Macro and Strategy Research - The capital market will focus on five enhancements, with a short-term emphasis on stability, indicating a "slow bull" market foundation [3] - In the recent trading period (March 6 to March 12), major indices showed mixed results, with the Shanghai Composite Index rising by 0.50% and the ChiNext Index increasing by 3.13% [3] - The recent CPI data for February showed a year-on-year increase of 1.3% and a month-on-month increase of 1.0%, influenced by low base effects from the Spring Festival and recovering consumer demand [3] - The PPI for February decreased by 0.9% year-on-year but increased by 0.4% month-on-month, with the decline narrowing due to the effects of "anti-involution" policies and price stabilization in certain sectors [3] Industry Research - The computing industry saw a significant increase, with the Shenwan computing sector rising by 5.83% from March 5 to March 11, outperforming the broader market [7] - The demand for AI computing power is expected to remain high, supported by recent price increases in cloud services from major providers like Amazon AWS and Tencent Cloud [7][8] - Domestic models such as MiniMax M2.5 and Kimi K2.5 are anticipated to become core choices for high Token consumption applications due to their cost advantages [8] - The AI application sector is experiencing rapid growth, with the potential for the industry to enter a new phase of development in 2026, driven by model iteration and promotion by major internet companies [8] Policy Aspects - The construction of supercomputing clusters and the capital expenditure of domestic and foreign cloud vendors are expected to continue to support the computing power sector [5] - The synergy between electricity and computing, along with rising expectations for energy storage demand, presents investment opportunities in the power equipment sector [5] - The importance of resource security is increasing due to geopolitical uncertainties, creating investment opportunities in the resource sector [5]

Export Performance - In the first two months of 2026, China's exports grew by 21.8% year-on-year, significantly exceeding the Wind consensus forecast of 7.3%[3] - The total export value reached $656.58 billion, well above the average of $550 billion in the same period over the past five years[3] - Key factors for the strong export performance include the late Lunar New Year, a rebound in global manufacturing PMI to 51.9, and the impact of RMB appreciation on export timing[3][4] Regional Export Growth - Exports to Africa surged by 49.9%, contributing 2.64 percentage points to overall export growth, with the share of exports to Africa increasing from 5% to 7%[4] - Exports to Hong Kong, ASEAN, and the EU grew by 38.7%, 29.4%, and 27.8% respectively, each significantly higher than the previous year's growth rates[4] - Exports to the US decreased by 11.0%, but the decline was less severe than in 2025, contributing approximately 1.5 percentage points to the overall export slowdown[4][16] Product Structure and Import Trends - Traditional labor-intensive product exports showed improvement, with categories like bags and textiles growing by 18.4% and 20.5% respectively, contributing about 2.3 percentage points to export growth[5][19] - High-tech and electromechanical product exports continued to rise, with growth rates of 26.9% and 27.1%, contributing 6.6 and 16.2 percentage points to overall export growth[5][19] - Imports increased by 19.8% year-on-year, significantly higher than the expected 6.9%, driven by a recovery in domestic demand and price stabilization[7][22] Future Outlook and Risks - While the strong export performance in early 2026 is encouraging, a potential decline in March is anticipated due to high base effects and pre-shipment factors[8][24] - Key risks include unexpected changes in overseas policies, slower-than-expected global economic recovery, and geopolitical tensions affecting manufacturing demand[26]

