Market Overview - The Shanghai Composite Index (沪指) rose by 72 points in October, an increase of 1.85%, while the Shenzhen Index and the ChiNext Index both recorded declines, with the STAR 50 experiencing the largest drop of 5.33%, reversing more than half of its September gains [1] - Micro-cap stocks saw the best performance in October, rising by 7.46%, while the North Exchange 50 also increased by 3.54% [1] - A notable market phenomenon occurred where the index declined while individual stocks rose, with 3,760 stocks gaining, indicating a shift from large-cap to small-cap stocks [1] Economic Indicators - The fourth quarter typically sees a style switch in the market, as investors tend to adopt a defensive posture to protect gains as the year-end approaches [2] - Recent statements from three Federal Reserve officials indicated that there is no need for interest rate cuts in December, leading to a stronger US dollar and fluctuations in the US stock market [2] Federal Reserve and Economic Concerns - The shift in the Federal Reserve's stance is attributed to the ongoing US government shutdown, which has lasted for a month with no signs of resolution, potentially impacting economic conditions and raising concerns about a recession [4] - The market is particularly sensitive to the changing expectations regarding interest rate cuts, with a shift from extreme optimism to extreme pessimism [4] Company-Specific Insights - Microsoft's recent financial report revealed that OpenAI incurred a significant loss of $11.5 billion in the third quarter, far exceeding market expectations, raising questions about the sustainability of the AI "myth" in the stock market [4] - The performance of AI-related stocks in the US market could have repercussions for the A-share market in China if trust in these companies diminishes [4] Technical Analysis - The recent decline in the Shanghai Composite Index has confirmed a daily top structure, indicating a need for defensive strategies as the market may face adjustments [6] - The critical support level for the index is at 3,890, which serves as an important dividing line for bullish and bearish sentiment [6] - The STAR market has emerged as the weakest index, warranting attention for potential bottoming patterns [6]

Core Viewpoint - The dividend sector experienced slight declines this week, with various indices showing negative performance, while certain dividend-focused ETFs attracted significant capital inflows [1][3]. Index Performance - The CSI Dividend Index fell by 0.5%, the CSI Low Volatility Dividend Index decreased by 0.9%, and the Hang Seng High Dividend Low Volatility Index dropped by 1.4% [1][3]. - The dividend yield for the CSI Dividend Index is 4.3%, while the rolling P/E ratio stands at 8.4 times [3][5]. - The CSI Low Volatility Dividend Index has a dividend yield of 4.2% and a rolling P/E ratio of 8.3 times [3][5]. - The Hang Seng High Dividend Low Volatility Index has a higher dividend yield of 5.9% and a rolling P/E ratio of 7.5 times [3][5]. Fund Inflows - The E Fund Dividend ETF (515180) and the Hang Seng Low Dividend ETF (159545) saw net inflows of 260 million yuan and 120 million yuan, respectively, this week [1]. Market Analysis - CITIC Securities noted that after a peak in trading activity in the computing power sector in early September, the market has entered a consolidation phase characterized by high capital rotation and low trading volume [1]. - The overall market sentiment remains bullish, supported by ongoing capital market reforms and structural economic stability, with limited downside potential [1]. Sector Composition - The CSI Dividend Index comprises 100 stocks with high cash dividend yields and stable dividends, with significant representation from the banking, coal, and transportation sectors, accounting for nearly 55% [4]. - The CSI Low Volatility Dividend Index consists of 50 stocks with low volatility and stable dividends, with over 60% representation from banking, coal, and transportation sectors [4]. - The Hang Seng High Dividend Low Volatility Index includes 50 stocks from the Hong Kong stock market, with over 60% representation from financial, real estate, and energy sectors [4].

