Huajin Strategy: A-shares may have bottomed out in the short term; consider buying on dips in high-quality technology and certain cyclical industries.

Investment Key Points

When looking back, the core drivers behind A-shares bottoming out after rapidly adjusting due to external events are a rebound in economic fundamentals, the reduction of negative factors, a repair following pessimism in sentiment, and supportive policies, among others. (1) Since 2003, there have been a total of 9 instances where A-shares bottomed out after a short-term, rapid adjustment under the impact of external events; the average duration was 33 trading days, and the average decline was 12.2%. (2) The core drivers of a bottom after a rapid adjustment are a rebound in economic fundamentals, the reduction of negative factors, and capital returning after pessimistic sentiment is released. First, a rebound in economic fundamentals is the core factor leading to a market bottom—for example, among the 7 rapid adjustment episodes since 2010, 6 of the bottoms were accompanied by rebounds such as year-over-year export growth or industrial enterprise profit growth. Second, the reduction of negative factors also plays an important role in bottoming out: after 9 external-event shocks since 2003, A-shares bottomed out precisely at the time when the event impact was most severe, followed by a marginal reduction in the shock—for example, in 2008 when the U.S. established the Federal Housing Finance Agency to take over the “two agencies” companies, and in 2020 when the domestic pandemic was effectively brought under control. Third, the release of pessimistic sentiment and the inflow of stock market capital are also drivers of bottoming out: first, during the period when the market bottomed out after a rapid adjustment, both sentiment indicators and valuations were at low levels or saw a sharp drop; the Shanghai Composite Index’s PE percentile on average fell to 26.5%, and trading value on average fell 57.8%; second, during rapid adjustments, financing and foreign capital often experience significant outflows, followed by some inflow—e.g., within 30 trading days after A-shares bottomed, in 3 instances for foreign capital, 2 saw daily average inflows rise, and among 6 instances for financing, 4 saw daily average inflows rise. Fourth, the introduction of positive policies also has a positive promoting effect on market bottoming out.

Looking at the current situation, fundamentals may continue to rebound, overseas risks have already been largely released, pessimism in sentiment has already been relatively well absorbed, and policies are relatively supportive—A-shares may have already bottomed out in the short term. (1) In the short term, the economy and earnings may continue to be in a rebound trend. First, the short-term economy may continue to rebound: first, manufacturing business conditions may move further upward; second, real estate sales may stabilize in the near term, and with the arrival of the construction-season peak, infrastructure investment may maintain relatively high growth rates. Second, short-term corporate earnings may continue to rise: first, the year-over-year PPI growth rate may continue to rebound, and industrial enterprise profit growth may extend its rebound trend; second, with commodity prices staying at high levels and technology hardware business conditions remaining strong, A-shares first-quarter earnings growth may continue to be in a rebound cycle. (2) In the short term, the release of external risks and pessimism in sentiment may have been relatively sufficient, and policies may still lean positive. First, the release of short-term external risks has already been fairly sufficient: first, the capital market’s expectations for further escalation of the U.S.-Iran conflict are relatively low; second, the possibility of reaching an agreement in U.S.-Iran negotiations in the short term and of the conflict ending is still present. Second, valuation and sentiment adjustments have already been relatively sufficient, but have not yet reached historical extremely low levels. Third, short-term policies may still be relatively positive. (3) In the short term, liquidity may remain loose, and stock market capital may see some return.

