Core Viewpoint - The report from Everbright Securities suggests that the A-share market is expected to continue its upward trend after the National Day holiday, supported by historical performance patterns and reasonable market valuations [1] Market Performance - Historically, the A-share market tends to perform well after the National Day holiday as trading activity picks up [1] - The current market valuation is considered reasonable, with no significant overextension observed [1] Investment Strategy - The report recommends focusing on the TMT (Technology, Media, and Telecommunications) sector as a key investment direction [1] - The TMT sector is expected to benefit from several catalysts, including ongoing industrial trends and the potential onset of a Federal Reserve interest rate cut cycle [1] - Recent trends indicate that the TMT sector has already shown relative strength, suggesting that this momentum may continue in the future [1]

Market Overview - In September, A-shares and Hong Kong stocks continued to rise, with most major A-share indices showing an upward trend, particularly the ChiNext Index, while the SSE 50 Index experienced the largest decline [4] - The Hong Kong stock market showed a fluctuating upward trend, influenced by the overseas interest rate cuts and improved domestic risk appetite, with the Hang Seng Technology Index rising by 12.4% [4] A-share Insights - The market is expected to continue its upward trend after the National Day holiday, supported by historical trends of increased trading activity post-holiday and reasonable market valuations [5] - The TMT sector is recommended as a key focus for investment, driven by liquidity and various catalysts such as ongoing industrial trends and the commencement of the Federal Reserve's interest rate cut cycle [5] Hong Kong Stock Insights - The Federal Reserve's interest rate cut cycle is anticipated to support a continued upward trend in the Hong Kong stock market, which has strong overall profitability and relatively low valuations [6] - A "barbell" strategy is suggested for investment, focusing on sectors like self-controllable technology, high-end manufacturing, and high-dividend low-volatility stocks such as telecommunications and utilities [6]

Core Insights - Hims & Hers Health, Inc. (NYSE: HIMS) has experienced a significant bullish trend in its stock performance, effectively managing uncertainties and overcoming challenges related to a partnership with Novo Nordisk [1] Company Performance - The company has shown resilience in navigating market fluctuations and has successfully maintained momentum despite external pressures [1]

Market Overview - As of September 25, 2025, the Shanghai Composite Index closed at 3,853.30 points, a slight decrease of 0.12% compared to the end of August. The major indices showed mixed performance, with the STAR 50 and ChiNext indices experiencing significant gains while the Shanghai 50 index saw a minor decline [3][13]. - In August, the industrial added value for large-scale enterprises in China grew by 5.2% year-on-year, while the retail sales of consumer goods increased by 3.4% year-on-year. Fixed asset investment, excluding real estate, rose by 4.2% from January to August [10][48]. Market Liquidity and Risk Sentiment - The liquidity in the A-share market is expected to continue improving, with significant long-term funds holding approximately 21.4 trillion yuan in A-share market value, a 32% increase compared to the end of the 13th Five-Year Plan [3][26]. - The net reduction in major shareholders' holdings in September was 456.82 billion yuan, while the total amount of A-share unlocks was about 3,179.75 billion yuan, showing a decrease from the previous month [26][30]. - The average daily trading volume in the A-share market from September 1 to 25 was 24,545.88 billion yuan, reflecting a 6.36% increase from the previous month [30]. Valuation Levels - As of September 25, 2025, the dynamic price-to-earnings (PE) ratio for the STAR 50 index is at a historical high of 99.85% [41][44]. - The valuation of various industries shows that sectors like commerce, telecommunications, electronics, and media have PE ratios exceeding the historical 50% percentile, indicating strong market performance [46]. Policy Analysis - The macroeconomic environment remains stable, with the government implementing measures to boost consumption and expand domestic demand. Recent policies include a focus on enhancing service consumption and improving financial support [48][49]. - The People's Bank of China has indicated a supportive monetary policy stance, aiming to maintain liquidity and facilitate economic recovery [20][48].

