Investment Rating - The report maintains a positive investment outlook on the construction materials industry, highlighting specific companies as key recommendations for investment opportunities [2][6][19]. Core Insights - The report emphasizes that both domestic demand hedging and TACO trading are merely processes of value discovery, suggesting that companies with high economic prospects and room for valuation growth will accelerate price discovery [2][3]. - It identifies a shift in focus towards companies that are expected to show resilience and growth potential, particularly in the context of domestic demand recovery and global demand expectations [4][12]. Summary by Sections Domestic Demand Hedging - Companies recommended under domestic demand hedging include Oriental Yuhong, Hanhigh Group, and Huaxin Cement, which are expected to show positive revenue trends in Q3 [2][4]. - The report highlights the importance of infrastructure projects in regions like Xinjiang, predicting a significant increase in cement demand due to major construction initiatives [7][9]. TACO Trading - The report suggests that the glass fiber and CCL industry chain will benefit from global demand expectations, with price increases observed in electronic fabrics and copper-clad laminates [3][5]. - Key companies in this segment include China Jushi and Zhongcai Technology, which are positioned to capitalize on the ongoing price increase cycle [6][15]. Cement Industry - The cement sector is noted for its potential growth driven by policy execution and governance improvements, with overseas expansion opportunities highlighted for companies like Huaxin Cement [34][38]. - The report indicates that the cement market is entering a phase of price stabilization, with a focus on limiting overproduction and enhancing governance [35][41]. Glass and Fiberglass - The glass sector is experiencing a recovery, particularly in photovoltaic glass, with companies like Fuyao Glass and Xinyi Glass expected to see improved profitability [10][12]. - The report notes that the fiberglass sector is witnessing a strong performance, with significant contributions from price increases in electronic fabrics [10][14]. Consumer Building Materials - The consumer building materials segment is showing signs of recovery, with companies like Sanke Tree and Beixin Building Materials expected to benefit from improved revenue performance in Q3 [19][25]. - The report emphasizes the importance of cost reduction and price stabilization in enhancing profitability for companies in this sector [26][27]. Key Recommendations - The report recommends focusing on companies with strong fundamentals and growth potential, such as China Jushi, Huaxin Cement, and Oriental Yuhong, as they are expected to outperform in the current market environment [6][17][19].

Core Viewpoint - The short-term upward elasticity of equities is limited, making it difficult for the inflow of funds to continue boosting convertible bond valuations. It is recommended to maintain a neutral to low position and wait for opportunities, focusing on low-priced convertible bonds that resonate with terms, especially those in the export chain that may be affected by tariff policies, which could present numerous TACO trading opportunities [1][8]. Summary by Sections Tariff Impact and Market Reactions - In early April, the market experienced panic selling due to the announcement of tariffs by the U.S. government, leading to significant declines in A-shares, with the Shanghai Composite Index dropping 7.34% on April 7. Convertible bonds followed suit, with the weighted index of convertible bonds falling over 12% [2]. - Following the initial panic, the market began to recover on April 8, driven by a focus on expanding domestic demand and self-sufficiency, with the convertible bond index rebounding by 2.45% from April 8 to April 11 [2][3]. Sector Performance in Convertible Bonds - The performance of convertible bonds varied significantly across sectors during April. Industries with high external demand, such as advanced manufacturing and electronics, saw deeper declines and weaker rebounds compared to others. For instance, the electronics and home appliances sectors experienced over a 15% drop, followed by a mere 5% rebound [4]. - Conversely, sectors with balanced internal and external demand, such as defense, computing, and pharmaceuticals, showed strong rebounds after the initial declines [4]. Export Chain Convertible Bonds - The performance of export chain convertible bonds also varied, with some, like those in the chemical and textile sectors, showing resilience and good rebound performance despite earlier declines. For example, the Li Min and Su Li convertible bonds in the chemical sector had lower declines and performed well in the subsequent rebound [6]. - However, sectors like consumer electronics and medical outsourcing saw deeper initial declines and weaker recovery in the rebound phase [6]. Market Trends and Future Outlook - The TACO trading opportunities re-emerged in April due to unexpected changes in tariff policies, leading to high volatility in asset prices. As of late September, the market saw a decrease in convertible bond holdings by insurance institutions and other major holders, but public funds increased their positions, keeping convertible bond valuations relatively high [7]. - Looking ahead, the consensus is forming around a recovery in micro-enterprise performance, with a focus on high-priced equity strategies and small-cap growth convertible bonds in sectors like AI, semiconductors, and military electronics [8].

