A：Against the backdrop of profound adjustments in the global economic landscape and technology-driven industrial transformation, the safe-haven characteristics and allocation value of RMB-denominated assets have been steadily increasing. Particularly amid escalating geopolitical tensions and a macroeconomic environment characterized by dual-pronged easing policies, a distinct window of divergence has emerged in cross-border asset allocation between domestic and foreign markets.

A：Following this, several distinguished guests will deliver opening remarks, including, but not limited to, Mr. Wang Bin, President of the Economic and Financial Research Institute at the Headquarters of Industrial Securities Group; Mr. Li Weihong, Member of the Legislative Council of the Hong Kong Special Administrative Region; Mr. Xiong Bo, Chief Executive Officer of Xinzheng Hong Kong; and Mr. Lam Dan, Executive Director and Chief Executive Officer of Xinzheng International, among others.

A：Of course! Please welcome our photographer to the stage now to capture this unforgettable moment for all of our guests. Please, all our guests, turn your attention to the photographer at center stage. Let’s capture this group photo together. The distinguished guests in attendance included representatives from world-renowned investment firms, asset management experts, and leading wealth management professionals, such as Mr. Wu Chao, Chairman of Gaoying Quantitative; Mr. Wang Yi, Vice President and Chief Investment Officer of Southern East Asset Management; Mr. Lü Dong, Executive Director and Fund Manager at Gaiteng International; as well as delegates from several partner institutions, including E Fund Hong Kong, Sumitomo Mitsui Trust Bank (Hong Kong), and China Europe Fund International.

A：As a major global financial center, Hong Kong leverages the stability and security of its home country to continuously attract capital from around the world. Xinzheng International fully leverages Hong Kong’s irreplaceable position as a global financial hub to provide efficient offshore wealth management services for both domestic and international capital. By bringing together a seasoned research team and leading investment institutions, it jointly explores structural opportunities and medium- to long-term investment value in the new market environment.

A：This forum is hosted by Xinzheng International. Xinzheng International serves as a key platform for Industrial Securities in implementing its internationalization strategy. It is committed to delivering global capital markets and wealth creation services, with a deep focus on comprehensive investment and financing capabilities across wealth management, asset management, sales and trading, and investment banking. Based in Hong Kong, the firm is actively expanding its footprint and operations in these areas on a pan-regional basis.

A：As the flagship of Industrial Securities’ internationalization strategy, Xinzheng International Financial Group Co., Ltd. has steadily established a solid foothold in Hong Kong, evolving into a comprehensive financial group that offers global securities and futures brokerage, trading and research, corporate finance, proprietary investment, asset management, and private wealth management services. The Group remains committed to serving national strategic priorities and supporting the real economy. With prudent operations and robust risk management at its core, it aims to achieve HK$910 million in revenue by 2025, accompanied by a substantial increase in net profit. Looking ahead, Xinzheng International will seize the opportunities presented by the development of the Guangdong–Hong Kong–Macau Greater Bay Area and the upgrading of Hong Kong’s status as an international financial center to build a comprehensive, end-to-end service platform spanning cross-border investment and financing, asset management, and wealth management. This will support Chinese enterprises in their global expansion and facilitate the participation of overseas capital in the mainland market.

A：Currently, global investors are shifting from highly concentrated, single-asset allocations to diversified portfolios. Meanwhile, China’s economy and capital markets have demonstrated strong resilience and attractive valuation levels. Therefore, global capital is expected to place greater emphasis on risk diversification and portfolio diversification, while the role of Chinese assets in global allocation will become more prominent. Specifically, Hong Kong’s function as a crucial bridge linking mainland China with global capital will be further strengthened, particularly in facilitating RMB internationalization, corporate overseas expansion, cross-border wealth management, and listings of Chinese companies in Hong Kong, thereby providing an ideal investment channel.

