Core Viewpoint - The current market trend is characterized as a "confidence reassessment bull market," initiated by the A-share reversal on September 24, 2024, driven by the resilience of the Chinese economy [1] Market Conditions - The market is currently in a slow bull phase, but dynamics may change, especially if the rapid rise in the third quarter leads to increased volatility in the latter half of the fourth quarter [1] - A strong signal is needed to significantly raise profit expectations, which requires ongoing evaluation [1] Industry Insights - Concerns regarding the long profit cycles of hard technology companies and potential valuation overextension are present, but it is premature to declare that overextension has occurred [1] - The issue of valuation divergence in the semiconductor sector has been ongoing since around 2019, during a significant bull market [1] - The core of risk assessment lies not in current valuation levels but in whether actual industry progress aligns with market expectations [1] Strategic Outlook - There is a need for strategic optimism regarding domestic substitution and self-control in the industry [1] - Investors must closely monitor the actual pace and progress of industry substitution [1] Sector Analysis - In the context of manufacturing upgrades, past experiences show that not all upgrades have translated into profit increases, and smooth consumption upgrades and internal circulation are crucial [1] - The new energy sector is highlighted as a key focus for countering involution policies, with significant differentiation within sub-industries [1] - Some sub-industries face severe overcapacity and require substantial time or strong policy intervention for profit recovery, while others may see significant improvement opportunities [1]

Group 1 - The current market rally is driven by a reassessment of confidence in the Chinese economy, which has shown resilience despite external pressures such as tariffs [1][2] - Significant events in various sectors, including AI, pharmaceuticals, and military, have bolstered market confidence in Chinese assets [1] - The market is experiencing a "slow bull" trend, differing from previous years, with a more gradual increase in stock prices and less reliance on high-risk funding [3] Group 2 - The overall profit growth has not fully materialized, indicating that the current market sentiment is more about restoring confidence rather than immediate financial performance [3] - Institutional investors are gradually reallocating funds from the bond market to the stock market, reflecting a rational assessment of valuations [3] - The market has not seen a significant influx of retail investors, with new account openings and fund subscriptions remaining stable [3]

Core Viewpoint - The A-share market experienced significant fluctuations on April 7, influenced by multiple factors, but institutional investors remain optimistic about future market trends, viewing the current situation as a strategic opportunity for mid-term positioning [3][19]. Group 1: Market Performance - On April 7, A-shares saw a collective decline, with over 100 stocks rising against the trend, indicating active participation from northbound funds and institutions [2][4]. - The agricultural sector stood out with stocks like Beidahuang and Dunhuang Seed Industry hitting the daily limit, with Beidahuang achieving a trading volume of 2.617 billion yuan and a net buy of 50.04 million yuan from northbound funds [5][6]. - Xiangcai Co. announced a stock swap merger with Da Zhi Hui, resulting in a 7.87% increase in its stock price, with a total trading volume of approximately 2.66 billion yuan [6][8]. Group 2: Institutional Activity - Institutions actively bought into several stocks despite the market downturn, including New Yisheng and Weichai Power, with significant trading volumes and net purchases reported [12][14]. - New Yisheng saw a 20% drop but still had a trading volume of 3.028 billion yuan, with northbound funds and institutions net buying a total of 1.83 billion yuan [12][13]. - Weichai Power experienced a 1.36% increase with a trading volume of 2.178 billion yuan, where institutions net bought approximately 921.14 million yuan [9][10]. Group 3: Strategic Insights - Analysts suggest that the recent tariff adjustments will not undermine the "confidence reassessment bull market," and the current market conditions present a mid-term strategic opportunity [18][19]. - The focus is on sectors with low correlation to tariffs, which may benefit from improved liquidity and supportive policies, emphasizing the importance of domestic consumption and technology growth [19][20]. - Investment recommendations include defensive assets such as gold, innovative pharmaceuticals, and growth-oriented dividends, with a gradual approach to positioning in technology sectors as market conditions stabilize [20][21].