Investment Rating - The report maintains an "Outperform" rating for the automotive industry as of October 20, 2025 [1]. Core Insights - The automotive industry is experiencing a mixed performance with a decline in retail sales for passenger vehicles in October, while cumulative sales for the year show growth. The report highlights significant developments in the smart vehicle sector, including international expansion and technological advancements [1][6][55]. Summary by Relevant Sections Market Overview - From October 1 to 12, 2025, retail sales of passenger vehicles reached 686,000 units, a year-on-year decrease of 8% but a month-on-month increase of 12%. Cumulatively, 17.694 million units have been sold this year, reflecting an 8% increase year-on-year [6][55]. New Energy Vehicles - During the same period, retail sales of new energy passenger vehicles totaled 367,000 units, down 1% year-on-year but up 1% month-on-month, with a penetration rate of 53.5%. Cumulative sales for the year reached 9.236 million units, marking a 23% year-on-year increase [6][55]. Smart Vehicles - The report notes that companies are advancing in technology and expanding into international markets. For instance, the Xiaopeng MONA series has been launched in the Middle East and Africa, making it the first Chinese brand to introduce pure electric models in Egypt and Africa. Tesla has also upgraded its Full Self-Driving (FSD) system to enhance traffic efficiency [6][55][57]. Heavy Trucks - The report mentions that China National Heavy Duty Truck Corporation announced a cumulative export of 111,000 heavy trucks this year, representing a 24.5% year-on-year increase. In September, exports surpassed 15,000 units for the first time, setting a new monthly record for the industry [6][55]. Robotics - The robotics sector is highlighted with the company UBTECH winning a contract worth 126 million yuan for humanoid robots, with orders for the Walker series exceeding 630 million yuan for the year [6][55]. Investment Recommendations - The report suggests focusing on leading companies that are accelerating their smart technology and international expansion in the passenger vehicle sector. It also recommends monitoring component manufacturers with advantages in market, technology, and customer relations in the smart vehicle space [6][55].

1. Report Industry Investment Rating No industry investment rating information is provided in the report. 2. Core Views of the Report - Since October, the bond market has shown a divergence in the term structure. The ultra - long - term interest rate varieties had a lagged increase in the first week of October but a concentrated catch - up in the second week, with the market style shifting from "spreading yield spread" to "compressing yield spread" [2][6]. - The catch - up of ultra - long bonds has pushed the spread between new and old bonds to compress, and the liquidity premium may determine the subsequent compression space. The spread between new and old bonds mainly depends on the "tax valuation anchor" and "liquidity premium", and the latter may play a more important role in the future [2][11][12]. - The deep - seated reason for the strong catch - up of ultra - long bonds last week is that the yield spread between ultra - long interest rates and other term interest rates has shown cost - effectiveness, attracting both allocation and trading desks [2][15]. - The bond market may see a downward space in the fourth quarter, but the rhythm may vary at different time points. In late October, it may enter a volatile period, and from November to December, it will be determined by the game between macro - fundamentals and policy expectations, with two scenarios presented [2][3][20]. - In terms of investment strategy, it is recommended to position the portfolio duration in the medium - to - long range, select high - quality coupon assets as the bottom position, and pay attention to trading opportunities in medium - duration varieties such as secondary perpetual bonds [3][103]. 3. Summary by Relevant Catalogs 3.1 How to View the Sustainability of the 30 - year Treasury Bond Catch - up Market - **Market Performance in October**: In the first week of October, the 10 - year Treasury bond outperformed the 30 - year Treasury bond in both the spot and futures markets. In the second week, the ultra - long - end assets took over, with the 30 - year Treasury bond yield accelerating downward and the catch - up momentum of ultra - long bonds being released [2][6]. - **New and Old Bond Spread**: The catch - up of ultra - long bonds drove the spread between new and old 30 - year special Treasury bonds (2500002 and 2500006) to compress. As of October 17, the spread had narrowed by 3.05BP. The subsequent spread trend may depend more on the liquidity premium [11][12]. - **Reason for Catch - up**: The yield spread between 30 - year and other - term Treasury bonds has reached a high level, attracting both allocation and trading desks. The trading desks, mainly represented by brokers and funds, played a leading role in the catch - up market [15][17]. - **Market Outlook**: The bond market may have a downward space in the fourth quarter. In late October, it may enter a volatile period due to important events. From November to December, two scenarios are presented based on the development of Sino - US economic and trade relations [2][3][20]. 