1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - The stock index market showed a pattern of hitting the bottom and rebounding throughout the day, with the ChiNext Index falling nearly 1%. The market has concerns about AI crowding out the traditional economy, and this topic may continue to ferment and increase market volatility. The view on the stock index is "oscillating" [1]. - Treasury bond futures closed with gains across different maturities. The bond market is supported by reasonable and abundant liquidity and a weak economic recovery, but lacks further upward momentum due to improved inflation data and cautious interest - rate cut operations. The bond market is expected to maintain a low - interest - rate environment and continue to oscillate within a range. The view on treasury bonds is "oscillating" [1]. 3. Summary by Relevant Catalogs 3.1 Research Viewpoints - **Stock Index**: The market was down, with the Shanghai Composite Index falling 0.1%, the Shenzhen Component Index falling 0.63%, and the ChiNext Index falling 0.96%. Over 3800 stocks in the Shanghai, Shenzhen, and Beijing stock markets were in the red, and the trading volume was 2.46 trillion. The article "The 2028 Global Intelligence Crisis" triggered concerns about AI crowding out the traditional economy, which affected software, services, finance and other sectors and led to a sharp decline in the Chinese and US stock markets [1]. - **Treasury Bonds**: Treasury bond futures closed with gains. The 30 - year, 10 - year, 5 - year, and 2 - year main contracts rose 0.12%, 0.04%, 0.02%, and 0.02% respectively. The central bank conducted 245 billion yuan of 7 - day reverse repurchase operations on March 12, with a winning bid rate of 1.4%. There were 230 billion yuan of 7 - day reverse repurchase maturities, resulting in a net investment of 15 billion yuan. The weighted average interest rate of DR001 decreased by 4.21bp to 1.3274%, and that of DR007 increased by 0.59bp to 1.4704% [1]. 3.2 Daily Price Changes - **Stock Index Futures**: On March 12, 2026, compared with March 11, 2026, IH fell 17.4 points (-0.58%), IF fell 28.6 points (-0.61%), IC fell 59.0 points (-0.71%), and IM fell 35.8 points (-0.43%) [2]. - **Stock Indexes**: The Shanghai 50 Index fell 13.8 points (-0.46%), the CSI 300 Index fell 16.9 points (-0.36%), the CSI 500 Index fell 43.9 points (-0.52%), and the CSI 1000 Index fell 27.6 points (-0.33%) [2]. - **Treasury Bond Futures**: TS rose 0.024 points (0.02%), TF rose 0.025 points (0.02%), T rose 0.05 points (0.05%), and TL rose 0.16 points (0.14%) [2]. - **Treasury Bond Yields**: The yields of 2 - year, 5 - year, 10 - year, and 30 - year treasury bonds changed by -0.29, -0.61, -0.03, and 0.25 respectively [2]. 3.3 Market News - **Overall Trend**: The market hit the bottom and rebounded throughout the day, with the ChiNext Index falling nearly 1%. Most stocks were in the red, and the trading volume was 2.46 trillion. The Shanghai Composite Index fell 0.1%, the Shenzhen Component Index fell 0.63%, and the ChiNext Index fell 0.96% [4]. - **Industry Sectors**: Carbon fiber, chemical, coal, and wind power sectors led the gains, while military, photovoltaic equipment, engineering machinery, and power grid sectors led the losses [4]. - **Popular Concepts**: The coal sector strengthened, with Shaanxi Black Cat, Yankuang Energy, and Zhengzhou Coal Industry hitting the daily limit. The chemical sector was active, with Jinniu Chemical, Baichuan Co., Ltd., and Chengzhi Co., Ltd. hitting the daily limit. The wind power sector rose in the afternoon, with Zhenjiang Co., Ltd., Dajin Heavy Industry, and Zhongji United hitting the daily limit. The military sector declined, with Hangya Technology and China Power falling more than 5% [4]. 3.4 Chart Analysis - **Stock Index Futures**: The report provides charts of the trends of IH, IF, IM, and IC main contracts, as well as the trends of their respective monthly basis [6][8][10]. - **Treasury Bond Futures**: The report provides charts of the trends of treasury bond futures main contracts, treasury bond yields, basis, inter - period spreads, cross - variety spreads, and capital interest rates [13][16][18]. - **Exchange Rates**: The report provides charts of the central parity rates of the US dollar against the RMB, the euro against the RMB, forward exchange rates, and various currency exchange rates [21][23][25][27][28].

