Huajin Securities: The spring market in January next year may continue, and technology is leading in some cyclical industries such as CKH HOLDINGS.

Hua Jin Securities released a research report stating that, as things stand currently, the spring market in January next year may continue, and A-shares may see a strong volatility. The firm believes that the technology sector and parts of CKH HOLDINGS may have a relative advantage in the upcoming period. Firstly, the technology sector and parts of CKH HOLDINGS in some cyclic industries may continue to trend upward in January next year: Firstly, the trend in the technology industry, led by artificial intelligence, is likely to continue to rise in the short to medium term; secondly, with the rate cut by the Federal Reserve and the demand for AI, industries like non-ferrous metals and chemicals may see a continued rise in January next year. Secondly, themes such as commercial spaceflight and controlled nuclear fusion may continue to serve as catalysts in January next year. Thirdly, funds may continue to increase their holdings in the technology sector and parts of CKH HOLDINGS in the first quarter of next year. The main viewpoints of Hua Jin Securities are as follows: Looking back on history, A-shares have shown a tendency to be strong in January when the spring market starts early, mainly influenced by factors such as policies, external events, and liquidity. (1) A-shares have shown a tendency to be strong in January when the spring market starts early. (2) The main factors affecting the trend of A-shares in January are policies, external events, and liquidity. Firstly, policies and external events are the core factors influencing the trend of A-shares in January: Firstly, positive policies and external events may lead to an increase in the Shanghai Composite Index, such as the easing of trade tensions between China and the US in 2019 and optimized epidemic prevention policies in 2023; secondly, external risk events or policy tightening may lead to the end of the spring market, such as the Eurozone debt crisis in early 2010, the resumption of IPOs in 2014, new circuit breaker regulations in 2016, the COVID-19 epidemic at the beginning of 2020, and the new "Nine Articles" in 2025. Secondly, liquidity also plays a significant role in the trend of A-shares in January: Loose liquidity may lead to a rise in A-shares in January; conversely, A-shares may show a weaker performance in January. Thirdly, the impact of economic and profit fundamentals on the trend of A-shares in January is limited. As of now, the spring market in January next year may continue, and A-shares may show strong volatility. (1) Positive policy expectations for next year in January may increase, and external risks may be limited. Firstly, positive policies may be further introduced and implemented in January next year: Firstly, more provincial "Fifteen-Year" planning suggestions may be released in January next year; secondly, policies to boost consumption may also be introduced and implemented; finally, policies with loose liquidity at the end of the year and the beginning of the year may be further implemented. Secondly, external risks may be relatively limited in January next year: Firstly, global central banks may further loosen policies in January next year; secondly, Sino-US relations may remain stable in January next year, while Sino-Japanese relations may tend to be tight, but with limited impact. (2) Liquidity may further loosen in January next year. Firstly, macro liquidity may further loosen: Firstly, the Federal Reserve is likely to continue cutting interest rates in January next year; secondly, the domestic central bank may further reduce reserve requirements and interest rates in January next year. Secondly, capital inflows into the stock market may increase in January. (3) Economic and profit conditions in January next year may continue the trend of weak recovery. Firstly, the economy may continue its weak recovery in January next year. Secondly, the growth rate of corporate profits may continue to rise in January next year: Firstly, the year-on-year growth rate of the Producer Price Index may continue to rise; secondly, profits in the technology and some cyclic industries may continue to improve. The technology sector and parts of CKH HOLDINGS in January next year may have an advantage. (1) Looking back on history, when the spring market starts early, the performance of the technology growth sector tends to be relatively advantageous in January. Firstly, statistically, when the spring market starts early, the technology growth sector tends to be relatively advantageous in January; secondly, industries that are relatively advantageous in January tend to continue to be advantageous throughout the entire spring market, while industries that were advantageous in December may not show a clear advantage in January. Secondly, the main factors driving the industries that are advantageous in January during the early start of the spring market are trends in the industries, thematic catalysts, and fund investment. (2) As things stand currently, the technology sector and parts of CKH HOLDINGS in January next year may have a relative advantage. Firstly, the technology sector and parts of CKH HOLDINGS may continue to trend upwards in January next year: Firstly, the trend in the technology industry, led by artificial intelligence, is likely to continue to rise in the short to medium term; secondly, with the rate cut by the Federal Reserve and the demand for AI, industries like non-ferrous metals and chemicals may see a continued rise in January next year. Secondly, themes such as commercial spaceflight and controlled nuclear fusion may continue to serve as catalysts in January next year. Thirdly, funds may continue to increase their holdings in the technology sector and parts of CKH HOLDINGS in January next year. Industry allocation: It is recommended to continue to balanced allocation to technology growth, parts of the cyclic industry, and consumer industries in January next year. (1) Currently, equipment, media, and other PEGs with low growth potential are in the growth stage. (2) It is recommended to continue to balance allocation in January next year: Firstly, machinery (Siasun Robot&Automation), defense (commercial spaceflight), new energy (nuclear fusion, energy storage), electronics (semiconductors, AI hardware), communication (AI hardware), computer (AI applications, satellite internet), media (AI applications, games), medicine (innovative drugs) may benefit from positive policies and industry trends; secondly, securities firms, consumer industries (food, retail, social services) may see an improvement in fundamentals and a potential for growth. Risk warning: Past experiences are not necessarily applicable to the future, unexpected changes in policies, and economic recovery may not meet expectations.