Can the end-of-year market continue to rise in 2025? Please see this week's top ten brokerage strategies.

With only the last three trading days remaining, 2025 is about to come to a close. This week, the Shanghai Composite Index continued its "eight consecutive rises" from last week; the total scale of Chinese ETFs exceeded 6 trillion yuan to hit a new historical high; the offshore renminbi briefly "broke 7"... Under the continuous stream of positive news, major securities firms are offering their views on the market outlook from different perspectives. How will the market in 2025 end? Which sectors will dominate in 2026? Check out the top ten securities strategies of the week for the latest insights from major securities firms. CITIC SEC: Looking at New Year varieties from the perspective of ETFs hitting new highs Among the 360 industry/theme ETFs, 39 hit new highs in December. Among consensus varieties, the old varieties are communication and non-ferrous related ETFs, corresponding to North American AI infrastructure and resource logic; the new varieties are commercial aerospace related ETFs (including military industry), which are the aggressive choice of active funds in the market volatility stage, similar to the past low-altitude themes. Whether it is communication, non-ferrous metals, or commercial aerospace, a common feature is that they all represent the competition between China and the United States in the next generation of transnational infrastructure construction, which is the direction with the highest market consensus. Of course, there are some varieties that are starting to gain attention but lack industrial discussion heat, quietly rising and hitting new highs in the past year, such as chemical industry, engineering machinery and other varieties, which represent the shift of China's manufacturing industry from global competitive advantage to pricing power. In addition, there are some varieties related to anti-hierarchical themes (such as new energy, steel) that are climbing again, and the catalytic effect of anti-hierarchical themes may intensify in the first quarter of next year. From a configuration strategy perspective, we still believe that before the appearance of unexpectedly strong domestic demand changes, it is still dominated by a mindset of dealing with structural opportunities, which is a basic framework for New Year configuration choices. Sectors with low heat and concentration of holdings but with increasing attention and long-term ROE improvement potential are preferred (such as chemical industry, engineering machinery, new energy, etc.). Some thematic sectors related to Shenzhen New Industries Biomedical Engineering (such as commercial aerospace) may still ferment repeatedly, and we still highly focus on tracking the trend of RMB appreciation and corresponding opportunities from this perspective. Securities and insurance are choices for both offense and defense under this view. Guotai Haitong: Crossing, looking far and seeing new peaks China's capital market is beginning to consolidate social confidence and social capital, ushering in a period of great development. The major policy shift in September 2024 signals the end of "internal worries"; since April 2025, China has adeptly handled trade frictions to alleviate "external worries", with implications for the country's strength and governance capacity. Unlike the contraction cycle from 2019-2024, since 2025, Chinese society has become more confident outwardly, more stable internally, and asset contraction has ended. Stock prices reflect expectations for the future and societal confidence trending upwards. During the urbanization development period, social confidence and individual participation in productivity improvement are mainly achieved through fixed asset investment. Traditional commercial expectations are waning in the transition gradually shifting towards knowledge, technology, and capital-intensive industries driving growth. Traditional capital how to participate in economic transformation, technological advancement, or asset allocation? Past rough investments to tap into traditional assets with risks might just be crucial now as capital markets are more important than ever, consolidating societal capital unlike before. China's economic "peg" has been broken, non-risk income is systematically sinking, and incremental market entry is far from over. In the past, Chinese society had many "pegged" assets, taking on the role of risk-free assets, such as trust, bank wealth management, non-standard assets, etc. The existence of "peg" assets has hindered the decline of risk-free interest rates and underpins the short bull and long bear markets in equities. In the latter half of 2024, China's long-term interest rates fell below 2%, and in 2025 comprehensive fixed-income returns declined. Leveraging real estate and debt-based non-standard assets exit, high-yield, risk-free assets saw an all-around decrease. The high revenue, risk-free asset decrease mainly indicates hopeful prospects of a revaluation of Chinese assets. In 2026, there will be a peak in fixed deposit maturities, and long-term capital has been pushed into the market, undoubtedly, China will enter an upsurge in demand for asset management, and incremental market entry has more gas. Furthermore, reform changes societal ideas. Capital market reform boosts China's investable asset capabilities; increases market resilience to risks and leads stock markets from fluctuating tremulous bourses to stable upward