3.2 Important Matters - **Central Bank's Reverse Repurchase**: In October, the central bank carried out 6000 billion yuan of 6 - month term buy - out reverse repurchase operations, with a net injection of 4000 billion yuan for 3 - month and 6 - month term buy - out reverse repurchases [27]. - **CPI and PPI Data**: In September, CPI decreased by 0.3% year - on - year and increased by 0.1% month - on - month; PPI decreased by 2.3% year - on - year, with the decline narrowing by 0.6 percentage points, and was flat month - on - month [29]. - **Credit Data**: From January to September 2025, the cumulative increase in social financing scale was 30.09 trillion yuan, 4.42 trillion yuan more than the same period last year. RMB loans increased by 14.75 trillion yuan [32]. - **Sino - US Tariff Tension**: On October 14, the US Treasury Secretary said that the 100% tariff on China "may not happen" and the communication channels between the two countries have reopened [33]. 3.3 Money Market - **Open Market Operations and Fund Rates**: From October 13 to 17, the central bank's 7 - day reverse repurchase operations had a net injection of - 3479 billion yuan. The bank - to - bank liquidity remained loose, and the policy rate of 7 - day open - market reverse repurchase was 1.40%. As of October 17, R001, R007, DR001, and DR007 changed compared with October 11, and the interest rate centers also changed slightly [37][41]. - **Certificate of Deposit Rates and Repurchase Transactions**: In the primary market, the net financing of inter - bank certificates of deposit (NCDs) last week was 2246.60 billion yuan, and the annual issuance scale as of the 42nd week of 2025 had reached 26.88 trillion yuan. The issuance interest rates of NCDs decreased compared with the previous week. In the secondary market, the yields of NCDs of all terms showed an upward trend [43][49][52]. 3.4 Bond Market - **Primary Market**: In the second week of October, the net supply of interest - rate bonds weakened, with a net financing of 218.71 billion yuan. The issuance of ultra - long - term special Treasury bonds in 2025 ended last week. As of October 17, the cumulative net financing of national bonds in 2025 was about 5.40 trillion yuan, and that of local bonds was about 6.15 trillion yuan. The issuance scale of special refinancing bonds as of last week was 2.01 trillion yuan [55][56][63]. - **Secondary Market**: Sino - US economic and trade games led to a weakening of the equity market, and interest rates showed a downward trend, with the long - end and ultra - long - end performing better. The 10 - 1 - year term spread further compressed. The average daily turnover rates of the 10 - year Treasury bond active bond (250011) and the 10 - year CDB bond active bond (250215) increased, and the liquidity premium between the 10 - year Treasury bond active bond and the secondary - active bond decreased to 5.20BP [55][66][70]. 3.5 Institutional Behavior Tracking - **Leveraged Trading**: Last week, the leveraged trading scale returned to a high level with the relatively loose capital, with an average of about 8.04 trillion yuan. The 20 - day moving average of the daily trading volume of inter - bank pledged repurchase was 6.72 trillion yuan, a decrease of about 0.15 trillion yuan compared with the previous week [86]. - **Cash Bond Market Transactions**: State - owned banks increased their holdings of bonds, mainly focusing on Treasury bonds within 5 years and policy - financial bonds between 5 - 10 years. Rural commercial banks reduced their buying and showed a net - selling profit - taking operation. Brokers and funds, as important trading desks, increased their holdings of Treasury bonds of all terms and 5 - 10 - year policy - financial bonds. Insurance companies increased their holdings of local bonds over 10 years [78][90]. 3.6 High - Frequency Data Tracking - **Futures and Commodity Prices**: Last week, the settlement prices of rebar futures decreased by 1.69% week - on - week, wire rod futures increased by 6.55%, cathode copper futures decreased by 2.09%, the cement price index decreased by 0.22%, and the Nanhua Glass Index decreased by 9.28%. The CCFI index decreased by 4.11%, and the BDI index increased by 5.68% [98]. - **Food and Crude Oil Prices**: The wholesale price of pork decreased by 4.35% week - on - week, and the wholesale price of vegetables increased by 3.89%. The settlement prices of Brent crude oil futures and WTI crude oil futures decreased by 2.66% and 2.44% respectively [98]. - **Exchange Rate**: The central parity rate of the US dollar against the RMB last week was 7.09 [101]. 