A-share midday report | Shanghai Composite Index rises by 2.38% to regain 2800 points, with nearly 5000 stocks in both markets rising. Financial stocks as a whole have surged.

On September 24th, the policy implemented a "combination punch": lowering reserve ratios and interest rates, reducing existing housing loans, promoting mergers and acquisitions, and six other measures... Stimulated by the news, the three major A-share indexes collectively rebounded. By the close, the Shanghai Composite Index rose 2.38%, the Shenzhen Component Index rose 2.58%, and the ChiNext Index rose 3.45%. Nearly 5000 stocks in the two markets rose. In terms of the market, the iron and steel sector once again rose, with Guangdong Zhongnan Iron & Steel hitting two consecutive limit up; real estate stocks were active at the beginning of the session, with CCCG Real Estate Corporation hitting the limit up, Shenzhen SDG Service and 5i5j Holding Group rising by more than 5%; photovoltaic stocks rebounded, with Hongyuan Green Energy hitting the limit up; brokerage, insurance, and diversified financial sectors strengthened collectively, with Anhui Xinli Finance hitting the limit up; liquor stocks rose, with Shanghai Guijiu rising by more than 7%, and Wuliangye Yibin rising by more than 3%; Yonghui Superstores hit the limit up by word, MNSO acquired 29.4% stake becoming the largest shareholder. In terms of declines, high-profile stocks plummeted during the session, with Baoding Tianwei Baobian Electric hitting the limit down, with a turnover of over 1.5 billion yuan; Shijiazhuang ChangShan BeiMing Technology once "almost hit the limit down", while Gansu Mogao Industrial Development, LingNan Eco&Culture-Tourism, Shenzhen Infogem Technologies, Shenzhen Silver Basis Technology, among others, rapidly decline. The Huawei industrial chain started off sluggishly, with Shenzhen Huaqiang Industry hitting the limit down, and Wuhan P&S Information Technology falling by over 4%. In terms of main capital flows, funds favored industries such as liquor, securities, and photovoltaic equipment; funds exited industries such as electric power equipment and software development. Institutional View Looking ahead, a research report from CICC stated that the recent high volatility in the US stock market has shown resilience in the cash cow style, and the "broad fiscal + loose monetary" policies are driving the momentum of pro-cyclical sectors. China International Capital Corporation (CICC): Cash cow, pro-cyclical, and state-owned enterprises expected to continue to perform well A research report from CICC stated that the recent high volatility in the US stock market has shown resilience in the cash cow style, and the "broad fiscal + loose monetary" policies are driving the momentum of pro-cyclical sectors. The expectation of a rate cut by the Federal Reserve has strengthened, and the advantage of the cash cow style under high volatility is prominent. In the A-share market, the market is mainly influenced by domestic fundamentals, and the cash cow style is converging towards state-owned enterprises. State-owned enterprises, leveraging stable demand and reform dividends, demonstrate high growth potential and cash flow premiums. It is expected that the combination of "cash cow + pro-cyclical" will continue to maintain an advantage in the two markets. Huatai Securities: The game sector is gradually emerging from the bottoming phase Huatai pointed out that in August 2024, the total revenue of the domestic gaming market was 33.64 billion yuan, a year-on-year increase of 15.1% and a month-on-month increase of 21.01%. Among them, the sales revenue of self-developed games was 27.261 billion yuan, an 8.35% year-on-year increase and a 32.9% month-on-month increase, mainly due to the significant incremental increase brought by "Black Myth: Wukong" to standalone and console games. The gaming sector is gradually emerging from the bottoming phase, and the marginal changes include: 1. Expectations for new products (supporting the upward space of EPS); 2. Policy stability (official media's positive publicity for domestic games, supporting the continued repair of valuations). The launch of new products by leading gaming companies in the second half of 2024 and 2025 is expected to contribute significantly to performance elasticity. China Securities Co.,Ltd.: Huawei Mate XT three-fold phone starts first delivery, continue to focus on Huawei's new product launches China Securities Co.,Ltd. pointed out that the Huawei Mate XT three-fold phone has started its first batch of deliveries, and the Hongmeng system PC product will be launched. It is recommended to continue to focus on the rhythm of Huawei's new product releases and sales, as well as domestic suppliers who are expected to benefit from it. Popular Sectors 1. The iron and steel sector rose again The iron and steel sector rose again, with Guangdong Zhongnan Iron & Steel hitting two consecutive limit up, and Bengang Steel Plates, Anyang Iron and Steel, Xinjiang Ba Yi Iron & Steel, Nanjing Iron & Steel, Angang Steel and others following suit. Comment: In terms of news, on September 23, the National Development and Reform Commission held a special press conference, where Deputy Director Zhao Chenxin revealed that China Resources Recycling Group is being set up to establish a national, functional resource recycling platform. China Baowu's scrap steel recycling business is expected to be integrated into the new state-owned enterprise, providing tangible support for promoting resource recycling. 2. Real estate sector strengthening The real estate sector opened strongly, with CCCG Real Estate Corporation hitting the limit up, and Gemdale Corporation, Cinda Real Estate, Langold Real Estate, China Merchants Shekou Industrial Zone Holdings, Seazen Holdings, and others opening higher collectively. Comment: Opensource Securities pointed out, entering the traditional sales peak season in September, market heat may continue to rise, but the land acquisition contraction by mainstream real estate companies in the first half of the year may affect the scale of push and supply and the warming of sales. It is expected that under the low base effect, the downturn in real estate sales is expected to continue to narrow, and multiple destocking policies are expected to help stabilize the housing market. Hold.Continued preference for strong credit property companies with high investment intensity, superior regional layout, and market-oriented mechanisms.3. Merger and reorganization concept stocks remain active Merger and reorganization concept stocks continue to be active, with Henan Yicheng New Energy up by the daily limit, Jilin Yatai, Hainan Shuangcheng Pharmaceuticals, SEC Electric Machinery, and Anhui Xinli Finance all up by the daily limit. Shenzhen Infogem Technologies rose by over 10%, while Qiming Information Technology, Chongqing Millison Technologies Inc., and Hanjia Design Group rose by over 5%. Commentary: On the news front, Wu Qing, chairman of the China Securities Regulatory Commission, stated on September 24 that the commission will take multiple measures to activate the merger and reorganization market. They will release measures to promote merger and reorganization and work with all parties to facilitate the fundraising, investment, management, and exit of private equity and venture capital funds. 4. Strong performance in the financial sector Brokerages, insurance companies, and diversified financial institutions have all shown strong performance. Anhui Xinli Finance reached the bidding limit, while Guangdong Golden Dragon Development Inc., Tianfeng, China Galaxy, Guosheng Financial Holding Inc., Kunwu Jiuding Investment Holdings, AVIC Industry-Finance Holdings, Hubei Biocause Pharmaceutical, Ping An Insurance, and others followed the rise. Commentary: On the news front, Pan Gongsheng, governor of the People's Bank of China, announced at a press conference on September 24 that securities, funds, and insurance companies will be interconnected to support qualified securities, funds, and insurance companies in obtaining liquidity from the central bank through asset pledges. This will significantly improve their ability to raise funds and increase their stock holdings. This article is reprinted from "Tencent Select Stocks"; GMTEight Editor: Wang Qiujia.