- The report discusses the seasonal characteristics of the A-share market in Q4, highlighting a tendency for slight upward movement driven by year-end policy signals and marginal improvements in the funding environment[65][66][55] - Large-cap stocks, represented by the CSI 300 index, typically outperform small-cap stocks in Q4 due to their defensive attributes and institutional fund reallocation preferences. Historical data shows a CSI 300 win rate of 61% and median return of 1.63%, compared to the CSI 1000's win rate of 39% and median return of -1.60%[19][20][27] - Micro-cap stocks exhibit strong resilience in Q4, with a win rate of 78% and median return of 7.35%. This performance is attributed to factors such as liquidity preferences post-holiday and supportive policies for small and micro enterprises[29][30][33] - Growth and dividend styles show distinct characteristics in Q4. Growth stocks often face volatility due to profit-taking and valuation rebalancing, while dividend stocks demonstrate stability with a win rate of 56% and median return of 0.87%[35][38][40] - Industry rankings experience significant shifts in Q4, with most leading industries from the first three quarters dropping in rank, while new leaders emerge due to policy catalysts or valuation adjustments. Stable industries typically benefit from consistent policy support, solid fundamentals, and uninterrupted fund allocation[44][48][50]

- The "Growth-Value Style Rotation Model" suggests overweighting growth stocks based on quantitative economic cycle analysis, where a high profit cycle slope and strong credit cycle favor growth, while high interest rate levels favor value. The model combines signals from fundamentals, valuation, and sentiment to recommend growth allocation[29][30][31] - The "Growth-Value Style Rotation Strategy" has achieved an annualized return of 13.10% since 2012, outperforming the benchmark's 7.77% annualized return. The strategy's annualized excess return is 5.33%, with a maximum drawdown of 43.07% compared to the benchmark's 44.13%[30][32] - The "Small-Cap vs Large-Cap Style Rotation Model" is constructed using 11 effective rotation indicators, including market sentiment concentration, Beta dispersion, and volatility risk. Currently, 7 indicators favor large-cap stocks, maintaining a recommendation to overweight large-cap style[33][34] - The "Small-Cap vs Large-Cap Style Rotation Strategy" has delivered an annualized excess return of 9.91% this year, with a shift from small-cap allocation in the first half to large-cap allocation in the second half. Since 2014, the strategy has consistently generated positive excess returns annually[34][35] - The "Short-Term Timing Strategy" integrates signals from fundamentals, valuation, sentiment, and liquidity. This week, the strategy turned cautious due to weak manufacturing PMI, high PE and PB valuation levels, and subdued market sentiment. Liquidity signals remain neutral[19][20][21] - The "Short-Term Timing Strategy" has achieved an annualized return of 16.52% since 2012, significantly outperforming the benchmark's 4.73%. The strategy's annualized excess return is 11.79%, with a maximum drawdown of 15.49% compared to the benchmark's 31.41%. This year, the strategy has delivered a return of 23.22%, with an excess return of 11.16%[21][24][27]

Group 1: Market Sentiment Indicators - The market sentiment index as of October 10 is 1.75, a slight decrease from 1.85 on September 26, indicating a bearish sentiment [8][11] - The financing balance ratio continues to rise, reflecting an increase in market leverage sentiment and improving trading atmosphere [27][11] - The industry trading volatility continues to decline, suggesting a slowdown in fund switching activity and a decrease in market participants' divergent views on short-term industry value [21][11] Group 2: Timing Model Insights - The model indicates a preference for small-cap value style, with a weak signal strength due to a slight decline in the 5-day RSI relative to the 20-day RSI [45][46] - The short-term trend scores for industries such as non-ferrous metals, power equipment, real estate, machinery, and electronics are notably strong, with non-ferrous metals scoring the highest at 98.31 [34][36] - The model maintains a strong signal for value style, suggesting potential for further strengthening in the future [45][46] Group 3: Industry Crowding and Performance - Recent high returns in non-ferrous metals and coal are accompanied by high fund crowding, indicating potential volatility risks due to valuation and sentiment corrections [42][41] - Industries like automotive and electronics show high crowding but lower returns, while sectors with low crowding such as pharmaceuticals and beauty care may present long-term investment opportunities as risk appetite increases [42][41] - The average crowding levels for industries as of October 10 show automotive, environmental protection, real estate, power equipment, and electronics as the highest, while agriculture, computers, defense, beauty care, and pharmaceuticals are the lowest [40][41]

