【Top 10 Brokerage Weekly Strategy】Adjustments Are Opportunities! Stay Committed to China's Advantageous Manufacturing Industry

CITIC Securities: Stand firm in China’s advantageous manufacturing sector, waiting for April’s decision

After Trump’s TACO last week, the situation in the Middle East may present a subtle balance where both warring parties maintain mutual deterrence while preventing the situation from spiraling out of control. The fact that supply chains are disrupted has not changed, but there is a possibility of intermittent air traffic before a ceasefire agreement is reached. In an environment where global rules and order are gradually losing ground, countries with resources, geography, and manufacturing advantages will fully leverage these comparative advantages to seek survival and development. In the context of the Middle Eastern war, intermittent blockades of the Strait of Hormuz may serve as a tool to counterbalance U.S. and Israeli actions, with the probability of ongoing and repeated energy supply disturbances increasing.

However, the impact of disruptions in energy and resource supply on industrial demand may differ from that in the 1970s and 1980s, when Europe and the U.S. were already in the early stages of deindustrialization, production outsourcing, and advancing globalization. The two oil crises actually accelerated this process, whereas today we are in a period where countries around the world are experiencing heightened insecurity and advancing re-industrialization. This is the biggest contextual difference and will affect future analytical frameworks.

From the direct impact of events, three directions worth paying attention to are the accelerated electrification globally, the transfer of orders from overseas to domestic, and more supply chain diplomacy. The short-term capital market is still in a period of emotional cooling, and the mentality of loss aversion may generate some demand for reducing positions. In terms of allocation, it is recommended to continue to stand firm in China’s advantageous manufacturing sectors and wait for April’s decision.

Guotai Junan: Adjustments are opportunities, layout Chinese assets

After the market adjustment, the Chinese stock market is showing important bottoms and entry points. First, China’s energy consumption of oil and gas accounts for less than 30%, which is below the global average. Diverse reserves and energy transformation have increased China’s resilience to risks. Second, China’s relatively stable security situation, relatively stable economy and society, complete supply chain system, and positive industrial progress are scarce even in global comparisons. Third, in recent communications with overseas long-term capital, an important marginal factor is that amidst overseas chaos and high exposure to U.S. stocks, foreign capital is re-evaluating China’s rise and industrial advantages, contrasting with the relatively low allocation to China.

Market adjustments are instead opportunities, and active layout is recommended. Finance and stability remain the top choices, and high dividend rates have allocation value. We are optimistic about Chinese technology manufacturing, such as electric power equipment and new energy/energy metals/construction machinery, as well as semiconductors/communication equipment/mechanical equipment in the AI field. Policy deployment stabilizes investments, and with inflation rebounding, it is expected to drive inventory replenishment demand, recommending construction materials/building/hotels/consumer goods.

Huatai Securities: Seeking certainty under weak balance

The intertwined geopolitical situation has heightened expectations of global liquidity tightening, and market trading sentiment is extremely cautious. Against the backdrop of changes in macro pricing logic, micro battles within the market have intensified. Capital is beginning to seek certainty in energy shocks (such as lithium batteries), but it should be noted that under a shrinking market environment, the sustainability of a single sector’s rise is facing challenges. Therefore, the core focus of the gaming direction lies in the “cost pass-through” ability within the supply chain. Looking ahead, the current weak balance will soon face multiple windows of testing.

In the subsequent outlook, external geopolitical variables and internal “pre-festival effects” suppress trading activity. However, from a cross-month perspective, as the A-share market enters a period of concentrated earnings disclosures in April, the market’s pricing anchor is expected to gradually penetrate emotional disturbances and return to fundamental verification. In terms of allocation, moderately focus on coal, electricity chains, and chemical raw materials that may benefit from high oil prices and have pass-through capabilities, while using low-level essential consumption as the base.

