Industrial: Geopolitical situation has limited impact on A-shares, focus on technology and resource sectors during the Two Sessions.

Industrial released a research report stating that since February, the geopolitical situation between the US and Iran has become a key variable affecting the performance of global asset classes. With the breakdown of the third round of Iran nuclear negotiations on February 26 and the US-Israel joint airstrikes on February 28, followed by Iran's retaliation, the US-Iran situation has shifted from diplomatic confrontation to direct military conflict, further raising concerns for investors about the future trend of equity assets. Industrial believes that, in the baseline scenario, the impact of this geopolitical event on equity assets is mainly reflected in risk appetite and structure, with limited substantive impact on the fundamentals of A-shares. In the short term, the escalation of US-Iran tensions will influence the risk appetite of global equity assets and further strengthen the hedging and strategic value of resources like oil and precious metals at a structural level. As subsequent geopolitical shocks ease, combined with China entering a period of dense policy deployment during the Two Sessions, risk appetite is expected to recover and market sentiment will return to a status of "self-reliance." Structurally, during the Two Sessions, as the overall annual total and industry policy deployments become clearer, small-cap stocks are likely to benefit from the boost in risk appetite, while technology and resources will remain the focus of the market. The decisions made during the Two Sessions regarding this year's growth targets, total policy adjustments, and investment side and industrial level deployment will provide more clues for trading in technology and resources sectors. Key viewpoints from Industrial are as follows: 1. The impact of the US-Iran geopolitical situation and the upcoming calendar effects to watch out for 2. How to understand the recent market style diversification 3. Recommendations for trading in March-April focusing on price hikes 4. Short-term outlook focusing on the resources and technology sectors In summary, the report suggests that investors should pay attention to price hikes and policy directions, particularly in the resources and technology sectors, taking into consideration the evolving geopolitical situation and upcoming policy deployments.