【Top 10 Brokerage Firms Weekly Strategy】Limited Downside Space for A-Shares, Decision Point in April! Focus on Certainty of Prosperity

CITIC Securities: Decisions to be Made in April

The trajectory of Iran conflicts and their market impact are highly divergent in expectations. Behind different judgments, three core issues currently cannot be verified, and answers are hard to find: First, after the conflict intensity decreases, to what extent can maritime navigation resume? Second, does the Federal Reserve prioritize inflation indicators or focus more on actual employment data? Third, is China facing cost shocks or opportunities from supply chain re-shoring? These questions may only become clearer by April. Faced with great uncertainty, the market has seen some short-term profit-taking, with previously high-flying stocks recently declining more.

Overall, most performance-driven and narrative-driven market cues have returned to the same starting line since the beginning of the year. The first three months can be seen as a market rotation driven by expectations and narratives during spring turbulence and cooling, not the key to the year’s success or failure. The broader rebound of PPI, price transmission, and corporate profit recovery are the directions with both expectation differences and room for growth this year. The decision depends on April.

GF Securities: Finding Industries That Can Maintain Independent High Prosperity Beyond Geopolitics and High Oil Prices

Aside from geopolitics and high oil prices, which industries might sustain independent high prosperity in the future? We believe that currently, sectors like optical communications and overseas AI chains, with visibility extending to 2027, remain the clear directions of prosperity and are the main holdings of institutions. However, their relationship with current Middle East conflicts (oil prices → US interest rate environment → US AI → domestic supply chain) makes short-term volatility difficult to control.

Drawing from the experience of the tech sector, at present, identifying industries that can maintain independent high prosperity in the future is key. If the prosperity trend is relatively decoupled from geopolitics and high oil prices, then regardless of how the US-Iran situation unfolds next, these industries should have an advantage in allocation. Therefore, from the perspective of controlling portfolio volatility and hedging, we suggest continuing to allocate two sectors that are inherently upward-trending and less affected by oil prices: energy storage chains (inverters/lithium batteries) and domestic AIDC chains (especially ByteDance-related).

Shenwan Hongyuan: We May Already Be at the Peak of Pressure

The deadlock in US-Iran conflicts continues to weigh on risk appetite, leading to short-term capital withdrawal from “first-phase rally” stocks. This suggests we may already be at the maximum pressure point. The policy of steady progress is understandable, but attention should be paid to potential differences between the structure of steady progress and absolute return reduction, which could pose tail risks. Meanwhile, we believe that medium-term uncertainties are underestimated: firstly, for China and the US, monetary tightening to combat imported inflation is a bad strategy. Increasing inflation tolerance is highly probable. Secondly, the US economy remains resilient, and China has room to maneuver; recession is not the baseline assumption. Additionally, geopolitical deadlock may enhance China’s energy and supply chain security, potentially creating global alpha. Even if the US-Iran conflict persists with fluctuations, the impact on A-shares is likely to gradually weaken.

In the short term, the market may follow a pattern of “oversold → policy support → rebound.” Subsequent movements are likely to be range-bound, with sector leadership rotating continuously. During phases with new themes (e.g., short-term energy storage, optical communications driven by prosperity), the market may challenge the upper limit of the range; if the rebound stalls, the market could test the lower bound.

In terms of allocation, the focus remains on “practicality,” with CPO and energy storage as strong directions. Under energy cost shocks, new energy and new energy vehicles benefit from energy diversification and supply resilience, potentially becoming key strategic resources alongside traditional energy. Additionally, the “second-phase rally” structure (AI industry chain + cyclical price increases) is likely to see pullbacks, which can be positioned for but with limited short-term timing.

China Galaxy Securities: Limited Downside Space for A-shares

The duration and evolution of geopolitical conflicts remain highly uncertain, and short-term disruptions to global risk assets are unlikely to subside soon. Global equity markets are expected to continue high volatility. Under the main supporting logic, the downside space for A-shares is relatively limited, and the market is likely to digest external pressures through oscillation and sector rotation. Structurally, the market focuses on inflation logic, with oil price movements under geopolitical conflict still being a key variable influencing recent market structure.

In allocation, focus on: First, as US-Iran tensions escalate, driving energy and substitute demand, pay attention to coal chemicals, coal, shipping ports, oil and gas. Second, as the market shifts toward defensive assets, focus on financials, utilities, transportation. Third, on technological innovation, focus on power equipment, new energy, energy storage, semiconductors, computing power, and communication equipment. Additionally, valuation of consumer sectors is at historically low levels, with some segments showing potential for recovery, such as agriculture, forestry, animal husbandry, fishery, food and beverages, and household appliances.

CITIC Construction Investment: The Market May Face a Long Period of Consolidation

Currently, due to the outbreak and escalation of the US-Israel conflict, the assumption of a weak US dollar faces challenges. Under high oil prices, the Federal Reserve’s rate cut expectations have shifted significantly, weakening the core momentum that previously drove this bull market. As we previously pointed out, in the latter half of the bull market, the focus will shift from valuation expansion to earnings growth (digesting valuations). If earnings growth expectations remain positive, the A-share bull market can continue. However, before growth expectations are confirmed, the market will face a transitional pain period from valuation expansion to earnings realization.

