Macro Liquidity - The US dollar index has rebounded, and the degree of "inversion" in the China-US interest rate spread has narrowed. The nominal/real interest rates of 10Y US Treasuries remained unchanged or declined, with inflation expectations rising [1][15]. - Offshore dollar liquidity has generally loosened, and the domestic interbank funding environment is balanced and slightly loose, with the term spread (10Y-1Y) narrowing [1][22]. Market Trading Activity - Overall market trading activity has continued to decline, with volatility across major indices also decreasing. More than half of the sectors still have trading activity above the 80th percentile [2][29]. - The volatility of major indices has decreased, while the volatility of the communication and electronics sectors remains above the 80th percentile [2][34]. Institutional Research - The electronic, pharmaceutical, non-ferrous metals, communication, and machinery sectors have seen high research activity, with consumer services, light industry, chemicals, steel, and non-ferrous metals sectors experiencing a month-on-month increase in research activity [3][46]. Analyst Forecasts - Analysts have continued to raise net profit forecasts for the entire A-share market for 2025/2026. The proportion of stocks with upward revisions in net profit forecasts has increased [4][52]. - The net profit forecasts for the financial, non-ferrous metals, machinery, coal, and electric new energy sectors for 2025/2026 have been raised [4][21]. - The net profit forecasts for the Shanghai 50, CSI 300, and ChiNext indices for 2025/2026 have been increased, while the CSI 500 index has seen mixed adjustments [4][23]. Northbound Trading Activity - Northbound trading activity has declined, continuing a net selling trend in A-shares. The trading volume ratio in sectors such as communication, non-ferrous metals, and banking has increased, while it has decreased in automotive, non-bank financials, and electronics [5][31]. - Northbound trading has mainly net bought in the pharmaceutical, non-ferrous metals, and electric new energy sectors, while net selling occurred in electronics, communication, and food and beverage sectors [5][33]. Margin Financing Activity - Margin financing activity has seen a slight rebound, with a net purchase of 27 billion yuan last week. The main net purchases were in the electronic, communication, and non-bank financial sectors, while net sales occurred in automotive, non-ferrous metals, and machinery sectors [6][35]. Hot Stocks Trading - The trading volume on the "Dragon and Tiger List" has continued to decline, but the total trading volume on this list as a percentage of total A-share trading has increased. Sectors such as coal, building materials, and oil and petrochemicals have a relatively high and rising proportion of trading volume on this list [7][41]. Active Equity Fund Positions - The positions of actively managed equity funds have decreased, while ETFs have seen overall net redemptions. Actively managed equity funds have mainly increased positions in communication, electronics, and computing sectors, while reducing positions in home appliances, banking, and food and beverage sectors [8][45]. - The correlation between actively managed equity funds and large/mid-cap growth and small-cap value has increased [8][48]. - New equity fund establishment has increased, with the scale of actively managed funds decreasing and passively managed funds increasing [8][50].

Core Viewpoint - The A-share market is experiencing strong fluctuations, reaching a ten-year high and approaching the 4000-point mark, with significant trading volume observed [1]. Market Performance - The Shanghai and Shenzhen markets saw a half-day trading volume of 1.57 trillion, an increase of 337.2 billion compared to the previous trading day [1]. - The market is characterized by rapid rotation of hot sectors, with strong performance in computing hardware, as evidenced by stocks like Dongtian Micro reaching a 20% limit up and others like Xinyisheng and Huylv Ecological hitting historical highs [4]. - The controllable nuclear fusion concept stocks are also active, with Dongfang Tantalum achieving a historical high after two consecutive trading days of gains [4]. - Local stocks in Fujian have surged, with Haixia Innovation hitting a 20% limit up and Pingtan Development achieving five gains in seven days [4]. - The coal sector shows signs of partial recovery, with Zhengzhou Coal Electricity gaining three times in six days [4]. - Conversely, the gaming and wind power sectors are experiencing collective adjustments, with stocks like Youzu Network and Haili Wind Power seeing significant declines [4]. Sector Performance - Steel, CPO, and Fujian-related sectors are among the top gainers, while wind power and gaming sectors are among the biggest losers [4]. - The Shanghai Composite Index rose by 1.04%, the Shenzhen Component Index increased by 1.26%, and the ChiNext Index gained 1.54% by the end of trading [4].

