Domestic Macro Perspective - China's economy is shifting from low inflation to input-driven price increases, with PPI rising over 0.4% for two consecutive months[1] - The upstream sectors and government benefit from rising prices, while downstream industries and consumer incomes face pressure, particularly in sectors like consumer electronics and automobiles[1] - Economic indicators such as retail sales and employment in March will be crucial for assessing the sustainability of economic recovery amid rising prices[1] Overseas Macro Perspective - Geopolitical disturbances have temporarily impacted risk appetite, with the market currently in a rebound phase[3] - The risk of stagflation is increasing globally due to rising oil prices, suggesting a focus on defensive investments in upstream resource sectors like oil, gas, and chemicals[3] Bond Market Perspective - The yield curve has shown divergence since February, with short-term rates declining and long-term rates rising; 1-3 year rates fell by 1-4 bps while the 10-year rate rose by 3.9 bps[4] - The market is at a crossroads between "inflation trading" and "stagflation trading," with current economic conditions not supporting stagflation[4] Investment Strategy - A balanced ETF allocation is recommended, focusing on sectors that can withstand inflationary pressures[7] - The report suggests monitoring the oil price, which is currently around $100/barrel, with potential to rise above $120/barrel if geopolitical tensions escalate[5] Risk Factors - Key risks include slower-than-expected economic policy implementation, unexpected changes in U.S. Federal Reserve monetary policy, and significant price volatility in major asset classes[9]

Group 1 - The core viewpoint of the report is that the recovery of corporate profit margins is crucial for the next phase of the A-share bull market, while the valuation at the index level has limited room for further recovery [1] - The disruption of the global supply chain presents an opportunity to validate the pricing power of China's advantageous manufacturing sector [1] - The Middle East conflict acts as a catalyst for style switching this year, with rising global costs and weakening financial conditions making low valuation and pricing power the two most important factors [1] Group 2 - In terms of industry trends, the expansion of codes and physical scarcity in China reflects an increase in the pricing power of advantageous manufacturing [1] - Disruptive innovation from AI and disturbances in the global energy and chemical supply chain are accelerating this trend [1] - The investment strategy should focus on the revaluation of China's advantageous manufacturing pricing power, particularly in sectors such as chemicals, non-ferrous metals, power equipment, and new energy, with price increases remaining a core trading clue [1] Group 3 - There is also a recommendation to increase exposure to low valuation factors, including insurance, brokerage, and electricity sectors [1]

Core Insights - The report from CITIC Securities indicates that the recovery potential for valuations at the index level is limited, and the rebound in corporate profit margins is crucial for the continuation of the bull market in A-shares [1] - The ongoing Middle East conflict is identified as a catalyst for style shifts this year, with rising global costs and weakening financial conditions making low valuations and pricing power the two most important factors [1] - Trends in the industry show that code inflation and physical scarcity are enhancing the pricing power of China's advantageous manufacturing sector, accelerated by disruptive innovations in AI and global supply chain disturbances [1] Industry Trends - The report emphasizes the importance of positioning around the pricing power of China's advantageous manufacturing sectors, particularly in chemicals, non-ferrous metals, power equipment, and new energy [1] - Price increases remain a core trading theme, while there is also a recommendation to increase exposure to low valuation factors such as insurance, brokerage, and electricity [1]

Investment Ratings - Electric Equipment: Buy (Maintain) [1] - Environmental Protection: Buy (Maintain) [1] Core Insights - The market has experienced a strong upward trend in related stocks, driven by energy security concerns due to the worsening situation in Iran and positive performance from companies like CATL [3][4] - The investment focus is on sectors such as lithium batteries, wind power, and energy storage, with specific recommendations for companies like CATL, Dafu Technology, and Sunshine Power [6][7] - The domestic wind power sector is expected to see significant growth, with new installed capacity projected to reach 119.33 GW in 2025, a year-on-year increase of 50.40% [8][10] Summary by Sections Market Review - Recent stock price movements in the electric power sector have shown divergence after a strong rally, influenced by energy security concerns and favorable performance from key players [3] - The market is witnessing rapid rotation among sectors such as lithium batteries, energy storage, and nuclear power, with significant daily gains compressing odds [3] Future Outlook - The current market phase is characterized by a late-stage rally, with caution advised for high-priced stocks, while maintaining a long-term positive outlook [4] - The domestic energy storage market is expected to rebound due to new pricing policies, with ongoing monitoring of installation data and market dynamics [7] Sector-Specific Insights - Wind Power: The domestic wind power sector is projected to add 119.33 GW of new capacity in 2025, with significant year-on-year growth [8][10] - Energy Storage: The energy storage sector is anticipated to benefit from strong domestic and international demand, with companies like Sunshine Power and Deyi Co. recommended for investment [6][7] - Lithium Batteries: The lithium battery supply chain is under pressure, with price fluctuations expected due to varying demand and supply dynamics [22][24]

- The report discusses the "HALO trading" strategy, which is linked to cyclical and resource sectors, suggesting that these sectors are likely still in the "residual phase" with macroeconomic and trading factors providing support[1][9][10] - The report highlights that cyclical sectors experienced a slight decrease in crowding due to significant crude oil price fluctuations, while advanced manufacturing sectors, such as new energy, saw an increase in crowding[9] - The "Four-Wheel Drive Industry Rotation Model" is mentioned, which tracks industry signals like "low golden cross" and "profit effect anomalies" to identify potential opportunities in sectors such as non-bank finance, communication, and power equipment[18]

Core Insights - The A-share index experienced narrow fluctuations during the week of March 9-13, 2026, with the Shanghai Composite Index slightly down by 0.70%, while the ChiNext Index rose by 2.51% [2][3][11] - The fluctuations were attributed to ongoing geopolitical tensions, particularly the conflict between the US and Iran, and the conclusion of China's Two Sessions, which led to stable domestic policy progress [3][14] - February export data showed a significant year-on-year increase of 39.60%, contributing to positive market expectations for the first quarter of 2026 [6][27] Industry Performance - Among the 31 first-level industries, coal and electric equipment saw the highest weekly gains of 5.03% and 4.55%, respectively, while defense and petroleum sectors faced declines of 6.64% and 4.33% [4][19] - In the second-level industries, wind power equipment and batteries led with weekly increases of 11.74% and 9.73%, while oil service engineering and precious metals showed significant year-to-date gains of 49.71% and 37.52% [4][24] - The third-level industries saw coal chemical and wind power components with weekly gains of 14.80% and 13.37%, and year-to-date leaders included oil and gas refining engineering with a 66.88% increase [5][24] Investment Recommendations - Long-term, the year 2026 is viewed as a starting point for the 14th Five-Year Plan, with expectations for continued proactive fiscal and moderately loose monetary policies to support stable economic growth and a "slow bull" market for A-shares [7][28] - Short-term strategies suggest a defensive approach, focusing on dividend-related sectors and industries benefiting from Middle Eastern conflicts, such as oil and gas extraction, coal chemical, and new energy sectors [9][28]

Report Industry Investment Rating - No information provided in the report Core Viewpoints - This week, margin trading activity and balances improved on a week - long basis, with the proportion of margin trading turnover in A - share turnover rising from 9.2% to 9.5%, and most industries' leverage ratios rebounding [3][4]. - ETF fund outflows slowed down or even showed net inflows, with representative broad - based ETFs such as CSI 300, SSE 50, ChiNext, CSI 500, and CSI 1000 showing slower outflows than last week, and SSE Composite Index and STAR 50 ETFs having net inflows [5]. - The outflow of main funds slowed down significantly. Although the main funds of CSI 300, ChiNext, and STAR Market still had net outflows, the speed slowed down. Some industries still had large outflows but also showed a slow - down trend compared to last week, while the basic chemical industry had a large net inflow [6]. - Northbound funds continued to have net inflows. Although their activity decreased slightly, the proportion of their turnover in A - share turnover remained above 12%. The performance of the top 50 Northbound heavy - holding stocks continued to improve, outperforming the market [7]. Summary by Relevant Catalogs Margin Trading - Activity and balance: The proportion of margin trading turnover in A - share turnover rose from 9.2% to 9.5%, and the balance increased from Monday to Thursday. The margin trading of broad - based indexes returned to net inflows, and the outflows of SSE 50 and STAR 50 decreased [4]. - Industry dimension: Most industries' leverage ratios rebounded. Construction decoration, public utilities, and environmental protection industries had a large proportion of net margin purchases in turnover, while comprehensive, beauty care, and non - ferrous metals industries had a large degree of de - leveraging [4]. - Individual stock dimension: Small - and medium - cap stocks shifted from de - leveraging to leveraging, and the de - leveraging of large - cap stocks (over 500 billion yuan) decreased. The top 35 popular stocks mainly increased leverage, and the median proportion of net margin purchases in turnover from Monday to Friday was 0.48%, 1.58%, 1.69%, 0.87%, and 0.34% respectively, a significant increase compared to last week [4]. ETF - Representative broad - based ETFs such as CSI 300 (510300.SH), SSE 50 (510050.SH), ChiNext (159915.SZ), CSI 500 (510500.SH), and CSI 1000 (512100.SH) had slower outflows than last week, and SSE Composite Index (510210.SH) and STAR 50 (588000.SH) ETFs had net inflows [5]. Main Funds - The main funds of CSI 300, ChiNext, and STAR Market still had net outflows, but the speed slowed down significantly. In terms of industries, the outflows from electronics, non - ferrous metals, power equipment, media, and computer industries were still large but had slowed down compared to last week. The basic chemical industry had a large net inflow, while the outflows from machinery and equipment, national defense and military industry, and communication industries accelerated slightly [6]. Northbound Funds - This week, the activity of Northbound funds decreased slightly, and the proportion of their turnover in A - share turnover decreased slightly but remained above 12%. The weekly performance of the top 50 Northbound heavy - holding stocks continued to improve, with the SSE Connect 50 rising 0.75% this week, outperforming the CSI 300 (0.19%). The median weekly increase and decrease of the top 20 most actively traded Northbound stocks was 0.72%, also outperforming large - cap stocks, indicating possible continuous net inflows of Northbound funds [7]. - Since Q4 last year, Northbound funds have continued to have net inflows. In Q4 2025, the net foreign exchange settlement peak occurred, with the securities investment foreign exchange settlement and sales difference reaching 16.6 billion US dollars. Since late December, the trading activity of Northbound funds has significantly rebounded, reaching a phased high on February 24. Since the end of February, the performance of Northbound heavy - holding stocks has gradually improved [8].