Core Viewpoint - The market is expected to experience a "first dip, then rise" pattern in Q4, with potential for upward movement driven by accumulating marginal positive factors [1][3] Market Factors - The marginal positive factors supporting the Hong Kong stock market include basic economic conditions, policy developments, liquidity, and valuation [2] - Despite a slowing macroeconomic environment in China, the new economy, particularly technology, shows strong growth with a reported profit growth rate of 31.7% in the first half of the year [2] - The U.S.-China tariff situation is anticipated to be a short-term disturbance, with a likelihood of easing tensions in the future [2] - The upcoming Fourth Plenary Session of the Communist Party is expected to introduce new policies that will enhance fiscal and monetary effectiveness, particularly in technology innovation and domestic demand [2] Liquidity and Interest Rates - U.S. inflation is stabilizing, leading to expectations of "preventive rate cuts" by the Federal Reserve, with predictions of two rate cuts in Q4 and three in the following year [2] - The inflow of foreign capital into the Hong Kong market is expected to continue, supported by the anticipated easing of U.S. monetary policy [2] Market Style - The market style is characterized by a balance between large-cap and small-cap stocks, with a relative preference for growth stocks due to the current liquidity conditions [4] Investment Strategy - The recommended investment strategy includes "four offensive sectors" (metals, technology, electricity, insurance) and "two defensive positions" (turnaround stocks, dividend stocks) [5] - The offensive sectors focus on resilient varieties, with specific attention to the AI industry and its potential for growth [5] - Defensive positions are aimed at long-term investments and risk mitigation, particularly in essential consumer goods and high-dividend stocks [6]

Core Viewpoint - The recent surge in gold prices, surpassing $4200 per ounce, is driven by several underlying factors, including the Triffin Dilemma and the intertwining of political and financial dynamics, leading to a trend of "de-dollarization" [2][3][10]. Group 1: Factors Influencing Gold Prices - Gold has seen a significant increase of nearly $1600 per ounce this year, representing a rise of approximately 60% [3]. - The four main factors affecting gold prices are: 1. The weakening of the US dollar due to global de-dollarization trends [3]. 2. Expectations of lower US interest rates, which enhance gold's appeal [3]. 3. Increased market risk appetite due to escalating geopolitical conflicts [3]. 4. Central banks' ongoing purchases of gold for safety reasons [3]. Group 2: Political and Economic Context - The recent rise in gold prices is partly attributed to renewed tariff threats from the Trump administration against Chinese goods, which has created market volatility [5]. - The US government shutdown has heightened concerns about economic growth, leading to increased expectations for interest rate cuts by the Federal Reserve [7]. - The ongoing geopolitical tensions and trade wars have prompted countries to reduce their reliance on the US dollar, further supporting gold's attractiveness as a safe-haven asset [10]. Group 3: The Triffin Dilemma - The Triffin Dilemma highlights the conflict faced by a country whose currency serves as a global reserve, where it must balance trade deficits to provide liquidity while maintaining currency stability [9]. - As US debt continues to grow, confidence in the dollar is waning, contributing to the rise in gold prices [10]. Group 4: Investment Strategies - The TACO trading strategy, which capitalizes on the cyclical nature of Trump's tariff threats, has gained attention as a method for investors to buy assets during market downturns and sell when conditions improve [5]. - Bridgewater Associates' founder Ray Dalio suggests that investors should allocate up to 15% of their portfolios to gold, emphasizing its superior safe-haven qualities compared to the dollar [10].

