China Securities Co., Ltd.: Three clues for A-share investment at the end of the year and the beginning of the year.

China Securities Co., Ltd. released a research report stating that the short-term volatility of A-shares is mainly affected by external factors such as concerns about the AI bubble in the US stock market and interest rate hikes by the Bank of Japan. Currently, the stock prices of core AI companies in the US have stabilized, and the impact of the Bank of Japan's interest rate hike is limited. A-shares are expected to resonate and rise along with global stock markets. As the year-end approaches, the focus of A-share industry allocation is on three key themes: dividend value, positioning in prosperity, and thematic hotspots. The industries of focus include non-ferrous metals (silver, copper, tin, tungsten), high-dividend Hong Kong stocks, non-banking financial institutions, AI (liquid cooling, optical communications), new energy (energy storage, solid-state batteries), innovative pharmaceuticals, and banks. The key themes of focus are Hainan (duty-free), nuclear power, and ice and snow tourism. China Securities Co., Ltd.'s main points are as follows: Recent market characteristics: Continuation of narrow-range volatility, still affected by external disturbances The firm believes that the market is still in a pattern of narrow-range fluctuations. With the ongoing interest rate cuts by the Federal Reserve in December and the policy implementation of the Central Economic Work Conference, the market's midterm policy and liquidity expectations have become clear. Short-term A-share volatility is mainly influenced by external factors, such as concerns about the AI bubble in the US stock market and interest rate hikes by the Bank of Japan. Currently, the stock prices of core AI companies in the US have stabilized, and the subsequent impact of the Bank of Japan's interest rate hike is limited. A-shares are expected to resonate and rise along with global stock markets. From the perspective of market sentiment, the investor sentiment index has recently dropped below 70, at the lower end of the range in this bull market. This also reflects that the current investor pessimism has been adequately responded to. Considering the still high leverage fund sentiment, it is expected that investor sentiment will also slightly rebound, driving market volatility to rise. Three key themes for A-share industry allocation As the year-end approaches, the firm's industry allocation strategy mainly focuses on three main themes: 1) Dividend value: According to the seasonal effect at the end of the year and the preference of investors for profit-taking, coupled with the expectation of "red envelope" inflow of risk capital, there is a demand for dividend allocation. Dividend value and high dividend styles have a higher success rate. Key focus areas include high-dividend Hong Kong stocks, non-banking financial institutions, and banks. 2) Positioning in prosperity: Positioning ahead of the spring boom next year (or early positioning for the year-end market), and positioning in high-growth industries when adjustments occur. Key focus industries with high prosperity include non-ferrous metals (silver, copper, tin, tungsten), AI (liquid cooling, optical communications), new energy (energy storage, solid-state batteries), innovative pharmaceuticals, etc. 3) Thematic hotspots: The end of the year is also a period of active thematic hotspots, with policy and technology themes expected to perform well. Currently, key focuses are on Hainan (duty-free), nuclear power, and ice and snow tourism. Industries of focus include non-ferrous metals (silver, copper, tin, tungsten), high-dividend Hong Kong stocks, non-banking financial institutions, AI (liquid cooling, optical communications), new energy (energy storage, solid-state batteries), innovative pharmaceuticals, and banks. The key themes of focus are Hainan (duty-free), nuclear power, and ice and snow tourism.