Investment Rating - Industry Rating: Outperform the Market (maintained rating) [7] Core Insights - The report highlights the introduction of a new educational product model by the company, which integrates AI dual-teacher systems, super training fields, and companion robots, marking a significant milestone in the education sector [2][4]. - The super training field is designed with three essential elements: AI super teachers, interactive modeling, and blended implementation, aiming to enhance learning outcomes and address parental concerns [3][6]. - The market response to the new products has been strong, with sales exceeding 300 million within just six days of launch, indicating a high demand for AI-driven educational solutions [4]. Summary by Sections New Product Launch - The company launched the "super training field" and "companion robot," which are positioned to redefine educational paradigms through AI integration [2][5]. - The companion robot serves multiple roles, including a tutor and a life assistant, enhancing the learning experience by providing emotional support and personalized engagement [5]. Market Demand and Validation - The rapid sales growth of the new AI products demonstrates a strong market demand for effective and convenient educational solutions that alleviate parental burdens [4][6]. - The report suggests that AI has the potential to significantly optimize educational processes, benefiting both students and teachers by improving resource delivery and personalized instruction [6]. Future Outlook - The report anticipates that the "AI + Education" sector is entering a phase of technological benefits and ecosystem restructuring, with the company's innovations leading the way in measurable educational effectiveness [7][10]. - It is recommended to pay attention to opportunities within the education sector as AI applications become more prevalent and impactful [10].

Group 1 - The report highlights a market correction in the bond market, with credit products showing varying degrees of resilience. The "see-saw" effect between stocks and bonds continues, leading to a decline in the bond market and some profit-taking, particularly in perpetual bonds [2][9]. - Credit products generally follow interest rate adjustments, but their decline is less pronounced than that of interest rates. The credit spread has narrowed passively, with perpetual bonds experiencing a greater decline compared to other credit types [2][9]. - The report notes that the yield on short-term credit products fluctuated, with a passive widening of credit spreads by approximately 5 basis points over the week [2][9]. Group 2 - During the bond market adjustment period, trading volumes for credit bonds have decreased, particularly for perpetual bonds. However, insurance and other institutional investors have shown a notable increase in their holdings of high-quality credit bonds [3][16]. - The report suggests that the market may not need to worry excessively about the current credit market conditions, as the marginal impact of the stock-bond see-saw effect is expected to diminish. The report anticipates a potential re-entry point for investors as the credit spreads adjust [4][27]. - The report recommends focusing on 2-year duration assets for portfolio allocation, as well as considering mid-to-high grade 5-year perpetual bonds, which have seen a decline in yields above 1.9%, indicating potential buying interest [4][29][34].

Investment Rating - Industry Rating: Outperforming the market (maintained rating) [6] Core Viewpoints - The overseas computing power industry chain remains highly prosperous and has not been impacted by DeepSeek and trade frictions, with stronger fundamental resonance in the related industry chain. The AI industry is viewed as a key investment theme for the year, with expectations for continued high prosperity in the AI sector and the AIDC industry chain [2][19] - The report suggests that 2025 may become a pivotal year for domestic AI infrastructure competition and application development, with ongoing advancements in AI in both China and the US [2][19] - The government work report has included "deep-sea technology" for the first time, indicating a positive trend for the offshore wind and submarine cable industry starting in 2025 [2] Summary