Investment Highlights - In February 2026, the equity market experienced fluctuations with mixed performance across indices, while the bond market saw increased volatility. Most major indices recorded gains except for the ChiNext and STAR 50 indices, which declined. The steel, building materials, and machinery sectors led the gains with increases of 9.52%, 7.72%, and 7.56% respectively, while media, non-bank financials, and consumer services sectors faced deeper declines of -4.22%, -3.48%, and -3.37% respectively [1][6][8] Equity Market Review - The A-share market is expected to maintain a wide fluctuation pattern in March 2026, supported by increased liquidity and policy expectations from the National People's Congress. Key focus areas include price increases driven by geopolitical tensions, sectors benefiting from AI technology maturity, and policy implementation post-NPC [2][12][15] Bond Market Review - The bond market in February saw decreased trading activity due to the Spring Festival, but strong liquidity support from the central bank helped maintain stability. The 10-year government bond yield briefly fell below 1.80%. Major bond fund indices showed positive performance, with the long-term pure bond fund index rising by 0.17%, and the convertible bond fund index increasing by 1.17% [8][20] Fund Performance Overview - The active equity fund indices showed a slight increase in February, with the active stock fund index rising by 1.20%. The market's risk appetite improved post-Spring Festival, leading to a recovery in equity performance, particularly in resource-related sectors [7][17] Thematic Fund Performance - The military industry theme fund ranked first in performance due to geopolitical tensions and the commercial aerospace sector's growth. Environmental theme funds also performed well, while the AI application sector faced a downturn due to concerns over profitability and regulatory scrutiny [9][11] Fund Index Construction - The active equity fund selection index aims to balance value, growth, and balanced styles, focusing on performance competitiveness and stability. The short-term bond fund index is designed to provide stable returns with low risk, while the medium to long-term bond fund index focuses on balancing yield and risk control [16][18][20]

Market Overview - The A-share market experienced fluctuations with the Shanghai Composite Index declining by 0.64%, the Shenzhen Component Index down by 1.35%, and the ChiNext Index falling by 1.67% as of midday trading [1] - The total trading volume in the Shanghai and Shenzhen markets was 1.59 trillion yuan, a decrease of 738 billion yuan compared to the previous trading day, with over 4,000 stocks declining [1] Sector Performance - The chemical sector showed strong performance, with Jin Niu Chemical achieving five consecutive daily limits, and several other stocks like Lu Hua Technology and Sanfangxiang also hitting the daily limit [4] - The coal sector was robust, with China Coal Energy reaching its highest market value since February 2008 at 234.2 billion yuan, and other companies like Yanzhou Coal Mining and Zhengzhou Coal Electricity also hitting the daily limit [4] - The green energy concept remained active, with stocks like Green Power and Huadian Energy achieving three consecutive daily limits [4] - The military industry sector weakened, with stocks like Hangya Technology experiencing declines [4] Hong Kong Market Insights - The Hang Seng Index and the Hang Seng Tech Index both fell over 1%, with tech stocks like SenseTime and Bilibili dropping more than 3% [6] - Concerns regarding potential "rate cuts + balance sheet reduction" by the Federal Reserve have contributed to the short-term volatility in the Hong Kong market [9] - The forward P/E ratio of leading internet companies has dropped to around 14 times, indicating increasing value for investment [9] - The macro outlook suggests that the current AI technology wave has not yet peaked, with a positive view on technology growth and upstream raw materials sectors [9]

