Brokerage Morning Meeting Highlights | The new energy industry is expected to usher in the Davis Double-click.

Yesterday, the market underwent a volatile adjustment, with the three major indices rising and then falling by over 1%, while the ChiNext index fell by over 2%. The turnover of the Shanghai and Shenzhen stock markets fell below 2 trillion yuan. In terms of sectors, concepts such as electricity, lithium battery materials, and commercial aerospace were active. On the downside, concepts like power grid equipment and fiber optics fluctuated downward. At the close, the Shanghai Composite Index fell by 1.09%, the Shenzhen Component Index fell by 1.41%, and the ChiNext Index fell by 1.34%. At today's morning meeting of securities firms, CITIC SEC believes that the new energy industry is expected to receive a "double boost" from the Davis thesis; Huatai believes that there is a positive outlook for electricity and environmental protection stability; CICC believes that the US pro-cyclical sectors are likely to continue outperforming. CITIC SEC: New energy industry expected to receive a "double boost" from the Davis thesis In the short term, with the sharp rise in oil and gas prices, the new energy industry is expected to benefit from its flexible allocation attributes and improved cost-effectiveness, leading to accelerated demand; in the medium to long term, there is a shortage of oil and gas resources in China, Europe, and the Asia-Pacific region, with vulnerabilities in the energy structure. Clean energy development will upgrade from being an optional path for low-carbon transformation to a necessary strategic choice for energy security. Therefore, combining the trend of increasing demand for new energy and event-driven resonance such as geopolitical conflicts, the industry is expected to receive a "double boost" from the Davis thesis. Huatai: Positive outlook for electricity and stable growth in environmental protection The year-on-year growth rate of thermal power generation in January-February turned from a decline to an increase, while coal prices decreased month-on-month and year-on-year. Some thermal power companies may still achieve a year-on-year increase in net profit attributable to shareholders in the first quarter of 2026; hydropower generation increased year-on-year in January-February; nuclear power operation is stable, and electricity price policies have been introduced; renewable energy operators have increased their electricity output year-on-year, but the absorption situation remains challenging. Looking ahead to the second quarter of 2026, for thermal power, attention should be paid to the scissors difference between electricity prices and coal prices; hydropower profits mainly depend on the water situation; renewable energy should focus on the inflection point of electricity prices and absorption; environmental protection should mainly focus on the progress of garbage incineration and power generation enterprises going overseas, as well as local water price adjustments and payment collection. CICC: US pro-cyclical sectors expected to continue outperforming US pro-cyclical sectors such as resources, energy, industrial, and defense aerospace are expected to outperform in the long term under policy-induced demand. Large US technology companies, after being "savvy," "buybackers," and "cash cows" for the past decade or so, are gradually starting to expand through debt, which to some extent will suppress their valuation. Therefore, the performance of tech stocks will be more profit-driven, and internal differentiation will also occur. In fact, looking back in history, during the period of rising commodity prices, US stocks, especially growth stocks, have had their valuations suppressed. Similarly, in periods of high nominal growth in the US, value pro-cyclical sectors often outperform growth. This article is reprinted from "Cai Lianshe". Editor: Xu Wenqiang.