3.7 Market Outlook - **Market Trend**: The bond market may see a downward space in the fourth quarter, but the rhythm may vary at different time points. In late October, it may enter a volatile period, and from November to December, it will be determined by the game between macro - fundamentals and policy expectations, with two scenarios presented [2][3][20]. - **Investment Strategy**: It is recommended to position the portfolio duration in the medium - to - long range, select high - quality coupon assets as the bottom position, and pay attention to trading opportunities in medium - duration varieties such as secondary perpetual bonds [3][103].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of 22.75 CNY over the next six months, based on a current price of 18.51 CNY [1]. Core Insights - The company is a leader in LNG and air separation equipment, benefiting from a high industry boom. It is actively exploring hydrogen energy applications and expanding its gas operation business, which opens up growth opportunities [6][8]. Summary by Sections 1. Company Overview - The company, originally named Deep Cold Co., was established in 2001 and focuses on gas purification, separation, and low-temperature liquefaction technologies. It has shifted towards high-end equipment manufacturing and is expanding into gas investment and clean energy operations [14][17]. 2. Financial Performance - The company is expected to achieve revenues of 861.51 million CNY in 2024, with a growth rate of 28.9%. By 2027, revenues are projected to reach 1.31 billion CNY, with a compound annual growth rate of 16% for net profit [3][4][6]. - In 2024, the company is projected to achieve a net profit of 72.37 million CNY, reflecting a significant growth of 121.67% compared to the previous year [3][4]. 3. LNG and Air Separation Equipment - The company is a leading player in the LNG and air separation equipment market, with a projected market size of 533 billion CNY by 2025. The company has the capability to design and manufacture LNG processing plants with a daily capacity of 10 million cubic meters [6][35][56]. - In 2024, LNG equipment is expected to generate 6.1 billion CNY in revenue, accounting for over 70% of total revenue [24][26]. 4. Hydrogen Energy Business - The hydrogen energy sector is rapidly developing, with a projected production of 3.815 million tons in 2024, growing by 3.5%. The company has established a joint venture with Toyota to enter the hydrogen fuel cell market [71][88]. - The company is actively involved in the entire hydrogen energy value chain, including hydrogen production, storage, and application, leveraging resources from its parent group [83][87]. 5. Gas Operation Expansion - The company is expanding its gas operation business, with revenues from gas operations expected to grow significantly in the coming years. In 2023, revenues from gas operations were 2.76 million CNY, with projections of 12.46 million CNY in 2024 [6][19][26]. - The company is pursuing strategic acquisitions and investments in gas operation projects to enhance its operational scale [6][19].

Loan Growth and Structure - In September 2025, corporate loans increased by CNY 12,200 billion, a year-on-year decrease of CNY 2,700 billion[2] - Short-term corporate loans rose by CNY 7,100 billion, a year-on-year increase of CNY 2,500 billion, indicating increased short-term financing needs[2] - Long-term corporate loans increased by CNY 9,100 billion, a year-on-year decrease of CNY 500 billion, reflecting weak demand[2] - Resident loans added CNY 3,890 billion, a year-on-year decrease of CNY 1,110 billion, with short-term loans down by CNY 1,279 billion[2] Social Financing Trends - The total social financing stock grew by 8.7% year-on-year in the first nine months of 2025, a slight decline of 0.1 percentage points from January to August[4] - In September, the social financing increment was CNY 16,080 billion, a year-on-year decrease of CNY 3,662 billion[4] - Government bond financing decreased by CNY 11,886 billion, a year-on-year decline of CNY 3,471 billion, continuing a downward trend[4] Monetary Supply and Deposits - In September 2025, RMB deposits increased by CNY 22,100 billion, a year-on-year decrease of CNY 15,300 billion[6] - M2 growth was 8.4%, down 0.4 percentage points from the previous month, while M1 growth rose to 7.2%, an increase of 1.2 percentage points[6] - The M1-M2 gap narrowed to -1.2%, a further contraction of 1.6 percentage points from the previous month[6]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views - The bond market may see a downward trend in the fourth quarter, but a cautious and optimistic attitude is recommended. The market has a foundation for a slow decline, with more rational pricing and stable allocation demand. The recent tariff shock is a "one - time" pricing behavior, and if the tariff policy fluctuates, long - duration assets may face callback risks. It's advisable to track the arrangement of the Sino - US summit to judge the implementation possibility of the tariff policy [2][90]. - The tariff and technology control may have limited impact on the domestic capital market. The potential "cancellation" or "reduction" of tariffs makes it difficult to immediately price the long - term impact on the fundamentals. The market is unlikely to repeat the extreme situation in April [4]. - In terms of investment strategy, the portfolio duration should be set at a medium - to - long level. High - quality coupon assets are recommended as the bottom - position, and opportunities in 2 - year AA -/AA - grade credit bonds and 10 - year local bonds can be explored. For trading, medium - duration varieties such as secondary perpetual bonds with large previous declines can be focused on [2][90]. 