China Securities Co.,Ltd.: Focus on the policies of the two sessions, technology is still expected to be the main theme.

China Securities Co., Ltd. released a research report stating that looking ahead to March, it is expected that the market will remain stable during the two sessions, and the market is expected to make certain choices following the policy guidance of the two sessions. If the policy outcomes of the two sessions exceed expectations, sectors related to the policy direction are expected to perform well. If the two sessions continue the previous style of stability maintenance, the performance of the technology industry itself is expected to continue, and there may be rotation in the development direction of the industry chain. The industry allocation recommendation for March revolves around two main themes: one is the direction expected to be further advanced by the two sessions policies, including pro-cyclical industries, consumption, etc, and the other is to continue to focus on the technology sector where the high prosperity trend has gradually landed, such as the general technology sector including semiconductors, AI industry chain, and internet (AI application mapping), Siasun Robot&Automation, intelligent driving, etc. China Securities Co., Ltd.'s main views are as follows: Market performance this month: Since February, A-shares have been fluctuating upward, interpreting a spring rally. Factors such as better-than-expected tariff policies, stabilization of the Renminbi exchange rate, anticipation of two sessions policies, and breakthroughs in domestic AI industry technology have collectively boosted market risk appetite. As of February 26, the month-on-month changes in the comprehensive A-share/SSE indices were +7.8%/+4.0%, respectively. On the style front, the outbreak of DeepSeek has led to a valuation re-evaluation rally in the domestic AI industry, boosting investor confidence and driving the high elasticity small-cap style performance. The changes in the CSI 2000 and CSI 1000 were +14.6%/+11.6%, while the large-cap style gains were relatively lower, especially due to the rebound in long-term interest rates causing valuation pressure on dividend-paying assets, with the Shanghai 50 index lagging behind with a monthly change of 3.2%. In the Shanxi primary industries, computers, machinery equipment, and electronics showed leading performances; on the other hand, in relative terms, banks, petroleum, petrochemicals, and coal industries lagged behind. Allocation recommendations: On a macro level, January's economic data showed slight improvement, with China's economy gradually moving out of the bottom phase: 1) CPI rose by 0.7% month-on-month in January, with a year-on-year increase from 0.1% last month to 0.5%. 2) January's social financing exceeded expectations: new social financing reached 7.06 trillion yuan, an increase of 560 billion yuan year-on-year, with new RMB loans (credit caliber) amounting to 5.13 trillion yuan, an increase of 210 billion yuan year-on-year. M2 growth rate was 7.0% year-on-year, a 0.3 percentage point decrease from last month; M1 growth rate adjusted for statistical caliber was 0.4% year-on-year, a 0.8 percentage point decrease from last month. On the policy side: 1) The private economy work conference was held in Beijing on 2/17, continuing to strongly encourage the development of the private economy. 2) The State-owned Assets Supervision and Administration Commission of the State Council deployed the deepening of the "AI+" special action for central enterprises. 3) The two sessions are expected to be held at the beginning of March, with the bank predicting the conference will focus on stabilizing the economy, consumer subsidies, and vigorously developing emerging industries. Overseas, although the recent economic data in the U.S. has been weakening, Trump's tariff trade policy has raised concerns in the market. However, progress in Chinese technology continues to prompt global investors to reevaluate Chinese technology stocks. The bank predicts that this phenomenon will continue in the future, as overseas investors are significantly underweight China, and they can continue to pay attention to the inflow of market investment funds due to technological progress. On the meso-industry level: 1) Domestic internet giant Alibaba's performance exceeded expectations, with capex investments in the past 25 years surpassing expectations. It has announced that in the next three years, the group's investment in cloud and AI infrastructure is expected to exceed the total of the past 10 years, significantly increasing investment in AI basic models to ensure technological advancement and industry leadership, and promoting the development of AI native applications. 2) Several large companies have further announced large-scale models; 3) New energy and military industries have shown marginal improvements, with the photovoltaic wind power industry chain entering the peak season for installations, and industry chain prices gradually warming up, with military orders gradually improving. Risk warning: 1) Data statistics may contain errors: The data in the report are derived from databases such as Wind and Datayes, which may have inconsistencies in the calibration between third-party databases. Additionally, due to data lag, for example, data disclosed on October 25 only reflects the industry situation in September, so conclusions drawn from historical data analysis have relatively limited guiding significance. 2) Economic recession at home and abroad: The current overseas economy is in a recessionary cycle, and a weak economic environment at home and abroad may affect the performance of certain industry demands. 3) Market liquidity risk: Stock price fluctuations rely on support from capital market liquidity, and liquidity risks may lead to downward valuation.