Hunan Securities: The A-share market in June may continue to fluctuate widely. It is recommended to pay attention to the chip manufacturing related sectors.

Xiangcai Securities released a research report stating that from a long-term perspective, 2026 is the beginning year of the "Fifteenth Five-Year Plan". China will continue to maintain an active fiscal policy and moderately loose monetary policy, providing important support for the stable operation of the domestic economy in 2026 and keeping the A-share market in a "slow bull" trend. In the short term, due to the lower-than-expected growth in fixed asset investment and total retail sales of consumer goods in April, it will offset the strong impact of exports on the overall economy. The bank expects that the A-share market will maintain a volatile pattern. Recommendations include focusing on left-leaning banks, securities, and service industries; right-leaning investments in the clear logic of cyclical industries, high-end equipment direction, and AI technology with certain performance in the chip manufacturing related fields. Xiangcai Securities' main points are as follows: June 2026 will present a macro strong, market weak, strong fundamental pattern The bank believes that the macroeconomic condition in June is still relatively strong. The main reasons are, firstly, China continues to implement an active fiscal policy and moderately loose monetary policy; and secondly, after the Middle East conflict, although there is short-term inflationary pressure from rising oil and gas prices, in the medium to long term, China-US relations have significantly eased after Trump's visit to China, reducing international pressure on China and making it more conducive for China to focus on solidly advancing the smart economy proposed in the "Fifteenth Five-Year Plan". Therefore, the bank believes that currently their three-dimensional model is in a state of "macro market fundamental ". The market situation is the main source of current changes Due to the slight decline in fixed asset investment and total retail sales of consumer goods in April, as well as increased discussions about domestic liquidity traps, the market has fluctuated. The bank predicts that the A-share market will remain in a overall volatile pattern in June. Fundamentally, the first quarter of 2026 has shown some strengthening There was a significant rebound in industrial enterprise profits in the first quarter of 2026 in China. However, the growth rates of fixed asset investment and total retail sales of consumer goods in April declined, offsetting the strong impact of exports on the economy. The short-term fundamental weakness is still inconclusive and needs further observation. In June 2026, midstream manufacturing is likely to be the main beneficiary Looking at the industries with the highest gains from 2017 to June 2025, the top five industries were other electronic II, engineering machinery, batteries, household appliance components II, and white goods. Compared to industries leading the rankings, they are more in the middle and lower reaches. The bank believes that the ongoing strength in electronics and communication equipment has accumulated significantly, with a demand to switch, and midstream manufacturing is likely to be the main beneficiary.