3. Summary by Relevant Catalogs 3.1 Important Matters - In October, the central bank did not conduct treasury bond trading operations [7]. - On October 9, the Shanghai Composite Index broke through 3900 points for the first time in 10 years, which may signal a slow - bull market in the equity market and put upward pressure on the bond market [8]. - The fourth - quarter treasury bond issuance plan was announced. Treasury bond issuance, especially ultra - long - term bonds, may enter a seasonal off - peak. The 30 - year ultra - long - term special treasury bond will no longer be renewed, and 2500002 has an advantage in becoming the active bond [11]. - On October 10, 2025, Trump announced an additional 100% tariff on Chinese goods and export controls on key software, which will take effect on November 1, 2025, increasing the uncertainty of the Sino - US summit [15]. 3.2 Money Market - From October 9 to 11, 2025, the central bank's net reverse - repurchase investment was - 15263 billion yuan. The liquidity in the inter - bank market was loose after the cross - quarter. The net financing of inter - bank certificates of deposit (NCDs) was positive, and the yields of NCDs declined [16][17]. - In the primary market, the total issuance scale of NCDs last week was 215.97 billion yuan, with a net financing of 81.02 billion yuan. The issuance scale of city commercial banks was the largest, but the net financing was negative. The issuance interest rates of NCDs increased compared with the previous week [26][28][30]. - In the secondary market, the yields of NCDs of all maturities decreased. The yield of AAA - rated 1 - month NCDs decreased by 17.96BP to 1.45%, and the 1Y - 3M spread was at the 56.98% quantile [32]. 3.3 Bond Market - In the first week after the holiday, treasury bonds were the main source of interest - rate bond supply. The total issuance of interest - rate bonds was 14, with an actual issuance of 286.864 billion yuan and a net financing of 215.998 billion yuan [34][41]. - In the primary market, from January to October, the net financing of local government bonds was faster than that of treasury bonds. As of October 11, 2025, the cumulative net financing of treasury bonds was about 5.58 trillion yuan, and that of local bonds was about 6.15 trillion yuan [34]. - In the secondary market, from Thursday to Friday last week, the yield of 10 - year treasury bonds decreased, and the 10 - 1 - year term spread was compressed. After Trump announced the tariff increase, the bond market declined significantly. The liquidity premium of active and sub - active bonds of 10 - year treasury bonds and 10 - year policy - bank bonds changed differently [34][46]. - The term spread of 10 - 1 - year treasury bonds was compressed to 47.19BP, and the 30 - 1 - year term spread widened. The long - and ultra - long - term spreads between local and national bonds changed differently [57][59]. 3.4 Institutional Behavior Tracking - The 20 - day moving average of the daily trading volume of inter - bank pledged repurchase in the first week after the holiday was 7.53 trillion yuan, and the leveraged trading scale recovered after the holiday [62][68]. - In the cash - bond market, state - owned banks weakened their bond - buying, rural commercial banks significantly increased their purchases, especially of long - term local bonds and 5 - 10 - year policy - bank bonds. Securities firms and funds were also important buyers, while insurance companies were net sellers, especially of long - term treasury bonds [62][70]. - The current average cost of major trading players adding 10 - year treasury bonds is around 1.87% [74]. - Considering capital occupation and tax costs, commercial banks and insurance companies can obtain relatively higher returns by investing in local bonds [82]. 3.5 High - Frequency Data Tracking - Last week, the settlement price of rebar futures decreased by 0.10% compared with before the holiday, the wire rod futures price was flat, the cathode copper futures price increased by 3.39%, the cement price index increased by 0.45%, and the Nanhua Glass Index increased by 0.66%. The CCFI index was flat, and the BDI index decreased by 9.89% [85]. - In terms of food prices, the pork wholesale price decreased by 3.47%, and the vegetable wholesale price decreased by 2.99%. The settlement prices of Brent and WTI crude oil futures decreased by 1.15% and 1.38% respectively. The central parity rate of the US dollar against the RMB was 7.11 [85].

