizing the value of hydropower investments [5][9].

Investment Rating - The report maintains an "Increase" rating for the food and beverage industry, indicating a positive outlook for the sector [5]. Core Insights - The white liquor sector is expected to stabilize, with a focus on product and channel transformation, highlighting both short-term and long-term investment opportunities [2]. - The consumer goods sector is facing pressure in Q3, but health-oriented innovations are emerging as new opportunities, with specific companies showing strong growth potential [4]. Summary by Sections White Liquor - The autumn sugar exhibition indicated a stabilization in sales, with regional brands showing more activity compared to national brands. The demand is expected to gradually improve, with stable pricing trends [2]. - Major liquor companies are maintaining strategic focus while promoting product and channel innovations, suggesting a long-term value in the sector [2]. Beer and Beverage - A strategic partnership between China Resources Beer and Guyue Longshan was announced, aiming to develop a cross-category product. The beer sector is transitioning from peak to off-peak season, with a focus on restaurant recovery and sales structure [3]. - Unification Enterprises reported a revenue increase in September, indicating resilience in the beverage sector despite competitive pressures [3]. Food Sector - The food and beverage industry faced a 12.3% decline in offline sales in Q3, with health-oriented products gaining traction as a response to changing consumer preferences [4]. - Innovations in food products are increasingly focusing on health, with new trends emerging in low-GI and functional foods, suggesting potential growth areas for investment [4].

Investment Rating - The report maintains an "Increase" rating for the industry [6] Core Insights - The AI-driven demand is significantly boosting the storage market, particularly for NAND Flash, as it accelerates the transition from HDD to high-capacity Nearline SSDs [1][14] - Samsung's Q3 2025 performance exceeded expectations, with a revenue increase of approximately 9% to 86 trillion KRW (about 85 billion USD), reaffirming its position as the largest storage supplier globally [2][21] - The ongoing price surge in storage products is attributed to tight supply and increased demand driven by AI applications, with significant price hikes observed across various storage categories [3][25][36] Summary by Sections 1. Storage Price Surge and Market Dynamics - NAND Flash suppliers are rapidly transitioning to large-capacity Nearline SSDs due to a significant supply gap in the HDD market, which is expected to enhance NAND demand further [1][14] - The average selling price (ASP) per GB for HDDs has risen from 0.012-0.013 USD to 0.015-0.016 USD, diminishing HDD's cost advantage [15] - The SSD market is experiencing a substantial price increase, with NVME3.0 and NVME4.0 capacities seeing price hikes between 11%-26% and 13%-24%, respectively [25][30] 2. Company Performance and Future Outlook - Samsung's Q3 2025 operating profit reached 12.1 trillion KRW (approximately 85 billion USD), driven by strong demand for DRAM and NAND products [2][21] - Samsung plans to mass-produce HBM4E by 2027, which is expected to significantly enhance data transfer speeds and energy efficiency compared to current products [21] 3. End-User Impact and Product Pricing - The price increases in storage components are reflected in the pricing of new mobile devices, such as the vivo X300 series, which has seen price increases of 100-300 CNY compared to its predecessor [4][37] - The supply constraints in NAND and LPDDR5X products are leading to tighter availability for mobile devices, prompting manufacturers to adjust pricing strategies accordingly [36][37] 4. Industry Events and Innovations - The OCP Global Summit showcased numerous AI-related innovations, indicating a strong focus on AI infrastructure and storage solutions [5] - TSMC reported a Q3 2025 revenue of 33.1 billion USD, with a projected annual revenue growth of nearly 35%, driven by advanced process technologies and AI demand [9]

Investment Rating - The report maintains a "Buy" rating for key companies in the optical module industry, including Zhongji Xuchuang and Xinyi Sheng [5][11]. Core Insights - The optical module market is experiencing rapid growth driven by the increasing demand for AI computing power, with price changes reflecting a healthy industry development rather than simple supply-demand dynamics [1][23]. - Optical modules are classified as technology-driven products rather than standard commodities, with their pricing following a unique industry pattern of "new product high gross margin → smooth decline after scaling → technological iteration" [2][24]. - Price reductions in optical modules do not necessarily lead to decreased profitability for companies; instead, leading firms can maintain or even enhance their profit levels through scale effects, process improvements, and supply chain optimization [3][25]. - The competition in the optical module industry has shifted focus from individual product pricing to continuous innovation and comprehensive solution offerings, which form the core competitive advantage of companies [4][27]. Summary by Sections Investment Strategy - The report recommends focusing on the optical communication sector, highlighting key players such as Zhongji Xuchuang, Xinyi Sheng, and Tianfu Communication, among others [9][14]. - It emphasizes the importance of technological iteration and product upgrades as the main growth drivers in the optical module industry [30]. Market Review - The communication sector has seen a decline, with operators performing relatively better compared to other segments [18][19]. - The report notes that the optical communication index has decreased by 6.7%, indicating challenges within the sector [22]. Optical Module Market Dynamics - The report outlines that the iteration cycle for 800G and 1.6T optical communication has shortened from 3-4 years to 1-2 years, with significant shipments expected for 800G and gradual ramp-up for 1.6T [2][24]. - The unique pricing model of optical modules is characterized by a predictable decline in prices as technology matures and production scales up [2][24]. Profitability and Competitive Barriers - Leading optical module companies have shown an ability to increase gross and net profit margins despite price reductions, supported by cost control and technological advancements [3][25]. - The report highlights that the core competitive barriers in the optical module industry are built around product upgrades and comprehensive capabilities rather than just pricing [4][27]. Recommendations - The report continues to favor the computing power sector and recommends investing in leading optical module companies while also suggesting attention to emerging players in the domestic computing power supply chain [8][29].

