Group 1 - The Ministry of Industry and Information Technology has issued guidelines for the construction of high-standard digital parks, emphasizing the need to enhance digital infrastructure, including the upgrade of network infrastructure and the promotion of 5G and high-speed optical networks [1] - The guidelines advocate for optimizing computing power infrastructure, aiming to improve the efficiency of computing resource utilization through a balanced approach to various computing applications [1] - Huaxi Securities suggests focusing on the domestic computing power industry chain, highlighting the increasing attention on domestic computing and AI applications following the strong growth of Alibaba Cloud and the launch of Huawei's super node cluster products [1] Group 2 - CITIC Securities notes that since 2025, both Chinese and American tech stocks have performed well, with the computing power sector leading market gains and opportunities emerging in models and applications [2] - Looking ahead to 2026, the domestic computing power sector is expected to thrive, with performance elasticity and investment certainty, potentially replicating the long bull market seen in US stocks since 2023 [2] - The urgency for domestic alternatives in semiconductor equipment and AI chips has increased due to overseas restrictions, and domestic chip manufacturers are exploring solutions like super nodes to overcome performance limitations [2]

Core Viewpoint - The artificial intelligence sector is experiencing increased attention and investment, driven by significant growth in domestic computing power and AI applications, particularly following the performance of Alibaba Cloud and Huawei's new product launch [1] Group 1: Market Performance - The CSI Artificial Intelligence Theme Index fell by 2.2% and the Shanghai Stock Exchange Sci-Tech Innovation Board AI Index decreased by 1.6% as of midday closing [1] - The AI ETF (159819) saw a net subscription of 40 million units in the morning session [1] Group 2: Industry Developments - Huaxi Securities noted that since the third quarter, there has been a rise in focus on domestic computing power and AI applications due to Alibaba Cloud's better-than-expected growth and Huawei's launch of super node cluster products [1] - The successful IPO of Moole Technology is expected to accelerate the scale and penetration of domestic AI computing power and applications [1] Group 3: Future Outlook - There is an optimistic outlook for the domestic computing power market, driven by advanced manufacturing processes and architectural upgrades, which are anticipated to enhance the overall level of domestic computing power [1] - The continuous improvement in domestic computing power share is expected as a result of these advancements [1]

Market Performance - The three major A-share indices collectively rose during the week of October 27 to October 31, with the Shanghai Composite Index increasing by 0.11% to close at 3954.79 points, the Shenzhen Component Index rising by 0.67% to 13378.21 points, and the ChiNext Index gaining 0.50% to 3187.53 points [2][3] - Approximately 52% of stocks experienced gains during the week, with 142 stocks rising over 15% and 15 stocks declining over 15% [2] Sector Performance - The leading sectors in terms of growth included electric power equipment, non-ferrous metals, steel, and basic chemicals, while sectors such as telecommunications, beauty care, banking, and electronics saw declines [2] International Market Overview - In the U.S. market, the three major indices also saw increases on October 31, with the Dow Jones Industrial Average rising by 0.09% to 47562.87 points, the S&P 500 increasing by 0.26% to 6840.20 points, and the Nasdaq Composite gaining 0.61% to 23724.96 points [4][5] - Conversely, European indices experienced declines, with the FTSE 100 down by 0.44%, the CAC 40 down by 0.44%, and the DAX down by 0.67% [4] Commodity Prices - International oil prices saw a slight increase, with light crude oil futures for December delivery rising by $0.41 to $60.98 per barrel, and Brent crude oil futures increasing by $0.07 to $65.07 per barrel [4] Economic Policies and Developments - The Chinese Ministry of Foreign Affairs emphasized the mutually beneficial nature of China-U.S. economic relations, highlighting discussions between the two countries' leaders aimed at enhancing cooperation [6] - The State Council of China, led by Premier Li Qiang, held a meeting to discuss deepening reforms in key areas and expanding institutional openness, focusing on aligning with international high-standard economic and trade rules [7] - The Ministry of Finance and the State Taxation Administration announced tax policies regarding gold transactions, aiming to support the gold market amid global economic shifts [8] Investment Opportunities - The low-altitude economy is projected to see commercial operations for manned travel by 2030, presenting potential investment opportunities in this emerging sector [10][11] - The solid-state battery market is expected to grow significantly, with production validation phases anticipated to complete by 2025, driven by new applications in low-altitude travel, robotics, and AI [12]