Overall Summary Report's Core View - During the period from September 29 to October 10, 2025, there was a divergence in funds flowing into bond ETFs, with credit - bond ETFs being favored by funds. The net inflow of funds into interest - rate bond ETFs, credit - bond ETFs, and convertible - bond ETFs was - 569 million yuan, 9.619 billion yuan, and - 2.452 billion yuan respectively, and the total net inflow of the bond ETF market was 6.598 billion yuan. The market preferred science - innovation bond ETFs and short - term financing ETFs [3][6]. 1.1 Various Bond ETFs' Net Inflow of Funds - There was a divergence in funds flowing into bond ETFs, with credit - bond ETFs being favored. The net inflow of funds into interest - rate bond ETFs, credit - bond ETFs, and convertible - bond ETFs was - 569 million yuan, 9.619 billion yuan, and - 2.452 billion yuan respectively. The bond ETF market had a total net inflow of 6.598 billion yuan, with a cumulative net inflow of - 2.967 billion yuan this month and 417.82 billion yuan this year. As of October 10, 2025, the bond ETF fund scale was 69.1673 billion yuan, up 1.06% from September 26, 2025, and up 284.75% from the beginning of the year, accounting for 12.70% of the total market ETF scale, a 19bp increase from September 26 [6]. - The market preferred science - innovation bond ETFs and short - term financing ETFs. The net inflow of funds into science - innovation bond ETFs and short - term financing ETFs last week was + 5.013 billion yuan and + 4.528 billion yuan respectively, leading significantly. The net inflow of funds into convertible - bond ETFs, policy - financial bond ETFs, and treasury - bond ETFs was negative, at - 2.452 billion yuan, - 491 million yuan, and - 78 million yuan respectively [6]. 1.2 Various Bond ETFs' Share Trends - Convertible - bond ETFs had a significant outflow of shares. As of the close on October 10, 2025, the shares of treasury - bond, policy - financial bond, local - bond, credit - bond, and convertible - bond ETFs were 684.67 million shares, 438.69 million shares, 80.18 million shares, 6.97434 billion shares, and 5.10215 billion shares respectively. Compared with the close on September 26, 2025, they changed by - 0.04 million shares, - 4.28 million shares, no change, 91.41 million shares, and - 208 million shares respectively, with a total change of - 120.91 million shares for bond - type ETFs [17]. 1.3 Main Bond ETFs' Share and Net Value Trends - Long - term interest - rate bond ETFs and convertible - bond ETFs had a net outflow of shares. As of the close on October 10, 2025, the shares of 30 - year treasury - bond ETF, policy - financial bond ETF, 5 - year local - bond ETF, urban investment bond ETF, and convertible - bond ETF changed by - 2.99 million shares, - 4.56 million shares, no change, no change, and - 107.80 million shares respectively compared with the close on September 26, 2025 [24]. - After the holiday, both stocks and bonds performed well, and the net values generally rebounded. As of the close on October 10, 2025, the net values of 30 - year treasury - bond ETF, policy - financial bond ETF, 5 - year local - bond ETF, urban investment bond ETF, and convertible - bond ETF changed by - 0.38%, 0.11%, 0.11%, 0.06%, and 1.56% respectively compared with the close on September 26, 2025 [28]. 1.4 Benchmark Market - Making Credit - Bond ETFs' Share and Net Value Trends - There was no significant change in shares. As of the close on October 10, 2025, among the 8 existing benchmark market - making credit - bond ETFs, the shares of most products had no change, and only a few had minor increases [31]. - The net values generally rebounded significantly. As of the close on October 10, 2025, the net values of the 8 credit - bond ETFs changed by 0.12% - 0.18% compared with the close on September 26, 2025 [32]. 1.5 Science - Innovation Bond ETFs' Share and Net Value Trends - The shares generally increased, with individual performance varying. Among the 24 existing science - innovation bond ETFs, the top three in terms of share inflow were GF Science - Innovation Bond ETF, Harvest Science - Innovation Bond ETF, and Dacheng Science - Innovation Bond ETF, with changes of 11.7 million shares, 10.0 million shares, and 8.0 million shares respectively compared with the close on September 26, 2025 [37]. - The net values generally increased, and the second - batch products generally had higher net values. This period saw a general increase in the net values of science - innovation bond ETFs, and the top three in terms of increase were Southern Science - Innovation Bond ETF, Harvest Science - Innovation Bond ETF, and GF Science - Innovation Bond ETF [38]. 1.6 Single Bond ETFs' Market Performance - Only the net values of ultra - long - term interest - rate bond ETFs declined. This period saw a general increase in net values, with convertible - bond ETFs leading the increase. Only the net values of 30 - year treasury - bond ETF and Boshi 30 - year treasury - bond ETF declined by - 0.4% and - 0.6% respectively [40]. - In terms of premium/discount rates, Boshi Credit - Bond ETF, E Fund Corporate Bond ETF, and Credit - Bond ETF Fund had relatively high discount rates. In terms of scale changes, the short - term financing ETF had a significantly leading net inflow this period, followed by GF Science - Innovation Bond ETF and Harvest Science - Innovation Bond ETF [40].

