Brokerage firms' spring strategy meetings reach consensus: external shocks do not alter the market's stable fundamentals

Securities Times Reporter Ma Jing

Currently, the global capital markets are in a stage where geopolitical tensions and AI (artificial intelligence) industry transformation are intertwined. On one hand, tensions in the Middle East have increased market risk premiums and disrupted global supply chains; on the other hand, disruptive innovations brought by AI continue to reshape market perceptions. Against this backdrop, the A-shares market remains a focus of brokerage firms’ spring strategy meetings.

On March 19, at CITIC Securities’ 2026 Spring Capital Market Forum, CITIC Securities’ Chief A-Share Strategist Qiu Xiang stated that geopolitical turmoil coincides with the index reaching a critical point, and spring is a period for rebuilding confidence and making index decisions. In the context of rising global energy costs and weakening financial conditions, low valuation and pricing power are the two most important factors. In terms of allocation, there is a firm focus on China’s manufacturing advantages and re-estimating the weighting of pricing power.

According to a review by Securities Times reporters, many brokerages believe that although the short-term market is affected by external disturbances, the medium- to long-term positive trend of Chinese assets remains unchanged.

Geopolitical conflicts do not alter the medium- to long-term trend of A-shares

Regarding the recent escalation of the Middle East situation, several brokerages believe that in the short term, risk appetite in the A-shares market will be affected, but its resilience will be evident, and the overall upward trend in the medium term will not change.

“From a medium- to long-term perspective, the reconstruction of the international order and the resonance with China’s industrial innovation trend are the core drivers of this round of A-share recovery and the revaluation of Chinese assets,” said Li Qiunsuo, Chief Domestic Strategy Analyst at China International Capital Corporation (CICC) Research Department. He believes that the short-term shocks caused by Middle East conflicts have not shaken the above medium-term logic. If changes in the geopolitical landscape accelerate the reconstruction of the international monetary order, it could even strengthen the logic for revaluing Chinese assets. Furthermore, against the background of macro paradigm shifts and ongoing reforms in the capital market system, the underlying environment of A-shares is undergoing structural improvements. The evolution of market operation mechanisms and investor structures makes it more conducive to forming a “steady progress” pattern, and the A-shares market is expected to continue its steady upward trend in the medium to long term.

“The shift in relative power among countries subtly influences asset pricing,” said Shenwan Hongyuan’s strategy team. They believe China is no longer a passive recipient of imported inflation and has demonstrated stronger proactive responses and external adaptation capabilities in geopolitical games, making it more capable of buffering the impact of sudden events.

Guotai Junan Securities’ Chief Strategist Liu Chenming analyzed from a liquidity perspective that before the deterioration of Middle East tensions, global non-U.S. markets, including A-shares, continued to hit record highs, reflecting abundant liquidity in non-U.S. markets. The probability of non-U.S. assets maintaining a bullish environment is relatively high.

After reviewing the historical impact of geopolitical situations on A-shares, Huatai Securities’ Fanzhengtao team believes that sudden military conflicts directly increase risk premiums and affect supply chains and costs. If conflicts do not escalate further, markets usually stabilize and rebound within 1 to 2 weeks, with an average maximum drawdown recovery time of about 20 days. However, they also emphasize that the trajectory of the US-Israel-Iran military conflicts is difficult to predict, and advise mainly on risk management and avoiding unilateral bets.

Halo trading and China manufacturing revaluation resonate

Alongside geopolitical risks, the AI industry is accelerating. Currently, market perceptions of AI technology are shifting from optimistic enthusiasm to rational assessment, with increasing divergence. Li Qiunsuo believes that the creative destruction caused by AI has a relatively limited impact on the overall stock market value but will lead to significant internal structural adjustments, with some individual stocks experiencing increased volatility. Therefore, sectors with lower AI substitutability are still expected to benefit temporarily.

In terms of market performance, Halo (asset-heavy, low淘汰率) trading is gradually heating up, with notable performance in sectors such as oil and petrochemicals, coal, basic chemicals, non-ferrous metals, and utilities.

Li Qiunsuo states that the investment logic is shifting from chasing growth to focusing on certainty and scarcity. In addition to traditional defensive assets, core growth stocks can also be included to balance defense and growth resilience. Outside the typical Halo sectors characterized by heavy assets, low淘汰率, and stable cash flows, infrastructure and upstream strategic resources that support AI technological innovation—such as AI “selling tools”—will also be main investment themes.

Qiu Xiang believes that the global trend of “code expansion and physical scarcity” is still emerging, but the focus of China and the US differs. “Halo is not something that can be simply overlaid onto A-shares.”

He suggests that in China’s market, the core trading logic involves resource and manufacturing companies with existing market share and competitive advantages actively managing future capital expenditure, transforming existing advantages into increased pricing power and profit margin recovery, thereby initiating a process of free cash flow expansion after a period of high capital expenditure with low returns.

“Assets with Halo characteristics that overseas investors are eager to find may have better substitutes in China. ‘Productivity equals wealth’ is becoming a reality,” said Mu Yiling, Chief Strategist and Executive Deputy Director at Guojin Securities. He notes that the valuation premium of overseas giants mainly comes from intangible assets like software and services, which are also the areas most feared to be disrupted by AI. China’s manufacturing industry, with its more tangible physical attributes, will benefit from this.

Fundamentals verification becomes key to future performance

Regarding the rhythm of the market’s future performance, different brokerages have varying views. CITIC Securities believes that from an index perspective, valuation repair space is limited, and corporate earnings recovery will be key to the next phase of A-shares’ performance.

Huatai Securities suggests that as the strong post-Lunar New Year and Two Sessions calendar effects fade, upward breakthroughs in the market may require stronger fundamental validation from economic data and quarterly reports in late March and April. Under external uncertainties, the market may enter a period of volatility, but after short-term adjustments, some sectors may see upward potential. Open Source Securities’ Chief Strategist Wei Jixing also believes that by 2026, A-shares will shift to a “profit structure + capital structure” driven market.

In terms of industry allocation, based on various brokerages’ views, the three main themes are “upstream resources + advanced manufacturing + AI technology,” with non-ferrous metals and chemicals being common recommendations among many institutions. For example, CITIC Securities recommends focusing on China’s advantageous manufacturing sectors (chemicals, non-ferrous metals, electrical equipment, new energy), with price increases remaining a core trading cue, while increasing exposure to undervalued factors (insurance, securities, electricity).