A：We expect that the immediate impact of this round of geopolitical conflict on capital markets has likely already subsided. Going forward, the key focus should be on how to allocate across sectors and select global assets as the conflict’s influence wanes. Based on a retrospective analysis of the past six geopolitical conflicts that drove up oil prices, the post-conflict phase typically unfolds in four stages: panic-driven trading, a reversal rally, stagflationary expectations, and, ultimately, a return to the mean. At present, we are inclined to believe that the market has entered the third phase, or is even approaching the fourth, in terms of directional choice. Furthermore, with respect to the core factors and dominant drivers that emerge after each war—such as oil-price trends, policy responses (whether focused on quality or quantity), and the Federal Reserve’s evolving approach to stagflation—we anticipate an upward trajectory in equity prices, given the global liquidity environment and the outlook ahead. Meanwhile, the Federal Reserve may maintain a relatively accommodative monetary policy and continue to hold a positive outlook on global asset prices.

A：This concern makes some sense, because in the past, the AI rally in U.S. stocks was closely linked to loose liquidity and a weak U.S. dollar environment. However, historical comparisons show that although the Federal Reserve’s rate hikes in 1999 triggered the bursting of the Nasdaq bubble, the index actually surged by 91% over the nine months following those rate increases. The ultimate cause of the market crash was underwhelming tech-company earnings, not the Federal Reserve’s interest-rate hikes. Therefore, regarding the current AI market trend, we believe that its own profitability may be an important variable determining its development.

A：Since February 8, both quarterly and annual EPS forecasts for U.S. stocks have been revised upward, indicating that corporate earnings have not been significantly impacted by the war and are instead trending higher. Furthermore, earnings reports and guidance from consumer technology companies due at the end of April may provide the market with additional positive catalysts. Therefore, we believe the U.S. equity market’s liquidity-driven bull cycle may not yet have ended in the second half of the year, and with corporate earnings尚未 reflected the impact of the war, they remain on an upward revision trajectory.

A：By comparing historical data, we found that the current AI market trend bears striking similarities to the NASDAQ market trend of the 1990s in terms of growth rate, slope, and intermediate waves. At present, we are roughly at a point corresponding to late 1997 through early 1998. Extrapolating from the market dynamics of that period, the Nasdaq bubble ultimately burst in March 2001. Based on this, it is speculated that the current AI bubble may not have reached the point of final rupture yet.

A：Hong Kong stocks have performed relatively weakly since the start of the year, primarily due to intensified regulation of the internet sector and geopolitical risk-off episodes. Currently, Hong Kong stocks are trading at relatively low valuations, offering good value. Based on indicators such as the Hang Seng Tech Index and the CSI 300, their valuations are among the most attractive globally. Meanwhile, a timing indicator we have developed for the Hong Kong stock market suggests that H-shares may be approaching a short-term bottom. As global geopolitical risks ease, Chinese economic data improve, and new catalysts emerge, the market is likely to embark on a recovery rally.

A：The mainstay sectors driving China’s economy are undergoing a transformation, shifting from a growth model previously reliant on real estate, infrastructure investment, and consumer spending to one now led by TMT (information technology, electronics, and telecommunications) and manufacturing. Data show that manufacturing, particularly high-end manufacturing, is emerging as a new engine of China’s economic growth. Historical trends and the performance of economies that have benefited from geopolitical conflicts indicate that China’s share and competitive advantages in global manufacturing are steadily increasing. Even amid ongoing geopolitical tensions, China’s manufacturing sector has demonstrated remarkable resilience and robust expansionary capacity.

A：We have three main advantages. First, the share of oil and natural gas in our energy mix is relatively low, while we have abundant renewable energy resources. Secondly, we possess a complete industrial chain and a fully developed industrial system. Finally, in our export sector, industries such as electric vehicles, lithium-ion batteries, and photovoltaics are highly aligned with the global demand for energy security. These competitive sectors have further expanded their market share amid ongoing geopolitical turmoil.

A：Practice over the past few years has shown that, despite external challenges such as tariffs and the appreciation of the renminbi, China’s manufacturing sector has managed to maintain robust export competitiveness thanks to its sufficiently high barriers to entry and its ability to absorb exchange-rate volatility. Recent data indicate that midstream manufacturers have strengthened their ability to pass on costs, with export-oriented sectors demonstrating greater resilience. Consequently, even if upstream prices continue to rise, we do not expect this to pose a significant constraint.

