*ST Shen Tian Delisted; Val. Below Threshold.

In the early morning session today, A-shares experienced a rise and subsequent fall, with the Shanghai Composite Index losing the 2800-point mark, while the Shenzhen Component Index and the ChiNext Index fell by more than 1%. Over 4,300 individual stocks declined across the two markets.

On the market, financial stocks showed strength across the board, with sectors such as securities firms, banks, diversified finance, and insurance leading the gains. The automotive industry also demonstrated overall strength, with segments like vehicle manufacturing, car dismantling, autonomous driving, and new energy vehicles showing active performance.

Mergers and acquisitions (M&A) expectations surged, leading to securities stocks opening high and trading higher.

Securities stocks started the morning with increased volume, opening high and continuing to rise, with the sector index climbing nearly 3% at one point, reaching a new high in a month. Trading volume within the first half hour of the opening exceeded the total volume of the previous day. Guohai Securities opened with a daily limit up, and Jinlong Shares, Tianfeng Securities, and China Galaxy also touched their daily limit highs at one point.

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In the late night of the previous day, both Guotai Junan and Haitong Securities issued a "Suspension of Trading for Planning Major Asset Restructuring" announcement. The two parties are planning a merger of Haitong Securities through the issuance of A-shares to all A-share shareholders of Haitong Securities and the issuance of H-shares to all H-share shareholders of Haitong Securities by Guotai Junan, followed by the issuance of A-shares to raise supporting funds.

The two companies began trading suspension from the opening of the market on September 6, 2024, and the suspension is expected to last no more than 25 trading days.

This is not the first case of securities firm merger and restructuring in recent times. Just the day before, Guosen Securities (002736) released an acquisition plan, intending to purchase 96.08% of Wanhe Securities' shares through the issuance of shares.

On the same day, Guolian Securities issued an announcement showing that the company held its first extraordinary general meeting of 2024, where the proposal regarding the acquisition of Minsheng Securities by Guolian Securities was reviewed and passed with a high number of votes.

The continuous announcements of M&A and restructuring by securities firms have opened up market expectations for other securities firms to restructure.

As for Guohai Securities, which hit the daily limit up today, some investors joked online, "Is the merger of Guotai Junan and Haitong Securities called Guohai Securities? Guohai Securities hit the daily limit up."In fact, the market is not aimless. The semi-annual report shows that as of June 30, 2024, Guotai Junan held 90.62 million shares of Guohai Securities, accounting for 1.42% of the total share capital, making it the eighth largest shareholder.

In addition, CITIC Construction Investment and CITIC Securities, as well as China Galaxy, CICC, and Shenwan Hongyuan, which are all part of the "Huijin System"; Guotai Junan and Orient Securities, which are both part of Shanghai State-owned Assets; and Zheshang Securities and Caitong Securities, which are both part of Zhejiang State-owned Assets, all have expectations of mergers.

Huachuang Securities clearly pointed out that if the merger between Guotai Junan and Haitong Securities goes smoothly, the imagination space for the merger of top-quality securities firms such as CICC and China Galaxy, as well as CITIC Construction Investment and CITIC Securities, is expected to be further opened up.

Huatai Securities stated that this integration may accelerate the supply-side reform of the industry and is expected to usher in a new round of mergers and acquisitions, with the trend of survival of the fittest becoming increasingly apparent. Overall, this integration may effectively catalyze short-term market sentiment and future expectations for sector mergers and integration.

Subsidies double as cars step on the gas to move forward.

Automobile stocks rose collectively in the morning, with the sector index rising for the fourth consecutive day, setting a new high in one month. Fute Technology, a newly listed stock for just three days, saw an increase of more than 22% during the trading day, and there were significant upward movements in stocks such as Power New Science, Changchun Yidong, and Xiangyang Bearing, with vertical sealing at the daily limit.

Sectors such as automotive dismantling, unmanned driving, and new energy vehicles also followed suit, with batches of stocks like Liancheng Electronics, Kai Zhong Precision, Jinlong Automobile, and Jinjiang Online hitting the daily limit.

The latest preliminary statistics from the Passenger Car Association show that in August, the retail market for new energy vehicles reached 1.015 million units, a year-on-year increase of 42%, and a month-on-month increase of 16%. The cumulative retail sales for the year reached 6.004 million units, a year-on-year increase of 35%.

In addition, with the arrival of the "Golden September and Silver October" sales season, many places have recently upgraded subsidies for automobile consumption.

The Department of Commerce of Shanxi Province and six other departments recently issued a new notice regarding the car replacement work across the province, clearly raising the subsidy standards for car scrapping and renewal. The subsidy for scrapping and renewing fuel vehicles has been increased from the original 7,000 yuan to 15,000 yuan, and the subsidy for scrapping and renewing new energy vehicles has been increased from the original 10,000 yuan to 20,000 yuan. The policy also includes measures such as raising the subsidy standards for car replacement and renewal, increasing financial support, and optimizing the review process for scrapping and replacing. Consumers who have already received the relevant subsidies will be refunded the difference according to the new standards.The General Office of the Shenzhen Municipal People's Government has also issued the "Shenzhen City Special Treasury Bond Fund for Extra Long-term Strengthening Support for the Consumer Goods Replacement Scheme with Old for New". For vehicles with a purchase price of 70,000 yuan (inclusive) to 150,000 yuan (exclusive), the subsidies for fuel vehicles and new energy vehicles are 8,000 yuan/vehicle and 9,000 yuan/vehicle, respectively; for vehicles with a purchase price of 150,000 yuan (inclusive) to 250,000 yuan (exclusive), the subsidies for fuel vehicles and new energy vehicles are 12,000 yuan/vehicle and 13,000 yuan/vehicle, respectively; for vehicles with a purchase price of 250,000 yuan (inclusive) and above, the subsidies for fuel vehicles and new energy vehicles are 15,000 yuan/vehicle and 16,000 yuan/vehicle, respectively.

According to incomplete statistics from Wind data, as of September 5th, the highest subsidy amount for vehicle replacement with old for new in places such as Beijing, Guangdong, Zhejiang, and Sichuan can reach up to 20,000 yuan.

Everbright Securities stated that it is focusing on the automobile complete vehicle sector. Over the past 11 days, more than ten provinces and regions have issued upgraded policies for vehicle replacement with old for new, with a common feature being that the subsidy standards for new energy vehicles and fuel vehicles are doubled. September and October are considered the "Golden September and Silver October" for car market sales, and with the car companies themselves increasing their promotional efforts, car sales in September and October are expected to see an increase in both year-on-year and month-on-month terms. In particular, new energy vehicles with greater subsidy strength are expected to expand their growth advantage and bring opportunities for sector valuation repair.