# Top 10 Brokerages Strategy: A-Shares Remain Range-Bound in the Short Term, Current Focus on "HALOPLUS" Strategy

CITIC Securities: Reassessing China’s Competitive Manufacturing Pricing Power

Currently, there are three key issues: First, the evolving Middle East geopolitical conflict is causing ongoing and severe disruptions to global supply chains. After a year and a half of a bull market in the A-shares index, it faces a critical juncture—what will drive continued upward movement? Second, global financial conditions are beginning to weaken; will market styles undergo significant changes? Third, disruptive innovations driven by AI and the rapid expansion of code are accelerating, impacting economic structures and asset allocation directions.

At the index level, valuation repair space remains limited. The key to sustaining the next phase of the A-share bull market is a rebound in corporate profit margins. The disruptions in global supply chains once again provide an opportunity to test China’s manufacturing pricing power. Style-wise, the Middle East conflict acts as a catalyst for style shifts this year. Under rising global costs and weakening financial conditions, low valuation and pricing power are the two most important factors. Industry trends show that code expansion and physical resource scarcity—reflected in China’s context as an increase in manufacturing pricing power—are strengthening this trend. Accelerating disruptive AI innovations and global energy supply chain disruptions further reinforce this. In terms of allocation, focus on China’s manufacturing pricing power reassessment (chemical, non-ferrous metals, electrical equipment, new energy), with price increases remaining the core trading theme, while increasing exposure to undervalued factors (insurance, securities, electricity).

Guotai Haitong: Stability Is the Foundation of China’s Stock Market

The world is round; China’s market indeed cannot be detached from energy price shocks, but it won’t be dragged down by a single risk narrative. The logic of China’s market/assets also has advantages and unique features. Stability is scarce, and China’s market has a lower risk premium. The growth logic offers a breakthrough in breaking global stagflation concerns, with a more diversified market. The Russia-Ukraine conflict and US-China tariff disputes show that after emotional peaks (without signs of cognitive correction), market direction depends on endogenous logic. Falling risk-free rates, reforms in China’s capital markets, and economic structural transformation are the fundamental drivers and pillars of China’s “transformation bull.”

Rising oil prices impact mid-sized industries by benefiting resource commodities and transmitting costs to manufacturing. Regarding industry comparisons, emerging technology remains the main theme—“waiting for the clouds to part to see the moon.” Financial stocks are well-positioned for both offense and defense, and value stocks will also have their spring. Recommended sectors include major financials (banks/non-banks), cyclical value (building materials, construction, chemicals, coal, non-ferrous metals), and technological manufacturing (electronics, communications, electrical equipment, machinery, aerospace, Hong Kong internet).

Huatai Securities: Managing Uncertainty Through Positioning and Stock Selection

Last week, A-shares experienced low-volume fluctuations. From market structure and capital behavior, overall risk appetite has cooled. Geopolitical risks and rising oil prices remain core market concerns. Looking ahead, macro-wise, short-term risks are not fully released; concerns about global stagflation are rising. Domestic liquidity remains ample, but the sustainability of improving import-export and inflation data needs verification. Micro-wise, fears of AI disruptive impacts persist. The upcoming earnings season, especially for high-growth sectors like grid equipment, optical fiber, and chemicals at cyclical turning points, will be key to validation.

Currently, macro and micro visibility is low. It is advisable for investors to reduce positions and respond flexibly. Focus on alpha opportunities within the power chain and essential consumer goods. Additionally, as valuation pressures gradually ease, hardware upstream of computing power chains with short-term catalysts can be accumulated on dips. Stock selection should emphasize valuation and dividends.

CMB International: Short-term Oil Price Rise Keeps A-shares Volatile

Geopolitical conflicts shift the market’s core contradiction toward supply security and strategic resources, with logic switching from risk aversion to re-inflation concerns. Rising oil prices reinforce inflation expectations, suppressing rate cuts and impacting most assets. The influence of oil prices on inflation is likely pulse-like, with a very low probability of triggering hyperinflation similar to the 1970s-80s. Regarding monetary policy, short-term inflation fears will hinder US rate cuts, likely delaying easing into the second half of the year. However, if conflicts ease, market risk appetite could quickly recover, keeping A-shares volatile.

Looking ahead, short-term geopolitical disturbances and rising nationalism support resource assets’ strategic value. Medium to long-term, policies against “involution,” synchronized demand from China and the US, and the return of the gold shadow anchor could accelerate PPI normalization. Focus on segments with sustained price increases, such as power equipment, crude oil, chemicals, precious metals, coal, and semiconductors.

CITIC Construction Investment: Middle East Tensions May Spur China’s Strategic Opportunities

The US-Iran conflict has entered a stalemate, causing sharp fluctuations in oil prices. China’s diversified oil imports, energy restructuring, and strategic petroleum reserves will provide buffers. However, under global risk appetite volatility and domestic liquidity constraints, A-shares may remain volatile in the short term. If the US-Iran conflict prolongs, three main impacts are possible: 1) upward pressure on oil prices and global inflation, complicating Fed rate cuts; 2) acceleration of the dollar-oil system loosening, with China potentially becoming a safe haven, benefiting RMB assets; 3) creating strategic opportunities for China, leveraging a “coal + new energy” dual energy base to ensure energy security and lead global energy transition.

