Core Viewpoint - The article discusses the recent performance of A-shares, highlighting the rotation between growth and value styles, with value stocks currently showing strength and returning to normal valuations after a period of underperformance [4][5][12]. Group 1: Market Performance - The overall market experienced a slight decline, with the CSI All Share Index down by 0.44% [1][2]. - Large-cap stocks showed slight gains, while small-cap stocks fell by over 1% [3]. - The Hong Kong stock market saw minor fluctuations, closing with little overall change [7]. Group 2: Style Rotation - A-shares exhibit characteristics of rotation between growth and value styles, with growth stocks significantly outperforming value stocks from 2020 to 2021, while the opposite trend has been observed from 2022 to 2024 [8][9]. - In the first three quarters of this year, growth stocks surged, while value stocks showed only modest gains [10]. - After the National Day holiday, growth stocks began to decline while value stocks started to rise [13]. Group 3: Valuation Insights - The 300 Value Index has returned to normal valuation levels, with some dividend and free cash flow stocks still undervalued but approaching normal valuations [14]. - The article provides a valuation table for various dividend indices, indicating their current earnings yield, price-to-earnings ratio, and other metrics [40]. Group 4: Long-term Performance - Value style funds have demonstrated a slow bull market trend over the years, with significant cumulative gains since 2019, outperforming many global indices [15][17][19]. - The article notes that both growth and value styles have shown long-term upward trends, but their volatility and return characteristics differ significantly [25][28]. Group 5: Investment Strategy - The article emphasizes the importance of considering both growth and value styles when they are undervalued, suggesting that investors can benefit from holding either style over the long term [38][39]. - It highlights that value style investments are generally easier to manage, with lower volatility and consistent returns, while growth style investments require more precise timing for entry and exit [31][33][34].

Group 1 - The article reveals the driving mechanism of foreign capital behavior and the dollar liquidity cycle on the differentiation of value and growth styles in A-shares through a dual-factor model of cross-border capital flow and global liquidity [23] - Cross-border capital flow framework indicates that the expansion of interest rate differentials and the surplus in the current account attract foreign capital to allocate to fundamentally strong large-cap value stocks [23] - Global liquidity spillover driven by the Federal Reserve's easing policies significantly enhances the valuation elasticity of small-cap growth stocks by lowering financing costs and increasing risk appetite [23] Group 2 - Since the launch of the Shanghai-Hong Kong Stock Connect in 2014 and the Shenzhen-Hong Kong Stock Connect in 2016, foreign capital has continuously increased its allocation to A-shares, with the market value share significantly rising [6] - The top 300 stocks held through the Shanghai and Shenzhen Stock Connect include 222 from the CSI 300 index, 62 from the CSI 500 index, and 10 from the CSI 1000 index, indicating a strong preference for liquid and fundamentally sound stocks [6] - The relationship between interest rates, exchange rates, and stock prices reflects the interaction between the money market and the capital market, showing a clear negative correlation overall [8] Group 3 - The current account surplus is the main source of the international balance of payments surplus, with merchandise trade being the primary driver, reflecting the relative changes in domestic and foreign demand [11] - When domestic interest rates rise relative to foreign rates, arbitrage capital flows into bonds and stocks, boosting the domestic currency and attracting more foreign capital into A-shares [13] - The dual-factor model effectively captures style-switching opportunities, with a strategy annualized return exceeding 10% [22]

Core Viewpoint - The current market is experiencing a rotation between value and growth styles, with growth stocks showing strength during periods of value style weakness [6][7][8]. Market Performance - The large-cap stocks have slightly declined, while small-cap stocks have seen minor gains [2]. - The bank index has shown significant volatility recently, peaking at overvalued levels before a pullback [4][5]. - The overall market rating remains stable at 4.8 stars [1]. Historical Comparison - The current market conditions are reminiscent of the 2013-2014 bear market, characterized by weak fundamentals and high interest rates, which suppressed market performance [10][28]. - In 2014, a significant interest rate cut stimulated the economy, leading to a rapid increase in A-share prices [13]. - The market saw three major uptrends from 2014 to 2017, with financial stocks leading the first surge [14][15]. Style Rotation - The market has shown a tendency to rotate between value and growth styles, with growth stocks often outperforming during periods of value style underperformance [7][8]. - The current market environment has seen a similar pattern, with growth stocks gaining traction as value stocks lag [30]. Economic Indicators - There are signs of fundamental recovery in certain sectors, such as technology and pharmaceuticals, which have shown significant year-on-year profit growth [32][33]. - The overall economic environment remains challenging, with a decline in A-share company profits noted for 2024 [28]. Investment Strategy - The company emphasizes a strategy of buying during market dips and selling during peaks, while maintaining patience during stable periods [41]. - The introduction of new features in the "Today Star" app aims to assist investors in tracking ETF valuations and identifying investment opportunities [42][44].