Sector allocation: In the short term, continue to allocate to leading-quality technology and some cyclical sectors at lower levels. (1) During the bottoming out and consolidation period, leading-quality technology and cyclical sectors may have a relative advantage. First, reviewing history: during the bottoming-out consolidation period, industries with policy support, upward industrial trends, and relatively higher earnings-growth ranking tend to have a relative advantage. Second, based on the current outlook, in the short term sectors such as electronics, communications, nonferrous metals, and power equipment may have a relative advantage. (2) Sectors such as transportation, nonferrous metals, electronics, computer software, defense/arms, etc., may see relatively high first-quarter earnings growth. First, sectors such as steel, computers, media, defense/arms, etc., according to Wind’s consensus forecasts, are expected to have relatively high first-quarter earnings growth. Second, for sectors such as transportation, nonferrous metals, TMT, and utilities, the cumulative year-over-year growth rate of industrial enterprise profits for January–February 2026 is relatively high. Third, sectors such as real estate, coal, and defense/defense and military industry this year’s first-quarter earnings growth may benefit from low base effects. Fourth, upstream sectors such as petroleum and petrochemicals, nonferrous metals, and chemical industries may see improved business conditions in the first quarter, while midstream sectors such as electronics and communications may see some improvement in business conditions in the first quarter. (3) In the short term, it is recommended to continue allocating at lower levels: first, communications (AI hardware), electronics (semiconductors, AI hardware), electrical & power (AI power, energy storage), innovative drugs, nonferrous metals, chemical industries, defense/arms (commercial aerospace), etc.; second, low-valuation dividend sectors such as coal, power, and banks.

Risk Warning: Historical experience may not necessarily apply in the future; policy changes may move beyond expectations; economic recovery may fall short of expectations.

Main Content

I. Has A-shares bottomed out in the short term?

(I) Reviewing history, fundamentals rebounding and negative factors diminishing lead to a short-term bottom

Based on historical review, the core drivers of A-shares bottoming out after a rapid adjustment under the impact of external events are a rebound in economic fundamentals, the reduction of negative factors, a repair following pessimism in sentiment, supportive policies, and more. (1) Since 2003, A-shares have seen a total of 9 instances where they bottomed out after short-term, rapid adjustments due to external events, with an average duration of 33 trading days and an average decline of 12.2%. (2) The core drivers behind the bottom after a rapid adjustment are a rebound in economic fundamentals, the reduction of negative factors, and capital returning after pessimistic sentiment is released. First, a rebound in economic fundamentals is the core factor driving the market bottom—for example, among the 7 rapid adjustment episodes since 2010, 6 bottoms coincided with rebounds such as year-over-year export growth or industrial enterprise profit growth. Second, the reduction of negative factors also plays an important role in forming a bottom: after 9 external-event shocks since 2003, A-shares bottomed out at the time when the event impact was most severe, followed by a marginal reduction in the subsequent shock—for example, in 2008 when the U.S. established the Federal Housing Finance Agency to take over the “two agencies” companies, and in 2020 when the domestic pandemic was effectively brought under control. Third, the release of pessimistic sentiment and stock market capital inflows are also drivers of bottoming out: first, when the market bottomed after a rapid adjustment, sentiment indicators and valuations were both at low levels or saw a sharp decline; the Shanghai Composite Index’s PE percentile on average fell to 26.5%, and trading value on average fell 57.8%; second, during rapid adjustments, financing and foreign capital often show substantial outflows, followed by some rebound—e.g., within 30 trading days after A-shares bottomed, among 3 instances for foreign capital, 2 saw daily average inflows increase; among 6 instances for financing, 4 saw daily average inflows increase. Fourth, the introduction of positive policies also has a positive effect in promoting a market bottom—for example, the establishment in April 2003 of a RMB 2 billion “SARS prevention and treatment fund” by the Central Government; the proposal of the “Four Trillion” plan in November 2008; structural tax cuts in 2011; multiple rate cuts by the central bank in 2018, accelerating the issuance of local government special bonds, and employment-stabilization policies; in April 2020, targeted reserve requirement ratio cuts and the establishment of RMB 1 trillion in special anti-epidemic government bonds; at the end of May 2022, the State Council issued 33 measures across 6 areas to stabilize the economy; in January 2025, RMB 13 trillion in ultra-long special government bonds to support “two priorities,” “two upgrades.”

