Huachuang Securities: A Four-Dimensional Perspective on the "Midstream Manufacturing" Quality of China's Broad-Based Indices

What does the differentiation of midstream content in broad-based indices mean for investors?

[Huachuang Securities: A four-dimensional perspective on the “midstream manufacturing” quality of China’s broad-based indices] According to a report by CaiLianShe on March 29, under the global “supply anxiety,” China’s midstream manufacturing is entering a strategic era of “going overseas to generate revenue.” To capture the dividends of this era, it is essential to penetrate the illusion of labels in broad-based indices and identify the true quality of underlying assets from four dimensions. First, look at scale and trend: the midstream content of broad indices is highly differentiated and faces systematic elevation. Second, look at reality and structure: the profitability supporting the midstream market capitalization in broad indices shows significant differences. Third, look at drivers and going overseas: the overall capability of midstream entities to go overseas is strong, but the indices exhibit different tool properties. Fourth, look at motivation and attribution: dual attribution reveals distinctly different evolutionary paths.