Group 1: Market Overview - The market is expected to continue high-level fluctuations due to a "policy window" period following the Fourth Plenary Session and new US-China negotiations, with a focus on the upcoming Central Economic Work Conference [2][3] - Economic fundamentals are showing marginal slowdown, with October retail sales expected to grow by approximately 2.9% year-on-year, while fixed asset investment is projected to decline by 0.7% [4][25] - The central bank's indication of restoring open market operations for government bonds signals a marginal easing of monetary policy, which may lead to a "stock-bond seesaw" effect if interest rates decline [3][17] Group 2: Industry Configuration - The AI industry remains a core focus, with adjustments providing opportunities for a new round of technology market trends, while sectors with strong performance support, such as energy storage/batteries, military industry, storage, and engineering machinery, are also highlighted [5][39] - The first main line of investment is to continue to focus on the AI industry chain, particularly in computing power (CPO/PCB/liquid cooling/optical fiber) and application sectors (robots/games/software), which are expected to maintain a clear trend of growth [39][41] - The second main line includes sectors with solid performance support, such as electric power equipment (energy storage/batteries), military industry, storage, and engineering machinery, which are anticipated to benefit from high demand and ongoing improvements in performance [39][41]

Group 1 - The equity market experienced a narrow "V-shaped" trend in October, with the Sci-Tech 50 index leading the decline with a drop of 5.33% [3][13] - The convertible bond market showed weakness, with AAA-rated convertible bonds rising by 1.40% in October, while high-priced convertible bonds fell by 2.72% [3][34] - As of October 31, the median price of convertible bonds remained above 132.34 yuan, marking a relatively high level since 2017, with a median premium rate of 30.43% [3][32] Group 2 - The October PMI weakened, indicating that there is still potential for economic stability, with the manufacturing PMI dropping to 49.0% [4][54] - Approximately 51.6% of convertible bond underlying stocks saw a year-on-year decline in net profit for the first three quarters of 2025, with industries like petrochemicals, steel, and environmental protection showing upward performance [4][51] - The report suggests focusing on high-quality convertible bonds that benefit from improving fundamentals and economic conditions, particularly in sectors supported by domestic policies such as transportation, steel, and coal [5][57] Group 3 - In November, it is recommended to maintain a neutral position in convertible bonds and seek quality targets based on fundamental improvements [5][57] - The report highlights the importance of low-priced convertible bonds and equity-type convertible bonds, particularly in sectors like AI, semiconductors, and innovative pharmaceuticals [5][57] - The convertible bond market is expected to see a reopening of incremental funds, which could boost valuations, especially for mid-to-low-priced large-cap convertible bonds [5][57]

Group 1: Industry Development - Liu Ning emphasized the need for technological transformation and upgrading in the coal chemical industry to achieve clean and efficient resource recycling [3] - The focus is on expanding product application scenarios and enhancing cooperation between upstream and downstream sectors in the steel industry to promote high-quality development [3] - Companies are encouraged to strengthen their innovation capabilities and integrate innovation chains, industrial chains, capital chains, and talent chains to foster the growth of the private economy [3] Group 2: Rural Development and Governance - The importance of developing rural characteristic industries and improving benefit linkage mechanisms to enhance the livelihoods of local residents was highlighted [4] - Liu Ning called for increased efforts in public welfare and basic livelihood construction to address the concerns of the community effectively [4] - The need for effective governance at the grassroots level, driven by party leadership, was emphasized to ensure community needs are met [4] Group 3: Water Resource Management - Liu Ning underscored the importance of enhancing flood disaster prevention and water resource management capabilities [4] - The focus is on implementing the recommendations from the recent plenary session in planning and advancing water conservancy projects [4] Group 4: Economic Stability - The necessity to align thoughts and actions with the spirit of the plenary session and to focus on stabilizing employment, enterprises, markets, and expectations was stressed [5] - The planning for the 14th Five-Year Plan period should be based on practical considerations to ensure the completion of annual targets [5]