(II) Looking at the current situation, A-shares may have already bottomed out in the short term

At present, fundamentals may continue to rebound; overseas risk release and pessimistic sentiment have already been relatively sufficient; policies remain relatively supportive—A-shares may have already bottomed out in the short term. Specifically:

In the short term, the economy and earnings may continue to be in a rebound trend. (1) The short-term economy may continue to rebound. First, domestic manufacturing PMI in March improved: March manufacturing PMI rose from February’s 49.5 to 50.5, already within the expansion range. Among the subcomponents, the prices of purchases of raw materials and new export orders rebounded significantly (up 9.1 and 4.1 percentage points respectively), indicating stronger external demand and improved manufacturing business conditions driven by rising raw material prices; in the short term, factors such as higher export growth and elevated commodity prices may continue, and manufacturing business conditions may move further upward. Second, external demand strength in the short term: March U.S. manufacturing PMI rose to 52.7 (prior value 52.4); February retail year-over-year growth rose to 3.7% (prior value 3.2%). Both continued to rebound, indicating stronger external demand in the near term. At the same time, the U.S.-Iran conflict has raised global energy costs, further highlighting China’s cost advantage; in the short term, exports may maintain relatively high growth rates. Third, high-frequency data shows the economy continues to rebound in the near term: first, the year-over-year decline in weekly commodity home sales in first-, second-, and third-tier cities has recently narrowed noticeably. According to data for March 29, the year-over-year growth rates of weekly commodity home sales in first-, second-, and third-tier cities were -15.5%, -16.2%, and 9.1%, respectively (prior values were -23.0%, -0.8%, and -16.3%). In addition, the year-over-year declines in existing home transactions in Beijing, Shenzhen, Chengdu, and Hangzhou narrowed significantly compared with February (March were 0.1%, -12.3%, -9.1%, and -38.1%, while February were -32.4%, -33.5%, -33.6%, and -52.2%), showing that with policy easing, real estate sales stabilized somewhat in the short term. Second, recently, rebar and electric furnace operating rates have risen markedly: the latest rebar operating rate recorded was 39.0%, and the latest electric furnace operating rate recorded was 62.8%, both up clearly from the lows in February; with the construction peak season arriving, infrastructure investment may maintain relatively high growth rates. (2) Short-term corporate earnings may continue to rise. First, the cumulative year-over-year growth rate of industrial enterprise profits in January–February reached as high as 15.2%, with a substantial rebound. This is mainly because the rebound in PPI drove the rebound in industrial enterprise profits. Looking ahead, commodity prices may remain strong, PPI year-over-year growth may continue to rebound, and industrial enterprise profit growth may extend the rebound trend. Second, among A-shares first disclosed for full-year 2025 results, the proportion of companies with positive year-over-year earnings growth is 58.0%. Among them, cyclical and technology sectors such as steel, nonferrous metals, and electronics have already disclosed relatively high earnings growth rates of 124.5%, 66.0%, and 44.8%, respectively. Looking ahead, with commodity prices staying at high levels and technology hardware business conditions remaining strong, A-shares first-quarter earnings growth may continue to be in a rebound cycle.

In the short term, the release of external risks and pessimistic sentiment may already be fairly sufficient; policies may still lean positive. (1) Short-term external risk release has already been relatively sufficient. First, Trump’s statements indicate that within the next two or three weeks there may be more intense strikes against Iran; crude oil prices have already risen to $110 per barrel, but global stock markets such as U.S. equities have generally been strong, indicating the capital market has lower expectations of further escalation of the U.S.-Iran conflict, while expectations for the conflict to end within two months are stronger. Second, Iran allows some oil tankers to pass through the Strait of Hormuz, showing that the possibility of U.S.-Iran negotiations reaching an agreement and the conflict ending remains. (2) Valuation and sentiment adjustments have already been relatively sufficient, but they have not yet reached historical extremely low levels. First, on April 3, the Shanghai Composite Index’s PE percentile was 54.3% (historical average 26.6%). Second, since February 28, the largest decline in trading value has been 47.1% (historical average 57.8%). (3) Short-term policies may still lean positive. First, on total-economy policies, the central bank emphasized continuing to implement a moderately loose monetary policy, increasing counter-cyclical and cross-cyclical adjustments; the Ministry of Finance proposed continuing to implement a more proactive fiscal policy, focusing on expanding the fiscal expenditure “portfolio,” optimizing the tool mix of government bonds, and improving the efficiency of transfer payment funds, among others. Second, on sectoral policies, the State Council clarified the need to increase support for the services sector such as fiscal and tax, finance, and factor guarantees; the “Special Action Plan to Boost Consumption” was launched with eight major actions; and ultra-long special government bonds were arranged to support “replace the old with the new” for consumer goods, and “buy now and get a refund when leaving the country” for tax refunds was promoted.

