October is generally seen as a hopeful start by most investors. In the last week of September, under significant positive developments such as the strong statements from the "one line, one bureau, and one meeting," and important decisions from the Politburo meeting, the A-share market experienced a long-awaited celebration.

On September 24th, the A-share market saw a significant volume increase and a sharp rise throughout the day, with all three major indices increasing by more than 4%. The Shanghai Composite Index recorded its largest single-day gain since July 6, 2020. Stocks showed a general upward trend, with a total of 5,167 stocks rising and 98 hitting the upper limit.

On September 27th, the exchange's order surge even triggered a temporary trading congestion, with the ChiNext board surging by 11.87% at one point, setting a record for the largest intraday gain in history.

On September 30th, the last trading day before the holiday, the A-share market's celebration continued, with the Shanghai Composite Index rising by 8.06% to reclaim the 3,300 point mark. The ChiNext Index, STAR 50, and Beijing Stock Exchange 50 all set historical records for the largest gains.

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Ultimately, the Shanghai Composite Index closed at 3,336.50 points, with a monthly increase of 17.39%; the Shenzhen Component Index closed at 10,529.76 points, with a monthly increase of 26.13%; the ChiNext Index closed at 2,175.09 points, with a monthly increase of 37.62%.

During the "Eleventh" holiday, the A-share market was closed, but the Hong Kong stock index soared, and U.S.-listed Chinese stocks raced ahead, with many foreign investors raising their ratings for the Chinese stock market.

On October 8th, the first trading day after the holiday, within just 20 minutes after the A-share market opened, the trading volume of both markets broke through one trillion. By the close, the Shanghai Composite Index rose by 4.59%, closing at 3,489.78 points; the Shenzhen Component Index rose by 9.17%; the ChiNext board surged by 17.25%.

In terms of economic data, the official manufacturing PMI for September was 49.8, an increase of 0.7 percentage points from the previous month, marking the first rise in five months and also higher than the market's expected 49.1, indicating that the overall expansion of domestic enterprises' production and business activities has accelerated. The official non-manufacturing PMI for the month was 50, with the previous value at 50.3.

On the policy front, specifically:On September 8th, the National Development and Reform Commission and the Ministry of Commerce issued the "Special Administrative Measures for the Access of Foreign Investment (Negative List) (2024 Edition)". After the revision, the number of restrictive measures in the "Negative List" was reduced from 31 to 29, and the restrictions on foreign investment access in the manufacturing sector were "zeroed out", marking a new progress in high-level opening up to the outside world.

On September 10th, the Financial Regulatory Authority issued the "Notice on Promoting Non-Bank Financial Institutions to Support Large-Scale Equipment Updates and Consumer Goods Exchange for the Old". From three aspects: increasing financial support, optimizing internal management systems and mechanisms, and increasing regulatory policy support, it encourages non-bank institutions to support large-scale equipment updates and consumer goods exchange for the old.

On September 18th, the State Council's executive meeting studied measures to promote the development of venture capital. The meeting pointed out that venture capital is related to scientific and technological innovation, industrial upgrading, and high-quality development. It is necessary to quickly unblock the blockages and bottlenecks in the "raising, investing, managing, and exiting" links, support qualified technology-based enterprises to go public domestically and abroad, vigorously develop equity transfer and merger and acquisition markets, promote the pilot of physical distribution of stocks, encourage social capital to set up market-oriented merger and acquisition mother funds or secondary market funds for venture capital, and promote a virtuous cycle in the venture capital industry; it is necessary to consolidate the institutional foundation for the healthy development of venture capital, implement key measures of capital market reform, improve the functions of the capital market, and further stimulate the vitality of the venture capital market.

On the morning of September 24th, the State Council Information Office held a press conference, where the main leaders of the People's Bank of China, the Financial Regulatory Authority, and the China Securities Regulatory Commission introduced the situation of financial support for high-quality economic development and announced a series of incremental policy measures.

