Core Insights - The defense and military industry index experienced a decline of -4.70% over the past week, ranking 23rd out of 31 in the Shenwan primary industry [7][41] - The current PE-TTM for the defense and military industry is 83.33, which is at the 76.67 percentile compared to the past decade, indicating a relatively high valuation level [12][15] - The report highlights significant individual stock performances, with North China Long Dragon leading with an increase of 8.71% over the past week, while Guorui Technology saw a decline of -14.00% [17][41] Industry and Stock Market Review - The defense and military industry index has shown a decline of -1.92% over the past month, ranking 11th out of 31 [9][41] - Over the past year, the industry index has increased by 16.91%, ranking 19th out of 31 [3][41] - The trading volume for the defense and military industry reached 310.8 billion yuan this week, a year-on-year decrease of -8.63% but a week-on-week increase of +128.08% [31][34] Important Company Announcements - The report includes various significant announcements from companies in the defense sector, such as strategic cooperation agreements and stock repurchase plans [38] Industry News - Indonesia confirmed its plan to purchase Chinese-made J-10 fighter jets, with a defense budget of at least 9 billion USD approved [40][41] - Successful launches of low-orbit satellite internet groups and the sixth batch of the Qianfan constellation were reported, indicating advancements in commercial aerospace [40][42] Investment Recommendations - The report suggests focusing on key investment themes such as military trade, commercial aerospace, unmanned equipment, military AI, and low-altitude economy [43]

Core Insights - The report maintains a positive outlook on the building materials sector, highlighting a shift in capital towards domestic demand-driven segments due to ongoing U.S.-China tariff tensions and a focus on defensive investments [4] - The competitive landscape within the consumer building materials sector is improving, with leading companies expected to gain market share as smaller firms exit the market due to financial strain [4] - The report emphasizes the potential for a recovery cycle in profitability for leading companies in the building materials sector, particularly in coatings and waterproofing segments, as price stabilization is observed [4] Market Performance - The building materials sector has shown a performance of -9% over the last 12 months, compared to the Shanghai Composite Index's -3% and the CSI 300's 4% [2][4] Recommendations - The report recommends prioritizing investments in leading companies within the building materials sector, specifically mentioning Sanke Tree, Oriental Yuhong, Rabbit Baby, and Keshun Co., as they are expected to benefit from the ongoing market consolidation [4] - For the cement sector, the report suggests a wait-and-see approach until supply-side improvements materialize, with a focus on Huaxin Cement and a watch on Shangfeng Cement and Tapai Group [4]

Report Industry Investment Rating There is no information regarding the report's industry investment rating provided in the content. Core Viewpoints - As of October 18, 2025, 117 listed companies have disclosed their Q3 earnings forecasts, the lowest in the past five years. About 84% of them announced positive news, similar to 2024. Most companies issued pre - increase announcements (60% of all forecasts). Only 10 convertible bond companies disclosed Q3 earnings forecasts, half the number of 2024, with 9 announcing positive news [2][6][14]. - Basic chemicals, electronics, non - ferrous metals, and machinery industries had more positive news. The non - ferrous metals and media industries showed significant improvement compared to 2024. Seven non - ferrous metal companies announced pre - increase, and 2 announced turnaround; 1 media company announced turnaround and 1 pre - increase [2][8]. - Four convertible bond listed companies, Luxshare, Limin, Bojun, and Downtow, reported positive Q3 earnings for two consecutive years. Luxshare expects a 20% - 25% net profit increase in Q3, Limin may see a year - on - year net profit increase of over 600%, Bojun expects a 50% - 80% net profit increase, and Downtow's Q3 profit may increase by over 30% [2][13][14]. - The market style may be switching, and geopolitical uncertainties increase market volatility. The risk appetite in the convertible bond market may have declined. Selecting high - quality convertible bonds during the earnings season may be a key strategy, especially those with consistently excellent performance [2][14]. Summaries by Directory 1. Q3 Earnings Forecasts: How to View the Convertible Bond Market - The number of listed companies disclosing Q3 earnings forecasts in 2025 is the lowest in the past five years, with a similar structure to 2024. The proportion of companies with positive news is about 84%, the same as in 2024. In the convertible bond market, only 10 companies disclosed forecasts, half the number of 2024, with 9 announcing positive news [2][6][14]. - Basic chemicals, electronics, non - ferrous metals, and machinery are industries with more positive news. Non - ferrous metals and media industries improved significantly compared to 2024. 