A：We believe that, following the global geopolitical tensions, China’s manufacturing sector will continue to benefit and see its market share increase. Meanwhile, China’s economy is being driven by high-end manufacturing. We are optimistic about the recovery of corporate earnings and demand in China, underpinned by manufacturing-led growth. This is our medium- to long-term outlook.

A：In our April report, we stated that “a united front embracing high-prosperity sectors is taking shape.” Initially, the market was primarily focused on geopolitical tensions. However, as the impact of these events waned, investor attention shifted significantly toward earnings growth and economic conditions. It is expected that market style will revert to high-prosperity sectors in the second quarter, with AI-related fields and the overseas expansion chain being the two main themes.

A：The impact of geopolitical tensions on global liquidity conditions and asset prices may gradually wane. The U.S. is expected to maintain an accommodative monetary policy stance, with the possibility of interest-rate cuts in the second half of the year. Regarding A- shares, we are optimistic about China’s manufacturing sector and expect the second-quarter market style to revert to the two main themes of AI and overseas expansion. In addition, analyses and outlooks were provided on the bottoming-out area of Hong Kong stocks, the sustainability of the AI cycle, and post-adjustment investment opportunities in the U.S. Nasdaq, among other topics.

A：Because the development of AI technology requires chips to have strong memory and computing capabilities, technological advancements in the storage field have lagged behind over the past few years, making it impossible to meet the AI sector's demand for fast and large-scale data processing. Now, with the arrival of an AI investment-driven industry cycle, storage chips have become crucial. Their supply can no longer keep up with the growing demand from AI applications, resulting in a bottleneck.

A：The rise in storage chip prices is due to increasing demand in the AI sector and long-term supply contracts with IDCs. Previously, chip sales were primarily driven by the consumer electronics market. However, increased investment in data centers has significantly boosted demand, reshaping market dynamics and leading to a supply shortage of memory chips, which in turn has resulted in price increases.

A：The key influencing factors include the massive investment in IDCs (data centers), which has disrupted the traditional consumer electronics cycle and given rise to a new, investment-driven cycle. As a result, the entire industry is undergoing a fundamental shift in its valuation framework. Because IDCs can enter into long-term cooperation agreements, even collecting advance deposits and implementing price adjustments, the supply-demand dynamics for storage chips have undergone a fundamental shift under this business model.

A：This year, the funding side has faced more scrutiny in AI investing. Previously, we focused on cloud computing price hikes and financing activities. However, in actual investment, it’s more important to identify which players in the downstream industrial chain can enter a new industry cycle, raise prices, and reach their maximum potential. For example, thanks to both competition and collaboration with companies such as Google and Broadcom, TSMC has gained pricing power and raised its prices by 30%, demonstrating the value of capital-market investment.

A：The Japan, South Korea, and Taiwan regions represent high-end chip manufacturing, possess bargaining power, and have benefited significantly from the AI trend. South Korea, in particular, not only ranks among the global leaders in the defense industry but also possesses rare, high-end semiconductor manufacturing capabilities that give it significant bargaining power worldwide. Even amid fluctuations in the international trade environment, its advanced manufacturing expertise enables it to maintain a strong position in the chip sector.

A：Clients can buy the dip during market downturns, as even with significant energy exposure in a particular region (such as the Middle East), alternatives remain available. As long as chips can be sourced from alternative suppliers and buyers are willing to pay higher prices, raising chip prices—particularly for high-end capacity—and passing those cost increases down the supply chain can help mitigate energy shortages. Therefore, when constructing a broad asset allocation strategy, it is essential to base decisions on a sound assessment of market downturns as potential buying opportunities, rather than simply following the crowd.

