Group 1 - The report anticipates a transition of the Chinese economy from a bottoming phase to a recovery phase in 2026, driven by three unexpected demand-side factors: U.S. fiscal expansion, rising exports, and improved real estate supply-demand dynamics [1][21][54] - U.S. fiscal deficit is projected to reach 5.9% in FY 2026, with potential increases to 7.2% if tariff revenues are eliminated, which could lead to a medium-strength recovery starting in Q1 2026 [1][21][25] - The global supply chain reconstruction is expected to boost China's export growth, particularly in machinery and transportation equipment, which have shown significant growth since April 2025 [2][54][58] Group 2 - The real estate market is showing signs of recovery, with an estimated inventory clearance period of approximately 25.3 months as of September 2025, suggesting a potential stabilization in housing prices by the end of 2026 [3][54] - The strategy emphasizes a focus on cyclical sectors before consumer sectors, with particular attention to industries such as chemicals, new energy, and construction materials, which are expected to benefit from the recovery narrative [6][54] - The report highlights that the micro-cap stock market may continue its bullish trend, with an estimated net inflow of approximately 5 billion yuan per month from new private equity quantitative products [7][54]