EBSCN·2025-05-19 11:10Investment Rating - The report indicates a cautious view on the market with a focus on small-cap stocks as a preferred investment style [1][12]. Core Insights - The A-share market continued to show volatility with a contraction in trading volume, leading to a cautious sentiment in the market. The liquidity remains loose, favoring small-cap stocks, and a "dividend + small-cap" strategy is suggested for relative returns [1][12]. - Major indices showed mixed performance, with the Shanghai Composite Index rising by 0.76% and the ChiNext Index increasing by 1.38%, while the CSI 500 and CSI 1000 experienced slight declines [1][13]. Summary by Sections Overall Market Performance - The report covers the performance of major indices from May 12 to May 16, 2025, highlighting a mixed outcome with the Shanghai Composite Index up by 0.76% and the ChiNext Index up by 1.38% [1][13]. - The report notes that the liquidity environment remains favorable for small-cap stocks, which are expected to continue outperforming [1][12]. Industry Valuation - As of May 16, 2025, the report categorizes the valuation of major indices as "moderate," while the ChiNext Index is classified as "safe." Specific industries such as non-bank financials, transportation, and utilities are also rated as "safe" [1][18][19]. Fund Flow Tracking - The report indicates that institutional interest was highest in stocks like Anji Technology and Hengda, with significant net outflows from ETFs, particularly in the stock-type ETFs [3][56]. - The report highlights that southbound capital saw a net outflow of 86.85 billion HKD during the tracking period [3][56]. Volatility Analysis - The report discusses the cross-sectional volatility of major indices, noting a decrease in the cross-sectional volatility of the CSI 300, CSI 500, and CSI 1000, indicating a deterioration in the short-term alpha environment [2][37]. - Time series volatility for the CSI 300 increased, suggesting an improvement in the alpha environment, while the CSI 500 and CSI 1000 saw declines [2][41].