Group 1: Report Investment Rating - No information provided on industry investment rating Group 2: Core Views - In the past week (20260302 - 20260308), US stock market indices and the Hang Seng index declined, with the Nasdaq, S&P 500, Dow Jones Industrial Average, and Hang Seng index changing -1.24%, -2.02%, -3.01%, and -3.28% respectively [4] - A - shares generally fell, with energy sectors leading the gainers. The wind all - A index changed -2.30%, and most of the other major A - share indices also declined [5][6] - In the past week, most Chinese government bond yields of various maturities decreased, while the US Treasury yield curve shifted upward overall. The US dollar appreciated [7][8][9] - Gold prices dropped, and crude oil prices soared. Brent crude oil futures prices rose 27.88% to $92.69 per barrel [10] - The February US non - farm payrolls report showed poor employment conditions, and the Fed faces a dilemma. The Fed may have more motivation to cut interest rates but may postpone the timing [11] - Looking ahead, in the A - share market, there are still structural opportunities due to the ongoing Iran situation and the "Two Sessions". In the bond market, the Chinese central bank may cut interest rates in 2026. In the commodity and exchange rate market, the US stagflation may cause the Fed to delay rate cuts, and the US dollar may strengthen [12] Group 3: Summary by Related Content Stock Market - US stocks: The Nasdaq, S&P 500, and Dow Jones Industrial Average decreased by -1.24%, -2.02%, and -3.01% respectively in the past week [4] - Hong Kong stocks: The Hang Seng index decreased by -3.28% in the past week [4] - A - shares: The wind all - A index decreased by -2.30%. Among different indices, the decline rates varied, and 7 out of 30 CITIC industries rose, with the petroleum and petrochemical and coal industries leading the gains with a weekly increase of more than 3.0% [6] Bond Market - Chinese government bonds: Most yields of various maturities decreased in the past week. The 10 - year government bond futures contract rose 0.13% compared to February 27, 2026, while the yield of the 10 - year active bond increased by 0.57 BP to 1.7810% compared to February 28, 2026 [7] - US Treasury bonds: The US Treasury yield curve shifted upward overall in the past week. As of March 6, 2026, the 10 - year US Treasury yield increased by 18 BP to 4.15% compared to February 27, 2026 [8] Exchange Rate Market - The US dollar appreciated in the past week. The US dollar index increased by 1.34%, and the exchange rates of the US dollar against the euro, pound, and yen increased by 1.81%, 0.64%, and 1.11% respectively. The exchange rates of the US dollar against offshore and onshore RMB also increased [9] Commodity Market - Gold: Gold prices declined in the past week. London spot gold decreased by 1.81% to $5127.55 per ounce, and COMEX gold futures decreased by 2.70% to $5137.50 per ounce. Domestic gold prices also fell, but to a lesser extent [10] - Crude oil: Brent crude oil futures prices soared 27.88% to $92.69 per barrel in the past week [10] Macroeconomic Situation - The February US non - farm payrolls decreased by 92,000, far lower than the expected increase of 58,000. The unemployment rate rose to 4.4%, up 0.1% from the previous month. The Fed faces a dilemma due to poor employment and rising inflation expectations [11] Market Outlook - A - shares: The impact of the Iran geopolitical situation may continue, but the "Two Sessions" are expected to release policy benefits. Suggested sectors to focus on include energy, precious metals, shipping, military, and technology [12] - Bond market: The Chinese central bank may cut interest rates in 2026, and the current 10 - year government bond yield around 1.80% has long - term investment value [12] - Commodity and exchange rate: The US stagflation may cause the Fed to delay rate cuts, the US dollar may strengthen, and commodity prices other than crude oil and precious metals may face pressure [12]

Core Insights - The global defense spending is projected to reach $2.63 trillion in 2025, a 2.5% increase year-on-year, with defense spending as a percentage of global GDP rising from 1.89% to 2.01% [4] - China's defense budget for 2026 is set at 1.91 trillion yuan, reflecting a 7% increase from 2025, indicating a stable growth trajectory [4][36] - The upcoming 2027 milestone for China's military development will likely accelerate industry growth and equipment development [4][39] - The military-civilian integration and military trade are expected to open new market opportunities for defense companies [4][6] Section 1: Military Investment Growth - The report highlights the increasing military expenditures by various countries in response to global uncertainties and conflicts, with the U.S. defense budget for 2026 at $901 billion [4][34] - China's