Macroeconomic Overview - October fundamentals continued to weaken, with real growth indicators showing significant decline, while price indicators remained supported by base effects and rebounds[2] - New home sales and investment in real estate further weakened, with infrastructure and manufacturing investment growth rates declining more sharply[2] - Social financing in October was 815 billion CNY, significantly below the expected 1,528.4 billion CNY and the previous value of 3,529.6 billion CNY[9] - New credit in October was 220 billion CNY, compared to an expected 460 billion CNY and a previous value of 1,290 billion CNY[9] Economic Data Analysis - Industrial value added in October grew by 4.9%, below the expected 5.5% and previous 6.5%[15] - Retail sales in October increased by 2.9%, slightly above the expected 2.7% but below the previous 3%[15] - Fixed asset investment showed a cumulative year-on-year decline of 1.7%, worse than the expected decline of 0.7%[15] - Real estate development investment fell by 14.7% year-on-year, slightly worse than the expected decline of 14.5%[15] Market Reactions - The stock market experienced a volume decline, with the Shanghai Composite Index down by 0.18% and the Shenzhen Component Index down by 1.40%[8] - Bond yields generally decreased, with the 10-year government bond yield falling by 0.1 basis points[8] - The U.S. stock market initially rose but later fell, with the Dow Jones up by 0.34% and the S&P 500 up by 0.08% before declining[8] - The U.S. dollar index fell by 0.26%, while the offshore RMB appreciated by 251 basis points against the dollar[8]

Core Insights - Southbound funds in Hong Kong experienced a trading volume of approximately HKD 91.376 billion, a decrease of about HKD 5.3 billion compared to the previous day, representing 42% of the total turnover of the Hang Seng Index, marking a short-term low [2] - The Hong Kong stock market continued its adjustment, with a net inflow of southbound funds amounting to approximately HKD 8.448 billion, with net inflows from the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect being approximately HKD 4.335 billion and HKD 4.113 billion, respectively [2] - Notably, the Yingfu Fund (02800.HK) saw a significant net buy of HKD 3.726 billion [2] Individual Stock Performance - Alibaba-W (09988.HK) had a net buy of HKD 2.071 billion, with short-term funds primarily flowing out, having reduced holdings by 4.096 million shares over the past five days [2] - Xiaomi Group-W (01810.HK) saw a decline of 0.94%, but short-term funds continued to flow in, increasing holdings by 9.056 million shares over the past five days [2] - Pop Mart (09992.HK) increased by 0.46%, with further inflow of short-term funds, adding 739,000 shares over the past five days [2] - Ganfeng Lithium (01772.HK) rose by 8.96%, with unclear short-term fund trends, having added 100,000 shares over the past five days [2] - SMIC (00981.HK) fell by 0.75%, with continued outflow of short-term funds, reducing holdings by 1.311 million shares over the past five days [2] Trading Activity Summary - The top active stocks in the southbound trading included Alibaba-W with a net inflow of HKD 12.02 billion from the Shanghai-Hong Kong Stock Connect and HKD 8.68 billion from the Shenzhen-Hong Kong Stock Connect [4] - The Yingfu Fund had a net inflow of HKD 31.80 billion, while Ganfeng Lithium experienced a net outflow of HKD 0.88 billion [4] - Over the past month, the total net inflow for the Shanghai-Hong Kong Stock Connect was HKD 59.858 billion and for the Shenzhen-Hong Kong Stock Connect was HKD 56.811 billion, totaling HKD 116.669 billion [3]