CITIC Construction Investment: Keep a close eye on the changes in the Middle East and seize China’s advantageous assets

The U.S.-Iran conflict situation has cooled somewhat, and global market panic emotions are being repaired. However, the latest U.S. military deployment plans against Iran still show a risk of escalation, so attention should be paid to market sentiment fluctuations over the next month. Currently, the A-share market has adjusted sufficiently, and we can wait for a long signal and find the right timing for layout. In the future, the A-share market will focus on industries benefiting from energy security and high inflation, high cash flow products, growth sectors that are easily misjudged, and valuation-lowered cyclical sectors. Key sectors to watch include coal chemicals, new energy, energy storage, lithium battery materials, pesticides, fertilizers, coal, hydropower, AI computing power, metals, innovative pharmaceuticals, and consumer goods.

China Merchants Securities: Focus on substantial actions in the capital market stabilization mechanism

Recently, the market has been impacted by strong liquidity shocks, but from the perspective of funds, there is no significant risk. First, the current round of main incremental capital financing and private equity is in a profitable state with a high safety margin, so there will be no downward negative feedback. Second, recent ETFs continue to see net outflows, and important institutional investors have not yet entered the market. Finally, the return of capital from the Middle East will narratively boost market upward momentum, which is a high-probability event in the medium to long term and cannot be easily disproven; “whether to believe” is more important than “whether it is true,” and the narrative may to some extent become self-fulfilling.

Looking forward, the space for A-shares to continue to plunge is limited, and the core observation signal for the phase-bottom lies in when the capital market stabilization mechanism begins substantial actions. Future attention should be paid to the petrochemical, coal, building materials, chemicals, shipbuilding, breeding poultry, and electricity sectors, which have relatively high or improving prosperity.

Shenwan Hongyuan: Discussing the stability of China’s capital market again

Reiterating that stagflation itself has uncertainties, both the tightening of monetary policies in China and the U.S. are not baseline assumptions. At the same time, potential upward clues for A-shares have not yet been fully priced in. High prosperity in new energy + subsequent export chain Alpha and pass-through capability verification → Middle Eastern capital pricing + foreign capital return resonance → A-shares reflecting the impacts of energy security and supply chain security. This may form clues for A-shares to return to a strong state more quickly. Both upward and downward risks have not been fully priced in; the A-share market is not in a stable balance in the short term but is also neutrally priced. In the short term, the global capital market is still pricing around the event-driven catalysts of the U.S.-Iran conflict, and it is not yet the time to place heavy bets. The A-share market remains in a medium to long-term upward cycle, with accumulated profit effects encountering disturbances, but this merely prolongs the consolidation period after the “first phase of rise,” and a “second phase of rise” in the A-share market is highly probable.

The oscillating consolidation phase between the two stages of rise, extending the technology main line + expanding macro narratives, remains the primary source of high-elasticity investment opportunities. In the technology “reality reassertion” direction, which was strong before the U.S.-Iran conflict, there are still opportunities, with a focus on CPO, energy storage, and AI electricity. In the next phase, new energy and new energy vehicles may become new leading directions. This is a direction that may resonate with macro narratives, possessing upward elasticity and diffusing profit effects.

Galaxy Securities: Where is the resilience of A-shares from a global perspective?

Under the repeated disturbances of external geopolitical factors, the A-share market experienced significant fluctuations during the week, with overall investor sentiment being weak, and major indices continuing to adjust; however, the decline has shown signs of narrowing compared to earlier periods. Looking forward, the evolution of the U.S.-Iran conflict still carries considerable uncertainty, and its suppressive impact on global risk assets is unlikely to fade in the short term. Before the trajectory of the conflict becomes clear, coupled with the marginal tightening of global liquidity brought about by rising inflation expectations, the global equity market is likely to continue exhibiting high volatility characteristics, with the A-share market mainly digesting fluctuations. However, amidst external uncertainties, domestic certainty advantages stand out, strongly supporting the resilience of the A-share market. The main lines of energy security, controllable autonomy, and industrial upgrading are clear, possessing stronger defensive attributes and cost-performance ratios. As annual reports and Q1 reports are disclosed in concentration, sectors with high earnings certainty and continuously improving prosperity will become the core focus of capital. In terms of allocation, we remain optimistic about the technology sector’s industrial-driven dual main lines and the rising price clues of cyclical sectors in the medium to long term.

