Broker Morning Meeting Highlights | The debt resolution policy mix is drawing to a close, with the fiscal focus shifting toward stabilizing growth.

On the previous trading day (October 27), the Shanghai Composite Index fell 1.33% to 3,648.30 points, the Shenzhen Component Index fell 2.50% to 11,245.73 points, and the ChiNext Index fell 3.41% to 2,548.15 points; turnover across the two markets was RMB1.842541 trillion; across the entire market, 606 stocks rose, 4,922 fell, 49 were flat, 40 hit the daily limit up, and 2 hit the daily limit down. Guotai Haitong believes the debt resolution policy mix is drawing to a close, hidden debt risks have been substantially eased, and the fiscal focus is shifting toward stabilizing growth; Sinolink believes margin financing and securities lending continued to see large net outflows, stock ETFs remain the main supporting force, and the market may face repeated trading at this stage; Huafu Securities believes the profit picture in the third-quarter reports continues to recover, with structural optimization proceeding in tandem; Huayuan Securities believes Ego data is expected to become the main data-collection thread for this round of physical AI and take the lead in achieving scaled expansion; SDIC Securities believes expectations of supply suppression and bottom support for coal coexist, and attention should be paid to the pace of capacity increase approvals being realized. Guotai Haitong: The debt resolution policy mix is drawing to a close, the fiscal focus is shifting toward stabilizing growth, and expectations for central government leverage are rising The phased results of debt resolution are significant: the swap quota under the debt resolution policy mix introduced in 2024 is nearly exhausted, stock risks from hidden debt have been substantially eased, and a large number of financing platforms have achieved market-based exit; urban investment financing has shifted from high-cost bonds and non-standard products to bank credit, financing costs have been reduced, debt duration has been extended, and short-term liquidity risks have been markedly eased. Debt resolution is entering its next stage: fiscal swap bonds can only cover hidden debt, while the pressure from the larger operating debt of urban investment platforms still needs to be absorbed; platform interest expenses remain high, and existing debt relies on refinancing rollovers. The focus of debt resolution will shift to clearing government arrears and platform transformation. Current government bond supply is characterized by "new issuance-led, special bonds driving, and refinancing shrinking," with fiscal expenditure ensuring people's livelihood while tilting toward infrastructure; looking ahead to next year, the pace of fiscal stimulus is expected to be significantly front-loaded. If exports slow and domestic demand needs to be boosted, there is a relatively high possibility that central fiscal authorities will continue to increase leverage to play a countercyclical adjustment role. Sinolink: Margin financing continues to see large net outflows, and stock ETFs remain the market's main supporting force Leverage funds represented by margin financing and securities lending continued to see large net outflows, but with last Friday's rebound, the maintenance guarantee ratio has recovered somewhat; stock ETFs remain the market's main supporting force, with northbound funds and active equity funds seeing phased inflows. The market may still face repeated trading at this stage, and follow-up attention should be paid to whether margin funds can gradually stabilize and flow back, as well as the sustainability of inflows from other participants. Huafu Securities: The profit picture in the third-quarter reports continues to recover, with volume and profit resonating in advantageous manufacturing chains As of October 26, the profit picture of 1,695 A-share listed companies that had disclosed third-quarter reports continued to recover: revenue rose 13.77% year on year, net profit attributable to parent companies rose 22.48% year on year, and the net profit margin rose 0.62 percentage points. The growth was not merely scale expansion, but was jointly driven by volume expansion, an upward shift in product mix, and profit resilience. The four advantageous manufacturing chains of nonferrous metals, electronics, power equipment, and basic chemicals saw resonance among volume growth, profit improvement, and an improved profit picture; among another 99 companies that had released earnings forecasts, high-growth names were concentrated in the electronics industry chain such as semiconductors, PCBs, optical chips, and AI computing power, further strengthening the earnings certainty of the high-prosperity manufacturing mainline. Huayuan Securities: Demand for physical AI data is expanding, and Ego data is expected to scale first One of the current bottlenecks in physical AI is the lack of high-quality real-world interaction data that can continuously scale, while the scaling potential of Ego (first-person perspective) data has been preliminarily verified. On industrial technology routes, four types of data deserve attention: Ego, UMI, Siasun Robot&Automation bodies, and simulation synthesis; short-term demand growth elasticity for Ego data is expected to be relatively large, while over the medium and long term the importance of real-machine and high-precision multimodal data will continue to rise. Companies with capabilities in 3D spatial reconstruction, motion trajectory extraction, physical simulation, and data closed loops are expected to further enhance the added value of data, and their business models may extend from traditional data collection to high-quality data assets and training infrastructure. Ego data is expected to take the lead in achieving scaled expansion. SDIC Securities: Legalization of thermal coal long-term contracts is implemented, with high coal price support coexisting with suppression from capacity increase expectations On October 23, the NDRC issued Order No. 50, upgrading thermal coal long-term contracts from an annual policy to a legalized system (effective December 2026), establishing a unified framework for three types of energy contracts, a signing term of more than one year, a "benchmark price + floating price" or monthly adjustment mechanism at the place of origin, and strictly controlling reselling, providing long-term institutional guarantees for smoothing irrational fluctuations in coal prices. As of October 26, the spot price of 5,500 kcal coal at Qinhuangdao Port reached RMB1,032/ton, deviating from the upper limit of the reasonable long-term contract range by about 33%; this round of capacity increase approvals is essentially the compliance of existing hidden overproduction, which at the expectation level suppresses irrational price support before winter storage, but is unlikely to create a substantial supply shock in the short term. In 2026, the supply-demand gaps for thermal coal and coking coal are 78.57 million tons and 15.47 million tons, respectively, supporting the price center at a high level; looking ahead to 2027, as production resumes and reaches full capacity and capacity increase approvals are realized, the supply-demand pattern will tend to loosen, and the price center will face downward pressure, though overall room for decline is limited.