BlackRock: DeepSeek is on fire, A shares enter the spring offensive?

On February 12th, Blackrock published an article stating that as global capital markets are still digesting geopolitical games and interest rate uncertainties, the emergence of DeepSeek has not only allowed domestic large models to stand on the world stage but also ignited the AI market. At the same time, the "Two Sessions" is set to take place in early March - will the A-share market further heat up? Which sectors should investors pay attention to? Shenyu Fei, Chief Equity Investment Officer at Blackrock Fund, stated that looking back at the market in January, the market as a whole experienced a "late spring chill", with broad-base indices first suppressing and then rising, and growth styles showing signs of recovery after experiencing a previous oversold period. By industry, non-ferrous metals, banks, automobiles, machinery and household appliances performed well; while non-financials, financials, retail, construction and real estate performed weaker. Looking ahead to February, historical experience suggests that the calendar effect of the "Two Sessions" is expected to stimulate a spring offensive market. After external risks gradually become clearer, there is also an expectation for further market warming after the "late spring chill" and continued research into the Hong Kong stock market. Focus will be on (1) investment opportunities in artificial intelligence in infrastructure construction and innovative applications; (2) investment opportunities generated by the "Two Sessions" themes around high-quality development; (3) investment opportunities focusing on the continuous advancement of large-scale equipment renewal and durable consumer goods renewal. In terms of risk warnings, Shenyu Fei warned about international macroeconomic turbulence and policies falling short of expectations. Bikai, manager of Blackrock Excellence Long Range Hybrid Fund, stated that 2025 started off with a "late spring chill", with currency fluctuations, market adjustments, and shifts in market styles, with structural trends in areas such as the application of artificial intelligence and Siasun Robot & Automation. The market rhythm and characteristics are similar to those in early 2024. At the current market position, there is a relatively positive view. Looking ahead to the whole of 2025, if policies continue to be enforced, the market may transition from a liquidity bull market phase to a fundamental structural bull market phase, although this process will take time and require continuous tracking of economic fundamentals and policy feedback. Bikai mentioned four main investment opportunities: (1) Improvement in domestic demand under policy stimulus, mainly including industries such as household appliances, food and beverages, textiles, internet, light manufacturing, real estate, and machinery. Opportunities with high success rates include investments related to consumer satisfaction and national consumer subsidies; while high-risk investments include opportunities related to the end of the downward cycle of real estate prices and the reversal of downward pressure on prices. (2) National security and technological advancement, mainly including industries such as electronics, communications, media, semiconductors, and machinery, with active opportunities on the application end of artificial intelligence innovation products and the emergence of artificial intelligence consumer electronics products, as well as the product innovation in the Apple chain in 2025. (3) Supply expansion slowing down and supply-demand rebalancing, mainly including industries such as agriculture, forestry, animal husbandry, fishery, pharmaceuticals, and building materials, focusing on the continuous clearing of supply-side losses, with a possible confirmation of turning point to the second half of 2025. At the current position, Bikai stated that the risk of a significant market downturn is controllable and there are many attractive targets based on market valuations. In terms of Hong Kong stocks, valuations in sectors such as consumption, internet, real estate, and convenience stores are more attractive, while in A-shares, opportunities in technology, national security, artificial intelligence, Apple chain, Siasun Robot & Automation are more active. Bikai mentioned that they will balance the success rate and risk of investment opportunities to strive for an ideal annual investment return. Zou Jiangyu, manager of Blackrock Advanced Manufacturing One-Year Holding Hybrid Fund, stated that since the beginning of 2025, the Chinese stock market has experienced a temporary suppression followed by a rise, with some structural opportunities in the growth sector. The development of the artificial intelligence industry is rapid, with breakthrough technology in China represented by DeepSeek and accelerated global applications in various industries. Technological changes bring not only new investment opportunities but also changes in the existing industry structure, which are worth continuous tracking and research. Looking ahead to 2025, Zou Jiangyu stated that they will continue to focus on opportunities related to the revolution of the artificial intelligence industry, the green energy revolution, and the industrial upgrade of Chinese manufacturing. The key directions they are optimistic about include: (1) Applications of artificial intelligence technology in consumer electronics terminals, embodied intelligence, and smart driving areas. (2) Opportunities brought by the demand explosion for infrastructures, semiconductors, hardware, and cloud computing that power artificial intelligence applications. (3) Opportunities in high-end equipment manufacturing and chip manufacturing benefiting from the demand for independent and controllable products. (4) Opportunities in the industrial chain brought by the green energy revolution and the rise of the electric vehicle industry.