Macro Perspective - On October 10, 2025, President Trump announced a 100% tariff on goods imported from China, effective November 1, as a response to China's export controls on rare earths [2][6] - In the first eight months of this year, China's exports increased by 4.6% year-on-year, while imports grew by 2.5%. However, exports to the US fell by 15.5% [2] - The escalation of tariffs could further pressure Chinese exports, but growth in non-US markets may provide some buffer against domestic economic impacts [2][3] Strategy Perspective - The announcement of reciprocal tariffs in April led to stable performance in sectors like daily consumption and public utilities, which could serve as short-term hedges against uncertainty [4] - Certain manufacturing sectors, such as passenger vehicles and white goods, are expected to be more resilient to tariff impacts due to capacity expansion overseas [4] Fixed Income Perspective - The new tariffs have sparked concerns about market volatility, with potential implications for asset prices. Observing the implied volatility in the options market may provide insights into market sentiment [5][6] - The impact of the tariffs on the domestic capital market is expected to be limited, with the possibility of tariff cancellation or reduction remaining [6] Pharmaceutical Industry Perspective - China's pharmaceutical exports to the US were valued at $19 billion in 2024, with a 12% increase, while imports were $15.1 billion, down 4.6% [8] - The tariff impacts are expected to primarily affect companies with significant US market exposure, particularly in innovative drugs and medical devices [8] Computer Industry Perspective - Domestic software products have gained traction in government and financial sectors, with a shift towards enterprise applications [12] - The urgency for domestic alternatives in EDA software has increased due to trade tensions, with local vendors beginning to gain competitive ground [13] Semiconductor Industry Perspective - The trade tensions have accelerated the push for domestic semiconductor production, particularly in areas with high external dependency [13][14] - The domestic semiconductor equipment sector has made significant progress, with local manufacturers entering mainstream production lines [14] Metals Industry Perspective - The market's acceptance of tariff expectations is higher than before, suggesting that after initial panic, opportunities in non-ferrous metals may become more pronounced [7][9] - Strategic metals are increasingly important in the context of US-China relations, highlighting potential investment opportunities in this sector [10]

Core Insights - The report presents two industry rotation models: one based on similar expected return differentials and another based on changes in analyst expectations, both aimed at identifying investment opportunities in various sectors [11][22]. Group 1: Similar Expected Return Differential Model - The latest configuration suggests focusing on sectors such as coal, communication, basic chemicals, automotive, real estate, and machinery [21]. - In September 2025, the model achieved a monthly return of +4.56%, outperforming the equal-weighted industry index by +3.66% [21]. - The historical backtest from December 2016 to September 2025 shows that the model has a mean Information Coefficient (IC) of 0.09, indicating strong selection ability [14][15]. Group 2: Analyst Expectation Change Model - The latest configuration highlights sectors including non-bank financials, non-ferrous metals, agriculture, communication, steel, and computers [33]. - In September 2025, the model recorded a monthly return of +1.03%, with an excess return of +0.13% over the equal-weighted industry index [33]. - The historical backtest from December 2016 to September 2025 indicates a mean IC of 0.06, demonstrating significant industry selection capability [23][24]. Group 3: ETF Portfolio Construction - The recommended ETF portfolio for October 2025 includes sectors such as non-bank financials, non-ferrous metals, communication, basic chemicals, and automotive [35]. - Specific ETFs listed include the Huabao CSI All-Share Securities Company ETF and the Southern CSI Non-Ferrous Metals ETF, among others, with significant fund shares [35].

