Core Insights - The report highlights a decline in the year-on-year growth rate of social financing (社融) to 8.7% in September 2025, down from 8.8% in August 2025, with new RMB loans amounting to 1.29 trillion yuan compared to 1.59 trillion yuan in September 2024 [3][4] - The report indicates that the demand for credit in the real economy remains weak, with government bonds continuing to support social financing growth, although the net financing scale of government bonds in September 2025 (1.17 trillion yuan) is lower than that in August 2024 (1.50 trillion yuan) [4][6] - The report notes a structural highlight in financial data for September, driven by base effects and short-term policy impacts, suggesting that the bond market may not return to a "fundamentals + liquidity" pricing model without significant interest rate cuts [4][6] Financial Data Analysis - In September 2025, the new social financing scale was 3.53 trillion yuan, lower than the seasonal level, indicating a decrease in financing activity [4][5] - The report mentions that the increase in M1 growth rate and the narrowing of the M1-M2 spread to historical lows since 2022 suggest a complex relationship between money supply and economic activity [4][36] - The report highlights that the weak performance in the equity market has led to a slowdown in the trend of household deposits entering the market, with non-bank deposits significantly dropping [4][10] Credit Demand Insights - The report identifies that the demand for credit from households is not strong, with improvements in medium and long-term loans being observed but still below seasonal levels [4][21][26] - It notes that corporate short-term loans have shown signs of recovery, while the demand for long-term loans remains weak [4][24][26] - The report emphasizes that the ticket discount rate has risen, which may suppress the demand for corporate bill financing [4][10] Government Bond Financing - The report indicates a slowdown in the issuance of government bonds and a decrease in loan demand, which together have dragged down the growth rate of social financing in September [4][6] - It highlights that the net financing pace of local government bonds has also slowed down, reflecting a cautious approach in fiscal policy [4][6] Market Trends - The report discusses the trend of household deposits remaining high, with a significant portion of deposits being held in demand accounts due to lower opportunity costs from deposit rates [4][35] - It also notes that the overall market for wealth management products has grown in line with seasonal expectations, indicating stable investor sentiment [4][43]

Core Viewpoint - The A-share market is experiencing a rebound, with significant trading activity and a notable inflow of funds into the securities sector, indicating a potential bottoming out and recovery opportunity for investors [1][2]. Group 1: Market Performance - The A-share market showed a strong performance with a half-day trading volume of 1.4 trillion, marking the 85th consecutive trading day with over 1 trillion in total trading volume [1]. - The securities sector, particularly the securities ETF (159841), has seen a decline of over 9% from its peak, yet it has attracted continuous net inflows for 22 consecutive trading days, totaling 3.516 billion [1]. Group 2: Fund Inflows and Investor Behavior - The recent increase in fund inflows is attributed to positive changes in the industry fundamentals, including a decrease in resident deposits and an increase in non-bank deposits, suggesting a shift of funds from savings to the stock market [2]. - The number of new A-share accounts opened in August has surged, with the average daily trading volume reaching 2.25 trillion, surpassing levels seen in September 2024 and June 2015, supporting the trend of residents moving deposits into the market [2]. Group 3: Securities Industry Performance - The securities industry reported a net profit increase of over 40% year-on-year in the first half of the year, with expectations for continued growth in brokerage business as market trading volumes rise [2]. - The total market size of ETFs has exceeded 5.3 trillion, reflecting an increase of over 2.4 trillion, or 85.36%, since the initiation of the "9.24" market rally, highlighting the growing popularity of ETFs as a primary investment tool for residents [2]. Group 4: ETF Characteristics and Opportunities - The securities ETF (159841) is designed to package high-quality listed brokerages, with nearly 60% of its holdings concentrated in the top ten leading brokerages, while the remaining 40% includes smaller brokerages with high earnings elasticity [2]. - Since the outbreak of the "9.24" market rally, the ETF has shown a cumulative increase of over 50% from September 24 to October 8, indicating strong offensive potential for investors looking to capitalize on long-term opportunities in the securities sector [2].

