Huatai Securities: "14th Five-Year Plan" focuses on the economy's intrinsic momentum, overweight in the upstream and midstream power chain sectors

Huatai Securities Research Team pointed out that the government work report’s deployment of macroeconomic policies this year continues the overall tone of “seeking progress while maintaining stability” from the December 2025 Central Economic Work Conference. Counter-cyclical policy intensity remains generally stable, economic growth targets are basically in line with expectations, with continued emphasis on expanding domestic demand but also partially balancing investment and consumption, and the effort to promote investment may marginally increase. The long-term development strategy maintains continuity and foresight, with the frequency of terms such as new productive forces, technological development, high quality, safety, and low carbon continuing to rise, and related structural policies are being steadily advanced. Overall, the main variable in this year’s macroeconomics is the economy’s own momentum. As deleveraging in real estate enters its final stage, the supply and demand rebalancing in manufacturing enters a virtuous cycle, which is expected to drive nominal growth and fiscal revenue recovery, and fiscal expenditure expansion will also become smoother. Focusing on this year, at the macro level, promoting a reasonable price rebound is an important intersection of policy goals and market transactions, and close monitoring will be maintained. At the industry level, energy is a key intersection of multiple priority tasks, reaffirming an overweight position in the upstream segments of the power chain. Domestic demand and AI are the main clues outside of energy.