Core Insights - The style rotation model accurately predicted trends in Q3 2025, with signals favoring small-cap and growth stocks for Q4 2025 [1] - The industry rotation model showed positive excess returns in September, with a monthly return of 3.33% and an excess return of 2.43% relative to the benchmark [1] Style Rotation Model - For Q4 2025, the dual-driven rotation strategy indicates a comprehensive score of -1, predicting a preference for small-cap stocks [2] - The growth style is favored in Q4 2025, with a comprehensive score of -3 from the dual-driven rotation strategy [3] Industry Rotation Insights - In September, the composite factor strategy achieved an excess return of 2.43%, while the single-factor multi-strategy had an excess return of -1.02% [3] - For October, the recommended long positions in single-factor multi-strategy include the computer, communication, electronic, non-bank financial, and banking sectors [3] - The composite factor strategy recommends long positions in home appliances, non-ferrous metals, electronics, communication, and computers [3]

Market Overview - The stock market experienced increased volatility with a notable adjustment in the small-cap growth sector, while value stocks outperformed growth stocks [3][9] - The Shanghai Composite Index fell by 1.2%, the CSI 300 decreased by 0.8%, while the ChiNext Index rose by 2.4% [3] Bond Market - Bond yields saw a slight decline, with the 10-year government bond yield down by 1 basis point to 1.83% and the 30-year yield down by 3 basis points to 2.11% [4] International Market - The U.S. labor market showed weakness with only 22,000 non-farm jobs added in August, significantly below the expected 75,000, leading to a decline in U.S. Treasury yields [5][10] - The Hang Seng Index rose by 1.4%, outperforming A-shares due to expectations of interest rate cuts by the Federal Reserve and continued inflow of capital [5] Sector Performance - Notable sectors included power equipment and new energy (up 5.91%), non-ferrous metals (up 2.26%), and pharmaceuticals (up 1.49%), while defense and military (-11.61%) and computers (-6.76%) underperformed [7][9] - The market saw a shift in capital flow, with low-growth sectors like power equipment and new energy performing well due to high-low switching of funds [9] Fund Issuance - A total of 38 public funds were issued last week, accumulating 27.6 billion units, with a noticeable shift towards equity funds [13]

Group 1 - The core viewpoint of the article indicates that the market is favoring small-cap and growth styles, with the style rotation model for Q3 2025 confirming this trend [1][2] - In August, the small-cap stocks outperformed large-cap stocks with a monthly excess return of 1.34%, while growth stocks outperformed value stocks with a monthly excess return of 12.76% [1][3] - The industry rotation model showed that in August, two industry combinations achieved absolute returns exceeding 12%, with excess returns above 4% [1][3] Group 2 - The dual-driven rotation strategy for Q3 2025 indicated a signal for small-cap stocks based on the latest data as of June 30, 2025, with a composite score of -3 [2] - The dual-driven rotation strategy for Q3 2025 also indicated a signal for growth stocks, with a composite score of -5 [3] - In August, the composite factor strategy achieved an excess return of 4.38%, while the single-factor multi-strategy achieved an excess return of 4.59% [3]

