Group 1 - The core viewpoint of the report indicates that the North Exchange Index has experienced fluctuations and a decline, with the North Certificate 50 Index dropping by 2.55% as of June 20, 2025, compared to the previous week's closing price [5][17] - The average market capitalization of the North Certificate A-share component stocks is 2.934 billion, with a daily average trading volume of approximately 30.07 billion, reflecting a decrease of 7.78% from the previous week [5][18] - The North Exchange is set to conduct the second nationwide test of the North Certificate Specialized and Innovative Index on June 21, 2025, to verify the market institutions' technical systems [10] Group 2 - The report highlights that the North Exchange A-share sector has a price-to-earnings (PE) ratio of 48x, compared to 34x for the ChiNext, 12x for the Shanghai Main Board, 20x for the Shenzhen Main Board, and 54x for the Sci-Tech Innovation Board as of June 20, 2025 [28] - The report suggests focusing on high-attention sub-sectors within the North Exchange A-share market, particularly those related to specialized and innovative themes and technological breakthroughs [5][28] - The report notes significant individual stock differentiation and thematic rotation, with policy benefits and high valuation pressures coexisting [5]

Core Viewpoint - The A-share market has shown a trend of oscillating upward since April 7, indicating a recovery phase, with opportunities emerging in industries that have seen their fundamentals bottom out before the overall economy does [1] Industry Summary - The overall performance of AH shares has been characterized by a gathering of market sentiment amid divergences and a gradual repair of valuations during fluctuations [1] - Industries expected to present more opportunities include innovative pharmaceuticals, new consumption, AI-related sectors, non-ferrous metals, and non-bank financials, as they are likely to see their fundamentals improve first [1] - Many industries are experiencing a relief from deflationary pressures, aided by adjustments in upstream prices, technological breakthroughs, and the benefits of engineering talent, leading to a gradual exit from profit troughs for many mid- and downstream sectors [1] - From a medium-term perspective, the A-share market is anticipated to continue following the main theme of Chinese manufacturing [1]

Market Overview - The three major A-share indices opened lower, with the Shanghai Composite Index down by 0.05% and the ChiNext Index down by 0.07% [1] Institutional Insights - Zhongtai Securities suggests that market indices may maintain strong resilience due to the unexpected suspension of "reciprocal tariffs," which enhances short-term risk appetite. Structural divergences remain, and the space for long-term tariff reductions is limited. The current market environment shows a strengthening of total policy determination, improvement in core city real estate, and high historical levels of margin trading, which, combined with policies emphasizing indices, may support continued resilience in market indices [2] - Investment funds are expected to rotate around sectors with high first-quarter report performance and mid-term industry trends, including public utilities, AI upstream and leading technology firms, gold, nuclear power equipment, military industry, and consumer sectors related to younger demographics such as pets and beauty products. Investors are advised to accumulate positions in these sectors on dips and to focus on high-quality leaders in the CSI 300 with significantly lower institutional allocation compared to index component ratios [2] New Market Dynamics - Minsheng Securities notes that a new order and narrative are emerging as investors begin to price in the marginal easing of trade shocks. However, structural shocks will persist, and the return to fundamental pricing characteristics will gradually become evident. Future declines in total demand and the fluctuating path of trade easing may disrupt market tranquility. The first quarter of 2025 is anticipated to be a pivotal moment for technology breakthroughs influencing market risk appetite, while the current phase is characterized by a rotation in investor styles towards technology themes, which may lack sustainability [3] - The gradual establishment of a long-term mechanism for domestic consumption is expected to yield three sources of returns: net profit growth, dividend payments, and valuation increases, with recommendations for sectors such as home appliances, food and beverages, cosmetics, trendy toys, tourism, gaming, and online retail [3] - The restructuring of China's foreign trade system is likely to gradually reveal the value of capacities in advantageous industries, such as machinery and automotive manufacturing, while resource products with significant supply constraints (copper, aluminum, gold) may also see new opportunities [3] - As the economic transition progresses and real estate stabilizes, the de-financialization process in China is nearing its end. The current investment and financing environment for Chinese enterprises is improving, which may drive new expansions in the financial sector, particularly as the new domestic growth paradigm and the acceleration of the RMB internationalization process unfold [3]

