On March 13, Caixin reported that the market saw a pullback after reaching a high yesterday, with the three major indexes experiencing slight declines. The Shanghai Composite Index briefly reached a new high for the year. The total transaction amount in the Shanghai and Shenzhen markets was 1.68 trillion, an increase of 201.9 billion compared to the previous trading day. In terms of sectors, Datacenter power supply, computing power, Brain-computer Interface, and Power Grid Equipment sectors saw significant gains, while Small Metal, Pork, Baijiu(Chinese Liquor), and Construction Machinery sectors faced notable declines. By the end of the trading day, the Shanghai Composite Index fell by 0.23%, the Shenzhen Component Index fell by 0.17%, and the Chinext Price Index dropped by 0.58%.

At today's Brokerage morning meeting, Tianfeng stated that Hong Kong stocks still have appeal for mainland investors from a configuration perspective; China Securities Co.,Ltd. predicted that the growth momentum of construction machinery domestic sales is expected to continue in March; China International Capital Corporation believes that there is still significant room for improvement in Consumer spending, and the space for service consumption is greater than that for Commodity consumption.

Tianfeng: From a configuration perspective, Hong Kong stocks still have attraction for mainland investors.

Tianfeng stated that in terms of configuration, the equity risk premium (ERP) of the Hang Seng Index, measured by the 10-year China's bond yield, is currently at a position equivalent to a breakthrough at a downward one standard deviation, similar to the beginning of October 2024, which allows for some downward space compared to early February 2023. Therefore, Hong Kong stocks are still attractive to mainland investors. Under the scenario of long-term U.S. Treasury bonds, the Hang Seng ERP has already broken through the low level of recent years. Although the 10-year U.S. Treasury yields have quickly retreated recently, the cost-performance ratio of U.S. Treasury bonds in the comparable range remains higher than that of Hong Kong stocks, and future foreign investment in Hong Kong stocks will require more observation. Given the economic recovery and market liquidity, the investment mainline can be narrowed down to three directions: 1) Deepseek breakthroughs and open-source leading Technology AI+; 2) Valuation recovery of Consumer stocks and gradual recovery of consumer stratification; 3) Continued rise of undervalued dividends. The core indicator for investment in the Consumer sector is valuation. With the current low valuation in the Consumer sector, declining interest rates, and policy catalysis, the recovery cycle is gaining traction (albeit with a very weak slope). Being overly pessimistic about consumption based on macro narratives poses risks, hence the focus on Hong Kong Internet stocks.

China Securities Co., Ltd. predicts that the growth momentum of domestic sales in Construction Machinery will continue in March.

China Securities Co.,Ltd. pointed out that domestic excavator sales grew by 51% in January and February, with good growth also seen in non-excavation core varieties. Domestic demand recovery exceeded expectations, and in March upstream parts manufacturers are tightly scheduled for production, suggesting the growth momentum for Construction Machinery domestic sales will continue. China Securities Co.,Ltd. believes that the domestic market is likely to enter an upward cycle. Firstly, from the perspective of cycle position, the sales of core varieties in 2024 have decreased by 70%-80% compared to the cyclical peak, significantly alleviating base pressure; recently, domestic new investments have been looking good, and from the second half of 2024, capital will be in place, Infrastructure investment and working hours are improving, and demand in multiple regions and various types will be positive in 2025. From the perspective of medium to long-term updating and replacing, the demand for replacing old equipment provides sustainability for the upward cycle, a new round of renewing cycles is starting, and in recent years, the quantity of second-hand machines exported has greatly increased while policies for updating and replacing equipment have accelerated the elimination of old models, thereby increasing the certainty of upward domestic demand for replacements.

China International Capital Corporation: There is still significant room for improvement in Chinese consumption, with service consumption having greater potential than Commodity consumption.

China International Capital Corporation stated that, from multiple dimensions, the ratio of China's consumption to GDP is relatively low. From an international comparison, the proportion of commodity consumption in China to GDP does not show significant deviation from its economic development stage, but the proportion of service consumption to GDP has deviated more from its economic development stage. Looking ahead, there is still considerable room for improvement in China's consumption, with more potential for service consumption than commodity consumption, especially in areas such as Medical Insurance and entertainment. The future of commodity consumption focuses more on upgrading, which means improving quality; whereas the growth in service consumption may mainly depend on increasing volume. Enhancing labor compensation can help boost consumption, but structural reforms, such as improving social security, are significant for enhancing consumption.