by Sections Artificial Intelligence and Digital Economy - Key recommendations for optical modules and optical devices include: Zhongji Xuchuang, Xinyi Sheng, Tianfu Communication, and Yuanjie Technology. Suggested stocks include: Guangxun Technology, Suosi, Dingtong Technology, and others [4][22] - For switch server PCBs, key recommendations are: Hudian Co., ZTE, and Unisplendour. Suggested stocks include: Shengke Communication, Ruijie Networks, and others [4][22] - Low valuation and high dividend stocks in cloud and computing IDC resources include: China Mobile, China Telecom, and China Unicom [4][22] - For AIDC and cooling solutions, key recommendations are: Yingweike, Runze Technology, and others. Suggested stocks include: Shenling Environment and others [4][22] - For AIGC applications and edge computing power, key recommendations are: Guanghe Communication, Meige Intelligent, and Yiyuan Communication. Suggested stocks include: Cai Xun Co., Mengwang Technology, and others [4][23] Offshore Wind and Submarine Cable - Key recommendations for offshore wind and submarine cable include: Hengtong Optic-Electric, Zhongtian Technology, and Dongfang Cable [5][24] - The report emphasizes the recovery of overseas markets and recommends focusing on leading companies in the submarine cable industry [3][20] Satellite Internet and Low-altitude Economy - The acceleration of national defense informatization and low-orbit satellite development is highlighted, with key recommendations including: Huace Navigation and Haige Communication. Suggested stocks include: Chengchang Technology, Zhenlei Technology, and others [6][25] Market Performance Review - The communication sector rose by 2.19% during the week of July 7-11, outperforming the CSI 300 index by 1.37 percentage points [26] - Notable individual stock performances include: Hengbao Co. and Changxin Bochuang, which saw significant increases [27][29]

Group 1: Overview of Major Assets - In Q2 2025, A-shares rebounded to 3400 points, with bond rates declining and commodities experiencing fluctuations after a significant drop [2][10] - The A-share market saw broad index gains, with micro-cap stocks surging, led by financial and growth sectors, particularly in defense, military, and banking industries [3][14] - The bond market experienced a narrow decline in yields, with credit spreads initially widening before stabilizing [30][34] - Commodity markets showed mixed performance, with gold fluctuating at high levels and oil prices experiencing a rise followed by a decline [32][46] - Global stock indices mostly rose, with the Nasdaq leading at a 17.7% increase, while the AH premium index fell to a five-year low [2][10] Group 2: A-share Market Dynamics - The A-share market's fundamentals showed weakness in Q2, with three major economic indicators declining for two consecutive months [3][14] - Macro liquidity indicators indicated a slight decrease in social financing, with a reduction in reserve requirements and interest rates implemented in May [3][14] - Micro-funding trends showed fluctuations in southbound capital and ETF performance, with a notable increase in newly established funds in June [3][14] - The industry landscape highlighted a resurgence in the "lipstick economy" and a growing trend in innovative pharmaceuticals, indicating a competitive edge in global markets [3][14] Group 3: International Market Influences - The tariff situation led to increased global uncertainty, with liquidity risks observed in early April, followed by stabilization in May as tariff negotiations eased [4][19] - The U.S. economy faced rising inflation and potential stagflation risks, with inflation expectations reaching new highs in May [4][20]

