①China Galaxy Securities: Increased short-term volatility before the holiday does not change the upward market trend; ②GF Securities: Two allocation strategies for Q4 each year; ③Everbright Securities: Seize the window of volatility to actively position; ④Guojin Securities: Gear-shifting amidst turbulence, paving the way for a true bull market.
Cailian Press, September 28 — This week, the A-share market experienced narrow-range fluctuations. As the upcoming National Day and Mid-Autumn Festival holidays approached, the calendar effect intensified market divergence. Some brokers interpreted the over-a-month-long sideways oscillation of the stock index as 'gear-shifting' during a bull market rally.
With two trading days left before the long holiday, should investors hold cash or stocks over the holiday? Meanwhile, with the fourth quarter approaching, will the stock index break upwards? In which areas will the most prominent opportunities emerge?
Here are the top ten broker strategies for this week.
CITIC Securities: Resource security, corporate globalization, and technological competition
Resource security, corporate globalization, and technological competition remain the most important structural market themes, corresponding to an industry allocation framework centered on resources + globalization + new productive forces. Beyond this, there are limited directions worth pursuing.
For the resource sector, the fundamental driver of the market dynamics remains the persistent underinvestment in traditional resource industries amid a high-interest-rate environment globally, leading to constrained supply. Complex geopolitical conditions and countries’ pursuit of security and autonomy have made such supply fluctuations more frequent.
For corporate globalization, the market will gradually recognize that Chinese enterprises going global and embracing globalization represent one of the most core yet relatively implicit fundamentals and market drivers in this phase. The stability of the trade environment and China's efforts to counter internal competition are two critical factors sustaining the market dynamics. The delicate balance of mutual checks between China and the US is crucial for the current market sentiment. Only by standing in the global market can Chinese enterprises see their market capitalization ceilings continually raised. The October APEC meeting and the Fourth Plenary Session are two key validation points.
For technological competition, Chinese enterprises are transitioning from strategic restraint to strategic assertiveness, with the competition between China and the US intensifying. Future AI competition will extend from the cloud to the edge, with AI agents becoming widespread across edge devices. The currently entrenched mobile internet application ecosystem barriers may be restructured, presenting business opportunities comparable to the initial explosion period of mobile internet applications. Once this industrial trend materializes, Chinese enterprises will officially enter a phase of strategic counter-offensive in the technology sector.
China Galaxy Securities: Increased short-term volatility before the holiday does not change the positive market trend.
Outlook for A-share Market Investment: Some funds have become more cautious ahead of the holiday, with market trading activity slightly declining. Broad-based indices are showing a volatile pattern, but short-term fluctuations do not alter the positive trend of the market. Meanwhile, structural market trends remain prominent, with the technology sector benefiting from continuous catalytic effects of domestic and overseas industrial trends. Despite Friday's adjustment due to sentiment factors, after short-term pressure is released, there remains room for upward recovery. Looking ahead, as the upcoming Fourth Plenary Session of the 20th Central Committee in October will focus on the “15th Five-Year Plan,” the A-share market is expected to enter a critical window period, with market risk appetite likely to improve further. Liquidity is anticipated to continue its favorable trend, with margin financing balances in an upward channel. The transfer of household deposits is still in its early stages, and the Federal Reserve’s interest rate cuts provide support for global liquidity. Attention should still be paid to the impact of Sino-US negotiations on short-term structural market trends.
Allocation Opportunities: (1) New Quality Productivity Theme: In an environment of increasing external uncertainties, China’s demand for technological self-reliance and strength has become increasingly urgent. Technology companies that align with national strategies and possess genuine technological barriers will be an important mainstay for A-share investment under the backdrop of the “15th Five-Year Plan.” (2) Anti-Internal Competition: Strict constraints on unfair competition through anti-internal competition policies allow companies to focus more on enhancing product value-added and service quality. As the competitive market environment improves, resources will concentrate towards high-quality enterprises, achieving better resource allocation. (3) Consumer Goods Sector: Further implementation of policies aimed at boosting domestic demand is expected to drive the consumer goods sector upwards. With both supply and demand sides working in tandem, a new wave of consumption is burgeoning. (4) “Two Major” Areas: Significant engineering projects in multiple regions are being accelerated, and project construction will promote the improvement and development of related industrial chains.