In the short term, liquidity may remain loose, and stock market capital may see some return. (1) Short-term macro liquidity may remain loose. First, with oil prices rising, expectations for interest rate cuts by the Federal Reserve within the year have fallen significantly; CME predicts that the Federal Reserve will basically not cut rates in the remaining months of this year (CME predicts a 23.2% probability of a rate cut in December), but given that the economy and employment are still relatively weak, the likelihood of the Federal Reserve raising rates within the year is also low (CME predicts a 2.1% probability of a rate hike in December). Second, the maturity size of the April MLF is relatively large (RMB 600 billion), so in the short term the central bank may still increase capital injections. (2) Stock market capital may return in the short term. First, historical experience shows that during periods of rapid adjustment, A-shares’ financing and foreign capital often see more outflows (financing: 4 out of 6 instances were outflows; foreign capital: 2 out of 3 instances were outflows), while during bottoming-out consolidation periods, foreign capital typically sees substantial inflows (average value RMB 76.73 billion). Second, since the U.S.-Iran conflict on February 28, financing has cumulatively flowed out by RMB 71.6 billion; as short-term sentiment may stabilize, foreign capital and financing may see some return in the short term.

II. Sector allocation: In the short term, continue to allocate at lower levels to leading technology, some cyclical sectors, and low-valuation dividend sectors

(I) During the bottoming-out consolidation period, leading technology and cyclical sectors have a relative advantage

During the bottoming-out consolidation period, leading technology and cyclical sectors may have a relative advantage. (1) Looking back at history, during bottoming-out consolidation periods, industries with policy support, an upward industrial trend, and top earnings-growth rankings tend to be relatively advantaged. First, industries with policy support during bottoming-out consolidation periods have a relative advantage—for example, from 2008/11/5 to 2008/12/31, power equipment, building materials, real estate, and other sectors that benefited from the Four Trillion policy stimulus and drove infrastructure investment demand had a relative advantage; from 2020/3/24 to 2020/5/22, consumer staples and beauty & personal care sectors had a relative advantage due to the “Implementation Opinions on Expanding and Upgrading Consumption and Accelerating the Formation of a Strong Domestic Market” and consumption voucher issuance in many places nationwide. Second, industries with upward industrial trends have a relative advantage—for example, from 2003/4/28 to 2003/7/1, media benefited from the outbreak of the SARS epidemic causing a surge in entertainment demand; with industrial trends like internet media moving upward, they were relatively advantaged. Third, industries with leading earnings-growth rankings have a relative advantage—for example, from 2003/4/28 to 2003/7/1, auto, and steel’s profitability growth rankings were 1st, 2nd, and 4th respectively; their corresponding price-increase rankings were 3rd, 4th, and 5th respectively. For 2020/3/24 to 2020/5/22, beauty and personal care’s earnings growth ranking was 1st, and its corresponding price-increase ranking was 1st. For 2025/4/8 to 2025/4/30, beauty and personal care and media’s earnings growth rankings were 2nd and 3rd respectively, with their corresponding price-increase rankings being 1st and 3rd respectively. (2) Looking at the current situation, in the short term sectors such as electronics, communications, nonferrous metals, power equipment, etc., may have a relative advantage. First, sectors such as power and electrical & power equipment may be supported in the short term by policies—for example, during this year’s two sessions the emphasis was on “power-amount coordination,” including proposing the establishment of a national low-carbon transition fund and supporting green fuels; the “Implementation Opinions on Improving the National Unified Electricity Market System” further deepens the power market reform; and the “Basic Rules for the Electricity Mid- and Long-Term Market” removes fixed time-of-use electricity prices, etc. Second, with AI demand driving the business conditions of AI hardware, the outlook for AI hardware business conditions may continue to rise. Increased prices of related commodities such as petrochemicals, nonferrous metals, and chemical products may also keep cyclical sectors’ business conditions moving upward. Third, based on disclosed 2025 annual report performance, in technology growth sectors, electronics, computers, and electrical equipment have relatively high annual earnings growth rates of 44.5%, 30.9%, and 27.1% respectively; in cyclical sectors, steel, nonferrous metals, and chemical industries have relatively high annual earnings growth rates of 124.5%, 66.1%, and 14.3% respectively.

