Key Points - The article highlights two critical time points in 2025: the trading opportunities arising from external risk resolution in early April and the allocation opportunities following the synchronization of the economic and policy cycles between China and the U.S. in mid-year [2][3] - The technology sector is expected to be a strong focus for investment in April and May, following significant adjustments in March and potential catalysts [3] - The article emphasizes the importance of focusing on core assets in A-shares and Hong Kong stocks, as the market is anticipated to undergo a significant style shift due to the recovery of traditional core assets [3] - The deep-sea technology sector is recognized as a strategic emerging industry, with government support expected to accelerate its development, similar to the low-altitude economy and commercial aerospace sectors [6][9] - Investment opportunities in the deep-sea technology industry are identified across the entire supply chain, including upstream core components, midstream equipment, and downstream operations and services [6] - The article suggests that the deep-sea technology sector could open up a new trillion-level market, driven by both market and policy catalysts [6][9] - The focus on stable earnings and low-valuation themes is recommended, particularly in low-tier consumption, AI+ themes, and commercial aerospace [3][9] - The potential risks include intensified U.S.-China friction, geopolitical conflicts, and domestic policy implementation falling short of expectations [4][10]

Core Viewpoint - The A-share market is experiencing fluctuations, with the Hong Kong stock market facing significant declines, particularly in the technology sector, leading to a potential style switch in investment focus [1][3][8]. Market Performance - The A-share market saw a trading volume of less than 1.3 trillion, with sectors like coal, electricity, and banking showing strength, while semiconductor, communication, and automotive sectors faced collective adjustments [2][8]. - The Hong Kong stock market, particularly the Hang Seng Technology Index, dropped over 3%, with Xiaomi's stock falling more than 6%, indicating a significant impact on market sentiment [3][6]. Fund Flows - Despite the market's downturn, over 11 billion was invested in stock ETFs over two trading days, indicating that funds are taking advantage of the market correction [12][14]. - The inflow of funds was particularly notable in ETFs tracking the Sci-Tech 50, A500 index, and sectors like healthcare and artificial intelligence [14][15]. Sector Analysis - The technology sector's decline is attributed to external factors, including volatility in overseas markets, particularly among U.S. tech giants, which has led to a contraction in risk appetite [8][18]. - Analysts suggest that as the market approaches the earnings reporting season, there will be a greater focus on performance verification, leading to a potential shift towards sectors with stronger earnings certainty, such as consumer goods and pharmaceuticals [8][17]. Investment Strategy - The current market environment suggests a rotation towards sectors that are undervalued and have potential policy catalysts, with a focus on banking, insurance, and consumer sectors like healthcare and home appliances [20][21]. - Historical data indicates that the consumer sector tends to perform well in the second quarter, with specific industries like food and beverage, home appliances, and automotive showing strong average gains [17][18].

Macro Environment - The macroeconomic environment significantly influences the growth theme market, with a stable macroeconomic environment since the beginning of 2025 providing a conducive space for theme market development [2][3] - In early 2023, the adjustment of pandemic policies led to a rapid release of pent-up demand, creating a "strong expectation, weak reality" macro environment that improved market risk appetite and supported the ChatGPT theme market [2] - By early 2024, economic recovery momentum weakened, leading to a constrained space for the SORA theme market due to pressures from slowing consumption recovery and real estate investment [2] - The current macro environment characterized by "steady recovery + policy support" has led to a neutral overall expectation for economic growth, which is favorable for the further development of the current technology theme market [2][3] Style Switching - Sustainable fundamental expectations are necessary for the further expansion of the market, as seen in the divergence between the ChatGPT theme and growth/profitability styles in 2023 [3][4] - The SORA market in 2024 differed from the previous round as market expectations for net profit growth in the AI sector significantly increased, leading to a simultaneous strengthening of growth styles [3][4] - The strong performance of defensive styles such as dividends and low valuations from 2022 to mid-2024 impacted the theme market, with the ChatGPT theme failing to boost growth styles [4] - The current growth style has shown strength after a pullback in January, with a high degree of industry diffusion, suggesting a potential extension of the current market duration while monitoring the rebound of defensive styles [4]