At the meeting, the People's Bank of China announced a package of monetary policies, mainly including reserve requirement ratio reduction, interest rate reduction; lowering the interest rates of existing housing loans; unifying the minimum down payment ratio for the first and second housing loans; extending the term of two real estate financial policy documents; optimizing the re-lending policy for affordable housing; supporting the acquisition of existing land by real estate companies; creating swaps for securities, funds, and insurance companies; and creating special re-lending for stock buybacks and increases.

The Financial Regulatory Authority announced that the upcoming policies include increasing core tier-one capital for six large commercial banks; appropriately relaxing the restrictions on the amount and proportion of equity investments by financial asset investment companies; optimizing the policy of loan renewal without principal repayment for small and micro enterprises; and supporting other qualified insurance institutions to set up private securities investment funds.

The China Securities Regulatory Commission announced that it will issue the "Guiding Opinions on Promoting Long-Term Capital into the Market" in the near future; study and formulate six measures to promote mergers and acquisitions; and will soon publicly solicit opinions on the guidelines for market value management.

Subsequently, on the evening of September 24th, the China Securities Regulatory Commission issued the "Opinions on Deepening the Reform of the Merger and Acquisition Market of Listed Companies" (i.e., "M&A Six Articles"), clearly supporting cross-industry mergers and acquisitions, allowing mergers and acquisitions of unprofitable assets, and encouraging private equity funds to participate in the mergers and acquisitions of listed companies.

On September 26th, the Political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation and deploy the next economic work. The meeting emphasized the need to strive to boost the capital market, vigorously guide long-term funds into the market, and unblock the capital market for social security, insurance, and financial management; support the mergers and acquisitions of listed companies, steadily promote the reform of public funds, and study and introduce policy measures to protect small and medium investors.

On the same day, the Central Financial Office and the China Securities Regulatory Commission jointly issued the "Guiding Opinions on Promoting Long-Term Capital into the Market", focusing on three aspects to promote long-term capital into the capital market: first, building and cultivating a capital market ecosystem that encourages long-term investment; second, vigorously developing equity public funds and supporting the stable development of private securities investment funds; third, focusing on improving the supporting policy system for various long-term capital to enter the market.The Politburo of the CPC Central Committee proposed, "It is necessary to reduce the reserve requirement ratio and implement a forceful interest rate cut." On September 27th, the central bank simultaneously issued announcements for reserve requirement ratio reduction and interest rate cuts, deciding to lower the reserve requirement ratio for financial institutions by 0.5 percentage points starting from that day (excluding financial institutions that have already implemented a 5% reserve requirement ratio); the open market 7-day reverse repurchase operation interest rate was adjusted from the previous 1.70% to 1.50%, a decrease of 0.2 percentage points.

On September 29th, the Ministry of Housing and Urban-Rural Development held a leadership group meeting, emphasizing the full effort to promote the real estate market to stop falling and stabilize. It is necessary to respond to public concerns and support cities, especially first-tier cities, to make good use of the autonomy in real estate market regulation, adjust housing purchase restrictions according to local conditions; it is also necessary to strictly control the increase in commercial housing construction, optimize the existing stock, and improve quality. The role of the urban real estate financing coordination mechanism should be leveraged to increase the approval and distribution of loans for projects on the "white list," meet the reasonable financing needs of real estate projects, and win the battle to ensure the delivery of commercial housing projects.

On September 29th, the central bank and the Financial Regulatory General Administration issued a notice to optimize the minimum down payment ratio policy for personal housing loans. For resident families purchasing homes with loans, commercial personal housing loans will no longer distinguish between first and second homes, and the minimum down payment ratio will be unified to no less than 15%.

At the same time, the central bank announced that it allows changes to the加点幅度 of housing loan interest rates based on the LPR, and取消了 the restriction that the shortest repricing cycle for housing loan interest rates is one year.

During the National Day holiday, the real estate markets in many places have seen significant adjustments. Beijing, Shanghai, Guangzhou, and Shenzhen all issued new real estate policies, involving optimizing purchase restrictions, reducing down payment ratios, and lowering the VAT exemption years, among other aspects. In addition, recently, more than 10 provinces (autonomous regions, municipalities) such as Chongqing, Sichuan, Guangdong, Hubei, and Yunnan, and more than 50 cities including Wuhan, Nanchang, Hefei, and Guangyuan, have also introduced relevant policies.

