During the Two Sessions in 2026, the draft outline of the '15th Five-Year Plan' and the government work report not only provided a clear blueprint for economic development and policy direction but also signaled numerous investment opportunities.
Multiple surveyed fund management companies believe that emerging industries represented by biomedicine, new infrastructure projects represented by coordinated computing and electricity, and the domestic mass market represented by consumer services contain a wealth of investment opportunities. As policy expectations stabilize and structural transformation accelerates, the Hong Kong and A-share markets are expected to initiate a new wave of growth driven by the synergy of technological innovation and domestic demand recovery.
Biomedicine has been incorporated into emerging pillar industries.
This year’s government work report places 'accelerating the cultivation and expansion of new drivers of growth' as a key task, with particularly detailed plans for the development of emerging and future industries, becoming a focal point of market attention.
Specifically, the government work report highlights the need to 'encourage central and state-owned enterprises to take the lead in opening application scenarios, and to build emerging pillar industries such as integrated circuits, aerospace, biomedicine, and low-altitude economy. Establish mechanisms for investment growth and risk-sharing in future industries, and foster the development of future energy, quantum technology, embodied intelligence, brain-computer interfaces, 6G, and other future industries.'
Ask Futubull AI:Compared to previous years, this year’s government work report newly added biomedicine to the list of emerging industries and brain-computer interfaces to the list of future industries, while also advancing the ranking of future energy within future industries.
On March 6, the biomedicine sector surged significantly, with the CSI Hong Kong Innovative Pharmaceuticals Index rebounding by 4.24% in a single day. $TRANSTHERA-B (02617.HK)$ 、 $REMEGEN (09995.HK)$ They surged by 43.53% and 10.92%, respectively. Additionally, the Wind Brain-Computer Interface Theme Index rose by 1.76%. The future energy sector, including nuclear fusion, space-based solar power, and energy storage, also trended upward. Multiple stocks, including Haiou Co., Ltd., China Energy Engineering Group, and Taijia Co., Ltd., hit their daily trading limits.
Liu Jun, Vice General Manager of Huatai Bai Rui and Director of the Index Investment Department, stated that the 2026 government work report incorporates biomedicine into 'emerging pillar industries,' providing clear top-level design. Coupled with the approval and market launch of multiple new drugs, the sector is entering a phase of performance release. The industry is benefiting from significant policy support and accelerated commercialization, compounded by the sector's oversold status, low valuation range, and capital inflows, creating potential for a subsequent recovery rally.
Guotai Fund also pointed out that the 2026 government work report explicitly lists biomedicine as an emerging pillar industry, emphasizing the promotion of high-quality development in innovative drugs, optimization of centralized procurement and pricing management, and enhancement of commercial health insurance support for innovative drugs to alleviate market concerns about profitability and payment issues. Previously, liquidity shocks caused by global geopolitical conflicts led to relatively low valuations for A/H shares. Additionally, active equity funds’ holdings of pharmaceutical stocks fell to a low point in Q4 2025, potentially releasing market pessimism, reducing selling pressure, and increasing sensitivity to positive marginal changes. This provides a higher safety margin and allocation window for a possible bottom rebound.
Liu Jie, Fund Manager of Guangfa Fund’s Index Investment Department, noted, 'The recent rise in geopolitical risk premium, the back-and-forth speculation over Federal Reserve interest rate cuts leading to marginal tightening of liquidity, and profit-taking digestion collectively contributed to the earlier correction in Hong Kong-listed innovative drug stocks.' 'For Hong Kong-listed innovative drug stocks, the core logic remains firmly anchored in three robust fundamentals: the inflection point for industry earnings realization in 2026, explosive growth in overseas launches of domestically produced new drugs, and the index valuation being at a historically low percentile (13th percentile over the past five years). The current adjustment, to some extent, brings the industry back to rationality. Looking ahead to Q2 2026, March-April will be a critical window for the release of significant clinical trial data and the outcome of a new round of medical insurance negotiations. Additionally, the annual ASCO/ESMO conferences can provide event-driven catalysts, making it worthy of investor attention.'
Integrated computing and power systems have been explicitly identified as new infrastructure.
In addition to the aforementioned emerging and future industries, the government work report also emphasized the development of a new form of intelligent economy, primarily focusing on the industrial implementation of 'Artificial Intelligence+'. In terms of hardware, it proposed the implementation of ultra-large-scale intelligent computing clusters and integrated computing and power systems as part of new infrastructure projects. Regarding applications, it highlighted the promotion of large-scale deployment of smart terminals and intelligent agents, fostering 'AI-native new business models.' Concerning data elements, it called for the improvement of foundational systems for data factors and the advancement of high-quality dataset construction.