Report Summary 1. Report Industry Investment Ratings - Not provided in the given content. 2. Core Viewpoints - The report maintains the current bull - market judgment for the stock market, suggesting investors to pay attention to short - term adjustment opportunities in IF, IM, and IC. For other commodities, it provides specific outlooks and trading suggestions based on their respective fundamentals and market conditions [2][3]. 3. Summary by Variety Options - A - shares continued to rise this week, with the Shanghai Composite Index breaking through 3800 points. The trading volume of the market exceeded 2 trillion for 8 consecutive trading days. For different index options (IO, MO, HO), the trading volume and open interest changed, and implied volatility increased. Trend investors should focus on the strength - weakness arbitrage opportunities between varieties, and volatility investors should go long on volatility when the target index rises and short on volatility when it falls. August 27th was the last trading day for the August contracts of SSE and SZSE ETF options [2]. Stock Index - The three major stock indexes had three consecutive weekly positive lines. The Shanghai Composite Index was relatively stable in the short - term, while the ChiNext had a relatively high short - term deviation rate and signs of overheating. The market showed a technology - growth and small - cap style advantage. The main channels for residents' funds to enter the market were the continuous increase in margin trading balances, private fund sizes, and active individual investor account openings. The report maintains the bull - market judgment and suggests investors to pay attention to short - term adjustment opportunities in IF, IM, and IC [3]. Aluminum - The market is still speculating on the Fed's September interest - rate cut expectation. Due to the release of supply increments and the off - season of consumption, the inventory accumulation expectation is strong. Aluminum prices are expected to maintain high - level consolidation in the short term, with a reference range of 20,000 - 21,000 yuan/ton [3]. Carbonate Lithium - The spot price of battery - grade carbonate lithium was 80,500 - 86,500 yuan/ton this week, with a futures price of 78,100 - 90,100 yuan/ton. The Friday closing price was 78,960 yuan/ton, a weekly decline of 7,940 yuan or 9.14%. If only the Jiaxiaowo mine stops production for several months, overseas lithium mines and salts can make up for the domestic reduction after sufficient logistics time. The supply - demand will gradually return to balance after November. Before that, the shortage will be mainly offset by digesting social inventories. The price is expected to be in a wide - range shock [3]. Coking Coal and Coke - The weekly raw coal production was 1912,000 tons, a week - on - week increase of 33,000 tons, and the raw coal inventory was 4716,000 tons, a week - on - week increase of 15,000 tons. The coking coal production was 771,000 tons, a week - on - week increase of 7,000 tons, and the coking coal inventory was 2756,000 tons, a week - on - week increase of 180,000 tons. The seventh round of coke price increases was fully implemented. With the Fed's interest - rate cut expectation and the improvement of the domestic macro - environment, the prices of coking coal and coke are expected to be firm and fluctuate strongly in the short term [4]. Urea - The domestic urea market price dropped significantly over the weekend, with the mainstream factory - gate price around 1680 yuan/ton. The daily production of the urea industry fluctuated around 190,000 - 200,000 tons. The inventory of upstream urea enterprises continued to accumulate, and the port inventory increased to 501,000 tons. The demand from compound fertilizer enterprises decreased, but there is an expectation of marginal improvement in downstream提货 at the end of the month. The futures market is expected to fluctuate weakly [4]. Steel (Rebar and Hot - Rolled Coil) - The production of rebar decreased while demand increased, and the inventory increase slowed down. The production and demand of hot - rolled coil both increased, and the inventory accumulation expanded slightly. The overall inventory accumulation speed was slow. With the Fed's possible September interest - rate cut and the upcoming SCO Summit, the market sentiment is relatively optimistic. Steel prices are expected to fluctuate strongly next week [4]. Eggs - The national egg spot price fell steadily last week and stabilized over the weekend. After this round of adjustment, due to the support of Mid - Autumn Festival stocking, the spot price is not expected to decline significantly. The futures market has a large premium over the spot, and the market has been shorting the high - premium contracts [5]. Pigs - The live - pig spot price declined last week. The supply is sufficient while the demand is weak, and the price is expected to continue to fall in the short term. The futures market showed a divergence in trends, with the near - term contracts reflecting the oversupply situation and the far - term contracts reflecting the expectation of capacity reduction. The market is expected to remain range - bound [5]. Sugar - The domestic sugar spot price was 5940 - 5950 yuan/ton, and the ICE raw sugar price was 16.2 - 16.09 cents/pound. The Brazilian sugar production is in a peak period, but the actual production is lower than expected, so the final output is uncertain. The domestic sugar price is greatly affected by the international price and is expected to follow the international trend and fluctuate weakly [5]. Cotton - The cotton spot price was 15,210 - 15,243 yuan/ton, and the ICE cotton price decreased by 0.7% week - on - week. The Zhengzhou cotton price decreased by 0.64% week - on - week. The international market lacks upward drivers, and the domestic market is expected to see a stable - to - increasing output as the new cotton listing approaches, which will put pressure on the long - term market. The demand side has shown some improvement, and the cotton market is expected to fluctuate within a range. Attention should be paid to the support at around 13,900 yuan [6].