Investment Rating - The report maintains an "Overweight" rating for the construction materials sector [4] Core Views - The construction materials sector is experiencing weak fundamentals, with a focus on policy catalysts during the window period [1] - The government is expected to alleviate fiscal pressure through increased local government debt issuance, which may support effective investment and accelerate municipal projects [2] - The glass industry is facing supply-demand contradictions, but self-regulated production cuts in photovoltaic glass may ease these issues [2] - The cement industry is in a phase of weak recovery, with increased production cuts and a focus on supply-side improvements [2] - Structural opportunities are emerging in the fiberglass sector as prices stabilize and demand from wind power increases [2] Summary by Sections Market Overview - From October 13 to October 17, 2025, the construction materials sector (SW) declined by 2.17%, with cement down 1.23%, glass manufacturing down 1.65%, fiberglass down 3.43%, and renovation materials down 2.50% [1][11] - The net capital inflow for the construction materials sector was -2.252 billion yuan [1] Cement Industry Tracking - As of October 17, 2025, the national cement price index was 343.2 yuan/ton, up 0.23% week-on-week, with cement output at 2.5285 million tons, up 7.71% [3][16] - The capacity utilization rate for cement clinker kilns was 54.36%, down 2.87 percentage points from the previous week [16] Glass Industry Tracking - The average price of float glass as of October 16, 2025, was 1300.97 yuan/ton, with a week-on-week increase of 0.87% [6] - Inventory levels for float glass increased significantly, indicating a need for market adjustments [6] Fiberglass Industry Tracking - The fiberglass price war has ended, with prices stabilizing and demand from wind power projects expected to rise [2][7] Consumer Building Materials - Consumer building materials are benefiting from favorable second-hand housing transactions and consumption stimulus policies, with significant potential for market share growth [2] Key Stocks - Recommended stocks include: - North New Materials (Buy) [8] - Weixing New Materials (Hold) [8] - Sankeshu (Buy) [8] - China Jushi (Buy) [8] - Yinlong Co. (Buy) [8] - Puren Co. (Buy) [8]

Investment Rating - The report maintains a "Buy" rating for Chow Tai Fook [6] Core Views - Chow Tai Fook's FY2026Q2 performance shows a positive trend with a 4.1% year-on-year growth in group RSV, aligning with expectations [1] - The company is expected to achieve a revenue growth of approximately 3% for FY2026, with a projected net profit increase of 32% to HKD 7.8 billion [3] Summary by Sections Domestic Performance - In FY2026Q2, Chow Tai Fook's same-store sales in mainland China turned positive, with a 7.6% year-on-year increase in direct same-store sales [1] - The average selling price of gold jewelry increased by 23% year-on-year, driven by a significant rise in gold prices, which were up 46% compared to the same period in 2024 [1][2] - Excluding price factors, same-store sales volume declined by 8.6%, but the decline was less severe than in Q1, attributed to new product launches and the optimization of existing product lines [2] E-commerce Growth - Chow Tai Fook's e-commerce sales in mainland China grew by 28.1% year-on-year, accounting for 6.7% of total sales and 15.5% of total volume [2] Hong Kong and Macau Performance - In FY2026Q2, RSV in Hong Kong and Macau increased by 11.4%, with same-store sales growth of 6.2% in Hong Kong and 17.3% in Macau [3] Financial Projections - The report forecasts Chow Tai Fook's net profit for FY2026 to reach HKD 7.8 billion, with a PE ratio of 21 times [3] - Projected net profits for FY2026-2028 are HKD 78.06 billion, HKD 88.30 billion, and HKD 98.78 billion respectively [3]