How to predict the market trend for the New Year? How to strategize for opportunities next year? The strategies from the top ten securities firms are here.

The latest strategic views of the top ten securities firms are fresh off the press, as follows: CITIC SEC: In terms of allocation, we should seek intersection, with overseas exposure as the base and positive changes in domestic demand also catalyzing certain varieties. Overseas demand varieties have already been fully confirmed and interpreted this year, but their continuation into next year is just a continuation of existing facts with limited space for exceeding expectations. Making profits from performance rather than valuation; the varieties of domestic demand currently experiencing a rise in prosperity are limited, and the effects of future policies and stimuli on domestic demand may have events, and this year has just gone through a correction from excessive expectations to returning to reality. However, with investors' expectations low enough and positions low enough, once expectations are exceeded, they can enjoy valuation elasticity. From an allocation perspective, the biggest intersection is the resource and traditional manufacturing industries in which China has a market share advantage in the world, corresponding to the leading companies in these industries. Emphasizing the investment logic of "supply inward, demand outward for profit," continuously enhancing pricing power globally, with a focus on industries such as non-ferrous metals, chemicals, and new energy. Although high visibility niche markets are overseas, if there is positive change in domestic demand, the elasticity of these varieties is not small. Companies going abroad is still an important way to open up profit and market value space. The transition of A-shares from positioning as an emerging market with domestic exposure to positioning as a mature market with global exposure is still a trend of the times, and this allocation clue will continue. Industries to focus on include engineering machinery, innovative drugs, power equipment, gaming, and military industries. However, from the perspective of reducing portfolio volatility, the advantages of domestic demand varieties are actually increasing. The main incremental funds in the market are still configuration-oriented funds seeking low drawdowns and stable returns (insurance, fixed income, etc.), fundamentally meeting the configuration needs of household savings; against the background of potential volatility increase and management difficulty in bond portfolios next year, the requirements for low volatility of stock positions by configuration-oriented funds will actually increase. We can start to focus on some service consumption varieties, such as aviation, duty-free, hotels, freshly made tea drinks, IP industry chain, and gold jewelry. China Securities Co., Ltd.: Getting ready for the year-end market momentum From early September to early December, the A-share and Hong Kong markets experienced a long period of adjustment, with investor sentiment becoming cautious. However, recent key events and data releases have been in line with or slightly better than market expectations. We believe that the underlying logic of the bull market is still there, mainly driven by structural trends and capital market reform policies. The market has basically completed its adjustment, and with the ranking of funds landing, we can expect a new wave of momentum at year-end. In terms of medium-term sector allocation, we focus on non-ferrous metals and AI with certain catalytic effects on prosperity, with a primary focus on commercial spaceflight, controllable nuclear fusion, and humanoid Siasun Robot & Automation; Hong Kong stocks also present investment opportunities, with potential hot sectors including internet giants and innovative drugs. Huaxi: Funds are not pessimistic, supporting a new phase of the market The market has entered the second phase of recovery, with support forming at levels before the major drop. We divide this round of recovery into two stages, with the first stage being the recovery of the large drop on November 21, which was mostly completed by December 5. The sharp rise on December 8 indicates that the chips near the drop point have largely accepted the logic of an uptrend and are no longer exerting pressure on the market, officially entering the second phase of recovery. In this stage, the levels before the major drop can act as support, such as the significant rebound in market performance on December 12 after a drop on December 11, indicating that the sentiment at this level is still optimistic, with chips around this level more inclined to view it as an opportunity to increase positions once the price gradually approaches the cost line, playing the rebound possible in the game. It is worth noting that structural risks are brewing again, which are not conducive to the continuous strength of leading themes. From the perspective of concentration of transactions (the top 5% of turnover), the current value is 44.42%, close to the historical high experience value of 45%. High concentration of transactions implies that market trading directions are too concentrated, requiring stricter logic for the subsequent uptrend. Once the logic falls short of expectations, funds may flow out quickly. In fact, the concentration of transactions was higher than 45% on December 9, with AI computing power, which had been performing strongly, giving way to consumption and commercial spaceflight. At the same time, the proportion of stocks with higher prices (stocks whose prices are higher than 95% of their historical percentile) is 