A：Within the U.S. dollar-centric financial system, gold is regarded as a substitute for the dollar. Particularly during periods of inflation, central banks and private investors significantly increase their gold holdings to hedge against the risk of dollar depreciation. However, over the past few years, gold price increases have not always moved in lockstep with inflation. For instance, during periods of 7% or 8% inflation in the United States, gold did not immediately begin to rise; instead, its rally lagged for a time. Under extreme market conditions, gold can serve as a long-term investment allocation, but it should be selected with caution.

A：In the current environment, gold does not qualify as a strictly safe-haven asset. Its correlation with risk assets, such as dividend-paying stocks, has increased. Nevertheless, it is not advisable to replace gold or U.S. Treasuries with dividend-paying stocks when constructing a broadly diversified, uncorrelated asset allocation portfolio. Currently, the correlations among different asset classes have become highly complex and unstable, necessitating extreme caution in strategic asset allocation to prevent the intended portfolio balance from breaking down.

A：When overseas investors seek to diversify their U.S. dollar allocations, the challenge is to identify markets that can absorb large inflows of capital and to uncover relative value within those markets. However, it is difficult to identify clear value traps in global asset allocation. In particular, while the A- share market boasts substantial size, it has yet to demonstrate significant advantages in areas such as technological innovation and interest rate differentials. Therefore, some capital will flow into emerging markets as well as countries such as Japan and South Korea. However, it is important to pay attention to these markets’ capacity to absorb inflows and their relative valuation levels.

A：When constructing a robust asset allocation strategy, it is essential to identify investment opportunities with strong fundamentals and long-term growth drivers within the context of global trends, rather than merely attempting to time the market by buying on short-term dips. Moreover, in a volatile market environment, a fixed-income-plus strategy is an effective approach for generating steady returns with moderate to low volatility. However, to confidently construct a defensive and resilient portfolio in an uncertain overseas setting, it must be combined with cross-border allocation and a multi-asset approach, alongside accurate market-trend assessment and agile responsiveness.

A：From the perspective of the RMB exchange rate, based on the interest-rate spread between U.S. Treasury bonds and Chinese government bonds, the RMB may still experience a relatively gradual appreciation within a certain range. Over the past two years, the interest rate differential between China and the United States has been relatively wide. However, recently this spread has been trending downward, increasing the likelihood of a Federal Reserve rate cut. Such a move would further narrow the China-U.S. yield gap, thereby supporting RMB appreciation. However, with limited room for domestic interest-rate cuts and China’s bond yields already lower than those of U.S. Treasuries, the narrowing of the China-U.S. yield spread is likely to support a gradual appreciation of the renminbi over the longer term.

A：We have noted the PBC’s changing stance on the renminbi. Between 2024 and 2026, the People’s Bank of China’s daily central parity rate for the renminbi has generally been set higher than the actual market trading price, indicating the central bank’s preference for a stronger yuan. However, in recent times, the central bank’s guided exchange rate has sometimes not emphasized appreciation expectations and has even shown signs of depreciation. This suggests that the central bank currently does not wish to see a substantial appreciation of the renminbi. The People’s Bank of China’s stance on the renminbi is closely tied to China’s domestic economic fundamentals. China’s economy posted stronger-than-expected growth in the first quarter of this year, with exports making a significant contribution. If the renminbi appreciates rapidly, it will place significant pressure on the export supply chain. Given that property investment has yet to stabilize, a rapid appreciation of the renminbi could exert upward pressure on the macroeconomy. Therefore, the central bank does not currently wish to see a swift rise in the currency’s value.

A：Key areas of focus include investments related to AI infrastructure, especially as leading AI application companies like Anthropic release their revenue figures. This is expected to catalyze investment in the AI infrastructure supply chain and the power sector. In addition, inflation-linked assets such as the oil value chain and the coal-to-chemicals value chain are also worth allocating to, as a hedge against bond-market uncertainty. Meanwhile, under the global trend of reducing reliance on oil, the new energy vehicle industry chain will encounter more investment opportunities, particularly as the penetration rate of NEVs continues to rise in China.

