Regarding sensitivity to policy, Hong Kong stocks clearly have the upper hand. A-shares were in quite a dangerous position today, while Hong Kong stocks opened higher from the start. A-shares eventually formed a V-shaped recovery, with the Hang Seng Index rising 1.79%.

The domestic and external environments were both favorable today. Trump stated he will not attack Iran before the midterm elections, which means there will be a relatively easier period of about a month. However, this cannot be fully trusted, as he could turn hostile at any time. Trump's statement is also meant to boost US stock market momentum, as a prolonged decline would be detrimental to the elections.

On our side, measures are also being taken. On October 8, the central bank issued a policy stance on the RMB exchange rate, emphasizing its commitment to letting the market play a decisive role in exchange rate formation. China's trade development stems from the improvement of industrial international competitiveness. China has no need and no intention to gain trade competitive advantages through currency depreciation, and never engages in competitive currency devaluation. The focus is on reassuring foreign investor expectations, reducing concerns about exchange losses, dispelling speculation about "active depreciation," and reducing panic-driven capital outflows.

In the afternoon, a screenshot circulated in the market saying that "insurance funds were summoned for talks at noon, requiring them to moderate their selling, and the market should rebound in the afternoon." This implies that insurance funds may be subject to window guidance, restricting them from selling recklessly. Under this atmosphere, large funds began to enter the market. Broad-based ETFs collectively saw volume surges. The China Science and Technology 50 ETF by Huaxia exceeded 8.5 billion yuan in turnover, and the ChiNext ETF by E Fund exceeded 6.8 billion yuan, both surpassing their full-day levels from yesterday. The CSI 1000 ETF by Southern, CSI 500 ETF by Southern, and CSI 300 ETF by Huatai-PineBridge also saw volume increases, with turnover all exceeding yesterday's full-day levels.

When large funds enter, they inevitably buy weighted stocks first. Hong Kong-listed Tencent (00700), Alibaba (09988), NetEase (09999), and Meituan (03690) all rose by 3%. The Hang Seng Index was directly stabilized. Securities stocks were also a direction of capital attack. The Securities Association of China recently circulated information within the industry on the operating conditions of securities companies for the first half of 2026: 150 securities firms achieved operating revenue of 329.81 billion yuan and net profit of 138.664 billion yuan, representing year-on-year growth of 31.38% and 23.50% respectively. Securities are at the bottom, objectively having room for rebound. Hong Kong-listed Yunfeng Financial (00376) surged over 15%, likely on speculation around cross-border hedging and stablecoin business. Others like Everbright Securities (06178) and China Merchants Securities (06099) rose over 2%, but trading volume was not large, so sustainability may be discounted.

Gold stocks performed quite strongly today. The decline in the US dollar and US Treasury yields boosted gold prices, with gold rising over 1% on Friday to break through $4,200. There are several other logics: 1) This week, OpenAI publicly released hundreds of AI mathematical achievements in one go, which not only shocked the global mathematics community but also caused the cryptocurrency industry to be on high alert. Justin Drake, a researcher at the blockchain platform Ethereum, stated on social platform X that digital currency holders should prepare for "bunker mode" and transfer funds to new wallet addresses. As digital currencies weaken, funds may buy safer gold; 2) Data released by the People's Bank of China on October 7 showed that as of the end of September 2026, China's gold reserves stood at 77.47 million ounces, an increase of 740,000 ounces from 76.73 million ounces at the end of August, with the increase further expanding from 650,000 ounces last month. The PBOC's current round of gold purchases began in November 2024, and as of the end of September 2026, it has been increasing gold holdings for 23 consecutive months. TONGGUAN GOLD (00340) rose over 9%, while other stocks including Zijin Gold International (02259), CHIFENG GOLD (06693) — a Zhitong October pick — Zhaojin Mining (01818), Shandong Gold (01787), and Lingbao Gold (03330) all rose over 6%.