On October 8th, the National Development and Reform Commission held a press conference to introduce the situation related to "systematically implementing a package of incremental policies to solidly promote the economy to move upwards structurally, and the development momentum to continue to improve." The key points include: the state is intensifying the introduction of a package of incremental policies, increasing the counter-cyclical adjustment of macro policies, expanding domestic effective demand, increasing the intensity of helping enterprises, promoting the real estate market to stop falling and stabilize, and boosting the capital market; relevant departments will take strong and effective comprehensive measures, vigorously guide medium and long-term funds into the market, unblock the capital market entry points for social security, insurance, and financial management, support mergers and acquisitions of listed companies, steadily promote the reform of public funds, and study and introduce policy measures to protect small and medium investors; use special bonds and other means to support the revitalization of idle land, accelerate the digestion of existing commercial housing, reduce the interest rates of existing mortgages, and urgently improve policies in land, finance, and finance to accelerate the construction of a new model for real estate development.

For the next market trend, under the expectation that the previous major policies will gradually take effect and subsequent policies will continue to intensify, most institutions are bullish. For example, BOC Securities believes that the current market bottom and policy bottom are clear; Shenwan Hongyuan believes that policy expectations have fully reversed, and economic optimism is also beginning to ferment, and it is expected that the market's policy effect on making money is still strong; CITIC Construction Investment believes that regardless of the long term, the current round of market trends, strategically, is an excellent opportunity to do more in the Chinese stock market in the next few years.

Of course, there are also views like those of SDIC Securities, which believe that the recent rapid bull market may briefly exist after the National Day holiday, but its sustainability is generally uncertain.

In terms of specific allocation, there is no phenomenon of many institutions unanimously promoting high dividend directions as in the past, and the scope of institutional recommendations has expanded. Among them, there is a certain commonality, including growth-type value stocks such as power equipment that have undergone significant valuation adjustments, benefited from policy support, and have third-quarter earnings expectations. In addition, the real estate chain and new quality productive forces that benefit from policy support and implementation are also worth paying attention to.

Investment has risks, and entering the market should be done with caution. The following content is for reference only.Shenwan Hongyuan: The Market's Profit Policy Effect Remains Strong

Strategic Viewpoint: In the short term, the continuous catalysis of monetary, fiscal, and capital market policies has led to a comprehensive reversal of policy expectations. Economic optimism is also beginning to ferment, causing market indices to quickly rise to new levels.

When the market evolves to the stage where economic optimism is fermenting, if expectations outrun reality, which has not yet caught up, market trends are bound to become dull. At that time, the rhythm of market increases may shift to a phase of strong fluctuations and sectoral theme rotation. Regardless, the market's profit effect after the holiday may still be strong.

In the medium to long term, with the establishment of the "policy bottom," the visibility of the "performance bottom" in 25H2 has significantly increased. The source of the "performance bottom" is the weak improvement in demand and the comprehensive decline in supply pressure. The "market bottom" may have already appeared, and the results of the US elections may affect the medium-term market trend.

Allocation Suggestions: Focus on cyclical + technology. Specifically: (1) Cyclical sectors to watch include the real estate chain, real estate stocks, as well as food, medical, non-ferrous metals, and coal; (2) The rotation of the technology market has already begun, with high elasticity in technology focusing on the STAR 50 and ChiNext 50; (3) During the sector rotation phase, pay attention to directions that may continue to improve in the second quarter and third quarter, such as power grid equipment, wind power equipment, and innovative drugs; pay attention to directions expected to have a turning point in 2025, such as power batteries and technology valuations; (4) The focus on high dividend stocks shifts to net-breaking high dividends using buybacks and increases in loans for market value management.

Golden Stock Portfolio: New China Life Insurance, Yilian Network, Alibaba-W (Hong Kong Stock), STO Express, Baofeng Energy, Binjiang Group, China Railway Group, China South Rail, AVIC Shenyang Aircraft, State Power Investment Corporation.