Market Overview - On October 21, the Shanghai Composite Index rose by 1.36%, the Shenzhen Component Index increased by 2.06%, the ChiNext Index climbed by 3.02%, and the CSI 300 Index gained 1.53% [1] - Among the tradable A-shares, 4,628 stocks rose, accounting for 85.25%, while 729 stocks declined [1] Capital Flow - The net inflow of main funds reached 27.724 billion yuan for the day [1] - The ChiNext saw a net inflow of 7.134 billion yuan, while the STAR Market had a net inflow of 3.374 billion yuan, and the CSI 300 constituents experienced a net inflow of 13.677 billion yuan [1] Industry Performance - Out of the 30 first-level industries classified by Shenwan, 30 industries rose, with the top gainers being the communication and electronics sectors, which increased by 4.90% and 3.50%, respectively [1] - The coal industry was the biggest loser, declining by 1.02% [1] Industry Capital Flow - A total of 17 industries experienced net inflows, with the electronics sector leading at a net inflow of 12.028 billion yuan and a daily increase of 3.50% [1] - The communication sector followed with a net inflow of 5.525 billion yuan and a daily increase of 4.90% [1] - Conversely, 14 industries saw net outflows, with the banking sector leading at a net outflow of 1.705 billion yuan, despite a daily increase of 0.33% [1] Individual Stock Performance - A total of 2,398 stocks had net inflows, with 882 stocks seeing inflows exceeding 10 million yuan, and 118 stocks with inflows over 100 million yuan [2] - The stock with the highest net inflow was Industrial Fulian, which rose by 9.57% with a net inflow of 2.199 billion yuan [2] - Other notable stocks included Xinyi Technology and Luxshare Precision, with net inflows of 1.792 billion yuan and 1.499 billion yuan, respectively [2] - Stocks with net outflows exceeding 100 million yuan included CITIC Securities, Silan Microelectronics, and Minsheng Bank, with outflows of 800 million yuan, 603 million yuan, and 491 million yuan, respectively [2]

Core Insights - The banking sector experienced the highest net inflow of funds today, amounting to 939 million yuan, with a price change of 1.35% and a turnover rate of 0.41% [1][2] - The non-ferrous metals sector faced the largest net outflow of funds, totaling 9.242 billion yuan, with a price change of -2.06% and a turnover rate of 3.61% [1][2] Industry Summary - **Banking**: - Trading volume: 5.497 billion shares - Change in trading volume: +6.81% - Net inflow: 939 million yuan [1] - **Communication**: - Trading volume: 2.571 billion shares - Change in trading volume: -6.13% - Net inflow: 895 million yuan [1] - **Coal**: - Trading volume: 3.489 billion shares - Change in trading volume: +24.19% - Net inflow: 650 million yuan [1] - **Food and Beverage**: - Trading volume: 1.153 billion shares - Change in trading volume: -15.33% - Net inflow: 362 million yuan [1] - **Transportation**: - Trading volume: 4.767 billion shares - Change in trading volume: +10.89% - Net inflow: 137 million yuan [1] - **Non-ferrous Metals**: - Trading volume: 7.979 billion shares - Change in trading volume: -12.50% - Net outflow: -9.242 billion yuan [2] - **Automotive**: - Trading volume: 7.415 billion shares - Change in trading volume: -7.47% - Net outflow: -1.496 billion yuan [2] - **Public Utilities**: - Trading volume: 5.066 billion shares - Change in trading volume: -15.44% - Net outflow: -1.510 billion yuan [2] - **Defense**: - Trading volume: 1.804 billion shares - Change in trading volume: -1.45% - Net outflow: -1.832 billion yuan [2] - **Media**: - Trading volume: 2.912 billion shares - Change in trading volume: -10.73% - Net outflow: -1.946 billion yuan [2] - **Home Appliances**: - Trading volume: 1.370 billion shares - Change in trading volume: -2.59% - Net outflow: -2.041 billion yuan [2] - **Basic Chemicals**: - Trading volume: 5.560 billion shares - Change in trading volume: -2.16% - Net outflow: -2.848 billion yuan [2] - **Non-bank Financials**: - Trading volume: 4.511 billion shares - Change in trading volume: -15.96% - Net outflow: -2.857 billion yuan [2] - **Computers**: - Trading volume: 5.556 billion shares - Change in trading volume: -2.14% - Net outflow: -5.202 billion yuan [2] - **Machinery**: - Trading volume: 7.265 billion shares - Change in trading volume: -6.20% - Net outflow: -5.281 billion yuan [2] - **Electrical Equipment**: - Trading volume: 10.566 billion shares - Change in trading volume: -5.32% - Net outflow: -6.900 billion yuan [2] - **Electronics**: - Trading volume: 7.787 billion shares - Change in trading volume: -11.16% - Net outflow: -7.403 billion yuan [2]

Group 1 - The banking sector opened lower today but rebounded, boosting the dividend sector, with the CSI Dividend Low Volatility Index rising by 0.6% at market close [1] - As of last Friday, the Dividend Low Volatility ETF (563020) has attracted over 100 million yuan in inflows over six consecutive days [1] - Long-term perspectives indicate that the dividend sector holds greater allocation value during low interest rate periods, with excess returns negatively correlated to government bond yields [1] Group 2 - The CSI Dividend Index consists of 100 stocks with high and stable cash dividend yields, with the banking, coal, and transportation sectors accounting for nearly 55% of the index [2] - The index has a current P/E ratio of 7.9 times and a dividend yield of 4.6% [2] - The CSI Dividend Low Volatility Index is composed of 50 stocks with good liquidity and stable dividend payments, with the banking, transportation, and construction sectors making up a significant portion [3] Group 3 - The Hang Seng High Dividend Low Volatility Index includes 50 stocks from the Hong Kong Stock Connect, with over 65% of its composition in the financial, industrial, and energy sectors [3] - This index has a P/E ratio of 7.1 times and a dividend yield of 6.1% [3] - The CSI Dividend Value Index consists of 50 stocks with high dividend yields and value characteristics, with banking, coal, and transportation sectors exceeding 75% of the index [3]

Report Industry Investment Rating No information provided. Core Viewpoints - Big funds drive up the financial sector, making the market prone to rising and difficult to fall. New news about DeepSeek will push the technology sector's market to spread and extend to the software application end, and the market is expected to continue in October [3] Summary by Directory Market Analysis - Domestically, the Political Bureau meeting emphasized high - quality development in the "15th Five - Year Plan" period, including new development concepts, reform, opening - up, and risk prevention. Overseas, Trump threatened to impose high tariffs on overseas - made movies and furniture from non - US countries [1] - In the spot market, A - share major indices strengthened, with the Shanghai Composite Index rising 0.9% to 3862.53 and the ChiNext Index rising 2.74%. The trading volume of the Shanghai and Shenzhen stock markets was about 2.1 trillion yuan. The scale of new policy - based financial instruments is 500 billion yuan. Overseas, US major indices also rose, with the Nasdaq up 0.48% [2] - In the futures market, the basis of stock index futures rebounded rapidly, and the IF and IH contracts were at a premium. Both trading volume and open interest increased [2] Strategy - Big funds drive the financial sector up, and the market is likely to keep rising. New news of DeepSeek will expand the technology sector's market to software applications, and the market is