Core Insights - The report highlights a structural upturn in the global PCB and CCL industries driven by AI infrastructure investment, with a projected 12.8% rebound in the PCB market by 2025 and an 18% growth in the CCL sector in 2024, indicating strong pricing power [4] - Pfizer is positioned as a leader in the pharmaceutical industry, with a forecasted 12% growth in non-COVID revenue in 2024, despite facing a patent cliff from 2025 to 2028 [6][7] - The semiconductor industry is experiencing a demand surge due to AI, with significant growth expected in high-performance products, benefiting leading manufacturers [4] Market Performance - The Hang Seng Index closed at 26,649, up 1.55% for the day and 32.85% year-to-date, while the Hang Seng Tech Index rose 1.34% [1] - Southbound capital saw a net inflow of HKD 6.65 billion, with notable purchases in China National Offshore Oil Corporation and Pop Mart, while Alibaba and SMIC saw the most significant net sell-offs [3] Company Analysis - Pfizer's aggressive cost-cutting plan aims to save USD 7.2 billion from 2024 to 2027, with an expected operating profit margin increase to 26.2% in 2024 from 9.6% in 2023 [5] - The report anticipates that Pfizer's revenue will begin to recover in 2029, driven by new product contributions, with a target price set at USD 36.16 [7] - Beike's revenue for Q3 2025 grew by 2.1% year-on-year, with a focus on improving profitability in its core real estate transaction business [8] Industry Trends - The report notes a shift in investment focus towards energy, chemicals, and consumer stocks in the Chinese market, with chemical sector valuations at historical lows, suggesting a potential buying opportunity [3] - Japan's new government is expected to implement expansive fiscal policies, focusing on key sectors such as semiconductors and defense, which may lead to a decline in government bond prices [3]

Core Insights - The report highlights the resilience and vitality of the Chinese economy amidst external risks and challenges, with 88% of Chinese CEOs expressing confidence in the country's economic development over the next three years, marking a recent high [8][18][20]. Group 1: Economic Outlook - Despite escalating external risks, Chinese CEOs show a rebound in confidence regarding short-term economic growth, with 54% expressing optimism for the next year, an increase of 9 percentage points from the previous year [9][11]. - The long-term economic outlook remains positive, with 58% of Chinese CEOs confident in global economic growth over the next three years, although this is a decrease of 13 percentage points from the previous year [18][20]. Group 2: Business Challenges - The report identifies "involution" competition as the primary challenge for businesses, with 51% of CEOs acknowledging intensified market competition as a significant impact on current business development [15]. - There is a notable decline in revenue growth expectations, with only 73% of CEOs anticipating positive revenue growth this year, down from 81% last year [11][12]. Group 3: Strategic Initiatives - 52% of Chinese CEOs prioritize research and innovation to develop new productivity as a key short-term strategy to combat "involution" competition [12][15]. - The focus on digital transformation and compliance investments is increasing, with a significant emphasis on enhancing supply chain security [12][15]. Group 4: Leadership and Management - 54% of Chinese CEOs believe their roles and responsibilities have significantly changed in the past five years, necessitating a multifaceted leadership approach that includes strategic foresight and adaptability [26]. - The importance of agility and rapid decision-making under pressure is emphasized, with 26% of CEOs identifying these as critical leadership capabilities [26]. Group 5: International Expansion - Chinese companies are shifting their overseas strategies from aggressive expansion to rational deepening, with 77% of CEOs citing strategic resource allocation as a primary driver for international ventures [29]. - The choice of overseas markets is increasingly focused on Southeast Asia and the Middle East, reflecting a strategic move to mitigate geopolitical risks [29][31]. Group 6: Technology and AI - The application of artificial intelligence (AI) is becoming more prevalent, with 86% of Chinese CEOs expecting a return on AI investments within three years, a significant increase from the previous year [33]. - Over 60% of CEOs view the competition for AI talent and skills enhancement as a key challenge for future development [36]. Group 7: ESG Investments - There is a growing proactive attitude towards Environmental, Social, and Governance (ESG) investments, with 76% of CEOs believing that ESG investments contribute to corporate transformation and demand enhancement [38]. - 49% of companies have initiated practices in low-carbon transformation, a notable increase from 35% the previous year [38].

