Top 10 Brokerage Strategies: Market adjustments may provide new opportunities for layout! Is refining the petrochemical sector the next hot spot?

CITIC Securities: Moving from Virtual to Real, Emphasizing the Spread of Price Increase Clues

The current round of ETF redemption wave is basically over, and the large-cap stocks are entering a repair window. Style rotation on a macro cycle level is happening, shifting from small caps to large caps, and from thematic to quality. Wosh’s nomination as Federal Reserve Chair represents the policy intention of “America’s move from virtual to real.” Whether or not this idea is successfully implemented, it will have a significant impact on the style of global risk assets. From the perspective of A-shares, shifting from resource-driven to cycle-driven, the full development of price increase clues may span the first quarter. The underlying commonality of cyclical sectors is large profit margin repair space, driven by China’s policy shift from expanding scale to improving quality and efficiency.

The fundamental investment approach should still revolve around reassessing China’s industries with competitive advantages in global pricing power. The bottom-up allocation ideas for chemicals, non-ferrous metals, electrical equipment, new energy remain valid, but increased caution is needed for precious metals sectors with more obvious speculative attributes. The recovery of consumer and real estate chains should occur in spring, which is not opposed to manufacturing and technology sectors.

Huatai Securities: Shifting to Win Rate Thinking

Last week, A-shares fluctuated at high levels, with value stocks outperforming. Looking ahead, there are many constraints on the rise in risk appetite before the holiday: externally, Kevin Wosh’s potential appointment as Fed Chair, given his previous reputation as a hawk on inflation, has caused the dollar and US bond yields to rise, pressuring risk assets; internally, as the market expands into low-valuation sectors like liquor, the speed of rotation increases, making it harder to capture excess returns, with technical adjustments and holiday profit-taking increasing. However, the core driver of this spring market has not fundamentally changed. The probability of success increased after the Spring Festival until the Two Sessions, providing a new window for deployment if the market corrects.

In the short term, the market is likely to remain volatile, with the spring rally continuing. It is recommended to reduce slope expectations and shift to win rate thinking, continuing to rotate into high-quality, low-position sectors: 1) From a fundamental perspective, sectors with high prosperity and some sustainability, signs of bottoming or improvement, such as power equipment, storage, semiconductor equipment, chemicals, engineering machinery, agriculture, and beauty; 2) From a thematic perspective, focus on AI applications, humanoid robots, and other catalysts from early February to Spring Festival; 3) From a style rotation perspective, moderately increase allocations in non-bank financials and cyclical dividends, and consider low-entry points for consumer and travel chains benefiting from the long holiday.

Shenwan Hongyuan: Starting a Range-bound Market

After the spring market ends, before the next upward phase begins, a consolidation phase is likely. The core of this phase is waiting for clearer clues on the next stage of industry trends, digesting earnings to ease valuation and the contradiction between valuation and chip structure. There will be a new upward phase in the second half of 2026, driven by cyclical improvement, new technological industry trends, residents shifting assets into equities, and China’s influence becoming more prominent. The strong structural market in 2025 will be led by cyclical alpha and AI computing power, with the second phase of gains possibly extending to advanced manufacturing and outbound chains’ turnaround. The AI industry chain may gradually shift toward application end. Therefore, medium- to long-term, optimistic about prosperity tech and cyclical alpha. Prosperity tech focuses on overseas computing power chains, AI applications (the industry trend of AI application entering a realization phase, Hong Kong internet stocks may re-emerge as leaders, with Hong Kong stocks outperforming A-shares), semiconductors, energy storage, robotics, and commercial aerospace. Cyclical alpha focuses on non-ferrous metals and basic chemicals.

Galaxy Securities: Sector Rotation Before the Holiday May Be the Main Theme

In January, manufacturing PMI fell below the boom-bust line again, reflecting ongoing insufficient effective demand. Wosh’s nomination as Fed Chair caused significant external market shocks. But liquidity support for A-shares continues, and with the approaching Spring Festival holiday, market activity remains high. In the short term, the market is likely to remain structured and volatile, with frequent style shifts, focusing on sectors with strong fundamentals.

Sector rotation is expected to remain the main theme before the Spring Festival, with attention to structural opportunities within rotation. Main theme one: technological innovation. In the short term, focus on rotation and catch-up opportunities among sub-sectors. Previously strong themes like commercial aerospace and AI applications are catalyzed by industry trends, but internal differentiation may increase. Main theme two: manufacturing and resource sectors with clear profit recovery paths. The volatility of non-ferrous metals has increased, and earnings forecasts support strong fundamentals, so look for short-term correction opportunities. Auxiliary theme one: consumer goods benefiting from policies like old-for-new, with renewed policy support for services, creating opportunities for consumer sectors aligned with expanding domestic demand. Auxiliary theme two: outbound trend driving corporate profit expansion.

Guojin Securities: From Monetary Aspects to Industry Narratives

The reasons for the recent correction in non-ferrous metals commodities and stocks are due to the reversal of the narrative “dollar credit loosening + liquidity easing expectations” caused by the appointment of Fed Chair candidates, after metals prices hit record highs and profits were taken. Copper and aluminum, which have industry demand, are better than gold, which only acts as a dollar hedge. “Dollar credit decline” is not the only support for the physical asset system built over the long term. When this narrative faces a phased challenge, it enters an industry pricing period.