Group 1 - The Hang Seng Index opened down 0.07%, and the Hang Seng Tech Index fell by 0.65%, with Alibaba and Xiaomi Group dropping over 1%, and BYD Company falling over 3% with a net profit of 7.823 billion yuan, a year-on-year decline of 32.6% [1] Group 2 - Guotai Junan Securities suggests that a significant style shift may occur in the Hong Kong stock market in the fourth quarter, with low-growth sectors like Hang Seng Tech potentially becoming relatively favorable [2] - According to China Merchants Securities, the recent adjustments in the Hong Kong stock market have been overly reactive to external shocks, and a rebound is expected as trade tensions ease and incremental policies provide marginal benefits [2] - Galaxy Securities indicates that the overall valuation of the Hong Kong stock market is at a historically high level, predicting wide fluctuations in the market, and recommends focusing on sectors such as precious metals and dividend assets [2] Group 3 - Huatai Securities reports that southbound capital has accumulated inflows exceeding 500 billion HKD since the second half of the year, but the momentum may slow down as the year-end assessment period approaches [3] - The sentiment indicators have returned to neutral, indicating that while there is balanced risk, high-risk investors may gradually build positions, but significant accumulation may still require waiting for better timing [3]

Group 1 - The report highlights a significant increase in the performance of the electronic sector, with TMT (Technology, Media, and Telecommunications) sector holdings reaching a historical high of 40% [12][12][12] - The report indicates that the electronic sector's profit growth is expected to be robust, with a projected net profit growth of 54% in 2025, followed by 34% and 25% in 2026 and 2027 respectively [12][12][12] - The report emphasizes the importance of monitoring PPI (Producer Price Index) trends, as a shift from negative to positive growth could influence market style changes, favoring value stocks over growth stocks [12][12][12] Group 2 - The report on Aofei Data (300738) indicates that the company achieved a revenue of 1.824 billion yuan in the first three quarters of 2025, representing a year-on-year growth of 15.3%, and a net profit of 145 million yuan, up 37.3% [13][13][13] - Aofei Data's gross margin improved to 35% in the first three quarters of 2025, reflecting a significant increase of 9.4 percentage points year-on-year, with a further increase to 37.6% in Q3 [13][13][13] - The report notes that Aofei Data's asset and liability structure shows strong delivery potential for data centers, with new fixed assets amounting to 3.161 billion yuan in the first three quarters of 2025 [13][13][13] Group 3 - The report on Jinlei Co., Ltd. (300443) states that the company achieved a gross margin of 24.63% in the first three quarters of 2025, an increase of 1.88 percentage points year-on-year, with Q3 gross margin reaching 26.41% [15][15][15] - The report indicates that the company is expanding its high-end transmission equipment market, with a focus on free forging products, which have seen a compound annual growth rate of 57% over the past three years [15][15][15] - The report maintains a "Buy" rating for Jinlei Co., Ltd., projecting net profits of 447 million yuan, 652 million yuan, and 758 million yuan for 2025-2027 [15][15][15] Group 4 - The report on Hisense Visual (600060) indicates that the company achieved a revenue of 42.83 billion yuan in the first three quarters of 2025, with a net profit of 1.629 billion yuan, reflecting a year-on-year growth of 24% [18][18][18] - Hisense Visual's market share in high-end televisions remains strong, with a 41.65% retail volume share in the 100-inch and above market [18][18][18] - The report maintains a profit forecast for Hisense Visual, expecting net profits of 2.5 billion yuan, 2.757 billion yuan, and 3.012 billion yuan for 2025-2027 [18][18][18] Group 5 - The report on Xinnengda (300207) highlights that the company achieved a revenue of 21.92 billion yuan in 2025, with a projected net profit of 3.516 billion yuan by 2027 [26][26][26] - The report notes that the demand for energy storage batteries is expected to remain strong, with the company investing in a new lithium battery project in Thailand [26][26][26] - The report maintains a "Buy" rating for Xinnengda, projecting a steady improvement in profitability due to the scale effect in the energy storage sector [26][26][26]