Exchange Rate Projections - Under the baseline scenario, the USD/CNY exchange rate is expected to approach 7.0 by the end of the year[1] - In an optimistic scenario, with extraordinary counter-cyclical policies, the new equilibrium for USD/CNY could be around 6.7[1] Monetary Policy Implications - A potential interest rate cut of 10-20 basis points (BP) by the People's Bank of China (PBOC) in Q4 may not delay RMB appreciation but could intensify it[1] - The current market does not fully anticipate a rate cut, meaning the existing exchange rate does not factor in this possibility[1] Economic Context - The recent RMB appreciation is not driven by strong economic fundamentals but rather by expectations and a self-fulfilling cycle of currency appreciation[1][10] - The Chinese government's debt cost is currently lower than economic growth rates, supporting fiscal expansion and the exchange rate[1] Investment Insights - RMB appreciation is expected to benefit Chinese stocks, with historical data showing that a 1% appreciation typically leads to a 2.73% increase in A-shares and a 4.52% increase in Hong Kong stocks[6] - The current RMB appreciation cycle has seen A-shares rise by an average of 8.31% and Hong Kong stocks by 10.52% since April 8, 2025[6] Risks and Considerations - Risks include misinterpretation of policy, unexpected monetary policy actions, and potential increases in U.S. tariffs[50]

Core Viewpoint - Technology stocks have emerged as the strongest theme in the A-share market this year, with the ChiNext Index and the Sci-Tech 50 Index both rising over 35% year-to-date, driven by significant gains in the TMT sector [1] Group 1: Factors Supporting Technology Stock Surge - The continuous rise of technology stocks is supported by various factors, including favorable market conditions and investor sentiment [1] - The TMT sector has shown remarkable leadership in this upward trend, indicating strong investor interest and confidence [1] Group 2: Potential Technology Sub-sectors - Certain technology sub-sectors are identified as having greater potential for growth, although specific areas are not detailed in the provided content [1] Group 3: Participation Strategies for Ordinary Investors - Ordinary investors are encouraged to consider ways to participate in the technology stock market, suggesting a growing accessibility and interest in this sector [1]

Macro and Strategy Research - External demand faces marginal decline pressure due to high base effects and demand front-loading from previous "export grabbing/transshipment effects," leading to uncertainty in the trade environment, making exports less effective as a fundamental support [2][3] - Domestic market shows a strong supply but weak demand characteristic, with fluctuations in consumption and investment data, indicating that the economic recovery foundation still needs further consolidation [2] - The overall liquidity in the domestic market is expected to remain abundant, despite the potential for short-term incremental measures being limited due to the emphasis on the implementation of existing policies [3] Capital Market Liquidity - In the fourth quarter, long-term funds represented by insurance are expected to continue flowing into the market, aided by the effectiveness of public fund reforms, which will help attract the migration of resident assets [3] - A-share market liquidity is anticipated to continue its incremental process, with foreign capital likely increasing its allocation to A-shares during the interest rate cut cycle [3] A-share Market Outlook - Market valuation repair is nearly complete, and under the policy guidance to "consolidate the capital market's recovery," liquidity is expected to maintain an incremental trend [3] - The core focus will shift to the flow of incremental funds, with performance factors remaining a crucial consideration for fund allocation, particularly in the technology sector, which is expected to lead structural market trends [3] Industry Opportunities - Investment opportunities in the TMT sector due to the promotion of "Artificial Intelligence+" initiatives and increased capital expenditure by domestic cloud vendors [4] - The power equipment industry presents investment opportunities driven by high overseas demand for energy storage and the ongoing industrialization of solid-state batteries [4] - The pharmaceutical and non-ferrous metals industries are highlighted for investment opportunities due to significant competitive advantages in domestic innovative drugs and the anticipated acceleration of the Federal Reserve's interest rate cuts [4] - The service consumption sector is expected to see investment opportunities as the "14th Five-Year Plan" aims to further improve basic security systems [4]