Group 1 - The report emphasizes a style rebalancing in the market, focusing on undervalued and stagnant sectors as institutional funds tend to take profits from high-valuation stocks and shift towards low-valuation sectors during the fourth quarter [4][7][16] - The report highlights that the manufacturing PMI for October decreased by 0.8 percentage points to 49.0, indicating a contraction in the manufacturing sector, with both production and new orders indices showing declines [8][9] - The report notes that profits of industrial enterprises above designated size increased by 3.2% year-on-year from January to September, with September alone seeing a profit growth of 21.6%, driven by high-tech manufacturing and equipment manufacturing sectors [9][10][11] Group 2 - The report identifies key investment areas, including high-dividend large-cap blue chips such as banks and utilities, new consumption sectors like health and cultural tourism, and sectors benefiting from the "anti-involution" policy such as steel and photovoltaic [4][16] - The report discusses the ongoing reforms in the capital market, particularly the deepening of the ChiNext reform and the enhancement of the Beijing Stock Exchange's role as a capital market hub [12] - The report mentions the positive developments in US-China trade negotiations, which may enhance market resilience and provide a favorable environment for A-share performance [13][14]

Core Viewpoint - The manufacturing PMI for October decreased by 0.8 points to 49.0, influenced by fewer working days, uncertainties in external trade, and a continued decline in the real estate sector [1][6][7]. Manufacturing Sector Analysis - In October, 8 out of 15 sub-sectors in manufacturing remained in the expansion zone, consistent with previous values. Industries showing improvement include emerging manufacturing (computer communication electronics, pharmaceuticals, automobiles, general equipment), consumer goods (agricultural products, textiles), and some raw material sectors (chemicals, black metals) [1][10]. - Emerging manufacturing sectors saw a month-on-month increase due to factors such as the "14th Five-Year Plan" policy benefits, trends in AI industries, and the tax exemption window for new energy vehicles [10]. - The consumer goods sector's improvement was driven by increased travel activities during holidays, seasonal changes, and the "Double Eleven" e-commerce promotional events [10]. - The black metal sector experienced slight improvements due to seasonal factors and demand from downstream construction and automotive sectors, while the chemical sector saw a decline in new orders and production indicators [10]. Absolute Prosperity Levels - The absolute prosperity levels and percentile values for emerging manufacturing sectors like automobiles and computer communication electronics are leading. The petrochemical sector's prosperity percentile is above 90%, benefiting from declining crude oil prices [2][13]. Declining Industries - Industries experiencing a downturn in October include petrochemicals, chemical fibers, non-ferrous metals, metal products, and electrical machinery. The decline in the petrochemical chain is linked to price adjustments, with the output price index for petrochemicals, chemical fibers, and chemicals dropping by 10.8, 2.0, and 3.4 points respectively [2][15][16]. - The electrical machinery sector, which includes both new energy-related products and home appliances, faced a decline primarily due to high base effects and reduced subsidies [15]. Emerging Industries - Emerging industries such as new-generation information technology, new energy vehicles, and the biopharmaceutical sector are leading in prosperity, with slight declines in energy-saving and environmental protection sectors. In October, the prosperity of new energy vehicles, biopharmaceuticals, and new-generation information technology increased by 14.9, 12.2, and 8.9 points respectively, marking three consecutive months of improvement [3][16][17]. - Export orders for emerging industries improved significantly, with October seeing increases exceeding 10 points for biopharmaceuticals, new-generation information technology, and new energy vehicles [3][16]. Construction Industry - The construction industry shows a divergence between real estate and infrastructure. Civil engineering construction increased by 8.1 points in October, ending a four-month decline. The basic drivers for infrastructure are clear, with new policy financial tools and special bonds allocated for investment construction [4][20]. - The real estate sector remains under pressure, with the real estate industry's prosperity declining by 1.7 points and the construction sector down by 6.7 points [4][20]. Service Sector - The service sector showed little change month-on-month, with significant improvements in accommodation, catering, and aviation due to holiday travel. The postal sector also saw a substantial increase driven by e-commerce promotions [4][22][24]. - The PMI for the service sector rose by 0.1 points to 50.2, indicating stability [23].

