Group 1: Supply and Demand Dynamics - Two categories of industries are highlighted: "supply clearing" industries with significant inventory and capacity reduction, and "strong expansion" industries with high revenue growth and capacity expansion [2][15]. - Industries exhibiting "supply clearing" characteristics include plastics, general equipment, gaming, agriculture, small metals, optical electronics, and communication services [2][15]. - Industries showing "strong expansion" characteristics include other electronics, leisure food, motorcycles, precious metals, and shipping ports [2][17]. Group 2: Export Chain Analysis - Industries with high overseas revenue ratios are expected to maintain independent growth despite domestic demand pressures, including other home appliances, consumer electronics, shipping ports, small appliances, and engineering machinery [3][20]. - The report notes that industries with high revenue from the U.S. face uncertainties until U.S.-China trade relations improve, with potential valuation recovery for sectors like entertainment products, textile manufacturing, and lighting equipment if tariff issues ease [3][23]. Group 3: High Dividend Yield Industries - High dividend yield industries identified include coal mining, oil and gas extraction, refining and trading, shipping ports, and white goods [4][26]. - Notably, the dividend yield for transportation and consumer sectors has significantly increased compared to the previous year, particularly in shipping ports, logistics, and white goods [4][26]. Group 4: Market Performance and Strategy - The A-share market shows resilience, with a net outflow of ETFs indicating reduced support from protective funds, yet the market remains stable with transaction volumes exceeding 1 trillion [5][29]. - The report suggests a cautious approach to position management due to ongoing uncertainties, with a focus on potential support levels for the index [5][29]. - A balanced allocation strategy is recommended to navigate uncertainties, with a renewed interest in technology sectors, particularly in AI, and a shift towards high-growth industries such as feed, motorcycles, and plastics [5][30].

Core Viewpoint - The export chain of listed companies in Q1 2025 is expected to perform well, driven by factors such as foreign trade enterprises "grabbing exports," accelerated expansion of mid-to-high-end products in overseas markets, and the ongoing efforts of the "Belt and Road" initiative. The net profit growth rate of the export chain in Q1 2025 is projected to be 15.33%, a significant increase of 14.54 percentage points compared to 2024A [1]. Group 1: Export Chain Performance - The net profit growth rate of the export chain in Q1 2025 is 15.33%, up from 0.80% in 2024A, outperforming the overall non-financial A-share market, which saw a decline of 12.94% [1]. - The export chain's performance indicates strong support from external demand over the past six months [1]. Group 2: Industry Overseas Revenue Proportion - As of the end of 2024, the highest overseas revenue proportion is in the electronics industry at 41.7%, followed by home appliances at 38.5% [2]. - Industries with over 20% overseas revenue proportions include automotive (26.5%), machinery manufacturing (23.8%), and light industry manufacturing (22.5%) [2]. - The light industry manufacturing sector saw a significant increase in overseas revenue proportion, rising by 4.76 percentage points compared to 2023 [2]. Group 3: Trends in Overseas Revenue - Since 2018, sectors such as automotive, personal care, and machinery have rapidly increased their overseas revenue proportions, reflecting a trend towards high-end, intelligent, and green exports [2]. - The electronics and communications sectors have experienced a noticeable decline in overseas revenue proportions due to geopolitical issues [2]. Group 4: Industry-Specific Developments - In 2024, industries such as non-ferrous metals and mid-to-high-end manufacturing have made significant progress in overseas business, with notable increases in overseas revenue proportions [4]. - The sectors with the most substantial marginal improvements in overseas revenue proportions include other electronics (+15.06 percentage points) and home goods (+9.23 percentage points) [4]. Group 5: Exposure to International Markets - The report categorizes industries based on their exposure to various international markets, highlighting those with high exposure to the U.S. and those with declining exposure [6]. - Industries currently with high exposure to the U.S. include home appliances, medical devices, and computer equipment, while sectors like communications and media have seen a decrease in U.S. exposure [6].