Group 1 - A-shares opened lower with the Shanghai Composite Index down 0.11% and the ChiNext Index down 0.16%, while the precious metals sector showed strong performance, and sectors like tourism, hotels, dairy, and education faced significant declines [1] - Shenwan Hongyuan predicts that the overall risk appetite for A-shares is expected to stabilize and recover, with a potential shift towards small-cap growth styles and an increasing weight of technology themes in the market [1] - The mid-term outlook suggests that the next offensive wave for A-shares may still be a structural rally in technology, with continued recommendations for domestic AI computing power and applications, embodied intelligence, and low-altitude economy [1] Group 2 - Industrial Securities indicates that the continuously improving economic fundamentals and timely responses to uncertainties will serve as a stabilizing anchor for the market, with a focus on domestic consumption and self-sufficiency as key themes [2] - The market is expected to be more self-reliant, with internal demand and self-sufficiency becoming focal points for economic momentum switching and short-term policy support [2] - Facing ongoing global trade negotiations, there is a need for preparedness against uncertainties, with a recommendation to tilt holdings towards low-volatility dividends and high-quality stocks [2] Group 3 - Dongfang Securities notes a short-term market adjustment with reduced trading volume, indicating a challenging environment for price movements, while emphasizing the importance of dividend stocks and the broader technology sector as key investment directions [3] - The bank sector's dividend attributes are highlighted, with policy easing potentially boosting retail credit demand, thus enhancing the investment value of bank stocks [3] - The market's inherent stability is gradually increasing with the influx of incremental capital, and there is a significant probability that the Shanghai Composite Index will continue to fill the "tariff gap" [3]

Core Viewpoint - The article discusses the recent significant drop in global stock markets, attributing it to Trump's tariff policies and suggesting that while the market is experiencing turbulence, it is not a long-term threat [4][13]. Market Overview - On April 7, global stock markets, including China, experienced a severe downturn, with the Shanghai Composite Index falling by 7.34% to 3096.58 points and the ChiNext Index dropping by 12.5% to 1807.21 points, marking its largest single-day decline in history [3]. - The Hang Seng Index fell by 13.22% to 19828.30 points, while the Hang Seng Technology Index plummeted by 17.16% to 4401.51 points [3]. Short-term Market Sentiment - Short-term market sentiment is characterized by high levels of trading activity and short-selling, with the short-selling ratio in Hong Kong exceeding 20%, indicating extreme bearish sentiment [46][48]. - The article suggests that the recent market movements are a result of profit-taking after a period of high investment activity [2]. Investment Strategy - The company recommends a defensive investment strategy in the short term, advising against using leverage when attempting to buy the dip [9][90]. - It emphasizes the importance of waiting for clearer signals before making significant investments, suggesting that the current market conditions are still uncertain [93]. Long-term Outlook - The article maintains a positive long-term outlook on Chinese assets, asserting that the revaluation of these assets is far from over, particularly in the technology and new consumption sectors [10][102]. - It highlights the potential for a rebound in the Chinese market, driven by domestic economic policies and the resilience of the Chinese economy [6][37]. Sector-Specific Insights - The technology sector, particularly companies like Tencent, is viewed as undervalued and poised for recovery, with a significant portion of the market capitalization in Hong Kong now represented by technology and new consumption companies [51][54]. - The article also points to the military and gold sectors as strategic assets worth considering for investment, given the current geopolitical climate [109][111]. Conclusion - The article concludes with a call for confidence in the Chinese market, suggesting that the current turbulence presents an opportunity for strategic investment in high-growth sectors [116][87].