Group 1 - The report highlights that the "15th Five-Year Plan" has significant implications for market performance, particularly in the context of historical trading patterns observed after the release of previous plans [5][11][20] - The report identifies key themes for investment opportunities in the upcoming month, including domestic substitution in computing power and software, military industry, AI applications, and robotics [5][12] - The report notes that the TMT (Technology, Media, and Telecommunications) sector currently has a crowding degree of around 35%, with a critical threshold at approximately 40% that warrants attention [5][27] Group 2 - The report emphasizes the importance of the "15th Five-Year Plan" in shaping the strategic direction of various industries, particularly in technology and defense sectors, with a focus on innovation and self-reliance [12][16] - The report outlines that the plan includes new strategic goals such as becoming a space power and an agricultural powerhouse, indicating a shift towards enhancing national capabilities [16][21] - The report discusses the historical performance of markets during previous Five-Year Plan cycles, suggesting that the current plan's implementation will likely reinforce existing market trends unless disrupted by significant macroeconomic narratives [5][17]

Group 1 - The report highlights a mixed economic outlook for the US, with expectations of a government shutdown resolution and a potential interest rate cut in December, impacting market liquidity and stock performance [4][15][19] - The A-share market is expected to remain in a consolidation phase, with a focus on three main investment themes: dividend recovery, economic recovery, and technology themes benefiting from the 14th Five-Year Plan [4][21] - The report identifies ten key stocks for November, including companies in the new energy, automotive, power equipment, fixed income, and pharmaceutical sectors, with no specific ranking [3][12][19] Group 2 - The report emphasizes the importance of the 14th Five-Year Plan in guiding future development directions, particularly in technology self-reliance, domestic consumption, and new energy [17][18] - The performance of the A-share market has shown volatility, with a significant portion of public fund holdings in the TMT sector, leading to potential profit-taking pressures [21][19] - The report provides detailed financial forecasts for selected companies, indicating expected revenue and profit growth across various sectors, including new energy and automotive [22][39][45]

Investment Rating - The report suggests a cautious outlook on the construction industry, recommending state-owned enterprises such as China Chemical, China Railway, and China Railway Construction, while also highlighting private companies like Zhizhi New Materials and Honglu Steel Structure as potential investment opportunities [3][12][14]. Core Insights - The construction industry is currently experiencing weak overall demand, but regional investments may gain momentum as national strategies are implemented [3][12]. - The report emphasizes the importance of modernizing infrastructure and upgrading key industries to enhance global competitiveness [3][10]. - Significant growth has been observed in specific sub-sectors, particularly in private infrastructure companies, which have shown substantial year-to-date gains [3][6]. Industry Performance - The SW Construction Decoration Index decreased by 1.49%, underperforming compared to major indices such as the Shanghai Composite Index, which increased by 0.11% [4][6]. - The best-performing sub-sectors for the week included Professional Engineering (+2.08%) and Decorative Curtain Walls (+1.39%) [4][6]. - Year-to-date, the private infrastructure sector has seen a remarkable increase of 67.91%, with individual companies like Chengbang Co. and Dongyi Risheng achieving gains of 182.55% and 182.38%, respectively [3][6]. Key Company Updates - Sichuan Road and Bridge reported a revenue increase of 1.95% and a net profit increase of 11.04% for the first three quarters of 2025 [12][14]. - Jianfa Hecheng experienced a revenue growth of 10.55% and a net profit increase of 21.2% during the same period [13][14]. - Notable changes in other companies include Xinjiang Jiaojian with a revenue increase of 38.58% and a net profit increase of 147.73% [14]. Market Trends - The report highlights the government's focus on constructing a modern industrial system and enhancing the competitiveness of key industries, including construction [10][11]. - The Ministry of Housing and Urban-Rural Development reported that 24,300 urban old residential communities were newly started or renovated from January to September 2025 [11][12]. - The report notes that the construction sector's fixed asset investment reached 2.6 trillion yuan in the first three quarters of 2025, reflecting a year-on-year decline of 4.17% [11].