CITIC Construction Investment Securities: A Great Opportunity to Go Long on the Chinese Stock Market

Strategic Viewpoint: This round of the market is a rare market with all three factors of upward revision of profit expectations, decline in risk-free interest rates, and increase in risk preference, so it is not a simple oversold rebound, but a reversal. In fact, the increase in the Hong Kong stock index can generally be considered to confirm a bull market, and the A-share market under similar backgrounds and logic can be considered a bull market trend.

The strategic decision of this policy at the current point in time has reason to make the market re-examine the previous misunderstandings of the policy's bottom line and objectives, and it has significantly reduced the uncertainty of the Chinese market in the medium term. In other words, the pessimistic risk premium should be repaired, and valuations should be boosted.

The medium-term logic is clear, to fully revitalize the economy, end deflation, and once the bow is drawn, there is no turning back. Regardless of whether the long term is optimistic, cautious, or unclear, this round of the market, strategically, is a great opportunity to go long on the Chinese stock market in the coming years.Golden Stock Portfolio: Ruide New Materials, Wolong Nuclear Materials, Tige Pharmaceutical, Pingao Electric, Jiangling Motors, Guangri Shares, Hikvision, Central Control Technology, Foxconn Industrial Internet, Focus Media.

Everbright Securities: Policy Support Implementation, Market Performance Expected

Strategy Viewpoint: Recently, various policies have been continuously exerting force, and it is currently possible to actively take long positions. In the past few years, the communiqués from the Politburo meetings in September usually involve less extensive discussion on economic work, while the current new policy "combination punch" significantly exceeds the market's previous expectations, significantly enhancing investor confidence.

Under the positive stance of policies, it is expected that corresponding policies will continue to be introduced, and the benefits may not be fully exhausted, so it is still possible to actively take long positions at present.

Configuration Suggestions: Focus on bond-like assets + policy-related industries + risk preference improvement main line.

Firstly, the current capital market policies still focus on shareholder returns and promote the active entry of medium and long-term funds into the market, which may be beneficial to the market performance of bond-like assets that can provide stable returns.

Secondly, the implementation of policies in the coming period may be an important main line of market transactions, and it is recommended to focus on assets related to real estate infrastructure that are expected to benefit from policy implementation (baijiu, real estate, building materials).

In addition, the recovery of market risk preference will help with the valuation repair of growth sectors, and some stocks in the TMT sector may have bottom-up opportunities.

Golden Stock Portfolio: Puyuan Shares, CATL, Wuliangye, Yili Shares, Tiantan Biological, Gree Electric Appliances, Longxiang Technology, PetroChina, Luoyang Molybdenum, China Merchants Property.

Ping An Securities: Layout along the direction of policy support and industrial transformationStrategic Perspective: The recent intensification of policies aimed at stable growth, coupled with the continuous advancement of capital market reforms, is conducive to improving market expectations and promoting further market recovery.

Allocation Recommendations: Structurally, we continue to recommend positioning along the direction of policy support and industrial transformation, including new productive forces, high-end manufacturing and going global, state-owned enterprise reform, and corresponding industrial consolidation opportunities through mergers and acquisitions.

Golden Stock Portfolio: China Pacific Insurance, Orient Wealth, China National Nuclear Corporation, Zijin Mining Group, Great Wall Motor, Fuyao Glass, Midea Group, Kingsoft Office, North Microelectronics, and Nocebo Health Sciences - U.

Guotai Junan Securities: Blue Chips First, Then Growth

Strategic Perspective: Expectations are revised upwards to open up space, with heavyweight stocks setting the stage for growth to perform. Stock prices represent investors' expectations for the future. Loose financial policies and a proactive Politburo meeting imply a realistic analysis of the economic situation by policymakers, and an urgent shift in their attitudes towards economic policies and the capital market, which is key to the upward revision of expectations.

The logic of this round of stock market trends is not focused on a significant upward revision of economic expectations, but rather on the decline in risk-free interest rates driving the inflow of incremental funds, an improvement in investors' expectations for risk prospects, and an increase in risk appetite expectations. The trading characteristics reflect the pricing by optimists that pushes up stock prices.