defense spending growth remains robust, with a 7% increase planned for 2026, maintaining a long-term upward trend [4][36] - The emphasis on achieving the centenary military goals by 2027 will drive new momentum in the defense sector [4][39] Section 2: Recommended Sectors - Key sectors to focus on include military technology for civilian use, military trade, and low-cost weaponry [6][42] - The commercial aerospace sector is expected to benefit from advancements in military aircraft development, with significant progress in the C919 program [42][44] - The military trade market is anticipated to experience rapid growth due to ongoing international conflicts [6][73] Section 3: Historical Performance and Future Outlook - The military industry has seen fluctuating performance, with a notable recovery in revenue and profit margins since 2025, driven by the end of previous disruptions [14][28] - The defense sector's revenue for Q1-Q3 2025 reached 540.57 billion yuan, a 16.2% year-on-year increase, indicating a positive trend [14][28] - The report suggests that the military industry will continue to recover and grow, supported by domestic demand and military trade opportunities [14][28] Section 4: Inventory and Order Demand - The military sector's inventory increased significantly, with total inventory reaching 366.65 billion yuan by Q3 2025, reflecting strong downstream order demand [21][24] - Prepayments and contract liabilities surged to 405.88 billion yuan, indicating a robust order pipeline [21][24] - The report emphasizes the correlation between inventory levels and order demand, suggesting a positive outlook for future revenue [21][24] Section 5: Cash Flow and Financial Health - The operating cash flow for the military industry showed improvement, with a net cash flow of -30.11 billion yuan for Q1-Q3 2025, an improvement from the previous year [28] - The long cash conversion cycle in the military sector continues to pose challenges, but the situation is expected to improve as previous disruptions are resolved [28]

Group 1: Market Overview - The A-share market experienced significant fluctuations due to geopolitical disturbances, with capital outflows following a brief return after the holiday [2] - The financing balance remains high, with an average guarantee ratio above 290%, indicating potential market volatility [2] Group 2: Fixed Income Insights - The recent Middle East tensions have increased market volatility, with a focus on oil and high-dividend stocks as potential investment strategies [3] - The conflict is expected to evolve into either a "war of attrition" or a slight easing, impacting trading strategies and market sentiment [3] Group 3: Automotive Industry - The geopolitical situation, particularly the US-Israel-Iran conflict, is projected to suppress overall sales, with an estimated impact of around 300,000 vehicles in the Middle East market [4] - Despite potential declines in fuel vehicle demand, the growth of new energy vehicles is expected to partially offset these losses [4] Group 4: Export and Trade Data - In January-February 2026, exports increased by 21.8% year-on-year, significantly higher than the previous month's 6.6% [5] - The trade surplus reached $213.6 billion, reflecting a strong performance driven by seasonal factors [5] Group 5: Credit Bond Market - The behavior of institutional investors is closely linked to credit bond market performance, with expectations for a slight improvement in supply-demand dynamics in 2026 [7] - The report suggests a focus on short-term credit bonds for unstable institutions and opportunities arising from market adjustments [7] Group 6: Infrastructure Investment - The transition from "incremental" to "stock quality" investment in infrastructure is emphasized, with a focus on urban renewal and pipeline renovation as key investment opportunities [8] - Companies like China Liansu and Oriental Yuhong are recommended for their potential in this sector [8] Group 7: Chemical and Energy Sector - The geopolitical tensions have highlighted the resilience of China's energy and chemical supply chains, with an upward revision of Brent crude oil price forecasts to $78 per barrel for 2026 [10] - Companies with complete industrial chains, such as Sinopec and Hengli Petrochemical, are recommended for investment [10] Group 8: Steel Industry - The global steel supply-demand balance is expected to improve from 2025 to 2030, with a potential shift to