Investment Rating - The report maintains a positive outlook on the construction industry, particularly in the context of the 14th Five-Year Plan emphasizing the consolidation of global competitiveness in the construction sector and the proactive development of new infrastructure [3][4]. Core Insights - The construction and decoration sector experienced a weekly decline of 1.49%, underperforming compared to major indices such as the Shanghai Composite Index and Shenzhen Component Index [5][6]. - The report highlights that the best-performing sub-industry for the week was professional engineering, with a weekly increase of 2.08% [7]. - Significant year-to-date gains were noted in the infrastructure private enterprises sector, which rose by 67.91%, and the decoration curtain wall sector, which increased by 44.62% [7]. - Key companies such as Sichuan Road and Bridge and Jianfa Hecheng reported revenue growth of 1.95% and 10.55% respectively for the first three quarters of 2025 [14][15]. Industry Performance - The construction industry underperformed against major indices, with a weekly drop of 1.49% compared to the Shanghai Composite Index's increase of 0.11% [5]. - The report indicates that the construction sector's performance is expected to improve as national strategic layouts deepen, providing greater elasticity in regional investments [4][12]. Key Company Updates - Sichuan Road and Bridge reported a year-on-year revenue increase of 1.95% and a net profit increase of 11.04% for the first three quarters of 2025 [14]. - Jianfa Hecheng's revenue grew by 10.55% year-on-year, with a net profit increase of 21.2% during the same period [15]. - Other notable companies include Xinjiang Jiaojian, which saw a revenue increase of 38.58% and a net profit increase of 147.73% [16]. Investment Recommendations - The report recommends low-valuation state-owned enterprises such as China Chemical, China Railway, and China Railway Construction, while also suggesting attention to companies like China Electric Power Construction and China Energy Construction [4]. - For private enterprises, companies like Zhi Te New Materials and Honglu Steel Structure are highlighted as potential investment opportunities [4].

Core Insights - The "15th Five-Year Plan" emphasizes the construction of a modern industrial system centered on advanced manufacturing, focusing on intelligent, green, and integrated development [1] - New industries such as quantum technology, biomanufacturing, hydrogen energy, nuclear fusion energy, brain-computer interfaces, embodied intelligence, and 6G mobile communication are identified as new economic growth points [1] Group 1: Future Industries - New Energy: Newao has been exploring nuclear fusion since 2017, focusing on the "hydrogen-boron fusion" route, achieving significant breakthroughs with the "Xuanlong-50U" device, which reached a plasma current of one million amperes and a magnetic field of 1.2T [2] - Brain-Computer Interfaces: Newao has initiated the "China Brain-Computer Valley" project to promote the industrialization of brain-computer interfaces, positioning itself in a competitive global landscape [3] Group 2: Intelligent Transformation - Comprehensive Empowerment: Newao is enhancing industrial intelligence transformation by developing platforms like the "Pan-Energy Network" and "Safety Network," focusing on integrated smart models in energy and safety sectors [4] - Energy and Carbon Intelligence: Newao has introduced integrated digital products and services to help industries achieve energy savings and efficiency improvements, exemplified by a project that increased green electricity usage by 15% [4] Group 3: Safety Intelligence - Safety Solutions: Leveraging over 30 years of experience in gas safety operations, Newao provides tailored safety solutions, such as an intelligent risk map for hazardous materials transportation, ensuring zero accidents in a technology park [5] Group 4: Future Outlook - Continued Investment: Newao plans to deepen its industrial intelligence transformation and increase R&D investment in future technologies, contributing to the modern industrial system with robust technology and practical solutions [6]