Core Insights - The small-cap market continues to show strong performance, with the CSI 2000 Enhanced ETF (159552) nearing a historical high of 1.2 billion, reflecting a year-to-date growth of 7247.70% [1] Group 1: Market Trends - The current channels for resident capital entering the market include rising financing balances, increasing private fund sizes, and active individual investor account openings, contributing to a positive feedback loop for incremental capital [1] - The market is exhibiting a clear preference for technology growth styles (represented by the Sci-Tech 200 and ChiNext Index) and small-cap styles (represented by the CSI 1000 and CSI 2000), which are expected to continue dominating until other types of external capital enter the market [1]

Group 1 - The small-cap stocks experienced a significant reversal, with the largest CSI 2000 Enhanced ETF (159552) hitting a new high for the 42nd time, reflecting a year-to-date increase of 53.80%, outperforming the benchmark index by 20.74% [1] - The total scale of the CSI 2000 Enhanced ETF has grown by 7212.50% this year, reaching approximately 1.2 billion [1] - Current channels for resident capital entering the market include rising financing balances, increasing private fund sizes, and active individual investor account openings, contributing to a positive feedback loop for incremental capital [1] Group 2 - The market is showing a clear preference for technology growth styles (CSI Technology 200, ChiNext Index) and small-cap styles (CSI 1000, CSI 2000), which are expected to continue until other types of external capital enter the market [1]

Market Performance - On August 18, the A-share market saw a strong performance with a trading volume of 2.81 trillion yuan, marking a near 10-year high for the Shanghai Composite Index [1][2][3] - The Shanghai Composite Index reached 3740 points during the day, the highest since August 21, 2015, while the ChiNext Index closed at 2606.20 points, the highest since February 2, 2023 [2][3] Sector Performance - Technology stocks led the market rally, with significant gains in the telecommunications, comprehensive, and computer sectors, which rose by 4.46%, 3.43%, and 3.33% respectively [3][4] - Small-cap stocks outperformed large-cap stocks, with the CSI 1000 Index and CSI 2000 Index rising by 1.69% and 2.14% respectively [2][3] Capital Inflow - As of August 15, the A-share margin trading balance reached 20,626.42 billion yuan, with a financing balance of 20,485.99 billion yuan, both hitting over 10-year highs [1][5] - The net inflow of leveraged funds exceeded 530 billion yuan last week, indicating strong market interest [5][6] Investment Opportunities - Analysts suggest that the current market conditions present numerous investment opportunities, particularly in technology growth and small-cap styles, with expectations of continued upward movement in the mid-term [1][7][8] - The overall market capitalization of A-shares reached 110.08 trillion yuan, with a rolling P/E ratio of 21.34 times, indicating a strong valuation environment [7][8] Stock Highlights - Notable stocks in the telecommunications sector included Ruijie Networks and Dekeli, both hitting the 20% limit up, while Guangke Technology rose over 18% [4] - The top stocks with significant net inflows included ZTE Corporation and Lioo Co., with inflows of 27.77 billion yuan and 15.11 billion yuan respectively [6]