15 companies mentioned AI contributions in their earnings forecasts, with 14 reporting positive results and most planning to increase AI investment [2][8][11]. - Four convertible bond listed companies had positive Q3 earnings for two consecutive years, with specific reasons for profit growth provided for each company [2][13][14]. 2. One - Week Market Performance - As of Friday's close, the Shanghai Composite Index closed at 3839.76, down 1.47% for the week; the CSI Convertible Bond Index closed at 474.22, down 2.35% for the week. The top - three rising industries in the stock market were banks (+4.99%), coal (+4.27%), and food and beverages (+0.85%), while electronics (-7.10%), media (-6.28%), and automobiles (-6.24%) declined [15]. - No new convertible bonds were listed this week. 45 convertible bonds rose, accounting for 11%. The top - five and bottom - five in terms of price changes are listed. 266 convertible bonds' conversion premium rates increased, accounting for 64%, and the top - five and bottom - five in terms of valuation changes are also listed [17]. 3. Major Shareholders' Convertible Bond Reductions - Nanjing Pharmaceutical announced a convertible bond reduction this week. A table shows the convertible bonds with high major shareholder holding ratios and their reduction status [25][26][27]. 4. Convertible Bond Issuance Progress - The primary - market approval process remains fast. Zhongqi Co., Ltd. (1.039 billion yuan), Mankun Technology (760 million yuan), and Huatong Cable (800 million yuan) have board proposals. Haitian Co., Ltd. (801 million yuan) has passed the shareholders' meeting, and Tianzhun Technology (872 million yuan) has received CSRC approval [27][28]. 5. Private EB Project Updates There were no progress updates on private EB projects this week [28]. 6. Style & Strategy: Large - Scale High - Rating Bonds Prevailed This Week - Using month - end rebalancing for back - testing and excluding bonds rated below A - and those with announced forced redemptions, large - scale high - rating convertible bonds prevailed this week. High - rating bonds had a 2.63pct excess return over low - rating bonds, large - scale bonds had a 1.89pct excess return over small - scale bonds, and equity - biased bonds had a - 8.24pct excess return over debt - biased bonds [29]. 7. One - Week Convertible Bond Valuation Performance: Convertible Bond Valuations Declined - The convertible bond market's 100 - yuan premium rate declined. As of the last trading day of the week, it closed at 29.31%, down 0.29% from the previous week, at the 86.5% historical percentile in the past six months and 93.6% in the past year. The median full - scope conversion premium rate increased by 0.78pct to 28.61%, and the market - value - weighted conversion premium rate (excluding banks) increased by 1.69pct to 41.46% [40]. - For equity - biased convertible bonds, the median conversion premium rate closed at 10.58%, down 1.12pct from the previous week, at the 80.6% historical percentile in the past six months. For debt - biased convertible bonds, the median pure - debt premium rate closed at 10.78%, down 1.43pct from the previous week, at the 71.4% historical percentile in the past six months [40]. - In terms of extreme pricing, as of the last trading day of the week, there was 1 convertible bond below par value, 0 below the bond floor, and 2 with a YTM greater than 3, at the 9.2%, 0%, and 6.7% historical percentiles since 2016 respectively. The median YTM of bank convertible bonds was - 3.97%, 5.84pct lower than the 3 - year AAA corporate bond yield; the median YTM of AA - to AA+ debt - biased convertible bonds was - 1.48%, 3.59pct lower than the 3 - year AA corporate bond yield [44]. - The adjusted 100 - yuan premium rate remained flat. After excluding factors such as bond nature and remaining term, it was at the 84.3% historical percentile in the past six months and 68.9% since 2018. Considering only the bond floor, it was at the 82.6% historical percentile in the past six months and 34.8% since 2018 [56].

