Industrial: What contributed to the rise in A-shares and Hong Kong stocks in this round?

Industrial released a research report stating that the one-year rise in A-shares and H-shares can be broken down into contributions from profitability, valuation, and dividends, with valuation contributions further divided into contributions from risk-free interest rates and risk preferences. Of the 50.66% increase in all A-shares over the past year, dividend contributions were 1.85%, profitability contributions were 6.5%, risk-free interest rate contributions were 14.1%, and risk preference contributions were 28.2%. Of the 55.47% increase in the Hang Seng Index over the past year, dividend contributions were 2.99%, profitability contributions were 10.56%, risk-free interest rate contributions were 25.34%, and risk preference contributions were 16.59%. Industrial's main points are as follows: The one-year rise in A-shares and H-shares can be broken down into contributions from profitability, valuation, and dividends, with valuation contributions further divided into contributions from risk-free interest rates and risk preferences. Of the 50.66% increase in all A-shares over the past year, dividend contributions were 1.85%, profitability contributions were 6.5%, risk-free interest rate contributions were 14.1%, and risk preference contributions were 28.2%. Of the 55.47% increase in the Hang Seng Index over the past year, dividend contributions were 2.99%, profitability contributions were 10.56%, risk-free interest rate contributions were 25.34%, and risk preference contributions were 16.59%. By breaking down the changes in the primary industries of A-shares since the beginning of the year, it was found that industries such as communications, non-ferrous metals, media, machinery, and electronics had positive contributions to profitability, while industries such as coal, petrochemicals, food and beverage, utilities, and construction were mainly affected by declining profitability and limited valuation increases. By looking at the secondary industries of A-shares, it was found that industries with the highest growth had mostly positive contributions to profitability, while industries such as ground armaments, glass fiber, new metal materials, automation equipment, automotive parts, small appliances, and rubber had negative contributions to profitability, mainly driven by valuation. Industries with slower growth had mostly negative contributions to profitability, while industries such as aviation airports, non-white liquor, white goods, rail equipment, passenger cars, shipping ports, telecommunication services, securities, and trade had positive contributions to profitability, mainly affected by valuation drag. By breaking down the changes in the primary industries of the Hong Kong Stock Connect since the beginning of the year, it was found that industries such as agriculture and animal husbandry, light industry, non-ferrous metals, pharmaceuticals, steel, and electronics had positive contributions to profitability. Meanwhile, industries such as social services, construction, petrochemicals, and coal were mainly affected by declining profitability and limited valuation increases, while appliances, utilities, and transportation had positive contributions to profitability, mainly affected by valuation drag. Looking at the secondary industries of the Hong Kong Stock Connect, industries with the highest growth had mostly positive contributions to profitability, while industries such as automation equipment, semiconductors, medical devices, and communication equipment had negative contributions to profitability, mainly driven by valuation. Industries with slower growth had mostly negative contributions to profitability, while industries such as local life services, infrastructure, household goods, traditional Chinese medicine, aviation airports, motorcycles, and glass fiber were mainly affected by declining profitability, while professional services, coke, publishing, textile manufacturing, railways, highways, and solar equipment had positive contributions to profitability, mainly affected by valuation drag. Risk Warning Information is based on publicly available data and does not include any investment advice or research opinions.