Huatai Securities: Middle East situation disrupts market risk appetite, dividends still have bottom-line value.

Huatai Securities research report stated that in recent years, with the increase in global macroeconomic uncertainty and the growth of domestic residents' asset allocation needs, as well as the decline in the overall social broad investment return rate, dividend strategies are receiving more attention from investors. Currently, dividend valuation is relatively low compared to growth, and with market risk preferences affected by the Middle East situation, dividends still have a bottom value. Huatai Securities is optimizing dividend strategies from both stock selection and timing perspectives: 1) From a stock selection perspective, based on dividend stability, earnings quality, and industry-neutral optimization, constructing a Huatai Strategy High Dividend Industry Neutral Portfolio. Also, based on free cash flow combined with growth and capital expenditure relative strength factors, constructing the Huatai Strategy Free Cash Flow Growth and Stability Portfolio. 2) From a timing perspective, focusing on three types of excess return environments such as declining risk preferences, rising inflation, and oscillating markets, combined with the Huatai Quantitative Timing model by the Huatai Wealth Management team, the current view is to be bullish on dividends.