A：The low-to-moderate volatility fixed-income plus strategy is absolute-return oriented, independent of market benchmark indices. It aims to control maximum drawdown while maximizing the Calmar ratio. Over the past four years, despite multiple bear markets in asset classes, this strategy has consistently achieved a steady increase in net asset value. By employing diversified asset allocation and sophisticated risk management—such as analyzing the distribution of six-month return ranges—we ensure that investments deliver strong value for money, thereby providing investors with stable and reliable returns.

A：Bribery is an issue that investors must contend with, particularly in bond investing, where exchange-rate fluctuations can significantly impact returns. By soliciting quotes, one can effectively compare and allocate across domestic and overseas bonds, thereby achieving more stable investment returns with controllable drawdowns.

A：Negative correlation among different assets is crucial for portfolio stability. A single asset tends to exhibit extreme performance during both bull and bear markets, whereas a diversified portfolio with negatively correlated assets can serve as a hedge against market volatility. For example, there is often a negative correlation between exchange rates and equity or bond markets.

A：When the AI bubble bursts and market risks increase, investors typically turn to U.S. Treasury bonds as a safe haven. At this time, U.S. Treasury yields tend to fall sharply, which can offset losses in AI investments and help maintain overall portfolio stability. Meanwhile, if AI ultimately succeeds in its development, it will lower the capital interest rate across the whole of society, making U.S. Treasury bonds a good investment option across currencies.

A：Domestic fixed-income-plus strategies are limited to RMB-denominated bonds, resulting in lower yields. In contrast, offshore fixed-income-plus funds can invest not only in RMB bonds but also in offshore RMB and U.S. dollar–denominated bonds, thereby achieving higher returns. In addition, overseas investors can enhance returns by participating in overseas convertible bond offerings, subscribing to new IPOs, and actively managing currency exposure.

A：Determine whether to combine U.S. dollar and RMB investments based on the carry trade yield (the interest rate differential between China and the U.S.). When the combined yield from RMB bonds exceeds that of U.S. dollar-denominated bonds, invest in RMB bonds; otherwise, invest in U.S. dollar bonds. This approach aims to enhance the portfolio’s yield without compromising its credit rating.

A：The central bank provides an additional exchange-rate premium, enabling overseas investors to earn risk-free returns when purchasing RMB-denominated bonds. When offshore capital flows into the Chinese market to purchase renminbi-denominated bonds for arbitrage purposes, it effectively helps to stabilize the exchange rate and has enabled the central bank to attract substantial foreign capital into China’s financial markets.

A：In the field of active management, AI has evolved into an exceptional researcher. For example, a friend of mine successfully earned HK$150 million last year by using AI (DouBao) to collect, consolidate, and analyze price fluctuations and industry changes, far surpassing his initial investment of HK$100 million. AI can process vast amounts of information, including structured and unstructured research reports and news sentiment data, and generate specific investment decisions based on this information, such as market sentiment indices and changes in analyst expectations. Moreover, AI can also monitor portfolio risks and offer optimization suggestions, making fund managers' decisions more data-driven.

A：In the past, researchers had to manually identify patterns and formulate hypotheses, which they would then validate using data. In the AI era, machines automatically learn and discover patterns from massive amounts of data, while humans take on the roles of model designers, supervisors, and risk managers. Building research models and finding data have become crucial. AI has enabled researchers to shift from manual to automated processes, greatly improving efficiency and reducing the risk of drawdowns.

A：In quantitative investment firms, AI serves as the core engine, bringing about more thorough changes. First, in terms of factor mining, AI leverages deep learning and algorithms to facilitate more in-depth factor exploration and generate a wider range of composite factors, particularly in high-frequency trading. Secondly, in high-frequency trading, AI algorithms are crucial for achieving stable profits. They not only support the algorithmic framework but also play a role in risk management, using sophisticated risk models to respond to market changes. The competitive focus of many quantitative firms has shifted to competing with AI-driven strategy systems, robust computing power systems, and data aggregation algorithms.