(II) First-quarter report earnings growth for transportation, nonferrous metals, electronics, computers, etc. may be relatively high

1, Wind’s consensus forecast for first-quarter earnings growth is high for steel, computers, media, defense/arms, etc.

Wind’s consensus forecast for first-quarter earnings growth is high for steel, computers, media, defense/arms, etc. Wind’s consensus forecasts for first-quarter earnings growth are high for steel, computers, media, and defense/arms, at 315.7%, 104.0%, 95.0%, and 81.6% respectively.

2, Industrial enterprise profit growth for January–February 2026 is high for transportation, nonferrous, TMT, utilities, etc.

Cumulative year-over-year industrial enterprise profit growth for January–February 2026 is relatively high for transportation, nonferrous metals, TMT, and utilities. (1) Cumulative year-over-year industrial enterprise profit growth for January–February 2026 is relatively high for transportation, nonferrous metals, TMT, and utilities, at 31.2%, 22.6%, 19.5%, and 13.9% respectively. (2) Compared with full-year 2025, industrial enterprise profit growth for January–February 2026 improved significantly for auto, transportation, pharmaceuticals, and utilities—up by 30.8 percentage points, 19.8 percentage points, 14.7 percentage points, and 10.5 percentage points respectively.

3, This year’s first-quarter earnings growth for real estate, coal, and defense/defense and military industry may benefit from low base effects

This year’s first-quarter earnings growth for real estate, coal, and defense/defense and military industry may benefit from low base effects. (1) This year’s first-quarter earnings growth for real estate, coal, and defense/defense and military industry may benefit from low base effects: first, first-quarter 2025 earnings growth was relatively low for real estate, coal, and defense/defense and military industry, at -804.8%, -28.2%, and -25.0% respectively; second, net profit year-over-year growth rates in the full-year 2025 annual reports (disclosed comparable basis) for industries such as light manufacturing, trade and retail, and real estate were also relatively low, at -431.2%, -325.4%, and -125.2% respectively—so this year’s first-quarter earnings growth has relatively more room. (2) This year’s first-quarter earnings growth faces high-base pressure for computers, agriculture, forestry, animal husbandry, and steel, etc.: first, first-quarter 2025 earnings growth was relatively high for computers, agriculture, forestry, animal husbandry, and steel, at 2309.9%, 925.6%, and 539.3% respectively, creating high-base pressure; second, full-year 2025 net profit year-over-year growth rates (disclosed comparable basis) were relatively high for steel, nonferrous metals, and electronics, at 124.5%, 66.0%, and 44.8% respectively, so this year’s first-quarter earnings growth may also face some pressure.

4, Petrochemicals, nonferrous, chemical, electronics, and communications: business conditions improve in this year’s first quarter

