China Securities Co., Ltd.: The bull market in 2026 is expected to continue. Commodities may become the new main direction.

China Securities Co., Ltd. Securities released a research report stating that the bull market in the A-share market is expected to continue in 2026. It is predicted that the index will continue to fluctuate upward but the rate of increase will slow down. Investors will pay more attention to fundamental improvements and economic validation. It is advised to be cautious of the risk of structural/phase retreat in the technology sector, and resources are likely to become a new main direction for A-shares after the technology trend. The comprehensive competition between China and the United States may have a significant impact on A-share investments, and it is recommended to focus on future industries and key resources such as defense industries. Key industries to focus on include new energy, non-ferrous metals, basic chemicals, petroleum and petrochemicals, non-banking financial institutions, defense industries, machinery and equipment, computers, etc. Key themes to focus on include new materials, solid-state batteries, commercial aerospace, nuclear power, cross-strait integration, etc. Fast rises are prone to fall, and steady progress leads to success - The pace and space of this bull market. This round of bull market started with policy shifts and focused on improving liquidity. The core logic supporting the bull market is expected to continue or even strengthen in 2026. China Securities Co., Ltd. Securities believes that the current market has entered the mid-term of the bull market, and the cost-effectiveness of equity assets has declined. Rapid short-term gains may lead to an early peak and premature end of the bull market. From the perspective of market pace, A-shares are entering a key phase of economic validation. At this stage, the index will continue to fluctuate upwards but the rate of increase will slow down, with economic fundamentals improving and the performance of emerging industries digesting high valuation levels. This stage may see a shift in market style, with sectors showing high valuation but downward growth expectations experiencing a phase of adjustment, and varieties with improving fundamentals leading the market, with a focus on prosperous investment styles. In the era of technological innovation, when rotation occurs - Choosing the main line of the market. The current market consensus is that from the perspective of policy, fundamentals, and fund flow, technological growth is the most logical direction. Beware of the risk of structural/phase retreat in the technology sector. It is recommended to find companies with flexible performance, grasp structural market trends, and focus on areas such as AI, new energy, and key resources. After the technology trend, pay attention to the bull market of resource products. Conditions for the rise of resource products are currently accumulating, and resources are likely to become a new main direction for A-shares after the technology trend. The logic for the expected rise in resource product prices includes loose global monetary policies, supply-demand gaps, price trends, the start of domestic replenishment cycles, and the current comprehensive competition between China and the United States, which may become a key factor in the rise of resource products. Positioning for the future, playing in the present - The decisive battle behind A-shares between China and the United States. China and the United States are entering a stage of comprehensive competition. For the future, China and the United States are intensifying their competition in future industrial layouts and cutting-edge technologies. It is recommended to focus on front-line technology tracks such as AI (photolithography machines, domestic computing power), new energy (solid-state batteries, nuclear power), biotechnology (innovative drugs, brain-machine interfaces), commercial aerospace (satellite internet), quantum technology, and so on. For the present, critical resources are the "strategic sieve" in the global competition, and defense industries are an important direction for the "Fourteenth Five-Year Plan." Focus areas include rare earth equipment/materials, superhard materials, special gases, aerospace equipment, and new materials (permanent magnet materials, high-temperature resistant alloys for aviation, etc.).