14.91%, basically touching the historical high experience value of 45%; the value-for-money ratio of individual stocks remains one of the potential pressures. While structural risks are brewing and it is difficult to promote leading themes, funds are not waiting and are instead choosing targeted breakthroughs. For example, on December 11, BSE 50 surged by 3.84%, driven by an afternoon surge, while other broad market indices basically declined that day. The reason for this is that BSE 50 constituent stocks have relatively small market values, with 92% of them not exceeding 10 billion yuan, making it easier for them to be lifted during targeted breakthroughs. The thematic market is similar, with commercial spaceflight and nuclear power showing signs of a surge, while AI computing power and semiconductor heat were relatively low before the rebound on December 12. Sinolink: Central Economic Work Conference sets the tone for expanding domestic demand and combating internal consumption, with a clear path out of deflation The most significant event impacting expectations on the fundamentals domestically this week was the convening of the Central Economic Work Conference. Against the backdrop of the Central Economic Work Conference setting the tone for expanding domestic demand and focusing on combating internal consumption, the path for China to get out of deflation has become clear: (1) Expanding domestic demand remains the top priority task, but the focus has shifted from government guidance to endogenous drive. Comparing the expressions regarding expanding domestic demand in 2024 to those in 2025, we can see a clear change in the formulation and implementation path for expanding domestic demand: on the income front, the emphasis in 2024 was on increasing the income of the middle and lower-income groups and improving the benefits of retirees, while in 2025, it is to "formulate and implement plans to increase income for urban and rural residents" under the guidance of the "15th Five-Year Plan"; on the "two news and two heavy" policies, compared to the statements in 2024, there has been a convergence, shifting from "strengthening expansion" and "greater efforts" to "optimizing implementation," with a focus on "stimulating vitality of private investment" rather than "effectively driving social investment with government investment." Combining the above expressions, we can conclude that expanding domestic demand in 2026 will rely more on expectations of improved household income rather than government subsidies, more on private investment rather than government investment, and more on the repair of endogenous self-operating mechanisms in the market rather than strong policy stimuli or governmental interventions. We can see that consumer confidence has been steadily recovering since 2023, but future income confidence has been steadily declining, with signs of stabilization and recovery in household income confidence in the third quarter of 2025. It can be said that past declines in income confidence, rather than declines in consumer willingness, have led to an excessive reliance on subsidy policies for consumption. (2) The Conference proposed "formulating regulations on the construction of a unified national big market, and intensively combatting 'internal consumption' competition." The anti-internal competition in the manufacturing industry continues to deepen, which is an important prerequisite for the profit recovery of midstream companies and lays the foundation for the transmission of enterprise profits to household income. Looking back at the historical experience of 2016-2017, the appearance of a "profit bottom" for industrial enterprises often corresponded to a trend of improvement in employment and salaries, forming a transmission path of "improved enterprise profits leads to increased employment and wage increases." The signal of the profit bottom for enterprises in the third quarter of 2025 has gradually become clearer, and we may expect to see marginal improvements in household incomes in the future. EB SECURITIES: New policy deployments to support year-end A-share market, focusing on TMT and advanced manufacturing sectors, and defensive and consumer sectors in case of short-term market fluctuations. A new round of policy deployments is set to guide the A-share market towards a year-end rally. Several important events have unfolded recently, leading to significant market volatility this week. With the Federal Reserve's interest rate cut of 25 basis points in December, in line with market expectations but with amplified internal disagreements, the Central Political Bureau meeting and the Central Economic Work Conference convened during the week, providing direction for economic work in 2026 and offering further clues for investors. While the underlying macroeconomic fundamentals remain sound, short-term risk preferences may slightly converge as the year-end approaches. However, given that the market is still in a bullish sentiment and with the Chinese New Year later in the year, a prelude to the year-end and Chinese New Year market frenzy is expected. In case of a correction or an opportunity for positioning, attention should be focused on the TMT and advanced manufacturing sectors. If external factors influence the market and cause short-term fluctuations, the defensive and consumer sectors should also be monitored. A new round of policy deployments to support the A-share year-end market is expected: on the one hand, domestic economic policies are projected to continue driving growth, keeping economic expansion within a reasonable range and further consolidating the basis for the thriving