XiaoCheng Technology soars over 16 times in just over two years! HALO trading heats up — revealing the underestimated potential stocks favored by institutions (list)

Physical assets are booming.

“The Big Three Oil Companies” Hit Limit Up Again

On March 3, the petrochemical sector surged sharply again, with stocks like Bohui Co., Tongyuan Petroleum, and QianNeng Hengxin hitting the 20% daily limit; China National Petroleum, China National Offshore Oil, and Sinopec also hit the limit up.

The so-called “Big Three Oil Companies”—PetroChina, CNOOC, and Sinopec—also closed at the daily limit. Notably, after their historic collective limit-up on March 2, these three companies once again joined together to hit the limit, recreating the “Big Three Oil” rally.

Besides the petrochemical sector, other sectors that defied the trend and surged on March 3 include coal, transportation, banking, and utilities. Notably, China Shenhua, the leader in coal, reached a new all-time high in A-shares.

Since the start of 2026, cyclical sectors have performed remarkably well. As of the close on March 3, the Petrochemical Index soared over 37%, ranking first among the Shenwan first-level industry gainers; non-ferrous metals and coal rose over 20%, while building materials, basic chemicals, and steel increased over 10%.

Cyclical stocks have also become the main gathering place for big gains this year. Stocks like Tongyuan Petroleum, Keli Co., Xianglu Tungsten, more than doubled; Zhangyuan Tungsten, QianNeng Hengxin, and Xiaocheng Technology rose over 100%. Among the stocks that doubled, more than ten hit new historical highs on March 3, and several have completed a tenfold increase in just over two years.

Specifically, Xiaocheng Technology (300139) had a minimum stock price of less than 6 yuan at the beginning of 2024, and on March 3, it approached 92 yuan, with a maximum increase of nearly 16 times. Xianglu Tungsten and Zhangyuan Tungsten saw their largest gains since 2024 exceed 11 times.

“HALO Trading” Becomes Popular

The recent sharp rise in cyclical sectors like petrochemicals and non-ferrous metals is not unique to A-shares but represents a new global narrative.

Recently, Wall Street investment banks such as Goldman Sachs, Morgan Stanley, and JPMorgan proposed the “HALO trading,” short for “Heavy Assets, Low Obsolescence,” with the sectors mentioned being typical examples.

Everbright Securities pointed out that “HALO trading” is a hedging strategy aimed at avoiding AI risks. Its screening criteria exclude “light assets” easily replaced by AI, focusing instead on industries with physical assets, infrastructure, and natural resources—“scarcity” sectors. In an environment of AI-driven uncertainty, it seeks assets with stable cash flows and low AI replacement risk, providing a safe haven against AI shocks. Heavy-asset, low-obsolescence industries have three natural advantages: high entry barriers, long industry renewal cycles, and the ability to withstand technological cycles. Additionally, these industries may benefit from AI efficiency enhancements, boosting profitability. From a macro perspective, the scarcity of physical assets will become more prominent, potentially reshaping valuation systems for heavy assets.

In the U.S. market, “HALO trading” mainly focuses on six core sectors: industrial (construction machinery, agricultural machinery), materials (non-ferrous metals, chemicals), energy (oil and gas producers, refineries), utilities (electricity, gas, water), transportation (railways, pipelines, ports, airports), and consumer staples (fast-food chains, food and beverages).

Guotou Securities stated that the core logic of “HALO trading” is to go long on “heavy assets that are difficult for AI to replace and rely on AI,” while shorting “light assets that are easily disrupted by AI.” Based on this logic, assets in power grid equipment, energy, mining, industrial equipment, defense, and signal towers are worth attention. The firm further analyzed from the perspectives of market saturation, industry differentiation, and historical excess returns, and favors a medium-term allocation priority of “cyclical > advanced manufacturing > TMT” according to the HALO trading logic and current conditions.

Unveiling Low-Valuation Potential Stocks Favored by Institutions

High-quality stocks with low valuations have greater potential. According to Securities Times Data Treasure, among stocks rated by 10 or more institutions, 29 stocks (from sectors like petrochemicals, coal, non-ferrous metals, chemicals related to HALO trading) have an estimated 2026 consensus PE ratio below 15. Among them, Huaneng International has the lowest forward PE at 8.01. Additionally, Huadian International, Xinji Energy, and China Eastern Logistics all have forward PE ratios below 10.

In terms of institutional attention, XCMG Machinery is rated by 21 institutions, ranking first. Wu Securities noted that as China’s leading construction machinery company, its main business remains stable, with mining machinery becoming a new growth point. Through electrification and globalization, it is building core barriers and is expected to benefit fully from the current industry upcycle.

China Coal Energy and Satellite Chemical each have 20 institutional ratings, while stocks like Juxing Technology, Zoomlion, Zhejiang Dingli, and Shaanxi Coal Industry have over 15 ratings. Western Securities believes that Juxing Technology, as a leader in hand tools, is expected to continue outperforming the industry. Its electric tool layout has already shown results, with accelerated growth expected over the next three years.

(Source: Securities Times Online)