Report Summary 1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints - During the two trading days before and after the double festivals (2025.09.29 - 2025.10.10), the market once reached a new high, with upstream resource products leading the rise, and lithium batteries, steel, and military industries taking turns to perform. However, the capital support for the pre - holiday rebound was weaker than before, and the market quickly declined on Friday after a brief post - holiday rebound. Some funds saw the decline as an opportunity to increase positions [11]. - The resurgence of the tariff issue is a continuation of the global tariff war since April. Although the current valuation of the equity market is significantly higher than in April, China's "double - loose" policy is clear, and investors have more experience in dealing with such situations [11]. - The market under the current friction may mainly involve profit - taking of the booming assets since the third quarter. If a style switch occurs, the market's development path depends on specific triggering factors [13]. - The essence of the current upstream resource stock market represented by non - ferrous metals is the switch of the valuation logic of resource stocks from the cycle to DCF with higher cash - flow visibility under the background of supply constraints and geopolitical instability. This logic will continue as long as commodity prices do not continuously decline [4][13]. 3. Summary by Directory 3.1 Weekly Market Observation - **Equity Market Review and Observation** - From 2025.09.29 to 2025.10.10, the market reached a new high, with upstream resource products leading. The pre - holiday rebound lacked capital support, and the market declined on Friday after a brief post - holiday rebound. When the market tumbled last Friday, there were net purchases of CSI 300, ChiNext, and STAR Market ETFs [11]. - On the evening of October 10, 2025, Trump threatened to impose a 100% tariff on China and cancel the APEC meeting between Chinese and US leaders, causing a sharp decline in risk assets. This trade conflict is a continuation of the global tariff war since April, and the conflict may escalate and spread to other fields [11]. - The current valuation of the equity market is higher than in April, but China's "double - loose" policy is clear, and investors have more experience in dealing with such situations [11]. - In the third quarter, the market's structural market was extreme, with technology innovation sectors rising significantly and pro - cyclical assets performing poorly. The market's ability to continue to rise depends on whether high - valuation hot sectors can maintain their upward momentum and whether low - valuation traditional pro - cyclical sectors can improve their fundamentals [12]. - The market under the current friction may mainly involve profit - taking of booming assets. If a style switch occurs, the development path depends on specific factors such as economic policies, the slowdown of booming industries, or geopolitical factors [13]. - The demand for energy metals is increasing, and the supply of strategic minor metals is restricted by anti - globalization. The valuation logic of upstream resource stocks represented by non - ferrous metals has switched from the cycle to DCF, and this logic will continue as long as commodity prices do not continuously decline [13]. 3.2 Active Equity Fund Index Performance Tracking - **Performance Statistics** - From 2025.10.09 to 2025.10.10, the Active Stock Fund Preferred Index fell 1.63%, the Value Stock Fund Preferred Index fell 0.09%, the Balanced Stock Fund Preferred Index fell 2.13%, the Growth Stock Fund Preferred Index fell 2.63%, the Pharmaceutical Stock Fund Preferred Index fell 2.66%, the Consumption Stock Fund Preferred Index fell 0.93%, the Technology Stock Fund Preferred Index fell 2.63%, the High - end Manufacturing Stock Fund Preferred Index fell 4.56%, and the Cyclical Stock Fund Preferred Index fell 1.42% [6][14]. - Since its establishment, the Active Stock Fund Preferred Index has recorded an excess return of 13.38%, the Value Stock Fund Preferred Index 4.80%, the Balanced Stock Fund Preferred Index 8.75%, the Growth Stock Fund Preferred Index 13.56%, the Pharmaceutical Stock Fund Preferred Index 19.67%, the Consumption Stock Fund Preferred Index 23.42%, the Technology Stock Fund Preferred Index 20.72%, the High - end Manufacturing Stock Fund Preferred Index - 5.99%, and the Cyclical Stock Fund Preferred Index - 1.99% [6]. - **Index Positioning and Benchmarks** - **Active Stock Fund Preferred Index**: 15 funds are selected each period and equally weighted. The core positions select active equity funds based on performance competitiveness and style stability, and the style distribution is balanced according to the CSI Active Stock Fund Index. The performance benchmark is the Active Stock Index (930980.CSI) [15]. - **Value Stock Fund Preferred Index**: It includes deep - value and quality - value styles. 10 funds of deep - value, quality - value, and balanced - value styles are selected to form the index. The performance benchmark is the CSI 800 Value Index (H30356.CSI) [17][18]. - **Balanced Stock Fund Preferred Index**: Balanced - style fund managers balance the valuation and growth of individual stocks. 10 funds of relatively balanced and value - growth styles are selected to form the index. The performance benchmark is the CSI 800 (000906.SH) [21]. - **Growth Stock Fund Preferred Index**: It aims to capture the performance and valuation double - click opportunities of high - growth companies. 10 funds of active - growth, quality - growth, and balanced - growth styles are selected to form the index. The performance benchmark is the 800 Growth Index (H30355.CSI) [23][24]. - **Pharmaceutical Stock Fund Preferred Index**: Funds are selected based on the intersection market value of their equity holdings and the representative index (CITIC Pharmaceutical). 15 funds are selected to form the index. The performance benchmark is the Pharmaceutical Theme Fund Index (fitted by Huabao Fund Research Platform) [26]. - **Consumption Stock Fund Preferred Index**: Funds are selected based on the intersection market value of their equity holdings and representative indices (CITIC Automobile, Home Appliances, etc.). 10 funds are selected to form the index. The performance benchmark is the Consumption Theme Fund Index (fitted by Huabao Fund Research Platform) [26][29]. - **Technology Stock Fund Preferred Index**: Funds are selected based on the intersection market value of their equity holdings and representative indices (CITIC Electronics, Communication, etc.). 10 funds are selected to form the index. The performance benchmark is the Technology Theme Fund Index (fitted by Huabao Fund Research Platform) [29]. - **High - end Manufacturing Stock Fund Preferred Index**: Funds are selected based on the intersection market value of their equity holdings and representative indices (CITIC Construction, Light Industry Manufacturing, etc.). 10 funds are selected to form the index. The performance benchmark is the High - end Manufacturing Theme Fund Index (fitted by Huabao Fund Research Platform) [32]. - **Cyclical Stock Fund Preferred Index**: Funds are selected based on the intersection market value of their equity holdings and representative indices (CITIC Petroleum and Petrochemical, Coal, etc.). 5 funds are selected to form the index. The performance benchmark is the Cyclical Theme Fund Index (fitted by Huabao Fund Research Platform) [32][33].