Policy Insights - The Beijing Stock Exchange (BSE) will implement a new code system starting October 9, 2025, enhancing its market recognition and independent status as China's third-largest stock exchange[3] - Since its inception, the BSE has raised a total of 1.47 billion CNY through refinancing, with an average of 24.5 million CNY per project[4] - The BSE has introduced a "small, fast, flexible, and diverse" review mechanism for mergers and acquisitions, with the first major asset restructuring case processed in May 2025[4] Supply Side - As of September 22, 2025, the BSE has 276 listed companies, with 70% classified as specialized, refined, and innovative enterprises[4] - The average net profit of new three-board listed companies increased from 44.61 million CNY in January 2024 to 69.27 million CNY in August 2025, indicating a solid pipeline for quality listings[4] Investment Trends - The average market capitalization of BSE's constituent stocks is approximately 3.3 billion CNY, significantly lower than other A-share segments, leading to a higher turnover rate of 8.05% as of September 22, 2025[5] - Public funds' holdings in the BSE reached 22.4 billion CNY by Q2 2025, a 76% increase from the end of 2024, with active funds growing by 118%[5] Valuation and Recommendations - As of September 23, 2025, the price-to-earnings (PE) ratios for BSE, ChiNext, Sci-Tech Innovation Board, and Main Board are 52, 45, 77, and 14 respectively, indicating room for valuation growth[5] - Investment focus is recommended on high-quality companies across various sectors, including advanced manufacturing and new energy[5] Risk Considerations - Key risks include policy changes, liquidity issues, and potential underperformance in corporate earnings[5]

Group 1 - The current bull market is expected to evolve into a slow and long bull market, characterized as a mixed bull market similar to the patterns observed in 2013-2014 and 2016-2017, transitioning from a structural bull to a comprehensive bull market [2][3] - Historical analysis of A-share bull markets from 2001 to 2025 reveals six distinct bull market phases, each driven by different macroeconomic conditions and profit dynamics, with valuation expansion being a common factor [9][12][45] - The current bull market is primarily driven by incremental capital, with insurance funds playing a significant role in the first half of 2025, while other funding sources such as retail investor accounts and public funds have not shown significant increases [3][45] Group 2 - The current "structural bull" market is driven by positive feedback from market participants towards AI hardware, but faces challenges related to the capacity of stocks that can be grouped together and the amount of incremental capital available [3][5] - The transition from a structural bull to a comprehensive bull market is anticipated, drawing parallels to the market rotations observed during the macroeconomic recovery phases from 2012 to 2017, where the focus shifted from technology to cyclical blue-chip stocks [3][5] - The report suggests a three-step expansion of the current bull market: first, a focus on AI hard technology; second, a broader technology growth phase; and finally, a comprehensive bull market driven by macroeconomic improvements [3][5][29]

Group 1 - The overall performance of A-shares is strong, with the Shanghai Composite Index reaching 3800 points, and most institutions are optimistic about the market outlook for Q4 [1][2] - Analysts expect a structural recovery in A-share earnings, driven by resilient export growth, manufacturing investment improvements, and seasonal consumption increases [2][3] - The market is anticipated to experience a "slow bull" trend, with a balanced style shift between growth and value stocks [2][4] Group 2 - The technology sector, particularly in optical communication and semiconductors, has shown strong performance, while cyclical and consumer stocks have lagged [4] - Historical data suggests a style rotation in Q4, with cyclical stocks likely to rebound and technology stocks diversifying beyond just hardware [4][5] - Key sectors to focus on in Q4 include TMT (Technology, Media, Telecommunications), machinery, pharmaceuticals, military, non-ferrous metals, chemicals, and non-bank financials [4][5] Group 3 - Financial analysts predict increased allocation to equity assets by residents in a low-interest-rate environment, with a current equity and fund allocation of 15% among Chinese residents, indicating room for growth [3] - Suggested investment themes for Q4 include precious and industrial metals, renewable energy, AI hardware and applications, and consumer sectors such as pet economy and beauty products [5]