1. Report Industry Investment Rating There is no information provided regarding the report industry investment rating. 2. Core Viewpoints of the Report - The bond market is still "widely bearish," but it is likely to be a bull market. The upper limit of bond market interest rates is clear. The 10 - year Treasury bond rate above 1.8% has absolute value, and the downward space of bond market interest rates is at least 20bp. There are opportunities for the narrowing of the spreads of ultra - long bonds and variety spreads [2]. - The logic of the upper limit of interest rates comes from the weak fundamentals, asset shortage, and the need to cooperate with fiscal policies. The large - scale purchase of 7 - 10y Treasury bonds by large banks in mid - September may reflect the policy intention of maintaining stability in the bond market [2][8]. - Regarding the lower limit of interest rates, the report is firmly bullish. The 1.7% is not an important resistance level. Interest rates are expected to reach new lows under the influence of factors such as the central bank's possible restart of Treasury bond trading, regulatory policies being less than expected, and cross - year allocation [11][12]. - The term spreads in the bond market since 2024 have generally widened, different from the previous narrowing trend. In the future, with the improvement of market sentiment, there will be opportunities for spread compression. The impact of the 500 billion yuan local government debt limit on the bond market is expected to be limited in the short term [3]. 3. Summary According to the Table of Contents 3.1 Is It a Sideways Market or a Bull Market? - There are still significant differences in the market. The short - term view of most investors is that the downward space of interest rates is limited. The lower limit of the 10 - year Treasury bond active bond rate may be 1.7%, and the upper limit is around the previous high of 1.83% [7]. - The long - term view believes that short - term Sino - US trade frictions are beneficial, and the negative factors in the third quarter are weakening. The short - term view believes that Sino - US relations may improve, the stock market is still strong, and regulatory policies will affect the bond market [7]. - The upper limit of interest rates: The 10 - year Treasury bond above 1.8% and the 30 - year Treasury bond above 2.1% have absolute allocation value. The upper limit comes from the weak fundamentals, asset shortage, and the large - scale purchase of 7 - 10y Treasury bonds by large banks in mid - September, which may be a manifestation of the central bank's intention to maintain stability in the bond market and cooperate with fiscal policies [8]. - The lower limit of interest rates: The report is firmly bullish. The 1.7% is not an important resistance level. Interest rates are expected to reach new lows under the influence of factors such as the central bank's possible restart of Treasury bond trading, regulatory policies being less than expected, and cross - year allocation. In extreme cases, the 10 - year Treasury bond rate can refer to the pricing at the beginning of this year plus points, that is, OMO + 10bp [11][12]. 3.2 How to View Spreads in a Sideways Market? - By tracing the sideways markets since 2022 with the 10 - year Treasury bond yield as the standard, 7 time periods are sorted out. Since 2024, the term spreads in the sideways market have generally widened, mainly because the bond bull market since 2024 is usually accompanied by supply pressure or the central bank's attention to long - term interest rates, making the mid - short end relatively safer and more certain [19][24]. - In terms of variety spreads, the spread between policy - financial bonds and Treasury bonds usually narrows, especially at the long end. The credit spreads have decreased significantly in most sideways markets [25]. - Since the end of August 2025, the spread between 5 - year and 2 - year Treasury bonds has declined, while the spreads between 10 - year and 5 - year, and 30 - year and 10 - year Treasury bonds have increased, and the variety spreads have increased rapidly. The reasons include large - scale purchases of medium - term Treasury bonds by large state - owned banks, the reduction of fund duration by public funds, and the weak buying of ultra - long bonds by large and medium - sized banks [31][33]. - Looking forward, the 30 - year Treasury bond rate has a greater downward space, and the variety spreads may also narrow. Insurance funds may increase their purchases of ultra - long bonds when the Treasury bond rate rebounds above 2.1%. With the improvement of bond market sentiment and the end of the cross - quarter period, the buying power of funds and rural commercial banks may return, driving the compression of the spread between policy - financial bonds and Treasury bonds [36]. 