Group 1 - The core viewpoint of the article highlights the recent fluctuations in the equity market, particularly influenced by trade tensions and changing investor sentiment, with a focus on resource stocks and sector rotation [4][14][17] - The article notes that the recent trade conflict, particularly the threat of increased tariffs from the U.S., has led to significant declines in risk assets, indicating a continuation of the global tariff war that began in April [4][14] - It emphasizes the potential for style rotation in the market, where the performance of cyclical stocks may depend on specific triggers such as economic policy adjustments or geopolitical factors [17] Group 2 - The article provides a review of the equity market performance during the holiday period, noting that the market reached new highs but faced challenges in sustaining upward momentum due to weaker funding support [3][14] - It discusses the performance of various active equity fund indices, with the active stock fund index declining by 1.63% last week but achieving a cumulative excess return of 13.38% since inception [5][19] - The article outlines the positioning and performance of different fund categories, including value, balanced, growth, and sector-specific indices, highlighting their respective excess returns since inception [6][8][10][11][12]

- **Barra style factors**: The report tracks various style factors including Beta, Market Cap, Momentum, Volatility, Non-linear Market Cap, Valuation, Liquidity, Profitability, Growth, and Leverage. Each factor is constructed using specific financial metrics and formulas. For example, the Profitability factor combines analyst forecast earnings price ratio, inverse price-to-cash flow ratio, and inverse price-to-earnings ratio (TTM), among others. The Growth factor incorporates earnings growth rate and revenue growth rate. These factors are used to evaluate stocks based on their historical and financial characteristics [13][14][15]. - **GRU factors**: GRU factors are derived from different training objectives, such as predicting future one-day close-to-close or open-to-open returns. Examples include `close1d`, `open1d`, `barra1d`, and `barra5d`. These factors are constructed using GRU models trained on historical data to forecast short-term stock movements. GRU factors showed strong performance, with most models achieving positive multi-period returns, except for `barra1d`, which experienced some drawdowns [20][28][32]. - **Factor testing methodology**: Factors are tested using a long-short portfolio approach. At the end of each month, stocks are ranked based on the latest factor values, with the top 10% being long positions and the bottom 10% being short positions. The portfolios are equally weighted, and factors are industry-neutralized before testing. This methodology ensures robust evaluation of factor performance across different market conditions [15][16][31]. - **Factor performance results**: - **Style factors**: Valuation, Profitability, and Leverage factors showed strong long performance, while Beta, Liquidity, and Momentum factors performed well on the short side [15][16]. - **Technical factors**: Across various time windows, low momentum and low volatility stocks generally outperformed, while high volatility and high momentum stocks underperformed. For example, the 60-day momentum factor showed a negative return of -3.11% in the last month but a positive return of 2.12% over the last six months [19][26][30]. - **GRU factors**: GRU models like `barra1d` achieved a year-to-date excess return of 5.22%, while `barra5d` and `open1d` also delivered strong multi-period returns. However, `barra1d` experienced a weekly drawdown of -1.65% [20][32][33]. - **Multi-factor portfolio performance**: The multi-factor portfolio outperformed the benchmark (CSI 1000 Index) by 1.35% over the past week. GRU-based models also showed strong excess returns, ranging from 0.68% to 1.60% over the same period. Year-to-date, the `barra1d` model achieved an excess return of 5.22% [32][33][34].