Risk Warning: Uncertainty risks regarding domestic policy effectiveness; risks from geopolitical disturbances; risks of unstable market sentiment.
GF Securities: How to View Q4 Calendar Effects, Two Allocation Strategies Each Year in Q4
Maintain key previous judgments; the market establishes a “bull market mindset.” Once a trend forms, it is difficult to reverse in the short term. Do not easily use oscillation or bear market experience rules as signals, and adhere to the industrial main line.
Approach One: Calendar effect of low valuation blue chips, but certain conditions must be met.
Entering the fourth quarter, an important feature exists in the market’s sector structure: From 2005 to the present, the probability of pro-cyclical industries rising in the fourth quarter exceeds 65%, with over 60% probability of outperforming the CSI 300 Index.
The “calendar effect” of “pro-cyclical” industries in the fourth quarter is based on expectations of improved macroeconomic fundamentals. Historically, this judgment arises from two scenarios—
Scenario One: Relying on PPI improvement expectations. Years of PPI improvements can be divided into two types:
① Relying on the natural economic cycle, such as the deduction of inventory cycle initiation in Q4 of 2009/2013/2019.
② Relied on economic stimulus policies (supply-side or demand-side), such as the slum renovation targets in Q4 2014 and supply-side structural reform in Q4 2015.
Scenario Two: Relying on grand narratives. For example, the Belt and Road Initiative in 2014 and state-owned enterprise reforms.
From these two perspectives, will the calendar effect of procyclical trends emerge in 2025?
Firstly, relying on the transmission path of 'inventory cycle → economic cycle → PPI expectations,' it currently appears unlikely to occur;
Secondly, according to the timeline of key year-end meetings, supply-side policies focus on tangible progress in 'anti-involution,' while demand-side policies track detailed policy measures at the end of November;
Finally, regarding grand narratives, attention should be given to subsequent developments from the Fourth Plenary Session and the Fifteenth Five-Year Plan.
Approach Two: Anticipating sectors with high growth for the upcoming year during the performance vacuum period.
1. In years where macroeconomic fundamentals are lackluster but industrial sectors are active, the fourth quarter stock prices have a stronger guiding influence on the following year. For instance, in 2013-2015, 2019-2021, and 2024, leading sectors in Q4 had a high probability of continuing to outperform throughout the next year.
2. How to screen for year-end growth sectors?
(1) Screening results based on the 'moving average deviation' indicator: Currently, the main trends in sectors such as 【optical modules, PCBs, innovative drugs, STAR Market chips, non-ferrous metals】 remain mostly healthy, except for innovative drugs which have entered a sideways consolidation phase. Based on historical patterns since 2012, entering consolidation does not signify the end of a trend. As long as the sector trend persists, there remains potential for new highs after the consolidation phase.
(2) Screening results for 'call option attributes': In addition to the TMT sector, which has accumulated significant gains, sectors with relatively high overlap also include [recently sluggish automotive parts/robotics segments, power grid equipment, consumer electronics], etc. These sectors, possessing call option-like characteristics, have seen overall stagnation recently, with downward adjustments being relatively controllable and upward sensitivity to positive catalysts remaining intact, making them relatively suitable for medium-term preemptive attention.
CITIC Securities: Which sub-sectors are expected to see earnings improvement or sustained high growth in Q3?
