1. Report Industry Investment Rating No relevant content provided in the report. 2. Core Viewpoints - The report expects the liability growth rate of the real - sector to decline to around 8.3% in March 2026, and to around 8.0% by the end of 2026. The liability growth rate of the government sector is expected to drop to around 11.5% in March and around 11.6% by the end of 2026. It is recommended that investors control stock and bond positions, focus on short - term and money - market assets, and the equity style is expected to shift towards value - dominance [2][17][18]. - Amid the China - US competition and potential re - valuation of the US technology sector, global funds may flow to China. Attention should be paid to whether the RMB exchange rate enters an appreciation channel. The risk preference may enter a range - bound state, and new funds in the financial market may be limited [6][20]. - In the short term, due to the Iran - US conflict, the A - share market is negatively correlated with international oil prices. Long - term bond prices have stabilized, and ultra - long - term bond prices have risen. The report continues to recommend the Shanghai Composite 50 Index (80% position) and the CSI 1000 Index (20% position) [7][21][22]. - In the de - leveraging cycle, the cost - performance ratio between stocks and bonds favors equities to a limited extent, and the value style is more likely to be dominant. The report recommends an A + H dividend portfolio and an A - share portfolio, mainly concentrated in industries such as banking, telecommunications, petroleum and petrochemicals, and transportation [9][58]. 3. Summary of Each Section 3.1 National Asset - Liability Sheet Analysis Liability Side - In February 2026, the real - sector liability growth rate was 8.4%, up from 8.3% previously. It is expected to decline to around 8.3% in March and remain stable in April. The government debt increased by 223.6 billion yuan last week, higher than the planned 185.4 billion yuan. The government liability growth rate at the end of February was 12.1%, down from 12.6% previously, and is expected to further decline to around 11.5% in March [2][17][18]. - The money market tightened last week. It is still expected that the peak of the money market in March will occur on the 5th. It is estimated that the one - year Treasury bond yield will have a lower limit of about 1.3% and a central value of around 1.4%, with a 10 - basis - point interest rate cut expected in 2026 [3][18]. Asset Side - The physical data from January to February showed a significant improvement compared to December. The two sessions set the annual real economic growth target for 2026 at 4.5 - 5%, and the nominal economic growth target is around 5.0% [19]. 3.2 Stock - Bond Cost - Performance and Stock - Bond Style - Since 2011, China has entered a period of declining potential economic growth, which may have ended in Q4 2024. The government put forward three major policy goals in 2016. Currently, the de - leveraging on the liability side has not ended, but the room for further de - leveraging is limited [6][20]. - Last week, the money market tightened, and the Iran - US conflict dominated the market. The A - share market was bearish, and the bond market was bullish, with the growth style prevailing. The ten - year Treasury bond yield dropped by 1 basis point to 1.82%, and the 30 - year Treasury bond yield dropped by 4 basis points to 2.35%. The stock - bond cost - performance ratio favored bonds [7][21]. 3.3 Industry Recommendation Industry Performance Review - This week, the A - share market declined with shrinking volume. The Shanghai Composite Index fell 1.1%, the Shenzhen Component Index fell 0.8%, and the ChiNext Index fell 1.7%. Among the Shenwan primary industries, non - ferrous metals, public utilities, basic chemicals, pharmaceutical biology, and textile and apparel had the highest gains, while non - bank finance, computer, agriculture, forestry, animal husbandry and fishery, beauty care, and national defense and military industry had the largest declines [29]. Industry Crowding and Trading Volume - As of March 29, the top five crowded industries were electronics, power equipment, non - ferrous metals, communications, and basic chemicals, while the bottom five were beauty care, comprehensive, social services, textile and apparel, and steel. The industries with the largest increase in crowding this week were pharmaceutical biology, non - ferrous metals, public utilities, basic chemicals, and automobiles, while those with the largest decline were computer, communications, power equipment, electronics, and building decoration [30]. - The average daily trading volume of the entire A - share market this week was 2.11 trillion yuan, down from 2.21 trillion yuan last week. Public utilities, coal, social services, pharmaceutical biology, and textile and apparel had the highest year - on - year growth rates in trading volume, while steel, basic chemicals, agriculture, forestry, animal husbandry and fishery, building decoration, and petroleum and petrochemicals had the largest declines [33]. Industry Valuation and Earnings - This week, among the Shenwan primary industries, building materials, basic chemicals, public utilities, petroleum and petrochemicals, and textile and apparel had the largest increases in PE(TTM), while beauty care, computer, agriculture, forestry, animal husbandry and fishery, non - bank finance, and electronics had the largest declines. Industries with high 2024 full - year earnings forecasts and relatively low current valuations compared to history include banking, securities, insurance, pharmaceutical biology, beauty care, new energy, gaming, and consumer electronics [35][36]. Industry Prosperity - In terms of external demand, there were both increases and decreases. The global manufacturing PMI rose from 50.9 in February to 51.9, and most major economies' PMIs increased. The CCFI index rose 1.6% week - on - week, and port cargo throughput rebounded. South Korea's export growth rate decreased slightly in February and increased to 50.4% in the first 20 days of March. Vietnam's export growth rate decreased from 34.3% in January to 6.3% in February [40]. - In terms of domestic demand, second - hand housing prices declined last week, and quantity indicators showed mixed trends. Highway truck traffic volume rebounded, and the capacity utilization rate of ten industries rebounded to around the historical median level in March. Automobile trading volume was relatively weak seasonally, new - home sales were at a historical low, and second - hand home sales were at a historical high [40]. Public Fund Market Review - In the fourth week of March (March 23 - 27), most active public equity funds outperformed the CSI 300. As of March 27, the net asset value of active public equity funds was 3.81 trillion yuan, up from 3.66 trillion yuan in Q4 2024 [55]. Industry Recommendation - In the de - leveraging cycle, the cost - performance ratio between stocks and bonds favors equities to a limited extent, and the value style is more likely to be dominant. The recommended A + H dividend portfolio includes 13 A + H stocks, and the A - share portfolio includes 20 A - share stocks, mainly concentrated in industries such as banking, telecommunications, petroleum and petrochemicals, and transportation [9][58].