Group 1 - The core viewpoint is that if the "anti-involution" policy in 2026 successfully promotes re-inflation, corporate profits are expected to recover rapidly, providing strong momentum for the market, similar to the successful logic of supply-side structural reforms in 2016-2017 [1] - The economic outlook for 2026 is analyzed through three dimensions: stable GDP growth, increasing share of the "three new" economy (including automotive and AI industries), and marginal improvement in consumption and investment, with domestic demand becoming the core driving force [1] Group 2 - In the A-share market, there is a strong correlation between A-share profits and PPI, with over 70% of the 5,400 A-share listed companies being manufacturing enterprises, indicating significant price elasticity [2] - As of October 2025, PPI is still at -2.1% year-on-year, and corporate profits are in a bottoming phase. If the "anti-involution" policy leads to a rebound in commodity prices, corporate profits could improve significantly, providing strong support for the market [2] - Concerns regarding the AI bubble in the US stock market are raised, with the S&P 500 index showing significant valuation risks, but the adjustment is expected to be relatively mild compared to the 2000 internet bubble [2] Group 3 - A risk warning is issued regarding the "policy expectation reversal risk," highlighting the potential conflict if both PPI and CPI rise unexpectedly, which could challenge the assumption of continued US interest rate cuts [3] - The year 2026 is seen as crucial for the success of the "anti-involution" policy in promoting re-inflation. If PPI turns positive year-on-year, A-shares could experience a rapid recovery in profits similar to the supply-side structural reform period, making this a key market driver [3]

Core Insights - The success of the "anti-involution" policy in 2026 could lead to a re-inflation, similar to the successful logic of the supply-side structural reforms in 2016-2017, which may result in a rapid recovery of corporate profits and inject strong momentum into the market [1] Economic Outlook - The economic outlook for 2026 is analyzed through three dimensions: stable growth with GDP growth remaining in a stable range, strengthening technology with the "three new" economy's share continuing to rise, and improving domestic demand with significant recovery expected from the low base in 2025 [1] A-Share Market Insights - A-share profitability is highly correlated with PPI, with over 70% of the 5,400 A-share listed companies being manufacturing firms, indicating significant price elasticity [2] - As of October 2025, PPI was down 2.1% year-on-year, with corporate profits in a bottoming phase; if the "anti-involution" policy leads to a rebound in commodity prices, corporate profits could improve significantly, providing strong market support [2] U.S. Market Analysis - Concerns regarding the AI bubble in the U.S. stock market are noted, with the S&P 500 index showing significant valuation risks, as both PE and PB ratios are at the 99th percentile historically; however, the potential adjustment is expected to be relatively mild compared to the 2000 internet bubble [2] Risk Warnings - A key risk identified is the "policy expectation reversal risk," particularly if both PPI and CPI rise unexpectedly, which could conflict with the assumption of continued U.S. interest rate cuts [3] - The year 2026 is critical as it marks the beginning of the "14th Five-Year Plan," with the success of the "anti-involution" policy being pivotal for driving re-inflation and corporate profit recovery, which is essential for market momentum [3]