3.3 How to View the Impact of 500 Billion Yuan of Local Government Debt Balance on the Bond Market? - In the absence of other incremental policy linkages, the impact of 50 billion yuan of special bonds on the bond market is limited. In 2022, the interest rate fluctuated upward due to a series of incremental policies, including fiscal, monetary, and structural policies [37][38]. - This 500 billion yuan of funds is likely to be issued in the form of new special bonds. Currently, the balance of general bonds is not large, and the use of this fund is more suitable for new special bonds [43]. 3.4 Bond Market Interest Rates First Rose and Then Fell - This week, the central bank's open - market operations changed from net investment to net withdrawal, but the liquidity in the market became looser. The bond market yield curve flattened as a whole, and the 10 - year Treasury bond yield first rose and then fell, rising 0.40bp to 1.82% [3][45]. - The reasons for the fluctuations in bond market interest rates include factors such as "TACO trading," good export performance, increased redemption pressure, market speculation on public fund fee reform, and the possible issuance of local government bonds in advance in 2026 [45]. 3.5 The Scale of Wealth Management Products Slightly Increased - As of October 12, the scale of existing wealth management products reached 30.9 trillion yuan, with a weekly increase of 120.652 billion yuan. From October 6 to October 12, the newly issued wealth management products totaled 14.68 billion yuan [55]. - In the second week of October, the scale of fixed - income products rebounded. By product type, the scale of cash - management products increased by 15.8 billion yuan, and the scale of fixed - income products increased by 41.7 billion yuan. By product risk level, the scale of first - level (low - risk) products increased by 5 billion yuan [59][60]. - The net - breaking rate of wealth management products decreased slightly last week. As of October 15, the average 7 - day annualized yield of 370 money funds was 1.05%, and the average 7 - day annualized yield of 265 cash - management products was 1.35% [60][62]. 3.6 Duration - This week, the duration of public funds decreased at first and then increased. From October 13 to October 17, the duration of public funds increased by 0.035 to 2.382 compared with October 10, and the weekly average was 2.364 [64]. - This week, the divergence of duration decreased, and the market's consensus expectation increased slightly. On October 17, the divergence of public fund duration decreased by 0.014 to 0.321 compared with October 10 [64].

Core Insights - The report emphasizes a focus on "internal" growth, prioritizing new economy sectors such as AI software, AI chips, semiconductor equipment and materials, and aerospace engines, alongside traditional sectors like finance and resource industries [4][11] - There are emerging signals of easing, suggesting a shift towards external demand-related sectors in the third quarter, particularly in North American computing power and innovative pharmaceuticals [11][12] - The report anticipates that growth will likely remain the leading style in the mid-term bull market, despite low probabilities for deep adjustments in growth due to a lack of strong policy expectations [12][18] Market Review and Outlook - The report reviews the market's transition towards large finance and consumption sectors, noting a rebound following the maximum negative impact of tariffs [9][10] - It highlights that the Shanghai Composite Index has risen over 10% to above 3800 points since the mid-year strategy [9] - The report suggests that the current market environment, influenced by U.S.-China trade tensions, presents a good opportunity for allocation despite a tendency for market participants to remain cautious [10][11] Growth and Performance Analysis - The report indicates that TMT (Technology, Media, and Telecommunications) sectors are experiencing sustained growth, with revenue and profit growth rates expected to continue improving [5][17] - It notes that the performance expectations for TMT sectors, including computing power and applications, have been consistently underestimated, with upward revisions anticipated as market understanding improves [17][27] - The report also discusses the relative valuations of U.S. tech stocks, indicating they are high but not at extreme levels compared to historical peaks [15][22] Investment Strategy - The report recommends prioritizing investments in sectors that are "internally focused," including autonomous controllable technologies and consumer sentiment-driven sectors [11][12] - It suggests that the market may face various expectation changes in October, but a stabilization in risk appetite is expected to lead to renewed market momentum [10][11] - The report outlines three potential scenarios for deep adjustments in growth, none of which are currently met, indicating a favorable outlook for growth sectors [12][18]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2][7] Core Views - The company has shown a revenue of 9.392 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 2.7%, with a net profit attributable to shareholders of 744 million yuan, up 81.2% year-on-year [7][8] - The company is expected to achieve a net profit of 1.084 billion yuan in 2025, with a significant growth rate of 226.69% [7][9] - The retail segment is driving growth, particularly through high-end products and services, while the engineering paint prices have stabilized [9][10] Financial Performance - Revenue projections for the company are as follows: 12.476 billion yuan in 2023, 12.105 billion yuan in 2024, and an estimated 12.754 billion yuan in 2025, with a growth rate of 5.36% for 2025 [6][10] - The net profit for 2023 is projected at 174 million yuan, increasing to 1.084 billion yuan in 2025, reflecting a substantial increase in profitability [6][10] - The company's EPS is expected to rise from 0.33 yuan in 2023 to 1.47 yuan in 2025, indicating strong earnings growth [6][10] Market Position and Strategy - The company has maintained high growth in the home decoration paint segment, with a revenue increase of 11.8% year-on-year for the first three quarters [9][10] - The gross margin has improved by 4.16 percentage points to 32.81%, attributed to a decrease in titanium dioxide prices and a higher proportion of high-margin products [9][10] - The company is focusing on enhancing service capabilities and expanding its retail presence, which has become the most important channel for revenue and performance growth [9][10]

Core Insights - The report emphasizes the construction of an AI-driven low-frequency index enhancement strategy using deep learning frameworks to build alpha and risk models [3] Market Index Performance - As of October 17, 2025, the Shanghai Composite Index fell by 1.47%, the Shenzhen Component Index dropped by 4.99%, and the CSI 300 decreased by 2.22%, indicating a general market decline with dividends performing counter to the trend [5][8] - The performance of index enhancement funds as of October 17, 2025, shows that the CSI 300 index enhancement fund had a minimum excess return of -2.97%, a median of 0.12%, and a maximum of 1.04% [12] - Year-to-date, the CSI 300 index has risen by 14.7%, while the CSI 300 index enhancement portfolio has increased by 23.7%, resulting in an excess return of 9.0% [19] Index Enhancement Fund Performance - The CSI 500 index enhancement fund recorded a minimum excess return of -0.22%, a median of 0.74%, and a maximum of 3.46% as of October 17, 2025 [12] - The CSI 1000 index enhancement fund had a minimum excess return of -0.59%, a median of 0.60%, and a maximum of 1.81% [12] - For the year, the CSI 500 index enhancement fund has achieved an excess return of 6.8%, while the CSI 1000 index enhancement fund has seen an excess return of 13.4% [24][30] Tracking Portfolio Performance - The report outlines the construction of index enhancement portfolios for the CSI 300, CSI 500, and CSI 1000 using deep learning frameworks, with weekly rebalancing and a constraint on weekly turnover rate of 10% [15] - The alpha signals are derived from a multi-source feature set and stacked multi-model strategies, while risk signals are identified using neural networks [15] CSI 300 Index Enhancement - As of October 17, 2025, the CSI 300 index has increased by 14.7%, while the CSI 300 index enhancement portfolio has risen by 23.7%, yielding an excess return of 9.0% [19] - The performance statistics for the CSI 300 index enhancement portfolio show a maximum excess return of 10.72% for the year [20] CSI 500 Index Enhancement - The CSI 500 index has risen by 22.5% year-to-date, with the CSI 500 index enhancement portfolio increasing by 29.3%, resulting in an excess return of 6.8% [24] - The performance statistics for the CSI 500 index enhancement portfolio indicate a maximum excess return of 12.39% for the year [25] CSI 1000 Index Enhancement - The CSI 1000 index has increased by 20.6% year-to-date, while the CSI 1000 index enhancement portfolio has risen by 34.0%, leading to an excess return of 13.4% [30] - The performance statistics for the CSI 1000 index enhancement portfolio show a maximum excess return of 18.12% for the year [31]