Quantitative Models and Construction Methods 1. Model Name: Quantitative Market Trend Judgment Framework - **Model Construction Idea**: The framework identifies the dominant market style by comparing asset characteristics based on their intrinsic attributes and industry life cycle stages. It evaluates assets using the priority sequence of growth (g) > return on equity (ROE) > dividend yield (D) to determine the most advantageous sectors[5][6][7] - **Model Construction Process**: - Classifies assets into five style stages: external growth, quality growth, quality dividend, value dividend, and distressed value[5] - Prioritizes mainstream assets (actual growth, expected growth, profitability) over secondary assets, with secondary asset priority determined by crowding levels[7] - Uses metrics such as Δg (actual growth momentum), Δgf (expected growth momentum), PB-ROE (valuation), and DP (dividend yield) to evaluate and rank assets[6][7] - **Model Evaluation**: The framework has demonstrated strong explanatory power for A-share market style rotations since 2009, achieving an annualized return of 26.85%[14] --- Quantitative Factors and Construction Methods 1. Factor Name: Actual Growth (g) - **Factor Construction Idea**: Measures the momentum of actual growth by evaluating the change in net profit growth rates (Δg)[18] - **Factor Construction Process**: - Calculates the spread between the top and bottom quintiles of industries based on net profit growth rates[18] - Δg > 0 indicates strengthening growth momentum, while Δg < 0 signals weakening momentum[18] 2. Factor Name: Expected Growth (gf) - **Factor Construction Idea**: Captures analysts' optimism by assessing changes in expected net profit growth rates (Δgf)[21] - **Factor Construction Process**: - Similar to Δg, calculates the spread between the top and bottom quintiles of industries based on expected net profit growth rates[21] - Δgf > 0 indicates increasing optimism, while Δgf < 0 suggests declining optimism[21] 3. Factor Name: Profitability (ROE) - **Factor Construction Idea**: Evaluates asset quality by combining ROE with valuation metrics (PB-ROE)[22] - **Factor Construction Process**: - Ranks industries based on ROE and PB-ROE residuals[30] - Identifies high ROE industries with low valuations for allocation[30] 4. Factor Name: Quality Dividend (DP+ROE) - **Factor Construction Idea**: Combines dividend yield (DP) and ROE to identify high-quality dividend-paying industries[33] - **Factor Construction Process**: - Scores industries based on DP and ROE, selecting the highest-scoring sectors for allocation[33] 5. Factor Name: Value Dividend (DP+BP) - **Factor Construction Idea**: Combines dividend yield (DP) and book-to-price ratio (BP) to identify undervalued dividend-paying industries[36] - **Factor Construction Process**: - Scores industries based on DP and BP, selecting the highest-scoring sectors for allocation[36] 6. Factor Name: Distressed Value (PB+SIZE) - **Factor Construction Idea**: Identifies distressed industries with low price-to-book ratios (PB) and small market capitalization (SIZE)[38] - **Factor Construction Process**: - Scores industries based on PB and SIZE, selecting the lowest-scoring sectors for allocation[38] --- Backtesting Results of Models and Factors 1. Quantitative Market Trend Judgment Framework - **Annualized Return**: 26.85% since 2009[14] - **Excess Returns**: Positive in most years, with notable outperformance in 2020 (44%), 2021 (38%), and 2022 (62%)[15] 2. Actual Growth Factor - **Recent Performance**: Δg turned negative, indicating weakening growth momentum and reduced opportunities for actual growth strategies[18] 3. Expected Growth Factor - **Recent Performance**: Δgf turned negative, signaling a halt in analysts' optimism and limited opportunities for expected growth strategies[21] 4. Profitability Factor - **Recent Performance**: ROE advantage continues to decline, but reduced crowding levels suggest potential opportunities in a weakening growth environment[22][24] 5. Quality Dividend Factor - **Recent Performance**: Outperformed in 2016, 2017, and 2023; recent recommendations include sectors like "Other Home Appliances" and "Service Robots"[33] 6. Value Dividend Factor - **Recent Performance**: Outperformed in 2009, 2017, and 2021-2023; recent recommendations include sectors like "Pet Food" and "Security"[36] 7. Distressed Value Factor - **Recent Performance**: Outperformed in 2015-2016 and 2021-2023; recent recommendations include sectors like "Other Electronic Components" and "Printing and Dyeing"[38]