development of the capital market; on the other hand, the release of policy dividends is poised to boost market confidence, further attracting various types of capital inflows. Historically, A-share markets have shown good performance in the opening years of the "13th Five-Year Plan" and "14th Five-Year Plan," and the positive performance in the opening years of the past has the potential to be sustained in 2026. Industry sectors to focus on include TMT and advanced manufacturing sectors; in case of short-term market fluctuations due to external factors, attention should be paid to defensive and consumer sectors. Soochow: The core feature of the AI industry this week is the simultaneous competition of full-stack capabilities and deep penetration of scenarios. This week, the global AI industry has entered a crucial period of "full-stack capability competition + deep penetration of scenarios," with systemic upgrades of infrastructure, large-scale deployment of applications at the application end, and collaborative innovation in cross-border ecosystems resonating. From cloud vendors' computing power layout to technological implementation in fields like film and terminal, coupled with the global giants game of technology, the industry displays the distinct characteristics of "building solid hard power, breaking scenarios, and competing in ecosystems," with the pace of technological iteration and industrial application integration accelerating. In the field of computing power hardware, domestic manufacturers are focusing on breakthroughs in full-stack system construction. This week, the core focus was on the technological breakthroughs of domestic manufacturers in the computing power hardware sector, with the competitive focus shifting from upgrading single computing power supply to constructing a full-stack system of "chips-servers-platform." Domestically, on December 10, Lenovo officially launched the "AI Factory" solution, releasing the full-stack innovation platform 4.0 and the WQ8080aG5 computation server, which can shorten the pre-training time for large models by 35% through heterogeneous computing scheduling technology, and support single GPU power levels over 1000 watts, providing room for future upgrades for higher-performing model training, successfully overcoming the integrative challenges of heterogeneous computing power in China. On the same day, Huawei Cloud released the "Pangu Computing Power Scheduling System," which enables intelligent allocation of computing resources across regions, improving computing power utilization to over 85%. These arrangements not only directly boost demand for communication equipment and high-standard data centers but also drive computing power infrastructure from being "resource-oriented" to "production-oriented." Cinda: Style switch may strengthen, focus on low-value sectors Recent allocation views: The style switch may strengthen, particularly focusing on low-value sectors. Non-bank financial elasticity is gradually increasing, with a focus on low-value shares in the power equipment and AI application sectors, and cyclical stocks are also expected to show elasticity within the next six months. Outlook on allocation style: Style shifts often tend to occur in the fourth quarter. From October onwards to early next year, the impact of quarterly and economic data on stock markets gradually diminishes, while the importance of policy expectations and valuations increases. On the one hand, the period after October often witnesses new policy catalysis, while on the other hand, the market begins to anticipate next year's earnings, with the profit outlook for most industries returning to the same starting line. The advantage of low-value sectors will become more apparent, with easily discernible valuation switch movements. After a period of turbulence in the bull market, style changes are likely. Following periods of turbulence in the bull market, there is a high probability of significant changes in large and small cap styles; while the possibility of a shift in the growth-value style is less clear, even if the growth-value style remains the same, there tend to be some shifts in leading sectors. Sector outlook for allocation: (1) Financials (non-bank): Overall financial valuations are low, increasing the likelihood of a bull market, with substantial potential for non-bank sector earnings. As residential funds start to flow in faster, the certainty of earning excess returns is higher; (2) Power equipment: The fundamentals for 2026 are gradually stabilizing, with potential price upticks due to the diffusion of investment opportunities in the AI industry chain, improved supply-demand dynamics, and price increase potential; (3) Mechanical equipment: The export prosperity of engineering machinery continues, with numerous catalytic events in the Siasun Robot & Automation sector, which may benefit from growth rebounds and style switches, as well as from policy games in the real estate chain; (4) Non-ferrous metals & military industry: Policies, performance, and thematic logic are all smooth, with relatively independent fundamentals benefiting from geopolitical disturbances, with non-ferrous metal demand benefiting from the resonance between new and old dynamics and domestic and global economies; (5) High dividend assets (petroleum and petrochemicals, utilities, transportation): Index downturn periods are suitable for maintaining core positions, with strong resistance to fluctuations, mainly aligned with long-term capital allocations such as insurance funds, with mutual funds having relatively low exposure compared to index weights, indicating potential for value