trajectories. Before, social circles cast doubt on the bourses, for instance, low investability and large market swings. Since the "new national nine standards" have come into effect, policies like delisting, shareholdings, insider trading, financial fraud, and disclosure regulations have revitalized China's asset appeal. Moreover, the construction and operation of the "market stabilization mechanism" significantly reduced market volatility, boosting confident market holdings. Most crucially, China's industrial structuring transition has decreased economic uncertainty, laying down investment clues. Following a domino effect of downturns, the traditional industries of "L-shape" vertical movements are now transitioning to a horizon of stability, with new technological sectors entering innovation and growth phases. Chinese manufacturing boasts a sleight of hand with competitive edges expanding globally. The downsides are the invisible economic growth outlook, which might pose a challenge in the understanding and evolution of the economy. Consequently, the typical hallmark of a "transformational bull" marks the boundaries of economic change intersecting with capital market reforms. Trading off a bearish mindset, maintaining faith, and patience, Chinese stock markets have higher altitudes to scale up. Risk Warning: Overseas recession diverges from expectations; global geopolitical uncertainties. Industrial: How to allocate industries after the RMB "breaks 7"? 1. In recent weeks, the RMB has been accelerating in value, primarily driven by the weakening US dollar and the end-of-year "net settlement tide", influencing market expectations for consistency. The RMB's "passive appreciation" and expectations-driven appreciation characteristics are becoming more pronounced. 2. In the short term, delayed release in corporate settlements could provide a boost to the RMB exchange rate at the end of the year, resonating with the seasonal spring rally in both the forex and capital markets. 3. Looking ahead to the next year, the weakening US dollar provides a favorable external environment for the RMB's appreciation. Moreover, the current impetus for the RMB's proactive appreciation lies in two fundamental factors that previously suppressed the RMB exchange rateinternal deflation pressures and decreasing returns on Chinese assets. These factors have reversed this year and are expected to strengthen further next year, forming a long-term support for the RMB's proactive appreciation. 4. Once the RMB's appreciation triggers a reversal in capital flows, including the return of domestic funds awaiting settlement abroad and foreign funds that had previously withdrawn from China, the flow of trillions of dollars back into Chinese assets could significantly drive up the revaluation of Chinese assets, proving to be a pivotal moment for future asset evaluation. 5. Since the RMB's four successive appreciation cycles starting in 2016, both A-shares and H-shares have mostly seen gains. With a macro combination of "upward trends in domestic fundamentals and liberal global atmosphere", H-shares are expected to be more sensitive to external liquidity. Meanwhile, gains in A-shares are mainly driven by profits, with the contribution from valuations being less significant. The exchange rate isn't the principal factor in sector allocation during RMB appreciation periods, but its primary role lies in steering investments towards preferred sectors based on cyclical trends and favored styles. 6. Four logics behind sector allocation affected by RMB appreciation: 1) Profit-wise, significant gains are observed in sectors with high import dependency like upstream resources benefiting from lowered import costs, including coal, steel, and some chemicals (plastics, chemical raw materials, agrochemicals, rubber), as well as downstream industries like aviation and airports; 2) Driven by the RMB's appreciation, foreign debt costs decrease, benefiting industries with substantial USD liabilities, such as the building and real estate chain, logistics, optics, electronics, and diversified finance; 3) The appreciation of the RMB boosts domestic purchasing power, benefiting demand-driven and cross-border consumption sectors like cross-border e-commerce, duty-free, hotels and catering, high-end consumer goods and services. Verified by stock price movements linked to the RMB exchange rate, these sectors indeed reflect market expectations during RMB appreciation. In terms of valuation, 4) the RMB's appreciation attracts foreign capital back into China, and this may lead to the continuation of current growth themes benefiting from increased foreign investment, establishing core trends favored by both domestic and foreign investors, which could further strengthen the prevailing market style revolving around cyclical and industrial trends. 