On October 9, the China Passenger Car Association released preliminary data on wholesale sales of new energy passenger vehicle manufacturers for September 2026. BYD (01211) led by a landslide with 456,713 units, rising nearly 4%. Meanwhile, the China Automobile Dealers Association released the September pure electric vehicle value retention rate rankings. Among major pure electric models in September 2026, the Xiaomi YU7, Li Auto MEGA, and NIO ES8 performed excellently in one-year value retention rate, ranking in the top three. With the range-extender market shrinking, Xiaomi's (01810) Pengcheng series secured 70,000 locked orders, which is quite strong, surging nearly 10% today. Li Auto (02015) i6 made a comprehensive upgraded debut: the 2026 model achieved leaps in six core experiences, aiming to become a global hit, rising nearly 4%.

During China's National Day holiday (October 1-7), tourism traffic performance remained soft, with total tourism traffic of approximately 2.14 billion person-trips, averaging about 306 million per day, up only 0.6% year-on-year. Although this was a recovery from the 0.9% year-on-year decline during the Dragon Boat Festival holiday, it was still far below the 6.2% year-on-year increase during the 2025 National Day holiday. The main reasons were outbound travel diverting domestic traffic and rising fuel costs suppressing self-driving tours. However, Macau's data was good. In the first three days of the Golden Week (October 1-3), a total of 540,549 visitors were recorded, averaging 180,183 per day, up 27.4% year-on-year. Combined with the temporary data from the Public Security Police Force for the fourth day (October 4), approximately 210,000 visitors entered, bringing the cumulative four-day total to about 750,000. Galaxy Entertainment (00027), Wynn Macau (01128), and MGM China (02282) all rose over 4%.

China's first AI hyper-realistic theatrical film "Sanxingdui: Future Past" is scheduled to hit national theaters on October 23. The film uses original digital characters and AI image generation, and has cleared key stages including public screening permits and theatrical distribution, driving the market to refocus on the value of film and television IP libraries, AIGC production platforms, copyright materials, and distribution channels. CHINA LIT (00772): a massive source of online literature IP, with 46 AI comic dramas surpassing 100 million views, and having launched the domestic "Qidian Theater" and overseas ToonScroll platform. It is a representative with a high degree of commercialization in "IP + AI + going global," rising over 7%. Zhitong October pick China Ruyi (00136): full-chain IP + AI film production, self-developed C-live visual intelligent agent for digital characters, film special effects, and asset generation; possessing a large existing IP library and own theater chain, converting novel IP into AI films/series, rising over 3%.

Data monitored by SunSirs shows that the latest PP price is 10,190.00 yuan/ton, up 5.60% in the last 30 days, up 15.66% in 60 days, and up 18.03% in 90 days. Related producer GON TECHNOLOGY (02768) rose over 8%.

On October 8, the Shenzhen Stock Exchange announced that Yunji (02670) and Longsys (09976) were added to the Stock Connect eligible securities list, effective immediately. Yunji (02670): the company's robots have achieved hundred-unit deployment at Tongji Hospital Optics Valley Campus, Tianjin Nankai Hospital, and Yuyao Traditional Chinese Medicine Hospital. Today's inclusion in Stock Connect attracted considerable capital, surging over 26%. Kinwong Electronic (03228), which was included in Stock Connect starting September 29, is at an inflection point of "automotive PCB base + AI computing power second curve," rising 6%.