expected to continue in October [3] Macro - economic Charts - Include charts on the relationship between the US dollar index, US Treasury yields, RMB exchange rate and A - share trends, as well as the relationship between US Treasury yields and A - share styles [5][6][8] Spot Market Tracking Charts - Show the daily performance of major domestic stock indices, such as the Shanghai Composite Index rising 0.9%, the Shenzhen Component Index rising 2.05%, etc. Also include charts on the trading volume of the Shanghai and Shenzhen stock markets and margin trading balance [5][6][13] Futures Market Tracking Charts - Provide data on the trading volume and open interest of stock index futures (IF, IH, IC, IM), basis, and inter - delivery spreads. For example, the trading volume and open interest of all contracts increased, and the basis of each contract changed [5][6][17]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - The convertible bond market rose following the underlying stocks today, with valuations increasing month - on - month. The small - cap growth style was relatively dominant, and trading sentiment in the convertible bond market heated up [1]. - Convertible bond prices and their central values increased, and the proportion of high - priced bonds rose. Valuations also increased, with the proportion of high - priced bonds over 130 yuan reaching 50.59%, a 3.52 - percentage - point increase from the previous day [2]. - Most industries in the underlying stocks rose today, with the top three gainers being the power equipment, electronics, and media sectors. All convertible bond industries rose, with the top three gainers being non - ferrous metals, communications, and national defense and military industries [3]. 3. Summary by Directory Market Main Index Performance - The CSI Convertible Bond Index rose 1.30% month - on - month, the Shanghai Composite Index rose 0.83%, the Shenzhen Component Index rose 1.80%, the ChiNext Index rose 2.28%, the SSE 50 Index rose 0.68%, and the CSI 1000 Index rose 1.70%. The small - cap growth style was relatively dominant, with small - cap growth rising 2.67% [1]. - The convertible bond equal - weighted index rose 1.41%, the convertible bond index rose 1.65%, and the convertible bond pre - plan index rose 1.90% [6]. Market Fund Performance - The trading volume of the convertible bond market was 88.173 billion yuan, a 5.48% increase month - on - month. The total trading volume of the Wind All - A was 2.347154 trillion yuan, a 6.80% decrease month - on - month. The net outflow of main funds in the Shanghai and Shenzhen stock markets was 279 million yuan, and the yield of the 10 - year treasury bond rose 2.52bp to 1.90% [1]. Convertible Bond Valuation - The weighted average closing price of convertible bonds was 130.16 yuan, a 1.34% increase from the previous day. The closing price of equity - biased convertible bonds was 179.14 yuan, a 1.72% increase; the closing price of bond - biased convertible bonds was 117.32 yuan, a 0.69% increase; the closing price of balanced convertible bonds was 126.13 yuan, a 1.15% increase [2]. - The fitted conversion premium rate of 100 - yuan parity was 28.42%, a 0.87 - percentage - point increase from the previous day. The overall weighted parity was 100.70 yuan, a 1.31% increase from the previous day [2]. Industry Rotation - In the A - share market, the top three gainers were the power equipment (+2.88%), electronics (+2.76%), and media (+2.59%) sectors; the top three losers were the banking (-0.36%), coal (-0.29%), and communications (-0.01%) sectors [3]. - All convertible bond industries rose, with the top three gainers being non - ferrous metals (+4.39%), communications (+3.15%), and national defense and military industries (+2.64%) [3].

