In which directions will the trend of technology spread?

EB SECURITIES released a research report stating that the current valuation of A-share market is near the average since 2010. With active policy support, long-term funds and incremental funds brought by prior profit-making effects may accelerate into the market, potentially further enhancing the valuation of A-share market. In terms of allocation, focus on two main themes: technology growth and consumption. In the technology growth sector, pay attention to industries such as TMT, machinery equipment, and power equipment that are reflected in capital market policies; in the consumption sector, focus on replacement and service consumption, such as household appliances, consumer electronics, social services, and retail trade. EB SECURITIES main points are as follows: This week there was a rebound in the A-share market Influenced by factors such as rising risk preferences, the A-share market rebounded this week. This week, the A-share market showed some signs of recovery, with major broad-based indices generally closing higher. Among the major broad-based indices, the sci-tech 50 index had the largest increase this week, up 7.1%, while the Shanghai 50 index had the smallest increase, up 0.8%. In terms of industries, there was differentiation in the performance of the industries this week, with industries such as communication, machinery equipment, and electronics performing relatively well, while coal, media, and real estate industries experienced larger declines. Where will the technology trend expand to next? Since the Spring Festival, the overall market performance has been good, with the technology sector performing particularly well. Since the Spring Festival, the overall performance of the A-share market has been good, with the Shanghai Stock Exchange index rising by 4.0% as of February 21. In terms of industries, technology-related industries have performed particularly well, with industries such as computers, media, communication, electronics, and machinery equipment leading in terms of percentage increases, with increases of 26.2%, 15.3%, 14.7%, 13.8%, and 13.5% respectively. Looking at the patterns from previous years, there may be a dual-theme situation in the Spring market. Looking at the patterns of previous Spring markets, most of the time the market has had a single theme, but there have also been cases of dual themes, such as in the Spring market of 2015 when both the growth and consumption sectors performed well, and in the Spring market of 2020 when the consumption and growth sectors also performed well. The current market sentiment is relatively positive, coupled with many favorable factors, this year's Spring market may also see two main themes. The current market sentiment is relatively positive, with the market turnover surpassing 2 trillion yuan on February 21. The high market turnover is expected to accommodate multiple themes at the same time. Looking ahead, due to factors such as the easing of US-China relations, policy catalysis of the Two Sessions, and difficult falsification of AI narratives, market sentiment is likely to remain active in the future, and this year's Spring market may also see two main themes. Apart from technology, consumption is potentially the most worth paying attention to due to policy catalysis and low trading congestion. On the one hand, consumption is a focus of current policy efforts and is expected to receive catalysis in the future. Looking at recent important meetings, consumption is a key area of current policy efforts, as the Central Economic Work Conference in December 2024 placed "boosting consumption" as the top priority in the key tasks for the economic work of 2025, and the Political Bureau meeting in December 2024 also explicitly mentioned "vigorously boosting consumption and expanding domestic demand in all respects." With the Two Sessions approaching, market attention may gradually shift towards the policy area, and the consumption sector is expected to receive policy catalysis. On the other hand, the consumption sector currently has relatively low trading congestion, meaning that even if policy expectations fall short, the likelihood of stock price stampedes is low and the downside risk is relatively limited. Actively seizing the Spring market, focus on two main themes of technology and consumption Continued policy support and the influx of funds brought by profit-making effects are expected to further enhance market valuation. The current valuation of the A-share market is near the average since 2010, and with active policy support, inflows of long-term funds and incremental funds brought by prior profit-making effects may accelerate into the market, potentially further enhancing the valuation of the A-share market. In terms of allocation, focus on two main themes: technology growth and consumption. In the technology growth sector, pay attention to industries such as TMT, machinery equipment, and power equipment that are reflected in capital market policies; in the consumption sector, focus on replacement and service consumption, such as household appliances, consumer electronics, social services, and retail trade. Risk analysis: Policy intensity is lower than expected; significant deterioration in US-China relations; significant decline in market sentiment.