Core Viewpoint - The A-share market is expected to welcome a significant amount of incremental funds in 2026, which may sustain a slow bull market. The first quarter is projected to be the peak period for the maturity of fixed deposits, with funds likely flowing from insurance and wealth management channels into the equity market, marking the most abundant time for incremental funds throughout the year [3][4][62]. Group 1: Incremental Funds Sources - Incremental funds are primarily sourced from the migration of household deposits and pressures from asset scarcity, with insurance premium income continuing to grow significantly. By Q3 2025, the equity allocation ratio is expected to rise to 15.5%, nearing historical highs, which could release over 840 billion yuan into the market [4][6][66]. - The total amount of fixed deposits maturing in 2026 is estimated to be around 45 trillion yuan, which will likely lead to increased allocations in wealth management and "fixed income+" products, contributing over 900 billion yuan in medium to long-term funds to the A-share market [4][14][17]. - Public funds are expected to see a net inflow of approximately 230 billion yuan in 2026, driven by the recovery of fund net values and the enhanced motivation of individual investors to enter the market [4][33][34]. Group 2: Market Dynamics - The market's main contradictions in 2026 will shift towards verifying economic prosperity and performance realization, with medium to long-term funds providing a safety net. Active funds from public and private sectors are anticipated to further strengthen the "technology + resource products" dual mainline market, with accelerated sector rotation [4][62][64]. - The "national team" funds are expected to see a significant reduction in inflows, with a projected net inflow of about 200 billion yuan in 2026, as their role shifts in a bull market environment [19][22][23]. - High-risk funds, represented by margin trading and private equity, are expected to remain active, with margin trading net inflows estimated at around 450 billion yuan and private equity assets projected to grow to 8.5 trillion yuan, contributing approximately 700 billion yuan in incremental funds [4][26][31]. Group 3: Global and Domestic Influences - Overseas funds are anticipated to strategically allocate to Chinese assets, with northbound capital expected to net inflow around 100 billion yuan in 2026, although this impact on the overall market is expected to be limited [4][36][39]. - The macro liquidity environment is favorable, with a global interest rate cut cycle entering its later stages, but the marginal improvement in policies is expected to gradually converge. The micro-funding situation is likely to improve significantly, supporting a strong performance in equities over fixed income [4][45][49].

Group 1 - The report highlights that since October 2025, price increases have gained attention, particularly in the fields of new energy, AI, and certain black, non-ferrous, and chemical products, with many areas experiencing transaction congestion close to historically high levels [4][10][12] - Historical cases indicate that price increases driven solely by sentiment or expectations typically reach a peak when congestion levels hit 90-100%, leading to a phase of adjustment, and subsequent rebounds are unlikely to surpass previous highs without additional supporting logic [14][16] - For price increases to break previous highs after an adjustment, they usually require new incremental logic support, such as a shift from expectation to reality in economic verification or the emergence of new catalysts [14][16] Group 2 - The report identifies two main areas where price increases are likely to continue: industrial metals, driven by global economic recovery expectations and supply constraints, and the AI chain, which remains a direction with confirmed economic prospects and potential incremental catalysts [51][52] - Strong sectors often reach a stage of congestion bottom when sentiment (transaction share) declines to 50-70% of previous highs, presenting a good buying opportunity [52] - The report suggests monitoring the TMT sector's transaction share to determine when it returns to the 20-25% range, indicating a potential buying point, while the Hang Seng Technology sector should be observed for a return to the 30-35% range [60][66] Group 3 - The report discusses the historical adjustment patterns of major technology sectors, noting that the average adjustment period is around 40 trading days, with an average absolute decline of approximately 15% [71][72] - The current adjustment in major technology sectors has seen declines of 15-20%, nearing historical averages, but the adjustment duration has been shorter than the historical average, suggesting a need for patience [71][72] - The report recommends continuing to allocate resources according to calendar effects, particularly in banking and white goods, while observing potential shifts in growth styles as economic data is released [71][72]