The Zhitong Finance app learned that Huaan Securities released a research report saying that looking ahead to November, positive factors will continue to accumulate, and A-shares are expected to rebound under more clear support. Main reasons: 1) Domestic macroeconomic policy expectations are improving, boosting market confidence; 2) It is expected that 10-year US bond yields will remain volatile after hitting a 5% phased peak, northward capital outflows will slow down, Sino-US relations have improved, and overall peripheral risks of A-shares have been mitigated; 3) the economy continues to recover; 4) the economy continues to improve; 4) monetary policy continues to ease; 4) monetary policy continues to ease; and the November downgrade can be expected to hedge against the impact of additional treasury bonds, special advance debt loans, and special refinancing bond issuance. Therefore, the overall environment facing A-shares has improved compared to October, so we can be more optimistic about the November market.

The main views of Huaan Securities are as follows:

There was a general decline in style and industry levels in October. Automobiles and electronics benefited from the catalytic effects of the Huawei chain. The industry performance ranked high. In the only rising industry, the medium to long term allocation logic at the bottom of the valuation of Pharmaceuticals and Biotech was also recognized by the market. However, sectors such as beauty care, communications, and social services have retreated significantly. At the current position, we can be optimistic about future market trends, and A-shares are expected to usher in a phased rebound. With the implementation of additional treasury bonds, the market's confidence in future policies underpinning the economy has recovered, and expectations have also begun to be raised on the positive tone of the Central Economic Work Conference. At the same time, in line with debt issuance, liquidity is expected to continue to ease. High-frequency data show that the momentum for growth and recovery continues to improve. The probability that the overseas Fed will continue to raise interest rates is low now. The US debt is expected to fluctuate at a high level but will not rise sharply further. The risk of capital outflow has been reduced, and the risk suppression of A-shares has weakened.

In terms of configuration, on the one hand, consider the biggest change that may be brought about if the market rebounds, that is, the direction of the rebound, and on the other hand, consider the most obvious marginal change in the fundamentals of the current market economy, that is, the favorable direction for a moderate economic recovery. Specifically, it is recommended to focus on two main lines.

1) A rebound in growth industries with potential, including:

① Electronics and communications benefit from the repeated fermentation of the Huawei chain catalytic process. Electronics is still in the first stage of the market and the valuation repair stage. There is still a lot of room for its historically comparable ceiling position, and after the first phase of the market, there is still a second phase where driving force is converted to profit support can be expected. The communications industry's high valuation point in this round and the current valuation position have also greatly improved the space expected to be repaired in this round. There are many catalysts superimposed on the Huawei chain. Electronics and communications remain the medium- to long-term direction of growth worth configuring.

② Power equipment whose configuration value increased after falling too much. Next, A-shares are expected to unleash a period of market rebound, while industries that were overfalling in the previous period are expected to usher in greater rebound and elasticity. Power equipment bears the brunt of both the time and magnitude of the decline. Furthermore, the recent development of the HUAWEI chain car is expected to spread to the direction of new energy.

③ Pharmaceutical biology with obvious inflection points at the bottom of valuation and medium- to long-term investment expectations.

2) A financial style approved by marginal economic improvements combined with increased market holdings.

The financial sector, including banks and non-bank banks, can all increase allocations. The bank expects the GDP growth rate to rise further to 5.2-5.3% in the Q4 quarter. At the same time, there is a probability that interest rates will be lowered, so it still satisfies the macro-mix environment of financial-style market interpretation. Furthermore, according to the yield and concentration of publicly funded active equity funds, the possibility of a style change at the end of this year is reduced, so it is expected that the financial style market since July will continue. Specifically, at the bank level, with the landing of 1 trillion treasury bonds and the release of a signal of steady growth, economic performance and expectations are expected to improve at an accelerated pace, and asset quality will improve accordingly. At the insurance level, firstly, the suspension of insurance is still expected to bring about a rapid increase in premiums, and second, the improvement in economic expectations is expected to bring about a general improvement in the economy.

Huaan Securities's top 10 gold stocks in November: Ningde Times (300750.SZ), Lixun Precision (002475.SZ), Shenzhou Digital (000034.SZ), Tianfu Communications (300394.SZ), Aier Ophthalmology (300015.SZ), Gujing Gongjiu (000596.SZ), Baolong Technology (603197.SH), Qinchuan Machine Tool (000837.SZ), Kaisai Biotech (688065.SH), and Wanli Shi (002785.SZ).

Risk warning: the tightening of the Federal Reserve's monetary policy exceeds expectations; domestic economic forecasts are highly biased; domestic policy tightening exceeds expectations; the risk of geopolitical conflict exceeds expectations, etc.