Group 1 - The overall equity market experienced adjustments during the week from March 2 to March 6, with the Shanghai Composite Index falling by 0.93% to close at 4124.19 points, and the Shenzhen Component Index declining by 2.22% to 14172.63 points [9][11] - The convertible bond market also saw a decline, with the China Convertible Bond Index dropping by 2.07% and the Shanghai Convertible Bond Index decreasing by 2.21% during the week [16] - The bond market showed a general strengthening trend, with the 1-year China government bond yield decreasing by 3.58 basis points, and the 10-year yield down by 0.67 basis points [20] Group 2 - In the commodity market, performance was mixed, with WTI crude oil rising significantly by 35.63%, while COMEX gold and silver fell by 2.17% and 10.27% respectively [10][28] - The South China Commodity Index overall strengthened, with a 6.43% increase, driven by strong performance in energy and chemical sectors, which rose by 15.45% [28] - The market saw active trading in both convertible bonds and underlying stocks, with transaction volumes of 3674.49 billion and 7711.56 billion respectively, indicating a recovery in trading activity [16]

- The report introduces a quantitative rotation strategy based on the weekly rate of change in the total heat rate (MA2) of broad-based indices. The strategy involves buying the broad-based index with the highest weekly heat rate change on the last trading day of the week. If the "Others" group has the highest change rate, the strategy remains in cash. The strategy's annualized return since 2017 is 8.74%, with a maximum drawdown of 23.5%. The return for 2026 is 1.8%[13][16][15] - The report defines the "total heat rate" indicator as the sum of the browsing, self-selection, and click counts of a stock, normalized as a percentage of the total market on the same day, and then multiplied by 10,000. The value range of the indicator is [0, 10,000]. This aggregated total heat rate is used as a proxy variable for "sentiment heat" to track the sentiment at the broad-based, industry, and concept levels[8] - The report also constructs two simple portfolios based on concept heat: the "TOP" portfolio, which selects the top 10 stocks with the highest total heat from the top 5 concepts with the highest heat change, and the "BOTTOM" portfolio, which selects the bottom 10 stocks with the lowest total heat from the same concepts. The BOTTOM portfolio has historically achieved an annualized return of 15.71% with a maximum drawdown of 28.89%. The return for 2026 is 0.00%[32][34]

Group 1: Overview of the Two Sessions - The growth target has been adjusted downwards from 5% to a range of 4.5-5%, with a continued focus on consumption and domestic demand [2][9] - Fiscal spending is expected to remain close to last year's levels, with a total deficit of 11.9 trillion yuan for 2026, comprising a deficit of 5.89 trillion yuan, special bonds of 4.4 trillion yuan, and special treasury bonds of 1.6 trillion yuan [2][9] - Special treasury bonds of 2.5 billion yuan will be allocated for new consumption, with an additional 1 billion yuan for fiscal-financial collaborative special funds [2][9] Group 2: Performance Trading Period Post Two Sessions - The correlation between market trading signals and performance changes will strengthen after the Two Sessions, with a focus on price increases and overseas expansion [3][13] - The upcoming month will see a concentrated disclosure of annual and quarterly reports, which will significantly influence market trading styles and directions [3][13] - High-prosperity industries are expected to focus on overseas "offensive HALO" and domestic "defensive HALO" strategies [3][15] Group 3: Impact of Rising Oil Prices on Asset Classes and Industries - During the oil price upcycle, stocks and commodities tend to perform well, with a monthly increase probability of 73% for stocks and 68% for commodities [4][26] - In contrast, during the downcycle, gold becomes a focus, with a monthly increase probability of 62% [4][26] - Key cyclical industries during the oil price upcycle include food and beverage, banking, automotive, home appliances, coal, and chemicals, which show significant cyclical characteristics [4][26] Group 4: Investment Strategy Directions - The report recommends focusing on "offensive HALO" strategies, which include price increases and overseas expansion in sectors such as TDI, amino acids, and high-end manufacturing [5] - Defensive HALO strategies involve sectors with low fund holdings, such as coal and construction, as well as TMT sectors with low correlation [5] - Emerging technology sectors like commercial aerospace, domestic computing power, and quantum communication are highlighted as potential catalysts for investment [5]