Group 1 - The brokerage strategies remain positive, addressing market concerns such as high-low switching, market style in Q4, and the pace of retail investor entry [1] - The strategy team from Xingzheng emphasizes that the current market rotation is driven by incremental funds and economic advantages, focusing on identifying opportunities based on economic logic and industry trends rather than simple position switching [1][7] - The Citic strategy team highlights the importance of the globalization of leading Chinese manufacturing firms, which is expected to enhance pricing power and profit margins, leading to market capitalization growth beyond domestic economic fundamentals [1][7] Group 2 - The strategy team from招商策略 notes that the Federal Reserve's interest rate cut in September historically correlates with a higher probability of A/H shares rising in the future [4] - Historical data indicates that the market tends to be relatively flat before the National Day holiday, but risk appetite improves significantly afterward, with over 60% probability of gains in major indices during the week following the holiday [4][8] - The strategy team from广发分析 suggests that the current rise in retail investor sentiment is still in its early stages, with various indicators showing that the market is not yet experiencing significant capital outflow from savings [1][9] Group 3 - The strategy from信达 suggests that the market is likely to continue its upward trend, with the current environment favoring strong industry trends while maintaining flexibility in high-low switching strategies [8] - The analysis indicates that the market is currently in a bull phase, with expectations of increased retail investment in the coming year, supported by a favorable policy environment [8] - The strategy team from国全策略 believes that the true bull market has not yet begun, but signs of recovery in corporate earnings and the potential for a new market cycle are emerging [9]

Core Insights - The Securities ETF (159841) has shown a positive performance with a 0.52% increase and significant trading volume, indicating strong investor interest [3] - The ETF has reached a new high in scale, amounting to 8.32 billion yuan, with a total of 727.4 million shares, reflecting a continuous inflow of funds over the past 16 days totaling 2.369 billion yuan [4] - The market is witnessing a trend where retail investors are increasingly moving their savings into the stock market, as evidenced by a rise in new A-share accounts and trading volumes [7] Fund Performance - The Securities ETF (159841) has seen a notable increase in its component stocks, with major players like Chuangye Securities and Pacific Securities experiencing significant price rises [3] - The ETF has recorded a net subscription of over 150 million shares, indicating strong demand from investors [3] Market Trends - The fund industry is experiencing a shift, with brokerages increasing their market share in equity fund sales, particularly in stock index funds, where they hold a 55% market share [6] - The trend of retail investors entering the market is supported by a decrease in household deposits, suggesting a migration of funds into equity investments [7] Institutional Perspectives - Analysts from various institutions highlight the strengthening position of brokerages in the index fund distribution market, with expectations for continued growth driven by policy support and market trends [8] - The securities sector is benefiting from improved market conditions and high trading activity, with potential for significant growth in the long term due to ongoing capital market reforms [8]

Summary of Conference Call Records Industry Overview - The current driving force behind the stock market rally is primarily institutional funds, including increased equity asset allocation by insurance funds, the entry of quasi-stabilization funds, and higher positions taken by private equity funds [1][4][21]. Key Points and Arguments - **Shift of Resident Deposits**: There is a gradual trend of resident deposits moving into the stock market, although this phenomenon was not significant as of mid-2025. In July, the growth rate of non-bank deposits increased significantly, while the growth rate of resident deposits slightly declined, indicating a marginal shift [1][5][12]. - **Regulatory Policies**: Regulatory measures have facilitated the entry of insurance funds into the market by lowering the risk weight of equity assets and optimizing investment methods. This has led to a notable increase in stock investments by property and life insurance companies, with year-on-year growth of approximately 33% and 45% respectively in Q1 2025 [7][8]. - **Private Equity Fund Growth**: Private equity funds have shown a recovery in scale, with significant growth observed in July 2025, primarily driven by resident deposits entering the market through private placements. The positions of large private equity funds have increased significantly, with a strong correlation to the performance of small-cap stocks [9][10]. - **Public Fund Performance**: The growth in public funds in the equity market is mainly attributed to passive index ETFs, which have contributed significantly to the increase in A-shares. Compared to the U.S. ETF market, China's ETF market still has considerable room for growth [11]. Important but Overlooked Content - **Excess Savings Potential**: The current excess savings amount to approximately 4.3 trillion, indicating a substantial potential for resident deposits to enter the market. However, the marginal decline in deposits is primarily due to early mortgage repayments rather than stock market investments [6]. - **Historical Context of Deposit Shifts**: Historically, the shift of resident deposits into the stock market typically occurs after a clear profit effect is observed in the stock market, often following monetary easing and favorable policy environments [3][18]. - **Future Monitoring Indicators**: To assess the trend of resident deposit shifts, two indicators are suggested: the annual savings rate and the difference between household deposit growth and M2 growth. A decreasing difference indicates a potential shift in behavior [13]. Future Considerations - **Economic Environment**: The current macroeconomic environment aligns with historical conditions for deposit shifts, including declining deposit rates and a favorable policy environment. The stock market has shown a strong profit effect, which may encourage further deposit movement into equities [20][21]. - **Manufacturing Sector's Role**: The ability of the manufacturing sector to replace real estate as a new economic engine is crucial for sustaining credit expansion and supporting the upward trend of A-shares [22][23]. - **Monitoring Factors for Market Trends**: Future assessments of the stock market should focus on the speed of resident deposit shifts and the potential for credit expansion in the manufacturing sector, as these factors will significantly influence market trends [24].

Investment Highlights - The report identifies four phases of the A-share bull market: initiation (broad-based rally, policy support, and undervaluation), consolidation (differentiation, value blue chips), main rise (uptrend, technology growth + strategic themes), and peak (breakthrough, speculative bubbles + consumption) [4] - With macroeconomic conditions improving in July, including a rebound in M1, narrowing M2-M1 spread, and PPI bottoming out, there has been a significant influx of resident deposits into the market, supporting the main rise of A-shares [4][10] Phase Analysis 1. Preventive Savings and Bond Market Dominance - From August 2022 to August 2024, the bond market has been favored while A-shares experienced a downward trend due to economic weakness and low PPI and M1 [5][13] - The report notes a shift in resident behavior towards preventive savings, with a significant increase in prepayment of loans and a decline in market liquidity [25][27] 2. Normalization of Savings and Balance Between Stocks and Bonds - From September 2024 to June 2025, the report anticipates trading opportunities in bonds while A-shares will experience volatility as the economy stabilizes [40][41] - The normalization of savings is driven by low interest rates and an asset shortage, leading to a gradual recovery in risk appetite among residents [60][61] 3. Resident Deposits Entering the Market and A-share Main Rise - Since July 2025, the report highlights a shift towards equities while bonds adjust, with a notable increase in resident deposits entering the A-share market [73][74] - The correlation between M1 growth and A-share performance is emphasized, indicating that as M1 increases, so does the A-share index [75][77] Policy Environment - The report outlines a combination of monetary easing, fiscal support, and real estate policy adjustments aimed at stabilizing the economy and boosting market confidence [24][47] - Key policy measures include multiple rounds of interest rate cuts and adjustments to housing loan policies to stimulate the real estate market [23][51] Asset Performance - The bond market has shown a configuration advantage, with a shift towards bond-like assets such as REITs and high-dividend bank stocks as investors seek defensive positions [32][64] - The report indicates that the A-share market is currently favoring a "barbell strategy," with strong performance in both high-dividend sectors and growth-oriented stocks [71][72]

Group 1 - The potential scale of resident deposits entering the market is estimated to be around 5 to 7 trillion yuan, driven by the current market activity and sustained profit effects [1] - The growth rate of non-bank deposits still has room for upward movement compared to historical peaks, indicating a continuation of the trend of residents moving their deposits [1] - The actual market entry situation will depend on various factors including macroeconomic conditions, policy expectations, and external environments [1] Group 2 - A rapid increase in short-term trading volume may lead to heightened short-term volatility, but it generally does not affect the medium-term trend [1] - Historically, sectors that have performed relatively well during deposit migration phases include those with high prosperity and verified performance, such as AI/computing power and innovative pharmaceuticals [1]

Core Insights - As of the end of July, the balance of RMB deposits reached 320.67 trillion yuan, reflecting a year-on-year growth of 8.7% [1] - In July alone, household deposits decreased by 1.11 trillion yuan, which is a reduction of 780 billion yuan compared to the same month last year [1] - Non-bank financial institutions saw a monthly increase in deposits of 2.14 trillion yuan, marking a nearly ten-year high and surpassing the level of 1.81 trillion yuan recorded in the same period of 2015 [1]

Group 1 - Chinese brokerage stocks saw significant gains, with Zhongzhou Securities rising by 11.91% to HKD 3.1, Guolian Minsheng up by 7.4% to HKD 7.11, CITIC Construction Investment increasing by 6.59% to HKD 14.56, and China International Capital Corporation rising by 5.67% to HKD 22.38 [1] - In July, non-bank financial institutions' deposits increased by CNY 2.14 trillion, a year-on-year increase of CNY 1.39 trillion, indicating a structural change in fund flows as residents shift funds to financial markets [1] - The balance of margin financing and securities lending surpassed CNY 2 trillion, reaching a ten-year high, reflecting high market trading sentiment [1] Group 2 - Huatai Securities noted that as market risk appetite rises, the net asset return rate of the brokerage sector is entering an upward phase, suggesting stronger stability and sustainability in brokerage performance [1] - The current cycle of market, expectations, and performance is expected to support a continuous recovery trend in the brokerage sector [1]