Zhongjin: The situation in Iran is still unclear, it is recommended to prioritize investing in technology hardware and internet stocks in the short term.

Zhongjin Research Report: Since the outbreak of tensions in Iran on February 28th, the conflict has entered its fifth week, with the evolving path more complex and lasting longer than initially expected by the market. It is estimated that true easing may still be a long way off, and the road to easing may not be smooth. Against this background, the performance of different assets has shown significant differentiation, with limited fluctuations in US bonds and gold, and even a slight rebound, while equity markets such as US stocks have started to decline. Zhongjin stated that the situation in Iran remains uncertain, but believes that the following premises may have a certain degree of credibility. In the short term, especially in April, the situation is likely to remain volatile, with market expectations for ceasefires, negotiations and escalations fluctuating back and forth. Therefore, volatility is unlikely to end quickly, and periodic escalations cannot be ruled out. However, in the medium term, the situation ultimately spiraling out of control is not the baseline scenario. Whether from the midterm constraints on US President Trump's reelection, or the global economy's ability to withstand sustained high oil prices, the conflict may drag on, but an evolution into a long-term, comprehensive, and uncontrollable escalation is not the baseline scenario. Even without considering the situation in Iran, the second quarter is already in a phase of relative weakness in China's credit cycle. From a purely quantitative short-term rotation perspective, Zhongjin expects that in the short term, technology hardware, internet, chemicals, building materials, and steel sectors will perform well in terms of profitability, valuation, and fund trading, and can be prioritized for deployment; banks, biotechnology, and non-ferrous metals sectors have strong fundamentals and can be continuously monitored for opportunities; conversely, the coal, oil and gas, and utilities sectors may be somewhat crowded in the short term.