Group 1 - The core viewpoint is that the A-share profit cycle may have reached a turning point, with a significant probability of profit indicators rebounding by Q3 2025, indicating a gradual stabilization of A-share profits [1] - Since the mid-2025 interim report, A-share profit indicators have shown signs of bottoming out, with the year-on-year decline in EPS for the entire A-share market narrowing in the third quarter [1] - There are clear signs of stabilization and rebound in key profitability metrics such as ROE, suggesting that critical indicators of profitability are gaining upward momentum [1] Group 2 - The domestic economy is likely in a recovery phase, supported by policies aimed at "anti-involution" and boosting domestic demand, which may further enhance the A-share profit cycle [1] - The ongoing narrative surrounding artificial intelligence continues to provide market support, indicating a favorable outlook for the market [1] - For investment allocation, it is recommended to focus on representative broad-based indices, prioritizing the CSI A500 ETF (159338) and the SSE Composite Index ETF (510760) to better navigate the anticipated high volatility in the market [1]

Core Insights - The A-share market is showing signs of a potential recovery in the earnings cycle, with a significant probability of an increase in earnings indicators for Q3 2025, suggesting a gradual bottoming out of A-share profits [2] - The Shanghai 180 Index has seen a rise of 0.96%, with notable increases in stocks such as Shengyi Technology and Zhongjin Gold, indicating positive market sentiment [1] - The top ten weighted stocks in the Shanghai 180 Index account for 26.29% of the index, highlighting the concentration of market performance among a few key players [3] Market Performance - As of November 25, 2025, the Shanghai 180 Index rose by 0.96%, with significant gains in stocks like Shengyi Technology (up 6.91%) and Zhongjin Gold (up 5.66%) [1] - The Shanghai 180 ETF Index Fund also increased by 0.68%, reflecting a positive trend in the broader market [1] Earnings Outlook - The earnings growth for the entire A-share market is projected to be 4.78% in 2025 and 10.98% in 2026, with net profit growth expected to be 10.70% and 17.94% respectively, indicating a potential recovery in profitability [2] - Historical data suggests that when the Producer Price Index (PPI) turns positive, A-share revenue growth tends to show significant elasticity, with past instances in 2016 and 2020 leading to substantial revenue increases [2] Sector Analysis - The TMT (Technology, Media, and Telecommunications) and consumer sectors are expected to exhibit more resilience in growth compared to other sectors [2] - The upstream sectors are predicted to see revenue growth primarily driven by non-ferrous metals and basic chemicals in 2025, with a potential turnaround in net profit growth by 2026 [2]

Core Viewpoint - The report from Tianfeng Securities indicates that the bottom of the A-share profit cycle may have been reached, with a significant probability of profit indicators rebounding by the third quarter of 2025, suggesting a gradual improvement in A-share profitability [1] Summary by Category Profit Growth Projections - For the years 2025 and 2026, the overall revenue growth rates for all A-shares are projected to be 4.78% and 10.98% respectively, while the net profit growth rates attributable to the parent company are expected to be 10.70% and 17.94% [1] Sector Performance - It is anticipated that all sectors will likely see a significant rebound in revenue by 2026, with growth rates expected to expand compared to 2025. The TMT (Technology, Media, and Telecommunications) and consumer sectors are expected to show more resilience in growth, while public utilities and transportation sectors are facing greater performance pressures [1] Upstream Cycle Insights - In the upstream cycle, the revenue growth in 2025 is expected to be driven solely by the non-ferrous metals and basic chemicals sectors. However, it is projected that the net profit growth attributable to the parent company will turn positive in 2026 after being negative [1]

Core Viewpoint - The report from Tianfeng Securities indicates that the bottom of the A-share profit cycle may have been reached, with a significant probability of profit indicators rebounding by the third quarter of 2025, suggesting a gradual improvement in A-share profitability [1] Group 1: Profit Growth Projections - For the overall A-share market, the expected revenue growth rates for 2025 and 2026 are 4.78% and 10.98%, respectively [1] - The projected growth rates for net profit attributable to shareholders for 2025 and 2026 are 10.70% and 17.94%, respectively [1] Group 2: Sector-Specific Insights - It is anticipated that all sectors will likely see a significant rebound in revenue growth by 2026, with growth rates expected to expand compared to 2025 [1] - The TMT (Technology, Media, and Telecommunications) and consumer sectors are expected to exhibit more resilience in growth rates, while the public utilities and transportation sectors are facing greater performance pressures [1] Group 3: Upstream Cycle Outlook - In the upstream cycle, the revenue growth for 2025 is expected to be driven solely by the non-ferrous metals and basic chemicals sectors [1] - However, it is projected that the net profit growth for 2026 will turn positive after being negative [1]

