Tianfeng: The third stage of the Tianfeng Challenge 2.0 is not easy, emphasizing the importance of the Hang Seng Internet. Investing focuses on these three directions.

Tianfeng released a research report stating that the third phase of the Sci-Tech Innovation Board 2.0 is challenging, with twists and turns inevitable, and emphasizes the importance of the Hengsheng Internet. Based on economic recovery and market liquidity, investment themes can be reduced to three directions: 1) Deepseek breakthrough and open-source leading technology AI, 2) internal and external resonance, gradual economic recovery, bull market style "the strong get stronger," but may show performance in the later stages of the cycle, 3) undervalued dividends continue to rise. Tianfeng's main points are as follows: In terms of the overall industry prosperity, this week, industries such as power equipment, machinery equipment, electronics, food and beverage, light industry manufacturing, real estate, and commercial retail are showing an upward trend; while industries such as petroleum and petrochemicals, building materials, pharmaceuticals, textiles and apparel, automobiles, utilities, and environmental protection are showing a downward trend. Based on the model and research framework within the "Application Framework of the Entire Industry's Mid-term Outlook Database" issued externally by Tianfeng on October 15, 2024, the institution predicted the second-level industries of the Shenwan in which industry will perform better in the next four weeks. Tianfeng's attention is on the Shenwan Second-tier industries such as automobile services, commercial vehicles, auto parts, rail transit equipment II, railways and roads, lighting equipment II, passenger cars, household appliance parts II, chemical pharmaceuticals, non-metallic materials II, plastics, consumer electronics, chemical fibers, electronic chemicals II, and motors II. As of October 12, 2025, the industry's attention-worthy prosperity indicators are as follows: In the automobile sector, in China, the operating rate for semi-steel tires weekly decreased by 27.07% compared to the previous week to 46.51%. In the machinery equipment sector, the ex-factory price of liquid oxygen in Shandong Hangyang increased by 3.85% weekly to 270.0 yuan/ton. In the transportation sector, in Beijing, the subway passenger volume increased by 52.78% weekly to 10.65 million, while in Suzhou, it decreased by 21.94% to 1.89 million. In the medical and biological sector, the market quotation for domestic vitamin E was 47.5 yuan/kg, down by 5.94% from the previous week. In the basic chemical industry, the spot price of acetic acid increased by 1.63% weekly to 2500 yuan/ton, while the distribution price of butadiene rubber in the northeast was 11500 yuan/ton, down by 2.54% from the previous week. In the electronics sector, the average spot price of DDR3 DRAM increased by 6.71% weekly to 2.58 USD. In the power equipment sector, the price of lithium hexafluorophosphate increased by 10.66% weekly to 67500 yuan/ton, while the average price of lithium iron phosphate decreased by 0.3% weekly to 33700 yuan/ton. Industry allocation recommendations: The third phase of the Sci-Tech Innovation Board 2.0 is challenging, with twists and turns inevitable, emphasizing the importance of the Hengsheng Internet. Based on economic recovery and market liquidity, investment themes can be reduced to three directions: 1) Deepseek breakthrough and open-source leading technology AI, 2) internal and external resonance, gradual economic recovery, bull market style "the strong get stronger," but may show performance in the later stages of the cycle, 3) undervalued dividends continue to rise. The withdrawal of dividends often occurs when strong industry trends appear, so the height of undervalued dividends depends on the progress of the AI industry trend, which in turn depends on breakthroughs in AI applications and consumer trends, with an emphasis on the Hengsheng Internet. In the early stages of a bull market, funds tend to favor a few highly prosperous industrial tracks, and later funds will focus on main themes, making it more difficult for new funds to profit, while cyclical stocks possess the attributes of low valuation and high beta, easily exhibiting better performance elasticity as the underlying fundamentals deepen, gaining favor from incremental funds. Risk warning: 1) Historical reviews are for reference only; 2) Market volatility may affect asset performance; 3) Model-based quantitative analysis cannot replace qualitative analysis of listed company fundamentals.