Q3 Earnings Outlook for Listed Companies: Boosted by low base effects, policies aimed at expanding domestic demand, and expectations of anti-internal competition measures alongside interest rate cuts, PPI has stabilized and rebounded, turning positive year-over-year in August industrial profits. Considering resilient export growth and an anti-internal competition backdrop supporting PPI stabilization, although the low base effect may gradually diminish, profitability is expected to recover amid volatility. Based on changes in earnings expectation growth since August, marginal changes in contracted liabilities as of Q2 2025, and Q3 meso-level industry momentum data, sectors anticipated to see earnings improvement or sustained high growth mainly concentrate in: 1) Mid-to-high-end manufacturing with recovering momentum: storage batteries and other batteries, printing and packaging machinery, lithium battery-specific equipment, military electronics, wind power components, etc.; 2) High-growth AI supply chain: communication network equipment and devices, consumer electronics components and assembly, analog chip design, gaming, etc.; 3) Resource sectors with improved supply-demand dynamics and rising prices: fluorine chemicals, copper, gold, coke, pesticides, fiberglass manufacturing, as well as grain and oil processing, home appliance components III, etc.
This week, the A-share market demonstrated overall strength, primarily driven by: (1) Positive Q3 earnings forecasts for domestic chip equipment, boosting long-term expectations for domestic supply chains; (2) Clear market focus, with the electronics sector (memory + equipment) becoming the main battleground for institutional and active capital, effectively consolidating market synergy; (3) Relative calm in overseas markets, with leading technology companies alternately reaching new stage highs.
DRAM memory prices increased, while TV LCD shipments in August expanded on a year-over-year basis. Key areas of improvement this week include: 1) Rising prices for copper, bismuth, cobalt, and cement, driven by restocking needs during the peak 'Golden September and Silver October' season, compounded by capacity constraints under an anti-internal competition backdrop; 2) Accelerated downstream installations and seasonal restocking led to widespread price increases across new energy and photovoltaic supply chains, with indices for wind turbine component prices trending upwards; 3) Early signs of stabilization and recovery in fresh milk prices within the consumer space, with volume and pricing improvements observed in home appliances since September; 4) Continued momentum in TMT, with robust DRAM memory price increases. Subsequent focus areas for high or improving momentum include copper, bismuth, cobalt, cement, photovoltaic cells, lithium battery-specific equipment, complete wind turbines, semiconductors, and white goods.
Net inflow from margin trading and net subscriptions to ETFs, with declining new fund issuance. Margin trading funds recorded a cumulative net inflow of RMB 45.79 billion over the first four trading days; newly established equity-focused public funds totaled 18.06 billion units, down by RMB 4.05 billion compared to the previous period; ETFs saw net subscriptions, translating into net inflows of RMB 15.18 billion. Electronic, power equipment, and telecommunications sectors were favored by margin traders; information technology ETFs saw significant subscriptions, while raw materials ETFs experienced more redemptions. Insider net selling shrank, but planned reductions rose.
[Risk Warning] Economic data may fall short of expectations, policy interpretations could be incomplete, and overseas policies might tighten unexpectedly.
Everbright Securities: Seize the window of fluctuation for proactive positioning.
Historically, market fluctuations during bull markets are not uncommon. The timing of the current market pullback aligns to some extent with historical patterns. Under pessimistic scenarios, if the market continues to adjust, the pullback could narrow the gains during this phase of market volatility to around 6%-7%, with the low point (Shanghai Composite Index level) potentially near 3,600 points.
The market is expected to continue its upward trend after the National Day holiday. Historically, following the National Day holiday, the market typically performs well as market sentiment rebounds. For this round of market movements, the underlying logic supporting the stock market's rise remains unchanged, and current valuations are relatively reasonable without clear signs of overextension. It is expected that the market will likely return to an upward trajectory post-holiday.
For the medium to long term, it is recommended to focus on the TMT sector as the main theme. Currently, market gains appear to be primarily driven by liquidity. In a liquidity-driven market environment, TMT is more likely to become the main theme in the mid-term, and this cycle may follow suit. The TMT sector currently has many catalysts, such as continuous progress in industry trends, and the Federal Reserve's interest rate cut cycle that started in September, providing intrinsic upward momentum. From recent sector rotation dynamics, TMT has already gained an advantage, indicating that this trend may persist.