- The GAN_GRU factor is based on the GAN_GRU model, which utilizes a Generative Adversarial Network (GAN) for processing volume-price time series features and then uses a GRU model for time series feature encoding to derive the stock selection factor[4][13][14] - The GAN_GRU model includes two GRU layers (GRU(128, 128)) followed by an MLP (256, 64, 64), with the final output prediction return (pRet) used as the stock selection factor[22] - The GAN model consists of a generator and a discriminator. The generator aims to generate data that appears real, while the discriminator aims to distinguish between real and generated data. The generator's loss function is $L_{G} = -\mathbb{E}_{z\sim P_{z}(z)}[\log(D(G(z)))]$[23][24][25] - The discriminator's loss function is $L_{D} = -\mathbb{E}_{x\sim P_{data}(x)}[\log D(x)] - \mathbb{E}_{z\sim P_{z}(z)}[\log(1-D(G(z)))]$[27][28][29] - The GAN_GRU model's training process involves alternating training of the generator and discriminator until convergence[30] - The GAN_GRU factor's performance from January 2019 to September 2025 shows an IC mean of 0.1136, an annualized excess return of 22.58%, and a recent IC of 0.1053 as of September 28, 2025[41][42] - The GAN_GRU factor's IC mean for the past year is 0.0982, with the highest IC values in the coal, building materials, social services, non-bank finance, and food & beverage industries[42][44] - The top-performing long portfolios in September 2025, based on the GAN_GRU factor, include sectors like building materials, steel, social services, coal, and non-bank finance, with excess returns of 5.78%, 5.13%, 1.91%, 1.55%, and 1.21%, respectively[45] - Over the past year, the top-performing long portfolios based on the GAN_GRU factor include home appliances, building materials, food & beverage, utilities, and textiles & apparel, with average monthly excess returns of 5.04%, 4.96%, 3.92%, 3.53%, and 3.10%, respectively[46] - The top stocks in each industry based on the GAN_GRU factor as of September 28, 2025, include companies like Baolaite, Yutaiwei-U, Cangge Mining, Tuowei Information, Hengtong Co., Angang Co., and others[49][50]

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - The bond market may break through its downward space in the fourth quarter. After experiencing multiple "stress tests" in the third quarter, the bond market has shown strong resilience. With the improvement of the bond market's adaptability to the strengthening of the equity market and the decline of the excessive trading of long - term bonds, a more rational pricing logic may dominate the market again, and the stable allocation demand will become the "ballast stone" for the interest rate to decline. The interest rate is expected to be in a "moderate" downward state [8][46]. 3. Summaries Based on Relevant Catalogs 3.1 Can the Bond Market Break Through the Sideways Trend in the Fourth Quarter? 3.1.1 The Bond Market Fluctuated Widely in September, with Bulls and Bears in a Fierce Battle and a Wavy Uptrend - The valuation yield of the 10 - year treasury bond has basically completed the anchoring to the "new bond". The spread between the new bond (250016) and the old bond (250011) is basically stable at 5 - 8BP, and the yield - to - maturity compensation due to value - added tax is about 2.8% - 4.5% [1][11]. - The capital interest rate fluctuated significantly due to the cross - quarter effect, and the central level increased to some extent. The increase in the central level of the capital interest rate led to an upward trend in the bond market interest rate and a compression of the Carry space, resulting in bond market selling pressure [1][14]. - The bond cashing demand of the bank's OCI account is one of the factors pressuring the bond market. From September 1st to 26th, joint - stock banks, city commercial banks, and rural commercial banks were the main sellers in the bond market [2][18]. - Regulatory policy adjustments and the increasing expectation of restarting treasury bond trading also drove the bond market trend. The "new rule" led to a rapid correction in the bond market in early September, while the increasing expectation of the central bank restarting treasury bond trading supported the rebound in mid - September [2][21]. 