Upstream: business conditions improve in the first quarter for sectors such as petroleum and petrochemicals, nonferrous metals, and chemical industries. (1) Petroleum and petrochemicals: first, the U.S.-Iran conflict has caused a sharp contraction in global crude oil supply; Brent crude prices have continued to rise. By end of quarter, the futures settlement price rose by 94.6%, and petrochemical sector earnings are expected to improve significantly. Second, the surge in crude oil prices also drives increases in refined product prices. As of March 20, the diesel (0#国VI)价格较1月31日低点上涨26.7%，汽油(95#国VI) price had risen 28.1% from the January 31 low. (2) Chemicals: first, the U.S.-Iran conflict caused shipping disruptions through the Strait of Hormuz, leading to shortages and price increases for chemical products such as phosphoric acid, sulfur, and bromine. Second, under concentrated domestic maintenance, supply contraction for butadiene and acrylic acid led to price increases. Third, the explosive demand for new energy and energy storage further drives price increases for lithium salts, phosphorus chemicals, and others. (3) Nonferrous metals: first, small metals such as indium, tungsten, and rare earths generally saw price increases due to policy contraction. Second, the explosion of AI + and new energy has driven price increases for indium, tungsten, lithium, and others.

Midstream: business conditions in the first quarter may improve somewhat for sectors such as electronics and communications. (1) Electronics: first, benefiting from the explosion in storage demand, storage chips saw a sharp price increase in the first quarter. For example, in the first quarter, spot average prices for DRAM: DDR4 16Gb (2Gx8) 3200 and DRAM: DDR4 8Gb (1Gx8) 3200 rose by 13.2% and 38.8% respectively. Second, the explosion in AI demand drove quantity-and-price increases across GPUs/AI chips, AI servers, PCBs, and more. (2) Communications: benefiting from the explosion in AI computing power demand, business conditions are expected to improve for optical modules, fiber optic cables, etc., and the export value of laser transmitter/receiver modules for optical communications equipment has high growth; year-over-year growth in February was 26.6%.

(III) In the short term, continue balanced allocation to leading technology, some cyclical sectors, and low-valuation dividend sectors

In the short term, it is recommended to allocate at lower levels to communications (AI hardware) and electronics (semiconductors, AI hardware) with upward policy and industrial trends, as well as electrical & power (AI power, energy storage), innovative drugs, nonferrous metals, chemical industries, and defense/arms (commercial aerospace), among others. (1) Communications: first, in December, optical cable output rose for two consecutive months—up 8.73% month-over-month from the previous month, up 27.24% from October, and up 6.20% year-over-year; second, the 2026 China Edge-side AI Chip and Smart Terminal Innovation Conference will be held in Shenzhen from April 9 to 11, 2026. The conference focuses on breakthroughs in edge-side AI chip technologies, ecosystem integration, and innovation development for smart terminals. It will gather industry strength to jointly explore technical paths and application scenarios, injecting strong momentum into upgrades of the industrial chain. (2) Electronics: first, the 14th China International Exhibition on Electronics Information (CITE2026) will be held in Shenzhen at the Shenzhen Convention and Exhibition Center (Futian) from April 9 to 11. The expo will be themed “New Technologies, New Products, New Scenarios,” and will set up eight exhibition areas: consumer electronics, embodied intelligence, AI large model/compute centers, AI+ application scenarios, integrated circuits, low-altitude economy, electronic components, and special electronics & dual-use electronics—systematically presenting innovation across the entire industrial chain. Second, the 2026 (5th) Semiconductor Ecology Innovation Conference will be held in Shanghai on April 22–23. The conference theme is “Ecosystem deep integration, innovation driving breakthroughs,” gathering forces from government, industry, academia, research, and users, helping China’s semiconductor industry to strengthen core competitiveness, and promoting efficient integration and coordinated development across the global semiconductor industry. (3) Electrical & power: the 2026 (6th) Solid Oxide Battery Technology Development and Industrial Forum will be held in Chengdu, Sichuan, from April 15 to 17, 2026. The forum will be themed “Stepping into the SOC-scaled zero-carbon era,” accelerating the connection across the industrial chain and contributing to the energy-structure transformation under the dual-carbon goals. (4) Pharmaceuticals: first, the 8th World Healthy Living Expo will be held in the Wuhan Optics Valley Science and Technology Expo Center from April 8 to 10, 2026. The expo will gather global wisdom using an innovative model to inject new momentum into high-quality development of the industry. Second, the 93rd CMEF 2026 China International Medical Devices Expo will be held from April 9 to 12 at the National Exhibition and Convention Center. (5) Nonferrous metals: first, the Nonferrous Metals Industry Intelligent Manufacturing, Low-Carbon Standards Conference & Standards Dissemination Meeting will be held in Quzhou, Zhejiang, from April 7 to 10, 2026. It will focus on hot directions for intelligent manufacturing and digital transformation standards as well as low-carbon standards for the “15th Five-Year Plan” period, accelerating the development, implementation, and application of standards. Second, the SMM AICE (21st) Aluminum Industry Conference & Aluminum Industry Expo will be held in Suzhou, Jiangsu, from April 8 to 10. The exhibition will bring together high-quality resources across the global aluminum industry chain and terminal application fields to build an ecological platform for coordinated upstream and downstream aluminum development. (6) Chemical industries: first, the acetic acid operating rate has risen for multiple consecutive days in March; by mid-March the acetic acid operating rate rose to the highest level in nearly half a year, and it has been consolidating near high levels. Second, the 2026 International Chemical New Materials Cooperation and Overseas Expansion Summit will be held in Suzhou on April 14. The meeting will carry out in-depth exchanges around themes such as “overseas chemical park investment recruitment policies,” “overseas investment regulations,” and “overseas enterprise briefings.” Third, the 4th COC/COP Technology and Market Conference will be held in Shenzhen from April 8 to 10, providing an exchange platform to improve the trial-production qualification rate for COC/COP, accelerate application verification and optimization, and build up effective production capacity for installations. (7) Defense/arms: first, the 2026 Defense Industry Surface Engineering Technology Conference will be held in Chengdu, Sichuan from April 22 to 24, 2026. The conference theme will be “Low-carbon leadership, digital intelligence empowerment, and integrated development,” helping to drive high-quality development of China’s defense science and technology industry and equipment manufacturing. Second, the 2026 China Space Conference (China Space Conference 2026) will be held in April 2026, strengthening the construction of space system engineering, promoting scientific development in the space industry, and facilitating cooperation and exchange at home and abroad.

