Core Insights - The Hong Kong IPO market experienced significant growth in the first three quarters of 2025, leading globally with 68 new listings and total fundraising of HKD 182.45 billion, representing increases of 51% and 227% year-on-year respectively [1][2] - The market saw a high level of oversubscription, with 98% of new stocks receiving excess subscriptions and 86% of these having oversubscription multiples exceeding 20 times, doubling from the previous year [1][4] - The decline in the first-day drop rate to 24% marks a nine-year low, with an average first-day return rate of 28%, significantly higher than the previous year's 10.82% [6][7] Market Activity - The number of new stocks with oversubscription multiples exceeding 1,000 reached 15, accounting for nearly 23% of the total, with the highest being Daheng Technology at 7558.40 times [2][3] - The pharmaceutical and durable consumer goods sectors were particularly favored, with several companies in these industries achieving high subscription rates [2][8] Regulatory Environment - The increase in market activity occurred in a post-regulatory environment, following the Hong Kong Securities and Futures Commission's new rules that ended the era of "high leverage" in IPO subscriptions [4][5] - The new regulations aimed to address issues of excessive leverage and chaotic funding practices, resulting in a healthier market structure [5][6] Investment Performance - The significant improvement in the profitability of new stocks is attributed to a combination of policy benefits, ample liquidity, and industry upgrades [7][8] - The performance of large new listings, such as Ningde Times, which saw a first-day increase of 16% and a cumulative rise of over 87% by September 30, highlights the strong market sentiment [6][7] Market Dynamics - The IPO market is driven by a dual engine of technology and consumer sectors, with the medical and pharmaceutical industries leading in the number of listings, while manufacturing accounted for over 30% of fundraising [8] - The diverse industry distribution enhances market resilience and attractiveness, moving away from reliance on a single sector [8]

Core Insights - The Hong Kong IPO market has experienced significant growth in the first three quarters of 2025, leading globally with 68 new listings and total fundraising of HKD 182.45 billion, representing a 51% and 227% increase year-on-year, respectively [1][4] - The market has seen a high level of oversubscription, with 98% of new stocks being oversubscribed and 86% having oversubscription multiples exceeding 20 times, doubling from the previous year [1][4] - The decline in the first-day drop rate to 24% marks a nine-year low, with an average first-day return of 28%, significantly up from 10.82% in the previous year [6][7] Market Activity - A total of 15 new stocks had oversubscription multiples exceeding 1,000 times, accounting for nearly 23% of the new listings, with the highest being Daheng Technology at 7,558.40 times [2][3] - The pharmaceutical and durable consumer goods sectors have been particularly favored, with several biotech companies achieving high oversubscription rates, indicating strong investor interest in innovative drug companies [2][3] Regulatory Environment - The recent surge in market activity is attributed to a healthier growth environment following regulatory changes that ended the era of high-leverage IPO subscriptions, with the Hong Kong Securities and Futures Commission implementing measures to curb excessive leverage [4][5] - The previous year saw only 2 new stocks with oversubscription multiples exceeding 1,000 times, highlighting the shift in market dynamics post-regulation [4][5] Investment Returns - The significant increase in first-day returns and the reduction in the drop rate have contributed to a more favorable investment environment, attracting more investors to the IPO market [6][7] - The performance of large new listings, such as NIO's H-shares, which saw a first-day increase of 16% and a cumulative rise of over 87% by September 30, has further enhanced the appeal of IPO investments [6][7] Market Drivers - The robust performance of the Hong Kong IPO market is driven by a combination of policy incentives, ample liquidity, and an evolving industrial landscape, with the medical and pharmaceutical sectors leading in new listings [7][8] - The Hong Kong Stock Exchange has received 348 listing applications as of October 5, 2025, indicating strong interest from companies, particularly in the technology and consumer sectors [7][8]

Group 1 - In September, foreign capital net inflow into the Chinese stock market reached $4.6 billion, marking the highest monthly figure since November of the previous year [3] - Passive funds contributed significantly to this inflow, with $5.2 billion entering, while active funds experienced a slight outflow of $0.6 billion [3] - By the end of September, total inflow from foreign passive funds for the year reached $18 billion, surpassing the total of $7 billion for the entire previous year [3] Group 2 - Active funds showed a preference for increasing holdings in capital goods and semiconductors, indicating a focus on sectors with strong fundamentals [3][4] - Notable stocks that saw increased investment include Alibaba, CATL, and JD.com, while Tencent, Ping An Insurance, and Pop Mart experienced reduced holdings [3] - The sustained interest from passive funds and the strategic focus of active funds suggest a long-term commitment to the Chinese market based on genuine demand and solid fundamentals [4]