Macro - The manufacturing and construction sectors experienced a decline in activity due to the impact of the Spring Festival, while the service sector saw a rebound driven by consumer spending during the holiday [5] - There is an increasing divergence among enterprises, with large companies continuing to expand while small companies' performance has dropped to a three-year low [5] - The price increase trend is spreading downstream, and the differentiation between old and new growth drivers persists, with high-tech manufacturing continuing to expand while consumer goods manufacturing and high-energy-consuming industries remain at low levels [5] Financial Engineering - The A-share market showed a volatile upward trend, with the CSI 1000 index rising by 4.34% week-on-week, leading the major broad-based indices [6] - The market's risk appetite has improved, as indicated by a positive increase in weekly financing amounts, although further upward movement may require increased trading volume [6] - Recent changes in the Middle East have led to fluctuations in resource prices, which may affect the performance of related sectors in the equity market [6] Fixed Income - In March, credit bond volatility risks are expected to increase, suggesting a cautious approach towards low liquidity and high valuation elasticity products [7] - Short-term credit bonds, due to their relatively better liquidity, are recommended for defensive positioning [7] - With high-grade credit spreads compressed to historical lows, there is limited space for yield enhancement, prompting a strategy shift towards lower-grade credits to increase returns [7] REITs - The secondary market prices of publicly listed REITs in China showed a downward trend in February, with the CSI REITs closing at 796.08, reflecting a return rate of -1.66% [8] - Compared to other major asset classes, REITs ranked lower in return rates, with gold, convertible bonds, and oil performing better [8] Banking - The impact of the Spring Festival on credit in February was minimal, with loan growth expected to be around one trillion yuan due to demand constraints and regulatory requirements [6] - The social financing growth rate is projected to slightly decline to 8.1% by the end of the month, influenced by the pre-issuance of government bonds [6] - M2 and M1 growth rates have also been affected by the Spring Festival timing [6] Metals - The price of rhenium has increased by 36% since January, while the production of electrolytic cobalt has decreased by 93% year-on-year [8] - Prices for various new materials have shown mixed trends, with platinum prices rising by 17.1% [8]