In the short term, it is recommended to allocate at lower levels to low-valuation dividend sectors such as coal, power, and banks. (1) Coal: first, the Shanxi high-quality mixed market price has risen. As of March 20, Shanxi high-quality mixed market price was up 6.04% compared with January 10, and up 6.71% year-over-year compared with the same period last year. Second, the 2026 Intelligent Mining Development Conference will be held from April 18 to 20 at the Xinjiang·Changji International Convention and Exhibition Center. The conference will summarize staged experience in building intelligent mines in Xinjiang and other areas, and promote intelligence upgrades for non-coal mines as well as standardized operation for intelligent coal mines. (2) Power: first, the completed investment amount in grid engineering has increased. February’s completed amount rose 5.88% compared with December last year, and rose 92.10% year-over-year compared with the same period last year. Second, the 2026 Power Market Innovation Development Forum will be held in Nanjing, Jiangsu, from April 14 to 15. It will focus on industry policy interpretation and market-based trading practices, in-depth exploring cutting-edge trends and response strategies, and jointly promoting healthy and orderly development of the power market. (3) Banks: “GoGlobal Connect” services are expected to officially launch in mid-April 2026. This is not only a strategic deployment by the Hong Kong Trade Development Council to connect with the “15th Five-Year Plan” of the country, but also a “super accelerator” for mainland enterprises to go global through Hong Kong.

III. Risk Disclosure

1. Historical experience may not necessarily be applicable in the future: The relevant reviews in the text have historical limitations. Changes in market conditions, industry trends, and global economic environment in different periods will produce different impacts on investments; past performance is for reference only.

2. Policy changes beyond expectations: Economic policies may be beyond expectations or below expectations due to influences from macroeconomic conditions, sudden events, and international relations, thereby affecting investment decisions under the current analytical framework.

3. Economic recovery not meeting expectations: Affected by external interference, trade disputes, natural disasters, or other unpredictable factors, the economic recovery process may experience fluctuations, thereby affecting investment decisions under the current analytical framework.

(Source: Huajin Securities)