Daily Investment Strategy

Recommended Stocks：LENOVO GROUP（992）

According to the latest statistics released by IDC, global traditional PC shipments reached 68.8 million units in the third quarter of 2024, with Lenovo Group being the fastest-growing among the top three manufacturers, outpacing the overall industry growth and expanding its market share to 24%, up by 1.3ppt yoy. Going forward, we believe that AI computer products represent a major turning point for the PC industry, being a new product cycle for business users and expected to drive demand growth in the medium to long term. To recap, Lenovo's revenue and profit attributable to equity holders grew by 20% and 38% yoy, respectively in 1Q25. Within this, the IDG segment saw revenue and profit increase by 11% and 27% respectively, primarily benefiting from the recovery in commercial sales and the demand shift towards higher value-added models. Notably, before the end of the second quarter, the group launched its AI PC in the market, which is expected to further drive up future average selling prices and the proportion of high-end products. As an industry leader, Lenovo would be the direct beneficiary of AI PC adoption. Target price: $13.2; Stop- Loss price: $11.

Hang Seng Index fell 31 points on Wednesday

The HSI closed at 20,286 for the day, fell 31 points or 0.2%. The HSTECH reported at 4,402, fell 48 points or 1.1%. The HSCEI Index fell 9 points, or 0.1%, to 7,267. The market turnover was HK$208.36bn.

The credit of U.S. residents has not deteriorated, reflected by recent quarter earnings call of US banks

Major U.S. banks have announced their third-quarter results one after another. Through post-earnings meetings, we understand each bank's confidence in credit ahead of the U.S. economy. Overall, they all pointed out that credit quality, especially credit card borrowing, has not deteriorated significantly. For example, Bank of America (BAC US)'s third-quarter provision expenses were flat QoQ, and commercial real estate provisions did not damage the bank's capital too much. Citibank (C US) said that U.S. consumers continue to remain healthy and resilient. Spend and payment rates continue to normalize, and underlying credit performance remains broadly in line with Citi expectations.

All three major U.S. stock indexes recorded gains, with the DJIA rising 337 points or 0.79% to close at 43,078; the S&P 500 rising 27 points or 0.47% to close at 5,842; and the Nasdaq composite rising 51 points or 0.28% to close at 18,367 points.

The initial jobless claim will fall per week while still in the high level

There were no important economic figures released by either China or the U.S. on Wednesday. On Thursday, the number of initial jobless claim was expected to record 241,000, which was lower than last week's 258,000, but still the highest in the past month. Considering that some states have been hit by the hurricane, the number of people applying for unemployment benefits may remain high in the coming weeks. Currently, according to the CME fed watch, traders’ consensus for a rate cut of only 25 basis points at the November FOMC meeting have further risen to 97.5%.

The net inflow of Hong Kong Stock Connect on Thursday was HK$1.55bn, of which Alibaba (9988) had the largest net inflow, reaching HK$508mn, followed by CNOOC (0883). Tracker Fund (2800) recorded the largest net outflow, reaching HK$4.72bn, followed by Kuaishou (1024).