7. Among sectors enjoying benefits from the RMB's appreciation, keep an eye on four indicators linked to economic outlook: 1) Cyclical growth themes favored by both domestic and foreign investors, including AI hardware, communication equipment, components, semiconductors, consumer electronics, advanced manufacturing (batteries, automotive parts, chemicals), and non-ferrous metals (industrial and energy metals); 2) Upstream resource industries gaining from the uptick in Chinese PPI and the combined resonance in the lower import costs propelled by the initiatives against the negative effects of internal competition - steel, chemicals (plastics, chemical raw materials, agrochemicals, rubber), among others; 3) Sectors benefiting from the increase in purchasing power and structural improvements in domestic demand, such as service and premium consumer goods like cross-border e-commerce, duty-free retail, hotels, restaurants, and jewelry; 4) Sectors with reasonable valuations poised to improve marginally in the coming year, likely to benefit from the various improvements brought about by the RMB's appreciation, including airport facilities, paper mills, logistics, etc. Soochow: Top ten predictions for A-shares in 2026 Prediction One: A-shares broad index continues to rise, with the upper hands in the growth-value style rotation game being rewarding. Prediction Two: Cyclical rotation of major A-share sectors (growth-value) will be the deciding factor in trading strategies in 2026. Prediction Three: Technology capital growth styles continue to lead in the first half of the year, with a broad diffusion trend in growth styles. Prediction Four: Dividend style surpluses will rise again in the second half of the year. Prediction Five: AI edge (AI glasses, etc.) may replicate a market trend similar to that seen after 2019 for TWS. Prediction Six: Trends in the "15th Five-Year Plan" industries (smart-tech, fusion, quantum technology, 6G, brain-machine interfaces, hydrogen energy, commercial aerospace) will dominate as trading commodities. Prediction Seven: Major commodity prices will see a mid-term peak by the second quarter. Prediction Eight: Small and mid-cap styles may face some volatility risks. Prediction Nine: The Federal Reserve is expected to cut interest rates once or twice in the first half, with a halt in rate cuts in the second half. Prediction Ten: Negative PPI values will continue to narrow. Risk Warning: Economic recovery falling short of expectations; delays in the peaking and decrease of US bonds; geopolitical black swan events. Zhongtai: Analyzing the market's continued rise this week How to interpret the ongoing rise in the market this week? The index hits new highs while individual stock nuances become more pronounced, signaling a period of high-level structural rebalancing. The A-share market continued its strong momentum this week, with indices like the Wendann Quan A, Shanghai-Shenzhen 300, and CSI 2000 indices increasing by 2.78%, 1.95%, and 3.06%, respectively. As for turnover volumes, the average daily turnover of the Wendann Quan A index increased from 1.76 trillion yuan last week to gradually surpass 1.97 trillion yuan this week, breaching the 2 trillion mark on Friday. From an individual stock perspective, approximately 52.20% of the Wendann Quan A index's gains this week were concentrated in individual stocks, a figure consistent with the previous week's performance. Overall, the upward trend in indices has been confirmed, but the mode of ascent has changed. The continued market rise this week is mainly driven by the risk appetite recovery thrusting the cyclical sector. Approaching year-end, the domestic and international policy environment and news are relatively calm, lacking new positive factors directly impacting the market, with the main influencing factor coming from internal structural changes. Based on the market structure, the week's rise is mainly propelled by the cyclical sector, with the rise in industrial metal commodity prices boosting stocks in cyclically linked resources sectors. In terms of funding and trading characteristics, there are visible signs of risk appetite recovery. Externally, the recent stage of RMB appreciation, combined with improved marginal expectations for overseas liquidity, enhances the prospects for foreign capital inflow to the A-share market. Looking ahead, there is still potential for a seasonal rally before the Chinese New Year, with opportunities to catch on low levels. Currently, factors hindering the market have substantially weakened, paving the way for heightened risk appetite. The policy environment remains favorable, creating an optimistic outlook for consumer policies in the pre-Chinese New Year period, enhancing overall risk appetite. However, it's important to note that the current market situation aligns more with the characteristics of a "bottoming out phase preparing for the Chinese New Year market," rather than the start of a formal upward trend. The market's funds are more aligned with a "buy-the-dip, shift-structure" participation mode, with trends more likely to evolve in a gradual "resume the upward trend while making internal structural adjustments" manner, rather than a rapid lift off and consistent upward trend from high levels. From a sectoral allocation point of view, focus on sectors with significant expansion potential and attention in the coming weeks and months. Consider industries that have experienced sufficient correction and demonstrated daily MACD bullish divergence signals, such as the Hang Seng Tech Index. Investment Recommendations Due to the high probability of a structural shift towards an up-trending market in A-shares, consider the following investment strategies: 1. Primarily focus on growth themes that are sensitive to AI hardware demand and energy resources. 2. Industries associated with China's equipment exports, such as power grid equipment, energy storage, lithium batteries, photovoltaics, mechanical engineering, and commercial vehicles, hold prominent opportunities for investment. 3. Beyond striving for progress in user consumption policies, seize opportunities in the service and trade sector for thematic trading. 