Market Performance - The A-share market experienced a fluctuation with the overall index declining by 0.48% from March 9 to March 13, 2026[2] - The ChiNext Index rose by 2.51%, while the Science and Technology Innovation 50 and North China 50 indices fell over 2%[4] - The daily average trading volume decreased to 24,987 billion yuan, down by 1,459.12 billion yuan from the previous week[11] Fund Flow - The margin trading balance increased to 26,646.47 billion yuan, up by 191.00 billion yuan from the previous week[13] - A total of 21 new equity funds were established this week, with a total issuance of 19.824 billion units, representing a 54.93% share of new fund issuance[19] - Global funds saw a net outflow of 3.615 billion USD from A-shares, reversing from a net inflow of 1.471 billion USD the previous week[27] Valuation Changes - The PE (TTM) ratio for the overall A-share index decreased by 0.44% to 23.33 times, placing it at the 94.22% percentile since 2010[36] - The PB (LF) ratio fell by 0.27% to 1.93 times, situated at the 56.66% percentile since 2010[36] - The bond yield spread for A-shares was 2.4717%, near the 42.78% percentile level since 2010[36] Investment Outlook - The government work report emphasizes domestic demand, fostering new growth drivers, and high-level technological self-reliance as key tasks[47] - The "14th Five-Year Plan" focuses on high-quality development and modern industrial system construction, indicating a long-term investment logic shift towards quality[47] - The market is expected to transition from "emotion-driven" to "fundamentals-driven," with corporate earnings becoming the core anchor for future trends[47]

Group 1 - The ongoing US-Iran conflict is expected to last longer than market expectations, with the potential for a prolonged "war of attrition" where both sides will compete on costs and endurance, giving Iran the upper hand in determining the conflict's end [5][15][19] - High oil prices resulting from the conflict are anticipated to negatively impact US stock earnings, consumer prices, and economic growth, with inflation expectations rising non-linearly over time [10][12][15] - The report suggests a balanced portfolio with a focus on energy security-related sectors, as the current geopolitical situation differs from previous trade disputes, indicating a potential for significant price fluctuations in the oil market [15][20] Group 2 - Investment recommendations include prioritizing "conflict-benefiting" assets in energy, resources, and public utilities, with opportunities to increase positions during technical corrections in the energy sector [20] - The report emphasizes the importance of technology sectors driven by domestic logic over those influenced by overseas factors, particularly in light of rising inflation expectations and interest rates that may suppress valuations of overseas tech assets [20] - For Hong Kong stocks, resource and high-dividend sectors may benefit from the ongoing geopolitical tensions, while the Hang Seng Technology Index, sensitive to global liquidity and risk appetite, may face some impact but has limited downside due to prior valuation adjustments [19][20]

Group 1: Future Energy Development - The "14th Five-Year Plan" emphasizes the importance of "future energy" including hydrogen and nuclear fusion as key areas for development, marking a formal commitment to these sectors[1] - The future energy strategy focuses on sustainable energy sources, aiming to create a comprehensive system for energy collection, storage, transportation, and application[1] - The plan aims to accelerate the development of strategic emerging industries, particularly in renewable energy infrastructure, while adhering to carbon peak goals[1] Group 2: Nuclear Energy Insights - China is expected to steadily expand its nuclear power capacity, with a projected installed capacity of approximately 70 million kilowatts by 2025 and 150 million kilowatts by 2035, reflecting a CAGR of 13% from 2025 to 2035[5] - As of December 2025, there are 74 nuclear reactors under construction globally, with China leading in capacity[5] - The approval rate for new nuclear units remains high, with 11 new units approved in 2024 and another 10 in 2025, maintaining an average approval of over 10 units per year[5] Group 3: Hydrogen Energy Developments - China's hydrogen industry is the largest globally, with a production target exceeding 37 million tons by 2025, including over 250,000 tons per year of green hydrogen[5] - The electrolyzer capacity is expected to account for approximately 60% of the global total by 2025, with a significant increase in bidding volumes for electrolyzers projected at 6.06 GW, a year-on-year growth of 155.6%[5] - The application of green hydrogen is expanding from transportation to high-energy-consuming industries, supporting industrial decarbonization[5] Group 4: Photovoltaic Industry Outlook - Domestic photovoltaic installations are projected to reach 315.1 GW by 2025, reflecting a year-on-year growth of 14%[5] - The average annual new photovoltaic installation during the "14th Five-Year Plan" period is expected to be between 238 GW and 287 GW[5] - The photovoltaic industry is anticipated to maintain high growth due to supportive policies and the implementation of large-scale projects[5]