a shortage by 2029 [11] - Domestic steel demand is stabilizing, with a significant reduction in reliance on real estate, suggesting a favorable outlook for leading steel companies [11] Group 9: Consumer Goods - The report highlights the growth potential of companies like Mingming Henmang in the snack retail sector, driven by innovative business models and efficient supply chains [13] - The company is projected to maintain a strong market position with a target price of HKD 535 [13] Group 10: Emerging Markets - Companies like Leshu Shi are positioned to benefit from growth opportunities in emerging markets, particularly in the hygiene products sector [15] - The report anticipates continued growth driven by market expansion and product diversification [15] Group 11: Lithium and Battery Materials - Tianqi Lithium is expected to benefit from tight supply conditions for lithium hexafluorophosphate (6F), with a strong outlook for revenue growth [20] - The company is maintaining a "buy" rating based on anticipated price increases and strong demand [20] Group 12: Travel and Tourism - Tuniu reported a strong performance in packaged travel products, with a year-on-year revenue increase of 35.3% [23] - The company is focusing on product differentiation and channel expansion to drive long-term growth [23]

Summary of Key Points from Conference Call Records Industry and Company Involvement - **Industry Focus**: High-end manufacturing, AI hardware, space photovoltaic, controlled nuclear fusion, military industry, and lithium batteries - **Key Companies Mentioned**: SpaceX, Bo Rui Kang, and various domestic photovoltaic companies Core Insights and Arguments 1. **AI Hardware Expansion**: 2026 is projected to be a year of AI hardware proliferation, with increasing supply-demand conflicts in computing power, storage, and electricity leading to rare price increases in certain manufacturing sectors [1][4] 2. **Investment Strategy**: The investment strategy emphasizes a combination of cyclical investments (60%-70%) and thematic investments, focusing on overseas/domestic computing power (15%-20%), power grid equipment (15%), gas turbines (15%), and electronic price increases (10%) [1][4][5] 3. **Space Photovoltaic Theme**: The core theme for 2026 is space photovoltaic, driven by the launch of SpaceX's V3 satellites, which is expected to expand solar wing area by 10-20 times and double the value per watt [1][10] 4. **Controlled Nuclear Fusion Investment**: Significant government investment exceeding 100 billion yuan in 2025, with the second phase of the Hefei BEST project expected to expand investment to 980-1000 billion yuan in 2026, necessitating close tracking of listed companies' order shares [1][8] 5. **Brain-Computer Interface**: Currently in a high-risk thematic investment phase, with a focus on IPOs and industrialization progress of leading projects like Bo Rui Kang [1][14] 6. **Military Sector Outlook**: The military sector remains under observation, with a focus on gas turbine overseas orders, C919 aircraft production, and military trade opportunities, particularly in the engine and shipbuilding segments [2][16] Additional Important Insights 1. **Market Dynamics**: The investment framework is based on macro industry selection and concentrated holdings in quality stocks, with a focus on quarterly revenue acceleration as a key indicator of industry health [3][4] 2. **Geopolitical Impact**: The impact of geopolitical conflicts and trade wars on high-end manufacturing supply chains is assessed as less severe than previous conflicts, with a focus on re-industrialization and re-militarization as long-term trends [9][10] 3. **Space Photovoltaic Industry Development**: The future industrialization pace of the space photovoltaic sector is expected to transition from thematic investment to cyclical investment as operational milestones are achieved, particularly with the V3 satellite launches [10][12][13] 4. **Investment in Lithium Batteries**: The current focus is on upstream resources in lithium batteries, particularly lithium carbonate, while the midstream materials segment remains under scrutiny due to competitive dynamics and uncertainties in downstream vehicle production [17][18] This summary encapsulates the critical insights and strategic directions discussed in the conference call, highlighting the anticipated trends and investment opportunities within the high-end manufacturing and related sectors.

