Huaxi Securities: The Spring Offensive Continues, Deepening the Exploration of Investment Opportunities Related to the "Two Sessions"

According to the Zhitong Finance APP, Huaxi Securities released a research report stating that the spring offensive continues, deeply exploring investment opportunities related to the "Two Sessions." In the short term, affected by the sharp decline in U.S. stocks and the U.S. tariff increases, the independence of this round of structural technology market has weakened, and market concerns about crowded TMT transactions have intensified. Some trading funds may temporarily retreat, suggesting a focus on the rebound opportunities benefiting from the policy efforts of the "Two Sessions" in the domestic demand direction. In the medium to long term, the current AI+ investment has shifted from overseas to the domestic AI industry chain's prosperity. As the domestic AI industry accelerates its catch-up with overseas, investment opportunities in A-shares in areas such as domestic computing power, robotics, and AI applications are expected to continue to spread.

In terms of industry allocation, focus on rebound opportunities benefiting from the policy efforts of the "Two Sessions" in domestic demand directions, such as consumption and "two new and two heavy" fields; in the medium to long term, "new quality bull" assets under the trend of the technology industry remain the main line, focusing on: AI+ (AI applications, humanoid robots, intelligent driving, smart wearables, domestic computing power), low-altitude economy, and domestic substitution.

Market Review: In February, the global equity market showed a "strong East and weak West" pattern, with the Chinese market experiencing a structural technology market, and the Hang Seng Technology Index rising by more than 20% at one point. At the end of the month, affected by the sharp decline in U.S. technology stocks such as Nvidia and U.S. tariff policies, profit-taking sentiment began to emerge in the previously strong technology sector, and some low-position cyclical and consumer sectors also saw a temporary rebound. In terms of funds, A-share financing funds have net bought for four consecutive weeks, while ETF funds have continued to see net redemptions. In February, most commodities fell, and there were signs of easing in geopolitical tensions, with recent international oil prices fluctuating downward.

The following aspects are the recent market focus:

1) Overseas, U.S. tariff policies disturb global market sentiment. On February 27 local time, the U.S. announced that the decision to impose a 25% tariff on products from Canada and Mexico will take effect on March 4, and on the same day, an additional 10% tariff will be added to the existing 10% tariff on Chinese goods. The U.S. tariff policy may be exacerbating concerns about stagflation in the U.S., with February economic data showing signs of slowing. First, the U.S. Markit Services PMI fell into contraction in February; second, the University of Michigan's U.S. Consumer Sentiment Index dropped significantly, while long-term inflation expectations rose to the highest level since 1995.

2) The "Two Sessions" will be held in early March, and market expectations for macro policies have increased. According to the bank's statistics, since 2019, the upward momentum of A-shares during the "Two Sessions" has somewhat slowed down, and after the "Two Sessions," attention will refocus on policy lines as expectations materialize. The 2025 "Two Sessions" will focus on statements regarding expanding domestic demand, new quality productivity, and stabilizing the real estate and stock markets. First, expanding domestic demand is the primary focus of this year's economic work, with boosting consumption prioritized; second, the General Secretary emphasized at the private enterprise symposium the need to "contribute more to promoting technological innovation, cultivating new quality productivity, and building a modern industrial system," with emerging industries and future industries such as artificial intelligence, low-altitude economy, and 6G remaining key support directions; third, the Central Political Bureau meeting on February 28 again mentioned "stabilizing the real estate and stock markets," and it is expected that this year's policies to stabilize the real estate market will likely be intensified 3) The short-term technology sector has increased its volatility following overseas market fluctuations, and concerns about crowded TMT transactions have intensified, which may trigger profit-taking in the short term. At the end of February, alongside a sharp decline in U.S. stocks, the Chinese equity market also experienced volatility, and the independence of this round of structural technology market has weakened. On one hand, the market has accumulated a considerable amount of floating profits, and the continuation of the short-term market relies on sustained breakthroughs in domestic and foreign industrial technologies; on the other hand, as March approaches, uncertainties such as U.S. tariff policies, Russia-Ukraine negotiations, and "Two Sessions" policies are yet to materialize, leading to a potential retreat of some trading funds.

4) From a medium to long-term perspective, the core of investment in the technology growth track lies in industrial trend changes, and "new quality bull" assets remain the main line. The core of investment in the technology growth track lies in industrial trend changes. Comparing the first phase of the "smartphone industry chain" from 2009-2015 to the second phase of the "Internet+" market, this round of AI+ investment is also shifting from overseas to the domestic AI industry chain's prosperity. The duration of the second phase market is often longer and covers a broader scope. As the domestic AI industry accelerates its catch-up with overseas counterparts, investment opportunities in A-shares in areas such as domestic computing power, robotics, and AI applications are expected to continue to expand.

Risk Warning: Macroeconomic fluctuations exceeding expectations; overseas liquidity risks, geopolitical risks, etc