A：High-frequency market-making strategies leverage AI technology to disrupt traditional models, achieving automation and intelligence. In AI-native mode, the AI system receives and analyzes order book data, historical data, and various factors, and generates efficient trading strategies through deep reinforcement learning. This AI-driven market-making strategy does not require predicting the market direction. Instead, it captures minute price discrepancies between buy and sell quotes in real time for matched trading. By leveraging AI for rapid matching and dynamic pricing, it capitalizes on pricing inefficiencies to generate returns and enhances profitability through composite arbitrage.

A：High-frequency market-making strategies exhibit strong defensiveness and low volatility, with a smooth return profile and a high Sharpe ratio. This strategy does not rely on predicting market direction or fundamental factors; instead, it focuses on capturing price spreads. As a result, it can maintain consistent profitability across diverse market conditions. Even in the event of short-term drawdowns, the strategy is able to recover quickly, delivering zero monthly drawdowns and a high slope of returns.

A：AI has brought four core values to high-frequency market-making strategies. First, it greatly enhances the efficiency of liquidity provision by proactively predicting order book depth, thereby improving capital utilization. Second, AI boosts market pricing efficiency, enabling prices to return to fair levels more quickly. Third, AI can identify complex arbitrage opportunities that traditional models miss, such as cross-exchange price discovery and spread arbitrage. Finally, AI significantly reduces operational costs through end-to-end automation.

A：The top five to fifteen high-frequency market-making firms globally are predominantly large market makers or fintech companies. They typically maintain proprietary trading capital and have demonstrated strong performance in high-frequency market-making activities. For example, a UK-based fintech firm, prior to obtaining a brokerage license, achieved an annual net profit of US$11 billion with virtually no drawdown by leveraging an efficient high-frequency trading strategy.

A：The AI quantitative trading system adopts a cloud-edge-end architecture. The top-tier cloud layer handles model training and backtesting, leveraging GPUs to conduct large-scale training and optimize algorithms. The middle-layer edge infrastructure serves as the system’s core engine, deployed in exchange data centers, and enables low-latency trading through dedicated programmable chips. The bottom-layer client-side provides a visualized user interface and administrative dashboard. This architecture is currently adopted by numerous quantitative hedge funds employing high-frequency market-making strategies.

A：The evolution of AI technology has propelled quantitative trading from early statistical models, through mid-stage classical ML, to the current era of large models and deep reinforcement learning. These deep-learning models exhibit superior self-learning capabilities in capturing order dynamics and short-term patterns. By employing a heterogeneous hybrid deployment architecture that integrates FPGAs and GPUs, trading speed and efficiency are significantly enhanced, enabling rapid order execution and arbitrage profit extraction even in environments characterized by massive volumes of complex orders.

A：There are three main trends shaping the future of AI-driven high-frequency trading: First, generative AI will address key challenges in model training by leveraging synthetic data. Second, while quantum computing remains a distant prospect, it holds the potential to fundamentally reshape the computational power landscape. Third, on the regulatory front, AI will be employed to tackle the supervisory challenges posed by high-frequency trading. Regulatory authorities in countries such as the United States and Japan are encouraging innovation in high-frequency trading to enhance market liquidity and diversify trading strategies and market ecosystems.

A：The strong performance of Asia-Pacific equity markets can be attributed primarily to the favorable impact of the interest-rate easing cycle on the region’s stock markets, as well as to improvements in corporate fundamentals, market transparency, corporate profitability, and investment appeal within individual markets. In particular, the Japanese and South Korean markets have benefited significantly from the more than two-year-long interest-rate decline.

A：Japan’s economy has emerged from more than two decades of deflation and entered an inflationary phase. Japan’s inflation rate this year is 1.2%, and household wages have recorded real annual growth of 5% for three consecutive years. This shift signifies sustained improvement for Japan’s economy, as reflected in macroeconomic factors (such as an inflationary environment that encourages consumption and investment), enhanced corporate profitability (driven by increased investment opportunities and government policies urging firms to raise their price-to-book ratios), and a change in household investment preferences (from holding cash to purchasing stocks and other assets).