Group 1 - The National Development and Reform Commission (NDRC) has allocated a total of 300 billion yuan in special bonds to support the consumption upgrade policy, with the latest batch being 69 billion yuan [1][2] - The government aims to boost consumption as a primary task this year, with the "old-for-new" policy playing a significant role in this initiative [2][3] - From January to August, 330 million people have claimed subsidies under the "old-for-new" policy, leading to over 2 trillion yuan in related sales, contributing to a 4.6% year-on-year growth in total retail sales of consumer goods [5][6] Group 2 - Analysts suggest that future consumption policies may expand the scope of subsidies from durable goods to general consumer goods and services [5] - The government has also introduced new policies to support service consumption, with 19 measures aimed at enhancing service supply in various sectors [6] - The expected growth rate of retail sales is projected to reach 4.5% this year, reflecting a 1.0 percentage point acceleration compared to the previous year [6]

- The Guozheng Hong Kong Stock Connect Consumer Theme Index is constructed using the Paasche weighted method and is calculated daily on a chained basis[3][11][39] - The index selects stocks from the Hong Kong Stock Exchange that meet specific criteria, such as being involved in consumer-related industries (e.g., apparel, jewelry, home appliances, food and beverages) and having mutual market access qualifications[43] - The index excludes stocks with abnormal price fluctuations, significant financial issues, or major operational problems in the past year[43] - The index selects the top 50 stocks based on the highest average daily market capitalization over the past year, after removing the bottom 10% in terms of average daily trading volume[43] - The Guozheng Hong Kong Stock Connect Consumer Theme Index has a cumulative return of 24.22% since its base date (December 31, 2014) as of September 16, 2025, outperforming the Hang Seng Equal Weight Index (-7.82%) and the Hang Seng Index (12.00%)[71] - The index's PE (TTM) ratio is 19.30 as of September 16, 2025, which is lower than 80.88% of the time since its launch on April 11, 2022, indicating a relatively undervalued state[75][77]

Core Viewpoint - The performance of the stock market after the Federal Reserve resumes interest rate cuts is heavily dependent on whether the economy enters a recession, with the unemployment rate being a key indicator for determining the economic trajectory [1][3]. Economic Conditions - Historical data shows that in the past fifty years, there have been seven instances where the Fed resumed rate cuts after a significant pause. Out of these, four were accompanied by economic recessions, while three saw continued economic expansion, leading to vastly different stock market performances [1][7]. - In scenarios without a recession, the MSCI World Index showed average performance increases of 1%, 2%, 8%, and 17% over 1 month, 3 months, 6 months, and 12 months respectively after rate cuts. In contrast, during recessionary periods, the average performance was -2%, 2%, 0%, and 6% [7][10]. Unemployment Rate - The unemployment rate is highlighted as a critical variable for distinguishing between recession and economic expansion. During recessions, the unemployment rate tends to rise for nearly a year after rate cuts, accumulating an increase of 2-3 percentage points. Conversely, in expanding economies, the unemployment rate only sees a slight increase before declining within a few quarters [3][14][17]. Market Expectations - Currently, the U.S. unemployment rate has risen to 4.3%, which is a significant factor driving market expectations for the Fed to resume rate cuts. Barclays economists predict that the Fed may lower the federal funds rate to 3.0% by the end of 2026 as the labor market slows [17]. Yield Curve and Sector Performance - The shape of the yield curve significantly influences sector performance. Historically, a flattening yield curve during bull markets is most favorable for the stock market, while cyclical sectors perform best during steepening phases in bear markets [6][20]. - In the absence of a recession, the yield curve tends to steepen moderately after rate cuts, while in recession scenarios, it initially steepens before flattening out, transitioning to a steepening phase again as the economy recovers [20][24].

Core Insights - Croatia's industrial output experienced a year-on-year decline of 0.9% in July, marking the first decrease after seven consecutive months of growth [1] Group 1: Industrial Performance - Three out of five sectors reported a decline: durable consumer goods production fell by 11.8%, energy production decreased by 10.2%, and non-durable consumer goods dropped by 1.3% [1] - In contrast, the production of intermediate goods increased by 5.4%, and capital goods production rose by 3.0% [1]