Group 1: Report Industry Investment Rating - Not available Group 2: Core Views - The current low - level capital price reflects the central bank's intention, and the trigger may be the demand for capital protection before the Fourth Plenary Session or the demand for liquidity easing during the repeated Sino - US relations. Capital is expected to remain optimistic until at least the Fourth Plenary Session. It is recommended to allocate 1 - year certificates of deposit (CDs) at a yield above 1.68% [4]. - Considering the central bank's supportive attitude, the forward - looking net investment in outright reverse repurchases has kept the weighted price of DR001 stable at 1.31% since early October. The capital situation is expected to remain optimistic before the Fourth Plenary Session. The 1 - year CD with a current yield of 1.67% can be gradually allocated to obtain riding returns [23]. Group 3: Summary by Relevant Catalogs 1. Fund Super - expected Looseness - Last week, the central bank significantly "shortened the short - term and lengthened the long - term", and the capital felt loose. The DR001 capital price remained stable at around 1.31% throughout the week [10]. - The central bank's "shortening the short - term and lengthening the long - term" operation is obvious. On the one hand, it is beneficial to the stability of commercial banks' capital lending, and on the other hand, it helps the central bank strengthen the regulation of the short - term capital market. In October, the central bank continuously withdrew short - term liquidity, while the net investment of outright reverse repurchases reached the highest value since March [16]. - In October, the central bank increased the 3 - month and 6 - month outright reverse repurchases and advanced the investment rhythm, which increased commercial banks' willingness to lend and supported the current capital looseness [18]. - The increase in short - term CD prices is mainly due to supply - side factors. The current low - level capital price represents the central bank's intention. Since October 9, the weighted price of DR001 has been stable at 1.31% [21][22]. 2. Weekly Fund CD Tracking and Key Event Reminders - **Central Bank**: Last week, the central bank had a net withdrawal of reverse repurchases and invested 60 billion yuan in 6 - month outright reverse repurchases. Next week, 67.31 billion yuan of short - term funds will mature, and 130 billion yuan of outright reverse repurchase funds and 70 billion yuan of MLF will mature in October [28]. - **Government Bonds**: Last week, the net financing of government bonds was - 2.36 billion yuan, and the cumulative net financing was 1.15455 trillion yuan, with a net financing progress of 83.3%. Next week, the net financing of government bonds is expected to be 44.52 billion yuan, and the cumulative net financing will reach 1.19908 trillion yuan, with a net financing progress of 86.5%. The net payment will be 15.84 billion yuan. Structurally, replacement bonds are close to full issuance, and the issuance progress of new local government bonds is still slower than the seasonal average [28]. - **Bills**: The bill interest rate was oversupplied last week, and the bill interest rate generally increased [28]. - **Exchange Rate**: The RMB depreciated by 0.05% against the US dollar last week. The USDCNH/USDCNY swap points were around 1300/1200 points. The central bank's demand for exchange rate regulation was weak [28]. - **Funds**: The central bank continuously invested, and the net lending of state - owned banks continued to increase. The capital price decreased, the net lending of capital pass - through parties (money market funds + wealth management products) decreased, and the non - bank capital borrowing demand continued to increase. The capital stratification remained at a low level. In terms of leverage, the leverage ratio of commercial banks decreased, while the leverage ratios of other institutions increased. In terms of price perception, the decline of the GC series > the increase of the R series > the increase of the DR series > the decline of the Shibor, and the term and institutional stratification narrowed, and the capital felt loose [28]. - **CDs**: In the primary market, the net financing of bank CDs turned positive last week, and the weighted issuance duration also lengthened. In the secondary market, the activity of CDs continued to decline, the yield center was basically the same as before, and non - bank buying increased significantly. The 1 - year AAA CD yield is currently 1.6725% [28][69][80]. 