Sinolink: A new main trend in A shares has emerged. Seize the current window of opportunity for a switch.

Sinolink released a research report stating that the new investment trend for 2026 has already begun to emerge in the commodity market, the physical industry chain, and the foreign exchange market: In a pattern where investment is greater than consumption, the physical consumption of various industrial chain manufacturing links is intensifying, the trading range of bulk commodities is lengthening, and China's manufacturing advantage is gradually being demonstrated and leading to feedback in the foreign exchange market. Recommendations: 1. AI investment and industrial resource products resonating with the global manufacturing industry recovery - copper, aluminum, tin, lithium, crude oil, and oil transportation; 2. Chinese equipment export chains with global comparative advantages and confirmed cyclical bottoms - power grid equipment, energy storage, lithium batteries, photovoltaics, engineering machinery, commercial vehicles, as well as domestic manufacturing bottoming out varieties - chemical industry (printing and dyeing, coal chemical industry, pesticides, polyurethane, titanium dioxide), wafer manufacturing, etc. ; 3. Seize the consumption recovery channel driven by inbound repair and resident income growth overlap - aviation, hotels, duty-free, food and beverages; 4. Beneficiaries of the expansion of the capital market and the bottoming out of long-term asset returns on the non-bank sector (insurance, brokerage). Sinolink's main points are as follows: The new year's market trend is slowly unfolding, and the market is no longer focused on a single narrative. Recently, the A-share market has been rising continuously, and the market's expectations for the new year's market trend are gradually starting. At a time where there have been no major changes in domestic and international fundamentals, the current rebound seems more like a global risk asset repair following the marginal easing of liquidity expectations on the denominator side. Overseas major stock indices have all experienced varying degrees of increases. It is worth mentioning that the market is gradually shifting away from a single narrative focused on the AI domestic and foreign mapping trend, and is spreading to a broader range, presenting a pattern of AI, domestic demand, price increase chains, and new industrial themes (commercial space). Market rallies driven by a single narrative tend to be unstable and highly volatile. A true bull market often sees a wide range of market opportunities emerging and coming together. As the current market gradually moves upward and industry rotation accelerates, the new investment trend for 2026 is slowly emerging. How to understand the recent price increases in various industrial chains: the diffusion and convergence of physical consumption. The current price increase chain has become the focus of the market. By examining the specific content of price increase letters in various industries and industry analyses, it can be seen that the rise in raw material prices is the main factor pushing prices up; at the same time, the effects of anti-internal engulfment policies are also showing. Faced with upstream price increases and downstream price pressures, some companies are choosing to reduce production voluntarily and raise prices collectively to maintain a reasonable competitive order within the industry. Looking ahead, due to differences in the level of economic prosperity on the demand side, the sustainability of price increases also varies. For bulk commodities, we believe that the sharp rise may have two reasons: the current rise in non-ferrous metals may indicate that more marginal demand is being driven by a large number of high-profit and growth-oriented emerging sectors, with the latter having a small proportion of costs, making them more accepting and tolerant of price increases, extending the trading range; in the past, industry + finance has been the actual bear in physical inventory, showing vulnerability when faced with changes in demand, policies, and trading structures. Looking ahead globally, driven by overseas interest rate cuts, the pattern of investment strength exceeding consumption in the manufacturing sector's recovery is expected to continue. However, due to the obstruction of the transmission of investment to employment under AI development, leading to slow service inflation, delaying the arrival of rate constraints brought on by inflation; reflected on the domestic stock market, the relationship between metals and AI investments at present is more akin to the relationship between coal/power and new energy in 2021, also influenced by the macro background of new energy development, but stock prices have deviated since 2021, which is actually due to the difference in the performance of first-order and second-order derivatives of earnings, with growth-oriented sectors paying more attention to changes in the second-order derivative of growth rate, while traditional industries focus more on the trend of fundamental reality. For upstream metal raw materials, the continuation of AI investment on the physical side will drive an increase in consumption, while for certain high-expectation individual stocks in the overseas AI mapping chain, further exceeding expectations will require an increase in the slope of AI investment growth. In terms of industries related to anti-internal engulfment, the demand side has some support, and price transmission in segments with relatively strong policy execution willingness may be smoother, making their price increases more sustainable, such as the lithium battery industry chain, wafer manufacturing, etc. For industries with relatively weak demand themselves (such as titanium dioxide), the sustainability of price increases still needs to be observed, however, with limited downstream resilience constraints, the limited addition of new production capacity in related industries, and as demand marginally recovers or price increases are smoothly transmitted, the likelihood of a sector's plight turning around is correspondingly high. A new external circulation pattern ushers in a new RMB appreciation cycle. In the short term, due to the absence of a clear reversal of fundamental expectations, the rapid appreciation of the RMB in the near term is mainly due to the convergence of Sino-US interest rate differentials under the weakening of the US dollar and the seasonal inflow of capital for end-of-year settlement. In the medium term, the marginal repair of Sino-US relations and the resilience of Chinese exports exceeding expectations are the main driving forces for the revaluation of the RMB exchange rate. Historically, during periods of trend appreciation of the RMB, sales gross profit margins of stocks highly exposed to foreign demand tend to experience a process of rise followed by decline, with the overall magnitude not being large, and compared to past appreciation cycles, there are significant differences in export structure, settlement methods, and trade environments at present, so the impact of RMB appreciation on weakening the competitiveness of export-oriented enterprises may not be overestimated: on one hand, with the continuous improvement in the acceptance of the RMB, the proportion of settlements in RMB in current exports has exceeded that of the US dollar; on the other hand, in the current highly prosperous areas of exports, China concentrates major global production capacity and market share, with a certain degree of irreplaceability and higher added value for its products, stronger price transmission capabilities. It is worth mentioning that in recent years, trade sanction events targeting Chinese low-priced exports have been frequent, and a proper price recovery in Chinese exports can help alleviate the sharp rebound of trade protectionism. It is worth mentioning that the appreciation of the RMB has also to some extent eased the cost pressure brought on by rising prices of bulk commodities, integrated circuits, etc. Our selection is based on the reduction of forex gains in the appreciation cycle, and after excluding industry factors, both gross profit margin and net profit margin still show an increase in two dimensions, and in the end, most of the stocks benefiting from the appreciation of the RMB are concentrated in industries such as communication equipment, environmental governance, airports, electronics, lithium batteries, etc.