Report Investment Rating The report does not mention the investment rating of the industry. Core Viewpoints - Tariff risks have intensified, leading to a collective decline in US stocks, an upward trend in US Treasury yields, a rebound in the US dollar, and increases in copper, gold, silver, and oil prices [1][9][10]. - Fed officials' hawkish stances have cooled the market's expectations for interest rate cuts [2][24]. - Trump's tariff policies have been the focus this week, with data indicating that tariffs were effectively implemented from May to June [3][30]. - The overall overseas economic situation shows mixed trends, with changes in recession probabilities, employment, demand, production, shipping, prices, and financial conditions [4][5]. Summary by Directory 1. Overseas Market Weekly Review - **Equity**: US stocks fell collectively due to tariff impacts, while European stocks rose. The S&P 500, Dow, and Nasdaq dropped by 0.31%, 1.02%, and 0.08% respectively. The German DAX, Eurozone STOXX, and London FTSE 100 increased by 1.97%, 1.79%, and 1.34% respectively [9]. - **Foreign Exchange**: The US dollar rebounded, with the dollar index rising 0.91%. The euro, yen, and yuan against the dollar decreased by 0.7%, 2.0%, and increased by 0.1% respectively [9]. - **Interest Rates**: US Treasury yields continued to rise due to inflation concerns, lower - than - expected jobless claims, and hawkish Fed officials. The 2Y and 10Y US Treasuries rose by 2BP and 8BP respectively [10]. - **Commodities**: Copper prices soared, and gold, silver, and oil prices also increased. COMEX copper rose 9.5%, WTI crude oil rose 3.4%, and COMEX silver and gold rose 6.9% and 1.1% respectively [10]. 2. Overseas Policies and Key News 2.1 Overseas Central Bank Dynamics - Fed officials' stances were hawkish. Some believed that the impact of tariffs would be fully felt later this year or early next year, and new tariff threats might delay interest rate cuts [2][24]. - Market expectations for interest rate cuts cooled. As of July 12, the probability of a rate cut by September was 60.4% (down from 69.4% a week ago), and the expected number of rate cuts in 2025 decreased from 2.25 to 2.01 [2][24]. 2.2 Trump Policy Tracking - **Tariff Announcements**: Trump announced "Reciprocal Tariffs 2.0" for 25 countries or regions on August 1, with different tariff rates for each. He also announced a 50% tariff on copper starting August 1 and threatened a 200% tariff on pharmaceuticals [3][30]. - **Tariff Implementation Data**: In June, US tariff revenue reached $27 billion, a 301% year - on - year increase. In May, the average effective tariff rate was 6.95%, up 3.25 percentage points from January, and the effective tariff on China was 45.6%, up 34.7 percentage points from January [3][30]. 3. Overseas Economic Fundamental High - Frequency Tracking 3.1 Overall Prosperity - The probability of a US recession was 35% (down from 37.5% a week ago), and the eurozone recession probability remained at 30%. The US weekly economic activity index rose, while Germany's declined [4][42]. - The Fed's expectations for US Q2 economic growth remained unchanged [46]. 3.2 Employment - The number of initial jobless claims decreased to 227,000, lower than expected and declining for the fourth consecutive week. The number of continued unemployment benefit recipients rose slightly to 1.965 million [51]. 3.3 Demand - US retail sales increased, with the Redbook commercial retail sales annual rate rising from 4.9% to 5.9%. Airport security check - in numbers decreased but were higher than last year, and railway transportation volume declined [55]. - Mortgage interest rates rose slightly, and real estate market activity rebounded [55]. 3.4 Production - The US production sector remained highly prosperous. Crude steel capacity utilization and production were higher than last year, while refinery capacity utilization was slightly lower [62]. 3.5 Shipping - International freight indicators showed mixed trends. The Baltic Dry Index rose 15.8%, and the Panamax Freight Index fell 22.4%. The Drewry World Container Freight Index (WCI) dropped 8.5% [65]. - Export demand from Ningbo and Shanghai continued to decline [67]. 3.6 Prices - US retail gasoline prices rose 0.29% to $3.157 per gallon. Inflation expectations in the swap market increased, with the 1 - year inflation swap rising 0.21 percentage points to 3.37% and the 2 - year inflation swap rising 0.11 percentage points to 2.93% [69]. 3.7 Financial Conditions - US financial pressure decreased. The OFR US Financial Stress Index fell to - 1.045, and the CCC high - yield bond credit spread decreased to 8.53%. The SOFR - ON RRP spread averaged 8.0bp [71]. 4. Next Week's Overseas Important Event Reminders Next week, key overseas events include US inflation data (CPI, PPI, import price index), US retail sales, and the US stock earnings season [76].

