Core Viewpoint - The A-share index is expected to be limited in space and primarily driven by structural trends in March, influenced by the upcoming Two Sessions and the release of the 14th Five-Year Plan [1][2] Market Outlook - The index is anticipated to oscillate near previous highs, with a focus on policy expectations and government investment intensity as key variables [2] - Geopolitical factors, particularly the US-Iran situation and US-China communications, are significant influences on market dynamics [2] - The market style is expected to balance between growth and value, with small-cap stocks likely to continue outperforming [3] Policy and Economic Indicators - The Two Sessions in March will reinforce expectations for stable growth policies, with a focus on traditional infrastructure and service consumption policies [2][3] - The first year of the 14th Five-Year Plan is projected to see significant project acceleration [2] Industry and Sector Recommendations - Key sectors to focus on include non-ferrous metals, basic chemicals, machinery (automation and engineering), power equipment (batteries and wind power), electronics (semiconductors), and public utilities (electricity) [3][5] - The market is positioned for a core window of policy anticipation and price increase trends [5] Liquidity and Fund Flow - Incremental capital is expected to continue net inflow in March, with attention on the dynamics between financing funds and ETF redemptions [4] - The macro liquidity environment is projected to remain stable and ample, supported by the central bank's monetary policy stance [4] Economic Performance and Profit Expectations - Recent adjustments in profit expectations indicate an upward trend, particularly in resource products, information technology, and midstream manufacturing sectors [4] - The sectors with the most significant profit growth adjustments include agriculture, coal, non-ferrous metals, steel, and power equipment [4] Market Sentiment and Trends - High sentiment areas in February were concentrated in midstream manufacturing, consumer services, and information technology, with notable improvements in machinery sales and resource prices [5] - The market is advised to focus on sectors benefiting from policy anticipation and price increases [5]

Core Views - The market is expected to experience limited index space and focus on structural trends in March, influenced by geopolitical factors and policy expectations surrounding the upcoming Two Sessions and the 14th Five-Year Plan [2][12][23] - The geopolitical situation, particularly the US-Iran conflict, is identified as a significant variable affecting A-shares, with potential implications for commodity prices and global macroeconomic logic [4][12][14] - The market style is anticipated to become more balanced, with small and mid-cap stocks likely to continue outperforming, driven by liquidity from financing and quantitative private equity [4][12][15] Industry and Sector Recommendations - Key sectors to focus on include non-ferrous metals (industrial metals, energy metals, and minor metals), basic chemicals, machinery (automation and engineering), power equipment (batteries, grid equipment, wind power), electronics (semiconductors), and public utilities (electricity) [4][5][18] - The report emphasizes the importance of cyclical price increases and the expansion of AI hardware as core investment themes for March [4][12][18] - The anticipated policy support for traditional infrastructure and consumer services is expected to catalyze investment opportunities in these sectors [4][12][18] Market Liquidity and Capital Supply - March is projected to see continued net inflows of incremental capital, with a focus on the dynamics between financing funds and ETF redemptions [4][12][15] - The macro liquidity environment is expected to remain stable and abundant, supported by the central bank's monetary policy stance and the upcoming Two Sessions [4][12][15] Economic and Profitability Outlook - Profit expectations have been adjusted upward, particularly in resource products, information technology, and midstream manufacturing sectors [5][12] - The report notes that the profitability growth rate for the entire A-share market and non-financial sectors for 2026 has been slightly revised upward, indicating a positive outlook for these industries [5][12]