3. Central Bank: 6 - month Outright Reverse Repurchase Investment of 60 Billion Yuan - Last week, the central bank had a net withdrawal of reverse repurchases and invested 60 billion yuan in 6 - month outright reverse repurchases. The OMO had a net withdrawal of 149.92 billion yuan. Next week, 67.31 billion yuan of short - term funds will mature, and 130 billion yuan of outright reverse repurchase funds and 70 billion yuan of MLF will mature in October [31][33]. 4. Government Bonds: Next Week's Net Payment to Rise to 15.84 Billion Yuan - Last week, the net financing of government bonds was - 2.36 billion yuan, and the cumulative net financing was 1.15455 trillion yuan, with a net financing progress of 83.3%. Next week, the net financing of government bonds is expected to be 44.52 billion yuan, and the cumulative net financing will reach 1.19908 trillion yuan, with a net financing progress of 86.5%. The net payment will be 15.84 billion yuan. Structurally, replacement bonds are close to full issuance, and the issuance progress of new local government bonds is still slower than the seasonal average. On October 20, a 149 - billion - yuan 10 - year treasury bond will be issued, and the peak of the government bond payment for the whole week will be on October 21, with an amount of 366.6 billion yuan [36][43]. 5. Bills: This Week's Bill Trend Generally Upward - The bill interest rate was oversupplied this week, and the bill trend generally increased. As of October 17, the 3 - month national - share direct discount rate, 3 - month national - share transfer discount rate, 6 - month national - share direct discount rate, and 6 - month national - share transfer discount rate were 0.57%, 0.43%, 0.75%, and 0.76% respectively, up 7BP, 8BP, 3BP, and 2BP from October 10 [45]. 6. Exchange Rate: RMB Exchange Rate Depreciated - The RMB depreciated by 0.05% against the US dollar this week. The USDCNH/USDCNY swap points were around 1300/1200 points. The central bank's demand for exchange rate regulation was weak. On October 17, the central parity rate of the US dollar against the RMB was 7.0949, and the inverse cycle factor was - 242pip. The central bank did not announce or issue offshore central bank bills this week [49][51][52]. 7. Market Capital Supply and Demand: Net Lending of State - owned Banks Continued to Recover - The central bank continuously invested, and the net lending of state - owned banks continued to increase. The capital price decreased, the net lending of capital pass - through parties (money market funds + wealth management products) decreased, and the non - bank capital borrowing demand continued to increase. The capital stratification remained at a low level. The leverage ratio of commercial banks decreased, while the leverage ratios of other institutions increased. The decline of the GC series > the increase of the R series > the increase of the DR series > the decline of the Shibor, and the term and institutional stratification narrowed, and the capital felt loose [54][61][67]. 8. CDs: Net Financing of State - owned Bank CDs Turned Positive, and the Weighted Issuance Duration Lengthened 8.1 Primary Issuance Market - The net financing of bank CDs turned positive last week, with a net financing scale of 22.466 billion yuan, and the average issuance interest rate decreased to 1.6315%. Next week, about 61.789 billion yuan of CDs will mature. Structurally, the net financing of state - owned bank CDs turned negative, and the weighted issuance duration lengthened. In terms of different entities, the net financing of national - share banks turned negative, the proportion increased, and the overall subscription success rate decreased. In terms of different terms, the weighted issuance duration of CDs increased to 6.07 months, and the proportion of long - term CD issuance by national - share banks decreased. In terms of price, the issuance interest rates of CDs at all terms decreased to varying degrees, with short - duration varieties declining more [69][73][75]. 8.2 Secondary Trading Market - The activity of CDs continued to decline last week, the yield center was basically the same as before, and non - bank buying increased significantly. The CD yield first increased and then decreased, and the weekly center increased by 0.03BP compared with last week, basically remaining the same. The bank system was a net seller as a whole, while non - banks except securities firms were net buyers, among which the strength of money market funds, wealth management products, and insurance significantly recovered. The 1 - year AAA CD yield is currently 1.6725% [80][83].