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The convertible bond market has reached a relatively high historical level in terms of index and valuation. However, currently, the remaining term of outstanding convertible bonds has shortened, the space for new bond issuance is limited, and issuers have a strong tendency to force redemption, putting pressure on the price ceiling of convertible bonds. If the supply of new bonds continues to shrink, there may be a risk of capital withdrawal on the demand side, which will also affect the high valuation of convertible bonds. On the positive side, the equity market is expected to continue its upward trend this year, and the small - cap style is likely to remain dominant, which is beneficial to the convertible bond market [34]. - It is recommended to focus on clause games based on the remaining term and performance and financial pressure. Low - priced and weakly - qualified convertible bonds have certain cost - effectiveness. It is also advisable to follow the underlying stocks and pay attention to industries with improved supply - demand patterns and expected performance recovery, as well as individual bonds in these industries [34]. - In the short - term, the stock market is expected to see a weak resonance between the domestic economic fundamentals and the capital market. The issuance pressure of convertible bonds is not expected to be high, but attention should be paid to the risk of valuation correction. Clause - wise, it is recommended to continue to focus on the game space of downward revisions and be vigilant against forced redemption risks, and also pay appropriate attention to short - term game opportunities for near - maturity convertible bonds [35]. 3. Summary According to Related Catalogs 3.1. 1. 转债周度专题与展望 (Convertible Bond Weekly Special Topic and Outlook) 1.1. 对比 2021，转债何去？ (Comparing with 2021, Where Are Convertible Bonds Heading?) - As of this Friday, the China Securities Convertible Bond Index closed at 4,508.48 points, reaching a 10 - year high. The median price of convertible bonds exceeded 125.82 yuan. This year, the index has risen by 8.75%, outperforming the Wind All - A Index. In 2021, the convertible bond market also outperformed the equity market, with the China Securities Convertible Bond Index and the Wind All - A Index rising by 18.48% and 9.17% respectively [11]. - In 2021, the outperformance of convertible bonds was due to three main factors: at the underlying stock level, the small - cap stocks led the rise in the equity market, and convertible bonds corresponding to small - cap stocks in dominant industries such as new energy, semiconductors, and cyclical industries had a structural advantage; at the valuation level, positive expectations for the equity market and high new - bond subscription returns boosted market enthusiasm, and institutional investors increased their positions in convertible bonds, leading to an overall upward shift in the valuation center; at the clause level, during the equity market correction in Q1 2021, some convertible bonds proposed downward revisions, enhancing investors' confidence in the price - repair function of the downward - revision clause. Later, high - quality convertible bonds announced no early redemption after triggering forced redemption, removing the "invisible ceiling" for bond prices [13][28]. - Currently, the convertible bond market is facing price - ceiling pressure due to issuers' strong tendency to force redemption. If new - bond supply shrinks, there may be a risk of capital withdrawal on the demand side. However, the upward trend of the equity market and the dominance of the small - cap style are beneficial to the convertible bond market. It is recommended to focus on clause games and consider low - priced and weakly - qualified convertible bonds, and also follow the underlying stocks and pay attention to industries with improved supply - demand patterns and expected performance recovery [34]. 1.2. 周度回顾与市场展望 (Weekly Review and Market Outlook) - This week, the market showed a strong upward trend, breaking key points. The "anti - involution" sectors were popular. Different days of the week had different market performances, with various sectors leading the rise or fall on different days [35]. - For the stock market, the current valuation of the A - share market has recovered. Policies such as large - scale equipment renewal and consumer goods trade - in are expected to boost domestic demand, while export growth may decline. A weak resonance between the domestic economic fundamentals and the capital market is expected to gradually start. For convertible bonds, considering the impact of refinancing policies, the issuance pressure is not expected to be high. The return of incremental funds has driven the valuation to a relatively high historical level, and attention should be paid to the risk of valuation correction. It is also recommended to focus on the game space of downward revisions, be vigilant against forced redemption risks, and pay appropriate attention to short - term game opportunities for near - maturity convertible bonds [35]. - Industries to focus on include popular themes such as AI computing power, humanoid robots, intelligent driving, low - altitude economy, data elements, and satellite Internet of Things; low - level science and technology growth sectors such as semiconductors and innovative drugs; sectors with expected recovery in domestic demand such as real estate, chemicals, and consumer electronics; and high - dividend sectors such as central state - owned enterprises, "Belt and Road" - related themes, and public utilities, petrochemicals, and precious metals [36]. 