1. Report Industry Investment Rating - No information provided in the given content 2. Core View of the Report - As of the market situation on February 27, considering the "return - crowding" quadrant chart and ETF fund flow, the power grid equipment sector still has high attention value. From February 24 - 27, resource products and power grid equipment led in terms of gains, and their crowding degrees increased. The resource products were the main market theme of the week, with both popularity and price rising. The crowding degree of the power grid equipment further heated up at a high level, and its short - term market depends on the flow of funds. Meanwhile, the chemical and semiconductor equipment sectors strengthened, with an increase in crowding degree but not overheating. The game, media, tourism, and liquor sectors declined significantly, with their sector popularity decreasing to varying degrees. The game sector adjusted significantly, and its popularity cooled down. Combining the ETF fund flow, the willingness to chase the rise of power grid equipment is strong, and its subsequent market is still worth tracking; the capital movement in the resource product sector is not obvious, and it may be in a wait - and - see state; some funds in the chemical and semiconductor equipment sectors took profits, the gambling sentiment increased, and there may be short - term fluctuations. In addition, the capital cashing sentiment in the game sector has eased, showing signs of stabilization [1]. 3. Summary by Relevant Catalogs 3.1 Market Trend: Steady Rise - From February 24 - 27, the market rose steadily. As of February 27, 2026, the closing price of the Wind All - A Index was 6942.40, up 2.75% from February 13 [6]. - From February 24 - 26, stock - type ETFs maintained a small net outflow. Stock - type ETFs had a net outflow of 32.86 billion yuan. Structurally, broad - based index ETFs had a net outflow of 26.244 billion yuan, theme index ETFs had a net outflow of 7.308 billion yuan, while industry index ETFs had a net inflow of 2.215 billion yuan [9]. 3.2 Theme Performance: Resource Products, Power Grid Equipment, and Chemicals Led in Gains - From February 24 - 27, resource products and power grid equipment led in gains, and their crowding degrees increased; the game, media, tourism, and liquor sectors declined significantly, and their popularity decreased to varying degrees. - Resource products were the main market theme of the week, with both popularity and price rising. From February 24 - 27, the rare earth, steel, non - ferrous metals, and oil and gas indexes rose 11.49%, 10.98%, 10.77%, and 9.06% respectively. At the same time, their crowding degree quantiles since 2020 increased by 6.4, 21.6, 4.9, and 17.1 percentage points respectively, showing the characteristics of volume - increasing and price - rising. The rare earth and non - ferrous metals mainly benefited from the price - rising logic, the oil market revolved around the US - Iran situation, and the steel benefited from the production control policy expectation. The crowding degrees of these themes are at a relatively high historical level, and the subsequent market may have stricter requirements for the logic [13]. - The crowding degree of the power grid equipment further heated up at a high level, and its short - term market depends on the flow of funds. The power grid equipment index rose 8.03%, and the crowding degree quantile since 2020 increased from 96.9% to 98.7%, a year - on - year increase of 1.8 percentage points. The power grid equipment has fundamental support, and the demand logic of AI for electricity is difficult to falsify, while the short - term market depends on the flow of funds [13]. - The chemical and semiconductor equipment sectors strengthened, with an increase in crowding degree but not overheating. The chemical and semiconductor equipment indexes rose 6.40% and 3.98% respectively this week. At the same time, their crowding degree quantiles since 2020 increased by 11.9 and 12.3 percentage points to 63.10% and 33.80% respectively [14]. - The game sector adjusted significantly, and its popularity cooled down. This week, the game index fell 6.57%, and the crowding degree decreased by 33.7 percentage points [14]. 3.3 Follow - up Attention: Focus on Power Grid Equipment - Combining the ETF fund flow, the power grid equipment had the largest net inflow and was favored by funds; while the chemical, media, and tourism sectors had large net outflows and faced cashing pressure. - The willingness to chase the rise of power grid equipment is strong, and its subsequent market is worth tracking. From February 24 - 26, against the background that most popular themes faced cashing, the power grid equipment ETF had a net inflow of 2.436 billion yuan. Moreover, this industry has both fundamental and logical support, and there may still be room for long - term growth. However, it is worth noting that the crowding degree of the power grid equipment is at a historical high since 2020, and the market may fluctuate in the short term. If the funds do not flow out significantly after the adjustment, it has high allocation value [19]. - The capital movement in the resource product sector is not obvious, and it may be in a wait - and - see state. From February 24 - 26, the net outflows of the Rare Earth ETF Harvest, Industrial Non - Ferrous Metals ETF Wanjia, Steel ETF, and Oil ETF Penghua were all less than 300 million yuan. After the crowding degree of the sector rose to a high level, the funds have not yet reached a consensus [19]. - Some funds in the chemical and semiconductor equipment sectors took profits, and the gambling sentiment increased. From February 24 - 26, some funds in the chemical and semiconductor equipment sectors chose to take profits, with net outflows of 1.685 billion yuan and 818 million yuan respectively for the ETFs. Coupled with the rising sector popularity and high gains this week, there may be short - term fluctuations [19]. - The game sector showed signs of stabilization. From February 24 - 26, the Game ETF had a net inflow of 25 million yuan, the capital cashing sentiment eased, and with the significant decline in sector popularity, it showed signs of stabilization [20].

Core Viewpoint - The A-share market is expected to experience a positive start in the Year of the Horse, with potential upward movement following the adjustments made prior to the Spring Festival, driven by event catalysts and calendar effects [1][4]. Group 1: Market Performance and Expectations - Historical data indicates that A-shares tend to perform better after the Spring Festival compared to before, suggesting a potential "opening red" for the Year of the Horse [2]. - The Hang Seng Index and the Hang Seng Technology Index showed strong performance before the Spring Festival, closing up 2.53% and 3.34% respectively, indicating positive market sentiment [2]. - Despite pre-holiday market volatility and negative sentiment, analysts remain optimistic about a rebound post-holiday, with expectations for a significant upward trend [3][4]. Group 2: Factors Influencing Market Movements - Recent market fluctuations were attributed to multiple factors, including global risk asset adjustments, geopolitical events, and concerns over tightening financial conditions due to the nomination of a new Federal Reserve Chair [3]. - Analysts noted that the combination of external pressures and seasonal factors contributed to a decline in investor confidence leading up to the holiday [3]. Group 3: Investment Opportunities - Analysts predict that sectors such as technology manufacturing, resource products, and infrastructure chains will outperform after the Spring Festival, driven by increased risk appetite and seasonal demand [5]. - The focus on emerging technologies is emphasized, while also recognizing the potential for value investments to thrive in the current market environment [6].

