Merchandising strategy: focus on the verification of first quarter results and the direction of continued prosperity, and suggest differentiating in the crowded track.

Guosen Securities' strategy research believes that since April, the easing of geopolitical risks has driven the return of risk appetite in A-shares, with the trading volume of both markets continuously exceeding 2 trillion yuan. The pricing logic has shifted from hedging and defense to performance verification. The current market presents characteristics of "extreme clustering" and "deep valuation differentiation", with funds accelerating their flow from consumer sectors to resources and technology sectors. Following the verification of first-quarter reports, three main themes in the market focus on: positive PPI and the revaluation of resources and computing power driven by the outbreak of AI; the resilience of high-tech manufacturing industry under the dividend of going global; bottom-up repair of the real estate chain after policy support. It is recommended to selectively differentiate in crowded fields, focusing on hard technology and real resources to grasp structural opportunities driven by profit and prosperity, with a key focus on areas such as electronics, power, power equipment, national defense and military industry, non-ferrous metals, and basic chemicals.