Core Viewpoint - The Central Economic Work Conference held on December 10-11 has outlined the direction for economic work in 2026, emphasizing a "steady progress" approach and a series of macro policies and industrial deployments that are expected to support the capital market [1] Policy Direction - The conference highlighted the need for a more proactive fiscal policy and moderately loose monetary policy, focusing on new infrastructure, livelihood projects, and urban renewal to stimulate demand in related industrial chains [3] - The balance between "stability" and "progress" is crucial, aiming to stabilize the economic fundamentals while fostering innovation and green transformation to enhance resource allocation efficiency [2] Investment Opportunities - Investment opportunities are anticipated in three main areas: 1. **Consumption Upgrade**: The focus on domestic demand is expected to benefit the consumer sector, particularly durable goods and smart consumption, supported by policies like trade-in incentives [5] 2. **New Quality Productivity**: Emphasis on innovation and technology breakthroughs, particularly in AI, semiconductors, and high-end manufacturing, is seen as a long-term investment theme [5] 3. **Infrastructure and Unified Market**: Traditional infrastructure sectors such as engineering machinery and building materials are expected to benefit from modernization projects, while logistics and supply chain services will gain from the construction of a unified national market [6] Investment Strategy - Institutions are adopting a balanced investment strategy, focusing on "growth offense + value defense" with four core sectors: 1. Technology growth related to new quality productivity, particularly in AI and autonomous technology [8] 2. Chinese advantages in overseas markets, focusing on the export of industry chains and brands, especially in new energy vehicles and energy storage [8] 3. Domestic demand-driven consumption and manufacturing sectors, emphasizing consumption upgrades and manufacturing recovery [8] 4. High dividend defensive sectors as a stabilizing component of the investment portfolio [8]

Core Viewpoint - The Central Economic Work Conference held on December 10-11 outlines the direction for economic work in 2026, emphasizing a "steady progress" approach and a series of macro policies and industrial deployments that are expected to support the capital market [1][2]. Policy Direction - The conference emphasizes the need for a balanced approach between "quality improvement" and "reasonable growth," with a focus on stabilizing the economy and preventing risks in key areas such as real estate and local debt [2]. - A more proactive fiscal policy and moderately loose monetary policy are to be implemented, with potential interest rate cuts in 2026, which could lead to increased capital inflow into the equity market and lower financing costs for enterprises [2][3]. Investment Opportunities - Investment opportunities are expected to concentrate in three main areas: 1. **Consumption Upgrade**: The focus on domestic demand is anticipated to benefit the consumer sector, particularly durable goods and smart consumption, supported by policies like trade-in programs and fiscal subsidies for sectors such as healthcare and tourism [3][4]. 2. **New Quality Productivity**: Emphasis on innovation and technology breakthroughs, particularly in AI, semiconductors, and high-end manufacturing, is seen as a long-term investment theme [3]. 3. **Infrastructure and Unified Market**: Traditional infrastructure sectors like construction machinery and materials are expected to benefit from modernization projects, while logistics and supply chain finance will gain from the construction of a unified national market [4]. Investment Strategy - Institutions are adopting a balanced investment strategy, focusing on "growth offense + value defense" across four core sectors: technology growth related to new quality productivity, overseas expansion of Chinese advantages, domestic consumption and manufacturing, and high-dividend defensive sectors [4]. - Specific investment tracks include maintaining core positions in the AI industry chain, focusing on quality stocks in the consumer sector that have seen significant pullbacks, and capitalizing on opportunities arising from new policies [4].