3.2. 2. 转债市场周度跟踪 (Weekly Tracking of the Convertible Bond Market) 2.1. 权益市场收涨，地产钢铁非银领涨 (The Equity Market Closed Higher, with Real Estate, Steel, and Non - Banking Financial Sectors Leading the Rise) - This week, major equity market indices closed higher. The market style was more inclined towards small - cap value. Among the Shenwan industries, 27 industries' indices rose, and 4 industries fell. Real estate, steel, and non - banking financial industries led the rise, while coal, banking, and the automobile industry were among the top decliners [41][44]. 2.2. 转债市场大涨，百元溢价率微降 (The Convertible Bond Market Rose Sharply, and the 100 - yuan Premium Rate Slightly Declined) - This week, the convertible bond market closed higher. The average daily trading volume increased. Among industries, 28 industries' convertible bonds rose, and only the banking convertible bonds fell. Most individual convertible bonds rose. The price median of convertible bonds increased, and the number of low - priced convertible bonds decreased. The weighted conversion value of the whole market increased, and the premium rate decreased [46][53][55]. 2.3. 不同类型转债高频跟踪 (High - Frequency Tracking of Different Types of Convertible Bonds) 2.3.1. 分类估值变化 (Changes in Classified Valuations) - This week, the valuation of equity - biased convertible bonds significantly increased. The valuations of convertible bonds with par values in the ranges of 0 - 80 yuan, 90 - 100 yuan, and 100 - 110 yuan decreased, while those of other par - value convertible bonds increased, especially those in the 80 - 90 yuan and 110 - 120 yuan ranges. The valuations of convertible bonds in most rating categories and size segments decreased. Since the beginning of 2024, the conversion premium rates of equity - biased and balanced convertible bonds have rebounded from their lows [63]. 2.3.2. 市场指数表现 (Market Index Performance) - This week, convertible bonds of all ratings rose. Since 2023, low - rated convertible bonds have shown weaker anti - decline attributes and greater rebound strength compared to high - rated ones. This week, convertible bonds of all sizes rose. Since 2023, small - cap and small - to - medium - cap convertible bonds have achieved relatively high returns [73][75]. 3.3. 3. 转债供给与条款跟踪 (Tracking of Convertible Bond Supply and Clauses) 3.1. 本周一级预案发行 (This Week's Primary Issuance Plans) - This week, 2 new convertible bonds were listed, and 5 were issued but not yet listed. The first - day closing prices and conversion premium rates of the newly - listed bonds were reported. Five convertible bonds passed the primary approval this week, with a total of 3 bonds being accepted by the exchange. From the beginning of 2023 to July 11, 2025, there were 86 convertible bond issuance plans in total, with a total scale of 137.972 billion yuan [79][80]. 3.2. 下修&赎回条款 (Downward Revision and Redemption Clauses) - This week, 6 convertible bonds were expected to trigger downward revisions, 13 announced no downward revisions, and 2 actually had downward revisions. Also, 8 convertible bonds were expected to trigger redemption, 3 announced no early redemption, and 4 announced early redemption. As of the end of this week, 4 convertible bonds were in the put - option subscription period, and 23 were in the company's capital - reduction settlement subscription period [84][88][90].

Market Insights - The market index experienced a breakthrough rise this week, but there was a style switch, with mid-cap indices performing the strongest while the Shanghai 50 lagged behind [1][11] - Leading sectors included real estate, steel, non-bank financials, and construction materials, which are characterized as "cold" industries [1][11] - Historical analysis from 2014H2 and 2006H2 indicates that after the Shanghai index reaches new highs, new account openings tend to rebound, suggesting a potential style switch [1][12][19] Domestic Economic Indicators - In June, the Consumer Price Index (CPI) returned to positive year-on-year growth at 0.1%, while the Producer Price Index (PPI) saw a wider decline at -3.6% [3][24] - Manufacturing activity showed signs of recovery with the Manufacturing PMI rising to 49.7, although it remains in the contraction zone [3][34] - The supply side continued to improve, with new orders and production indices both showing marginal increases [3][34] International Economic Indicators - In June, the U.S. non-farm employment exceeded expectations, with an increase of 147,000 jobs, and the unemployment rate fell to 4.1% [4][50] - The labor market showed strong demand, with job openings rising to 7.77 million, indicating a robust employment landscape [4][52] Industry Allocation Recommendations - The report suggests focusing on three main investment directions: breakthroughs in AI technology, valuation recovery in consumer stocks, and the rise of undervalued dividends [5] - Emphasis is placed on the importance of monitoring the AI industry trends and their impact on consumer sectors [5]

