China Securities Co., Ltd.: Hong Kong A shares performed well in February, while US stocks performed poorly. Optimistic about gold and AI applications.

China Securities Co., Ltd. released a research report stating that Chinese A-shares and Hong Kong stocks performed well in February, while American stocks performed poorly, bonds were average, and gold, non-ferrous metals, and soybean meal performed well, while oil performed poorly. It is predicted that the return on equity (ROE) for the Wenshi Global A and non-financial sectors in 2024Q4 will be 7.16% and 6.23% (estimated to be 7.06% and 6.18% in 2025Q1), which analysts have lowered compared to the previous month; the ROETTM for 2024Q3 was 7.77% and 6.94%. It is forecasted that the peak year-on-year GDP for the United States will be in 2025Q1, for Japan in 2025Q2, and for the Eurozone in 2025Q2. It is also predicted that the weakness of the Japanese yen relative to the US dollar will improve, and that the Euro may strengthen relative to the US dollar; it is forecasted that gold priced in US dollars will continue to rise. Deep seek believes that artificial intelligence will evolve from computing power to optimized algorithms, and is bullish on AI applications. China Securities Co., Ltd.'s views are as follows: Global asset class performance and the positioning of cycles from a Kangbo perspective: Chinese A-shares and Hong Kong stocks performed well in February, American stocks performed poorly, bonds were average, and gold, non-ferrous metals, and soybeans performed well, while oil performed poorly. Currently in a Kangbo recession, the next round of Kangbo cycle recovery is likely to be led by artificial intelligence; the negative impact of population factors on the stock market became significant starting in 2015 and has been increasing gradually; China's capacity utilization has been declining since 2021; the inventory cycle hit bottom in 2023Q2, but constrained by Kangbo, population, and capacity cycles, the rebound of the producer price index is weak, and the current upswing cycle is nearing its end. Fundamental and asset price outlook: According to the analyst expectations summarized from bottom-up analysis, it is predicted that the ROE for the Wenshi Global A and non-financial sectors in 2024Q4 will be 7.16% and 6.23% (estimated to be 7.06% and 6.18% in 2025Q1), which analysts have lowered compared to the previous month; the ROETTM for 2024Q3 was 7.77% and 6.94%. Based on the estimation of the intrinsic value of the Wenshi Global A index in 2025Q1 based on three cycles (inventory cycle + capacity cycle + population cycle), is in the range of 5,289 points (5,343 points for 2025Q2); it is forecasted that the value of A shares will enter a downward phase in 2025Q3. The ten-year Chinese government bond yield has deviated from historical cyclical norms. It is forecasted that the peak year-on-year GDP for the United States will be in 2025Q1, for Japan in 2025Q2, and for the Eurozone in 2025Q2. It is also predicted that the weakness of the Japanese yen relative to the US dollar will improve, and that the Euro may strengthen relative to the US dollar; it is forecasted that gold priced in US dollars will continue to rise. Global multi-asset allocation strategy portfolio tracking: The global multi-asset allocation absolute return @ low-risk portfolio had a return of 0.16% this week, 0.16% this month, and has seen an excess return of 0.39% relative to the Zhongcai Index (total wealth) since the beginning of the year; the global multi-asset allocation absolute return @ medium-high-risk portfolio had a return of 0.29% this week, 0.29% this month, and has seen an excess return of 0.87% relative to the Wenshi FOF Index since the beginning of the year. A-share industry and style rotation relative returns: Based on financial statements, analyst expectations, and industry macro data, an industry prosperity index was constructed, with the agriculture, forestry, animal husbandry, fishery, non-ferrous metals, communications, and banking sectors having relatively high prosperity. Consumer services and comprehensive attention have decreased from high levels; in the past week, the institutional attention to the "non-ferrous metals", "building materials", "commercial retail", "real estate", and "communication" industries has increased. The communication, media, computer, home appliance, automobile, commercial retail, and machinery industries are in a state of triggering the congestion index threshold (liquidity, component consistency) and are in a continuous congested state; recently, the overall congestion signal and the number of congested industries have been on the rise.