Core Viewpoint - The A-share market is experiencing fluctuations, particularly in the technology sector, but the medium-term positive outlook remains intact despite recent trade tensions impacting U.S. markets [1][2]. Group 1: Market Analysis - The current index level is higher compared to the adjustment on April 7, indicating a learning effect in the market, with expected lower amplitude in price movements [2]. - Analysts believe that the recent adjustments in the technology sector are due to short-term disturbances and ongoing issues since the A-share market's correction in early September [2]. - Despite the emotional impact of overseas trade uncertainties, the fundamental and liquidity conditions for A-shares remain unaffected, supporting a positive outlook [2][3]. Group 2: Future Expectations - Analysts predict that the A-share market will enter a wide-ranging fluctuation phase in the short term, with corporate earnings expected to stabilize and some sectors showing improvement [3]. - The potential for domestic exports to remain resilient and the possibility of better-than-expected domestic demand improvements could provide new momentum for the market in the fourth quarter [3]. Group 3: Style Rotation - There is a noticeable divergence among research firms regarding future style assessments, with some suggesting a shift towards financials and cyclical stocks, while others maintain that technology will continue to lead [4]. - The recent performance indicates a potential style switch, with a focus on traditional value sectors such as real estate, brokerage, and consumer goods in the fourth quarter [4].

Summary of Conference Call Records Industry or Company Involved - The records primarily discuss the overall market trends, focusing on the performance of various sectors, particularly technology, cyclical, and dividend stocks. Core Points and Arguments 1. **Market Trends and Risks** - After an index rise, concerns over deleveraging led to a market pullback, with the ChiNext Index breaking its upward trend line, indicating short-term market risks [1][2][3] 2. **Sector Performance Disparity** - There is a noticeable divergence in sector performance; technology stocks are weakening while cyclical and dividend sectors are gaining favor among investors, reflecting a shift towards risk aversion [1][3][4] 3. **Technology Sector Weakness** - Within the technology sector, there is internal differentiation, with certain areas like optical modules showing signs of fatigue. The ChiNext Index's support from its upward trend line is crucial for its future performance [4][5] 4. **Frequent Market Direction Changes** - The market has experienced frequent directional changes, necessitating flexible investment strategies and risk management to adapt to the rapidly changing environment [6] 5. **Impact of External Factors** - Prior to tariff conflicts, the market was already showing signs of weakness, with significant declines in indices like A50 and Nasdaq, indicating vulnerability to negative news [6][9] 6. **Future of ChiNext Index** - The ChiNext Index may enter an ABC structural adjustment phase lasting 4-6 weeks, with potential testing of the 60-day moving average [8][10] 7. **Relationship Between ChiNext and Shanghai Composite Index** - A decline in the ChiNext Index could lead to a corresponding adjustment in the Shanghai Composite Index, although the latter is expected to be less volatile due to accumulated positions [9][11] 8. **Long-term Market Outlook** - Despite short-term adjustments, the long-term systemic slow bull market is believed to be intact, with the Shanghai Composite Index showing strong support around 3,700 points [11][12][13] 9. **Investment Strategy Recommendations** - Focus on financial sectors, particularly banks, and dividend stocks, as they are expected to provide defensive characteristics during market adjustments. Infrastructure stocks are also highlighted for their resilience [14][20] 10. **Market Volatility and Strategy Adaptation** - In the face of rising market volatility, strategies focusing on low volatility and mean reversion are expected to perform better, while momentum strategies may lose effectiveness [24][26] 11. **Sector Allocation and Future Trends** - The current market environment suggests a shift towards cyclical and dividend stocks, with recommendations to monitor banking, infrastructure, and real estate sectors for potential gains [20][31] 12. **Emerging Trends in Specific Industries** - Industries such as non-ferrous metals, electric power, and construction are gaining attention, while technology sectors are experiencing an average decline in rankings [31] Other Important but Possibly Overlooked Content - The records indicate that external negative factors primarily trigger emotional responses in the market, affecting volatility but not necessarily leading to catastrophic outcomes [22] - The discussion on the military industry highlights its unique characteristics compared to other sectors, suggesting a need for special attention [28] - The concept of a balanced market approach is emphasized, indicating a shift from extreme growth to a more diversified investment strategy across broader indices [29][30]

