- The HALO trading strategy focuses on going long on "AI-resistant and AI-dependent" heavy assets while shorting "AI-disruptible" light assets[2][11] - The strategy suggests focusing on sectors like power grid equipment, energy, mining, industrial equipment, defense, and signal towers[2][11] - Recent market performance indicates initial validation of the HALO strategy, with sectors like non-ferrous metals, military, communication, building materials, machinery, and chemicals performing well over the past quarter[2][11] - The macro strategy chart toolbox helps track the HALO trading status through metrics like crowding and industry differentiation[3][11] - Crowding: Current transaction volume share of cyclical sectors is below the median of the past 10 years, while advanced manufacturing and TMT sectors are around the 85%-90% percentile[3][11] - Industry differentiation: This indicator has been oscillating upwards since the beginning of the year and has now returned to the level of August 2025[3][11] - Historical excess returns: Cyclical sectors are in the early stages of an upward trend after a long-term bottoming, TMT sectors are at historical highs, advanced manufacturing sectors are above the median, and consumption and financial real estate sectors are still at the bottom of the past 20 years[12] - Based on the HALO trading logic and current status, the recommended mid-term allocation priority is "cyclical > advanced manufacturing > TMT"[13]

Investment Rating - The investment rating for the industry is "Outperform the Market" (maintained rating) [1]. Core Insights - The report emphasizes the rapid development of AI and the value of AI HALO assets, which are characterized by heavy assets and low obsolescence [2][7]. - HALO assets include infrastructure such as power grids, oil and gas pipelines, public utilities, and transportation infrastructure, which are less susceptible to technological disruption compared to software and IT services [7]. - The performance of the US infrastructure stock index has significantly outperformed the US SaaS index, with an increase of 80.59% compared to a decrease of 17.05% over the specified period [7]. Summary by Sections AI HALO Definition - HALO stands for Heavy Assets and Low Obsolescence, indicating a business model based on substantial physical capital with high replication barriers and economic relevance that persists through technological cycles [7]. Market Performance - The report compares the performance of the US infrastructure stock index and the US SaaS index over a 25-year period, highlighting the superior performance of infrastructure stocks [7]. Drivers of AI HALO - The report identifies two main drivers for AI HALO: 1. The rapid enhancement of AI Agent capabilities, which diminishes the moat of light asset models [8][11]. 2. A significant increase in capital expenditures by major overseas companies, which directly benefits HALO assets [12][15]. Company Analysis - The report provides a list of domestic companies related to AI HALO, categorized by industry, including IDC, computing power leasing, wafer foundry, AI chips, AI servers, and more [16].

Group 1 - The core view of the report indicates that the A-share market typically exhibits a calendar effect around the Two Sessions, showing an overall upward trend, with small-cap stocks outperforming large-cap stocks before the sessions and consumer stocks potentially showing stronger price elasticity afterward [2][8][15] - Historical data suggests that during the window period of the first year of each Five-Year Plan, the market is likely to focus on the industrial main lines outlined in the plan, with significant correlations between market performance and financing balance during bull markets [9][10][11] Group 2 - In the week following the Lunar New Year, the A-share market experienced a strong start, led by cyclical sectors, with the CSI 1000 index outperforming other indices, indicating a preference for small-cap stocks [7][8] - The report highlights that the market focus is expected to shift towards policy discussions from the Two Sessions, annual report disclosures, and key events such as the Federal Reserve's meetings and Sino-US relations [7][8] - The report identifies four main investment themes aligned with the "15th Five-Year Plan," including technological innovation, national security, resource management, and consumer services, which are expected to benefit from policy support [11][20]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - Nvidia's FY2026 Q4 revenue reached $68.1 billion, a year-on-year increase of 73% and a quarter-on-quarter increase of approximately 19%. The data center business revenue was $62.3 billion, growing 75% year-on-year and 22% quarter-on-quarter, primarily driven by the release of Blackwell and Blackwell Ultra products [5][13] - DeepSeek, in collaboration with Tsinghua University and Peking University, introduced the DualPath system, which significantly enhances online inference throughput by an average of 1.96 times, addressing storage bandwidth bottlenecks in LLM inference [6][16] - The report emphasizes the ongoing global AI resonance, highlighting four main investment themes: optical networks, liquid cooling, domestic computing power, and satellite internet [7][18] Summary by Sections Nvidia Performance - Nvidia's data center revenue is projected to continue growing, with an expected FY2027 Q1 revenue of $78 billion, not accounting for Chinese data center income. The demand for Nvidia's AI chips from major cloud service providers remains strong, contributing over 50% of the data center revenue [14][15] DeepSeek Innovation - The DualPath system represents a milestone innovation in AI computing power, effectively breaking traditional single-path dependencies and optimizing model efficiency and cost structure. This collaboration between academia and industry is expected to establish technological barriers in the domestic computing power industry [6][16][17] Investment Recommendations - The report recommends focusing on three core AI themes: optical networks, liquid cooling, and domestic computing power, while also considering AI applications, telecom operators, and satellite internet & 6G sectors. Specific recommended stocks include Zhongji Xuchuang, Xin Yi Sheng, and others across various segments [18][19][20] Communication Data Tracking - As of December 2025, China had 4.84 million 5G base stations, with 1.204 billion 5G mobile phone users, reflecting an 18.74% year-on-year growth. However, 5G mobile phone shipments saw a decline of 27.3% year-on-year [28][30][41]