3.1.2 The Bond Market May Break Through the Downward Space in the Fourth Quarter - The "see - saw" effect between stocks and bonds weakened in September. If the equity market turns into a slow - bull pattern in the fourth quarter, the suppression on the bond market from the equity market may ease [3][23]. - The price level is still in the repair stage, with PPI bottoming out and rising, but CPI has not shown signs of recovery. If the economic recovery slope is lower than expected or Sino - US economic and trade relations deteriorate unexpectedly, there is still a possibility of another interest rate cut this year [5][28]. - From the supply side, the fourth quarter is usually the "off - season" for government bond supply, but attention should be paid to the possible advance issuance of the special bonds for replacing hidden debts in 2026. Even if the supply pressure increases, the impact on the market may be relatively controllable, and the central bank may use open - market operations for hedging [6][33]. - From the demand side, even if the "new rule" is implemented in the fourth quarter, its impact on the bond market is likely to be short - term and frictional, not a trend - based decline in demand. The demand from core bond - market allocators such as wealth management and insurance remains strong [7][40]. 3.2 Important Matters - The net MLF injection was 300 billion yuan in September. On September 25th, the central bank conducted a 600 - billion - yuan MLF operation, with a maturity scale of 300 billion yuan in September [48]. 3.3 Money Market 3.3.1 Open - Market Operations and Capital Interest Rate Trends - From September 22nd to 26th, the central bank injected a total of 2.4674 trillion yuan through reverse repurchase operations, with a maturity of 1.8268 trillion yuan, and the net injection was 640.6 billion yuan. It is expected that 516.6 billion yuan of base money will be recalled from September 29th to 30th [50]. - The inter - bank liquidity was tight first and then loose last week, mainly due to the central bank's protection of liquidity. As of September 26th, R001, R007, DR001, and DR007 changed by - 16.49BP, 3.78BP, - 14.62BP, and 2.17BP respectively compared with September 19th [54]. 3.3.2 Certificate of Deposit Interest Rate Trends and Repurchase Transaction Situations - In the primary market, commercial banks' inter - bank certificates of deposit showed a net outflow, with a net financing scale of - 188.79 billion yuan last week. The issuing scale of state - owned banks was the largest, but they also had the largest net outflow [59][63]. - The issuing interest rate of inter - bank certificates of deposit increased last week. In the secondary market, the yields of inter - bank certificates of deposit at all maturities showed an upward trend [64][67]. 3.4 Bond Market - In the primary market, the supply of interest - rate bonds was relatively small last week. The total actual issuance was 60.834 billion yuan, with a maturity of 9.2 billion yuan and a net financing of 51.634 billion yuan [68]. - In the secondary market, the bond market sentiment was relatively weak last week, showing an upward trend in the shock, and the curve shape became steeper. The average daily turnover rates of the 10 - year treasury bond and 10 - year CDB bond active bonds decreased, and the liquidity premium of the 10 - year treasury bond active bond increased [68][77]. 3.5 Institutional Behavior Tracking - The institutional leverage ratio increased seasonally in August but was at a seasonal low year - on - year. The average daily trading volume of inter - bank pledged repurchase decreased last week, with an average of about 7.27 trillion yuan [94][99]. - In the cash bond market, state - owned banks increased their purchases of treasury bonds within 5 years and 5 - 10 years; rural commercial banks continued to sell but with a reduced intensity; insurance institutions continued to increase their holdings of treasury bonds and local bonds over 10 years; securities firms and funds sold significantly [104]. - The current average cost of major trading desks for adding positions in 10 - year treasury bonds is around 1.85% [107]. 3.6 High - Frequency Data Tracking - Last week, the settlement prices of rebar and wire rod futures decreased, while those of cathode copper, cement, and glass increased. The CCFI index decreased, and the BDI index increased [117]. - In terms of food prices, the pork wholesale price decreased, and the vegetable wholesale price increased. The settlement prices of Brent and WTI crude oil futures increased [117]. - The central parity rate of the US dollar against the RMB was 7.12 last week [117].