Multiple sectors present structural opportunities: Public fund research on the new narrative of the A-share market

Author: Wei Zhaoyu

On the first trading day after the Spring Festival holiday (February 24), the A-shares market strengthened, with multiple sectors experiencing hot trading. Several public fund institutions recently released investment outlooks stating that, against the backdrop of a moderate economic recovery and accelerated industrial upgrading, sectors such as artificial intelligence, semiconductors, and consumer goods present structural opportunities.

How to balance rapid technological development with macroeconomic cyclical fluctuations? How to precisely capture those “future assets” that can transcend cycles within China’s high-quality economic development? In response to these questions, many public fund institutions have provided forward-looking assessments.

Expectations of Continued Inflow of Incremental Funds

Geng Rui, Chief Equity Strategist at Dacheng Fund, believes that from the perspective of corporate performance, the contraction of manufacturing investment and capital expenditure by A-share listed companies has driven supply and demand rebalancing, supporting performance. Fiscal expansion in overseas economies, combined with global trade restructuring and re-industrialization, will bring clear external demand beta.

Regarding micro liquidity, Geng Rui states that currently, A-shares are in an environment of expanding liquidity and increased risk appetite. Future focus should be on fiscal and monetary policies. Recently, A-shares have continued to see net capital inflows, mainly from insurance funds and financing, with high-net-worth and high-risk appetite individual investors dominating. It is expected that by 2026, there will still be considerable incremental capital entering the market.

In the medium to long term, Hu Song, Fund Manager at Guotai Fund, believes that with the implementation of medium- and long-term plans and continued policy encouragement for long-term capital to enter the market, the market still has upward momentum. The current decline in risk-free rates, accelerated reforms in the capital market, and optimistic macro expectations provide strong support for the market.

Both A-shares and Hong Kong stocks have room to rise

Huaxia Fund states that the medium-term positive trend in the market is expected to continue through deepening and balancing. From a macro perspective, medium- and long-term plans provide ample policy space, while the easing of external uncertainties and the retreat of overseas risks create a more friendly external environment. Market driving forces are shifting from simple valuation repair to profit and structural rebalancing.

HFT Fund indicates that the market is likely to maintain a volatile upward trend, with the expansion of the pro-cyclical price increases and AI rally remaining the main themes. 2026 marks the beginning of the “14th Five-Year Plan,” and expectations for policies stabilizing growth are gradually rising. Meanwhile, financing balances are expected to flow back post-Spring Festival, coupled with recent risk appetite improvements, suggesting ample market liquidity. Focused industry trend-based allocations are recommended. During the Spring Festival, oil prices and resource prices rose across the board, so cyclical investment opportunities related to PPI recovery are also worth attention.

Lu Jiaming, Fund Manager at China Europe Fund, believes that considering China’s economic resilience has been recognized by the market, and foreign capital still underweights Chinese assets, Hong Kong stocks remain a global valuation bargain, and the CSI 300 Index is at a mid-to-low level. Although the expected high number of IPOs in Hong Kong this year may impact the market, mainly through capital flow diversion and reduced risk appetite, the market performance in Q4 2025 has already partially reflected this effect. Based on these judgments, the Hang Seng Index still has some upward potential this year.

Widespread Optimism for the AI Sector

AI is a key focus in the strategy meetings of various public fund institutions. Du Cong, Fund Manager at Dacheng Fund, states that he remains optimistic about the AI industry chain performance in the first half of 2026. On one hand, continuous breakthroughs in AI model capabilities boost market confidence. On the other hand, unlike the previous pattern dominated by computing power and weak application, in 2025, pure AI-native applications like OpenAI saw significant growth in ARR (Annual Recurring Revenue), and giants like Google are also gaining substantial incremental revenue through AI empowerment of traditional businesses. Industry giants are accelerating their AI ecosystem transformation, with demand for computing power expected to explode, and under the demonstration effect, other CSP (Cloud Service Providers) will also continue to increase their computing investments.

Regarding the semiconductor industry, Huaxia Fund believes that driven by the continuous development of AI large models, the pace of change in the semiconductor sector is rapid. From hardware chips and semiconductors to software large models and algorithms, signs of this trend are evident. Focus should be on the growth performance of individual semiconductor stocks and the advancement of industry trends.

For the consumer sector, Wu Yue, Director of Consumer Research at Jiashi Fund, states that the consumer industry has entered a critical turning point. With the release of residents’ wealth effects and the upgrading of high-end and service consumption demand, 2026 is expected to see renewed investment opportunities in consumption. When market sentiment is low, it may be an ideal window for布局.

Additionally, cyclical industries have become a frequently mentioned hot topic among many public fund institutions recently. CITIC Prudential Fund believes that the cyclical investment narrative in 2026 is undergoing a fundamental shift: policy-driven “anti-involution” and the reshaping of the global industrial chain are jointly elevating a number of Chinese manufacturing leaders from “price takers” to “value setters” with pricing power.

HFT Fund states that the spring market rally is underway, and it is advisable to consider low-level布局. Specific allocation ideas include: first, the technology main line, including semiconductors, computing power, gaming, robotics, etc., where new productive forces remain a policy focus; second, industries related to external demand, such as chemicals, non-ferrous metals, and machinery.

(Edited by: Xu Nannan)

Keywords: