In October, global markets entered the earnings season. 

Onshore Market：

In the Chinese market, third-quarter earnings reports indicate a further economic slowdown. However, this has been largely priced into the market, with valuations reflecting lower levels. The market’s focus has now shifted to potential upcoming fiscal stimulus policies. Following the surge at the end of September, the market may need time to digest current valuations and wait for a recovery in fundamentals or clearer policy signals. This fiscal stimulus package is aimed directly at addressing two of the largest risks in China’s economy: local government debt and the real estate sector. Over the coming years, the government is expected to allocate approximately RMB 10 trillion to restructure local government debt and acquire land and existing properties from developers. These measures are expected to significantly reduce potential financial risks in the economy and alleviate deflationary pressures. At the same time, the direction of future stimulus policies is expected to shift, with increased investment in livelihood improvements and consumption. 

We believe that under these policies, China’s economy may start to recover around the second quarter of next year, with growth accelerating in the second half. We are primarily focused on the technology sector and recovery of domestic demand. 

Offshore Market：

In the U.S. market, investment in artificial intelligence (AI) continued its rapid growth, accompanied by optimistic guidance for next year. The impact of AI applications on corporate revenue is accelerating, though current contributions remain relatively small. We expect significant growth in the AI sector over the next 2-3 years.