Brokerage Morning Meeting Highlights | April Industry Allocation Recommendations Focusing on Two Main Themes

The market underwent a volatile adjustment yesterday, with the ChiNext Index leading the decline. The total turnover of the Shanghai and Shenzhen stock markets was 1.22 trillion yuan for the whole day, an increase of 102.6 billion yuan from the previous trading day. In terms of sectors, precious metals, computing power, banks, and new stocks were among the top gainers, while photovoltaic, Hainan, breeding, and tourism sectors were among the top losers. At the close of trading yesterday, the Shanghai Composite Index fell by 0.46%, the Shenzhen Component Index fell by 0.97%, and the ChiNext Index fell by 1.15%. At today's brokerage morning meeting, Galaxy Securities stated that the characteristics of short-term economic structural recovery are still evident, with industries related to new quality productivity performing better. China Securities Co., Ltd. proposed industry allocation recommendations for April around two main themes. Galaxy Securities: The characteristics of short-term economic structural recovery are still evident, and industries related to new quality productivity perform better. In March, the manufacturing, construction, and service industries all had PMI figures in the expansion zone, demonstrating the resilience of China's economy. The push for new industries and exports to continue expanding production, with high growth in new order index due to expanded government spending in the first quarter, continuous implementation of policies for new industries, and increased external demand. However, the persistently low price index, especially the ex-factory price, has suppressed enterprise profits and indicates the presence of "internal competition" among enterprises. The deeper reasons may still be the enterprises' cautious outlook on the sustainability of the current demand, especially given potential future pressures on exports and the lack of temporary improvement in consumer spending. Reforms to address internal competition and internal demand in policies still require patience. On the 29th, relevant officials of the State-owned Assets Supervision and Administration Commission of the State Council stated at the China Electric Vehicle Hundred People Forum that efforts would be made to address issues such as disorderly competition in the automobile industry. Some demand policies still need further implementation, such as childcare subsidies, and urban village transformation plans. In terms of investment, the characteristics of short-term economic structural recovery are still evident, and industries related to new quality productivity perform better. Galaxy Securities still favors two directions: consumer and machinery sectors clearly supported by fiscal policies; and technology growth driven by risk appetite and improved liquidity. China Securities Co., Ltd.: Industry allocation recommendations for April focus on two main themes. China Securities Co., Ltd. stated that looking forward to April, the market is expected to remain volatile, with a focus on gradually expanding in the direction of good first-quarter reports. On a macro level, 1) Trump's tariffs are expected to take effect on April 2nd, requiring a reassessment of specific industry policies and their actual impact on the Chinese economy; 2) First-quarter macroeconomic data will gradually be revealed, with improvements in the economy starting from January-February data, although not significant, and industrial enterprise profits still under pressure. 3) The Central Political Bureau meeting at the end of the month is expected to continue to introduce policies to support the economy in the later period, especially after Trump's tariffs take effect, which may cause some fluctuations in China's exports. Industry allocation recommendations for April focus on two main themes, one being directions with good first-quarter reports, including electronics, AI, wind power, engineering machinery, non-ferrous metals, military industry, innovative medicine, etc., and the other considering overseas uncertainties and performance risks in the middle and late April, recommending defensive sectors such as high dividend stocks in the banking, home appliance, telecommunications, and electricity sectors. In the medium to long term, there is continuous optimism for undervalued performance directions such as HS Technology and HS Consumption. In addition, if the technology industry makes further breakthroughs, it may bring about a new round of significant investment opportunities in industry allocation. This article is a reprint from "Cai Lianshe", GMTEight editor: Jiang Yuanhua.