Core Viewpoint - The trend of socialized employment is expanding, driven by macroeconomic pressures, demographic changes, and technological advancements, leading to a shift in labor relations and employment models [1][2][6]. Summary by Sections Concept - Socialized employment refers to various forms of employment that establish labor relations outside of standard employment contracts, including outsourcing, labor dispatch, hourly pay, platform-based flexible employment, and shared employment [3][4]. Macro Environment - Economic and Market Changes - The macroeconomic environment is shifting from high-speed growth to improving total factor productivity, with GDP growth slowing and market uncertainty becoming the norm. This has led to increased demand for flexible employment models [6]. - By 2024, the digital economy is expected to reach 63.2 trillion yuan, accounting for 46.8% of GDP, driving high-quality economic development and transforming the employment market [6]. Macro Environment - Policy Guidance - The government has introduced various supportive policies for socialized employment, encouraging innovation while ensuring compliance with labor regulations [9]. Macro Environment - Technological Drivers - Digital technology is a key driver in reshaping employment relationships, giving rise to various platform-based flexible employment forms that enhance labor resource allocation efficiency [12]. Mid-level Environment - Talent Structure - The aging population and declining birth rates are reducing the working-age population, creating a dual pressure of labor shortages and rising costs for companies [16]. Mid-level Environment - Penetration Status - As of 2024, over 240 million flexible workers are in China, with socialized employment deeply penetrating various industries. Business outsourcing has a penetration rate exceeding 50% [19]. Mid-level Environment - Enterprise Demand - External competition and internal management needs are driving companies to adopt socialized employment strategies to enhance organizational agility and control labor costs [23]. Core Value of Socialized Employment - Socialized employment effectively balances the need for cost efficiency in companies with the personal development needs of workers, facilitating a shift from rigid to flexible labor configurations [26]. Socialized Employment Drivers and Main Models - In the retail sector, socialized employment is used to address sales peaks and market fluctuations, with non-standard employment becoming a common choice for managing labor needs [29]. Typical Scene Employment Characteristics - The retail sector employs diverse labor forms based on situational demands, with flexible employment dominating front-end sales roles, while logistics and supply chain management rely on full-time staff [31]. Different Types of Enterprises' Socialized Employment Characteristics - Foreign and leading private enterprises show a higher inclination towards socialized employment, with discrete manufacturing sectors exhibiting greater penetration compared to process manufacturing [49]. Socialized Employment Demand Pain Points - High employee turnover is a core pain point in the retail sector, with turnover rates exceeding 30%, leading to increased management costs and operational inefficiencies [37][52].

Core Insights - The 8th China International Import Expo (CIIE) is taking place in Shanghai from November 5 to 10, showcasing a positive shift in CEO confidence regarding China's economic growth for the upcoming year [1] Summary by Categories Economic Outlook - 54% of Chinese CEOs express confidence in China's economic growth over the next year, an increase of 9 percentage points from the previous year, and significantly higher than their confidence in the global economy [1] - 73% of Chinese CEOs anticipate positive revenue growth for their companies this year, down from 81% last year; 20% expect negative revenue growth, up from 15% last year [1] Industry Performance - There is a notable divergence in revenue growth expectations between emerging and traditional industries; the life sciences and technology sectors show the most optimistic revenue growth outlook [1] - Traditional industries such as industrial manufacturing, consumer retail, and real estate face pressure on revenue growth due to supply-demand imbalances and weak demand [1] Competitive Challenges - "Involution" competition is identified as a significant short-term challenge for Chinese companies; 52% of CEOs prioritize R&D and innovation to develop new productive capabilities to overcome this competition [1]

