Report Industry Investment Rating No information regarding the report industry investment rating is provided in the content. Core Viewpoints of the Report In Q3 2025, under the influence of the "anti - involution" policy and the new public fund fee regulations, the bond market weakened, and the bond fund market scale declined. Active bond funds adopted a "defensive" strategy of reducing leverage and shortening duration. In terms of performance, hybrid secondary bond funds had outstanding returns, while other types of funds showed different degrees of decline. In terms of bond holdings, active bond funds increased their holdings of convertible bonds and reduced their holdings of other bond types. In terms of heavy - held credit bonds, they increased their holdings of urban investment bonds and industrial bonds and reduced their holdings of financial bonds [1][2][3]. Summary According to Relevant Catalogs 1. Overview of the Bond Fund Market in Q3 2025 - The number of bond funds increased, with 3,936 funds at the end of Q3 2025, a quarter - on - quarter increase of 74 funds or 1.92%. The market scale decreased, with a total market scale of 10.69 trillion yuan, a quarter - on - quarter decrease of 0.24 trillion yuan or 2.23%. The fund shares had a net redemption of 475.2 billion shares, with a redemption ratio of 4.95% [12]. - In terms of market structure, medium - and long - term pure bond funds dominated the market, accounting for 55.5% of the total scale, followed by passive index bond funds at 14.7% [14]. - Different types of funds had different trends. Pure bond funds and hybrid primary bond funds had net redemptions and a decrease in market scale, while hybrid secondary bond funds and convertible bond funds had net subscriptions and an increase in market scale [17]. 2. Quarterly Performance of Active Bond Funds 2.1 Performance: Significantly Improved Quarterly Returns of Hybrid Secondary Bond Funds - In Q3 2025, the single - quarter weighted average returns of short - term pure bond funds, medium - and long - term pure bond funds, hybrid primary bond funds, and hybrid secondary bond funds were 0.17%, - 0.19%, 0.48%, and 4.31% respectively. Compared with the previous quarter, the return of hybrid secondary bond funds increased by 262.5 BP, while those of other funds decreased [22]. 2.2 Leverage Ratio and Duration: Reducing Leverage and Shortening Duration - At the end of Q3 2025, the single - quarter weighted average leverage ratios of short - term pure bond funds, medium - and long - term pure bond funds, hybrid primary bond funds, and hybrid secondary bond funds were 110.96%, 119.72%, 113.12%, and 108.14% respectively, with quarter - on - quarter decreases [25]. - The weighted average durations of heavy - held bonds were 0.91 years, 2.80 years, 3.16 years, and 3.77 years respectively, also showing quarter - on - quarter decreases [28]. 2.3 Bond Holdings: Increasing Holdings of Convertible Bonds and Reducing Holdings of Other Bond Types - At the end of Q3 2025, the total bond holding market value of active bond funds decreased by 7.66% quarter - on - quarter. Only the market value of convertible bonds held by active bond funds increased quarter - on - quarter, while other bond types decreased to varying degrees [30]. - By fund type, the bond holding scales of pure bond funds and hybrid primary bond funds decreased, while that of hybrid secondary bond funds increased [33]. 3. Analysis of Heavy - Held Credit Bonds of Active Bond Funds 3.1 Urban Investment Bonds: Leading Increase in Holdings in Regions such as Jiangxi and Jiangsu - **Heavy - Held Region Analysis**: At the end of Q3 2025, the market value of heavy - held urban investment bonds by active bond funds was 76.841 billion yuan, a quarter - on - quarter increase of 4.344 billion yuan. Regions such as Zhejiang, Jiangsu, and Shandong had large heavy - held market values. Active bond funds increased their holdings in regions such as Jiangxi and Jiangsu and reduced their holdings in regions such as Guangdong and Sichuan [35]. - **Heavy - Held Subject Analysis**: At the end of Q3 2025, active bond funds mainly held high - rated urban investment subjects such as Hunan Expressway, Hanjiang State - owned Assets, and Tianjin Urban Construction. Subjects such as Jiangxi Communications Investment and Hanjiang State - owned Assets had leading increases in holdings [39]. 