Today’s market saw slight fluctuations, let's take a look at what happened.

On October 22, the three major A-share indices experienced a day of volatility, closing with the Shanghai Composite down 0.07%, the Shenzhen Component down 0.62%, and the ChiNext down 0.79%.

Out of 2,280 stocks, 72 hit the daily涨停 (upper limit), while 2,965 stocks declined.

Deep Earth Economy concept stocks remained active, with Shenkai股份 and China National Heavy Machinery Corp both achieving three consecutive涨停.

Hubei state-owned asset stocks continued their strong performance, with Wuhan Holdings hitting the涨停 limit. On October 16, Hubei’s deputy party secretary and governor, Li Dianxun, conducted research on the management reform of state-owned "three assets" in Wuhan and held a meeting to arrange key tasks. At the meeting, Li emphasized that deepening the reform of state-owned "three assets" management and accelerating the construction of a large fiscal system are essential to improving the operational efficiency of state-owned enterprises and are key supports for current stabilizing growth, managing risks, and ensuring people's livelihoods. He urged a more profound understanding of the three principles: assetization of all state-owned resources, securitization of all state-owned assets, and leveraging of all state-owned funds. Moreover, he suggested the scientific use of four strategies: utilization if possible, sale if not used, rental if not sold, and financing if feasible, further advancing significant reforms in the province's state-owned asset management.

Guosheng Securities report stated that the maximum efforts to tap the potential of state-owned "three assets" will effectively supplement local government financial resources, accelerating the securitization of state assets and warranting attention to the investment value of state-owned assets.

Real estate stocks continued to rebound, with Tianbao Infrastructure and Beijing Investment Development both hitting涨停.

Agricultural Bank reported 14 consecutive days of gains, with its stock price surpassing 8 yuan, closing at 8.09 yuan per share, marking a new historical high, and an increase of over 58% year-to-date.

In the afternoon, compute chip concept stocks strengthened, with Cambrian Technology seeing an intraday increase of over 7%, pushing its market cap back above 600 billion yuan. This surge was fueled by a widely circulated small report regarding Cambrian’s orders across various platforms.

Meanwhile, gold-related stocks fell, with Hunan Silver dropping over 7%. This follows a significant decline in spot gold, which dropped 6.3%, marking the largest single-day drop since April 2013. Spot silver saw an intraday decline of 8.7%, the largest drop since 2021.

Goldman Sachs predicts a 30% upside in Chinese stock market by 2027. The top investment bank forecasts that, benefitting from more favorable market policies, profit growth, and strong capital inflows, key Chinese stock indices are expected to rise by 30% by the end of 2027.

Their report states, “We now assess that Chinese stocks will enter a more sustained upward trend, likely moving upward with lower volatility, reminiscent of a shift from ‘hope’ to ‘growth’ in the stock cycle.”

Goldman Sachs strategists indicated last month that considering low valuations and the potential for increased allocation from residents and institutions, investors should adopt a “buy on dips” approach towards Chinese stocks. In July, they raised their 12-month target for the MSCI China Index from 85 to 90, citing improved prospects of a trade agreement between China and the US. Goldman pointed out that further demand-side stimuli, profit growth driven in part by AI developments, and stable capital inflows from domestic and foreign sources are key factors propelling Chinese stocks upward. Over the next three years, corporate profits are expected to grow by 12%, with valuation multiples possibly rising by an additional 5% to 10% from current levels.

However, the report cautions that macroeconomic deceleration in the fourth quarter and the resurgence of tariff risks could provide an excuse for investors to take profits. Unless these issues intensify further, “we suggest continuing to hold and buying on dips during corrections.”

This message is made available for informational purposes and does not constitute investment advice. Investment decisions should be made at the investor's own risk.