Core Viewpoint - The A-share market is transitioning from a stock game to an incremental market, driven by significant improvements in capital inflow and supportive macro policies [1][3][2] Capital Inflow and Market Transition - The scale of capital inflow has significantly improved, contributing to the shift towards an incremental market [2][3] - From October 2024, the trend of net outflow from actively managed public funds has gradually narrowed, with a net inflow expected by June 2025 [3] - Various types of funds, including public, quantitative, and insurance funds, are showing synchronized incremental inflows, promoting orderly rotation and structural increases in the A-share market [3] Investment Strategy Shift - Investors are advised to shift from short-term trading strategies to holding strategies as liquidity gradually recovers, enhancing the attractiveness of core assets with high economic resilience [4][2] - The preference for short-term trading has been influenced by market weaknesses and valuation corrections over the past three years [4] Focus on Overseas Markets - The exploration of overseas markets is becoming a key investment theme, with expectations that this direction will provide new breakthroughs post mid-year reporting season [5] - Specific sectors such as computer equipment, general equipment, agricultural chemicals, and home furnishings are projected to see net profit increases of 3.2%, 2.3%, 2.2%, and 1.7% respectively for 2025 [5] - Historical data indicates that overseas expansion significantly enhances companies' ROE and profit margins, although external factors have recently impacted these sectors [5] Sector Rotation Opportunities - Key sectors for investment include Hang Seng Technology, non-ferrous metals, and AI, which are expected to attract capital focus due to their unique investment logic and clear rotation rhythms [7] - The Hang Seng Technology sector, despite short-term performance pressures, is anticipated to benefit from domestic AI applications and improvements in production capacity [7] - The non-ferrous metals sector presents structural opportunities, with precious metals providing price support and industrial metals benefiting from recovering demand [7] Long-term Trends and Resilience - The long-term narrative of overseas expansion is shifting the characteristics of emerging market stocks from being highly correlated with domestic economic cycles to being more aligned with global income [6] - The AI sector is experiencing a positive feedback loop, enhancing user engagement and driving further demand for computational power, while innovative pharmaceuticals are positioned as a resilient growth area [7][8]