After a short-term surge, the optimistic expectations for policy will continue to push up the stock market. Referring to the 2019 policy attitude shift, there is still some upward space for the Shanghai Composite valuation. Heavyweight stocks are filling in the pricing lowlands, and after trading volume increases, the stage is set for growth stocks to perform, with excess returns expected to shift towards growth stocks.

Allocation Recommendations: Subsequently, it is recommended to focus on sectors that benefit from the decline in risk-free interest rates and the improvement in risk appetite: (1) sustained trading volume increase + merger and acquisition expectations, recommend non-bank financials; (2) risk appetite improvement, focus on valuation elasticity, recommend computers/media; (3) stable 2025E expectations, growth stocks with significant valuation adjustments, recommend electronics/automotive/communications/electrical equipment (batteries)/pharmaceuticals, as well as some growth consumer goods.

Golden Stock Portfolio: Guolian Securities, Compass, Neusoft Power, Hengxuan Technology, Xin Yuan Micro, Wanda Film, Kedall, EVE Energy, Hengli Hydraulics, Yizumi, Ruihu Mould, Tencent Holdings, Bilian Life, Gujia Home Furnishings, Oriental Yuhong, Yingjia Gongjiu, China Duty Free, Aier Eye Hospital, Auspicious Airlines, Betani.

State Development & Investment Securities: The sustainability of a fast and sharp bull market is overall uncertain.Strategic Perspective: Fast and sharp market movements may briefly exist after the National Day holiday, but their sustainability is highly uncertain. Increased volatility is inevitable, and the inflection point of volume release will become an important cause and signal for the emergence of fluctuating market movements.

It is relatively appropriate to compare the current market situation to the beginning of 2019. Historically, based on the rebound after several double bottoms in recent years, the rebound space is around 10-30%, accompanied by the repair and improvement of fundamental expectations and the timely realization of profit bottom, then the larger the rebound space (at least above 15%), the better.

Configuration Suggestions: On the structural level, it is expected that risk appetite will remain high in October, creating a breeding ground for a large number of thematic investment opportunities, with a preference for small and medium-sized style, growth still outperforming value, and the Science and Technology Innovation Board Index and the CSI 1000 Index will become important configuration targets following the ChiNext Index and the Hang Seng Technology Index.

Golden Stock Portfolio: SMIC, Great Wall Motor, Midea Group, Shenzhen Technology, SMIC, New Continent, CITIC Securities, New China Life Insurance, Luzhou Laojiao, China Merchants Bank.

Tianfeng Securities: Seize the opportunity of increased volatility

Strategic Perspective: This Politburo meeting may be an important turning point for stable growth policies, representing a more proactive policy orientation. Although there are not many specific incremental measures proposed in this meeting, under the more proactive policy, expectations for policy intensification can continue to be maintained.

With the weakening of exchange rate pressure opening up space for policy intensification, there is still a possibility this year to use temporary increases in the deficit ratio and the issuance of additional government bonds to make up for the fiscal revenue gap, especially to make up for the general public budget revenue gap more related to the grassroots "three guarantees" work mentioned in this Politburo meeting.

It is expected that after this meeting, the fourth quarter may also usher in a transformation of policy acceleration.

Configuration Suggestions: Seize the opportunity of increased volatility, and still focus on "patient assets" in the long term.

Seize the opportunity of large fluctuations in consumption and information innovation, and pay attention to the Hang Seng Internet. The A-share market since August has shown the market's high sensitivity to domestic demand policy expectations, and after the policy intensification on September 24, the wind preference is expected to open up.In the long run, there may be two conditions for high dividend excess reversal: First, the central rate of long-term Treasury bonds no longer declines, and second, the dividend rate of high dividend sectors is further hindered from increasing.

Patience is needed for long-term style switching, and high dividend assets with monopolistic and scarce characteristics are expected to receive value revaluation.