Group 1 - The core viewpoint of the article indicates that after the release of favorable policies, the probability of style switching in the market has increased, with a focus on technology and manufacturing sectors as the main drivers of domestic development [2][5] - The equity market is expected to transition to a stable operation as new catalysts diminish following the implementation of the "14th Five-Year Plan," suggesting a potential reduction in growth momentum [2][5] - It is recommended to moderately reduce positions in technology growth sectors and consider switching to broader indices or low-volatility dividend stocks for a more stable investment approach [2][5] Group 2 - In the stock market, the balance between large-cap and small-cap stocks has been maintained, while growth styles have shown a tendency towards growth [7] - The volatility of both large-cap and growth styles has increased, indicating a more dynamic market environment [7][8] - The concentration of trading has slightly decreased, with the proportion of trading volume from the top 100 stocks showing a minor decline [7] Group 3 - In the commodity market, the trend strength of precious metals and agricultural products has decreased, while other sectors have shown an increase in trend strength [20] - The liquidity of precious metals, non-ferrous metals, and agricultural products has declined, indicating potential challenges in these markets [20] Group 4 - In the options market, the implied volatility has decreased, reflecting a calming of market expectations regarding tariff increases, although uncertainty remains as both put and call option positions have increased [23] Group 5 - The convertible bond market has shown slight recovery, with stable pure bond premium rates and a steady increase in the premium rates for bonds convertible at 100 yuan [25]

Core Viewpoint - The A-share market is experiencing a positive sentiment with the Shanghai Composite Index breaking the 4000-point mark, reflecting investor confidence and potential for further upward movement, supported by regulatory policies and long-term capital inflows [3][5][6]. Market Performance - On October 28, the Shanghai Composite Index briefly surpassed 4000 points, reaching a high of 4010.73 before closing at 3988.22, down 0.22%. The Shenzhen Component Index and the ChiNext Index also saw declines, with total trading volume in Shanghai, Shenzhen, and Beijing at 2.17 trillion yuan, a decrease of nearly 200 billion yuan from the previous day [3][6]. - The market's fluctuations are attributed to profit-taking behaviors in popular sectors and high valuations, with a potential shift in market style expected in the fourth quarter [3][7]. Regulatory Environment - The Chairman of the China Securities Regulatory Commission emphasized the importance of stability and balance in asset allocation, indicating that A-shares and Hong Kong stocks are undergoing continuous revaluation, enhancing their investment appeal [5]. - The regulatory framework is seen as supportive for long-term capital, with plans to introduce a refinancing framework and encourage companies to improve governance and increase shareholder returns through dividends and buybacks [5][6]. Sector Analysis - There is a notable divergence in sector performance, with high-growth sectors like artificial intelligence and solid-state batteries significantly outperforming the broader market over the past six months. However, the fourth quarter is traditionally a time for style rotation in the A-share market [8][9]. - Analysts predict that while high-growth sectors may face increased volatility due to high valuations, low-valuation sectors such as financial stocks are expected to attract more capital in the fourth quarter [10][11]. Investment Strategy - The market is anticipated to maintain a "slow bull" trend with increased volatility, and structural differentiation is expected to remain prominent. Investors are advised to focus on fundamentally strong companies and avoid chasing high valuations [9][12]. - The potential for a shift towards low-valuation sectors is highlighted, with financial and cyclical stocks possibly leading the market if supportive policies or capital inflows materialize [10][11].