A：Changes in Japan’s investment environment have three main positive effects: First, rising inflation is encouraging both households and businesses to increase consumption and investment. Second, higher interest rates are boosting the overall economy and drawing foreign investors’ attention to the Japanese market. Third, corporate profitability is improving, and the government is urging companies to enhance their price-to-book ratios by boosting capital expenditures, pursuing new investment opportunities, or divesting non-core assets to deliver stronger returns to shareholders. All of these factors are conducive to better stock market performance.

A：South Korea’s stock market has performed well because it is an export-oriented economy that is heavily influenced by the external environment. Recently, South Korea’s semiconductor and shipbuilding industries have entered an upward cycle that is expected to continue through 2028. As a result, with the current phase of the “Samsung Cycle” now underway, the Korean market presents attractive investment opportunities.

A：The development of AI technology, especially end-to-end decision-making tools like Xiaolongxia, has solved execution challenges and spurred investment opportunities ranging from single AI models to integrated software-hardware solutions. For example, the growing demand for AI models has driven up the stock prices of related listed companies. At the same time, AI has improved production efficiency, alleviated challenges in commercial monetization, and facilitated the development of human-machine collaborative decision-making processes. Moreover, AI has also sparked investment opportunities across the entire industry chain, spanning infrastructure sectors such as data storage, computing chips, optical modules, and CPO. As AI penetration increases, it will bring tremendous potential for wealth creation.

A：Currently, the trajectory of model development is twofold: on one hand, it is advancing toward AGI (artificial general intelligence), with a focus on building larger, more complex models and investing vast resources; on the other hand, in response to practical challenges such as constraints on energy supply, there is growing momentum to revamp data-center power systems—through initiatives like DC power distribution, high-voltage direct-current transmission (HVDC), and even more advanced solid-state transformer (SST) technologies—to enhance energy efficiency.

A：Initially, some believed that model efficiency was more important than model size. However, over the past few months, the reality has shown that even though Chinese models enjoy a cost advantage, model size remains crucial for tackling complex tasks. For example, when it comes to creating PowerPoint presentations, the latest large-scale cloud-based models, thanks to their vast parameter counts and enhanced multi-step task-handling capabilities, can precisely replicate a company’s template style—something that other models, including those from OpenAI, are unable to achieve. The core reason for S Office’s rapid revenue growth lies in the strength of its model architecture, which is underpinned by the use of larger-scale, more complex, and more powerful models. Even though large-parameter models such as the domestically developed MiniMax-MassSpec significantly outperform smaller models, this does not render the latter entirely useless; they still hold value for simpler tasks.

A：Based on trade frequency, overseas quantitative investment strategies are broadly categorized into high-frequency, medium-frequency, and low-frequency approaches. High-frequency trading primarily profits from riskless arbitrage, exchange rebates, and bid–ask spreads. Mid-frequency trading generates returns through statistical arbitrage, alternative data mining, and short-term trend forecasting. Low-frequency trading, in contrast, hinges on expertise in asset allocation across major classes, macroeconomic cycle modeling, and risk premium management. Moreover, market-making strategies constitute the largest and most stable profit-generating core segment in overseas quantitative markets, characterized by an extremely low annual loss probability and a very high win rate.

A：Market makers, as the core providers of liquidity in global capital markets, continuously furnish bid and ask prices by simultaneously placing orders on both sides of the market, thereby enabling investors to execute trades promptly. They primarily profit from the bid-ask spread and exchange rebates, rather than by betting on whether asset prices will rise or fall.

A：The key characteristics of a market-making strategy include: very small profits per trade, accumulated through high-frequency execution; extremely short holding periods, typically on the order of milliseconds and rarely exceeding a few minutes, with virtually no overnight positions, thereby reducing risk exposure; rapid order entry and cancellation, which places high demands on both software/hardware infrastructure and trading speed; and the need to efficiently acquire and process extensive order-book data, resulting in significant barriers to entry.

