china-idea-generation

china-idea-generation

Purpose

Systematically surface new A-share investment opportunities through quantitative screens, thematic analysis, and pattern recognition.

Data Sources

Primary: iFind MCP (Tier-1 paid) / AkShare MCP (Tier-2 free alternative)

get_market_overview()                    → Top gainers, losers, most active
get_quote(ticker)                        → Price, PE, PB, market cap
get_historical_data(ticker)              → Price trends, momentum
get_financials(ticker, "income")         → Financial metrics
get_financials(ticker, "balance")        → Balance sheet health
get_industry_stocks(industry="...")      → Peer comparison

Secondary Screening Data

Data	Source	Use
Dragon-Tiger list	East Money	Unusual activity, institutional interest
Northbound flows	Shanghai-Hong Kong Stock Connect	Foreign investor sentiment
Margin trading	Exchange	Leverage and sentiment
Changes in number of shareholders	CNINFO	Institutional accumulation/distribution
Institutional holdings	Quarterly report/F10	Fund ownership trends
Block trades	Exchange	Smart money signals

Workflow

Step 1: Define Screen Criteria

Investment philosophy alignment:

• Value vs Growth vs GARP vs Momentum
• Market cap preference (large / mid / small)
• Sector focus or sector-agnostic
• Liquidity requirements (turnover threshold)
• Risk tolerance (volatility, leverage, earnings stability)

Screen parameters (A-share specific):

Parameter	Typical Range	Notes
PE (TTM)	5-50x	Avoid negative PE
PB	0.5-5x	<1x may indicate distress
PS	0.5-5x	For high-growth unprofitable
Market cap	>5 billion	Liquidity threshold
Daily turnover	>50 million	Tradability
ROE	>10%	Quality filter
Debt/Equity	<100%	Financial health
Revenue growth	>10%	Growth filter
EPS growth	>15%	Earnings momentum

Step 2: Quantitative Screens

Screen 1: Deep Value

Filters:
- PE (TTM) < 15x AND PB < 1.5x
- ROE > 10% (past 3 years average)
- Debt/Equity < 80%
- Revenue growth > 0% (not declining)
- Market cap > 30亿

Output: Value candidates with potential mispricing

Screen 2: Growth at Reasonable Price (GARP)

Filters:
- PEG < 1.0 (PE / growth rate)
- Revenue growth > 20%
- Gross margin > 30%
- ROE > 15%
- Market cap > 100亿

Output: Quality growth at reasonable multiples

Screen 3: Momentum

Filters:
- Price above 20-day MA AND 60-day MA
- Price within 10% of 52-week high
- Volume above 20-day average
- RSI between 40-70 (not overbought)
- Upward earnings revision

Output: Momentum names in uptrends

Screen 4: Turnaround

Filters:
- Recent loss or margin compression
- New management / strategy announced
- Order book recovering
- Debt restructuring completed
- Insiders buying

Output: Potential turnaround candidates

Screen 5: Dividend Yield

Filters:
- Dividend yield > 3%
- Payout ratio < 60%
- FCF positive and stable
- Debt/Equity < 100%
- Stable earnings history

Output: High-quality income names

Screen 6: Special Situations

Filters:
- Lock-up expiry within 3 months (限售解禁)
- M&A announcement pending
- Regulatory catalyst (集采结果, etc.)
- Index inclusion/exclusion
- STAR/ChiNext eligibility

Output: Event-driven opportunities

Step 3: Thematic Research

Identify emerging themes:

Theme Type	Examples (A-share)	Data Sources
Policy-driven	Domestic substitution, new infrastructure, dual carbon	Policy documents, ministry announcements
Technology	AI applications, autonomous driving, robotics	Technology progress, order announcements
Demographics	Aging population, declining birthrate	Population data, consumption data
Consumption	Consumption upgrading, rise of domestic brands	Retail data, brand research
Industrial	High-end manufacturing, specialized and sophisticated SMEs	Industry data, policy

Thematic screening approach:

1. Define theme and investable universe
2. Map A-share companies to theme
3. Rank by exposure and quality
4. Identify pure-plays vs beneficiaries

Step 4: Technical Analysis

A-share technical considerations:

