Report Industry Investment Rating - Not provided in the content Core Viewpoints - The duration of the current US-Iran conflict may exceed market expectations, and the conflict may enter a "war of attrition." If the conflict unfolds beyond market expectations, the crude oil market may show a pattern of upward central tendency, increased volatility, and high-level oscillations. The pricing environment for global risk assets will face a systemic tightening, and high oil prices will suppress the valuation of technology stocks. It is recommended to balance positions and prioritize the allocation of energy security-related sectors. [5] - For the technology track, it is advisable to prioritize the export chain segments related to global energy shortages, countries' military build - up, and manufacturing expansion. Domestic logic - driven technology segments are superior to overseas mapping directions. [5][8] - For Hong Kong stocks, the resource and high - dividend sectors may benefit, while the Hang Seng Technology Index may be impacted, but its downside space is limited. [8] Summary by Directory Market Review - **Market Performance**: Last week, most major market indices rose, with the ChiNext 50 having the largest increase of 2.62%. Among the major industries, the utility index and the daily consumption index performed relatively well, with weekly changes of 3.01% and 0.42% respectively, while the telecommunications service index and the information technology index performed weakly, with weekly changes of - 2.59% and - 1.17% respectively. Among the 30 Shenwan primary industries, 10 industries rose. The industries with larger increases were coal, power equipment, and building decoration, with increases of 5.03%, 4.55%, and 4.12% respectively. The industries with larger declines were national defense and military industry, petroleum and petrochemicals, and non - ferrous metals, with declines of 6.64%, 4.33%, and 3.69% respectively. [9][15][17] - **Trading Heat**: Last week, the average daily trading volume of the Wind All - A was 24987.07 billion yuan (the previous value was 26446.19 billion yuan), which was at a relatively high historical level (92.10% of the three - year historical quantile). [9][20] - **Valuation Tracking**: As of March 13, 2026, the valuation (PE_TTM) of the Wind All - A was 23.33, a decrease of - 0.10 from the previous week, and it was at the 97.80% quantile of the historical level (in the past 5 years). Among the 30 Shenwan primary industries, 10 industries' valuations (PE_TTM) showed improvement. [9][26] Market Observation - **How Geopolitical Conflicts May Affect Major Asset Classes** - **Asset Allocation in Case of Prolonged Geopolitical Conflict**: The current US - Iran conflict may last longer than expected. If the conflict unfolds beyond market expectations, the crude oil market will show upward trends, and the pricing environment for global risk assets will tighten. It is recommended to balance positions and prioritize the allocation of energy security - related sectors. For the technology track, prioritize export chain segments related to energy shortages, military build - up, and manufacturing expansion. Domestic logic - driven technology segments are better than overseas mapping directions. For Hong Kong stocks, resource and high - dividend sectors may benefit, while the Hang Seng Technology Index may be impacted but with limited downside. [5][8] - **Investment Recommendations** - **Main Line 1**: Focus on "conflict - beneficiary" sectors such as energy, resources, and public utilities and add positions on dips. [8] - **Main Line 2**: Pay attention to the technology export chain driven by energy transformation and military expansion, such as photovoltaic, energy storage, wind power, non - ferrous metals, rare earths, nuclear power equipment, electronic components, and basic chemicals with dual - use properties. [8] - **Two Types of Risks to Watch**: First, small - and medium - cap and concept stocks with a relatively high proportion of leveraged funds are vulnerable to liquidity shocks and enhanced financial supervision. Second, overseas technology mapping sectors may be affected by both valuation and earnings expectations due to geopolitical disturbances. [8] Economic Calendar - **Domestic Economic Data**: On March 16, 2026, data on February's fixed - asset investment, social retail sales, industrial added value, real estate, and other economic data will be released. [28] - **Overseas Economic Data**: On March 16, 2026, the year - on - year growth rate of US retail sales in February will be released; on March 18, the year - on - year growth rates of US PPI and core PPI in February will be released; on March 19, the US federal funds target rate will be announced, and the Federal Reserve will release its interest rate decision. [28]

Group 1 - The ongoing US-Iran conflict is expected to last longer than market expectations, with the potential for a prolonged "war of attrition" where both sides will compete on costs and endurance, giving Iran the upper hand in determining the conflict's end [5][15][19] - High oil prices resulting from the conflict are anticipated to negatively impact US stock earnings, consumer prices, and economic growth, with inflation expectations rising non-linearly over time [10][12][15] - The report suggests a balanced portfolio with a focus on energy security-related sectors, as the current geopolitical situation differs from previous trade disputes, indicating a potential for significant price fluctuations in the oil market [15][20] Group 2 - Investment recommendations include prioritizing "conflict-benefiting" assets in energy, resources, and public utilities, with opportunities to increase positions during technical corrections in the energy sector [20] - The report emphasizes the importance of technology sectors driven by domestic logic over those influenced by overseas factors, particularly in light of rising inflation expectations and interest rates that may suppress valuations of overseas tech assets [20] - For Hong Kong stocks, resource and high-dividend sectors may benefit from the ongoing geopolitical tensions, while the Hang Seng Technology Index, sensitive to global liquidity and risk appetite, may face some impact but has limited downside due to prior valuation adjustments [19][20]