Core Viewpoint - The A-share market is experiencing a significant upward trend, with the Shanghai Composite Index recently breaking the 4000-point mark, reflecting positive market sentiment and investor confidence [2][3][4]. Market Performance - On October 28, the Shanghai Composite Index briefly surpassed 4000 points, reaching a high of 4010.73 before closing at 3988.22, down 0.22% for the day [1]. - The Shenzhen Component Index and the ChiNext Index also saw declines, closing at 13430.1 and 3229.58 respectively [1]. - Trading volume in the Shanghai and Shenzhen markets was 2.17 trillion yuan, a decrease of nearly 200 billion yuan compared to the previous day [1]. Regulatory Environment - The China Securities Regulatory Commission (CSRC) is set to introduce a refinancing framework to enhance merger and acquisition support, while encouraging companies to improve governance and increase shareholder returns through dividends and buybacks [2]. - The regulatory environment is perceived as stable, which is expected to boost market confidence and attract long-term capital [3]. Investment Trends - There is a notable shift towards high-dividend stocks, with some already reaching new highs, indicating a potential preference for lower valuation sectors in the fourth quarter [1][4]. - Analysts suggest that the market may continue to experience a "slow bull" trend, with structural differentiation remaining a key theme [5][6]. Sector Analysis - High-growth sectors such as artificial intelligence and solid-state batteries have significantly outperformed the market, but there are concerns about high valuations leading to increased volatility [4][6]. - Analysts predict a potential rotation from growth to value stocks, particularly in the financial sector, as the market focuses on valuation in the fourth quarter [6][7]. Future Outlook - The market is expected to maintain a "slow bull" trend with increased volatility, and a comprehensive rally is deemed unlikely before early 2026 [5]. - There is a consensus among analysts that technology stocks may continue to perform well, with sectors like pharmaceuticals and consumer goods being highlighted as key areas for investment [8].

Market Overview - The A-share market achieved a breakthrough amidst fluctuations, with the Shanghai Composite Index successfully surpassing 3950 points during the week of October 20-24, 2025, reflecting a 2.88% increase [3][11] - The technology growth sector made a strong comeback in the latter half of the week, indicating market expectations for policies promoting technological self-reliance and new productive forces [3][11] - The average daily trading volume in the A-share market decreased to 1.7928 trillion yuan, showing a decline compared to the previous week, influenced by macroeconomic uncertainties [11] US-China Negotiations - The upcoming US-China negotiations from October 24-27 in Malaysia are viewed as a critical signal for easing trade tensions, potentially improving risk appetite in the capital markets if a summit between the leaders occurs [4][11] Style Rotation - The market is entering a phase of style equilibrium, suggesting that discussions around style rotation have largely concluded, with various sectors seeking their own changes and returning to performance-driven market characteristics [4][12] Active Equity Fund Index Performance - The Active Equity Fund Selection Index rose by 3.72% last week, with a cumulative excess return of 39.11% since inception [5][15] - The High-end Manufacturing Fund Selection Index increased by 8.47% last week, but has recorded a cumulative excess return of -2.53% since inception [6][15] - The Growth Stock Fund Selection Index saw a rise of 5.14% last week, with a cumulative excess return of 38.79% since inception [7][15] Sector-Specific Fund Performance - The Technology Stock Fund Selection Index increased by 5.79% last week, achieving a cumulative excess return of 51.08% since inception [7][15] - The Consumer Stock Fund Selection Index rose by 0.59% last week, with a cumulative excess return of 7.88% since inception [7][15] - The Pharmaceutical Stock Fund Selection Index decreased by 1.12% last week, but has a cumulative excess return of 20.21% since inception [7][15]