Group 1: Report General Information - Report title: Fund Analysis Special Report (In - Depth) [1] - Report date: November 6, 2025 [1] Group 2: Hong Kong Stock Fund Performance and Scale Development Performance - **Return**: Among different types of Hong Kong stock funds, in the recent quarter, the return of Hong Kong - Stock Connect - Active funds was 20.11%, and that of Hong Kong - Stock QDII - Active funds was 22.43%. In the recent year, the return of Hong Kong - Stock QDII - Active funds reached 55.02%. In the recent 3 - year and 5 - year periods, different types of funds also showed various returns [13]. - **Maximum drawdown**: The maximum drawdown of Hong Kong - Stock Connect - Active funds in the recent quarter was - 4.57%, and that of Hong Kong - Stock QDII - ETF&Passive Index funds in the recent 5 - year period was - 54.98% [13]. - **Annualized Sharpe ratio**: The annualized Sharpe ratio of Hong Kong - Stock Connect - Active funds in the recent quarter was 3.87, and that of Hong Kong - Stock QDII - ETF&Passive Index funds in the recent 5 - year period was 0.11 [13]. Scale and Share - The report presents the scale development and share changes of different types of Hong Kong stock funds through relevant charts [17] New Fund Issuance - The new issuance situation of Hong Kong stock funds in each quarter is shown in the chart [21] Group 3: Hong Kong Stock Fund Positioning Characteristics Stock and Hong Kong Stock Positions - The distribution of stock positions and Hong Kong stock positions of Hong Kong stock funds in different periods is presented. For example, from 2024/12/31 to 2025/9/30, the proportion of different industries in the stock positions showed certain changes [29] Sector and Stock Allocation - **Sector allocation**: In 2025Q3, the top sectors in the heavy - position stocks of Hong Kong stock funds included Media (22.31%), Commerce and Retail (16.99%), and Pharmaceutical Biology (15.52%) [33]. - **Stock allocation**: The top 10 stocks in terms of market - value ratio in 2025Q3 included Alibaba - W (13.87%) and Tencent Holdings (13.00%). The report also shows the top 10 stocks for increased and decreased positions [35]. - **Number of heavy - position funds**: Tencent Holdings had the largest number of holding funds in 2025Q3 (192), and the report also shows the top 10 stocks for increased and decreased positions in terms of the number of holding funds [37]. - **Market - value distribution and concentration**: The market - value distribution and concentration of heavy - position stocks of Hong Kong stock funds are presented [42] Group 4: Hong Kong Stock Fund Company Analysis Fund Company Scale - The top 20 fund companies in terms of Hong Kong stock fund scale in 2025Q3 are listed. For example, E Fund had a scale of 155.06 billion yuan in 2025Q3, with a scale change of 79.91% compared to 2025Q2 [44]. Heavy - Position Industries and Stocks - **Heavy - position industries**: Different fund companies have different first, second, and third heavy - position industries. For example, E Fund's first heavy - position industry in 2025Q3 was Non - Banking Finance (29.53%), with a 14.61% change compared to the previous period [47]. - **Heavy - position stocks**: Each fund company has its own top heavy - position stocks. For example, E Fund's first heavy - position stock was Tencent Holdings (16.52%) [48]. Group 5: High - Performance Hong Kong Stock Fund Positioning Display and Quarterly Report Views Positioning Display - The report shows the heavy - position stocks of some high - performance actively managed Hong Kong stock funds in 25Q3, including their fund codes, names, types, 25Q3 returns, fund managers, total scales, and the proportion of the market value of holding stocks to the fund net value [51][52] Quarterly Report Views - Different high - performance funds have different investment strategies and views. For example, HuaAn Hong Kong - Shanghai - Shenzhen Connect Select A believes that the semiconductor, communication, and new - energy industries have contributed excess returns, and it has increased positions in Hong Kong stock Internet and A - share self - controllable industrial chains [53].

Domestic Policy Highlights - The adjustment of gold tax policy involves differentiated tax management based on the purpose of gold transactions, changing the invoicing method for non-investment gold transactions from special invoices to ordinary invoices, leading to tax rate changes [4][8][10] - The new policy on fiscal incremental policies includes the completion of the issuance of 500 billion yuan in new policy financial instruments, supporting over 2,300 projects with a total investment of approximately 7 trillion yuan, resulting in a multiplier effect of about 14 times [12][13][15] - The China Securities Regulatory Commission (CSRC) is seeking opinions on the performance comparison benchmarks for public funds, emphasizing the need for stability in benchmarks and the potential impact on fund managers' performance compensation if long-term performance significantly lags behind benchmarks [19][20] - The Beijing Stock Exchange has outlined key work directions for the 14th Five-Year Plan, including the promotion of the North Exchange 50 ETF and the deepening of reforms in the New Third Board [21][23] Overseas Policy Highlights - The meeting between Chinese President Xi Jinping and U.S. President Trump resulted in agreements on tariffs, export controls, and cooperation in agricultural trade and semiconductors, indicating a potential stabilization in U.S.-China relations [29][30][31] - The U.S. has reached agreements with several Asian countries, including Malaysia, Cambodia, Thailand, Vietnam, Japan, and South Korea, focusing on the removal of trade restrictions and commitments to increase investments, with Japan pledging the largest amount of 550 billion USD primarily in the energy sector [2][36]

