Domestic Economic Overview - In September, industrial enterprise profits showed a slight recovery, with a year-on-year increase of 21.6%, up from 20.4% in the previous month. The year-to-date profit growth for January to September was reported at 3.2%, compared to 0.9% previously [14] - The manufacturing PMI for October decreased to 49%, down from 49.8% in September, indicating continued contraction. The non-manufacturing PMI rose slightly to 50.1% from 50% [8][9] - The supply side showed marginal declines, with new orders and production indices both down. The upstream price index has also declined for two consecutive months [8][9] International Economic Context - The Federal Open Market Committee (FOMC) lowered interest rates by 25 basis points in October, bringing the benchmark rate to a range of 3.75%-4.00%. This marks the second consecutive rate cut [33][34] - The geopolitical landscape remains tense, with ongoing conflicts in Ukraine and the Middle East impacting global economic conditions. A joint statement from Western nations emphasized support for Ukraine and a call for immediate ceasefire [28][30] Industry Allocation Recommendations - Investment strategies are focused on three main directions: 1) Breakthroughs in technology AI led by Deepseek, 2) Economic recovery with a "stronger stronger" market style, and 3) Continued rise of undervalued dividends [38] - The report emphasizes the importance of the Hang Seng Internet sector, suggesting that the performance of undervalued dividends is closely tied to advancements in the AI industry [38]

Group 1 - The A500 Index (000510) has shown a strong increase of 1.61%, with notable gains from stocks such as Mango Super Media (300413) up 18.75%, Stone Technology (688169) up 14.01%, and Hengxuan Technology (688608) up 11.07% [1] - The A500 ETF Fund (512050) has also risen by 1.34%, with a latest price of 1.06 yuan and a trading volume of 42.30 billion yuan, indicating active market participation [1] - Recent economic data from the National Bureau of Statistics shows a slowdown in growth rates for retail sales, fixed asset investment, and industrial value-added, prompting various government departments to intensify economic policy measures for the second half of the year [1] Group 2 - Tianfeng Securities identifies three main investment themes: 1) breakthroughs in Deepseek and leadership in AI technology, 2) valuation recovery in consumer stocks and gradual recovery in consumption, and 3) the continued rise of undervalued dividends [2] - The A500 Index is designed to reflect the overall performance of the most representative listed companies across various industries, selecting 500 securities with larger market capitalization and better liquidity [2] - As of July 31, 2025, the top ten weighted stocks in the A500 Index include Kweichow Moutai (600519), CATL (300750), and Ping An Insurance (601318), collectively accounting for 19.83% of the index [2]