On May 6, the three major A-share indices collectively opened higher. The Shanghai Composite Index rose by 0.57%, while the ChiNext Index advanced by 2.27%. Leading the gains were the semiconductor, memory chip, and optical module sectors. In contrast, the oil and gas extraction, baijiu (white liquor), and coal sectors experienced declines. Wuliangye Yibin Co.,Ltd. saw its shares fall by over 6% following its financial report, which disclosed a net profit of 89.54 billion yuan for 2025, marking a year-on-year decrease of 71.89%, and a net profit of 80.63 billion yuan for the first quarter of 2026.
Looking ahead, China Merchants Securities Co.,Ltd. suggests that with profits trending upwards, a market breakthrough appears imminent. The firm believes that as the conflict between the US, Israel, and Iran becomes prolonged, its marginal impact on A-shares will diminish. The market's focus is now shifting towards improvements in domestic corporate profitability and high-growth sectors. On the liquidity front, macro liquidity remains relatively ample, creating favorable conditions for capital inflows. Considering recent fundamentals, policy support, and liquidity factors, the market is expected to maintain a volatile upward trend in May, with indices potentially reaching new periodic highs for the year. While recurring external conflicts may temporarily affect risk appetite, they are unlikely to alter the overall market direction. According to their framework, A-shares entered the third phase of a bull market starting in April, with capital expected to continue flowing into sectors showing accelerating or improving earnings trends. Cyclical sectors related to government investment and those benefiting from price increases are anticipated to perform well. Specifically, sectors like non-ferrous metals and chemicals within the new energy sphere, semiconductors benefiting from the acceleration of domestic information infrastructure construction, and new energy-related sectors gaining from the development of a domestic new energy system and rising global demand under high oil prices are poised to achieve excess returns in May. In terms of sector selection, focus in May should be on five areas showing marginal improvements: domestic computing power, lithium batteries, overseas computing power, commercial aerospace, and coal. Industry allocation advice primarily revolves around directions validated by first-quarter earnings reports and sustained high景气度 (prosperity).
Boc International (China) Co.,Ltd. indicates that while external disturbances exist, internal support remains strong, suggesting a post-holiday focus on a "dual mainline" strategy. They expect A-shares to continue their volatile upward trajectory after the holiday, with structural opportunities concentrated on two core themes: AI technology and resource/energy security. The market is currently transitioning from being driven by geopolitical games to being driven by its own profitability and policy logic. It is anticipated that A-shares will maintain a volatile upward pattern post-holiday. On one hand, the ongoing recovery in A-share first-quarter earnings and positive official PMI data provide fundamental support. Additionally, the positive performance of US stocks, Hong Kong tech stocks, and China-concept assets during the holiday, coupled with high pre-holiday trading volumes, indicates sustained market participation willingness. However, attention should be paid to potential impacts from changes in overseas Federal Reserve policies and trade policies. Regarding allocation, technology and resources remain the two core themes. 1) AI Technology Chain: The strong performance of the US AI sector during the holiday, bolstered by Apple's better-than-expected earnings and Intel's high growth in AI business, is expected to positively influence sentiment in related A-share AI computing power and application stocks post-holiday. However, internal structural differentiation should be noted, with potential rotation from previously high and crowded segments to tech hardware and independent controllable chains with lower valuations and higher earnings certainty. 2) Resource and Energy Security still holds allocation value, serving as a short-term hedge against geopolitics and inflation, and potentially undergoing a revaluation of industrial and financial attributes in the medium term. The pre-holiday performance of minor metal sectors and continued market focus on geopolitical changes and policy paths suggest resource sectors will likely maintain high attention post-holiday.
Industrial Securities Co.,Ltd. offers its perspective on the post-holiday market outlook. They believe that for A-shares, the effective mapping of US tech stocks onto global equity markets during the holiday, combined with first-quarter reports continuing to validate high growth trends in related sectors, positions the domestic AI hardware industry chain (represented by optical communication and storage)—which is deeply tied to overseas tech giants and highly synchronized with global AI trends—as the most direct beneficiary. This sector is expected to remain a structural highlight in the post-holiday A-share market. Looking at the entire month of May, a favorable external environment—including resonance in global tech sector highlights, the钝化 (blunting) of geopolitical conflict impacts, and events like Trump's visit to China—is conducive to continued allocation towards tech growth. Regarding recent market concerns about high crowding度 (degrees), they view the current situation more as "structural overheating" rather than a major constraint on the overall tech growth trend. However, as some strong sectors have accumulated significant consensus and show initial signs of structural overheating, crowding度 will likely become a key factor influencing internal sector structure moving forward. Going forward, with first-quarter reports providing clues on景气度 (prosperity) and a window of intensive industry catalysts approaching, the more important task is to identify sub-sectors with relatively lower crowding度 and better cost-effectiveness based on景气度 (prosperity) trends and industrial catalysts.
Comments