Amidst disturbances and opportunities, a dual approach of “physical assets + certain growth” is recommended. On one hand, reassessment of physical assets like coal, coal chemicals, power grids, utilities, and petrochemicals remains valuable. On the other, sectors benefiting from electrification—renewable energy, electric vehicles, AI-driven supply chains, and power equipment—have clear growth prospects, supported by AI-driven price increases and power shortages.

Guojin Securities: “Stagflation” Not So Easy to Achieve

In the second week of the US-Iran conflict, markets began to price in stagflation expectations driven by sharp oil price increases. Despite concerns, the economy shows strong adaptive capacity, and prior to the conflict, the global economy was still recovering. Drawing from Russia-Ukraine experience, countries will focus more on energy independence. For China’s new energy and power equipment sectors, there may be “opportunities within crises.” Asset prices are racing ahead of fundamentals; in the near term, A-shares face valuation digestion, with limited downside at the index level but ongoing structural differentiation as the key to future market performance.

Stocks representing China’s resources and manufacturing—such as oil, shipping, copper, aluminum, rare earths, coal, and rubber—offer the best allocation value amid global turmoil. Second, Chinese manufacturing with global leadership or accelerated overseas expansion. Third, structural opportunities in consumption sectors less affected by rising oil prices, such as tourism, scenic spots, fermented flavor products, beer and other alcohols, pharmaceuticals, and medical aesthetics.

Industrial Securities: A-shares Likely to Become More “Dominant”

Currently, as the situation stabilizes, the sustained high oil prices’ impact on the economy and inflation, and the policy and asset price transmission, require ongoing attention. As tensions persist and oil prices strengthen, a potential “second TACO” (Technology + Overseas) scenario could trigger a market revaluation. The core market dynamics are shifting from “intensity escalation” to “negotiation and bargaining,” and from pricing based on inflation to assessing the impact of high oil prices on the economy and policies. Once these shifts are confirmed, and as the market’s negative reaction diminishes and domestic policy certainty increases, A-shares are expected to become more “self-reliant.” Two strategic directions are recommended: first, identify sectors whose prices can link with oil prices and benefit from rising energy costs; second, find sectors with resilient fundamentals less affected by oil price increases, with independent growth prospects.

Guotou Securities: “One-Sided” Approach Won’t Work

Regarding the US-Israel-Iran military conflict, global authoritative think tanks generally believe it will not become a prolonged conflict like Russia-Ukraine, but it’s unlikely to end within three months. Given the recent oil price volatility, we expect the A-share market to remain high and oscillate structurally between “inflation (rising prices)” and “TACO (tech + exports).” There is no clear dominance between “tech + exports” and resource commodities yet. Although “tech + exports” faces risks of a second inflationary shock leading to a hard landing, current price fluctuations are within a fundamental framework. It’s unwise to bet heavily on one side or to switch repeatedly; a balanced portfolio management approach is key. The main focus should be on: resource commodities (non-ferrous metals, cyclical chemicals, AI applications, power equipment, export machinery like wind turbines and construction machinery), with medium-term emphasis on “rebalancing”—rebalancing between old and new industries, AI downstream, export orientation, and resource commodities’ return to their commodity nature with reduced financial attributes.

Caitong Securities: Emphasize “HALO PLUS” Strategy Now

Historical experience shows that whether during the 20th-century oil crises, Gulf War, or Iraq War, escalation in Middle East conflicts often first pushes up oil prices, which then transmits through energy and transportation costs to inflation, disrupting global asset pricing. Currently, US inflation is sticky, and market expectations for Fed rate cuts are fragile. If the Strait of Hormuz risks persist and oil prices stay high, US re-inflation pressures could intensify, constraining the Fed’s easing space and temporarily depressing risk appetite, impacting global liquidity and equities.

In this environment, adopting a “HALO PLUS” strategy—defensive HALO cash flow + offensive low-valuation growth—is advisable. On the defensive side, prioritize sectors with high cash flow, heavy assets, high barriers, and low correlation with TMT, such as coal, petrochemicals, construction, to hedge macro volatility. On the offensive side, focus on sectors with low trading congestion and low interest rate sensitivity, such as low-altitude economy, commercial aerospace, batteries, silicon materials, inverters, and wind power components. If catalysts emerge or risk appetite recovers, these sectors could see strong capital inflows.

Bank of China International: The Third Energy Paradigm Shift

In the long term, the recent rise in oil prices driven by geopolitical tensions and secondary effects may rival previous global oil crises, potentially accelerating the shift from “fossil fuel dominance” to “renewable energy sovereignty.” China has already begun to assume a leading role in this historic transition. In the short term, the current geopolitical tensions and soaring oil prices are likely within manageable impact ranges for the A-shares index. The view remains that the market will shift into a structural slow bull phase, with short-term turbulence.

In industry allocation, focus on expanding core themes and key sub-segments with “performance clustering.” First, due to liquidity constraints, the valuation of tech sectors may face short-term shocks, but the trend from tech TMT to advanced manufacturing (electricity, new energy vehicles) is underway. Second, the change in Middle East tensions catalyzes energy and chemical sectors’ upward movement. Coupled with macro re-inflation, the performance-driven rally in cyclicals (metals) is expected to spread to chemicals, with industrial commodities (non-ferrous metals) also gaining momentum. Lastly, AI industry trends are less affected by Middle East tensions; core segments with strong earnings growth will continue to be driven by “performance clustering,” ensuring sustained market performance.