Recommendations: First, shift the valuation logic of physical assets from liquidity and dollar credit to low industry inventories and demand stabilization. The “oil dollar” system will be reinforced, with a recommended order of crude oil and shipping, copper, aluminum, tin, and lithium. Second, bottom reversal stocks in manufacturing with global comparative advantages and confirmed cyclical bottoms, such as chemicals (petrochemicals, dyeing, coal chemicals, pesticides, polyurethane, titanium dioxide). Third, the “capital inflow + easing of domestic residents’ balance sheet shrinkage + inbound trend” as a channel for consumption recovery, including duty-free, hotels, and food & beverages. Fourth, benefiting from market expansion and bottoming long-term asset returns, non-bank financials.

BOC International: Low-level sector rotation but no major shift yet

After the previous acceleration, the market is reassessing the weight of the “trend” and “volatility” in the non-ferrous sector. In 2026, the non-ferrous industry will still benefit from the resonance of financial attributes and industry trends, with short-term corrections potentially offering better long- and medium-term deployment opportunities. Sector rotation is accelerating but has not yet reached a major shift point. The current “low-weight” stocks and the situation in 2014’s “Stage 4” with incremental funds differ in many ways, such as the lack of a strong brokerage-led rally, the absence of “Belt and Road” concepts capable of driving the index higher, and most importantly, the lack of the scale of incremental funds seen at the end of 2014. Previously pressured low-position sectors are finally entering a phase of absolute gains. From the perspectives of valuation and chip structure, these sectors are now in a window attracting “left-side and long-term funds” to deploy.

Everbright Securities: Focus on Earnings, Hold Stocks for the Holiday

This spring market remains promising. In the coming months, whether in policy or fundamentals, there may still be positive news. However, the market may not be smooth sailing; before the Spring Festival, a brief correction phase is likely. After the previous oscillation, a phased adjustment often occurs. Still, it is recommended to hold stocks through the holiday. After the festival, trading activity is expected to pick up again, and combined with high-frequency data and industry hot topics, a new rally may follow.

Currently, focus on two main lines: growth and pro-cyclicals. Growth benefits from sustained industry heat and increased risk appetite during the spring market; pro-cyclicals benefit mainly from strong commodity prices and policy support. Additionally, industries with good annual report performance are worth attention. Under the five-dimensional industry comparison framework, top sectors include electronics, electrical equipment, machinery, non-ferrous metals, and communications & computing, mostly aligned with growth and independent prosperity.

Western Securities: Heavy Refining & Chemicals, the Next Non-Ferrous

Confidently bullish on non-ferrous metals, liquor, and heavy refining, not solely based on micro-industry changes but on capturing the core underlying drivers: abundant dollar liquidity will become even more excessive. During the Kondratiev depression, the main currency credit cracks expanded, leading to a super cycle in commodities, with gold, industrial metals, oil, and agricultural products rising sequentially.

Following the surge in gold and industrial metals, global oil prices are expected to rise significantly in 2026, driving a revaluation of chemical prices. Heavy refining will replicate the upward path of non-ferrous metals, and due to its lower position and later start, its future upside may be even larger. The rise in non-ferrous metals is just the first half of the super cycle; in the more abundant liquidity phase, heavy refining will absorb spillover momentum from precious and industrial metals. Chemicals may become the next non-ferrous sector. Buying heavy refining now is akin to last year’s investment in non-ferrous. In 2026, Fed QE will become a “game changer”: the flood of dollar liquidity from QE will intensify, strengthening the super cycle of commodities; it will also open up policy space for China’s central bank to QE debt, returning China to the Kondratiev depression phase, a prosperity period for catch-up nations. The A-share market will likely reach new highs, with sector allocations favoring non-ferrous, new consumption, and high-end manufacturing.

Zhongtai Securities: Mid-term Structural Uptrend in Commodities Unchanged

The core logic supporting the recent rise in commodities, including geopolitical games, the rigid demand from AI + industrial upgrades, and structural supply-demand gaps, has not fundamentally changed. As short-term panic subsides and capital congestion eases to a reasonable level, sectors will revert to fundamentals-driven growth, maintaining a mid-term upward trend. A new upward phase is expected in the second half of 2026, driven by cyclical fundamental improvement, new technological industry trends, residents shifting assets into equities, and China’s increasing influence. The strong structural market in 2025 will be led by cyclical alpha and AI computing power, with the second wave of gains possibly extending to advanced manufacturing and outbound chains’ turnaround. The AI industry chain may gradually shift toward application sectors. Therefore, medium- to long-term, optimistic about prosperity tech and cyclical alpha. Prosperity tech focuses on overseas computing power chains, AI applications (the industry trend of AI application realization, Hong Kong internet stocks may re-emerge as leaders, outperforming A-shares), semiconductors, energy storage, robotics, and commercial aerospace. Cyclical alpha focuses on non-ferrous metals and basic chemicals.

Zheshang Securities: Continue to Be Bullish, Moderate Structural Adjustment

Last week, the market continued to “cool down,” with obvious style shifts. Looking ahead, after three weeks of strong performance, the technology growth sector is entering a high-level consolidation following the rhythm of the large-cap index; meanwhile, the most robust non-ferrous resource sector has experienced two-way fluctuations amid broad resource price swings globally. The spring offensive launched in mid-December last year and the continuous rise of technology growth and resource sectors have come to an end. The market is likely to enter a relatively strong oscillation before the Year of the Horse Spring Festival. In terms of allocation, based on the judgment of “style switching with growth taking a rest, strategic optimism for short-term oscillation,” it is advised to maintain mid-term positions despite short-term volatility, expecting a “systematic slow bull,” but with moderate control over portfolio flexibility.

In terms of industries, focus on sectors with limited downside and significant upside potential, and upcoming timing for opportunities, such as securities firms, banks (some above the annual line), and social services with good technical patterns and relatively low positions. Additionally, Hong Kong stocks have gained less in this round of rise; if suitable retracement opportunities arise, they can be further strengthened.