Report Industry Investment Rating No information provided in the content. Core Viewpoints - This week, Sino-US trade frictions have been fluctuating, with the SCFI continuing to rise. In the short term, Sino-US relations may ease, creating opportunities for high-level meetings between the two sides [2]. - Real estate sales are weak, and the "Silver October" is lackluster, partly due to the high base caused by the "924 New Policy" last year [2]. - The prices of rebar and cement continue to decline. Weak demand remains the key factor restricting the recovery of spot prices. In the futures market, coking coal and coke led the rise in domestic commodity futures on Friday night, and safety supervision has some impact on the supply side [2]. Summary by Directory 1. Real Estate Sales - This week, real estate sales remained weak after the holiday. The new home sales area in 20 cities tracked by Wind increased by 269.58% week-on-week but decreased by 21.66% year-on-year. New home sales in all tiers of cities were significantly stronger than the previous period but still weak compared to the same period last year, with first-tier and third- and fourth-tier cities showing a large decline in new home sales area compared to last year [3][8]. - Looking at key cities, new home sales increased significantly week-on-week, with notable increases in Shenzhen (567.67%) and Suzhou (419.10%). However, new home sales area in all cities was significantly lower than the same period last year [14]. - Second-hand home sales also increased significantly week-on-week, with the decline narrowing year-on-year. In key cities, second-hand home sales area increased significantly week-on-week, with significant increases in Beijing (582.88%) and Shenzhen (573.7%). However, second-hand home sales area in all key cities decreased compared to the same period last year [25]. 2. Investment - In terms of investment, most commodity prices declined this week. Rebar prices, glass futures prices, asphalt prices, and cement prices all decreased [34]. 3. Production - In terms of production, most operating rates increased this week. The PTA operating rate decreased, while the operating rate of automobile tires increased significantly, and the operating rates of petroleum asphalt, polyester filament, coking enterprises, and steel blast furnaces remained basically flat [44]. 4. Consumption - In terms of consumption, the momentum of travel was strong. Subway ridership, domestic flights, and automobile consumption were above seasonal levels, while movie box office was below seasonal levels [52]. 5. Exports - In terms of exports, the SCFI index increased significantly this week, the BDI index increased, and the CRB spot index decreased slightly [59]. 6. Prices - In terms of prices, pork prices decreased, vegetable prices increased, and oil prices decreased. Rebar prices also decreased [63].

Global Asset Prices - Global bond market yields generally declined, with the 10-year U.S. Treasury yield down by 3 basis points[7] - Major global stock indices showed mixed results, with the S&P 500, Dow Jones, and Nasdaq increasing by 1.7%, 1.6%, and 2.1% respectively[7] - WTI crude oil and Brent crude oil prices fell by 7.3% and 6.4% respectively, while London gold prices rose by 5.8%[7] Central Bank Monetary Policy - The Federal Reserve is considering halting its balance sheet reduction, citing sufficient reserves and stable economic growth[9] - ECB President Lagarde indicated that the monetary policy is in good shape but does not rule out further rate cuts if necessary[9] U.S. Economic Dynamics - The U.S. government remains shut down, with the Senate rejecting a temporary funding bill for the tenth time, impacting federal operations[12] - The NFIB small business optimism index fell by 2 points to 98.8, marking a three-month low due to declining economic outlook and inventory concerns[13] - The October Beige Book reported stable economic activity, but increased layoffs and natural attrition were noted due to weak demand and ongoing economic uncertainty[13] Other Regional Economic Dynamics - The IMF raised its global growth forecasts for 2025 and 2026 to 3.2% and 3.1% respectively, but these remain below pre-tariff levels[25] - Eurozone industrial production fell by 1.2% month-on-month in August, with capital goods being a major drag[25] - Japan's industrial output contracted by 1.5% in August, marking the second consecutive month of decline due to trade policy uncertainties and weak demand[25] Upcoming Focus - Key upcoming data includes the U.S. September CPI and the October S&P Global PMI, which will be closely monitored for economic indicators[29]