Investment Rating - The report maintains an "Outperform" rating for the defense industry, indicating expected performance above the market benchmark by over 10% [1][6]. Core Insights - The 2026 national defense budget is set at 1,909.561 billion RMB, reflecting a year-on-year increase of 7%, marking the 11th consecutive year of steady growth [2][3]. - Despite a slight decrease from the previous year's growth rate of 7.2%, the defense budget continues to emphasize a balanced approach to economic and military development, adapting to international security dynamics [2][3]. - The military industry is expected to see strong demand driven by the goal of achieving modernization by the centenary of the military, with a focus on executing the "14th Five-Year Plan" and accelerating major defense projects [3]. - The government report highlights aerospace as a newly defined pillar industry, underscoring its strategic importance in national development and technological self-reliance [4]. Summary by Sections Defense Budget Overview - The 2026 defense budget reflects a 7% increase, maintaining a trend of single-digit growth for over a decade, with a focus on coordinated growth in defense and economic development [2][3]. Military Industry Demand - The military industry is poised for strong demand due to the rigid requirements of achieving modernization goals, despite a slight slowdown in budget growth [3]. Emerging Industries - The government emphasizes the cultivation of new industries, with aerospace being recognized as a strategic pillar, indicating significant growth potential in both military and civilian applications [4]. Investment Recommendations - Focus on companies within the aerospace supply chain, commercial space, and low-altitude economy sectors, particularly those with strong competitive advantages and growth potential [5][7].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Due to the intensified military conflict between the US - Israel and Iran at the end of February and the blockade of the Strait of Hormuz, which led to rising oil prices, the market is worried about the resurgence of US inflation. The US bond yields and the US dollar index rebounded, suppressing the prices of risk - assets globally. In the short term, the ongoing Middle - East geopolitical conflict is the main factor suppressing market risk appetite [2][12]. - In the context of the impact on risk appetite, the financial style can be used as a defensive allocation, and attention should be paid to the volatility risk of technology - growth stocks at relatively high levels. Future focus should be on the evolution of the US - Iran conflict, the navigation situation in the Strait of Hormuz, and the impact of oil price trends on global inflation and national monetary policies [3][13]. - The bond market is currently in a situation of mixed long and short factors. There may be short - term emotional suppression on the bond market, but there is also a demand for capital hedging. The market is still in a state of game, with possible short - term corrections in the shock. It is recommended to choose the opportunity to layout after the correction [4][14]. 3. Summary According to the Directory 3.1 Weekly Market Observation 3.1.1 Equity Market Review and Observation - Global risk - asset prices were generally under pressure. The domestic stock market showed a trend of "first decline and then stability" with relatively low volatility compared to overseas markets. The Shanghai Composite Index fell 0.93%, the ChiNext Index fell 2.45%, and the Hang Seng Index fell 3.28%. The value style outperformed the growth style, and large - cap stocks were relatively more resistant to decline. The average daily trading volume of the whole A - shares was 2641.8 billion, showing a month - on - month increase. The energy, military, and precious metal sectors performed strongly [12]. - The Middle - East situation escalated over the weekend. Iran's selection of a new leader and drone attacks may lead to extended conflicts and energy supply shortages. Domestically, the Two Sessions announced relevant policies, which were in line with market expectations [12]. 3.1.2 Pan - Fixed - Income Market Review and Observation - Last week, the bond market continued to fluctuate. The 1 - year Treasury yield dropped 3.10BP to 1.39%, the 10 - year Treasury yield rose 0.57BP to 1.78%, and the 30 - year Treasury yield rose 0.86BP to 2.28%. The short - end yield declined significantly [14]. - The US bond yields rose across the board. The 1 - year US bond yield rose 7BP to 3.55%, the 2 - year US bond yield rose 18BP to 3.56%, and the 10 - year US bond yield rose 18BP to 4.15%. The CSI REITs total return index fell 0.79% to 1027.62 points, with data centers and consumer sectors leading the decline. Nine new public REITs made progress in the primary market [15]. 3.2 Fund Index Performance Tracking 3.2.1 Equity Strategy Theme - Based Index - **Active Stock Fund Selection**: The index selects 15 funds each period with equal - weight allocation. The core positions select active equity funds based on performance competitiveness and style stability, and balance the style distribution according to the CSI equity - biased fund index. The performance benchmark is the CSI equity - biased fund index [19]. 