Report Summary 1. Investment Rating - No investment rating for the industry is provided in the report. 2. Core View - On Tuesday, most domestic commodities declined, with industrial products and agricultural products mostly weakening [1]. 3. Summary by Category Black Series - Most black series commodities fell. The market sentiment was weak, with the Shanghai Composite Index dropping from a high. The actual situation of the black series remained weak, and the rebar futures reached a more than three - month low. Last week, the inventory of the five major steel products increased by 8.68% week - on - week to 1.60072 billion tons, with the increase far higher than 3.65% of the same period last year and a year - on - year increase of 19.5%. In the future, the property transactions during the National Day holiday were halved year - on - year, the national replenishment in many places was suspended, the sales of automobiles and home appliances declined, and the accumulated inventory needed time to digest. Exports also faced new challenges, so the fundamental contradictions were prominent, and the upward pressure on prices continued [1]. Basic Metals - Most basic metals declined. In the copper market, there was concern about the Sino - US tariff game. The market had different views on copper, mainly focusing on capital pull and demand pressure in traditional fields. The domestic copper market might continue the feature of "both supply and demand being weak". For aluminum, non - ferrous metals rose and then fell. The spot in East China was at par, and the social inventory of aluminum ingots and aluminum rods had a neutral accumulation. There were signs of inventory reduction in major regions on Tuesday. The apparent consumption of aluminum in the off - season was basically the same year - on - year, and the demand was resilient but lacked a high point. In the short term, Shanghai aluminum would fluctuate, and the upside space should be carefully viewed [1]. Energy and Chemicals - Most energy and chemical products weakened. As the macro - sentiment eased and investors' risk appetite gradually recovered, international crude oil prices rebounded. However, the willingness of domestic funds to chase the rise was relatively cautious, and the main contract of SC crude oil continued to decline. In the future, the market entered the TACO trading mode, and oil prices might fluctuate and repair in the short term. But the unpredictable style of Trump made the macro - level highly uncertain, and the trading rhythm was difficult to grasp. In the medium and long term, as geopolitical risks eased, the price center might move down [1]. Oilseeds and Oils - Most oilseeds and oils declined. The weakening of external - market oils and the decline of crude oil led to a weak overall sentiment in the oil market. According to the National Grain and Oil Information Center, the commercial inventory of the three major domestic oils was 2.41 million tons, up 340,000 tons year - on - year, at a high level in recent years. The fundamentals of oils lacked positive support for the time being, and they were expected to maintain a weak and fluctuating pattern in the short term. Attention should be paid to the trend of crude oil prices. In the long term, palm oil was about to enter the seasonal production - reduction period, and the B50 biodiesel plan in Indonesia would have an impact, so oils still had room to rise. The decline of double - meal (rapeseed meal and soybean meal) widened, and rapeseed meal reached a three - month low. The inventory of imported soybeans and soybean meal in China was at a high level, and the weak fundamentals restricted the upward space of prices. In the short term, double - meal might continue to fluctuate, and attention should be paid to the arrival of imported soybeans and rapeseeds [1]. Others - Shipping futures had a large increase, with the Container Freight Index (European Line) rising 7.36%. All precious metals rose, with Shanghai gold rising 2.70%. Most new - energy materials rose, with polysilicon rising 2.55% [1].

Market Performance - The Hang Seng High Dividend Yield Index increased by 0.30% as of October 15, 2025, with notable gains from Wan Zhou International (up 2.72%) and China Ping An (up 2.64%) [3] - The Hong Kong Dividend ETF (博时, 513690) rose by 0.19%, reaching a latest price of 1.08 CNY, with a cumulative increase of 1.13% over the past week [3] - The CSI Dividend Index experienced a slight decline of 0.01%, with mixed performance among constituent stocks [5] - The Large Cap Growth ETF (159203) decreased by 0.39%, with a latest price of 1.29 CNY, but showed a cumulative increase of 2.54% over the past month [5] Liquidity and Trading Volume - The Hong Kong Dividend ETF had a turnover of 2.01% and a transaction volume of 1.09 billion CNY, with an average daily transaction volume of 2.66 billion CNY over the past week [3] - The Large Cap Growth ETF recorded a turnover of 4.49% and a transaction volume of 679,800 CNY, with an average daily transaction volume of 802.88 million CNY over the past year [7] Economic Insights - A recent meeting emphasized the need to expand domestic demand and strengthen the domestic circulation to create new growth points [8] - The upcoming important meeting in late October is a critical time for the 14th Five-Year Plan, focusing on self-sufficiency and expanding domestic consumption [9] Market Sentiment and Trading Logic - On Monday, the market opened lower but closed higher, driven by optimistic expectations regarding trade negotiations, contrasting with the more cautious sentiment observed on Tuesday [10][11] - The trading logic on Tuesday reflected a recognition of the complexities and potential duration of current trade conflicts, suggesting a more cautious approach to investment strategies [11] Fund Performance and Composition - The Hong Kong Dividend ETF (博时, 513690) has a latest scale of 5.362 billion CNY and a record high of 5.008 billion shares [13][14] - The ETF closely tracks the Hang Seng High Dividend Yield Index, which includes high dividend-paying stocks, with the top ten stocks accounting for 28.98% of the index [15] - The Large Cap Growth ETF tracks the National Large Cap Growth Index, with its top ten stocks representing 48.85% of the index [16]