Investment Rating - The industry investment rating is "stronger than the market," indicating an expected performance that exceeds the market by more than 5% within the next six months [21]. Core Insights - The government work report emphasizes stimulating domestic consumption and implementing policies to promote sustained growth in consumer spending, which is expected to lead to a recovery in consumption [3][7]. - The overall market experienced a pullback, with most segments of the consumer sector underperforming the broader market during the week of March 2 to March 8, 2026 [3][6]. Summary by Relevant Sections Social Services - The tourism sector is expected to continue its recovery, with leading companies responding quickly to changes in consumer demand. The retail tourism industry is stabilizing, supported by policies that may boost sales [4]. - The beauty industry is experiencing steady growth, with a focus on companies that can quickly adapt to market dynamics and integrate products, brands, and channels [4]. - In the food and beverage sector, the at-home dining market shows significant potential, with companies like Guoquan building barriers through their products, channels, and supply chains [4]. - The dairy industry is seeing an improvement in supply-demand relationships, with leading companies likely entering a profit recovery phase [4]. Media - Companies in the media sector are encouraged to focus on consumer sentiment and emotional fluctuations, which may present opportunities for growth [4]. Food and Beverage - Mass Market - The market for at-home dining is expanding, with companies like Guoquan showing positive trends in store recovery and expansion [4]. - The dairy sector is improving, with leading companies expected to recover profitability [4]. - The restaurant supply chain is stabilizing, with sectors like condiments and frozen foods emerging from a downturn [4]. Food and Beverage - Alcohol - Many liquor companies are experiencing deeper declines in net profits, but leading firms are expected to maintain or increase market share due to superior brand management [4]. - The report highlights three main investment lines: high-end liquor with stable demand, mid-range liquor with national expansion, and local market-focused products [4]. Key Company Announcements - Up-and-coming companies like Shangmei are projected to see significant revenue growth, with expected revenues of approximately 9.1 to 9.2 billion yuan, reflecting a year-on-year increase of 34% to 35.4% [8]. - Bilibili reported a net revenue of 8.32 billion yuan for Q4 2025, marking an 8% year-on-year increase, driven primarily by a 27% increase in advertising revenue [9][10].

Core Insights - The A-share indices experienced a downward trend due to escalating conflicts in the Middle East, particularly the blockade of the Strait of Hormuz by Iran, which led to a significant rise in international oil prices and increased global inflation expectations [2][12] Industry Performance - Among the 31 first-level industries, the top gainers were Oil and Petrochemicals and Coal, with increases of 8.06% and 3.79% respectively, while the largest declines were seen in Media and Non-ferrous Metals, which fell by 6.97% and 5.47% respectively [3][18] - In the 124 second-level industries, the best performers were Oil Service Engineering and Electric Grid Equipment, with weekly gains of 12.73% and 6.66%. Year-to-date, Oil Service Engineering and Small Metals led with increases of 60.08% and 41.71% respectively. The largest weekly declines were in Energy Metals and Digital Media, down 9.22% and 8.24% respectively, with year-to-date declines in Aviation Airports and State-owned Large Banks II of 12.79% and 8.69% respectively [3][21] - In the 259 third-level industries, the top gainers were Coal Chemical and Oil and Gas Refining Engineering, with weekly increases of 15.17% and 14.58%. Year-to-date, Oil and Gas Refining Engineering and Communication Cables and Accessories led with increases of 75.77% and 54.40% respectively. The largest weekly declines were in Photovoltaic Processing Equipment and Communication Value-added Services, down 12.18% and 10.42% respectively, with year-to-date declines in Aviation Transportation and Brand Consumer Electronics of 14.29% and 9.99% respectively [4][22] Investment Recommendations - The report suggests a long-term view for 2026, indicating it is the beginning year of the "14th Five-Year Plan," with the central bank implementing proactive fiscal policies and moderately loose monetary policies to support stable economic growth and maintain a "slow bull" market for A-shares [5][24] - Short-term focus should be on sectors benefiting from the "14th Five-Year Plan" related to new productivity (technology, environmental protection), structural opportunities in traditional sectors related to "anti-involution," defensive dividend sectors related to long-term capital inflows, and sectors benefiting from the Middle East conflict [5][24]