Guotou Securities: 2026 and 2021, the fate of re-balancing

Currently, oil prices remain high, and regardless of whether there is TACO or not, the upward shift in oil price levels leads to undeniable inflationary stickiness heading into the second quarter. This indicates that a significant macro change has already occurred in the medium term. Therefore, it is necessary to cautiously assess the probability of global economic stagflation or even recession; if it occurs, global equity assets will be very passive, corresponding to reducing positions rather than restructuring. A grand “re-balancing allocation” within the year is unavoidable, meaning some varieties will never return, which also means being brave enough to bid farewell to many varieties that benefited immensely from the previous logic over the past three years; full psychological preparation is needed for this point.

Currently, I tend to believe that it resembles the 2021 “structural adjustment” model, corresponding to a scenario of mild inflation + resilient global economy + strong dollar. The old and new re-balancing (technology/cyclical) has been validated, and the decline in financial properties of resource products and the recovery of commodity properties have also been verified. The internal re-balancing of technology + offshore is still ongoing. Currently, it seems that electric power equipment and new energy, representing midstream and upstream offshore varieties, will be an indispensable part of the “2026 Ning combination.”

Dongwu Securities: Seeking medium-term certainty amidst geopolitical expectation fluctuations

Geopolitical conflicts have replaced AI industry logic, becoming the core pricing factor in the current market. The long-term bull market of A-shares has not been invalidated, and we can analyze two extreme scenarios: one is that the timing of war mitigation exceeds expectations, in which case A-shares will return to their original endogenous logic from a total perspective; the other is that in a low-probability scenario, geopolitical conflicts unexpectedly escalate/persistently drag on, leading to overseas stagflation, with oil prices rising to $150-$200. Both extreme scenarios correspond to the fact that the index is unlikely to “stop at 4200” from a medium-line perspective. Considering the risk-reward ratio, the current market has entered a “bullish and long” zone, and the irrational amplification of pessimistic sentiment is the betting space under the bull market. However, due to the risk of “overseas stagflation” being a low-probability scenario, and the potential rewards carrying asymmetry, adjustments in position structures are needed for certain hedging. The “additive” approach can be maintained along two lines: first, unlike the micro-logics dominated by AI industry trends before the war, the energy anti-fragility and the chain of rising oil price levels may likely become another significant logical clue for subsequent trends. This part of the holding should also be able to hedge against “overseas stagflation” tail risks; second, to supplement positions in relatively independent directions aligned with prosperity logic when prices are low.

Xibu Securities: Before the U.S. stock market plummets, this indicator may flash red

Last Friday evening, Iran once again closed the Strait of Hormuz, and the U.S.-Iran conflict may escalate, exacerbating global disturbances. Various signs indicate that the global market is in a state of high-level resonance. Similar to early April last year when the U.S. “reciprocal tariffs” caused stock markets in various countries to plummet, the current escalation of the U.S.-Iran conflict may also trigger liquidity shocks to U.S. stocks and global assets. Historical experience shows that before the outbreak of liquidity shock events in the U.S. stock market, there is a high probability of at least three occurrences of the “triple whammy” of stocks, bonds, and currencies. After the third or fourth occurrence of the “triple whammy,” all asset classes, including gold, will experience sharp declines. However, “exiting” during the third occurrence of the “triple whammy” may help avoid an 80% drawdown. On March 6, the first occurrence of the U.S. “triple whammy” has already been confirmed. However, even if the U.S. experiences three consecutive instances of the “triple whammy,” the liquidity disturbance to A-shares may also be short-lived and will not change the trend of “core asset bull” in A-shares.

It is recommended to continue to pay attention to energy sectors benefiting from the upward shift of oil prices (oil/chemicals/coal/new energy chain); sectors in the agricultural sector (agricultural chemicals/agricultural products) that are completing the “value filling” in the super cycle of commodities; and core Chinese consumer assets (liquor/real estate) benefiting from cross-border capital inflows and expectations of Fed QE; as well as offshore assets (Hang Seng Technology) benefiting from a weak dollar and recovery of China’s consumption fundamentals.

Editor: Wang Lulu

Typesetting: Liu Junyu

Proofreading: Wang Chaoquan