Open Source Securities: Changes to this round of spring excitement after 8 consecutive gains

The open source securities report stated that strong incremental funds have become further driving forces for the spring fever in late December, coupled with positive factors from earlier periods, helping the Shanghai Composite Index achieve 8 consecutive days of gains. The report suggests continuing to actively allocate resources for the spring fever, with both technology and cyclical sectors taking off. In terms of investment strategy, the overall allocation strategy is still recommended to focus on technology + PPI, but trading should pay attention to new marginal changes. One such change is the continuous strengthening of policies to boost domestic demand, leading to localized heat in sectors such as commerce and social services, with overall consumption still heavily reliant on sustained data improvement. Another opportunity to watch is the strong theme of year-end and new year cross-year events, with a focus on the commercial aerospace and satellite industry chain. Summary of the report: As of December 26, 2025, the Shanghai Composite Index has achieved 8 consecutive gains. In our report on November 30th, "Early Deployment for Spring Fever," we pointed out that the recent market correction has occurred, but we believe that it is now a good time to be more positive. We proposed on December 21st that the reasons for further positive outlook at present include the weakening impact of the 3 major factors affecting the earlier market correction: firstly, the disturbance in overseas liquidity, with the Fed rate cut offsetting the impact of Japan's rate hike; secondly, the risk overflow of the AI bubble theory during the US stock earnings season has improved, so there is no need to panic; thirdly, recent economic data has been relatively mild, coupled with the Central Economic Work Conference not having any significant beyond expectation points. We believe that the continuous appreciation of the Renminbi exchange rate may indicate that global investors still have ample confidence in the Chinese economy, refuting this concern. As of December 26, 2025, the Shanghai Composite Index has achieved 8 consecutive gains, the third time since the market rally on September 24, 2024. The anomaly in December: significant net inflows into A500 ETF. In December, there is an "anomaly" in broad-based ETF inflows: (1) In the second half of the year, only in December did the broad-based ETF show net inflows, and the scale of net inflows was large, with a single-month net inflow of 110.6 billion RMB (as of December 25th); (2) Out of this 110.6 billion, a surprising 101.9 billion came from the A500 ETF, accounting for 92.2%. At the same time, the other types of broad-based ETFs did not have net outflows of the same magnitude, proving that the net inflows of funds into the A500 ETF are more likely to be incremental rather than transferred from other broad-based ETFs. Impact on the market: (1) Contribution to the recent market: strong incremental funds have become further driving forces for the spring fever in late December, coupled with positive factors from earlier periods, helping the Shanghai Composite Index achieve 8 consecutive gains. (2) Impact on the future market: If the funds are a temporary "boost", considering that the funds are more likely to be "newly added" rather than "transferred", it implies that after the year-end "boost" ends, the funds may flow back, leading to minor disturbances in the money market in early January; however, the core DRIVE of this round of spring fever is not the incremental funds of the A500 ETF, so the changes in this part of the funds will not have a significant impact on the market trend. If it is medium to long-term funds, the impact on the future market will not be significant. Price increase has also become the catalyst for this round of spring fever: Analysis of investment opportunities in price increases Overall, in the macroeconomic environment of PPI recovery and anti-internal rotation policy, combined with the weakening US dollar overseas and significantly increased demand for AI hardware, there is potential for price increases in a variety of sectors such as chemical products (PTA, agrochemicals, organosilicon, refrigerants, phosphorus chemicals, etc.), new energy materials (hexafluoride, lithium carbonate, electrolytes, membranes, cobalt, photovoltaic silicon wafers, etc.), electronic and communication varieties related to computing power (electronic chemicals, memory chips, liquid-cooled logic overflow, etc.), and non-ferrous metals (precious metals, minor metals, energy metals), among others. Investment Strategy - Continue to actively allocate resources for the spring fever, with technology and cyclical sectors taking off. The overall allocation strategy is still recommended to focus on technology + PPI, but trading should pay attention to new marginal changes. One such change is the continuous strengthening of policies to boost domestic demand, leading to localized heat in sectors such as commerce and social services, with overall consumption still heavily reliant on sustained data improvement. Another opportunity to watch is the strong theme of the year-end and new year cross-year events, with a focus on the commercial aerospace and satellite industry chain. Industry configuration recommendations: (1) Internal repair and high-low section within technology: military industry, media (games), AI applications, Hong Kong Internet, batteries, core AI hardware; (2) Benefits of PPI improvement and broad-spectrum anti-internal rotation: photovoltaics, chemicals, steel, non-ferrous metals, electricity, machinery; (3) Long-term bottom: gold, optimized high dividend stocks. Risk warning: Unexpected changes in macroeconomic policies; short-term market liquidity risks; geopolitical risks; risks of changes in industrial policies.