Risk Analysis: Overseas risk disruptions exceed expectations; historical patterns may fail; market sentiment drops significantly.
Zheshang Securities: Large-cap growth stocks show prolonged upward volatility; balanced allocation between pro-cyclical and technology sectors.
In September, large-cap growth stocks stood out significantly, just as we predicted in our August report with 'heading towards a climax.'
Amid expectations of global liquidity easing, the technology sector facing a 'separating truth from falsehood' earnings test, ongoing 'anti-internal competition' policies, and potential escalation of geopolitical tensions, we believe that in October, large-cap growth will exhibit extended endurance but with rising volatility, suggesting a balanced allocation between pro-cyclical and technology sectors.
Key industries to watch: 1) From a probability mindset, relatively optimistic about electric new energy, electronics, non-ferrous metals, and basic chemicals as investment directions for growth. 2) From a risk-reward perspective, focus on relatively lagging sectors that decide the market’s turning point—such as securities—and other underperforming areas like real estate within broader financials.
Open Source Securities: Market main themes before and after holidays—crossing over and switching.
Prioritize technology, while managing high-low rotations within the tech sector.
Following the market breakout, our long-term outlook remains optimistic for index breakthroughs: ① Maintain confidence in a bull market, with dual drivers prioritizing technology and supplemented by PPI trading. ② Stick with technology; neither short-term nor long-term conditions currently support high-low rotations. ③ The market’s current 'technology-first' characteristic is prominent, with capital flowing from chasing a few high-growth tech niches to spreading across most sub-thematic investment areas within technology, reinforcing the belief in 'technology first' through sustained profit-making effects and actively seeking high-low opportunities within the tech sector. ④ For investors who are cautious of elevated levels, if looking for low positions beyond sectors with significant prior gains such as optical modules, PCBs, innovative drugs, sci-tech chips, and liquid cooling, we recommend focusing on gaming, media, internet, Huawei supply chain (consumer electronics), and batteries.
Calendar Effect: Pre-holiday lull, post-holiday surge.
As the upcoming National Day holiday approaches, how should we grasp market timing? By analyzing calendar effects, we explore patterns in market behavior before and after the holiday: ① In terms of indices, the two trading days before and after the National Day holiday typically exhibit a pattern of 'pre-holiday sluggishness, post-holiday vigor.' ② Sector-wise, industries such as pharmaceuticals and biotechnology, automobiles, agriculture, forestry, animal husbandry, fisheries, and electronics tend to outperform. ③ On an individual stock level, there is a preference for high price-to-earnings (P/E) stocks in October.
Market trends around holidays
Does the main market trend change before and after the National Day holiday? Do sectors that lead gains before the holiday continue to do so afterward? Based on calendar effects around the National Day holiday, the probability of market trend switching versus persisting is similar, with switching slightly more likely than persistence. Among these, technology-related trends are relatively more likely to persist through the National Day holiday, such as fintech, TMT (technology, media, and telecommunications), and domestic substitution. The sustainability of this round of tech-driven trends remains strong, stemming from three major mid-to-long-term advantageous factors in the absence of significant changes in macro expectations: ① Relative profitability of technology stocks regaining dominance, a sufficient condition for medium-term style leadership; ② Overseas influences providing key support for this round of technology; ③ A renewed upward resonance in the global semiconductor cycle, leading to abundant opportunities across the broader technology sector.
Implications for the market around the National Day holiday
Core strategies for asset allocation and considerations for trading around the National Day holiday include: (1) Dual drivers of the market, prioritizing technology; (2) Pre-holiday sluggishness, post-holiday vigor, with a preference for high P/E stocks in October; (3) Similar probabilities of market trend switching versus persistence, with technology-related trends more likely to persist through the holiday.