Group 1: Financial Performance - The projected net profit for 2024A, 2025E, and 2026E for MicroPort is -642 million, -205 million, and -107 million respectively, indicating a significant improvement in profitability over the years[1] - The expected revenue growth for MicroPort is 37% in 2024A, 68% in 2025E, and 47% in 2026E, reflecting strong market demand[1] - The EPS for MicroPort is projected to improve from -0.7 in 2024A to -0.1 in 2026E, showing a trend towards profitability[1] Group 2: Market Trends and Risks - The surgical robot sector is identified as one of the fastest-growing fields in the global and Chinese medical device markets, driven by high clinical value and strong demand[1] - The white cardboard paper industry is experiencing a price increase of 200 yuan per ton, which is expected to enhance profitability for leading companies like Bohui Paper[1] - Risks include potential delays in overseas sales for MicroPort and competition in the surgical robot market, which could impact revenue growth[1] Group 3: Industry Insights - The lithium industry is expected to benefit from a supply-demand driven price increase, with Ganfeng Lithium projecting significant revenue growth from -2074 million in 2024A to 9379 million in 2026E[1] - Huayou Cobalt is positioned to benefit from rising nickel and cobalt prices due to supply-side changes, with projected revenues increasing from 4155 million in 2024A to 9268 million in 2026E[1] - The phosphoric chemical industry is experiencing a recovery in demand, with Xingfa Group's revenue expected to rise from 1601 million in 2024A to 2078 million in 2026E[1]

Group 1 - The report indicates that the A-share market is likely to experience a strong oscillation in March, continuing the spring market trend, influenced by policies and external events, with a rising impact of fundamentals after the Two Sessions [7][10] - Historical data shows that in the past 16 years, the Shanghai Composite Index has only risen in March in 7 years, highlighting the volatility of the market during this period [7][10] - The report suggests that March's market performance will be primarily driven by policy expectations, external events, and liquidity conditions, with a potential for positive sentiment following the Two Sessions [7][10] Group 2 - The report emphasizes that sectors related to technology growth and certain cyclical industries are expected to outperform in March, with a focus on small and mid-cap stocks [26][28] - Historical analysis indicates that growth and consumption styles have often led the market in March, driven by policy support and industry trends [28][30] - The report identifies high-growth sectors such as automotive, machinery, and electronics as likely to perform well in March, with a recommendation to accumulate positions in these areas [26][28] Group 3 - The report highlights that March may see a continuation of weak economic recovery, with consumer confidence and retail sales expected to improve due to supportive policies [20][21] - It notes that the profitability of cyclical industries, particularly in metals and chemicals, is likely to rise, contributing to overall earnings growth in the A-share market [21][22] - The report anticipates that the issuance of special bonds may increase in March, further supporting infrastructure investment and economic activity [20][26]

Core Conclusions - The overall valuation of A-shares has expanded this week, with the steel industry leading the gains. The weak accumulation of winter storage for steel this year has resulted in lower inventory pressure, and the seasonal increase in steel demand post-holiday, combined with strong price recovery expectations due to PPI rebound, supports a rebound in the steel sector. The current full dynamic valuation of the steel industry is at the historical 45.3 percentile, indicating further room for valuation improvement [1][8]. Valuation Overview - The overall PE (TTM) of A-shares increased from 23.10 times last week to 23.59 times this week, while the PB (LF) rose from 1.86 times to 1.90 times [10]. - The main board's PE (TTM) rose from 18.37 times to 18.79 times, and PB (LF) increased from 1.54 times to 1.57 times [18]. - The ChiNext board's PE (TTM) increased from 77.83 times to 80.11 times, and PB (LF) rose from 4.59 times to 4.69 times [20]. - The Sci-Tech Innovation board's PE (TTM) decreased from 227.96 times to 208.25 times, while PB (LF) increased from 5.75 times to 5.82 times [23]. Industry Valuation Levels - From a static PE (TTM) perspective, major industries such as consumer discretionary, midstream manufacturing, cyclical, and consumer staples have absolute and relative valuations above the historical median. Notably, consumer discretionary and midstream manufacturing are above the historical 90th percentile, while essential consumer goods, services, and financial services have relative valuations below the historical 10th percentile [28]. - In terms of PB (LF), industries like resources, cyclical, midstream manufacturing, TMT, and midstream materials have absolute and relative valuations above the historical median, with resources and cyclical industries exceeding the historical 90th percentile. Conversely, consumer staples, services, financial services, and essential consumer goods have both absolute and relative valuations below the historical median, with relative valuations below the historical 10th percentile [31]. - Analyzing full dynamic PE, industries such as consumer discretionary, midstream manufacturing, cyclical, and midstream materials have absolute and relative valuations above the historical median, while financial services and essential consumer goods are below the historical median, with consumer staples having relative valuations below the historical 10th percentile [33]. Performance and Yield Comparison - Current industries like construction materials, power equipment, media, non-bank financials, and steel exhibit both low valuations and high performance growth, indicating potential investment opportunities [3][52]. - The A-share non-financial equity risk premium (ERP) decreased from 0.70% to 0.63%, and the equity-bond yield spread fell from -0.20% to -0.25% this week [53].

