This week, the three major indices showed mixed performance: the Shanghai Composite Index fell 0.34%, the Shenzhen Component Index rose 0.84%, and the ChiNext Index gained 2.74%. How will the market evolve? Here’s what institutions say.
**CITIC Securities: Balancing Domestic and Overseas Exposure** The Central Economic Work Conference reaffirmed the focus on expanding domestic demand, similar to last year. However, market expectations for domestic and overseas demand-driven sectors differ significantly. While overseas-facing stocks have strong earnings but limited valuation upside, domestic demand-driven sectors, though currently weak, could see substantial valuation recovery if conditions improve. Investors should seek stocks with overseas exposure as a base but also potential catalysts from domestic demand recovery.
**China Merchants Securities: How Will the 2025 Central Economic Work Conference Guide A-Shares?** Held from December 10–11, the conference maintained a positive tone. Historically, large-cap stocks outperform in the seven days post-conference, with sectors like social services, utilities, coal, and media showing higher excess returns. Medium-term, focus on major infrastructure projects to stabilize investment.
**SWS Research: Macro Environment Limits Upside for A-Shares** The spring rally is expected to remain modest. After the AI connectivity theme plays out, high-volatility swings may follow. Tech growth sectors offer rebound opportunities, with themes like commercial aerospace and robotics in focus. The conference highlighted areas like marine economy, energy security, and flood control infrastructure. Cyclical sectors, particularly industrial metals and chemicals, may benefit from PPI recovery in 2026.
**Soochow Securities: Beyond Commercial Aerospace, What Trends Matter?** Key 2026 themes include: 1. **Tech & Security**: AI infrastructure, strategic resources (copper, aluminum, rare earths), and next-gen energy (solid-state batteries, nuclear). 2. **Reform & Growth**: Supply-side optimization (lithium battery materials, polysilicon) and demand-side consumption (travel, healthcare, FMCG).
**Kaiyuan Securities: Tech Still Leads Post-Conference Spring Rally** Despite recent corrections, tech remains favorable long-term. Opportunities lie in: 1. **Tech & Cyclicals**: Defense, media (gaming), AI applications, and undervalued blue-chips. 2. **PPI Recovery**: Solar, chemicals, metals. 3. **Defensive Plays**: High-dividend stocks, gold.
**China Galaxy Securities: Policy-Driven Cross-Year Rally** Key themes: 1. **New Productivity**: AI, robotics, quantum tech. 2. **Supply Reform**: Manufacturing and resources. 3. **Domestic Consumption & Global Expansion**.
**Zheshang Securities: Stay Cautious Amid Market Divergence** Avoid chasing rallies; target lagging sectors like brokers, appliances, and machinery. Watch for undervalued stocks in healthcare, consumer, and AI.
**Bohai Securities: Policy Clarity Supports Volatile Market** With supportive policies and Fed easing, markets may rebound, but year-end caution persists. Focus on: 1. **AI & Robotics**: Cloud capex and localization. 2. **Energy Storage & Batteries**. 3. **Policy-Driven Sectors**: Services and commodities.
**Guosheng Securities: 2026 Outlook—From Valuation to Earnings-Driven Rally** Valuation tailwinds may weaken, but AI, security, global expansion, and dividend strategies retain long-term appeal.
**Orient Securities: Multi-Asset Strategy for 2026** Adopt a passive (gold, commodities, REITs) and active (equity style rotation, bond trading) approach to navigate low rates and risk appetite shifts.
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