4. Capitalize on the deepening of domestic consumption policy directions to engage in thematic trading and investments. Risk Warning: Economic revival falls short of expectations; US bond downside unfolding slower than expected; geopolitical black swan events. Sinolink: New mainlines emerging 1. The year-end A-share market has seen a continuous rise prompted by various factors. As global risks subside and domestic policy expectations strengthen, along with potential purchases by insurance and pension funds, the outlook is bright for a spring rally. As we observe the current uptrend, with technology companies and other top stocks leading the charge, the market structure is likely to continue its upward trajectory. 2. The market is shifting towards a broader range of focus areas, highlighting sectors like AI, domestic consumption, increasing commodity prices, and new industry themes like commercial aerospace. The market is witnessing a diffusion in hot topics and a rotation in various segments. This diversified focus brings about a more stable and consistent market rally, as opposed to volatile spikes driven by singular narratives. 3. In terms of sectoral allocation, it's crucial to focus on growth themes driven by innovative technologies and consumer trends, as well as industries expected to benefit from anti-hierarchical policies and rising prices. Additionally, pay attention to sectors poised to benefit from increased purchasing power and structural improvements, such as high-end consumer goods and services driven by domestic demand enhancements. 4. As the RMB appreciates and commodity prices surge, industries related to AI, renewable energy, and international trade stand to gain. This creates opportunities for investors to capitalize on these emerging trends and themes in the market. These new mainlines are indicative of a market that is gradually diversifying and expanding, offering broader investment opportunities across various sectors and industries. By staying attuned to these emerging trends and aligning investment strategies accordingly, investors can navigate the evolving market landscape with greater confidence and potential for growth. Risk Warning: Economic recovery lags behind projections; uncertainties in global economic trends; geopolitical events impacting market stability. Huaxi: A likely "small attitude" spring rally ahead of the New Year The A-share market has been trending higher, delivering an "attitude-driven" rally into the year-end. With the Shanghai Composite Index marking an eight-day winning streak, there is speculation of a potential spring rally on the horizon. As the momentum builds up, the market is witnessing increased volume and stronger assertiveness. Key sectors like electronic and telecommunications equipment, as well as commercial aerospace, are leading the charge. This gradual uptick is being supported by buoyed risk appetite, driven by a mix of internal and external factors that are providing the market with a positive outlook. Looking forward, the market is poised for a potential spring rally, reflecting a shift towards a broader market trend with a focus on growth and innovation. While caution is advised in times of increased uncertainty, strategic investments can be made by closely monitoring emerging opportunities across different sectors and themes. As the market dynamics continue to evolve, nimble and informed decision-making will be key to harnessing the potential gains from the emerging trends and market shifts. In summary, the market is showing signs of resilience and adaptability, paving the way for a potential spring rally poised for growth, driven by a mix of internal and external factors. By staying alert to emerging opportunities and adjusting investment strategies accordingly, investors can position themselves for success in the dynamic and evolving market landscape. Risk Warning: Economic developments diverging from projections; geopolitical tensions impacting market stability; policy uncertainties leading to market volatility. China Galaxy: A-shares to welcome a New Year "mild rally" The A-share market is showing signs of a "mild rally" as the year-end approaches, with the Shanghai Composite Index marking an eight-day consecutive rise. Market dynamics are driven by liquidity, with a significant increase in trading volume, exceeding 2 trillion yuan. The rotation of hot themes has prompted a steady upward trajectory in sectors like industrial metals, lithium minerals, and aerospace themes. In the short term, the market is expected to maintain its current structure, with volume being a key determinant of the trend. The recent appreciation of the RMB, along with improved external conditions, is providing a favorable environment for the inflow of foreign capital, further boosting market sentiment. Looking ahead, the medium-term outlook for A-shares remains positive, with a gradual upward trend expected to continue. In the short term, investors are advised to maintain their current positions and avoid chasing high valuations. Opportunities for increasing positions may arise during any potential pullbacks in the market, presenting a chance for strategic allocation. By focusing on core sectors and individual stocks with growth potential, investors can navigate the market with a balanced approach, positioning themselves for potential gains in the evolving market environment. In conclusion, the A-share market is set to embrace a phase of consolidation and growth, with the potential for a spring rally on the horizon. By adopting a cautious yet proactive