3.2 Industrial Bonds: Increasing Holdings in Transportation and Real Estate, Reducing Holdings in Petroleum and Petrochemicals and Non - bank Finance - **Heavy - Held Industry Analysis**: At the end of Q3 2025, the market value of heavy - held industrial bonds by active bond funds was 129.823 billion yuan, a quarter - on - quarter increase of 8.719 billion yuan. Industries such as non - bank finance, public utilities, and transportation had large holding scales. Active bond funds increased their holdings in industries such as transportation and real estate and reduced their holdings in industries such as petroleum and petrochemicals and non - bank finance [41]. - **Heavy - Held Subject Analysis**: At the end of Q3 2025, active bond funds mainly held AAA - rated central and state - owned enterprises such as Central Huijin, State Grid, and China Guoxin. Subjects such as State Power Investment, China Chengtong, and Beijing Capital Tourism Group had leading increases in holdings [44]. 3.3 Financial Bonds: Leading Reduction in Holdings of Commercial Bank Tier 2 Capital Bonds - **Heavy - Held Variety Analysis**: At the end of Q3 2025, the market value of heavy - held financial bonds by active bond funds was 553.951 billion yuan, a quarter - on - quarter decrease of 21.666 billion yuan. Ordinary commercial financial bonds and commercial bank tier 2 capital bonds accounted for the main scale. Active bond funds increased their holdings of ordinary commercial financial bonds and TLAC bonds and reduced their holdings of sub - debt, perpetual bonds, and tier 2 capital bonds [46]. - **Heavy - Held Subject Analysis**: At the end of Q3 2025, active bond funds mainly held large state - owned banks and joint - stock banks such as Bank of China, China Construction Bank, and China Everbright Bank. Subjects such as Shanghai Bank, Huatai Securities, and Ping An Bank had leading increases in holdings [49].

Core Viewpoint - Starting from October 9, the margin trading rates for certain stocks have been adjusted to zero, indicating a significant change in the trading conditions for investors holding these stocks [1] Group 1: Company Specifics - The margin trading rate for SMIC (中芯国际) has been adjusted from 0.7 to 0 [1] - The margin trading rate for BAW Storage (佰维存储) has been adjusted from 0.5 to 0 [1]

Group 1 - The credit bond market has seen a predominance of upgrades in credit ratings, with 83 upgrades and only 9 downgrades as of September 19, 2025, indicating a continued reduction in credit risk [1][10][18] - The majority of upgrades have been by one level, with 95.18% of upgrades being one level up, and only one case of a four-level upgrade [10][13] - The most frequent upgrade was from AA+ to AAA, with 48 instances, reflecting a favorable credit environment [2][18] Group 2 - In the urban investment bond sector, the majority of rating adjustments have been upward, with 25 upgrades and only 5 downgrades, primarily concentrated in county-level platforms [21][25] - The downgrades in urban investment bonds were mainly located in Yunnan and Guizhou, with 4 out of 5 downgrades occurring in these regions [25][27] - The distribution of upgrades shows that regions with lighter debt burdens and better economic conditions, such as Hunan and Zhejiang, have seen significant upgrades [25][27] Group 3 - The industrial bond sector has also experienced a positive trend, with 52 upgrades and only 4 downgrades, indicating a significant improvement in the credit quality of companies, particularly in real estate and retail [28][30] - The majority of upgrades in the industrial sector were from state-owned enterprises, with 42 upgrades from local state-owned enterprises [28][30] - The downgrades were primarily in the non-bank financial, construction, and coal industries, suggesting sector-specific challenges [30][32] Group 4 - In the financial bond sector, there have been no downgrades, with all 6 rating adjustments being upgrades, primarily among city commercial banks [3][34] - The notable upgrades include HanKou Bank, which was upgraded from AA+ to AAA, reflecting improved creditworthiness [3][34][35] - The overall trend in financial bonds indicates a recognition of the credit quality of city commercial banks [3][34] Group 5 - The service consumption market and light industry are developing in tandem, with policies aimed at enhancing supply-demand compatibility and expanding service consumption [36][50] - The government is focusing on improving service quality and expanding the scale of service consumption, particularly in areas like dining and accommodation [50][41] - The light industry is expected to play a significant role in stabilizing growth and promoting consumption, with initiatives to support high-quality supply [36][50]