Indicator	Use
Moving averages	Trend direction (5/10/20/60/120 day)
MACD	Momentum and trend changes
RSI	Overbought/oversold
KDJ	Short-term momentum
Volume	Confirmation of moves
Dragon-Tiger list	Institutional activity
Northbound flows	Foreign flows

Chart patterns to watch:

• breakout — above resistance
• pullback to support — entry opportunity
• double bottom/head & shoulders — reversal signals
• volume-price divergence — trend exhaustion

Step 5: Fundamental Deep Dive

For each candidate:

1. Business model review: How does company make money?
2. Financial health: Balance sheet, cash flow, earnings quality
3. Competitive position: Market share, moat, pricing power
4. Management quality: Track record, capital allocation
5. Valuation: vs peers, vs history, vs international peers
6. Catalyst: What could re-rate the stock?

Red flag checklist:

• Goodwill ratio too high (>30% of equity)
• Accounts receivable growth > revenue growth
• Operating cash flow persistently negative
• Major shareholder pledge ratio too high (>50%)
• Audit opinion not unqualified
• Frequent changes of accounting firm
• High proportion of related-party transactions

Step 6: Build the Ideas List

Standard format:

Rank	Ticker	Company	Sector	Idea Type	Thesis	Catalyst	Risk	Conviction
{{RANK}}	{{TICKER}}	{{COMPANY_NAME}}	{{SECTOR}}	{{DIRECTION}}	{{THESIS}}	{{CATALYST}}	{{RISK}}	{{CONVICTION}}
Example	600519	Kweichow Moutai	Baijiu	Long	Stable wholesale price + strong sales + high dividend	Q1 results beat expectations	Wholesale price decline	High
2	...	...	...	...	...	...	...	...

Conviction levels:

• High: Strong thesis, clear catalyst, limited downside
• Medium: Good thesis, catalyst timeline uncertain
• Low: Exploratory, needs more research

Step 7: Monitor & Update

Ongoing tracking:

• Weekly price and news updates
• Catalyst tracking (china-catalyst-calendar)
• Thesis validation / invalidation
• Position sizing recommendations

Update triggers:

• Earnings results
• Material news (M&A, guidance, regulation)
• Price moves >15% in a week
• Thesis breaking or confirming

China-Specific Screening Considerations

Market Structure

Feature	Screening Implication
Price limit restrictions	Momentum may be interrupted
High retail investor share	Sentiment-driven overreactions common
Policy sensitive	Regulatory risk premium in certain sectors
Northbound flows	Track foreign flows for large-caps
Dragon-Tiger list	Unusual activity signals
Trading halt	Due diligence risk for suspended names

Common A-share Investment Styles

Style	Description	Key Metrics
Value investing	Deep value, dividend, asset-based	PB, dividend yield, below net asset value
Growth investing	High growth, innovation	Revenue growth, R&D intensity
Thematic investing	Policy/trend themes	Catalyst proximity, theme purity
Technical analysis	Chart-based trading	Moving averages, MACD, volume-price
Quantitative strategies	Systematic, factor-based	Multi-factor models
IPO subscription	IPO subscription	Winning rate, expected gain

Sector-Specific Screening

Sector	Screening Focus
Baijiu	Wholesale price trend, channel inventory, cash collection, brand strength
Semiconductors	Capacity utilization, domestic substitution progress, technology iteration
New energy	Overcapacity/clearance, technology route, impact of subsidy phase-out
Pharmaceuticals	Innovative drug pipeline, centralized procurement wins, internationalization
Banks	NIM trend, NPL ratio, provisions, valuation (below book value)
Real estate	Sales, financing capacity, land reserve quality
Consumption	Sell-through, inventory, consumption upgrading/downgrading trend

Quality Checks

Before delivering ideas list:

• Screen criteria documented and reproducible
• Each candidate has fundamental backing
• Catalysts identified for each idea
• Risk factors clearly stated
• Conviction levels assigned
• Liquidity verified (tradable)
• Regulatory/compliance review passed

Data Source Mode Switch: Set env var IFIND_DATA_SOURCE_MODE to control data source preference.

• ifind-only (strict): Use iFind only, error if unavailable
• ifind-fallback (default): iFind preferred, fallback to AkShare
• akshare-only, wind-only (Wind only), wind-fallback (Wind first, fallback to iFind → AkShare): Skip iFind, use AkShare only