Ping An Fund: The oscillating upward trend is expected to continue; optimistic about opportunities in technology and cyclical sectors

Looking ahead to investment opportunities in the Year of the Horse market, Shen Aiqian, Director of Equity Investment at Ping An Fund, believes that the market faces a favorable internal and external environment, with relatively low systemic risk. The investment focus is on identifying structural industry and individual stock opportunities.

Shen Aiqian analyzes that, on one hand, it is important to pay close attention to signs and expectations of macroeconomic stabilization and improvement. As the starting year of the 14th Five-Year Plan in 2026, macro policies are expected to become more proactive, especially as the contradiction between domestic supply and weak demand is likely to gradually ease.

On the other hand, the profitability of listed companies as a whole is expected to improve. The revenue of listed companies in the third quarter of 2025, which better reflects true demand, has stabilized and begun to rise, but overall gross profit margins are still declining, indicating that prices remain a major drag on profits. However, since the second half of 2025, under the influence of the “anti-involution” policy, prices of cyclical resource commodities have improved. In 2026, PPI is expected to gradually rebound year-on-year, driving a substantial recovery in listed company profits.

Additionally, the external environment is expected to be warmer. By 2026, tariff disruptions will diminish, and external frictions may decrease. Meanwhile, the Federal Reserve’s interest rate cut cycle will begin, major economies’ fiscal policies are trending toward expansion, and global liquidity conditions are relatively warm. Finally, incremental funds are expected to enter the market in an orderly manner. The global asset shortage continues to be evident, and household funds are gradually increasing their market participation. As active equity funds demonstrate profitability, their growth is also anticipated. The proportion of medium- and long-term investment funds will increase, further stabilizing the stock market.

After last year’s systematic valuation and position repairs, Shen Aiqian believes that the rise of A-shares in the Year of the Horse will mainly be driven by earnings. Based on industry performance analysis, he is more optimistic about investment opportunities in the technology and cyclical sectors.

In the broader technology field, there is currently significant debate over AI investments, mainly questioning future returns. Shen Aiqian believes that, on one hand, model capabilities are continuously improving, which is expected to sustain the expansion of commercialization space. From Gemini 3.0 in Q4 last year to Clawdbot at the beginning of the year and recently Seedance 2.0, model capabilities are still rapidly advancing, especially in multimodal, multi-agent interaction, and long-term automated operation, with notable progress. The commercialization potential of AI continues to open up. On the other hand, data such as token usage and API calls are still growing rapidly, with demand constantly increasing.

In summary, Shen Aiqian remains optimistic about the AI industry, believing that domestic AI investment may accelerate in the Year of the Horse, and related domestic industries, especially domestically produced semiconductors, are also expected to benefit.

In the broader cyclical sector, Shen Aiqian focuses on cyclical commodities with good supply constraints and moderate demand recovery, such as industrial metals and chemicals. Compared to metals like copper and gold, which are driven by global demand and pricing, he believes that in the Year of the Horse, more attention should be paid to domestically driven demand and pricing, such as electrolytic aluminum and chemicals. Currently, the expansion pace of listed companies’ capacities has significantly slowed, and the industry’s supply structure is gradually improving. Coupled with the “anti-involution” policy reshaping the supply and demand landscape of cyclical manufacturing sectors, some industries’ gross profit margins are already showing signs of recovery, and the effects of supply-side optimization are gradually becoming evident. If macro policies continue to support demand recovery, inventory cycles may enter a phase of active replenishment, potentially reversing short-term supply and demand, with some structural cyclical commodities experiencing profit elasticity beyond expectations.

(Source: Securities Times)