Zhongtai: A shares focus on stability, pay attention to opportunities in public utilities such as nuclear power and telecommunications operators.

Zhongtai released a research report stating that the determination of the current total policy and the direction of financial regulation have not changed. This week, the overall A-share market stabilized, and the major indices saw a slight rebound. Zhongtai stated that they will maintain the strategy of stability in the second half of the year, and recommended focusing on opportunities in sectors such as nuclear power, telecommunications operators, public utilities, core military industry, and non-ferrous metals. For the global manufacturing industry expansion related to sectors such as engineering machinery and electrical equipment, they suggest gradually buying on dips. Key points from Zhongtai: What characteristics will be presented in the fourth quarter "year-end and New Year" market outlook? This week, the overall A-share market stabilized, and the major indices saw a slight rebound. The economic data announced in early September gradually reduced market disturbances. After the holidays, there was a slight oversold rebound, and sentiment improved to a certain extent. On the other hand, the 50bp rate cut by the Federal Reserve strengthened the Hong Kong stock market, to some extent boosting sentiment in the A-share market. Recently, the rebound in the export chain represented by sectors such as electrical equipment, new energy, and the Growth Enterprise Market started to lead the market. The reason behind this was the relative advantage shown by Harris in the U.S. presidential election debate, which lowered expectations of future tariffs. The first televised debate reshaping the U.S. presidential election landscape (Trump vs. Harris) was held in Philadelphia on the evening of September 10. Overall, Harris had a relative advantage in this debate. According to data from the polling website RCP, the expectation for Harris to win increased significantly after the debate. Due to the extreme complexity of this election, it is easily influenced by various unexpected events. Even if Harris had an advantage in the debate, it is still difficult to say with a "high probability" about her final election probability. At the same time, in the second half of this year, China's anti-subsidy investigation on EU dairy imports, the white-hot stage of the election, and the increase in tariffs on a series of products including new energy by the U.S., will make the stabilization of the export chain present a complex situation of "ups and downs". Therefore, we maintain the strategy of gradually buying on dips for the export chain segments closely related to the expansion cycle of global manufacturing industries, with a focus on engineering machinery and electrical equipment. During the two sessions period from mid-November of this year to next year, the market may see expectations of a new round of stimulus policies, leading to a market rebound. Depending on the outcome of the U.S. presidential election, this year's "year-end and New Year" market may present two completely different scenarios. If Harris is elected, with the expectation of relatively manageable U.S.-China relations, there may be a strong rebound in the export chain, Growth Enterprise Board, etc. However, under the expectation of her election, expectations for U.S. tariffs and domestic stimulus policies may weaken. Therefore, the performance of cyclical sectors such as non-ferrous metals and real estate may rebound due to the impact of new year policy expectations, but may be relatively weaker than in the past. As market expectations align with fundamentals, the valuation of related sectors after the rebound may stabilize at a certain central level. If Trump is re-elected, along with his weak dollar policy and advocacy of boosting U.S. exports, the Federal Reserve may cut rates more aggressively. Coupled with strong tariff expectations under his administration, the market may anticipate further efforts in domestic total policies to counter the expected decline in exports. At this time, cyclical sectors, especially non-ferrous metals and real estate, may experience a rebound. However, investors are advised to engage in short-term operations in this scenario. If Trump is re-elected, it may bring about strong global geopolitical turbulence, prompting China's policy direction to focus more on security rather than stimulus. Risk warning: Macro policy adjustments fall short of expectations, industrial policy implementation falls short of expectations, considering the risks of policy falling short of expectations and unstable market sentiment, there may be risks of information lag or lack of timely updates in the public data used in the research report.