Daily Investment Strategy

Daily focus：Fast Retailing Group (6288)

While holding a leading market position, the company is facing an anti-monopoly investigation by the State Administration for Market Regulation (SAMR) for allegedly abusing its dominant position to interfere with pricing. This regulatory risk is currently the core variable. If violations are found, the company may face administrative fines ranging from 1% to 10% of its previous year's revenue and be forced to adjust its business model, putting pressure on profit margins. Before the investigation results become clear, policy uncertainty will cause market volatility, and the stock price is expected to fluctuate significantly in the short term. Investors should be highly vigilant about downside risks and are advised to adopt a cautious wait-and-see approach until the compliance path is clarified.

Policy variables offset inflation benefits

U.S. stocks fell on Wednesday, with the S&P 500 down 0.53%. Weak bank earnings and policy shocks were the market focus. JPMorgan Chase and Wells Fargo underperformed, and the government's proposal to cap credit card interest rates at 10% severely impacted the financial sector. Furthermore, Federal Reserve Chairman candidate Reid's interview today, with his dovish stance sparking heated debate, further fueled the market's reaction. Banks face threats of narrowing interest rate spreads and pricing constraints, causing a sharp drop in sector valuations and offsetting the benefits of cooling inflation. If interest rate restrictions materialize, bank profit models will be reshaped, and investors are repricing financial stocks.

Hong Kong Stock Connect recorded a net inflow of HK$2.87bn on Wednesday, with Tencent Holdings (0700) recording the largest net inflow at HK$2.01bn, followed by Alibaba Health (0241); China Mobile (0941) recorded the largest net outflow at HK$910mn, followed by Xiaomi Group-W (1810).