Pre-market Report on A-shares | Chinese assets continue to surge! Nasdaq China Golden Dragon Index up over 9%

Early Morning Top News Highlights 1. Chinese assets continue to surge! Nasdaq China Golden Dragon Index up more than 9%, RMB hits 16-month high Overnight US-listed Chinese stocks saw a general rise, with the Nasdaq China Golden Dragon Index up 9.13%, marking the largest single day increase in about two years; the FTSE China A50 Index rose over 6% during the day and closed up 2.69% in the night session; offshore RMB against the US dollar rose nearly 500 points, hitting a 16-month high. 2. China Securities Regulatory Commission (CSRC) issues six measures to promote mergers and acquisitions, seeks public opinion on market value management of listed companies The CSRC document outlines support for cross-border mergers and acquisitions, allowing acquisitions of non-profitable assets, and supporting securities companies to enhance competitiveness through mergers and acquisitions. Additionally, the CSRC seeks public opinion on market value management, promoting the increase in investment value of listed companies through mergers and acquisitions, equity incentives, cash dividends, and share buybacks. 3. Long-term undervalued stocks become a focus of market value management policies, 88 companies currently undervalued with a dividend yield of over 5% The CSRC draft on market value management mentions that long-term undervalued companies should disclose their valuation enhancement plan, including targets, timelines, and specific measures. Statistics show that there are currently 88 undervalued stocks in the market with a dividend yield higher than 5%, mainly concentrated in the banking, transportation, and coal industries. 4. When will the interest rate on existing housing loans decrease? Banks respond: actively studying implementation plans The central bank plans to guide banks to make bulk adjustments to the interest rates on existing housing loans, and currently banks are actively studying implementation plans. Some banks have stated that they are waiting for the head office to establish detailed regulations and specific execution standards, and they predict that the pace of implementation will accelerate, with varying degrees of reduction in different regions. Economic calendar Today, there is the IPO of Qiangbang New Materials on the Shanghai and Shenzhen stock markets, with no new IPOs listed. Highlights - Global Digital Trade Fair today Opportunities to look out for Analyzing market opportunities of interest, we see a focus on Hongmeng OS, Ultra High Voltage (UHV), and computing power. 1. Huawei launches multiple new products for the autumn, Yu Chengdong: Pure Hongmeng OS will kick off public testing on October 8th Huawei's Executive Director, Terminal BG Director, Intelligent Automotive Solutions BU Director Yu Chengdong announced that Huawei's native HarmonyOS system will officially begin public testing on October 8th under the theme HarmonyOS NEXT, with the first batch of public testing models including the Huawei Mate 60 series, Mate X5 series, and MatePadPro 13.2 series. Analysis: Desheng Securities: Hongmeng OS ecosystem has achieved full coverage in 18 major fields such as travel and social networking. Original Hongmeng OS will be able to fully unleash the potential of the operating system. With the continuous construction of the Hongmeng OS ecosystem, it will inject long-term application dividends into the market. 2. Accelerating the construction of UHV, institutions optimistic about the continued prosperity of the industry and related supporting industries According to the National Grid Corporation, the Datong to Tianjin South 1000kV UHV AC project recently received approval from the National Development and Reform Commission. This is one of the inter-provincial power transmission projects in the "14th Five-Year Plan" of national power development, with the construction of 3 1000kV substations and 1 1000kV switching station, 63000MVA main transformers, and approximately 770 km of 1000kV UHV lines. The total investment in the project is approximately 22.5 billion yuan. Analysis: Shanxi Securities: the rapid increase in wind power installations at present, there is an urgent need for UHV and related supporting facilities. The progress of follow-up projects is expected to accelerate. The future outlook remains positive, with high certainty of the benefits to related sectors. 3. The 2024 China Computing Power Conference is about to be held, the computing power infrastructure segment is expected to continue to benefit According to information from Huawei's WeChat public account in China, the 2024 China Computing Power Conference will be held on September 27-29 in Zhengzhou, Henan. Huawei will participate under the theme "A win-win new era of computing power," showcasing solutions and innovative practices in areas such as connectivity, computing, storage, green development, and digital inclusion. Analysis: China Great Wall Securities: With leading companies like OpenAI accelerating the deployment of AI large models and the continuous implementation of edge AI applications, the demand for computing power is increasing. The computing power infrastructure segment is expected to continue to benefit. Market outlook Huachuang Securities: a shift in policies that helps improve market risk appetite, maintaining the judgment that the broader market will outperform the small-cap market Huachuang Securities believes that a shift in policies may help improve market risk appetite, which will drive a market rally. However, the switch between stocks and bonds still requires the observation of trends in corporate profits. Currently, using leading indicators, the improvement in profits in the all-A index still requires some patience. In terms of style, they still maintain the judgment that the broader market will outperform the small-cap market and that Hong Kong stocks will outperform A-shares. For the bond market, the fluctuations may increase in the short term due to the increased risk appetite, but with the overall downward trend in broad interest rates, the intrinsic value of bonds has improved, so it is not advisable to sell easily. Positive and negative announcements by listed companies In terms of positive announcements, China Energy Engineering Corporation won a construction project bid, while Datang Telecom Technology, which has been in a 6-day trading halt, has issued a risk warning. Positive announcements 1. China Energy Engineering Corporation: Subsidiary jointly wins bid for approximately 15.096 billion yuan reclamation project survey design and construction general contracting project 2. Hefei Urban Construction Development: Planning to issue shares to purchase 100% equity of Xingtai Group held by Trade Group, stock to resume trading from tomorrow 3. Shenzhen Yitoa Intelligent Control: Planning to repurchase shares worth 10-20 million yuan 4. Ningbo Sinyuan Zm Technology: Expected sales of 170 million over three years, for a designated customer project 5. Zhejiang Communications Technology: Subsidiary companies jointly pre-bid for a 1.973 billion yuan project for highway expansion and reconstruction 6. Xi'an Qujiang Cultural TouriSM: Termination of judicial disposal of part of the shares held by the controlling shareholder.Negative Announcements 1. Datang Telecom Technology, which has seen a significant increase in the short term, carries the risk of a subsequent decline after a significant increase in the short term. 2. Hainan Shuangcheng Pharmaceuticals, with 8 consecutive trading days of increase, is planning a major asset restructuring. 3. Shandong Yabo Technology, with 2 consecutive trading days of increase, has its controlling shareholder increasing their stake in the company. 4. SEC Electric Machinery, with a latest rolling price-to-earnings ratio of 347.13, significantly higher than the industry average. 5. Penyao Environmental Protection, along with related parties, received a warning letter from the Jiangsu Securities Regulatory Bureau. 6. Hynar Water Group, with shareholder Li Qin and its concerted actors planning to reduce their stake in the company by up to 2%. Unlocking List Looking at the unlocking ratio, in the next 5 days, Shanghai Geoharbour Construction Group Co., Ltd. has an actual unlocking ratio of 68.42%, followed by Zhongjie(Jiangsu)Technology Co.,Ltd. and Tibet Duo Rui Pharmaceutical. Overseas Markets Overnight, the US stocks closed slightly higher, with the S&P and Dow hitting new highs. The Chinese concept stock index soared over 9%, marking the largest single-day increase since 2022. In other markets, COMEX gold futures rose by 0.92% to $2677.00 per ounce; light crude oil futures for delivery in November on the New York Mercantile Exchange closed at $71.56 per barrel, up 1.69%; Brent crude oil futures for November delivery closed at $75.17 per barrel, up 1.72%. This article is reprinted from "Tencent Stock Selection", GMT8 edition by Xu Wenqiang.