Core Viewpoint - The A-share market is experiencing fluctuations, particularly in the technology sector, which has seen significant gains recently. However, analysts maintain a positive mid-term outlook for A-shares despite short-term disturbances caused by trade tensions and market adjustments [1][2][4]. Group 1: Market Analysis - The recent downturn in the A-share market is attributed to short-term disturbances and the ongoing uncertainty in mid-term upward potential. Analysts suggest that the current market index is at a higher midpoint compared to previous adjustments, indicating a learning effect in the market [4]. - Analysts from various securities firms agree that the mid-term positive outlook for A-shares remains intact, despite the emotional impact of external trade uncertainties. They emphasize that the fundamental and liquidity conditions have not been adversely affected [4][5]. - The market is expected to enter a wide-ranging fluctuation phase in the short term, with some sectors showing signs of improvement, such as industrial profits and narrowing PPI declines. This could lead to a slight recovery in A-share earnings in the fourth quarter, providing new momentum for the market [5]. Group 2: Sector Rotation - There is a growing divergence among analysts regarding sector rotation. Some analysts suggest that the technology sector may not have a sustained basis for adjustment, while others indicate a potential shift towards financials, cyclical stocks, and dividend-paying sectors [6][7]. - The current market conditions may lead to a focus on value-oriented sectors such as real estate, brokerage, and consumer goods in the fourth quarter, as historical trends suggest that outperforming sectors during market fluctuations often underperform subsequently [7]. - The long-term outlook for technology remains positive, with expectations that it will continue to be a catalyst for market growth, particularly in the context of advancements in AI and manufacturing [6][7].

Core Viewpoint - The A-share index has reached a new high of 3800 points, indicating a structural market characterized by significant divergence, with technology stocks led by AI continuing to rise while traditional sectors remain sluggish [1][4][9]. Group 1: Market Performance and Insights - The third quarter saw extreme structural differentiation in the market, aligning with the current economic fundamentals and interest rate environment [4][5]. - Despite the overall economic pressure, there are structural highlights driven by innovation, particularly in technology sectors [4][5]. - The market has transitioned from low volatility to increased fluctuations since September, suggesting a new critical phase [1][4]. Group 2: Future Market Outlook - The index's breakthrough of 3800 points reflects both internal and external factors, including China's strong global competitiveness in technology and abundant global liquidity [9][10]. - The sustainability of the market's upward trend depends on the transition from risk appetite to improvements in corporate earnings and further declines in interest rates [10][11]. - The potential for a market correction exists if lagging sectors do not begin to rise, indicating a need for careful monitoring of economic fundamentals [10][11]. Group 3: Investment Strategies and Style Shifts - The current extreme market differentiation may lead to a style shift, with potential beneficiaries being traditional cyclical sectors and those supported by stable growth policies [13][14]. - Historical patterns suggest that extreme differentiation often contains mean-reversion dynamics, increasing the likelihood of a style switch [13][14]. - Investment strategies should focus on identifying undervalued sectors and companies with recovery potential, while avoiding chasing high-flying stocks [13][14][15]. Group 4: Risks and Cautions - The current market environment presents heightened risks, particularly for sectors that have seen significant price increases, such as AI-related stocks [18][19]. - Investors should remain cautious, as rapid technological advancements in AI could lead to swift changes in market expectations and valuations [18][19]. - Maintaining a balanced approach and being prepared for potential corrections in overheated sectors is essential for managing investment risks [18][19][20]. Group 5: Advice for Investors - Investors who missed the recent market rally should focus on sectors that have not yet experienced significant gains, as these may present future opportunities [23][25]. - Emphasizing a long-term investment perspective and avoiding impulsive decisions based on short-term market movements is crucial [23][26]. - The importance of understanding one's investment capabilities and risk tolerance is highlighted, suggesting that professional management may be beneficial for those lacking confidence [26].