Industry allocation ‘4+1’ recommendations: (1) Technology growth + self-reliance + defense: AI hardware, semiconductors, robotics, gaming, AI applications, Hong Kong-listed internet companies, defense, along with financial technology and brokerages that show high correlation with index movements. (2) Beneficiaries of ‘marginal improvement in PPI expectations + some low-position rebounds’: non-ferrous metals, chemicals, steel, and building materials are expected to benefit, while insurance, liquor, and real estate may present valuation recovery opportunities. (3) Anti-internal competition resilience, broader directions: This round of anti-internal competition extends beyond traditional cyclical products, with manufacturing and growth areas such as photovoltaics, lithium batteries, construction machinery, healthcare, and Hong Kong-listed Hang Seng Internet also holding mid-term potential. (4) Structural overseas opportunities: Eased China-EU trade relations (exports to Europe: automobiles, wind power, etc.) and niche exports (e.g., snacks). (5) Core holdings: Stable dividend-paying stocks, gold, and optimized high-dividend strategies.
Risk warning: Unexpected macro policy changes could accelerate the recovery process; risks of deteriorating global liquidity and geopolitical tensions; forward-looking indicators are based on historical data and may not represent future performance.
Zhongtai Securities: How to interpret recent rotations in technology and pullbacks in the financial sector?
I. How to interpret recent rotations in technology and pullbacks in the financial sector?
This week, market styles continued to show divergent characteristics, with tech sectors transitioning from high to low momentum, while cyclical assets remained broadly weak. Within the technology sector, the communications industry, which ranked among the top performers over the past three months, saw a decline this week. Meanwhile, electric equipment, which had experienced relatively smaller gains earlier, maintained its upward trajectory, with wind power and photovoltaics showing relatively strong performance. Firstly, net redemptions of STAR Market ETFs and ChiNext ETFs showed signs of stabilization and bottoming out this week, indicating that a significant portion of funds still believe in the upside potential of tech valuations and are willing to hold positions amid volatility. Secondly, leading tech stocks were weighed down by the mid-term correction of the Nasdaq Index, but their valuation resilience may gradually emerge as U.S. equities rebounded starting Thursday. Thirdly, among cyclical sectors, only non-ferrous metals benefited significantly from rising gold and silver trends, while real estate, petrochemicals, and chemicals experienced weekly declines. According to data from the National Bureau of Statistics, the Producer Price Index (PPI) fell by 2.9% year-on-year in August, with the decline narrowing by 0.7 percentage points compared to the previous month. This indicates that anti-internal competition efforts in cyclical industries have achieved some success, easing downward pressure on industrial product prices, though overall demand has yet to see substantial recovery.
Although there is some short-term adjustment pressure, the A-share market has strong support in the medium to long term, and the current level still offers a relatively high probability of success. From a capital flow perspective, on one hand, using the second-order difference of net inflows to measure retail investor sentiment indicates that compared with historical thresholds, there remains significant room for growth. This implies that the profitability effect has not yet spread to the vast majority of investors, and there may still be new funds entering the market in the future. On the other hand, the marginal decline in net reductions by major shareholders for two consecutive weeks suggests some easing of withdrawal pressure from industrial capital. At the same time, the continued rise in margin financing balances indicates solid willingness to engage in leveraged trading, meaning bullish forces remain supported at the capital level. In terms of news, Alibaba announced a RMB 380 billion investment in AI infrastructure, signaling confidence in the sector’s growth potential and further stimulating upward momentum in the technology sector. Additionally, Moore Threads, the first domestic GPU stock, passed its IPO review this week, taking only 88 days from acceptance to approval, sending a clear positive signal to the market.