Core Insights - The banking sector experienced the highest net inflow of funds today, amounting to 1.4 billion yuan, with a price change of 1.52% and a turnover rate of 0.46% [1] - The electronics sector faced the largest net outflow of funds, totaling 20.043 billion yuan, with a price change of -0.06% and a turnover rate of 5.16% [1] Industry Summary - **Banking**: - Trading volume: 6.077 billion shares - Change in trading volume: +81.06% - Net inflow: 1.4 billion yuan [1] - **Electronics**: - Trading volume: 14.370 billion shares - Change in trading volume: +16.27% - Net outflow: -20.043 billion yuan [1] - **Construction Decoration**: - Trading volume: 6.474 billion shares - Change in trading volume: +19.24% - Net inflow: 0.169 billion yuan [1] - **Coal**: - Trading volume: 3.816 billion shares - Change in trading volume: +34.20% - Net inflow: 0.004 billion yuan [1] - **Transportation**: - Trading volume: 5.010 billion shares - Change in trading volume: +20.43% - Net outflow: -0.396 billion yuan [1] - **Real Estate**: - Trading volume: 6.654 billion shares - Change in trading volume: +9.90% - Net outflow: -1.529 billion yuan [1] - **Automotive**: - Trading volume: 10.455 billion shares - Change in trading volume: +32.68% - Net outflow: -5.950 billion yuan [1] - **Pharmaceuticals**: - Trading volume: 6.020 billion shares - Change in trading volume: +32.36% - Net outflow: -8.115 billion yuan [1]

Report Industry Investment Rating - The rating for stock index is "Volatility" [4] Core Viewpoints of the Report - This week, the A-share market showed a pattern of rising and then falling, with obvious divergence in market confidence. The A-share market pricing is confusing and shows obvious characteristics of building a top at a high level. It is recommended to take appropriate profit-taking [2][10] Summary by Relevant Catalogs 1. One-week Views and Overview of Key Macroeconomic Events - **Next Week's Viewpoint**: Pay attention to the change in risk appetite after the Sino-US talks. It is recommended to take appropriate profit-taking due to the confusing pricing clues and obvious high-level topping characteristics in the current A-share market [2][10] - **This Week's Key Events**: - On September 15, an important article by the national leader will be published in Qiushi Magazine, aiming to rectify chaos in enterprise competition and government procurement [11] - On September 15, the economic data for August showed a weakening trend, with declines in consumption, industrial added value, investment, etc [12] - On September 16, 9 departments jointly issued policies to expand service consumption [13] - On September 16, the Premier of the State Council investigated new quality productivity-related fields [14] - On September 17, the Ministry of Commerce will select 50 new consumption pilot cities [15] - On September 18, it was reported that China's R & D investment intensity in 2024 exceeded the EU average [16] - On September 19, the President of China had a phone call with the President of the United States [17] - On September 19, the State Council executive meeting studied policies on implementing domestic product standards in government procurement [18] 2. One-week Market Quotes Overview - **Global Stock Market Weekly Overview**: From September 15 - 19, global stock markets denominated in US dollars rose. The MSCI Global Index increased by 0.99%, with emerging markets (+1.55%) > developed markets (+0.97%) > frontier markets (-0.01%). The Dutch stock market led the world with a 6.23% increase, while the Australian stock market performed the worst with a 2.17% decline [20] - **Chinese Stock Market Weekly Overview**: During the same period, Chinese equity assets were differentiated, with Hong Kong stocks > Chinese concept stocks > A-shares. The average daily trading volume of the Shanghai, Shenzhen, and Beijing stock markets was 2518.1 billion yuan, a 191.4 billion yuan increase from last week. The ChiNext Index rose 2.34%, performing the best, while the Shanghai 50 Index fell 1.98%, performing poorly [23] - **Weekly Overview of GICS Primary Industries in Chinese and Foreign Stock Markets**: Most global GICS primary industries rose this week, with the information technology industry leading (+2.47%) and the real estate industry performing poorly (-1.32%). In the Chinese market, the real estate industry led the rise (+1.94%), while the financial industry lagged (-3.90%) [27] - **Weekly Overview of China's A-share CITIC Primary Industries**: This week, 16 out of the A-share CITIC primary industries