Group 1: Core Insights - The report indicates that the TACO trade is not straightforward, as Trump's tariff timeline coincides with the APEC summit, suggesting potential negotiation opportunities but also continued pressure [1][5][8] - The economic impact of the current trade conflict is expected to be less severe than in April, but the constraints faced by the U.S. have eased, allowing for a prolonged hardline stance from Trump [5][7][8] - The report emphasizes the importance of focusing on gold and AH stocks while managing volatility, and suggests a cautious approach to trading until substantial progress is made in U.S.-China negotiations [1][8] Group 2: Company Insights - J&T Express - J&T Express reported a significant increase in parcel volume in Southeast Asia, with Q3 2025 showing a 78.7% year-on-year growth, totaling 1.997 billion parcels [10][11] - In contrast, the Chinese market's growth rate is lagging behind the industry average by approximately 1.3 percentage points, with Q3 2025 parcel volume growing by 10.4% [11][12] - The report maintains a "buy" rating for J&T Express, citing strong growth prospects in Southeast Asia and new markets driven by the booming e-commerce sector [12] Group 3: Industry Insights - North Exchange - The North Exchange market is experiencing structural opportunities focused on resource optimization and domestic substitution, particularly in sectors like semiconductors and rare earths [3][15] - The report highlights a recent increase in trading volume and suggests that the market may continue to exhibit high volatility, with a focus on companies with reasonable valuations and confirmed growth [3][15] - It is recommended to balance investments across hard technology sectors and resource products, leveraging the ongoing reforms to enhance market vitality [3][15]

Core Viewpoint - The bond futures market has experienced fluctuations driven by policy expectations and risk aversion, with significant performance in the 10-year and 30-year bonds [1] Group 1: Market Dynamics - Since September, the bond futures market has gone through a cycle of "volatile decline → rebound driven by policy expectations → increase driven by risk aversion" [1] - The 30-year bond futures contract hit a six-month low on September 24, while the 10-year bond futures fluctuated around 107.7 yuan [1] - After the National Day holiday, a relaxed funding environment helped the bond market recover, with the 10-year bond yield dropping by 3.2 basis points to 1.743%, marking a new low for the period [1] Group 2: Trade Tensions Impact - The escalation of trade tensions has introduced new shocks to the market, with "TACO trading" being the main theme prior to late September [2] - Historical patterns indicate that trade tensions affect the real economy primarily through inventory cycles, with U.S. importers stockpiling goods before new tariffs take effect [2] - The Nasdaq Composite Index's price-to-earnings ratio has increased from 24 times in April to 31 times currently, suggesting a higher likelihood of market volatility [2] Group 3: Domestic Asset Allocation - The logic of under-allocation in domestic assets continues, with expectations of seasonal declines in credit issuance as the "golden September and silver October" peak season passes [3] - The insurance industry is projected to generate over 3 trillion yuan in new premiums by 2025, creating a rigid allocation gap for long-term bonds [3] - The expectation of the inclusion of Chinese government bonds in global indices may lead to a cessation of foreign capital reduction, prompting increased allocation to government and local bonds, particularly 30-year and 50-year bonds [3] Group 4: Monetary Policy Outlook - The central bank is expected to maintain a moderately loose monetary policy, with a projected 0.5 percentage point reserve requirement ratio cut in the fourth quarter to support economic growth [3] - The central bank will utilize open market operations and other tools to ensure ample liquidity, with the DR007 rate likely to remain between 1.5% and 1.6% [3] - A downward testing of the 10-year bond yield towards 1.70% is possible if credit expansion remains weak, with the policy mix potentially shifting to a "loose + hedging" model [3]