New Stock Offerings - Hai'an Group is set to launch an IPO with a subscription code of 001233, priced at 48.00 CNY per share, with a maximum subscription limit of 14,500 shares [1] Economic and Regulatory Developments - The Ministry of Commerce of China has agreed to discussions with the Netherlands regarding semiconductor supply chain stability, emphasizing the need for constructive solutions [4] - The People's Bank of China reported that the total social financing increased by 30.9 trillion CNY in the first ten months of 2025, up by 3.83 trillion CNY year-on-year, with a year-on-year growth rate of 8.5% for the total social financing stock [5] - The Financial Regulatory Bureau plans to release a revised "Commercial Bank Merger Loan Management Measures" to support mergers and transformations of various enterprises, including tech companies [5] - The Ministry of Industry and Information Technology announced the completion of the first phase of 6G technology trials, with over 300 key technology reserves established [5] - A new regulation on oil and gas infrastructure management will take effect on January 1, 2026, aiming to streamline investment mechanisms and encourage private capital participation [5] Company Performance - Tencent Holdings reported third-quarter revenue of 192.87 billion CNY, a year-on-year increase of 15% [8] - JD Group's third-quarter revenue reached 299.1 billion CNY, reflecting a year-on-year growth of 14.9% [9] - Semiconductor Manufacturing International Corporation (SMIC) posted a net profit of 1.517 billion CNY in the third quarter, marking a significant year-on-year increase of 43.1% [10] Market Trends and Analyst Insights - Huatai Securities noted that the current A-share profit cycle is improving, with signs of recovery in asset balance sheets and orders, suggesting a positive outlook for sectors like advanced manufacturing and TMT [21] - Zhongyuan Securities highlighted the lithium battery industry's ongoing upward trend, recommending close monitoring of raw material prices and policy developments while focusing on leading companies in the sector for long-term investment [22]

Group 1 - The report indicates that the A-share market is entering a new profit cycle, with the profit structure shifting from upstream resource dominance to a dual drive of technology and overseas expansion, currently with a profit share exceeding 30% [10][12][21] - The technology and overseas expansion sectors are expected to continue rising, potentially reaching a profit share of 60% in the next 5-8 years, marking them as the core fundamental themes of this economic phase [2][3][10] - The report highlights that the rise of technology and overseas expansion will significantly impact the A-share profit cycle, with a breakthrough of 50% in their profit share likely to usher in a new upward cycle for A-shares [3][10][12] Group 2 - The analysis of the Q3 financial reports indicates that the bottom of the A-share profit growth has gradually become clear, with profit growth rates for the entire A-share market and non-financial sectors showing slight increases compared to H1 2025 [7][28] - The report identifies AI industry chains, overseas expansion, and rising resource prices as the core themes driving profitability, with notable growth in sectors such as electronics and communication equipment [8][37] - The report emphasizes that companies with a higher proportion of overseas business revenue have significantly better revenue and profit growth compared to domestic demand-driven companies, with ROE levels also showing continuous improvement [23][25][28]

Core Viewpoint - The recovery of A-share earnings growth in Q1 2025 alleviates previous investor concerns about a prolonged decline in the earnings cycle, suggesting a potential rebound in the earnings cycle driven by stabilizing high-dimensional variables such as capacity and real estate cycles [1] Group 1: Index Performance - As of June 3, 2025, the CSI 500 Quality Growth Index (930939) increased by 0.55%, with notable gains from constituent stocks such as Debang Co., Ltd. (603056) up 10.00%, Huahai Pharmaceutical (600521) up 6.94%, and BeiDa Pharmaceutical (300558) up 6.76% [1] - The CSI 500 Quality Growth ETF (560500) rose by 0.32%, with the latest price at 0.94 yuan [1] Group 2: Top Holdings - As of May 30, 2025, the top ten weighted stocks in the CSI 500 Quality Growth Index accounted for 23.79% of the index, including Chifeng Gold (600988) and Ninebot Company (689009) [2] - The top ten stocks by weight include Chifeng Gold (3.13%), Ninebot Company (2.71%), and Shenghong Technology (2.53%) among others [3]

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].