Market Overview - A-shares continue to rise, with major indices reaching new highs, particularly in technology growth sectors like communications and electronics [1] - Industry leaders are achieving historical stock price highs, indicating strong market performance [1] Future Market Outlook - Analysts predict that the realization of profit improvement expectations will be the main driver for the next phase of market trends [1][4] - Investment strategies should focus on sectors with genuine profit realization or strong industrial trends, such as resource stocks, innovative pharmaceuticals, gaming, and military industries [4][5] Regulatory Developments - The China Securities Regulatory Commission (CSRC) is enhancing the classification and evaluation system for securities companies to promote high-quality development and support differentiated growth for small and medium-sized institutions [2] Investment Recommendations - Citic Securities suggests focusing on sectors with real profit realization and strong industrial trends, highlighting opportunities in resource stocks, innovative pharmaceuticals, gaming, and military sectors [4] - Guojin Securities recommends three main investment lines: industrial metals (copper, aluminum, steel), insurance and brokerage, and food and beverage, as well as power equipment [5] - Industrial metals are expected to maintain an upward trend, supported by historical data showing a reverse correlation with the US dollar index [8] Sector Insights - The robotics sector is poised for a new round of growth driven by policy support, accelerated technological iteration, and successful implementation in various scenarios [8] - Many industries are currently trading at price-to-earnings ratios below the 50th percentile of the past 15 years, indicating potential investment opportunities [7]

Group 1 - The article highlights the performance of various industries year-to-date, with the non-ferrous metals sector leading with a gain of 36.96% [2] - The communication industry follows closely with a 36.57% increase, while machinery equipment and pharmaceutical biotechnology sectors also show strong performance with gains of 27.45% and 26.35% respectively [2] - In contrast, the coal industry has experienced the largest decline at -7.61%, followed by the food and beverage sector at -5.60% [2] Group 2 - The article mentions the formation of a MACD golden cross signal, indicating a potential bullish trend for certain stocks [3]

Report Industry Investment Rating - The report is optimistic about the investment value of the non - banking financial sector, believing it can enjoy both Beta and Alpha [4]. Core Viewpoints of the Report - Policy interpretation: Since 2022, reform measures for public funds have been gradually implemented, focusing on fees, assessment, and compensation. Future reforms are expected to be fully rolled out in the next three years. Floating fees will expand coverage, and fee reform phases are about to be implemented. Benchmark constraints and assessment will influence industry allocation and investment focus [4]. - Impact on public funds: The industry pattern will be optimized, with benchmark constraints potentially forcing active equity funds to become "quasi - passive". Investment research will first follow the benchmark and then pursue excess returns. Passive products will continue to develop, and channels, talent, and back - end operations will face corresponding adjustments [4]. - Impact on securities companies: The profit contribution of publicly - held funds by securities companies will show greater differentiation, and the advantage of securities companies in selling equity index funds will expand [4]. - Investment analysis opinion: The non - banking financial sector is a sector that can enjoy both Beta and Alpha, and its investment value is promising [4]. Summary by Relevant Catalogs 1. Policy Interpretation: Promote the High - quality Development of the Public Fund Industry in Multiple Dimensions - Regulatory roadmap: Since 2022, the roadmap and schedule for the high - quality development of public funds have become clearer. Reforms started with fee reduction and are now being comprehensively rolled out. The "Action Plan" covers aspects not implemented in the 2022 "Opinions" [8][10][12]. - Comparison of 2022 and 2025 reform requirements: The 2025 requirements are more detailed and quantitative, covering aspects such as overall requirements, differentiated development, long - term incentive constraints, and