Core Insights - Precious metals, particularly gold and silver, have reached historic highs, with gold surpassing $4,000 and silver hitting a 45-year peak, drawing significant market attention [1][2] - Despite the recent surge, there are concerns about short-term volatility, leading some institutions to adopt a cautious stance on precious metals [1][3] Market Performance - On October 14, gold futures rose initially but faced a significant drop, with gold futures down 3% at one point and silver futures fluctuating over 6%. By the end of the day, gold futures closed at 938.98 yuan per gram, up 2.7%, while silver futures closed at 11,533 yuan per kilogram, also up 2.64% [2] - The London spot market saw gold prices recover above $4,100 after a brief decline [2] Drivers of Price Movement - The recent surge in precious metals is attributed to the "TACO trade" initiated by the Trump administration, alongside a liquidity crisis in the silver market that has driven prices higher [2][4] - The Philadelphia Fed's new chair's support for two more rate cuts this year, combined with the fragile Middle East ceasefire, has contributed to the bullish trend in precious metals [2] Institutional Outlook - Major U.S. institutions express a consensus of being "long-term bullish but short-term cautious" on precious metals. Bank of America raised its 2026 gold price target to $5,000 per ounce and silver to $65 per ounce, citing ongoing support from unconventional policies [3] - Goldman Sachs also sees potential for silver price increases driven by private investment inflows but warns of liquidity risks [3][5] Silver Market Dynamics - The silver market is experiencing a historic short squeeze, with London spot inventories down 75% since 2019, leading to soaring leasing rates and increased delivery costs for short sellers [4] - Year-to-date, silver prices have risen nearly 80%, outperforming gold recently [4] Long-term Investment Considerations - Despite gold's rise above $4,000, its unique safe-haven value remains highly regarded, with suggestions for investors to allocate 15% of their portfolios to gold [6] - Goldman Sachs predicts further increases in gold prices, raising its 2026 forecast to $4,900, driven by central bank diversification and expected rate cuts [7] - The ongoing strong performance of gold in 2025 is attracting renewed investor interest, with ETF inflows turning positive [8]

Core Viewpoint - The pharmaceutical sector, particularly innovative drugs, is experiencing significant volatility, with both A-shares and Hong Kong stocks showing sharp declines in recent trading sessions, indicating potential investment opportunities amidst market fluctuations [1][3][5]. Group 1: A-Share Market Performance - A-share market saw major declines in innovative drug stocks, with Beida Pharmaceutical dropping by 10.63%, Hengrui Medicine down 4.05%, and Baili Tianheng falling 6.18%, leading to a 2.21% drop in the only drug ETF (562050) [1]. - The CXO sector also faced declines, with WuXi AppTec falling 3.82%, while the largest medical ETF (512170) only decreased by 1.32%, indicating some resilience in the market [1]. Group 2: Hong Kong Market Performance - The Hong Kong pharmaceutical market experienced even more volatility, with innovative drug stocks like Kelun-Bio dropping 9.82% and major players like CSPC Pharmaceutical and Innovent Biologics falling over 6% [3]. - The Hong Kong Stock Connect innovative drug ETF (520880) opened up 1.86% but ended the day down 4.22%, marking its largest single-day drop since inception, with a trading volume of 4.1 billion [3]. Group 3: Investment Sentiment and Opportunities - Despite the ongoing market downturn, there is a noticeable increase in buying interest, as evidenced by a significant inflow of capital into the medical ETFs, suggesting that investors may be looking for "golden pit" opportunities in the pharmaceutical sector [5][6]. - Analysts suggest that the recent declines may be a release of short-term risks and emotional volatility, with potential for greater opportunities than risks if the market undergoes significant adjustments [5]. Group 4: Market Dynamics and Future Outlook - The fund manager of the Hong Kong Stock Connect innovative drug ETF highlighted the interconnectedness of the US and Chinese biopharmaceutical industries, suggesting that recent tariff tensions may lead to a "TACO trade" strategy, where investors anticipate a reversal of aggressive policies [6]. - The innovative drug sector is supported by strong fundamentals, including innovation capabilities and global competitiveness, which remain unchanged despite market fluctuations [6]. - With the global liquidity easing cycle initiated by the Federal Reserve, many institutions view Hong Kong stocks as undervalued and a favorable investment opportunity [7].