Sector Focus

According to a Huatai Securities research report, on October 7, Hang Seng Indexes Company released the "Consultation Results and Summary on Proposed Amendments to the Hang Seng Tech Index Methodology." The consultation received 49 market responses, with all six amendment proposals receiving over 80% support, five of which were adopted as proposed, and the dual-class share selection mechanism was "adopted after adjustment," adding two additional eligibility thresholds based on the consultation paper. The revised methodology will be implemented in the quarterly review for the period ending September 30, 2026. The review results are scheduled to be announced on November 20, with corresponding constituent changes effective from December 7 (Monday). The adjusted parts: 1) Minimum liquidity requirement: all non-existing constituents must meet a minimum average daily turnover of HK$100 million over the past 3 months; 2) Minimum revenue requirement: constituents selected by revenue growth ranking must have recorded annual revenue of no less than HK$500 million in each of the most recent two consecutive fiscal years. Impact: approximately 10% weight rebalancing, corresponding to about HK$28.9 billion in rebalancing funds. CATL (03750) is the largest single addition, expected to have a weight of 2.27% to 2.43%, corresponding to inflows of HK$6.6 billion to HK$7 billion. Overall, those expected to be included in the market cap group: CATL (03750), Kingboard Laminates (01888), JD Logistics (02618), ASMPT (00522), Biren Technology (06082), AAC Technologies (02018), UBTech (09880); those expected to be included in the growth group: East Buy (01797), Meitu (01357), Kingdee International (00268), Kingsoft Cloud (03896).

Stock Spotlight

CHIFENG GOLD (06693): Abundant resource reserves with dual domestic and overseas layout; the Canon mining area is the core incremental driver. Gold prices rebounded, with spot gold rising above $4,200/oz. The company released its 2026 semi-annual report, achieving operating revenue of 7.018 billion yuan during the reporting period, up 33.11% year-on-year; net profit attributable to shareholders of 1.732 billion yuan, up 56.50% year-on-year; basic earnings per share of 0.92 yuan, up 46.03% year-on-year. Commentary: The company has abundant resource reserves with a dual domestic and overseas layout. In 2026H1, the company's self-produced gold revenue was 6.178 billion yuan, up 30.16% year-on-year, with a gross margin of 61.63%, up 7.11 percentage points year-on-year. The average selling price of self-produced gold was 1,008.52 yuan/gram, up 44.08% year-on-year. The significant increase in selling price was the main source of revenue growth. At the end of 2025, gold resources stood at 512 tons, with reserves of 105.76 tons; the updated Sepon SND project in Laos has gold equivalent of 260 tons (gold + copper), an increase of 143%, and is the largest future incremental source. In 2026H1, the company's self-produced gold output was 6,149.24 kg, down 8.96% year-on-year, and sales volume was 6,125.63 kg, down 9.45% year-on-year, mainly due to technical renovation construction at the Sepon mine in Laos and restricted sulfuric acid supply causing output to fall below budget. The production decline was offset by rising gold prices, and self-produced gold revenue still achieved positive growth; medium-term increments are expected to come from the Ghana Wassa ADK decline (expected to contribute 180,000 tons of ore in the second half) and domestic mine expansion projects. In 2026H1, the unit operating cost of mineral gold was 383.44 yuan/gram, up about 20.18% from 319.06 yuan/gram in the same period last year, with overall cost increases being relatively large. Copper provides a second growth curve. The Sepon project is a gold-copper associated ore. After future primary ore production begins, electrolytic copper output will continue to be released, and copper prices can hedge against gold price fluctuation risks, achieving a gold-copper dual-drive model. With the completion of the company's technical renovation and maintenance, the company's 26H2 output is expected to recover, and costs are expected to decline. On March 22, 2026, approved by the sixth meeting of the ninth board of directors, the company signed a "Strategic Investment Agreement" with Zijin Gold, under which the company plans to issue 310,902,731 H-shares to Zijin Gold. After the completion of the above transaction, Zijin Gold will become the controlling shareholder of the company. After Zijin takes control, the company's operational capabilities are expected to further improve. The company's resources have been significantly upgraded to 260 tons of gold equivalent. The Canon mining area will commence primary ore production in 2027Q2, with a designed annual ore processing capacity of 1.3 million tons. After production begins, it will bring substantial increases in mineral gold and electrolytic copper, serving as the core engine for the company's performance leap from 2027 to 2030.