Zhongtai: The peak of spring restlessness is approaching. Short-term attention should be focused on the recovery pulse of cyclical goods.

Zhongtai's research report states that in the short term, attention can be focused on the repair pulse of cyclical goods, while in the medium term, the focus should continue on industry alphas. (1) From the perspective of the calendar effect, February is the core time point of spring volatility, with historical high win rates and high odds for cyclical goods such as chemicals, steel, agriculture, forestry, animal husbandry, fisheries, and building materials. In the short term, opportunities for pulse-like repairs in these industries can be observed. (2) It should be noted that industries with a favorable historical performance in February will experience a significant decline in subsequent win rates and odds, with rankings of decline also at the forefront. This is because economic data and financial reports for March will be released, and cyclical industries will face the challenge of matching valuations with performance. February is the core time point of spring volatility. (1) In terms of monthly win rate frequency, the overall win rate for the entire A-share market in February is 76%, much higher than in other months; when looking at daily win rate frequency since 2000, there have been 12 years where the percentage of days with an upward trend in February exceeded 60%, with a median of 60%. (2) From the perspective of odds analysis, the overall odds in February are as high as 8.4. When looking at daily odds frequency, there have been multiple years with high odds in February. In February, styles typically shift from large-cap value to small-cap value and small-cap growth. (1) Market style performance can be measured using the win rate and odds of large-cap/value/growth indices at the monthly level. In terms of win rates, large-cap value outperforms in January during the spring volatility, while small-cap stocks perform well in February and the overall market performance in March falls. (2) In terms of odds, large-cap styles are relatively stable, with large-cap value outperforming in January; small-cap styles, especially small-cap growth, excel in February but quickly decline in March. The style shift is mainly the result of the combined effects of liquidity, policies, and economic expectations. (1) Macro liquidity shifts from tight to loose at the end of the year and the beginning of the year, with the Chinese New Year serving as a turning point for market style shifts. (2) From the perspective of policies and economic expectations, the central economic work conference at the end of the year and the "Two Sessions" in March often lead to positive expectations for new policy directions and market sentiment, boosting investor risk appetite. Therefore, in February, small-cap styles perform better. Which primary industries perform well in February? Concentrated in the cyclical sector. Cyclical industries have high win rates in February. (1) Comparing horizontally, cyclical industries such as machinery, agriculture, forestry, animal husbandry, fisheries, steel, chemicals, and building materials all have win rates exceeding 80% in February. (2) Within consumer goods, agriculture, forestry, animal husbandry, fisheries, and textiles have high win rates, while other industries have lower win rates. (3) Technology industries have a moderate win rate, with electronics, computers, defense, electrical equipment, and communications all having win rates between 75% and 80%. (4) Large financial and real estate industries have lower win rates and are ranked towards the bottom. Cyclical industries also have characteristics of high odds. (1) According to odds data, chemicals, steel, non-ferrous metals, and building materials have high win rates along with high odds, while machinery has a high win rate but moderate odds. (2) Within consumer goods, agriculture, forestry, animal husbandry, fisheries, and textiles still have high odds, while other industries have relatively lower odds. (3) Technology industries have a wide range of odds, with electronics and computers having higher odds, while communications, defense, and electrical equipment have lower odds. (4) Large financial and real estate industries also have lower odds in February. Overall, industries with high win rates and odds in February are concentrated in chemicals, steel, agriculture, forestry, animal husbandry, fisheries, textiles, and environmental protection.