Investment Rating - Industry Rating: Outperform the market (maintained rating) [12] Core Views - The report emphasizes the importance of the pig sector, noting a slowdown in the growth rate of breeding sows in June, and highlights the expectation gap in the pig market [1][2] - The pet sector is witnessing a rise in domestic brands and a positive trend in pet food exports, indicating a robust growth potential [3][4] - The poultry sector is focusing on the breeding gap for white chickens and the marginal improvement in demand for yellow chickens, with investment recommendations based on supply and demand dynamics [5][6][7] - The planting sector is prioritizing food security and the strategic importance of biological breeding, with recommendations for key seed and agricultural companies [9][10] - The feed sector is recommended for companies with increasing market share and consistent performance, while the animal health sector is advised to focus on new demands and innovative products [24][25] Summary by Sections Pig Sector - As of July 12, the average price of pigs in China is 14.91 CNY/kg, down 2.42% from the previous week, with self-breeding profits around 177 CNY per head [1][16] - The report highlights the low valuation and expectation gap in the pig sector, recommending leading companies such as Muyuan Foods and Wens Foodstuffs [2][16] Pet Sector - In June 2025, pet sales on Douyin reached 964 million CNY, a year-on-year increase of 73.97%, indicating strong growth for domestic brands [3][17] - Pet food exports from China increased by 10.89% year-on-year in the first five months of 2025, reaching 41.75 billion CNY [4][17] Poultry Sector - The report notes a 33.46% year-on-year decline in the breeding stock of grandparent chickens due to import restrictions, with a total of 529,300 sets updated in the first half of 2025 [5][19] - Investment recommendations include focusing on companies like Shengnong Development and Yisheng Livestock [6][20] Planting Sector - The report stresses the need for high yield production to ensure food security, with a focus on integrating advanced agricultural technologies [9][23] - Key recommendations include leading seed companies such as Longping High-Tech and Dabeinong [10][23] Feed and Animal Health Sectors - The feed sector is highlighted for companies like Haida Group, which is expected to benefit from market share growth and performance consistency [24][26] - The animal health sector is advised to focus on new product development and market expansion, particularly in the pet health segment [25][26]

Industry Rating - The industry investment rating is maintained at "Outperform the Market" [1] Core Insights - The transportation industry is experiencing a supply-driven cycle, with technology fostering new platforms [1] - The shipping and aviation sectors are seeing efficiency declines rather than capacity shortages, influenced by geopolitical tensions and global trade disruptions [2] - The logistics sector is shifting from growth to price-driven profitability, with a potential transition from trade to manufacturing [4] - New energy vehicles and autonomous driving are expected to lower transportation costs and create new platforms for ride-hailing and instant delivery services [5] Summary by Sections 1. Shipping and Aviation - The shipping cycle since 2020 has been characterized by a decline in operational efficiency rather than a shortage of capacity [2] - Future aviation cycles may also be driven by decreased aircraft turnover efficiency [2] 2. Ports and Highways - With demand growth slowing, the focus is shifting from new capacity expansion to the integration of existing capacities, which will determine profitability [3] - Mergers and acquisitions in the highway sector are expected to enhance return on equity (ROE) and price-to-book (PB) ratios [3] 3. Express Logistics - The growth rate of express delivery volumes is slowing, with single-package pricing becoming the main driver of profitability [4] - Future price competition may ease, and the transition from trade to manufacturing could influence profit growth [4] 4. Transportation Platforms - The emergence of new energy vehicles and autonomous driving technologies is expected to create significant cost savings and new business models in transportation [5] 5. Shipping Market Dynamics - Shipping rates are influenced by supply-demand cycles, with operational efficiency being a key factor [6][8] - Port congestion and rerouting of vessels have led to significant increases in shipping rates [10][11] 6. Oil Shipping - Oil tanker earnings are also subject to supply-demand dynamics, with operational efficiency impacting daily earnings [12][14] 7. Air Transportation - The aviation sector is expected to see a reversal in supply-demand dynamics by 2025, with demand gradually recovering post-pandemic [27][29] - The growth in