Opportunities Through Three Mindsets
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Abstract
Equities stabilized and rebounded last week as leadership broadened beyond AI, with average daily turnover at RMB 2.43 trillion. Huatai Securities expects a shift from rapid decline to a range-bound market with an upward bias—but not yet a trend rally—given the Unitree IPO subscription, dense interim disclosures and possible public-fund redemptions, and recommends continued rotation from crowded into lagging positions. Allocation follows three lines: AI derivatives (compute-power synergy, upstream consumables, AI power generation); independent-boom sectors (innovative drugs, CXO, AI4S, energy storage, earnings-validated names); and geopolitical-premium resources (oil, gas, coal chemicals, strategic metals), while downweighting overseas-chain proxies and liquidity-sensitive names. For convertibles, hold a moderately neutral position centered on structural adjustment: low-premium bank bonds as core holdings—Industrial Bank (RMB 41.35bn outstanding), Bank of Shanghai (RMB 19.98bn) and Bank of Chongqing (RMB 11.56bn)—with elasticity from newly listed or equity-like issues, avoiding double-high names. Debt-like factors rebounded 6.6% in Q3 after Q2 pressure; the high-YTM factor with a rating constraint returned about 10.0% annualized with 16.0% maximum drawdown; the debt-recovery multifactor portfolio gained 9.2% year to date, roughly 6.2 percentage points above the CSI Convertible Index; the LLM liquidity-shock strategy rose 8.7%. Watch Unitree's subscription, Warsh at Jackson Hole, the August FOMC, interim earnings delivery and US-China developments.