Core Viewpoint - The market is experiencing a shift from speculative trading to value reassessment, as evidenced by the divergence in valuations between high-growth AI stocks and undervalued blue-chip stocks [1][3]. Group 1: Market Dynamics - The average valuation of the CSI 300 index has quietly fallen below the 20th percentile of the past five years, indicating a significant market correction [1]. - The past two years have seen a typical cycle of "herding-dispersion-collapse" in the market, particularly with high-growth stocks, leading to extreme valuations detached from fundamentals [3]. - High-growth stocks with P/E ratios exceeding 100 have experienced an average drawdown of 45% since the beginning of 2024, while stocks with P/B ratios below 1 have seen net inflows [3]. Group 2: Value Opportunities - Low-valued blue-chip stocks, particularly in the banking sector, are showing unique investment appeal, with one major state-owned bank having a P/E ratio of only 4.5 and a dividend yield of 6.2% [3]. - The decline in non-performing loan ratios for leading banks over eight consecutive quarters and signs of stabilizing net interest margins highlight the resilience of fundamentals against valuation discounts [3]. - The transition from a "storytelling" market to one focused on performance metrics provides a solid foundation for the revaluation of undervalued blue-chip stocks [3]. Group 3: Macro Factors - Structural changes in the macroeconomic and policy environment are driving the shift in market styles, with the central bank's focus moving from "broad monetary policy" to "broad credit policy" since 2025 [4]. - The end of the Federal Reserve's interest rate hike cycle and the stabilization of the RMB exchange rate have led to a resurgence of northbound capital inflows into A-shares, particularly in the banking sector [4]. - In the third quarter, northbound capital net purchases of bank stocks exceeded 30 billion yuan, marking a two-year quarterly high, while the AI sector saw a net outflow of 18 billion yuan [4]. Group 4: Investment Philosophy - The market oscillates between extremes of overvaluation and undervaluation, and the end of speculative trading in high-growth stocks signals a re-evaluation of the safety margin and growth certainty of undervalued blue-chip companies [5]. - Investors are encouraged to seek out undervalued companies that consistently generate cash flow and return dividends to shareholders, as these firms are likely to shine in the wave of value recovery [5].