Why did the consumer leaders surge? Will foreign capital increase in Chinese assets spread?

According to the Zhitong Finance APP, CMS released a strategic research report stating that the index showed a significant rebound this week, with a breakthrough rise led by consumer leaders. Consumption is expected to become the second main line beyond AI+ in 2025. The main reasons are: First, the export growth rate significantly declined in January-February, putting pressure on export expectations for 2025, thus increasing the importance of boosting consumption. Second, the growth rate of general fiscal expenditure in the government budget for 2025 is expected to increase significantly, which may enhance consumption growth. Third, the upcoming annual reports and first-quarter reports will confirm the upward turning point of free cash flow, with significant improvements in the consumption sector and the highest free cash flow yield. Fourth, in 2024, as expectations decrease, the valuation of the CSI 300 consumption sector is expected to fall back to around 20 times, offering a relatively high valuation cost-performance ratio. Fifth, foreign capital's preference for Chinese assets may gradually expand from technology stocks to the consumption sector since this year.

The main viewpoints of CMS are as follows:

This week, the A-share market performed well overall

The main reasons are (1) the consumer sector performed strongly, with the two sessions' policies mentioning "vigorously boosting consumption," enhancing consumer confidence; (2) expectations of interest rate cuts by the central bank; (3) Citigroup upgraded the rating of the Chinese stock market to overweight and downgraded the U.S. stock market to neutral; (4) continuous inflow of southbound funds, with Hong Kong stocks in the technology sector recovering strongly on Friday.

In February, Taiwan's electronic revenue generally improved, and automotive production and sales rebounded year-on-year

The growth rates of imports and exports in January-February both significantly slowed, with stable growth in exports of communications and automation equipment. The areas of improvement this week mainly include: 1) Prices of industrial metals and precious metals generally rose, with cobalt material prices in the new energy industry chain significantly recovering; 2) The electronics sector remains highly prosperous, with the year-on-year growth rate of global semiconductor sales expanding in January, and the revenue of Taiwanese electronic manufacturers generally improving year-on-year in February; 3) Improvements in automotive, passenger vehicles, and new energy vehicle production and sales. Future attention should be paid to the price rebound of certain resource products and improvement opportunities in some sectors driven by the "two new" policies, such as consumption, automotive, and consumer electronics.

Significant net inflow of financing, continuous net redemption of ETFs

In the first four trading days, the net inflow of financing funds totaled 16.99 billion yuan; 8.85 billion shares of newly established equity public funds, a decrease of 2.61 billion shares compared to the previous period; net redemption of ETFs, corresponding to a net outflow of 3.74 billion yuan. Net purchases of financing funds were made in electronics, non-ferrous metals, and power equipment; there were many subscriptions for information technology ETFs, while consumption ETFs saw significant redemptions. The scale of net reductions by important shareholders has decreased, while the planned reduction scale has increased.

Alibaba releases and open-sources the latest large model, gradually accelerating the open-source process

On March 6, Alibaba released and open-sourced the Tongyi Qianwen reasoning model QwQ-32B in the early morning. This is a model with 32 billion parameters, whose performance can rival that of DeepSeek-R1, which has 671 billion parameters (of which 37 billion are activated).

This week, the overall valuation level of A-shares has risen

The PE (TTM) of the Wind All A Index is 15.6, up 0.2 from last week, at the 53.9 percentile of historical valuation levels. Most index valuations rose this week, with beauty care, food and beverage, and defense military industry valuations leading the increase, while computer, real estate, and electronics valuations led the decline Risk Warning: Economic data is below expectations, overseas policies are tightening more than expected, and policy understanding is not comprehensive.