3.2.2 Investment Style - Based Index - **Value Stock Fund Selection**: It includes deep - value and quality - value styles. Ten funds of deep - value, quality - value, and balanced - value styles are selected to form the index. The performance benchmark is the CSI 800 Value Index [19]. - **Balanced Stock Fund Selection**: Balanced - style fund managers balance stock valuation and growth. Ten funds of relatively balanced and value - growth styles are selected to form the index. The performance benchmark is the CSI 800 [22]. - **Growth Stock Fund Selection**: It aims to capture the performance and valuation double - click opportunities of high - growth companies. Ten funds of active - growth, quality - growth, and balanced - growth styles are selected to form the index. The performance benchmark is the 800 Growth Index [26]. 3.2.3 Industry Theme - Based Index - **Pharmaceutical Stock Fund Selection**: Funds are selected based on the intersection market value ratio of equity holdings and the representative index. An evaluation system is established, and 15 funds are selected to form the index. The performance benchmark is the CSI All - Index Pharmaceutical and Healthcare Index [28]. - **Consumer Stock Fund Selection**: Funds are selected according to the intersection market value ratio of equity holdings and relevant representative indices. Ten funds are selected to form the index. The performance benchmark is the consumer - theme fund index [31]. - **Technology Stock Fund Selection**: Funds are selected based on the intersection market value ratio of equity holdings and relevant representative indices. Ten funds are selected to form the index. The performance benchmark is the technology - theme fund index [35]. - **High - end Manufacturing Stock Fund Selection**: Funds are selected according to the intersection market value ratio of equity holdings and relevant representative indices. Ten funds are selected to form the index. The performance benchmark is the high - end manufacturing - theme fund index [38]. - **Cyclical Stock Fund Selection**: Funds are selected based on the intersection market value ratio of equity holdings and relevant representative indices. Five funds are selected to form the index. The performance benchmark is the CS Cyclical Index [41]. 3.2.4 Money Enhancement Index - **Money Enhancement Strategy**: The index aims at liquidity management, pursues a curve that surpasses money funds and is smooth and upward. It mainly allocates money - market funds and inter - bank certificate of deposit index funds. The performance benchmark is the CSI Money Fund Index [46]. 3.2.5 Pure Bond Index - **Short - Term Bond Fund Selection**: The index aims at liquidity management, pursues a smooth and upward curve while controlling drawdowns. Five funds with stable long - term returns, strict drawdown control, and significant absolute - return capabilities are selected to form the index. The performance benchmark is 50% * Short - Term Pure Bond Fund Index + 50% * Ordinary Money - Type Fund Index [48]. - **Medium - and Long - Term Bond Fund Selection**: The index invests in medium - and long - term pure bond funds, pursues stable returns while controlling drawdowns, and selects five funds with both returns and drawdown control. It adjusts the duration and the proportion of credit bond funds and interest - rate bond funds according to market conditions [51]. 3.2.6 Fixed - Income + Index - **Low - Volatility Fixed - Income + Selection**: The equity center is positioned at 10%. Ten funds with an equity center within 15% in the past three years and recently are selected. The performance benchmark is 10% CSI 800 Index + 90% ChinaBond New Composite Full - Price Index [52]. - **Medium - Volatility Fixed - Income + Selection**: The equity center is positioned at 20%. Five funds with an equity center between 15% - 25% in the past three years and recently are selected. The performance benchmark is 20% CSI 800 Index + 80% ChinaBond New Composite Full - Price Index [55]. - **High - Volatility Fixed - Income + Selection**: The equity center is positioned at 30%. Five funds with an equity center between 25% - 35% in the past three years and recently are selected. The performance benchmark is 30% CSI 800 Index + 70% ChinaBond New Composite Full - Price Index [56]. 3.2.7 Other Pan - Fixed - Income Index - **Convertible Bond Fund Selection**: Funds with a convertible - bond investment ratio meeting certain conditions are used as the sample space. An evaluation system is established, and five funds are selected to form the index [60]. - **QDII Bond Fund Selection**: Six funds with stable returns and good risk control are selected according to credit and duration conditions to form the index [64]. - **REITs Fund Selection**: Ten funds with stable operation, reasonable valuation, and certain elasticity are selected according to the underlying asset types to form the index [65].