Three strategies to cope with global changes: First, with global energy prices soaring, sectors vulnerable under suppressed consumption include high-valuation stocks, high-energy-consuming industries (oil consumption), and demand-driven cost-inflation sectors. Favorable sectors include those benefiting from the Strait of Hormuz closure and sustained high oil prices, such as coal chemicals, new energy, energy storage, nuclear power, and power grids; defensive stocks with stable cash flow like coal and hydropower; and certain growth stocks that may be mispriced, such as AI-related price increase chains and power shortage chains.

Guojin Securities: Revaluation of China’s Manufacturing Value

Amid rising global energy security concerns, China’s assets’ unique advantages are increasingly evident. On one hand, China has leading coal chemical and power equipment industries; its photovoltaic capacity corresponds to an energy efficiency equivalent to 24% of Iran’s oil exports through the Strait of Hormuz. The energy system’s completeness reduces external shocks’ fragility and can effectively supply energy globally. On the other hand, Chinese manufacturing giants are undervalued in PE and capacity value compared to overseas counterparts—PE ratios are at their lowest since 2018, and total market value relative to capacity is also undervalued. Continuous export growth supports this revaluation. Meanwhile, domestic demand shows signs of endogenous recovery: retail sales in January-February stabilized and improved, with notable performance in non-subsidized sectors like tobacco, alcohol, jewelry, indicating consumption recovery not solely reliant on policy stimulus. Export remittances may be gradually shifting to domestic demand.

The narrative of rising physical assets globally is not over; clearing the dollar fog reveals the true world. Our recommendations: First, in the context of global turmoil, energy security becomes crucial. This year, primary energy development outperforms secondary energy, with focus on crude oil, shipping, coal, copper, aluminum, gold, and rubber. Second, China’s manufacturing remains the global ballast, with slow but steady movement of physical assets awaiting revaluation—power equipment, new energy, machinery, chemicals. Third, seek structural opportunities in consumption sectors with reversing downward factors—tourism, scenic spots, flavor fermentation, beer and other alcohols, pharmaceuticals, medical aesthetics.

Industrial Securities: Performance Period Still Focused on “My Own” and Prosperity Certainty

Recent market adjustments mainly stem from two concerns: first, the risk of “stagflation,” and second, the risk of “escalating conflict out of control.” Neither may be the final outcome of this conflict. In the short term, escalation of conflict may create opportunities for de-escalation, meaning the market’s rally often begins when sentiment is most pessimistic. In the medium to long term, “stagflation” could be the most pessimistic scenario for the economy, but it is not necessarily the baseline. The current market’s pessimistic expectations about this are quite priced in, forming a basis for medium- to long-term recovery.

In allocation, from the perspective of benefiting from rising oil prices, focus on new energy with both overseas prosperity logic and energy substitution; also, coal, agriculture, and gas stocks with cyclical and price-increase potential. For prosperity certainty, consider North American and domestic computing chains (CPO, PCB, semiconductor industry), and AI downstream sectors with large expectations gaps (gaming, digital media benefiting from AIGC, cloud services driven by price increases). From a low base, consider previously adjusted biotech drugs.

Everbright Securities: Consolidation and Waiting for Breakthrough

External factors currently suppress A-shares: ongoing Strait of Hormuz tensions, global energy market turmoil, rising inflation expectations, and the Fed’s hawkish stance pressure liquidity. However, some positive factors remain, such as central bank supportive signals, strong economic data in January-February, and relatively limited impact of Middle East tensions on the domestic economy. Overall, the market is expected to fluctuate mainly sideways.

In the short term, safe-haven assets and commodities may perform due to Middle East tensions. Medium to long term, focus on two main themes: growth and pro-cyclicality. Growth benefits from sustained industry enthusiasm and increased risk appetite in spring, with sectors like humanoid robots and AI. Cyclical sectors benefit from strong commodity prices and policy support, such as resources with ongoing price increases and offline services.

In hotspots, investors can continue to focus on themes like price increases and clean energy. Mid-term, monitor whether crude oil prices stay high for long, which could trigger concerns about “stagflation-like” conditions in the US, increasing volatility across asset classes.

Zheshang Securities: Building Up Strength for a Higher Level

Looking ahead, the Shanghai Composite Index may stabilize gradually after mid-March, with some growth indices stabilizing by late April. The “systematic slow bull” remains, and from Q2 to Q3 2026, the index may challenge the 5178–2440 range’s 0.809 quantile. Style rotation favors large and medium caps, with balanced growth and value.

Industry allocation should focus on “new and old energy” and cyclical consumption, with four main directions: strong new energy leaders, traditional industries expected to revalue under HALO trading, and internal expansion of cyclical and consumer segments. Thematic focus on AI reshaping value foundations, with attention to “HALO” trading and token globalization opportunities.

West China Securities: Hold and Await More “Market Stabilization” Policies

The ongoing US-Iran conflict and the shift in overseas rate cut expectations intertwine, keeping global markets under risk appetite pressure. Compared to this, domestic policy environment is more certain, with regulators signaling “stabilizing the capital market.” Future policies like “stabilization funds,” structural tools, long-term funds, and counter-cyclical regulation are worth期待. Meanwhile, imported inflation has limited impact on domestic monetary policy, and loose liquidity will continue, supported by active fiscal policies to restore investor confidence.

In industry allocation, defensive strategies are temporarily favored: focus on banks, utilities, consumer staples; energy independence-related sectors like new energy and power; and high-growth sectors like AI computing power and energy storage.