Galaxy Securities released a research report stating that the current technology sector continues to adjust, with some thematic rebounds observed last week, though sustainability remains weak. The market is expected to remain volatile, presenting post-adjustment allocation opportunities. Investors are advised to focus on anti-involution and dividend themes amid sector rotation, while technology sectors should watch for catch-up segments and industrial catalysts.
Key investment themes include: (1) **Anti-Involution**: Comprehensive measures are being taken to curb "involution-style" competition. Anti-involution has become a key macro-control tool, enhancing the medium-to-long-term investment value of related sectors. (2) **New Quality Productivity**: Companies aligned with national strategies and possessing genuine technological barriers will be a major investment focus in A-shares. (3) **Consumption Sector**: As a critical component of domestic demand, consumption is vital for economic stability. Service consumption and new consumption segments warrant close attention. (4) **"Dual Key" Projects**: Infrastructure development will drive industrial chain improvements, benefiting companies through order growth and earnings realization.
**Last Week’s Market Performance**: (1) From November 3 to November 7, A-shares showed upward volatility, with major broad-based indices mostly rising. The All-Share Index gained 0.63%, while the Shanghai Composite Index rose over 1%. The SSE 50, CSI 300, and ChiNext indices also outperformed, though the BSE 50 fell 3.79%. (2) In terms of style, large-cap stocks led, with the CSI 300 (+0.82%) outperforming the CSI 1000 (+0.47%). Cyclical and stable sectors rose 1.85%, while financial and growth sectors also advanced. Consumption declined 0.70%. (3) Sector-wise, power equipment, coal, and petrochemicals topped gains, while beauty care, computers, and healthcare lagged.
**Fund Flows**: (1) Trading activity cooled, with average daily turnover dropping to ¥2.01 trillion, down ¥312.99 billion week-on-week. The daily turnover rate fell 0.06 percentage points to 1.8621%. (2) Northbound capital averaged ¥243.48 billion daily, down ¥29.38 billion. Margin lending stood at ¥2.50 trillion as of Thursday, up ¥12.56 billion. (3) Forty-one new funds launched last week, raising ¥26.5 billion, including ¥21.84 billion in equity funds (82.4% share).
**Valuation Trends**: The All-Share Index’s P/E (TTM) rose 0.86% to 22.20x, at the 89.19% percentile since 2010. P/B (LF) climbed 0.85% to 1.82x, at the 49.83% percentile. The equity-bond yield spread was 2.6893%, near the 3-year rolling average (3.3507%) minus 1.38 standard deviations.
**Outlook**: The technology sector’s adjustment persists, with thematic rebounds lacking sustainability. Volatility is expected to dominate, offering allocation opportunities post-correction. Amid policy and earnings lulls, rapid sector rotation may continue, with grid equipment, lithium batteries, and chemicals reflecting the anti-involution theme. Price recovery logic is bolstering mid-term growth expectations.
Q3 earnings demonstrated corporate resilience, with structural highlights. The upcoming 15th Five-Year Plan emphasizes high-quality development and technological self-reliance, calling for improved macroeconomic governance. As policies clarify, anti-involution sectors and tech trends will validate performance, sustaining A-shares’ long-term upward trajectory.
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