Core Viewpoint - The article emphasizes the strong correlation between social financing (社融), Producer Price Index (PPI), and the A-share profit cycle, suggesting that the bottom of the current profit cycle in A-shares may occur in the second half of 2025, with technology and manufacturing sectors showing signs of recovery while consumption and pharmaceuticals remain at historical lows [1][7]. Macro Perspective: Transmission Logic of Social Financing, PPI, and A-share Profit Cycle - Historical data indicates a high correlation between A-share profit cycles and policy changes, with monetary expansion preceding profit cycles. For instance, from 2012 to 2015, various macro indicators reflected this trend, although PPI and PMI stabilized more slowly. The cumulative growth rate of "credit + non-standard + bonds" over 12 months is preferred for predicting financing conditions, leading PPI and PMI turning points by 3-4 quarters [2]. Micro Perspective 1: Observing Industry Cycle Position through ROE Marginal Changes - The amplitude and wavelength of Return on Equity (ROE) provide a multi-dimensional view of industry cycles. Supply typically determines ROE wavelength, while demand drives the direction of cycles. A set of tracking indicators based on ROE marginal changes has been developed to reflect the cycle position of core assets across different industries [3]. Micro Perspective 2: Systematic Errors in Market Consensus Forecasts - A-share consensus profit growth forecasts tend to be systematically overestimated, reflecting changes in market expectations. Analysis from 2012 to 2023 shows that forecast errors are larger at the beginning of economic cycle bottoms, with downward adjustments throughout the year. In years of rapid recovery, such as 2017 and 2021, forecasts are often revised upward during earnings seasons [4]. Micro Perspective 3: Textual Analysis of Financial Reports - Analysis of earnings forecasts and official reports reveals common issues in the technology and manufacturing sectors, such as insufficient demand and deteriorating competitive landscapes. Core reasons for losses in consumer and pharmaceutical sectors include economic downturns, e-commerce impacts, and cost increases. Factors for turning losses into profits include operational efficiency improvements, market recovery, strategic adjustments, and non-recurring gains [6]. Current Analysis of A-share Profit Cycle Based on the Framework - If the bottom rebound of social financing growth continues, a turning point in the PPI cycle is expected in the second half of 2025, leading to stabilization and recovery in A-share revenue, profit growth, and ROE levels by the end of 2025. The technology sector has entered a recovery phase since 2023, while manufacturing sectors like engineering machinery and lithium batteries have shown clear recovery trends. However, consumption and pharmaceuticals have not yet shown definitive turning points, remaining at historical lows [7].