Core Insights - The National Development and Reform Commission (NDRC) highlights existing issues in China's computing power infrastructure, including small and scattered facilities and low efficiency of outdated equipment, indicating significant room for improvement in energy-saving and carbon reduction efforts [1] - First Shanghai Securities expresses optimism about the sustained high growth in computing power demand driven by AI applications, noting that both domestic and international AI applications are reaching a commercialization turning point [1] - Huaxi Securities recommends focusing on the domestic computing power industry chain, citing the unexpected growth of Alibaba Cloud and the launch of Huawei's super node cluster products as factors increasing attention on domestic computing power and AI applications [1] Industry Developments - The NDRC plans to prioritize the large-scale, intensive, and green development of computing power infrastructure, aiming to enhance efficiency through optimized construction layouts [1] - Domestic computing power capacity bottlenecks are expected to be broken through by 2026, with a significant increase in domestic chip production anticipated [1] - The acceleration of commercialization by overseas AI giants like OpenAI is expected to maintain high demand for computing hardware [1] Market Trends - The recent IPO approval of Moore Threads is expected to accelerate the scale and penetration of domestic AI computing power and applications [1] - The overall domestic computing power level is anticipated to improve due to advancements in manufacturing processes and chip architecture upgrades, which may lead to an increase in domestic market share [1]

Core Viewpoint - The Ministry of Industry and Information Technology is soliciting opinions on the "Guidelines for the Construction of Computing Power Standard System (2025 Edition)", aiming to revise and establish over 50 standards by 2027 to promote the development of the computing power standard system [1] Group 1: Industry Outlook - The demand for computing power driven by AI applications is expected to continue its high growth, with a significant commercialization moment for AI applications both domestically and internationally [1] - The domestic computing power capacity bottleneck is anticipated to be broken, with a forecast of substantial production of domestic chips by 2026 [1] - The acceleration of commercialization by overseas AI giants like OpenAI is expected to maintain high demand for computing hardware [1] Group 2: Investment Recommendations - Current market conditions suggest a focus on the domestic computing power industry chain, with notable growth from Alibaba Cloud and Huawei's new products [1] - The successful IPO of Moore Threads is expected to enhance the scale and penetration of domestic AI computing power, with advancements in manufacturing processes and chip architecture likely to boost overall domestic computing power levels [1] - The global AI sector is projected to maintain high activity levels through 2025, with significant investments from leading companies like Oracle and Google, and an increase in the shipment ratio of ASICs [2]

Group 1: Policy Developments - The Ministry of Industry and Information Technology (MIIT) announced a special action plan to accelerate the deployment of high-performance networks between computing power centers, aiming for a 50% deployment rate of 400Gbps and above by 2027 [1] - A joint implementation plan from seven departments emphasizes the construction of new information infrastructure and the integration of "5G + industrial internet," promoting the layout of computing power infrastructure [2] - The National Development and Reform Commission (NDRC) highlighted the "East Data West Computing" project, focusing on the deployment of computing power resources and the establishment of a unified national computing network [2] Group 2: Market Trends and Opportunities - The domestic AI computing power ecosystem is evolving, with over 90% of server bids won by domestic suppliers during the recent procurement period [3] - The report from Huaxi Securities suggests a focus on the domestic computing power industry chain, with significant growth in AI applications and computing power capabilities [3] - Companies like Weichai Power reported a 491% year-on-year increase in data center product sales, indicating a new growth point in their business [5] Group 3: Company Developments - ZTE Corporation is enhancing its data center capabilities to meet the growing demand for computing power, leveraging self-developed temperature control products to optimize energy efficiency [5] - Zhonggan Communication, known as the "first stock of computing power infrastructure" in Hong Kong, has established stable business relationships with major telecom operators in China [6] - China Telecom's Tianyi Cloud has developed an integrated intelligent computing service platform that addresses computing power scheduling challenges, utilizing a high-bandwidth network system [6]

Investment Rating - Industry rating: Recommended [5] Core Viewpoints - The overseas AI-related heat continues, with OpenAI partnering with AMD to deploy up to 6GW of AMD Instinct GPUs over the next few years, with the first batch of 1GW expected to be operational by 2026 [2][7] - The capital market shows strong enthusiasm for AI-related transactions, as evidenced by AMD's average increase of 30% [3][8] - Domestic AI applications are expected to accelerate breakthroughs, with a focus on the domestic computing power industry chain [3][9] Summary by Sections 1. Overseas AI Developments - OpenAI has launched the Sora 2 model, which features intelligent synchronization of audio and visuals, and has announced a significant increase in active users and API usage [2][8] - Samsung and SK Group have entered into a partnership with OpenAI to supply DRAM and HBM wafers for AI data centers [3][9] 2. Investment Recommendations - Focus on the domestic computing power industry chain, with notable growth from Alibaba Cloud and Huawei's super node cluster products [3][9] - Key beneficiaries include companies like Cambricon, Moore Threads, and SMIC, as well as those involved in advanced process manufacturing and chip architecture upgrades [3][9][11] - Recommendations extend to companies in the switch, optical device, PCB, and other related sectors, such as ZTE, Unisoc, and Longfly Fiber Optics [3][11] 3. Communication Sector Insights - Emphasis on two main areas: Beidou and satellite applications, and AI computing power [12] - Recommended companies include major telecom operators and equipment manufacturers, as well as third-party computing power leasing firms [12][14]