Broker Morning Meeting Highlights | Jensen Huang's Departure Disturbs AI Valuations; Monetary Policy Report Optimizes Short-End Rate Regulation

On the previous trading day (November 12), the Shanghai Composite Index fell 0.67% to 3,655.83 points, the Shenzhen Component Index fell 1.68% to 11,197.98 points, and the ChiNext Index fell 2.44% to 2,509.43 points; combined turnover of the two markets was RMB2.457155 trillion; 875 stocks rose and 4,635 fell, with 31 hitting the limit up and 0 hitting the limit down. CITIC SEC believes that Jensen Huang's departure combined with changes in the U.S. political landscape may trigger a revaluation of the AI industry chain, but the medium-term trend of U.S. equities still depends on earnings fundamentals; SDIC Securities believes that the monetary policy report proposes optimizing the short-end rate regulation mechanism, the bond market trend remains unchanged, and pullbacks may be better buying points; Huayuan Securities believes that both October CPI and core CPI cooled year-on-year, PPI continued to rise year-on-year but sequential momentum slowed; Huafu Securities believes that overseas leaders are locking up domestic large-size indium phosphide substrate capacity through multi-year long-term contracts, with substrate scarcity shifting to long-term contract pricing. CITIC SEC: Jensen Huang's departure may trigger revaluation of the AI industry chain; U.S. equities medium-term still look to earnings fundamentals NVIDIA announced the departure of founder and CEO Jensen Huang, which, combined with changes in the U.S. political landscape, may trigger a revaluation of the AI industry chain and a rebalancing of U.S. equity style, but the impact on the medium-term trend of U.S. equities still depends on the evolution of corporate earnings fundamentals. At the political level, bipartisan policy consensus in the U.S. on technology restrictions against China may be further strengthened, and bills related to advanced chip exports, semiconductor equipment, and remote computing power regulation may be accelerated, but implementation remains constrained by executive branch decisions, allied coordination, and the China-U.S. negotiation process, with the year-end diplomatic window potentially providing room for easing. At the technology level, the market may reprice in the short term on slower AI capital expenditure and downward revisions to semiconductor earnings expectations, but industry chain inventory risk is relatively limited, and the adjustment in the hardware sector may be relatively contained; slower capex growth helps improve CSP free cash flow, and combined with a potential decline in long-end rates, the SaaS sector is expected to benefit. In the short term, midterm elections and management changes at technology leaders may exacerbate volatility, but systemic selling pressure is relatively limited; as political risks are gradually digested, the pricing logic of U.S. equities may return from risk sentiment dominance to earnings fundamentals, and earnings growth and upward revisions to expectations are expected to continue supporting medium-term performance. SDIC Securities: Monetary policy report optimizes short-end rate regulation; bond market trend unchanged, pullbacks may be better buying points After the "anchor switch" was implemented, the central bank continues to optimize the short-end rate regulation mechanism. The recent tightening of funding conditions may reflect the central bank's intent to strengthen macroprudential supervision of the bond market, and it is necessary to observe whether funding prices fall significantly after the tax period. Loan rates and bank net interest margins are both at historically low levels, and a further decline in loan rates may require deposit rates to fall first; deposit rate rigidity is relatively strong, and there is still room for future loan rate declines, but the pace may slow. In Column 2, the central bank mentioned the impact of tax exemption on treasury bond interest on rate comparisons, and whether tax will be reinstated on treasury bonds remains to be seen. The tax exemption provision originates from the Corporate Income Tax Law and its implementing regulations, and adjustments require legislative procedures, with the timing of implementation depending on the progress of legislative amendments; even if implementation begins, the grandfathering approach, the length of the transition period, and the rules for handling existing bonds will all change investors' expectations for after-tax returns, and the form of implementation remains highly uncertain. The monetary policy report clarified the operating mechanism of the Bond Non-bank Swap Facility (BNSF) for large non-bank redemptions in the bond market and emphasized that non-bank institutions applying must meet a series of requirements; it also proposed stepping up implementation of the two tools supporting the capital market to maintain the smooth operation of the stock, bond, and foreign exchange markets. The central bank's increased emphasis on capital market stability means the probability of equity market stabilization is relatively high, and the risk of a large bond market adjustment is also relatively limited. The bond market trend remains unchanged, and pullbacks may be better buying pointsthe recent pullback helps alleviate elevated duration and crowded trading. Fundamentals recovery momentum is weak, and expectations for strong growth stabilization are not high; the bond market's "asset shortage" pattern may continue, and rate products are expected to remain relatively strong within the year; however, yields are already at relatively low levels, and volatility may increase. Huayuan Securities: October CPI and core CPI both cooled; PPI continued to rise year-on-year but sequential momentum slowed October CPI and core CPI year-on-year growth both cooled: the food drag deepened, the energy contribution strengthened, core prices fell while services rose, but price transmission remains weak. PPI continued to rise year-on-year, with sequential momentum slowing from September; the energy chain led the month's increase, some advanced manufacturing prices rose but industry diffusion remained limited. Foreign trade continued to grow rapidly, with the trade surplus narrowing from September; export increments were mainly in technology manufacturing, with the growth breadth narrowing somewhat from September and prices still an important support; geographically, export growth to the U.S. and ASEAN declined, exports to South Korea grew substantially, and exports to Latin America and Africa increased. The high import growth reflected both technology chain demand and rising commodity prices. This PPI upside surprise was still mainly affected by imported inflation brought by rising international energy prices, and its short-term disturbance to the bond market may be weaker than in the previous period. Currently, the economy shows K-shaped divergence, domestic demand is under pressure, financing demand remains weak, and there is a possibility of a policy rate cut; the trade surplus remains high and inflationary pressure is small, making it difficult for funding conditions to tighten excessively. The institution predicts that the 30Y treasury bond yield may move below 2.0% within the year. Huafu Securities: Overseas long-term contracts lock up domestic large-size substrate capacity; indium phosphide scarcity shifts to long-term contract pricing Optics Technology Holding signed a long-term supply letter of intent with Coherent to supply 6-inch indium phosphide substrates to its Swiss and Swedish factories over the next three years, with the company expecting the transaction amount to be no less than US$601 million (about RMB1.3 billion annually); Yunnan Lincang Xinyuan Germanium Industry signed a five-year long-term contract with AOI to lock up 4-inch indium phosphide substrates, purchasing 180,000 wafers next year, corresponding to US$190 million (about RMB1.3 billion). Coherent has its own indium phosphide capacity yet still locks orders externally, confirming that its expansion scale has exceeded its own substrate supply; from 4-inch to 6-inch, overseas leaders are using multi-year contracts to lock up domestic large-size capacity, and the realization of substrate scarcity has shifted from spot pricing to long-term contract locking. Overseas device makers' quarterly reports beat expectations and they simultaneously raised capacity plans: Coherent's indium phosphide output capacity achieved a year-on-year doubling one quarter ahead of schedule and plans to more than double again by the end of 2027; AOI plans to raise equipment capacity corresponding to 800G/1.6T from the current approximately 330,000 units per month to more than 500,000 units by the end of 2026 and more than 1 million units by the end of 2027. Marvell acquired Lumentum, bringing optical connectivity into a chip platform provideron November 2, the two sides officially announced an all-stock transaction with an implied enterprise value of approximately US$115 billion, a 23.9% premium to the closing price before the news. Indium phosphide capacity construction cycles are long and supply elasticity is weak; the relatively high premium is pricing for scarce existing capacity.