Core Insights - The current bull market is driven more by liquidity and confidence rather than actual earnings growth, with future trends dependent on policy implementation and corporate profits catching up to valuations [4][3]. Group 1: Overview of Chinese Listed Companies - As of October 24, 2025, there are 8,070 Chinese companies listed globally, accounting for 70% of China's GDP, with a total market value of approximately 153 trillion RMB [3][8]. - The revenue growth for Chinese listed companies in the first half of 2025 was only 0.9%, while net profit increased by 3.9%, despite a 25% rise in total market value [3][11]. Group 2: Market Valuation Discrepancies - The market value growth of A-shares is 9.3 times the profit growth, significantly higher than the ratios for Hong Kong and U.S. listed companies [21][20]. - The A-share market has seen a total market value increase of 25% year-on-year, while profits have only grown by 2.6% [21][23]. Group 3: Industry Performance Analysis - Certain sectors like semiconductors and hardware have shown strong performance, with revenue and profit growth, while many others rely on market sentiment and liquidity [10][27]. - Industries such as defense and consumer retail have experienced revenue growth but at the cost of profit margins, indicating a trend of expanding scale without corresponding profit increases [28][29]. Group 4: Comparison with U.S. Markets - Chinese companies have a lower P/E ratio compared to U.S. companies, but their PEG ratio is significantly higher, indicating that Chinese stocks may be overvalued relative to their earnings growth [40][41]. - The average profit margin for U.S. companies is higher than that of Chinese companies, with U.S. firms showing a 13% profit growth compared to only 3.9% for Chinese firms [34][40]. Group 5: Future IPO Considerations - The current market conditions suggest a need for a shift in IPO standards, moving from strict profit requirements to a focus on growth potential and innovation [55][64]. - The trend of high-quality IPOs in China has not translated into strong post-listing performance, indicating a potential misalignment between market expectations and actual company growth [61][62].

Group 1 - The "14th Five-Year Plan" emphasizes accelerating high-level technological self-reliance and leading the development of new productive forces, focusing on areas such as quantum technology, biomanufacturing, hydrogen energy, nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G mobile communication as new economic growth points [1] - The plan suggests improving the new type of national system and implementing extraordinary measures to achieve decisive breakthroughs in key core technologies across various sectors, including integrated circuits, industrial mother machines, high-end instruments, basic software, advanced materials, and biomanufacturing [1] - According to Guotai Junan Securities, China's strategic goal has shifted from "catching up" to "leading," moving from merely addressing technological bottlenecks to actively participating in and leading competition in the technology industry [1] Group 2 - The plan also aims to boost consumption through special actions, enhancing brand leadership, upgrading standards, and applying new technologies to expand and upgrade consumer goods, creating new consumption scenarios that are widely impactful [1] - Galaxy Securities highlights that leading new supply with new demand involves developing new consumption trends, such as emotional consumption, which has given rise to new sectors like trendy toys, outdoor activities, pet economy, traditional gold ornaments, and beauty products [1] - The emergence of IP-related economies, where both middle-aged and young consumers engage in trendy toys and anime culture, reflects a significant social phenomenon [1] Group 3 - Companies like Roborock, Ecovacs, and Yingshi Innovation are noted for their leading advantages in the international market for certain technology consumer products, achieving high-end brand positioning in Europe and the United States [2] - East China Numerical Control specializes in CNC machine tools and ordinary machine tools, holding core technologies in key functional components such as dynamic and static pressure combined spindle support, static pressure turntables, hydraulic control systems, and various accessory milling heads [2]