Group 1 - A-shares show resilience with notable performance in the midstream and technology sectors, as the overall revenue growth for A-shares turned positive in 2025H1, with cumulative year-on-year revenue growth of 0.2% for all A-shares and 0.2% for non-financial A-shares [15][33][76] - The profit growth for A-shares in 2025H1 has slowed but remains positive, with cumulative year-on-year net profit growth of 2.6% for all A-shares and 2.8% for non-financial A-shares, reflecting a slight decline compared to 2025Q1 [33][43][76] - The midstream sector's performance has improved significantly, with a profit growth rate of 11.3% in 2025H1, while the technology sector maintained a high profit growth rate of 17.1% [2][43][44] Group 2 - The return on equity (ROE) for all non-financial A-shares has slightly rebounded, with a TTM ROE of 7.5% in 2025Q2, showing a minor increase from 7.4% in 2025Q1 [48][56] - The midstream and technology sectors have shown significant ROE recovery, with midstream ROE at 4.8% and technology ROE at 6.4% in 2025Q2, indicating improvements from the previous quarter [58][66] - Industries such as food and beverage, home appliances, and non-ferrous metals have demonstrated notable ROE improvements, with food and beverage ROE reaching 20.9% in 2025Q2 [67][70] Group 3 - Hong Kong stocks have maintained stable performance, with non-financial profit growth slightly improving in 2025H1, and the Hang Seng Technology Index showing a high profit growth rate of 20.8% [4][5][32] - The profit growth for the Hang Seng Index and Hang Seng Non-Financial Index in 2025H1 was 2.5% and 4.0%, respectively, indicating a recovery compared to 2024H2 [4][5][27] - The sectors with higher profitability in Hong Kong include durable consumer goods, building materials, media, and hardware equipment, with significant improvements in net profit growth and ROE in 2025H1 [5][32][37]

Core Viewpoint - A-share companies are currently experiencing a bottoming out in profitability, with a notable structural divergence in performance across sectors [2][3] Summary by Sections Overall Performance - A-share companies' total revenue growth for the first half of the year is -0.02%, while non-financial enterprises show a decline of -0.53% year-on-year, indicating a slight improvement compared to the first quarter [2] - Net profit growth for A-share companies is 2.42%, and for non-financial enterprises, it is 0.98%, both showing a decline from the first quarter [2] - The second quarter's net profit growth for non-financial enterprises reached a seasonal low since 2010, primarily driven by financial companies [2] - Return on Equity (ROE) for A-share companies is 7.76%, and for non-financial enterprises, it is 6.55%, both down from the previous quarter [2] - Cash flow analysis shows that while net cash flow remains negative, operational, investment, and financing cash flows have improved, with non-financial real estate companies maintaining high free cash flow levels, indicating strong potential for dividends [2] Structural Performance - High-tech and overseas-oriented companies are performing well, while domestic consumption sectors are still recovering [3] - The net profit growth for the Sci-Tech Innovation Board exceeded 20% in the second quarter, leading the market, with significant contributions from the AI, semiconductor, and innovative pharmaceutical sectors [3] - Companies focused on overseas markets, as indicated by the Outbound 50 Index, reported a revenue growth of 12% and a 0.6% increase in ROE, outperforming the overall market [3] - Companies with over 10% of revenue from overseas markets are seeing a recovery in profit margins and ROE, making overseas business a key growth driver [3] - In contrast, domestic consumer goods sectors have shown a significant decline in growth rates compared to the first quarter, indicating a need for recovery in domestic consumption [3] - Overall, A-share companies' profitability is gradually solidifying, with innovation and overseas expansion becoming new growth points [3]

Group 1 - Shandong listed companies reported strong financial performance in the first half of the year, with 309 A-share companies generating over 1.48 trillion yuan in revenue and 258 reporting profits [1] - The province is witnessing rapid growth in sectors such as AI computing power, green energy, advanced materials, life sciences digitization, and low-altitude economy, becoming a new engine for economic development [1] - Shandong High-speed Group is actively investing in new energy, smart transportation, and computing infrastructure, establishing a "green electricity + computing" ecosystem through its subsidiary, Shandong High Control [1] Group 2 - Shandong High Control achieved a revenue of 2.503 billion yuan in the first half of 2025, with 96% of this revenue coming from emerging industries, and a net profit of 476 million yuan, a 506% year-on-year increase [1] - Other companies in the AI computing sector, such as Zhongji Xuchuang, reported significant growth, with a net profit of 3.995 billion yuan, a 69.4% increase year-on-year [2] - The chemical industry in Shandong, despite facing cyclical challenges, saw companies like Wanhua Chemical achieving revenues of 90.901 billion yuan and net profits of 6.123 billion yuan [3] Group 3 - The durable consumer goods sector, represented by Haier Smart Home, reported revenues of 156.49 billion yuan, a 10.2% increase, and a net profit of 12.03 billion yuan, a 15.6% increase [3] - The mechanical manufacturing sector, exemplified by Weichai Power, generated a net profit of 5.643 billion yuan in a challenging market environment [3] - The development trajectory of Shandong listed companies offers replicable and referenceable strategies for high-quality regional economic development [4]