Group 1 - The report highlights a high probability of style switching in A-shares around the Spring Festival, with a historical tendency for value and large-cap stocks to dominate before the festival, while growth and small-cap stocks tend to perform better afterward [1][8][23] - From 2010 to 2025, there were only two years (2020 and 2022) without a clear switch between growth and value styles, indicating a strong historical pattern of style rotation [8][18] - The report identifies that in 62.5% of the years analyzed, there was a significant switch from large-cap to small-cap stocks after the Spring Festival, suggesting a high likelihood of this trend continuing [1][8] Group 2 - Historical analysis shows that the sectors leading in performance before the Spring Festival often do not repeat their success in the following month, indicating a high probability of sector rotation [2][8] - The report notes that in years where value stocks led after the Spring Festival (2011, 2016, 2021), there were common factors such as liquidity tightening or unexpected risk events that suppressed growth stocks [2][23] - The macro environment in 2015 and 2019, characterized by ample liquidity and weak fundamentals, is compared to the upcoming 2026 Spring Festival, suggesting potential for similar market dynamics [2][3] Group 3 - The report assesses that the current market style is shifting towards value before the 2026 Spring Festival, with technology and growth stocks receding [3][4] - It suggests that if the value style continues post-festival, it will be driven by expectations of domestic economic recovery and policy support, although there are concerns regarding inflation metrics [3][4] - The analysis indicates that the performance of small-cap stocks is expected to rebound significantly after the Spring Festival, driven by liquidity recovery and risk appetite [18][19]

Core Viewpoint - The article discusses the strategies for investors in the last trading week before the Spring Festival, highlighting the mainstream recommendation of "holding stocks over the holiday" based on historical "Spring Festival effect" analysis and current economic expectations [1][5]. Market Trends and Historical Analysis - A-shares typically exhibit a "calendar effect" around the Spring Festival, characterized by "volume contraction before the festival and expansion afterward" [2][3]. - Historical data indicates that market volume usually starts to decline from T-8 days (T being the day of the festival), with significant volume drop observed around February 4, 2026, where trading amounts fell below 2.5 trillion yuan [2]. - The market tends to rebound in the last five trading days before the festival, with a clear upward trend often continuing until about T+6 days after the festival [2]. Fund Behavior and Market Dynamics - The "down then up" pattern of the index is attributed to risk-averse behavior of funds during the holiday, leading to a temporary market decline before a rebound as investors anticipate the "Spring Festival effect" [3]. - The rotation of large-cap and small-cap stocks is notable, with large-cap stocks performing better before the festival and small-cap stocks gaining an advantage afterward [3][4]. Investment Strategies and Recommendations - Multiple brokerage firms suggest a balanced approach to investment, emphasizing "stable allocation" before the festival and a focus on growth and industry trends afterward [8]. - Specific sectors such as low-volatility, high-dividend stocks in banking and consumer sectors are expected to attract funds during the pre-festival period [8]. - The technology sector remains a long-term consensus for investment, with a focus on AI applications, high-end manufacturing, and new energy post-festival [8]. Sector Focus and Future Outlook - Analysts recommend monitoring sectors that may experience marginal changes during the festival, including humanoid robots, AI industry chains, and gaming [9]. - The overall sentiment suggests that the market may see renewed upward momentum post-festival, driven by improved economic and profit expectations, as well as a favorable liquidity environment [6][7].

