Core Insights - The report emphasizes a strategy based on industry rotation and thematic ETFs, recommending a focus on sectors such as communication equipment, real estate development, and gaming for the upcoming week [2][3]. - The model portfolio has shown a cumulative net return of approximately 0.96% for the period from October 27 to October 31, 2025, outperforming the CSI 300 ETF by about 1.25% [3][12]. - Since October 14, 2024, the strategy has achieved a cumulative return of approximately 26.57%, with an excess return of about 4.11% compared to the CSI 300 ETF [3][12]. Strategy Update - For the week of November 3, 2025, the strategy will add positions in communication ETFs, real estate ETFs, and gaming ETFs, while continuing to hold the Sci-Tech Medicine ETF [2][12]. - The report includes a detailed list of ETFs with their respective market values and weightings, indicating a strategic shift towards sectors with positive timing signals [12]. Performance Tracking - The report provides a performance comparison of the industry rotation ETF strategy against the CSI 300 ETF, highlighting a significant outperformance since the strategy's inception [3][4]. - A graphical representation shows the cumulative return rates of the industry rotation ETF strategy compared to the CSI 300 ETF, illustrating the effectiveness of the strategy over time [4][5].

Core Viewpoint - The A-share market is experiencing a strong upward trend, with major indices reaching new highs not seen since August 2015, indicating a potential bullish market sentiment and increased investor interest in A-shares [1]. Market Performance - As of 13:31, the Shanghai Composite Index rose by 0.78% to 3800.53 points, the Shenzhen Component increased by 1.45% to 12092.66 points, and the ChiNext Index surged by 2.64% to 2663.89 points [1]. - The STAR 50 Index saw a significant increase of approximately 7% [1]. Sector Performance - Among the Shenwan secondary industry sectors, the semiconductor, glass fiber, communication equipment, components, and computer equipment sectors showed the highest gains [1]. - Conversely, the fisheries, airport, food processing, city commercial banks, and real estate services sectors experienced the largest declines [1]. Market Outlook - According to Dongxing Securities, the market is expected to target the 4000-point mark in the short term, reinforcing a narrative of a slow bull market and potentially activating off-market funds' interest in A-shares [1]. - In a longer-term perspective, there is confidence that the Chinese stock market will reach new heights [1].

Market Overview - On June 23, the A-share market opened lower but rose slightly, with the Shanghai Composite Index finding support around 3348 points and closing at 3381.58 points, up 0.65%[4][9]. - The Shenzhen Component Index closed at 10,048.39 points, up 0.43%, while the ChiNext Index rose by 0.39%[10][9]. - Total trading volume for both markets reached 11,471 billion yuan, above the median of the past three years[4][17]. Sector Performance - Strong performers included banking, software development, semiconductors, and energy metals, while sectors like liquor, aviation, engineering machinery, and electricity showed weaker performance[4][9]. - Over 80% of stocks in the two markets rose, with notable gains in energy metals, shipping ports, and software development[9]. Valuation and Investment Strategy - The average P/E ratios for the Shanghai Composite and ChiNext are 13.85 times and 36.04 times, respectively, indicating a suitable environment for medium to long-term investments[4][17]. - The report suggests focusing on investment opportunities in software development, semiconductors, banking, and chemical pharmaceuticals in the short term[4][17]. Economic Context - China's economy continues to show moderate recovery, driven by consumption and investment, with long-term capital inflows increasing and ETF sizes growing steadily[4][17]. - The Federal Reserve maintained interest rates in June, but uncertainty remains regarding future rate cuts, which could significantly boost global risk appetite[4][17]. Risks - Potential risks include unexpected overseas economic downturns, domestic policy changes, and geopolitical tensions affecting global trade and energy supplies[5][4].