According to the China Financial Policy Package issued on September 24, we make some market comments as below：

The State Council convened a press briefing to outline financial strategies intended to foster high-quality economic advancement on Sep 24. Collaboratively, the People's Bank of China( PBOC ), in partnership with National Financial Regulatory Administration (NAFR) and the China Securities Regulatory Commission( CSRC ), has introduced a comprehensive set of financial measures tailored to promote the growth of high-quality economic development. This comprehensive financial policy package spans across a variety of sectors including interest rates, real estate, and the capital market.

Part One: Interest Rates

With respect to liquidity and interest rate management, it is imperative to decrease the deposit reserve ratio and the policy interest rate, thereby prompting a decline in the market benchmark interest rate.

1）A reduction of 0.5 percentage points in the deposit reserve ratio is anticipated to inject approximately 1 trillion yuan of long-term liquidity into the financial market. Throughout the year, the PBOC may consider an additional reduction in the deposit reserve ratio by 0.25 to 0.5 percentage points, depending on the situation.

2) The PBOC announces to decrease the central bank's policy rate ，specifically the seven-day reverse repurchase operation rate, by 0.2 percentage points.

Part Two: Real Estate

The PBOC and NFRA have unveiled five real estate finance measures, including

1）a policy to align existing mortgage rates with new loan levels, targeting an approximate 0.5% reduction.

2) Standardize the minimum down payment ratio for both first and second homes, lowering the national minimum for second homes from the current 25% to 15%.

3) Extend the validity period of the two real estate finance policy documents.

4) Enhance the relending policy for government-supported housing.

5) Back the acquisition of stock land by real estate companies.

Part Three: Capital Market

The central bank has introduced two new structural monetary policy tools for the capital market. The PBOC will roll out two such tools, including: to establish a swap facility for securities, fund, and insurance companies, and to assist eligible entities in obtaining liquidity from the central bank via asset-backed pledges, an initial quota of 500 billion yuan has been allocated. This measure is anticipated to markedly bolster their fund-raising capabilities and their capacity to increase equity investments. Additionally, a specialized refinancing program for stock buybacks and equity enhancement is crucial. Banks and financial institutions should be instructed to offer credit to listed companies and key shareholders to facilitate their share repurchase and increase in holdings. The initial fund allocation is 300 billion yuan.

Part Four：Comment

The financial policy package is meticulously designed to encompass the three core areas of interest rates, real estate, and the capital market, which are of paramount importance to investors. It is poised to cultivate an optimal monetary and financial ecosystem conducive to stable economic expansion and the pursuit of high-quality development，which is expected to boost corporate earnings and bolster investor confidence. Coupled with monetary policy, we forecast a phased implementation of fiscal stimulus, including the issuance of special treasury bonds, aimed at invigorating demand. At current depressed valuations, we anticipate a market rebound and potential upside if fiscal policies outperform expectations.