rose (26 last week), and 14 fell (4 last week). The coal industry led the rise (+3.59%), while the banking industry lagged the most (-4.09%) [30] - **Weekly Overview of China's A-share Style**: The large-cap growth style was dominant this week [34] - **Overview of Futures Basis**: Information on the basis of IH, IF, IC, and IM in the past 6 months is provided [37][41] 3. Index Valuation and Earnings Forecast Overview - **Broad-based Index Valuation**: Valuation data such as PE and PB of various broad-based indexes this week, their eight-year percentile, and changes from the beginning of the year are presented [42] - **Primary Industry Valuation**: Valuation data such as PE and PB of various primary industries this week, their eight-year percentile, and changes from the beginning of the year are presented [43] - **Broad-based Index Equity Risk Premium**: The ERP of the CSI 300 rose rapidly this week, while that of the CSI 500 and CSI 1000 declined slightly [44][49] - **Consensus Earnings Growth Forecast for Broad-based Indexes**: The expected earnings growth rate of the CSI 300 in 2025 was raised to 7.40%, and in 2026 was lowered to 8.53%. For the CSI 500, the 2025 rate was lowered to 32.14%, and the 2026 rate was raised to 18.08%. For the CSI 1000, the 2025 rate was raised to 38.54%, and the 2026 rate was lowered to 20.77% [50] 4. Liquidity and Capital Flow Tracking - **Interest Rates and Exchange Rates**: This week, the 10-year bond yield declined, the 1-year yield rose, and the spread narrowed. The US dollar index was 97.7, and the offshore RMB was 7.11 [56] - **Trading Capital Tracking**: This week, the average daily trading volume of northbound funds increased by 12 billion yuan compared to last week, and the margin trading balance increased by 50.8 billion yuan [59] - **Capital Inflow Tracking through ETFs**: There are 29 ETFs tracking the CSI 300, 27 tracking the CSI 500, 15 tracking the CSI 1000, and 39 tracking the CSI A500. This week, the share of ETFs tracking the CSI 300 decreased by 600 million shares, the CSI 500 by 200 million shares, the CSI 1000 by 300 million shares, and the CSI A500 by 500 million shares [62][66] 5. Tracking of Domestic Macroeconomic High-frequency Data - **Supply Side**: The tire production rate rebounded slightly [69] - **Consumption Side**: Real estate transactions remained sluggish, but the year-on-year growth rate of passenger car wholesale sales rebounded, and the crude oil price dropped to around $67 per barrel [77][87] - **Inflation Observation**: The prices of production materials weakened, while agricultural product prices rebounded [89]

Core Insights - The electronic sector is experiencing a surge driven by the explosive demand for AI computing power, leading to a potential new growth phase for the electronic industry chain [3][5] - The recent interest rate cut by the Federal Reserve may provide a boost to the Hong Kong stock market, suggesting a significant potential for valuation recovery in the medium to long term [5] Market Temperature - The market temperature indicators show a mixed sentiment with the Shanghai Composite Index at a 97.7% PE percentile, Shenzhen Component Index at 84.12%, and ChiNext Index at 50.68% as of September 18, 2025 [1] Sector Performance - The electronic sector led the market with a nearly 3% increase, driven by significant capital inflows exceeding 10 billion yuan over the past five days, marking it as the top sector for net inflows among 31 primary industries [3][5] - Other sectors such as media, household appliances, and automobiles showed declines, with the media sector down by 2.25% and household appliances down by 2.81% [2] Capital Flow - The top three sectors for capital inflows included coal (999 million yuan), real estate (144 million yuan), and oil and petrochemicals [2] - Conversely, the sectors with the highest capital outflows were non-bank financials (-11.597 billion yuan), electronics (-10.481 billion yuan), and computers (-9.660 billion yuan) [2] ETF Performance - The electronic ETF (515260) reported a 38.57% increase over the past six months, indicating strong performance in the sector [3] - Other ETFs such as the smart manufacturing ETF and the smart electric vehicle ETF also showed positive growth, with respective increases of 29.18% and 23.01% [3] Economic Outlook - The overall economic outlook suggests that with improved supply-demand dynamics and economic stabilization, the Hong Kong market may see a demand recovery point, enhancing its attractiveness as a global valuation opportunity [5]