Regarding the recent adjustments in the financial brokerage sector, whether the upward momentum can be sustained hinges on whether there is a substantive shift in the policy stance toward the capital markets. On Monday, the State Council Information Office held a press conference on the series of themes related to the high-quality completion of the 14th Five-Year Plan, introducing achievements in the financial industry during this period. Concerning the capital markets, the conference highlighted accomplishments such as a "steady increase in the proportion of direct financing" and "growth in the market value held by long-term funds," signaling that policies are likely to continue strengthening overall support for the stock market and enhancing fundamental market allocation functions rather than resorting to short-term interventions. For the market, these statements can be interpreted as reflecting a policy inclination toward “stabilizing expectations,” providing marginal support to equity assets, particularly within the financial brokerage sector. Based on this, the current adjustments in the brokerage sector are more likely to reflect a process where long-term funds are gradually building positions at lower levels rather than a passive withdrawal due to liquidity tightening. In other words, as long as policies remain moderately supportive and capital market reforms continue to advance, there is no need for excessive pessimism regarding the financial brokerage sector, which instead offers good strategic allocation value and potential rebound space.
II. Investment Recommendations
We believe that the rise in risk aversion ahead of the National Day holiday may lead to continued pullbacks in high-positioned technology sectors. However, from a medium to long-term perspective, the policy tone has not fundamentally deviated, and long-term funds and foreign capital still show allocation preferences. Retail investor sentiment remains rational, and with the financial and brokerage sectors still in relatively low valuation ranges, we recommend holding stocks through the holiday. Investors may focus on four key allocation directions:
1) Innovation in Technology: Focus on sub-sectors such as consumer electronics and robotics, which have mid- to long-term growth potential under the backdrop of policy support and industrial upgrading;
2) “Anti-Internal Competition” Theme: Concentrate on high-growth industries within the ChiNext board, and sectors benefiting from infrastructure and manufacturing recovery, such as non-ferrous metals and building materials;
3) Beneficiaries of Easing U.S.-China Relations: Constituents of the Hang Seng Tech Index and leading innovative pharmaceutical companies;
4) Brokerage Sector: Current valuations are attractive.
Risk Warning: Unexpected tightening of global liquidity, increased complexity of market speculation, or faster-than-expected shifts in policy dynamics, among others.
Huaxi Securities: Temporary pullbacks in the A-share and Hong Kong markets signal a slow bull market, which translates to a long bull market.
Market Outlook: A temporary pullback in A-shares and Hong Kong stocks; a slow bull market is a long-term bull market. After the trend growth in July and August and crowding in tech leaders’ trading, divergence among capital flows has intensified since September. With the upcoming long holiday next week, the 'calendar effect' may slow down off-market capital inflows, leading to short-term fluctuations and consolidation in A-shares and Hong Kong stocks. Some funds are inclined to position themselves for the October rally after the holiday. In the medium term, this bull market continues to unfold: ample micro-liquidity in the stock market, combined with 'stock market stabilization' policies and the entry of long-term funds, lays the foundation for a gradual bull market. Economic data remains weak, but the effects of 'anti-involution' have preliminarily appeared, improving the marginal profit outlook for A-shares. In terms of industrial trends, Chinese companies have demonstrated global competitiveness in artificial intelligence, biomedicine, and high-end manufacturing, maintaining high activity in the tech sector.
The following aspects are key areas of recent market focus:
1) Overseas developments: The Fed's 'precautionary' rate cut has materialized, with growing divisions on the subsequent rate-cut path. In September, the Fed cut rates by 25 basis points as expected, and the dot plot suggests another 50-basis-point cut this year and one more cut in 2026. Moreover, internal divisions within the Fed over the future rate-cut trajectory have widened: of the 19 officials, nine anticipate two more cuts in 2025, two expect one cut, six foresee no further cuts, and Stephen Milan, newly appointed by Trump to the Fed, supports a 50-basis-point cut. Current U.S. economic data remains resilient, with Powell’s remarks signaling a 'prudent rate-cut' approach, but Trump's impact on the Fed's independence is becoming apparent, indicating that this rate-cut path could be complex.