Report Industry Investment Rating No information provided in the given content. Core Viewpoints of the Report - Combining the "Gain/Loss - Crowding" quadrant chart and ETF fund flow, there are gaming opportunities in the industrial non - ferrous metals and rare earth sectors [1]. - The oil and gas and power grid equipment sectors led the gains from March 2 - 6, becoming the market's main lines, while the gaming and media sectors had significant declines [1]. - Industrial non - ferrous metals and rare earths received reverse capital increases, presenting potential opportunities, while the power grid equipment may be volatile in the short term, and the oil and gas sector's future is highly uncertain [1]. Summary by Directory 1. Market Review: Oil and Gas and Power Grid Equipment Led the Gains - **Overall Market Trend**: From March 2 - 6, the market declined and then stabilized. As of March 6, 2026, the closing price of the Wind All - A Index was 6783.03, a 2.30% drop from February 27 [6]. - **Performance of Major Indexes**: Large - cap stocks outperformed. The Shanghai Composite Index and CSI 300 Index fell 0.93% and 1.07% respectively, while the STAR 50 Index and CSI 1000 Index had larger declines of 4.95% and 3.64% [7]. - **ETF Fund Flow**: Stock - type ETFs had a net outflow of 7.349 billion yuan from March 2 - 6, a narrower outflow compared to February 24 - 26. Broad - based index ETFs had a net outflow of 42.875 billion yuan, while theme index ETFs had a net inflow of 23.533 billion yuan, and industry index ETFs had a net inflow of 13.731 billion yuan [10][11]. - **Market Focus**: The market focused on the oil and gas and power grid equipment sectors. The oil and gas index rose 9.50% with a crowding degree of 3.7%, reaching a new high since 2020. The power grid equipment index rose 5.49%, and its crowding degree increased from the 98.7% percentile to the 99.7% percentile since 2020. The gaming and media sectors fell 7.44% and 7.04% respectively, and their crowding degrees decreased for the second consecutive week. The rare earth and industrial non - ferrous metals sectors fell 7.00% and 4.74% respectively, with a slight decrease in crowding degree [14][15]. 2. Future Focus: Rare Earths and Industrial Non - Ferrous Metals May Present Gaming Opportunities - **Fund Flow Analysis**: Industrial non - ferrous metals and rare earths received reverse capital increases. The Industrial Non - Ferrous Metals ETF Wanjia and Rare Earth ETF Jiashi fell 4.91% and 7.15% respectively, but had net inflows of 559 million yuan and 1.991 billion yuan [22]. - **Power Grid Equipment**: The power grid equipment ETF had a net inflow of 5.284 billion yuan from March 2 - 5, accounting for 17.49% of its fund size. However, its crowding degree reached 3.92%, at the 99.7% percentile since 2020, and there may be a risk of adjustment [23]. - **Oil and Gas**: The oil and gas ETF had a net inflow of 5.108 billion yuan from March 2 - 5. The sector's future depends on the development of the US - Iran situation [26]. - **Gaming and Media**: The media ETF and gaming ETF fell 7.29% and 6.99% respectively, with net outflows of 1.505 billion yuan and 538 million yuan. If the HALO trading trend remains unchanged, these two industries will continue to face pressure [26].

Market Overview - The A-share market experienced wide fluctuations this week, with major indices showing signs of top divergence, including declines of 0.93% for the Shanghai Composite, 1.54% for the SSE 50, and 1.07% for the CSI 300[11] - Growth indices like the CSI 500, CSI 1000, and National CSI 2000 saw larger declines of 3.44%, 3.64%, and 3.53% respectively, indicating a bearish trend[11] - The ChiNext Index and STAR 50 also fell by 2.45% and 4.95% respectively, while the North Star 50 dropped 7.14%[11] Sector Performance - The energy sector showed strength, with traditional energy sources like oil and coal rising by 8.06% and 3.79% respectively, while new energy sources like electric equipment increased by 0.55%[12] - Technology sectors, particularly TMT-related industries, faced significant declines, with media, computer, and electronics down by 6.98%, 5.29%, and 5.07% respectively[12] Market Sentiment and Capital Flow - The average daily trading volume in the Shanghai and Shenzhen markets increased to 2.62 trillion yuan, indicating heightened market activity[19] - Margin trading balances slightly decreased to 2.65 trillion yuan, with the proportion of financing purchases rising to 10.28%[28] - Stock ETFs saw a net inflow of 135.6 billion yuan, with the most significant inflow in the metals sector[28] Future Outlook - The ongoing geopolitical tensions in the Middle East are expected to continue impacting market stability, with A and H shares likely to experience further adjustments in the near term[4] - The A-share weight indices are anticipated to stabilize after mid-March, while growth indices may not find stability until late April due to earnings pressure[4] - The banking index shows signs of sufficient adjustment and potential bottom divergence, making it a viable short-term hedge[44] Risk Factors - There are concerns regarding the domestic economic recovery not meeting expectations, alongside uncertainties in global geopolitical situations[45]

