Highlights of the Broker Morning Meeting | Wong In-hoon's Departure Disturbs AI Valuation and Goods Policy Report Optimizes Short-Term Interest Rate Regulation

The Zhitong Finance App learned that on the last trading day (November 12), the Shanghai Stock Exchange Index fell 0.67% to 365.83 points, the Shenzhen Securities Index fell 1.68% to 11197.98 points, and the GEM index fell 2.44% to 2509.43 points; the two markets had a turnover of 2457.155 billion yuan; up 875, down 4,635, up and down 0.

CITIC Securities believes that Huang Renxun's departure was compounded by changes in the US political landscape or triggered a revaluation of the AI industry chain, but the mid-term trend of US stocks still depends on profit fundamentals; China Investment Securities believes that the goods policy report proposed optimizing the short-term interest rate regulation mechanism, and that the bond market trend has not changed, pulled back, or better buying points; Huayuan Securities believes that the CPI and core CPI both cooled down year on year in October, and PPI continued to rise year on year but the momentum slowed down from month to month; Huafu Securities believes that overseas leaders locked in domestic production capacity for large indium phosphide substrates over a period of many years, and the background is shifting to a tight shortage Long-term pricing.

CITIC Securities: Huang Renxun's departure may trigger a revaluation of the AI industry chain. US stocks still look at profit fundamentals in the medium term

Nvidia announced the departure of founder and CEO Hwang In-hoon, compounding changes in the US political landscape, or triggering a revaluation of the AI industry chain and rebalancing of US stock styles. However, the impact on the mid-term trend of US stocks still depends on the evolution of corporate profit fundamentals.

At the political level, the policy consensus between the US parties on China's technology restrictions may be further strengthened, and laws relating to the regulation of advanced chip exports, semiconductor equipment, and remote computing power may be implemented at an accelerated pace, but implementation is still limited by administrative decisions, allied coordination, and the Sino-US negotiation process. The diplomatic window at the end of the year may provide space for mitigation. At the technological level, the market may reprice AI capital expenditure in the short term, and semiconductor profit expectations have been lowered, but the inventory risk in the industrial chain is relatively limited, and the adjustment in the hardware sector may be more manageable; the slowdown in capital expenditure growth will help improve CSP free cash flow, compounded by the potential decline in long-term interest rates, and the SaaS sector is expected to benefit.

In the short term, the mid-term elections and changes or intensified fluctuations in leading technology management, but systemic selling pressure is relatively limited; as political risks gradually digest, the pricing logic of US stocks may return to profit fundamentals dominated by risk sentiment, and profit growth and rising expectations are expected to continue to support mid-term performance.

SDIC Securities: The Goods Administration Report optimizes short-term interest rate regulation. The bond market trend has not changed, has pulled back, or is a better place to buy

After the “anchor change” was implemented, the central bank continued to optimize the short-term interest rate regulation mechanism. Funding has recently subsided, or reflects the central bank's intention to strengthen macroprudential supervision of the bond market. It is necessary to observe whether capital prices have declined significantly after the tax period.

Loan interest rates and bank net interest spreads are all at historically low levels. Loan interest rates may decline further or deposit interest rates need to fall first; deposit interest rates are highly rigid, and there is still room for future loan interest rates to fall, but the pace may slow down.

The central bank mentioned in column 2 the impact of treasury bond interest exemptions on interest rate comparisons, and it remains to be observed whether to resume taxation on treasury bonds. The tax exemption regulations stem from the corporate income tax law and its implementing regulations. The adjustments need to go through legislative procedures, and the timing of implementation depends on the progress of the law amendments; even at the implementation stage, the old and new cutting methods, the length of the transition period, and the rules for handling stock vouchers will change investors' expectations of earnings after tax, and there is still great uncertainty about the form of implementation.

The goods policy report clarifies the operating mechanism of the non-bank large redemption and swap facility (BNSF) in the bond market, and emphasizes that applications from non-bank institutions must meet a series of requirements; at the same time, it is proposed to step up the implementation of two tools to support the capital market to maintain the smooth operation of the stock, bond, and foreign exchange markets. The central bank is paying more attention to capital market stability. The probability that the equity market will stabilize is relatively high, and the risk of major adjustments in the bond market is also relatively limited.

The trend in the bond market has not changed, and a pullback may be a better place to buy — the recent pullback can help ease prolonged periods and trading congestion. The momentum for fundamental recovery is weak, and expectations for steady growth are weak. The “asset shortage” pattern in the bond market may continue, and interest rates are expected to remain strong during the year; however, yields are already relatively low, and fluctuations are likely to increase.

Huayuan Securities: Both CPI and core CPI cooled down in October. PPI continued to rise year-on-year but momentum slowed month-on-month

The year-on-year growth rate of CPI and core CPI both cooled down in October: food drag deepened, energy contributions increased, core prices fell and service prices rose, but price transmission was still weak. PPI continued to rise year on year. Month-on-month momentum slowed compared to September. The energy chain dominated the month's increase. Prices for some advanced manufacturing increased, but industry spread was still limited.

Foreign trade continued to increase rapidly, and the surplus narrowed compared to September. The increase in exports was mainly based on technological manufacturing. The growth area was narrower than in September, and prices are still an important support; regionally, the growth rate of exports to the US and ASEAN has declined, and there has been a sharp increase in South Korea, and there has been an increase in Latin America and Africa. Higher imports simultaneously reflect demand from the technology chain and rising commodity prices.

The current rise in PPI that exceeded expectations is still mainly affected by imported inflation brought about by rising international energy prices, which may disrupt the bond market in the short term or be weaker than the previous period. Currently, the K-type economy is divided, domestic demand is under pressure, financing demand continues to be weak, and there is a possibility that policy interest rates will be lowered; trade surpluses are still high and inflationary pressure is low, making it difficult to tighten capital excessively. The agency predicts that the yield on 30Y treasury bonds may fall below 2.0% during the year.

Huafu Securities: Overseas long-term contracts lock in domestic large-size substrate production capacity, indium phosphide shortage shifts to long-term contract pricing

Guangzhi Technology signed a long-term supply agreement with Coherent to supply 6-inch indium phosphide substrates to its Swiss and Swedish plants in the next three years. The company expects a transaction amount of not less than US$601 million (an average annual average of about 1.3 billion yuan); Yunnan Germanium and AOI signed a five-year long-term contract with AOI to purchase 180,000 tablets next year, with a corresponding amount of 190 million US dollars (about 1.3 billion yuan). Coherent has its own indium phosphide production capacity and is still locked out, confirming that the scale of its production expansion has exceeded the supply of its own substrates; from 4 inches to 6 inches, overseas leaders lock in large domestic production capacity with multi-year contracts, and the cash method for scarce substrates is shifting from spot pricing to locking in length contracts.

Overseas device manufacturers' quarterly reports exceeded expectations and production capacity plans were revised simultaneously: Coherent's indium phosphide production capacity doubled one quarter ahead of schedule, and plans to more than double by the end of 2027; AOI plans to increase the production capacity of 800G/1.6T compatible equipment from the current monthly production capacity of about 330,000 units 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, and Optical Connectivity was included as a chip platform provider — the two sides officially announced an all-stock deal on November 2, implying a corporate value of about US$115 billion, a 23.9% premium over the closing of the previous closing. Indium phosphide production capacity has a long construction cycle and weak supply elasticity. Higher premiums price scarce production capacity.