returns. Huabao Securities: Seizing opportunities, focusing on growth in the spring Seizing opportunities, focusing on growth. The Central Economic Work Conference has set the overall tone of "seeking progress while maintaining stability and enhancing quality and efficiency," planning to continue implementing more proactive fiscal policies and moderately loose monetary policies to stabilize long-term expectations. However, as markets often enter a period of expectation realization, short-term risk preferences are likely to converge. Nonetheless, given the current bullish sentiment in the market and the later-than-usual Chinese New Year, the year-end and Chinese New Year frenzied markets are expected to start early, providing a chance for adjustment or positioning. In terms of style, high-growth sectors like technology, with a primary focus on emerging AI, are likely to continue to outperform in the medium term. BOC International: Focusing on AI computing power and commercial spaceflight double themes Under the vigorous demand for computing power infrastructure construction, key ancillary facilities such as optical modules have a certain supply gap. Third-party organization LightCounting estimates that the compound annual growth rate (CAGR) of the optical communication chip market from 2025 to 2030 will be 17%, with total sales expected to exceed $11 billion by 2030, up from around $3.5 billion in 2024. The shortage of EML and CW laser chipsets is expected to continue until the end of 2026, with optical chip supply-demand gaps reaching 25%-30%, leading to a potential price increase in optical chips by 2026. The "spring frenzy" market is launching, with high resilience in technology sectors taking precedence; AI hardware is leading, focusing on the TPU industry chain with advancing technology growth driving demand, particularly in optical modules, PCBs, OCS, and fiber optic suppliers. Additionally, attention is directed to the scarce storage chip links in the hardware industry. The commercial spaceflight theme enters a "heating up" phase. The commercial spaceflight sector recently experienced improved top-level design and new policy support, with the establishment of the Commercial Spaceflight Department by the National Space Administration on November 29 and the issuance of the "National Space Administration's Action Plan for Promoting the High-Quality and Safe Development of Commercial Spaceflight (2025-2027)." The Plan provides a clear development blueprint for the industry, enhancing market confidence in the long-term development of commercial spaceflight. The Plan also highlights the expansion of government procurement to drive commercial carrier rockets and satellites to participate in national aerospace missions, indicating that private companies may undertake national projects, opening up future market potentials for private companies. The Plan also suggests the establishment of a National Commercial Addsino Co., Ltd. Fund through a diverse capital investment model to attract social capital and provide certainty for private rockets, satellite internet development, etc. The deployment of satellite internet low-orbit satellite network launches has accelerated, with significant advancements in the industry. On December 3, Zhuque 3 carrier rockets from the Dongfeng Commercial Spaceflight Innovation Test Zone took off, successfully completing the flight mission, with the rocket's second stage entering the designated orbit. The researchers at Blue Arrow Aerospace, who initiated a Science and Technology Innovation Board listing guidance in July, have now set their sights on a consistent pace of launch frequency for domestic commercial spaceflight, which is expected to provide substantial benefits to the industry chain. Galaxy Securities: Paying attention to the layout opportunities of the policy dividend and prosperity direction next year Numerous significant events both domestic and international have taken place recently. The interest rate cut of 25 basis points by the Federal Reserve in December, the meetings of the Central Political Bureau and Central Economic Work Conference held during the week, and the various crucial economic and financial data announced, along with the guidance provided for economic work in 2026, are shaping the market's future direction. The Central Economic Work Conference continues the sentiment expressed at the Central Political Bureau meeting, emphasizing "stabilizing and seeking progress, enhancing quality and efficiency" for next year. As domestic demand takes the lead as a critical task, reflecting the urgent need to address the reality of "effective demand insufficiency", the importance of technological innovation under the drive of innovation becomes prominent, and policies to counter internal competition are expected to be further advanced. At the same time, the role of the capital market is set to be further strengthened, with the meeting explicitly stating, "continuing to deepen the comprehensive reform of capital market financing." In the short term, as the year-end approaches, the structural characteristics of market volatility are likely to continue, with rapid rotation of themes, focusing on opportunities for the deployment of the policy dividend and the direction of prosperity next year. In terms of allocation, the focus is on the following "two main lines + two auxiliary lines": Main Line One involves the accelerating global century-level change, as China transitions towards new-quality productivity under the motto of 'seeking progress while maintaining stability and enhancing quality and efficiency,' making key areas like AI, embodied intelligence