Tianhong Fund believes that artificial intelligence continues to be a key focus of government work, with the report deepening and expanding on 'Artificial Intelligence+'. This signifies that the future will revolve around AI as the core to build a complete economic system, deeply integrating data, computing power, and electricity to form an end-to-end intelligent economic model.
Notably, 'integrated computing and power systems' was mentioned for the first time in the government work report and explicitly listed as a new infrastructure project, drawing significant market attention. Subsequently, Chen Changsheng, Deputy Director of the State Council Research Office and a member of the report drafting team, emphasized at a briefing hosted by the State Council Information Office: 'There is a popular saying online that the ultimate frontier of AI is energy. We must leverage the advantages of the national grid system and further advance the construction of new infrastructure such as ultra-large-scale intelligent computing clusters and integrated computing and power systems.'
Recently, the electric power and grid equipment sectors have remained highly active, with the Guozheng Green Power Index and the CSI Grid Equipment Index rising by 13.54% and 40.51%, respectively, year-to-date. Notably, the CSI Grid Equipment Index reached a new high on March 6.
Cao Xuchen, fund manager of Huabao Power ETF, pointed out that the strong performance of electric power stocks reflects two trends: the accelerating AI-driven transformation of China's IDC data center industry and the gradual upgrading of the country's overall power demand structure. Amid volatile market sentiment, the pricing of the relatively low-valued electric power sector may just be beginning. However, whether this can transition from logic-based trading to earnings expectation trading might still require waiting until the second half of the year. Nevertheless, the overall sector shows potential for fluctuating upward movement.
The explosive growth of AI computing power has driven up electricity load demands, which traditional grids struggle to meet due to high-density energy consumption needs. Integrated computing and power systems address structural energy supply challenges through dynamic allocation of computing clusters and green energy resources. Policies explicitly call for the construction of supporting power grids for ultra-large-scale intelligent computing centers, driving surging demand in areas like ultra-high voltage transmission, flexible DC distribution, and energy storage peak regulation. Leading equipment suppliers could see a significant increase in orders, and with policy support, the industry holds trillion-level growth potential.
The recovery of domestic consumption driven by internal demand is worth anticipating.
Notably, this year’s government work report placed 'building a strong domestic market' at the top of its ten key tasks, emphasizing an internal demand-driven approach, coordinating efforts to boost consumption and expand investment, exploring new growth spaces for domestic demand, and better leveraging China’s advantage as a super-large-scale market.
Tianhong Fund believes that the consumer policies for 2026 will maintain their momentum while optimizing their structure. For the first time, the report proposed the formulation and implementation of an income growth plan for urban and rural residents, explicitly supporting regions with appropriate conditions to promote spring and autumn breaks for primary and secondary schools and implement staggered paid leave systems for employees. By creating consumption scenarios, these measures aim to stimulate the potential of domestic demand, making the recovery of domestic consumption in 2026 highly anticipated.
Xingshi Investment believes that expanding domestic demand has ranked first in the government’s work tasks for two consecutive years, with clear policy emphasis on boosting domestic demand and greater attention to unleashing the potential of service consumption and effective investment.
Specifically, policies will focus on both supply and demand. On the demand side, the “two new” policies have been optimized, with a special allocation of 250 billion yuan from ultra-long-term special treasury bonds to support the replacement of old consumer goods with new ones. A 100-billion-yuan fiscal and financial synergy fund has been established to stimulate domestic demand through a combination of loan interest subsidies, financing guarantees, and risk compensation. Additionally, plans have been formulated and implemented to increase urban and rural residents’ incomes, while implementing a staggered paid vacation system for employees, creating more financial and leisure space to promote consumption. On the supply side, efforts will focus on “creating a series of consumption scenarios with broad coverage and high visibility to accelerate the cultivation of new consumption growth points,” as well as “expanding and improving the quality of the service industry.” This is expected to further unleash household consumption demand by increasing high-quality consumption supply. Xingshi Investment believes that given the strong momentum of resident consumption growth already evident in the first two months of this year, it is expected that with policy support on both supply and demand sides, China’s consumer market will demonstrate robust intrinsic growth momentum.
