The broker note states that as October begins, the market is clearly choosing a direction, with AI applications (security + software + edge) becoming the next focus and having clean positioning. Security stocks are benefiting from both US narratives and domestic catalysts, with a 3-6 month capability gap in model performance as the underlying logic.
The broker is bullish on China's AI application sector, especially security stocks, with Sangfor as the top pick and NSFOCUS and Qilinsec as higher-beta plays.
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