2) On the supply side, the impact of 'anti-involution' policies is gradually showing, with industrial profits rebounding in August. Industrial profits grew 20.4% year-on-year in August, while cumulative growth improved from -1.7% in July to 0.9%. Regarding prices, the year-on-year decline in PPI narrowed to -2.9% in August, marking the first contraction since March of this year. The month-on-month PPI also ended eight consecutive months of negative growth, driven by low base effects and the growing impact of 'anti-involution' policies, which have led to price increases in upstream commodities. The People's Bank of China emphasized 'insufficient domestic demand and low inflation' challenges at its third-quarter meeting. Recent policies aimed at boosting prices have been implemented, with work plans in building materials, steel, and petrochemicals industries emphasizing strict control over new capacity. The State-owned Assets Supervision and Administration Commission held discussions with some state-owned enterprises, urging them to resist 'involution-style' competition – a positive factor for improving long-term profitability expectations in A-shares.
3) Structurally, there are multiple catalysts in the technology sector, with high-growth profit expectations in TMT. AI is accelerating its penetration across various fields: firstly, domestic and international AI industry trends are becoming clearer, with global tech giants ramping up their AI capital expenditures, and strong earnings validating high sector activity; secondly, the Fourth Plenary Session in October and the '15th Five-Year Plan' will continue to focus on hard tech and new productivity; thirdly, consensus market forecasts indicate high-growth profit expectations for growth sectors in 2025, including military electronics, software development, IT services, optoelectronics, gaming, new energy, semiconductors, communications equipment, and components.
4) On the liquidity front, abundant liquidity in A-shares remains unchanged. Non-bank deposits increased by RMB 550 billion year-on-year in August, with the M1-M2 negative spread narrowing continuously, reflecting how the bull market has effectively boosted household risk appetite, creating potential for 'deposit migration.' Unlike the 2019-2021 'structural bull market,' where households entered the market through actively managed funds, this bull market sees a preference for passive products. Since Q4 2024, the net asset value of equity ETFs has rapidly expanded, with index funds surpassing active equity funds for three consecutive quarters, further driving industry indexation. The central bank has maintained a moderately loose monetary policy this year, lowering the funding rate, and bank wealth management yields remain historically low. Micro-level liquidity in A-shares is expected to remain abundant in Q4.
In terms of sector allocation, the main theme of technology remains unchanged. In October, both 'momentum investing' and 'thematic investing' will coexist, with faster rotation within growth sectors (AI downstream applications, solid-state batteries, energy storage, computing power, innovative drugs, etc.). Pay attention to non-tech sectors with improving momentum, such as chemicals, non-ferrous metals, and construction machinery.
Risk Warning: Unexpected macroeconomic volatility, overseas liquidity risks, geopolitical risks, etc.
Guojin Securities: Navigating Bumps, Welcoming a True Bull Market
Past 'bull markets' in China were more a result of following the excessive expansion of global finance, with their industry linkages dependent on U.S. drivers. As global financial assets reach high levels, physical consumption and profitability in China’s real economy are recovering. The transition from virtual to real will bring about a true uptrend for Chinese assets and mark the beginning of a new cycle for resource-based products. Meanwhile, growth investments will gradually shift from being tech-driven to export-led expansions.
Specific allocation recommendations are as follows: First, tangible assets that benefit simultaneously from the improvement in domestic operating conditions due to reduced internal competition, and the recovery of manufacturing activities alongside accelerated investment following interest rate cuts overseas: upstream resources (copper, aluminum, oil, gold), capital goods (construction machinery, heavy trucks, lithium batteries, wind power equipment), and raw materials (basic chemicals, fiberglass, steel). Second, opportunities will gradually emerge in domestic demand-related sectors after profit recovery: food and beverage, pork, etc. Third, the long-term asset side of insurance will benefit from a rebound in capital returns.
