Core Insights - The report emphasizes a strategic shift towards large financial and consumer sectors, indicating that the maximum negative impact from equal tariffs has been realized, leading to a potential rebound window after initial panic [3] - The report highlights a significant improvement in corporate earnings, with the Shanghai Composite Index rising over 15% to above 3900 points, driven by external friction easing, clear domestic policy blueprints, and accelerated corporate profit recovery [3][4] - The report suggests that the market is expected to gain momentum due to three converging factors: external friction easing, clear domestic policy direction, and improved corporate earnings [3] Overall Performance - The overall performance of the A-share market shows a cumulative year-on-year net profit growth of 5.9% for Q3 2025, with a notable improvement of 3.2 percentage points compared to Q2 [4][23] - The non-financial A-share companies reported a cumulative net profit growth of -0.1%, which is an improvement of 0.25 percentage points from the previous quarter [25] - The report indicates that the revenue growth for non-financial A-share companies has also improved, with a cumulative year-on-year growth of 1.7% [25] Industry Performance - Key industries such as electric equipment, military industry, and pharmaceuticals have shown accelerated performance, with significant upward trends in earnings and revenue [4][36] - The steel, military, non-bank financial, and non-ferrous metals sectors exhibited the most substantial quarter-on-quarter improvements [4] - The report notes that the semiconductor, industrial metals, and non-bank financial sectors continue to show high growth despite high base effects [38] Fund Allocation - The report indicates a shift in fund allocation towards technology and cyclical sectors, while reducing exposure to consumer, manufacturing, and dividend-paying stocks [4] - The TMT (Technology, Media, and Telecommunications) sector has reached a historical high in terms of holding proportions [4] Macro Economic Overview - The macroeconomic environment shows a stabilization in the US economy, with signs of recovery, while domestic recovery is experiencing some slowdown [5][22] - The report highlights that the US Treasury yields are fluctuating within a narrow range, and global funds continue to flow into capital markets [5] Micro Tracking - The report notes a marginal decline in turnover rate and transaction volume, with an increase in industry rotation speed [6] - High-end transportation equipment and non-ferrous metals sectors are leading in profit growth rates [6] Investment Strategy - The report suggests a focus on cyclical sectors, consumer goods, and electric new energy as key investment directions for November [7][22] - The investment strategy emphasizes a "barbell" approach, favoring TMT sectors while also considering cyclical and consumer sectors [7]