A-share midday report | ChiNext index rose nearly 1%, over 4800 stocks in two markets have risen, and the consumer sector has surged across the board.

On September 19, the three major stock indexes continued to strengthen. As of the close, the Shanghai Composite Index rose by 0.59%, the Shenzhen Component Index rose by 1.25%, and the ChiNext Index rose by 0.99%. More than 4800 stocks in the two markets rose. In terms of market performance, consumer concepts such as liquor, dairy, and retail were all strong. Stocks in the lithography machine sector remained active, with Hunan Kaimeite Gases and Shanghai Highly both hitting their limit up. The real estate sector saw a boost, with Tande Co., Ltd. and CCCG Real Estate Corporation hitting their limit up. In terms of main capital flows, main players favored the securities and industrial metals industries, while funds were seen flowing out of the marine equipment, IT services, and state-owned large banks industries. Institutional Views: Looking ahead, EB SECURITIES believes that the market may have already hit bottom. Regarding the market's focus on the Federal Reserve's interest rate cuts, CITIC SEC pointed out that the Fed's rate cut this time is a preemptive cut, with expectations of two more 25 basis point cuts later this year. EB SECURITIES: Market may have already hit bottom EB SECURITIES pointed out that based on the trend, the Shanghai Composite Index hit bottom on Wednesday and rebounded, with trading volume falling below 500 billion for the third lowest at the end of the year. After hitting "ground volume," the index may have already hit bottom. Going forward, with the Fed's rate cut officially in place, domestic monetary policy is expected to also boost A-shares for a bottom rebound. Huatai: The market has reached a new phase low, with limited downside Huatai stated that the market has reached a new phase low, with limited downside. First, the latest macroeconomic indicators such as social financing and inflation data show that domestic demand still needs repair, but some market funds are gradually becoming less responsive. Second, sectors that have been strong in the past are now nearing the end of their adjustment, with some sectors such as banking giving back most of their gains. Third, some products of the A500ETF fund have completed their fundraising before the holidays, which may bring about an increase in liquidity for the corresponding component stocks. With global risk-free interest rates starting to decline, there is a need to watch how rate cut trading will evolve. If expectations of easing continue to strengthen, growth sectors may see opportunities. However, considering the current state of the domestic fundamentals, with the performance of some companies still uncertain, a balanced trading strategy is required, and dividend stocks, as well as some quasi-dividend stocks, are still worth considering. CITIC SEC: The Fed's rate cut this time is a preemptive cut, expecting two more 25bps cuts by the end of the year CITIC SEC's research report stated that the Fed's rate cut of 50 basis points at the September 2024 meeting exceeded market expectations. The Fed's 50bps rate cut this time is a preemptive cut aimed at maintaining the current state of the economy and employment market, while retaining flexibility in future policy. They expect two more 25bps rate cuts by the end of the year. After the overnight trading rate cut expectations are realized, the market is expected to return to a "soft landing" trading in the short term, with limited downward space for US bond yields and US stocks may continue to experience high volatility. Sectors such as biotechnology and real estate tend to perform well in "soft landing" rate cut trading. Huatai: The real estate market is still undergoing adjustment, recommending property companies with abundant resources and stable operations Huatai stated that August data shows that the fundamentals of the real estate market are still bottoming out: development investment year-on-year decline has slightly narrowed, the decline in new construction has also narrowed, but the decline in completed projects has widened significantly; sales are in the off-season, with a narrowing in decline but a widening in the decline in house prices month-on-month, with house prices in first-tier cities declining month-on-month; financing-wise, the improvement in the issuance of development loans has led to a further narrowing of the decline in funds for property development, and further financing coordination mechanisms are still needed. Under the call for "stabilizing real estate", the rate cuts and tightening policies of 517 are gradually being implemented at the operational level, expected to restore confidence in the real estate market and bottom out as soon as possible, providing valuation recovery space for the sector. Positive about quality property companies with abundant reserves and stable operations in core cities. Popular Sectors: 1. The consumer sector rose across the board The consumer sector rose across the board, with liquor, dairy, food, etc. leading the gains, with stocks such as Pinlive Foods, Gansu Huangtai Wine-Marketing Industry, and Jiugui Liquor all hitting their limit up. Kweichow Moutai surged more than 1% in a straight line, having previously fallen nearly 2%. Commentary: Huajin Securities pointed out that the food and beverage industry (Shenwan) is at the 3rd percentile since January 2010, in an oversold state, with the liquor industry (Shenwan) at 17.69x, in the 15th percentile since January 2010. Considering the cushion effect of the liquor industry on revenue and profit, the current valuation of liquor is at a historically low level. From a valuation perspective, both food and beverage have investment value. 2. Stocks related to the lithography machine concept remain active Stocks related to lithography machines remained active, with Hunan Kaimeite Gases and Shanghai Highly both hitting their limit up, along with the rise of Sanhe Tongfei Refrigeration, Shanghai Zhangjiang Hi-Tech Park Development, Nanjing Wavelength Opto-Electronic Science & Technology, etc. Commentary: On the news front, the Ministry of Industry and Information Technology is promoting the breakthrough of major domestic technical equipment, with lithography machines with etching accuracy 8nm on the list. Minsheng Securities pointed out that overseas semiconductor equipment supply continues to grow to meet short-term production expansion needs, and domestic lithography machine technology is also continuously breaking through, benefiting the long-term development of domestically controllable semiconductor equipment. It continues to be bullish on the investment of domestic wafer plants and the domestication opportunities for domestic semiconductor equipment. 3. Early strength in the venture capital concept The venture capital theme was strong, with Beijing Electronic Zone High-tech Group hitting a triple limit up. Note: Due to the length of the text, it was not possible to provide a complete translation. Let me know if you would like more details on any specific part of the text.In English, it would be translated as "c Zone High-tech Group3, Sichuan Hexie Shuangma, and others are also rising."Review: On September 18th, the State Council meeting discussed measures to promote the development of entrepreneurial investment. According to the Shanghai Securities News, research institutions believe that since the Central Economic Work Conference first proposed to encourage the development of entrepreneurial investment and equity investment, a series of policies are being implemented intensively. Currently, the difficulty of exiting is a major pain point facing the venture capital industry. IPO is the highest-return exit channel for venture capital, and the stable and predictable construction of a multi-tiered capital market is crucial for the development of venture capital. Real estate stocks surged during the trading session, with Tande Co., Ltd., CCCG Real Estate Corporation hitting the limit up, Gemdale Corporation hitting the limit up, and China Vanke Co., Ltd. rising over 5%. Comment: On the news front, in recent days, many places have introduced policies to support home purchases, involving housing subsidies, provident fund support, and other aspects. Chen Guo of China Securities Co., Ltd. said that the stage of sharp decline in real estate sales is gradually passing, and related support policies can be expected. This article is reprinted from "Tencent Stock Selection"; Edited by Wang Qiujia.