Core Viewpoint - The article discusses the potential for a style shift in the A-share market in the fourth quarter, based on historical trends and market dynamics [2][4]. Group 1: Historical Trends and Market Behavior - Historical data indicates that there is often a noticeable style shift from Q3 to Q4, with sectors that performed well in Q3 typically underperforming in Q4 [2][4]. - A report from Dongwu Securities highlights that from 2010 to 2024, industries that ranked high in Q3 often see a decline in their rankings in Q4, with sectors like banking and home appliances showing a high excess return probability of 60% [2][4]. Group 2: Institutional Behavior and Market Dynamics - The fourth quarter is crucial for institutions as they aim to lock in profits and avoid ranking volatility, leading to potential profit-taking in previously high-performing sectors [4]. - The current market is characterized by a high degree of structural divergence, which may trigger a style shift as institutions adjust their strategies [4][5]. Group 3: Credit Cycle and Growth Trends - Historical patterns suggest that credit cycles last between 11 to 23 months, with the current credit cycle showing signs of recovery, which may favor technology and growth sectors in Q4 [7]. - Reports indicate that since 2010, technology earnings and credit cycles have been closely aligned, suggesting that a recovery in credit could benefit growth stocks [7][8]. Group 4: Investment Strategies and Market Outlook - The article emphasizes the importance of maintaining a growth-oriented investment strategy, as historical cycles show that growth sectors tend to outperform during recovery phases [8]. - Factors that typically catalyze a shift from growth to value include strong economic recovery or significant policy stimulus, but current conditions suggest limited potential for such shifts, favoring growth styles instead [8].

Group 1 - The core viewpoint is that the A-share market is expected to maintain a slow bull pattern in the medium term, with a tendency for a "post-holiday rally" following the National Day holiday, despite typical liquidity contraction before the holiday [1] - Citic Securities notes that the current A-share market is not in an irrationally overheated state, indicating a bull market that may not have ended but is entering a critical phase of fundamental testing and style switching [1] - The breadth of the market is still high, with no signs of divergence between index highs and breadth, suggesting that the current rise is supported by a wider range of stocks rather than just a few large-cap stocks [1] Group 2 - Ping An Securities highlights that market volatility may increase due to capital speculation before the National Day holiday, but major indices remain in a high-level consolidation, with trading volume staying above 2 trillion yuan [2] - Following the holiday, the return of capital is expected to create upward potential in the market, with the technology sector likely to catalyze more structural opportunities [2]

Core Viewpoint - The divergence between "old economy" assets and "new economy" assets has sparked widespread discussion, with notable shifts in investment strategies among prominent investors [1][2]. Group 1: Investment Trends - Some prominent investors, previously resistant to technology stocks, have begun to allocate funds to this sector, albeit reluctantly, due to market requirements [3]. - Investors maintaining a focus on "old economy" assets are facing challenges, with significant declines in fund values and missed opportunities in emerging sectors [3][4]. - The white wine sector, a traditional "old economy" asset, has seen a 7.56% decline in the China Securities White Wine Index this year, indicating ongoing struggles in this market [3]. Group 2: Market Dynamics - The tourism sector is also underperforming, with hotel prices dropping due to low demand, reflecting broader trends in consumer spending [4]. - Certain "old economy" stocks, like West Cement, are experiencing downturns due to declines in infrastructure and real estate markets [4]. - A company has reported a significant increase in net profit, exceeding last year's total within just six months, attributed to expansion in African markets [6]. Group 3: Seasonal Trends and Predictions - Historical data suggests that sectors with strong performance in the first three quarters often underperform in the fourth quarter, indicating a potential shift in market focus [6][7]. - The likelihood of "old economy" assets appreciating in the fourth quarter may depend on policy stimulus or significant economic narratives [7]. - The upcoming holiday period may lead to a preference for cash holdings among investors, although market conditions are expected to remain stable with potential for stock market gains post-holiday [8].