1. Report Industry Investment Rating - No relevant content provided 2. Core View of the Report - Last week (2025.10.20 - 2025.10.24), the A - share market broke through in fluctuations, with the Shanghai Composite Index standing above 3950 points on Friday. The technology - growth sector made a strong comeback in the second half of the week, reflecting market expectations for policies in the "15th Five - Year Plan". However, the A - share market entered a volume - shrinking phase due to macro uncertainties [12]. - If the possible upcoming summit meeting between the two heads of state materializes, the risk appetite of the capital market may be further restored [3][12]. - The "15th Five - Year Plan" focuses on technological self - reliance and self - strength + expanding domestic demand. The strategic position of technology development has been significantly elevated, and expanding domestic demand is emphasized as a "strategic base point" [4][13]. - The market has entered a style - equilibrium stage, indicating that the style switch has basically ended, and the market has returned to a performance - driven structural market. Looking forward, the market may enter a consolidation period, and after November, it may be dominated by valuation [4][14]. 3. Summary by Relevant Catalogs 3.1 Equity Market Review and Observation - Market performance: The Shanghai Composite Index rose 2.88%, the ChiNext Index rose 8.05%, and the Hang Seng Index rose 3.62%. The technology - growth sectors such as communication, electronics, and power equipment led the gains. The average daily trading volume of the whole A - share market was 1792.8 billion, a further decline from the previous week [12]. - Sino - US consultations: The consultations in Malaysia from October 24th to 27th are seen as a key signal to ease trade tensions, laying a positive foundation for a possible summit meeting between the two heads of state at the APEC meeting. Past summit meetings have effectively broken negotiation deadlocks [12]. - "15th Five - Year Plan": Compared with the "14th Five - Year Plan", it adds "centering on economic construction" and removes "deepening supply - side structural reform as the main line". The key focuses are technological self - reliance and self - strength + expanding domestic demand, with a significant increase in the strategic position of technology development [13]. - Style switch: The market has entered a style - equilibrium stage, and the style switch has basically ended. After November, the market may be dominated by valuation, and the difficulty of judging its sustainability will increase significantly [4][14]. 3.2 Active Equity Fund Index Performance Tracking 3.2.1 Active Stock Fund Preferred Index - Performance: It rose 3.72% last week and has recorded a cumulative excess return of 13.84% since its establishment. Its performance comparison benchmark is the active stock fund (930980.CSI) [5][15]. - Index positioning: Each period selects 15 funds with equal - weight allocation. Core positions select active equity funds based on performance competitiveness and style stability within value, equilibrium, and growth styles, and balance the style distribution according to the CSI Active Stock - Type Fund Index [16]. 3.2.2 Value Stock Fund Preferred Index - Performance: It rose 1.44% last week and has recorded a cumulative excess return of 2.93% since its establishment. Its performance comparison benchmark is the CSI 800 Value Index (H30356.CSI) [6][15]. - Index positioning: It includes both deep - value and quality - value styles. It selects 10 funds of deep - value, quality - value, and equilibrium - value styles based on multi - period style division to form the index [18]. 3.2.3 Equilibrium Stock Fund Preferred Index - Performance: It rose 3.14% last week and has recorded a cumulative excess return of 7.66% since its establishment. Its performance comparison benchmark is the CSI 800 (000906.SH) [7][15]. - Index positioning: It selects 10 funds of relatively equilibrium and value - growth styles based on multi - period style division to form the index. Fund managers in this style balance the valuation and growth of individual stocks and consider cost - effectiveness at the industry level [20]. 3.2.4 Growth Stock Fund Preferred Index - Performance: It rose 5.14% last week and has recorded a cumulative excess return of 12.21% since its establishment. Its performance comparison benchmark is the 800 Growth (H30355.CSI) [7][15]. - Index positioning: It aims to capture the performance and valuation double - click opportunities of high - growth companies and selects 10 funds of active - growth, quality - growth, and equilibrium - growth styles based on multi - period style division to form the index [24]. 3.2.5 Pharmaceutical Stock Fund Preferred Index - Performance: It fell 1.12% last week and has recorded a cumulative excess return of 19.19% since its establishment. Its performance comparison benchmark is the pharmaceutical - themed fund index (fitted by Huabao Fund Research and Investment Platform) [7][15]. - Index positioning: It selects funds based on the intersection market value ratio of fund equity holdings and representative pharmaceutical indexes. It constructs an evaluation system in eligible samples, mainly considering indicators such as the fund's relative benchmark index winning rate, and ensures 15 funds are included in the index [24][27]. 