Broker morning meeting highlights | November equities to be mainly range-bound with recovery; confirmation of market bottom still requires capital inflow

On the previous trading day (November 3), the Shanghai Composite Index fell 0.82% to 3,608.10 points, the Shenzhen Component Index fell 1.21% to 10,876.99 points, and the ChiNext Index fell 2.73% to 2,391.65 points; combined turnover of the two markets was RMB1.703437 trillion; 48 stocks hit the daily limit up and 17 hit the daily limit down. Guotai Haitong believes that November equities will be mainly range-bound with recovery, and confirmation of a market bottom still requires capital inflow; Huayuan Research believes the core contradiction in AI is the time lag between capex expansion and return realization, and October PMI fell back below the boom-or-bust line; Zhongtai believes that implementation of the PTFE solution will drive demand release for spherical silica powder, hydrocarbon resin and PTFE resin; SDIC Securities believes the decline in sales by the top 100 developers is expected to narrow further under incremental policies. Guotai Haitong: Market Trend | Stay steady, wait for recovery Looking ahead to November, the equity market is expected to be mainly range-bound with recovery. Inflows into broad-based ETFs can buffer systemic risk, but confirmation of a market bottom still requires the early laggard sectors to stop falling, endogenous selling pressure to weaken and capital to return. The bank believes the industrial trend in the technology sector remains intact, but high crowding, high valuations and overseas interest rate constraints have not yet been fully digested, and a systemic rally in the sector still awaits four types of catalysts: first, overseas cloud vendors' capex continues to be revised upward, with free cash flow and capital return expectations stabilizing; second, domestic companies' fourth-quarter and 2027 profit expectations are revised upward or order trends improve; third, new breakthroughs emerge on the AI application side; fourth, technology sector position crowding and trading share stabilize further, and overseas interest rates stop rising. Huayuan Research: Macro | Profit realization concerns weakening domestic demand This week US stocks came under notable pressure, with the Nasdaq falling for a third consecutive week and by a larger margin than traditional value sectors. This week's earnings from tech giants such as Microsoft, Alphabet and Amazon became the market focus; although AI-related businesses continued to grow, continuously expanding capex triggered market concerns over the investment return cycle and free cash flow. The bank believes the core contradiction in the current AI industry chain is not weakening demand, but the time lag between capex expansion and commercial return realization. The most noteworthy domestic development this week was the October PMI data released on October 31 falling back below the boom-or-bust line. It expects the short-term market to continue to revolve around the tug-of-war between AI profit realization and domestic demand recovery; for the AI industry chain, focus on the liquidity environment after the third-quarter reporting season basically ends; for overseas assets, a pullback in US Treasury yields does not necessarily mean improved risk appetite, and attention should still be paid to Fed policy expectations and tech giants' capex returns; for domestic assets, high-end manufacturing and the technology industry chain still have structural prosperity advantages, but traditional cyclical sectors can also be included in strategic allocation directions. Zhongtai: Building Materials & New Materials | PTFE solution analysis In the 448G era, dielectric loss dominates, and PTFE materials have entered the industry's field of vision. AI cluster interconnect is upgrading along 56G-112G-224G-448Gbps; at 448Gbps the PAM-4 Nyquist frequency exceeds the effective bandwidth, and the industry is gradually switching to PAM-6/PAM-8, further compressing the link loss budget; after frequencies exceed 56GHz, dielectric loss grows faster than conductor loss and becomes the main source of total loss. PTFE has Dk of about 2.1-2.2 and Df below 0.0004 at 10GHz, a generational lead over M9 (Df about 0.0009), and Nvidia has been advancing PTFE copper-clad laminate certification and application since GTC 2025. However, PTFE has shortcomings such as a high coefficient of thermal expansion, mediocre thermal conductivity, soft texture, poor interfacial adhesion and difficult molding and processing, so its industrialization depends on coordinated breakthroughs in material modification and manufacturing processes. If the PTFE solution is implemented, it will drive demand release for spherical silica powder, hydrocarbon resin and PTFE resin. The PTFE solution is expected to be first adopted in the Rubin Ultra NVL576 switch tray, and the bank, based on industry research, separately estimates demand and market space for PTFE resin, hydrocarbon resin and chemically produced spherical silica powder. The estimates show that for every 10,000 units of NVL576, PTFE resin demand is about 1,152 tonnes, corresponding to a market space of about RMB170 million; hydrocarbon resin demand is about 864 tonnes, corresponding to a market space of about RMB2.16 billion; chemically produced spherical silica powder demand is about 3,040 tonnes, corresponding to a market space of about RMB1.22 billion. Notably, hydrocarbon resin is not replaced by PTFE resin, but is a key supporting material for the engineering implementation of the PTFE route, used in the PP layer to provide partial rigidity. SDIC Securities: Real Estate | Narrowing decline in top 100 sales For January-October, the year-on-year declines in both total sales and total land acquisition by the top 100 developers narrowed. According to China Index Academy statistics, in January-October 2026 the top 100 developers' total sales were RMB2.5 trillion, with the year-on-year decline narrowing by 0.9 percentage points from January-September; by scale tier, there were 6 developers with sales of RMB100 billion or more in January-October, one fewer than a year earlier, and 58 developers with sales of RMB10 billion or more, four fewer than the same period last year, with continued contraction in the scale of the RMB100 billion and RMB10 billion developer tiers. On land acquisition, the top 100 developers' total land acquisition was RMB646.5 billion, down 17.5% year on year, with the decline narrowing by 3 percentage points from January-September; among leading developers, CHINA RES LAND and Hangzhou Binjiang Real Estate Group saw year-on-year increases in land acquisition. The bank believes that under intensive incremental policies, hot sales of quality projects in core cities have provided some market support, and combined with expectations of a year-end performance sprint by developers, the decline in sales is expected to narrow further.