the number of aircraft is projected to remain low, impacting operational efficiency [31][32] 8. Infrastructure Development - The growth rate of freight demand across highways, railways, and ports is expected to trend downward, affecting capacity expansion [39][41] - The integration of existing highway assets is becoming more prevalent as new construction slows [42][46] 9. Market Opportunities - The express delivery sector is witnessing a slowdown in volume growth, but revenue is still increasing due to rising e-commerce penetration [61][63] - Price competition in the express delivery market may ease, presenting investment opportunities [64][66] 10. Supply Chain Dynamics - The profitability of large commodity supply chain companies is closely tied to fluctuations in commodity prices [67][70] - The shift from trade to manufacturing in the supply chain sector is becoming more pronounced [71][73] 11. New Energy and Autonomous Transportation - The adoption of new energy vehicles is expected to significantly reduce transportation costs, while autonomous driving technologies are anticipated to enhance operational efficiency [77][79] - The rapid increase in the penetration of smart driving technologies is projected to reshape the transportation landscape [80][82]

Quantitative Models and Construction Methods Models Model Name: Industry Allocation Model - **Model Construction Idea**: This model aims to recommend industry sectors based on medium-term trends and specific market conditions[2][3][10] - **Model Construction Process**: - The model identifies sectors that are likely to benefit from current market trends and conditions. - It recommends sectors such as Hong Kong innovative drugs, Hong Kong securities, and photovoltaic sectors due to their potential for reversal and growth. - The model also suggests focusing on technology sectors, including military and communication, as well as A-share banks and gold stocks[2][3][10] - **Model Evaluation**: The model is effective in identifying sectors with potential growth and aligning with current market trends[2][3][10] Model Name: TWO BETA Model - **Model Construction Idea**: This model focuses on recommending technology sectors based on their beta values and market conditions[2][3][10] - **Model Construction Process**: - The model evaluates the beta values of different sectors to identify those with higher potential for growth. - It recommends technology sectors, particularly military and communication, based on their beta values and current market trends[2][3][10] - **Model Evaluation**: The model is useful for identifying high-potential technology sectors based on their beta values[2][3][10] Model Name: Position Management Model - **Model Construction Idea**: This model aims to manage stock positions based on valuation indicators and short-term trends[3][10] - **Model Construction Process**: - The model uses valuation indicators such as PE and PB ratios to determine the stock positions. - It suggests an 80% stock position for absolute return products based on the current valuation levels of the wind All A index[3][10] - **Model Evaluation**: The model provides a balanced approach to managing stock positions based on valuation and market trends[3][10] Model Backtesting Results 1. **Industry Allocation Model**: - **PE Ratio**: 70th percentile[3][10] - **PB Ratio**: 30th percentile[3][10] - **Position Suggestion**: 80%[3][10] 2. **TWO BETA Model**: - **PE Ratio**: 70th percentile[3][10] - **PB Ratio**: 30th percentile[3][10] - **Position Suggestion**: 80%[3][10] 3. **Position Management Model**: - **PE Ratio**: 70th percentile[3][10] - **PB Ratio**: 30th percentile[3][10] - **Position Suggestion**: 80%[3][10] Quantitative Factors and Construction Methods Factor Name: Moving Average Distance - **Factor Construction Idea**: This factor measures the distance between short-term and long-term moving averages to identify market trends[2][9][14] - **Factor Construction Process**: - Calculate the 20-day moving average and the 120-day moving average of the wind All A index. - Compute the distance between the two moving averages. - The formula is: $$ \text{Distance} = \frac{\text{20-day MA} - \text{120-day MA}}{\text{120-day MA}} $$ - If the distance exceeds 3%, the market is considered to be in an upward trend[2][9][14] - **Factor Evaluation**: The factor is effective in identifying market trend shifts from a volatile to an upward trend[2][9][14] Factor Name: Profitability Effect - **Factor Construction Idea**: This factor measures the market's profitability effect to predict the inflow of incremental funds[2][10][14] - **Factor Construction Process**: - Calculate the profitability effect value based on market data. - The current profitability effect value is 3.50%, indicating a positive market trend[2][10][14] - **Factor Evaluation**: The factor is useful for predicting the inflow of incremental funds based on market profitability[2][10][14] Factor Backtesting Results 1. **Moving Average Distance**: - **Distance**: 3.04%[2][9][14] - **Profitability Effect**: 3.50%[2][10][14] 2. **Profitability Effect**: - **Distance**: 3.04%[2][9][14] - **Profitability Effect**: 3.50%[2][10][14]