Brokerage Morning Meeting Highlights | Tech Stocks at Low Valuations, Watch the 27Q1 Window

On the previous trading day (November 6), the Shanghai Composite Index fell 1.10% to 3,649.18 points, the Shenzhen Component Index fell 2.57% to 11,175.78 points, and the ChiNext Index fell 3.96% to 2,465.23 points; combined turnover of the two markets was RMB2.098863 trillion; across the entire market, 758 stocks rose and 4,741 fell, 80 were flat, 28 hit the daily limit up and 2 hit the daily limit down. Guotai Haitong believes that in terms of overall market assessment, the room for market adjustment during the year has been relatively sufficient, valuations of multiple indices are at historically low levels, and with the PBOC and CSRC intensifying efforts to stabilize the market (after the swap facility, relending for share buybacks will create incremental market-stabilizing funds), the current market is already at a bottom position; CITIC SEC believes that after the Democratic blue wave, policy will not shift radically, and aggressive changes in AI and data center regulation are unlikely; SDIC Securities believes that after the 10Y government bond yield broke below 1.6%, long bonds still have room but the risk-reward of chasing the rally is low; Sinolink believes that the computing power market has overly priced in pessimistic expectations, and the technology cycle will not reverse due to short-term regulation; Huafu Securities believes that coal prices will remain high, and AI energy use will constitute incremental demand. Guotai Haitong: This year's adjustment has been relatively sufficient, the market is at a bottom, opportunities lie in large-cap blue chips and domestic technology In terms of overall market assessment, the room for market adjustment during the year has been relatively sufficient, valuations of multiple indices are at historically low levels, and with the PBOC and CSRC intensifying efforts to stabilize the market (after the swap facility, relending for share buybacks will create incremental market-stabilizing funds), the current market is already at a bottom position; however, there is temporarily a lack of a large-scale growth narrative, and under year-end performance assessments across multiple sources of funds, incremental liquidity is limited. A strong rebound still needs to wait for a better catalyst; the timing is approaching, and conditions will be more sufficient around the end of the year and the beginning of next year. In terms of style, expectations need to be recalibrated: this round does not involve broad speculative excess; the adjustment is concentrated in specific sectors. Future opportunities lie in large-cap blue chips and domestic technology the dynamic P/E of the CSI 300 (excluding electronics and telecommunications) remains persistently low, trading heat is at a historical low, and the cash flow and dividend value of blue chips deserve attention; the AI industry cycle is not over, and China's AI growth is expected to develop an independent narrative. In terms of industries, allocate in a balanced manner across four main lines: emerging technology (the micro structure of the domestic chain is better), overseas expansion leaders, stable dividends, and strategic resources. CITIC SEC: Tech stocks at low valuations, watch the 27Q1 window Although factors such as controversy over AI investment returns, high interest rates and the financing environment, and trading crowding continue to suppress tech stock valuations, ChiNext valuations have now returned to the low levels seen in 2017-2018 and 2023-2024 during previous Federal Reserve rate hike cycles, and the STAR 50 is also at a low since the 924 rally. Considering strong reality factors such as still-tight computing power supply and demand and high EPS growth for tech stocks, once events occur such as a reversal in 2027 rate hike expectations, a decline in financing costs, breakthroughs in model capabilities, and the next round of ARR driven by new applications A-share tech sectors will have enormous recovery elasticity. In terms of timing, we believe 27Q1 will become an important observation window. On the one hand, the next-generation model trained on Rubin is expected to be launched and validate capability improvements, domestic models will also enter a major version iteration window around the Spring Festival, and domestic HBM is expected to enter a mass production ramp-up phase. On the other hand, the 2028 computing power demand outlook is expected to become clearer, and previously suppressing factors such as high US Treasury yields, the FCC leadership choice, and geopolitical disruptions are also expected to become clear in Q1. The overall trend of A-share technology may be low first and high later. In terms of structure, we believe the certainty of AI applications is increasing. Applications such as AI film and television, AI4S, and enterprise AI are brewing new directions, physical AI is ushering in its first year of commercialization, and in addition, domestic computing power is entering a volume-production harvest period, while domestic storage expansion is driving high prosperity in equipment. Pay attention to alpha opportunities such as technological upgrades and high earnings certainty. Sinolink: Computing power expectations are overly pessimistic After the election, calls for AI regulation and data center moratoriums intensified, and the Nasdaq fell 5.52% in a single day, with the market overly pricing in pessimistic policy expectations. However, foundation model costs have plunged and generalization has broken through, while AI penetration into enterprise and physical scenarios has only just begun; overseas H100/H200 rental prices rose 10%27% month over month, domestic high-end effective computing power is structurally scarce, and cloud prices have been raised. The technology cycle will not reverse due to short-term regulation; supply-demand bottlenecks remain in chips, FAB, and HBM, and scarce resources are being revalued. Huafu Securities: Coal prices remain high, watch for cooling to drive up daily consumption Prices and supply: As of November 6, the FOB price of 5,500K thermal coal at Qinhuangdao Port was RMB1,016/ton (up RMB8/ton week over week), and average daily output at 462 sampled thermal coal mines was 5.37 million tons (down 2.2% year over year); the ex-warehouse price of main coking coal at Jingtang Port was RMB2,380/ton (down RMB50/ton week over week), and clean coal daily output at 523 sampled mines was 661,000 tons (down 10.4% year over year). Coking coal underproduction and resource scarcity are becoming increasingly evident. Demand and medium-term logic: Power plant restocking combined with high methanol operating rates has driven coal prices higher, and the policy floor for coal prices has been established in 2025; AI development's pull on energy is incremental demand, China's supply chain and energy cost-advantage are a solid guarantee for electricity consumption, and coal prices are in a new upward cycle. Under the guidance of establishing the new before abolishing the old and the demand for energy security, coal supply elasticity is limited, coal companies' financial statements are healthy, dividends are improving, and coal stocks still have comparative advantages.