Core Viewpoint - The recent strong performance of the A-share market is attributed to long-term valuation compression and the potential for valuation recovery, which has been building up over the past few years [1] Investment Philosophy - The investment philosophy emphasizes "value anchoring and going with the trend," focusing on maintaining a balanced portfolio while adhering to low valuation assets for a more "secure" investment approach [1][5] - The strategy involves a flexible adjustment to market conditions, allowing for rebalancing of positions and combinations based on market dynamics [7] Investment Strategy - The preferred investment model is to focus on low-valuation assets, reflecting a preference for a stable investment style [5] - The approach includes diversified sector allocation and holding assets at different valuation realization stages, rather than concentrating on a single high-risk investment [5] - The focus is on capturing valuation recovery rather than speculative valuation expansion, with a keen eye on risk-reward ratios and certainty [5][6] Market Outlook - The investment outlook remains positive across multiple sectors, including innovative pharmaceuticals, technology, cyclical industries, automotive, and public utilities [10][11] - The innovative pharmaceutical sector is particularly highlighted as a promising area, with expectations for domestic companies to transition from following to leading innovation [10] - The AI sector is noted for its potential, especially in computing power and humanoid robotics, which are expected to become significant markets [11] Sector-Specific Insights - In advanced manufacturing, the shift towards higher value chain segments is seen as crucial for enhancing competitiveness and market returns [11] - The cyclical sector, particularly energy and chemicals, is anticipated to see price stabilization and growth potential due to favorable market conditions [11] - In the automotive sector, the focus is on identifying companies undergoing deep reforms or new product cycles, with an emphasis on smart and robotic trends [11] - The public utilities sector is viewed as presenting medium to long-term investment opportunities due to currently reasonable valuations and expected growth in electricity demand [11] Conclusion - Overall, the A-share market is expected to witness a maturation of shareholder return and market value management systems, with a focus on identifying undervalued assets that show potential for fundamental improvement [12]

Core Viewpoint - The recent strong performance of the A-share market is attributed to long-term valuation compression and the subsequent recovery potential, which has been building up over the past few years [1][3]. Investment Philosophy - The investment philosophy emphasizes "value anchoring and going with the trend," focusing on maintaining a balanced portfolio while adhering to low valuation principles for safer investments [1][2]. - The preference for low-valuation assets reflects a stable investment style, favoring diversified sector allocations and different stages of valuation realization [2][4]. Market Strategy - In a strong market environment, capturing the trend of valuation recovery is more important than trying to maximize profits [3][4]. - The approach to investment is flexible, adapting strategies based on market conditions, with a focus on risk-reward ratios and certainty [4][5]. Research and Team Structure - The investment research team consists of nearly 20 members, covering various sectors such as manufacturing, TMT, pharmaceuticals, and consumer services, focusing on both fundamental and technical analysis [4][5]. Sector Focus - The company is optimistic about multiple sectors, including high-end manufacturing, technology, cycles, military, and pharmaceuticals, with a particular emphasis on the innovative drug sector [5][6]. - The innovative drug industry is expected to undergo significant transformation, moving from reliance on technology imports to self-innovation and global market expansion [6][7]. Future Outlook - The company anticipates continued growth in the innovative drug sector, with a focus on tracking key companies' pipeline data and business development progress [6][7]. - Other areas of interest include AI, advanced manufacturing, energy and chemicals, automotive, and public utilities, with specific strategies for each sector [7].