A：Robinhood aggregates large volumes of retail orders and routes them to market makers such as CD Securities. These market makers earn profit from the bid-ask spread by providing liquidity services and share a portion of their revenue with Robinhood, which helps sustain the platform’s commission-free trading model.

A：In quantitative investing, inflation is a factor that cannot be ignored. In recent years, inflation trends have varied across major global economies, with some countries facing reflationary pressures. Quantitative investment strategies adjust based on varying inflation environments and incorporate other macroeconomic factors, such as interest rates and economic growth, to inform asset allocation and risk management.

A：Amid global inflationary shifts, different countries and regions have experienced varying degrees of impact. For instance, the United States and China have been relatively less affected, whereas Middle Eastern nations have faced more significant repercussions. In terms of asset allocation, it is advisable to monitor energy price trends and their alternative industries (such as wind power, solar energy, and other new energy sources). Meanwhile, during periods of stagflation, sectors like healthcare and information technology tend to perform well, while the insurance industry typically benefits from rising interest rates. In addition, it is important to monitor the impact of geopolitical conflicts on market volatility and to identify both investment opportunities and risk-mitigation strategies in this context.

A：China has just emerged from a deflationary phase, with inflation indicators showing modest improvement. The economy is currently undergoing a transition between old and new growth drivers. Against the backdrop of the property sector’s downturn and a low-interest-rate environment, 10-year government bond yields remain low. It is expected that China will not raise interest rates this year. In this environment, liquidity remains relatively ample, driving significant gains across emerging markets, commodities, equities, and bonds. The primary focus is on the liquidity boost stemming from the global wave of interest-rate cuts. Meanwhile, China’s bank credit and total social financing remain substantial, increasing demand for financial assets. In particular, with 80% of household wealth concentrated in real estate and bank deposits, liquidity in the financial market has been further boosted.

A：In the equity market, we are optimistic about China’s equity market, as it is underpinned by supportive policy measures and ample liquidity. Coupled with China’s competitive advantages in high-end manufacturing, exports, energy, and artificial intelligence, the medium- to long-term outlook remains positive. In the government bond market, the current decline in interest rates is linked to the war-induced rally in Chinese government bonds. However, overall price action remains volatile, presenting potential investment opportunities. In the bond market, we recommend focusing on the short end in the U.S., where certainty is relatively high, while the intermediate- and long-end segments are expected to remain volatile. Returns can be captured through a snowball strategy.

A：Given central banks’ increasing gold holdings and the ongoing de-dollarization trend, coupled with significant pressure on U.S. Treasury bonds, gold can serve as a core allocation asset for the medium to long term. In the U.S. stock market, despite elevated valuations, structural opportunities remain in the technology sector, particularly among leading tech companies. Compared with U.S. stocks, A- shares are more attractive; compared with U.S. Treasuries, China’s long-end government bonds may deliver better returns, face lower default risk, and benefit from a lower fiscal deficit ratio.

A：Strategy managers need to carefully manage the risks of making research errors and selecting the wrong stocks. By conducting fundamental analysis and employing a bottom-up, long-only stock-picking approach, they can mitigate these risks and ensure that they enter positions at appropriate valuations and in a manner consistent with a value-reversion investment thesis. It is crucial to build a robust investment framework that can withstand market volatility, helping you avoid making misguided decisions driven by short-term emotional swings. In addition, it is important to strengthen risk controls during portfolio construction, such as avoiding the use of leverage, and ensuring that the investment manager’s investment style aligns with the investor’s risk tolerance.

A：In the face of challenges in quantitative strategies, alpha and improved beta can be pursued through diversified asset allocation and risk dispersion. For example, in the U.S. market, in addition to volatility futures (VIX), investors can further diversify their portfolios by incorporating other futures products, such as S&P 500 futures and Nasdaq futures. For the A- share market, given its data differences from the U.S. stock market and its edge in daily win rate, a diversified allocation strategy can be adopted. By leveraging AI technologies and the transformer architecture, R&D efficiency and accuracy can be enhanced to enable dynamic adjustments across markets and products, thereby achieving superior portfolio performance.