Golden stock portfolio: Agricultural Bank of China, Guotai Junan, Zhongji Xuchuang, Zhongtian Technology, China Mobile, Luxshare Precision, Foxconn Industrial Internet, Innovation New Materials, Kingdee International, Foxit Software, Smart Micro, Higon Information, Shanghai Film, Huace Testing, Ruihu Mold, Wanhua Chemical, Huatong Shares, Midea Group, Gree Electric Appliances, Vatti Shares, BeiGene-U, Aibo Medical, Only Education, Tianli International Holdings, Anta Sports, Oppein Home, Jinzi Food, Wuliangye, Beijing Human Resources, Tongqing Tower, Jinbo Bio, Fu Erjia, Sichuan Road and Bridge, Honglu Steel Structure, San Shu Trees, Baofeng Energy, Xingtong Shares, China Hongqiao, China Merchants Shekou, Narui Radar, Shuanghuan Drive, Bilibili.

Bank of China Securities: The market bottom and policy bottom are clear

Strategy view: The market bottom and policy bottom are clear, and the implementation of fiscal policy and the effectiveness of policies to stabilize growth that have been introduced can be expected.

From the experience of industry rotation at the beginning of trend reversal, the superior industry at the beginning of the reversal must be the industry that has been under great pressure before, so this round of style can focus on the growth style cyclical industry first.

Configuration suggestion: It is suggested to continue to focus on "non-bank + cyclical" first. The securities sector is highly related to the A-share market, and the high beta characteristic is significant.

The core of consumer goods lies in the expectation of recovery first, consumer electronics are driven by the new product cycle, black electricity has the dual catalysis of going abroad and home appliances "exchange old for new", the reduction of cost pressure in beer helps to expand the profit space, and several industries have the momentum to go first under the expectation of consumer recovery.

Golden stock portfolio: Gemdale Group, Greentown China, Jitu Express, Satellite Chemical, Anji Technology, CATL, Shantui Shares, Sanyou Medical, Liansheng Shares, Yonyou Network.

Galaxy Securities: A-shares are expected to continue reboundingStrategic Perspective: October policies are expected to continue to intensify to support the market, and A-shares are likely to see a sustained rebound. Against the backdrop of further policy reinforcement and Federal Reserve rate cuts, positive factors both domestically and internationally are accumulating. The market has reached a stage of bottoming out, and A-shares are expected to continue their rebound. In September, a series of policies were introduced, and it is anticipated that in October, additional policies will be further intensified to boost investor confidence.

Additionally, in October, A-shares will enter the disclosure period for their third-quarter reports, and earnings expectations will be another key factor driving market performance.

Looking ahead, with the joint promotion of policy reinforcement, third-quarter earnings catalysts, and other factors, the valuation center of A-shares is expected to rise.

Allocation Suggestions: The investment strategy for October should focus on growth-type value stocks that benefit from policy support and have third-quarter earnings expectations. It is recommended to allocate funds to value stocks in sectors such as power, non-ferrous metals, non-bank finance, and machinery.

Golden Stock Portfolio: China Mobile, Waneng Power, Heng Xuan Technology, Tencent Holdings, CICC Gold, CITIC Securities, Sany Heavy Industry, China State Construction Engineering Corporation, Tuhu-W, and Tebao Bio.

China Merchants Securities: Core assets will become the focus of capital attention.

Strategic Perspective: Looking forward to October, after the market experiences a rapid rebound at the index level, it usually enters a structural market for 2-3 months.

In this round of rebound, the role of policy catalysis is significant, especially the comprehensive set of policies released by the state on September 24, which involved monetary aggregates, capital markets, real estate, and other fields, demonstrating the state's determination to support high-quality economic development.

Allocation Suggestions: With the introduction of these policies, the market's main line is gradually becoming clear. It is expected that core assets, large-cap growth stocks, and high SIRR-type stocks will become the focus of capital attention, and industries such as the real estate chain, government investment, consumption, and AI hardware are also expected to be favored by capital.

Overall, policy support and signs of economic stabilization will provide more structural opportunities for the A-share market, which has a high allocation value.Golden Stock Portfolio: China Taiping, Zijin Mining, XCMG, BYD, WuXi AppTec, Ninebot-WD, Meituan-W, Luxshare Precision, InnoLight Technology, Tencent Holdings.