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Hong Kong stock market, which recently reached a four-year high before experiencing a global market risk-off adjustment [1][2]. Core Insights and Arguments - The rapid rise in the Hong Kong market in January exceeded general expectations, particularly after a period of low investor interest during Q4 [1][2]. - Two critical questions arose post-adjustment: 1. Whether and when to add to positions 2. Whether the recovery will be led by recently underperforming sectors like technology and cyclical materials or if new leading sectors will emerge [2]. - The response to the first question indicates that adding to positions is advisable, as the adjustment is seen as healthy [2][3]. - External factors causing market adjustments have not fundamentally impacted the market; liquidity concerns regarding the Federal Reserve's hawkish stance are largely priced in [3]. - Active foreign capital has shown consistent net inflows for three weeks, and earnings expectations continue to be revised upwards [3]. - Seasonal trends around the Lunar New Year and catalysts like AI developments are expected to favor the Hong Kong market [3]. Additional Important Insights - The current high congestion in popular sectors, particularly in resource commodities, may lead to continued short-term volatility [4]. - A potential opportunity to build positions may arise if volatility indicators like VIX decrease and congestion levels drop before the Lunar New Year [5]. - The focus on technology and resource sectors is characterized as a technical pullback rather than a reversal, emphasizing the distinction between the "Hang Seng Tech" index and core stocks in AI hardware/software and innovative pharmaceuticals [5]. - The current hawkish stance of the Federal Reserve is not expected to fundamentally disrupt the narrative for technology and resource sectors [5]. - Insurance, local Hong Kong stocks, and high-quality consumer leaders are recommended as stable core holdings due to their robust fundamentals [6]. - The annual outlook emphasizes three major equilibria for the Hong Kong market: earnings valuation rebalancing, internal and external capital rebalancing, and sector rebalancing, advocating for a mid-term investment perspective focused on fundamentals rather than chasing rapid gains [6].

Market Overview - The Hang Seng Index reached a four-year high last week, but experienced a technical pullback due to a hawkish Federal Reserve chair nomination, indicating a risk-off sentiment in global equity markets [1] - The market sentiment index moved from panic to optimism within 16 days, suggesting a shift in investor sentiment [1] - Current market volatility is expected to persist, but it is more likely to be a correction rather than a reversal of market performance [1] Earnings and Revenue Expectations - Non-financial earnings expectations have been revised upward by 0.4% over the past four weeks, while revenue expectations have been slightly downgraded by 0.1% [2] - The sectors with the most significant upward revisions in earnings expectations include non-ferrous metals (7.7%), military industry (4.0%), and electric new energy (1.8%) [2] Capital Flow - Foreign capital continues to flow into Hong Kong stocks, with net inflows reaching $2.8 billion, up from $1.95 billion the previous week [3] - Active foreign capital has seen a continuous inflow for three weeks, with a record weekly inflow of $640 million [3] - The nomination of Kevin Warsh as the next Federal Reserve chair has led to short-term volatility, but the medium-term liquidity outlook remains accommodative [3] Market Sentiment - The market sentiment index has risen to 62.1, indicating an optimistic outlook [4] - Factors contributing to this optimism include strong net inflows from southbound capital and high buying intensity [4] Investment Recommendations - Companies with earnings certainty should be considered as core holdings, while opportunities to increase allocations in technology and cyclical materials should be explored during market corrections [5] - Focus on sectors showing upward trends, such as AI-related industries, semiconductor manufacturing, and innovative pharmaceuticals [5]

Market Overview - In January, A-shares and Hong Kong stocks experienced a general upward trend, with major A-share indices rising, particularly the Sci-Tech 50, which increased by 15.8% [4] - The Hong Kong market also showed a positive trend, with the Hang Seng Index rising by 5.8% and the Hang Seng Technology Index by 4.3% as of January 27, 2026 [4] A-share Insights - The recommendation for investors is to maintain a stable position and hold stocks through the holiday, anticipating a new market trend post-Spring Festival [5] - The upcoming spring market is expected to be promising, with potential positive news in both policy and fundamentals over the next few months [5] - Focus areas include growth sectors such as humanoid robots, AI industry chain, gaming, and film, alongside cyclical sectors benefiting from strong commodity prices and policy support [5] Hong Kong Stock Insights - The overall trend in the Hong Kong market remains positive due to earnings recovery, improved liquidity, low valuations, and policy support [6] - The market is transitioning from being driven by funds to being driven by performance, with a structural rebound expected in the first quarter [6] Investment Strategy - The strategy suggests capturing structural opportunities amidst market volatility, focusing on the AI industry chain and defensive assets like non-ferrous metals, chemicals, and insurance for stable returns [7]