Brokerage Morning Meeting Highlights | A-share valuation adjustments and earnings recovery are still expected to provide support for the market.

Yesterday, the Shanghai Composite Index held above 3,700 points in late trading, while the ChiNext Index fell nearly 3% and the Shenzhen Component Index dropped more than 2%. E Fund CSI 300 ETF recorded intraday turnover of over RMB 19 billion, the largest since January 28, 2026. E Fund ChiNext ETF and ChinaAMC STAR 50 ETF both exceeded RMB 10 billion in turnover, the first time since August 19. Combined turnover in Shanghai and Shenzhen reached RMB 1.63 trillion, up RMB 218.6 billion from the previous trading day. At the close, the Shanghai Composite Index fell 1.59%, the Shenzhen Component Index dropped 2.43%, and the ChiNext Index declined 2.92%. CICC believes that A-share valuation adjustments and earnings recovery are still expected to provide support for the market; Huatai believes the baijiu industry may already be at the bottom of this round of industry adjustment; CITIC SEC believes AI EDA is becoming the next important direction for AI Agent deployment, and EDA value is expected to be re-rated. CICC: A-share valuation adjustments and earnings recovery are still expected to provide support for the market CICC believes that over the medium term, valuation adjustments and earnings recovery are still expected to provide support for the market. After the adjustment, the medium-term cost-effectiveness of overall A-share valuations has further improved, and the structural overvaluation issues faced by some sectors in the first half of the year have also been substantially alleviated; the full year is expected to usher in the best earnings period of the past five years; the restructuring of the global monetary order and the technology narrative still provide support for A-shares. CICC believes that, overall, domestic fundamentals and medium-term logic have not changed, and there is no need to be pessimistic about the market's medium-term trend. Huatai: The baijiu industry may already be at the bottom of this round of industry adjustment Huatai believes that although baijiu industry performance during the 2026 Mid-Autumn peak season was under pressure, there were still highlights such as inventory destocking and the price floor stabilizing at a low level, and this round of industry adjustment may already be at the bottom; before the 2027 Spring Festival, the industry will be in an off-season earnings vacuum period. Against the backdrop of a dual-low chip structure and market expectations, and gradually strengthening expectations for policy and capital rotation, we believe that the implementation of positives such as external policy stimulus and marginal improvement in fundamentals could significantly boost sector performance, and the industry may unfold along the rhythm of first-stage (before the 2027 Spring Festival) expectation repair plus second-stage (2027 Spring Festival and Mid-Autumn peak seasons) fundamental recovery from a low base. CITIC SEC: AI EDA is becoming the next important direction for AI Agent deployment, and EDA value is expected to be re-rated EDA is gradually evolving from a "tool" into an "intelligent agent," becoming the Agent operating foundation for the entire chip design process. Progress from EDA leaders such as Synopsys has been intensive, and AI EDA has begun to enter a validation phase. AI EDA drives value enhancement for EDA companies, with triple upgrades in business model, barriers, and demand. Domestic EDA players have launched AI efficiency tools, and engineering data has become a core moat. AI EDA is becoming the next important direction for AI Agent deployment, and EDA value is expected to be re-rated. This article is reprinted from "Cailian Press," edited by GMTEight: Liu Jiayin.