China Securities Co., Ltd. 2026 Investment Outlook: Seizing the new mainline of A-share resources, the activity in the Hong Kong market will be further stimulated.

China Securities Co., Ltd. released a research report stating that looking ahead to 2026, the bull market in A-shares is expected to continue, with natural resources likely becoming a new mainline direction for A-shares after the technology trend. In terms of the Hong Kong stock market, the concept of the "new four bulls of A-shares and Hong Kong stocks" was introduced in 2025, namely the "capital inflow bull," "technology innovation bull," "institutional reform bull," and "consumption upgrading bull." The forces of these four bulls will continue to drive the market upward in 2026. With a large number of high-quality domestic companies listing in Hong Kong and the evolution of the U.S. interest rate cycle, the activity in the Hong Kong stock market in 2026 will be further stimulated, and there is still significant upside potential for Hong Kong stocks. The main viewpoints of China Securities Co., Ltd. are as follows: Overall, 2026 is a year to consolidate the foundation and make comprehensive efforts; externally, it is a year for strategic counterattacks; economically, it is a year for nurturing innovation; in terms of growth drivers, it is a year to boost domestic demand; in terms of policy space, it is a year of "dual relaxation" of fiscal and monetary policies; in terms of risk challenges, it is a year to converge risks. With the support of "policy support + stable domestic demand + industrial upgrading," GDP growth in 2026 is expected to be around 5%. A-share market: The bull market in A-shares is expected to continue in 2026, with the index still showing upward fluctuations but with a slower increase. Investors will pay more attention to improvements in fundamentals and business cycle validation. China Securities Co., Ltd. believes that caution should be taken with regards to the risk of structural/phase rotation in the technology sector, and natural resources are likely to become a new mainline direction for A-shares after the technology trend. The comprehensive game between China and the U.S. may have important implications for A-share investments, and it is recommended to focus on future industries and critical resources in the military industry. Key sectors to focus on include: new energy, non-ferrous metals, basic chemicals, petroleum and petrochemicals, non-banking financial institutions, military industry, machinery and equipment, and computers. Key themes to focus on include: new materials, solid-state batteries, commercial spaceflight, nuclear power, and cross-strait integration. Hong Kong stock market: The concept of the "new four bulls of A-shares and Hong Kong stocks" was introduced in 2025, namely the "capital inflow bull," "technology innovation bull," "institutional reform bull," and "consumption upgrading bull." The power of these four bulls will continue to drive the market upward in 2026. With a large number of high-quality domestic companies listing in Hong Kong and the evolution of the U.S. interest rate cycle, the activity in the Hong Kong stock market in 2026 will be further stimulated, and there is still significant upside potential for Hong Kong stocks. Global market: In 2026, global asset pricing may have the following three clues worth tracking. First, in 2025, the most prominent assets globally were safe-haven assets and precious metals (gold and silver) given the loose monetary policies of the Federal Reserve, while in 2026, amid anti-fragility and resonance, the most prominent assets may shift to non-ferrous metals (copper and aluminum). Second, the global trend is still in the process of wind correction. The AI industry chain is worth tracking due to the technology security competition between China and the U.S. Third, in 2025, the U.S. bond rates and inflation levels were difficult to lower, and three major trends and a minor global recovery will determine that in 2026, global interest rates and inflation levels will still remain high. Bond market: In terms of interest rate bonds, the overall risk in the short term is limited, and the yield curve is expected to steepen. Credit spreads in credit bonds are expected to remain at a low level, and widening spreads from incremental events will create opportunities for allocation. Convertible bond assets may still exhibit significant range oscillations due to the catalyzing effect of equity assets and the constraints of high redemption probabilities.