Zhongtai: How much does the first quarter report of the technology sector contribute to the market?

Zhongtai has issued a research report stating that in the short term, the market is shaking towards the upper boundary, and defensive assets such as commodities can be used as a bottom position configuration to hedge against market volatility. In terms of technology, attention should be focused on sectors with strong fund inflows such as optical modules, power equipment, and innovative drugs. Sectors with high performance certainty can be bought on dips. It is recommended to strategically position in sectors such as new energy, chemical equipment, global arms expansion, Middle East reconstruction, and pipeline construction to capture opportunities for recovery after geopolitical risks ease. Zhongtai's main points are as follows: There are substantial signs of easing in the US-Iran situation, leading to a preference for global asset risk appetite This week, the A-share market has been showing an upward trend, with the ChiNext Index and the BSE 50 performing well. The easing of tensions between the US and Iran is the core factor driving the market up this week. Both the US and Iran have "principally agreed" to extend the temporary ceasefire agreement, which is set to expire on April 22, in order to gain more diplomatic time. In terms of the domestic economy, the first quarter data exceeding expectations, combined with a rise in AI computing power prices resonated in an upward trend. This week, international crude oil prices fluctuated downward, while precious metal prices rose. The easing of geopolitical risks significantly improved global market risk appetite, with foreign capital risk preferences driving A-share sentiment recovery. The sustainability of this rebound: Focus on the US-China Summit and the AI inflation narrative The core risks facing the market currently come from two aspects: one is the development path of the US-Iran conflict, and the other is the anticipated changes in the US-China summit. Leading indicators of the US-China summit include high-level US officials such as Blinken and Rubio visiting China or beginning close contact, although such signals have not been seen yet, meaning that there is still considerable uncertainty about the prospects for the summit. The bank maintains its assessment that the market is currently not in a major upward trend and remains in a volatile range. Due to the easing of tensions between the US and Iran influencing oil prices significantly lower on Friday, this may lead to a short-term upward trend in the market next week, but it is important to be cautious as the situation may still have risks of disturbance. Sectors with high short-term trading congestion and large rebounds may be suitable for profit-taking. In terms of strategic allocation, it is recommended to reverse positions in the petrochemical, free cash flow, and dividend sectors to counter market volatility. Looking ahead to late April, the market will enter a period of pressure testing, requiring close attention to global market performance. If the financial markets converge towards physical oil shortages and resulting inflation, economic pressures, oil prices may reverse, driving a global retreat in risk assets including technology. In this scenario, it may pressure Trump to further compromise with Iran, leading Iran to fully control the Strait of Hormuz, causing significant impact on the US dollar. In this situation, gold, Hong Kong stocks, and Renminbi assets may become the main theme, with safe assets significantly outperforming risk assets. In another scenario, the market narrative shifts from the US-Iran conflict to a desensitization of oil prices, gradually turning towards the AI industry prosperity narrative. If overall oil prices remain under control and global technology stocks such as NASDAQ still show strong resilience, then A-share market's technology sector bull market may continue. First quarter reports continue to be disclosed, what trends are worth monitoring? By 2025, the overall performance of A-shares shows characteristics of turning from weak to stable and gradually recovering, with a year-on-year growth of 4.09% in net profit attributable to mother. As of April 17, 2026, 2136 listed companies have disclosed their 2025 annual reports, with an overall disclosure rate of 38.84%. The performance of listed companies in 2025 demonstrates a trend of stable recovery, with a year-on-year growth of 1.33% in total revenue, an increase of 1.63 percentage points from the previous year, and growth rates returning to 2023 levels. In terms of profits, the net profit attributable to mother of listed companies grew by 4.09% year-on-year, a significant increase of 7.06 percentage points from the previous year, indicating that A-share profit growth has gradually emerged from the bottom range. From the distribution of sectors that have disclosed annual reports, the technology, high-end manufacturing, and pharmaceutical sectors in 2025 are leading in performance growth compared to other sectors, reflecting structural highlights driven by industrial upgrading and technological innovation. In the technology growth track, the net profit attributable to mother in the electronics sector grew by 35.36% year-on-year, while the computer sector grew by 17.61%, mainly benefiting from the continued vigorous development of the AI industry and the stimulation of consumer electronics demand by national subsidy policies. The power equipment sector maintained a high growth rate; in 2025, the net profit attributable to mother increased by 37.89% year-on-year, mainly benefiting from the continuous increase in the penetration rate of new energy vehicles and the accelerated construction of supporting facilities. The cyclical sector in 2025 showed a clear profit recovery feature, with some sub-sectors showing significantly faster profit growth than revenue growth. The non-ferrous metals sector continued its high growth momentum, also benefiting from the dual drive of the new energy industry and AI construction cycle. As of Friday, a total of 156 listed companies have disclosed their first quarter reports. The ChiNext Index has recently shown a significant overall increase, to some extent influenced by positive first quarter performance results. From the disclosed data, the performance of the power equipment and AI industry chain sectors stand out, becoming the core drivers pushing the ChiNext Index upwards. Currently, it is advisable to pay attention to the quarterly reports and subsequent performance guidance of the new energy and AI sectors. Risk warning: Global liquidity tightening exceeding expectations, complexity of market games exceeding expectations, and complexity of policy changes exceeding expectations.