Core Insights - The total mobile phone call duration in China for the year 2025 is projected to be 40,815.62 billion minutes, reflecting a decline of 5.3% compared to previous years [1] - In December 2025, the mobile phone call duration is expected to reach 3,354.64 billion minutes, showing a year-on-year decrease of 4.8% but a month-on-month increase of 1.5% [1] Summary by Category - **Overall Trends** - The cumulative mobile phone call duration is experiencing a significant decline over the years, indicating a potential shift in consumer behavior or market dynamics [1] - **Monthly and Yearly Comparisons** - December 2025's call duration shows a slight recovery on a month-to-month basis, with a 1.5% increase, despite the overall yearly decline [1]

Group 1 - The total volume of postal industry delivery services reached 216.5 billion items in 2025, representing an 11.8% increase from the previous year [1] - The postal sector completed 680 million postal letter services, 30 million parcel services, and 1.99 billion express delivery services, with express delivery revenue amounting to 1,493.9 billion yuan [1] - The total telecommunications business volume was 1,862.7 billion yuan, showing a 9.1% growth year-on-year [1] Group 2 - By the end of the year, there were 12.87 million mobile phone base stations, including 7.19 million 4G stations and 4.84 million 5G stations [1] - The number of mobile phone users reached 1,826.84 million, with 1,204.13 million being 5G users, resulting in a mobile phone penetration rate of 130.0 devices per 100 people [1] - Fixed broadband internet access users totaled 690.82 million, an increase of 20.99 million from the previous year, with 238.39 million users having access speeds of 1000M or higher [1] Group 3 - The number of mobile IoT terminal users reached 2.888 billion, an increase of 232 million [1] - The number of internet users in China was 1.125 billion, with 1.121 billion accessing the internet via mobile devices, leading to an internet penetration rate of 80.1%, and 69.5% in rural areas [1] - Mobile internet user access traffic was 3,958 billion GB, reflecting a 17.3% increase year-on-year [1] Group 4 - The software and information technology services industry generated software business revenue of 15,483.1 billion yuan, marking a 13.2% increase from the previous year [1]

Group 1 - The core viewpoint highlights the positive impact of various policies and cultural activities on the consumption market in Guangdong during the Spring Festival, leading to a sustained economic growth trend [1] Group 2 - Upgrading consumer goods showed significant growth, with daily sales revenue of household appliances like robotic vacuum cleaners increasing by 137.9%, communication devices like smartphones by 53.1%, and new energy vehicles by 46.8%, indicating a clear trend of consumer upgrading [1] - The comprehensive retail sales revenue in the province grew by 51.7% year-on-year, with offline department stores and supermarkets seeing increases of 141.7% and 48.6% respectively. New retail models such as vending machines and mobile stalls experienced sales revenue surges of 12.2 times and 3.5 times respectively, while online retail sales grew by 75.7% [1] - The demand for clothing during the Spring Festival saw a concentrated release, with retail sales of pastries and bread increasing by 1.3 times and grain and oil by 11.0%. Retail sales of clothing, textiles, and knitted goods rose by 1.5 times and 2.6% respectively [1] Group 3 - Cultural and tourism consumption continued to rise, with traditional cultural activities significantly boosting related sales, leading to a 9-fold increase in sales revenue from cultural relics and intangible cultural heritage, and increases of 37.6% and 326.9% in museum and memorial sales respectively [2] - The dining and accommodation sectors experienced quality upgrades, with unique homestays and Cantonese cuisine attracting many tourists. Sales revenue for homestay services and budget chain hotels grew by 52.6% and 42.8% respectively, while the restaurant industry saw a revenue increase of 48.1% [2]