Market Commentary - The market is experiencing a significant rise, with the Shanghai Composite Index up by 1.36% and the ChiNext Index up by 3.02% on October 21, 2025, supported by a trading volume of 1.89 trillion yuan, an 8% increase from the previous trading day [3] - Most industries are seeing gains, particularly in telecommunications (up 4.89%), electronics (up 3.21%), and real estate (up 2.26%), while coal is the only sector declining (down 1.05%) [3] Key Insights - The expectation of interest rate cuts is increasing, with several small and medium-sized banks lowering deposit rates, indicating a potential for further monetary easing by the central bank in the fourth quarter [3] - The demand for optical modules is expected to continue growing, with Nvidia raising its shipment expectations for the new AI chip Vera Rubin, leading to significant stock price increases for key players in the optical module sector [3] - State media has published articles emphasizing that stabilizing the stock market can enhance consumer confidence and spending, which is expected to positively impact market sentiment [4] Growth Cycle Analysis - Historical data suggests that the current healthy adjustment phase in the growth industry cycle is nearing its end, typically lasting 1-2 months with maximum adjustments of 15-20% [5] - The upcoming release of Q3 earnings reports and potential high-level meetings between the US and China are seen as critical events that could validate the market's transition into a new performance-driven phase [5][7] - The report identifies two main investment themes: the ongoing growth cycle in AI infrastructure and sectors with strong performance support, such as power equipment and non-ferrous metals [7][8] Investment Strategy - The report suggests that the current period is an optimal time to position for the next phase of growth, with a focus on sectors like AI computing infrastructure, robotics, and military technology [7] - The second key investment theme includes sectors with robust support, such as power equipment benefiting from wind energy and storage demand, and non-ferrous metals like rare earths, which are resilient amid changing US-China relations [8]