Macro Liquidity - The US dollar index has rebounded, and the degree of inversion in the China-US interest rate differential has deepened, with inflation expectations also rising [2][14] - Offshore dollar liquidity has marginally tightened, while the domestic interbank funding environment remains balanced and relatively loose [2][20] Market Trading Activity, Volatility, and Liquidity - Market trading activity continues to rise, with trading heat in sectors such as oil and petrochemicals, military industry, public utilities, and steel exceeding the 90th percentile [3][27] - Volatility has increased across major indices, with sectors like steel, military, oil and petrochemicals, and non-ferrous metals showing volatility above the 80th percentile [3][33] - Market liquidity indicators have improved, although all sectors remain below the 70th historical percentile [3][37] Institutional Research - The banking, electronics, computing, electric new energy, and pharmaceutical sectors are leading in research activity, with construction materials, computing, media, pharmaceuticals, and textiles showing a month-on-month increase in research heat [4][43] Analyst Forecasts - Analysts have simultaneously downgraded net profit forecasts for the entire A-share market for 2026/2027 [5][51] - The proportion of stocks with upgraded net profit forecasts for 2026/2027 has decreased across the A-share market [5][51] - Sectors such as computing, transportation, machinery, electricity, and public utilities have seen their net profit forecasts for 2026/2027 upgraded [5][4] - The net profit forecasts for the CSI 500 and ChiNext indices for 2026/2027 have been upgraded [5][23] - Mid-cap/small-cap growth and large/mid/small-cap value sectors have also seen their net profit forecasts for 2026/2027 upgraded [5][25] Northbound Trading Activity - Northbound trading activity has rebounded slightly, continuing to show a small net sell-off in A-shares [6][31] - In the top 10 active stocks, the buy-sell ratio for Northbound trading in sectors like telecommunications, electric new energy, and automobiles has increased, while it has decreased in non-bank financials, non-ferrous metals, and electronics [6][32] - Northbound trading has mainly net bought in sectors such as electronics, electric new energy, and media, while net selling occurred in computing, military, and coal sectors [6][33] Margin Financing Activity - Margin financing activity has rapidly declined to the lowest point since mid-July 2025 [6][35] - The main net purchases in margin financing have been in oil and petrochemicals, transportation, and non-ferrous metals, while net selling occurred in TMT, electric new energy, and banking sectors [6][39] - Only sectors like agriculture, textiles, and transportation have seen an increase in the proportion of financing purchases [6][38] Trading Heat on the Dragon and Tiger List - The trading heat on the Dragon and Tiger list has decreased, with the total trading amount falling [7][41] - Sectors like oil and petrochemicals and agriculture have a relatively high trading amount on the Dragon and Tiger list, which is still on the rise [7][44] Active Equity Fund Positions - Active equity funds have continued to reduce their positions, while ETFs have seen a net redemption, although the pace has noticeably slowed [8][45] - After excluding price fluctuation factors, active equity funds have mainly increased positions in oil and petrochemicals, military, and media sectors, while reducing positions in electronics, telecommunications, and chemicals [8][47] - The correlation between active equity funds and small-cap growth/value has increased, while the correlation with large/mid-cap growth/value has decreased [8][48] - The scale of newly established equity funds has rebounded, with both active and passive new establishment scales increasing [8][50] - ETFs related to the CSI 500, CSI 300, and CSI 1000 have seen significant net redemptions, while ETFs tracking sectors like brokerages have been net subscribed [8][52]