In addition, Harvest Fund Management stated that the government work report proposed in-depth implementation of measures to boost consumption and foster the growth of emerging and future industries, providing clearer directions for the capital market to seize related industrial opportunities. Looking ahead, Harvest Fund Management suggests that investors actively explore value revaluation opportunities in low-position domestic demand sectors and pro-cyclical assets, including high-quality targets that directly benefit from initiatives such as replacing old consumer goods with new ones and expanding goods and services consumption.
The market is expected to usher in a new round of upward momentum.
Overall, fund companies generally believe that the positive policy expectations from the Two Sessions will help boost market confidence and risk appetite. The market is poised to enter a new phase of momentum, with domestic demand and technological innovation potentially replacing real estate as key drivers of economic growth. This structural economic transformation is expected to create corresponding opportunities in the stock market for companies aligned with these strategic priorities.
HSBC Jintrust Fund Management stated that recent escalations in overseas geopolitical conflicts have had some impact on global capital markets, but for the domestic market, the effects are primarily limited to short-term risk appetite. Looking ahead, proactive fiscal policies and moderately accommodative monetary policies set to continue until 2026 will ensure an overall macroeconomic environment characterized by improving fundamentals and strong policy support. As post-holiday resumption of work and production advances comprehensively, coupled with the implementation and effectiveness of growth-stabilizing policies following the Two Sessions, the market is expected to welcome a new round of momentum. It is recommended to adopt a balanced allocation strategy, focusing on midstream manufacturing and pro-cyclical sectors benefiting from supply-demand improvements and economic recovery, as well as technology sectors driven by industrial trends.
Invesco Great Wall Fund Management noted that the government work report released relatively positive signals, maintaining certain growth targets and policy support at the aggregate level, while placing high emphasis on fostering and supporting new drivers of economic growth. Support for technological innovation has reached new heights with several novel proposals. Amid uncertain external environments, positive policy expectations are expected to boost market confidence and risk appetite, potentially supporting a trend of A-share market volatility moving upward. In terms of allocation, it is recommended to focus on policy-supported areas: first, new infrastructure projects related to artificial intelligence and green development, as well as AI+ application fields; second, taking advantage of low positions to invest in domestic demand-driven consumption, particularly in service-related industries.
Pengyang Fund’s General Manager Assistant and Chief Equity Investment Officer Zhang Xun believes that the core themes emanating from the Two Sessions revolve around new quality productive forces, boosting domestic demand, and deepening reform dividends. Correspondingly, in terms of market structure, the current stock market exhibits inherent momentum for sector rotation. Some sectors are overvalued, while others remain at the bottom, creating conditions for style rebalancing. The market is transitioning from a 'dumbbell-shaped' structure to a 'barbell-shaped' structure. One end of the barbell consists of traditional high-quality leading enterprises, which are undervalued and offer good cost-performance ratios, qualifying as core assets. The other end comprises the broad technology industry chain represented by AI, with significant growth potential. The connecting bar includes consumer services and some pro-cyclical areas.
Caitong Fund believes that based on the policy signals from the Two Sessions, investors may consider focusing on three main lines for long-term deployment: first, a new quality productive force line centered on high-tech manufacturing and equipment manufacturing; second, a Digital China line aimed at increasing the proportion of core digital economy industries from 10.5% to 12.5%; and third, a green and low-carbon energy transition line driven by the shift from 'energy consumption dual control' to 'carbon emission dual control.' Combined with the funding tilt toward six major areas under the '15th Five-Year Plan'—including 109 major projects in new quality productive forces, modern infrastructure, and green and low-carbon initiatives—the relevant tracks for attention may include computing power and industrial software, clean energy and new power systems, high-end equipment and machine tools, aerospace and low-altitude economy, equipment upgrades and consumer goods replacement, as well as future energy, quantum technology, embodied intelligence, brain-computer interfaces, and 6G-related future industries.
Bosera Fund’s Chief Equity Strategy Analyst Chen Xianshun analyzed that based on the policies released during the Two Sessions, we believe there are three main lines worth considering. First, science and technology innovation and advanced manufacturing, including artificial intelligence, high-end equipment, and semiconductors. Second, industries related to energy transition, such as new energy, grid upgrades, and energy storage technologies. Third, consumption upgrading and service consumption, including healthcare, elderly care services, and cultural tourism consumption. These directions align with national industrial upgrade strategies and also exhibit strong long-term growth potential.
Ping An Fund predicts that the earnings of listed companies representing China's outstanding enterprises will significantly rebound within the next two to four quarters. Coupled with continued monetary and fiscal easing, both the A-share and Hong Kong stock markets will fully benefit from the dual drivers of improved fundamentals and valuation multiples. The current market is still on an upward trajectory.
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