3.2.6 Consumption Stock Fund Preferred Index - Performance: It rose 0.59% last week and has recorded a cumulative excess return of 22.45% since its establishment. Its performance comparison benchmark is the consumption - themed fund index (fitted by Huabao Fund Research and Investment Platform) [7][15]. - Index positioning: It selects funds based on the intersection market value ratio of fund equity holdings and representative consumption indexes. It constructs an evaluation system in eligible samples and ensures 10 funds are included in the index [27]. 3.2.7 Technology Stock Fund Preferred Index - Performance: It rose 5.79% last week and has recorded a cumulative excess return of 21.12% since its establishment. Its performance comparison benchmark is the technology - themed fund index (fitted by Huabao Fund Research and Investment Platform) [7][15]. - Index positioning: It selects funds based on the intersection market value ratio of fund equity holdings and representative technology indexes. It constructs an evaluation system in eligible samples and ensures 10 funds are included in the index [33]. 3.2.8 High - end Manufacturing Stock Fund Preferred Index - Performance: It rose 8.47% last week and has recorded a cumulative excess return of - 2.53% since its establishment. Its performance comparison benchmark is the high - end manufacturing - themed fund index (fitted by Huabao Fund Research and Investment Platform) [7][15]. - Index positioning: It selects funds based on the intersection market value ratio of fund equity holdings and representative high - end manufacturing indexes. It constructs an evaluation system in eligible samples and ensures 10 funds are included in the index [35]. 3.2.9 Cycle Stock Fund Preferred Index - Performance: It fell 1.90% last week and has recorded a cumulative excess return of - 2.85% since its establishment. Its performance comparison benchmark is the cycle - themed fund index (fitted by Huabao Fund Research and Investment Platform) [7][15]. - Index positioning: It selects funds based on the intersection market value ratio of fund equity holdings and representative cycle indexes. It constructs an evaluation system in eligible samples and ensures 5 funds are included in the index [35].

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the **A-share market** in China, highlighting a recent style shift from **'growth/tech'** to **'value/dividend'** during October 2025. The ChiNext and STAR 50 indices have decreased by **7.6%** and **8.5%** month-to-date (MTD) as of October 20, while the CSI 300 has only dipped **2.2%** and the SSE Dividend Index has increased by **5.6%** [1][7][14]. Core Insights and Arguments 1. **Factors Behind Style Shift**: - Investors are rebalancing portfolios due to escalating **China-US trade frictions** [1][14]. - Profit-taking is occurring after a recent rally in the **greater tech** sector [1][14]. - Concerns about a slowdown in net inflows into high-beta stocks following adjustments to **SMIC's margin-financing conversion rate** [1][14]. 2. **Medium-Term Outlook**: - Despite the near-term style shift, the **'growth'** style is expected to remain the main investment style in the medium term. The A-share market typically prices in trade tensions quickly, and the recent corrections have largely absorbed the shock from tariff risks [2][15][16]. - The **greater tech** sector's turnover has decreased to **32%**, down from **38%** in late September, indicating reduced crowding risk [2][24]. 3. **Investment Recommendations**: - The **ChiNext Index** is recommended for better risk-reward opportunities, as it has a **39%** weight in the greater tech sector, which is currently undervalued [3]. - Pro-cyclical sectors such as **solar, chemicals, and lithium** are preferred under the current market conditions [3][51]. Additional Important Insights - **Earnings Growth**: The aggregate earnings growth of ChiNext constituents has notably increased to **16.5%** in H125, indicating potential for future performance [3]. - **High-Dividend Stocks**: High-dividend sectors are expected to outperform due to their defensive nature and strong fundamentals, benefiting from long-term inflows from insurers [49]. - **Consumer Sector Performance**: During the National Day holiday, key retail and catering companies saw a **2.7%** YoY sales increase, which is lower than previous holidays, indicating potential challenges in the consumer sector [50]. - **Property Market**: Property sales volume in China's 30 cities declined by **12%** YoY, suggesting a slow recovery for property-related sectors [51]. Conclusion - The A-share market is currently experiencing a style shift influenced by external trade tensions and profit-taking in tech stocks. However, the medium-term outlook remains positive for growth-oriented investments, particularly in the ChiNext Index and pro-cyclical sectors. High-dividend stocks are also positioned to perform well in the near term.