product innovation [13]. - Key points of the "Action Plan": It includes establishing a floating management fee mechanism, reducing investor costs, increasing the scale and proportion of equity investment, establishing a performance - based assessment system, strengthening regulatory classification evaluation, and enhancing compensation management [14][15][16][18][19][20]. - Reasons for the "Three - Year Goal": Investor risk preferences have declined, leading to a slowdown in the growth of public funds, especially new equity funds. The "Long - term Capital Market Entry" has set a 10% quantitative requirement for public fund capital entry [27][25]. - Fee reform: It aims to establish a floating fee mechanism linked to performance and reduce investment costs. It also expands the scope of fee reduction and promotes the development of floating - rate funds [31][32][36]. - Differentiated competition: Fee reduction and classification supervision will optimize the industry pattern, benefiting public funds strong in equity and index products [44][48]. - Benchmark constraints and long - term assessment: In the short term, industry allocation will be adjusted; in the long term, the focus will return to fundamental research, and turnover will decrease [49][50]. - Product innovation: The development of equity and fixed - income + products will be promoted to meet market demand [53][57]. - Research and investment capabilities: The co - management model may become the future development trend of the industry [58]. 2. Impact on Public Funds: Analysis from Research and Investment, Products, Channels, Talent, and Back - end Operations - Research and investment: Benchmark constraints may force active equity funds to become "quasi - passive". The co - management model may be adopted to improve research and investment capabilities [63][58]. - Products: The passive trend will continue, and equity index products and fixed - income + products will have development opportunities [69][74]. - Channels: Public funds should strengthen self - sales and investment advisory channels to reduce dependence on代销 channels. The combination of fund investment advisory and direct sales platforms may bring opportunities for large public funds to enter the wealth management market [78][84]. - Talent: For researchers, the "department wall" between research and investment should be broken; for fund managers, hierarchical management should be implemented [90][93]. - Back - end operations: Fee reduction will raise the break - even point, and financial technology may be an effective means to cope with fee reduction in the short term [94][95]. 3. Impact on Securities Companies: Analysis from Public Fund Business, Sales, and Allocation - Public fund business: The "Action Plan" will directly impact the income of publicly - held funds by securities companies, potentially compressing their profit contribution in the short term [102]. - Sales: The similar classification evaluation mechanism will benefit securities companies' sales, and they will maintain their advantage in selling equity index funds [106]. - Allocation: Securities companies should strengthen research on high - weight benchmark targets and explore non - public fund customers [4]. 4. Investment Analysis Opinion - The non - banking financial sector can enjoy both Beta and Alpha, and its investment value is promising. The Beta logic lies in the promotion of the transformation of household savings into investments and the entry of long - term funds into the market. The Alpha logic is that the non - banking financial sector is under - allocated and has low valuations [4].

Report Summary 1. Market Overview - The Shanghai Composite Index rose 1.04% to close at 3455.97, the Shenzhen Component Index rose 1.72% to close at 10393.72, and the ChiNext Index rose 3.11% to close at 2128.39. The total trading volume of A-shares in the two markets was 1639.7 billion yuan. The top-performing sectors were non-bank finance (4.46%), national defense and military industry (3.36%), and computer (2.99%), while the bottom-performing sectors were coal (-1.00%), petroleum and petrochemical (-0.57%), and transportation (-0.21%) [2][6] 2. Stock ETFs - The top trading volume stock ETFs were Huatai-PineBridge CSI 300 ETF (up 1.65%, discount rate 1.59%), Cathay CSI All-Securities Company ETF (up 5.37%, discount rate 5.36%), and ChinaAMC SSE STAR Market 50 ETF (up 1.85%, discount rate 1.79%) [3][7] 3. Bond ETFs - The top trading volume bond ETFs were ChinaAMC SSE Benchmark Market-Making Corporate Bond ETF (down 0.01%, discount rate 0.03%), Haitong CSI Short-Term Financing Bond ETF (down 0.01%, discount rate -0.02%), and Bosera Shenzhen Benchmark Market-Making Credit Bond ETF (down 0.03%, discount rate 0.02%) [4][9] 4. Gold ETFs - Gold AU9999 rose 0.34% and Shanghai Gold rose 0.26%. The top trading volume gold ETFs were HuaAn Gold ETF (up 0.27%, discount rate 0.28%), E Fund Gold ETF (up 0.21%, discount rate 0.25%), and Bosera Gold ETF (up 0.23%, discount rate 0.31%) [12] 5. Commodity Futures ETFs - ChinaAMC Feed Soybean Meal Futures ETF fell 1.32% with a discount rate of -1.20%, CCB E Fund YiSheng Zhengzhou Commodity Exchange Energy and Chemical Futures ETF rose 0.45% with a discount rate of -0.86%, and Dacheng Nonferrous Metals Futures ETF rose 0.30% with a discount rate of 0.46% [13][14] 6. Cross-Border ETFs - The previous trading day, the Dow Jones Industrial Average rose 1.19%, the Nasdaq Composite rose 1.43%, the S&P 500 rose 1.11%, and the German DAX rose 1.60%. Today, the Hang Seng Index rose 1.23% and the Hang Seng China Enterprises Index rose 1.15%. The top trading volume cross-border ETFs were E Fund CSI Hong Kong Securities Investment Theme ETF (up 8.51%, discount rate 8.63%), GF CSI Hong Kong Innovative Drug ETF (up 0.69%, discount rate 0.53%), and ChinaAMC Hang Seng Tech ETF (up 1.26%, discount rate 1.54%) [15] 7. Money Market ETFs - The top trading volume money market ETFs were Silver HuaRiLi ETF, Huabao TianYi ETF, and CCB TianYi Money Market ETF [17][18]

Group 1: Bond Market Tracking - The report discusses the liquidity in the interbank market, indicating trends and fluctuations in available cash [4] - It also covers the offshore RMB exchange rate, providing insights into its performance against other currencies [6] - The report analyzes government bond yields, highlighting changes and their implications for investors [8] Group 2: Stock Market Tracking - The report examines the flow of broad-based ETFs, indicating investor sentiment and market trends [12] - It provides detailed analysis on major indices such as the Shanghai Composite Index (SSE 50), with performance metrics and trends [12] - The report includes insights on the CSI 300, CSI 500, and other indices, detailing their movements and market implications [14][16][19] Group 3: Industry-Specific Insights - The report highlights the flow of industry-specific ETFs, indicating sector performance and investor interest [25] - It discusses the gold spot market, analyzing price movements and market dynamics [28] - The report provides insights into the artificial intelligence sector, discussing growth potential and investment opportunities [31] - It covers the Hong Kong internet sector, detailing market trends and key players [33] - The report analyzes the biopharmaceutical industry, highlighting growth drivers and investment risks [36] - It also discusses the photovoltaic and new energy vehicle sectors, emphasizing their growth trajectories and market challenges [42][44] - The report includes insights into the home appliance industry, discussing market trends and consumer behavior [46]

Core Viewpoint - The China Securities Index for non-bank financial themes has shown a mixed performance, with a recent increase of 3.63% but a decline of 11.34% over the past month [1][2]. Group 1: Index Performance - The China Securities Index for non-bank financial themes closed at 2875.01 points with a trading volume of 14.822 billion yuan [1]. - Year-to-date, the index has decreased by 4.54%, while it has increased by 4.16% over the last three months [1]. Group 2: Index Composition - The index comprises up to 50 listed companies that meet the non-bank financial theme criteria, reflecting the overall performance of this sector within the Hong Kong Stock Connect [1][2]. - The top ten weighted companies in the index include Hong Kong Exchanges (17.3%), China Ping An (14.56%), and AIA Group (14.48%) [1]. Group 3: Sector Breakdown - The index's sample composition shows that insurance accounts for 64.72%, other capital markets for 21.81%, and securities companies for 12.10% [2]. - Other financial services and consumer credit represent a minimal portion of the index, at 1.19% and 0.19% respectively [2]. Group 4: Sample Adjustment Mechanism - The index samples are adjusted biannually, with changes implemented on the next trading day following the second Friday of June and December [2]. - In special circumstances, temporary adjustments may occur, such as when a sample company is delisted or when new companies meet the criteria for inclusion [2].