Core Insights - The market is experiencing wide fluctuations, with some indices showing signs of divergence. A and H shares are expected to undergo further adjustments due to the complex evolution of the Middle East situation and global asset price volatility. The A-share weighted index is gradually stabilizing after sufficient structural adjustments, while some growth indices may stabilize after April due to significant gains and earnings pressure from the reporting season [1][4][44] Weekly Market Overview - The market saw wide fluctuations from March 2 to March 6, with major indices mostly retreating. The Shanghai Composite Index, Shanghai 50, and CSI 300 fell by 0.93%, 1.54%, and 1.07% respectively. Growth indices like CSI 500, CSI 1000, and National CSI 2000 dropped by 3.44%, 3.64%, and 3.53%, showing daily MACD divergence [11][42] - The energy sector, both traditional and renewable, showed strong performance, while technology sectors faced declines. Traditional energy stocks like oil and coal rose by 8.06% and 3.79%, while renewable energy stocks like electric equipment increased by 0.55%. In contrast, technology-related sectors such as media, computing, and electronics saw declines of 6.98%, 5.29%, and 5.07% respectively [12][43] Market Sentiment - The average daily trading volume in the Shanghai and Shenzhen markets was 2.62 trillion yuan, showing an increase compared to the previous week. The main futures contracts were mostly in a state of contango, indicating a positive market sentiment [19][28] Fund Flows - As of March 5, the margin trading balance was 2.65 trillion yuan, slightly down from the previous week, with the proportion of financing purchases rising to 10.28%. The stock ETF saw a net inflow of 13.56 billion yuan, with the most significant inflow in the metals sector ETF [28][33] Valuation Insights - The dynamic valuation model indicates that the overall market index valuations are reasonable, while the ChiNext index is relatively undervalued. As of March 6, the PE-TTM for the Shanghai Composite Index was 17.12, at the 99.6 percentile, while the ChiNext index was at 41.71, at the 46.08 percentile [36][39]

Group 1 - The report highlights that the worsening situation in the Middle East has led to a significant rise in oil prices, with Brent crude exceeding $90 per barrel, marking a 22-year high, which has elevated inflation expectations and suppressed risk appetite globally [4][13]. - The report indicates a shift towards a stagflation scenario, characterized by downward revisions in growth expectations and upward adjustments in inflation expectations, resulting in increased yields on U.S. Treasury bonds and pressure on gold prices [4][13]. - Domestic equity markets have also experienced negative disturbances, with energy-related sectors such as oil and petrochemicals, coal, and public utilities performing well, while growth sectors like media, computing, and electronics have seen more significant adjustments [4][14]. Group 2 - The report anticipates three potential impacts from the ongoing Middle East situation: first, a possible easing of conflict could restore global equity markets; second, the end of conflict may lead to heightened inflation expectations and a reassessment of global policy easing; third, an increase in global risk assessment could position the domestic market as an attractive destination for global capital [4][16].

Investment Rating - The report rates the industry as "Buy" [4] Core Insights - The recent settlement between Google and Epic Games, which includes a reduction in the Google Play Store commission to 20% and 10% for subscription services, marks the end of high commission practices in app stores. This change is expected to benefit high-quality game developers as they gain more negotiating power in channel discussions [3][11][12] - The gaming sector is viewed as having high valuation attractiveness, with a recommendation to continue investing in leading companies that are expected to maintain high growth rates despite recent market adjustments [5][15] Summary by Sections Google and Epic Games Settlement - Google and Epic Games have reached a settlement that reduces the Google Play Store commission to 20% and 10% for subscriptions, allowing developers to use their own payment systems. This agreement will be effective until September 30, 2032, and will be rolled out globally by September 30, 2027 [9][11][12] Gaming Sector Valuation - The gaming sector has experienced significant adjustments due to macroeconomic narratives, but it remains complex and difficult to replace with AI. AI is expected to enhance game development efficiency rather than replace it. The report emphasizes that high-quality content will drive user retention and payment, opening new growth avenues in the industry [5][13][14][15] Recommended Companies - The report suggests focusing on companies with strong growth potential, including Wanda Film, Perfect World, and Mango Excellent Media, among others, as they are expected to benefit from the changing landscape in the gaming industry [8][16]