CITIC Securities: External disturbances are concentrated, and the A-share spring market begins to take off

According to the Zhitong Finance APP, CITIC Securities released a research report stating that external disturbances are concentrated and the spring market is starting to take off, with market sentiment gradually warming up, focusing on three major themes before the holiday. From the perspective of the A-share market, as the U.S. President officially takes office and the Federal Reserve holds its interest rate meeting, the external disturbance factors that have caused capital to be cautious are expected to be resolved, leading to a more obvious willingness of active capital to increase positions recently, warming market sentiment and starting to take off for the spring market. It is recommended to focus on three themes: consumption hotspots during the Spring Festival, infrastructure and business model going overseas, and semiconductor localization.

From the thematic environment perspective, with the external disturbance factors becoming clearer, the expectations for infrastructure manufacturing and business model going overseas are being restored, while the U.S.-China technology competition is tending towards a long-term situation. At the same time, market trading activity is not low, and investors' participation in thematic investments is expected to increase. From the analysis of catalytic factors, attention can be paid to the positive implementation of consumption policies and the approaching peak of consumption during the Spring Festival; the U.S. President's short-term statements on geopolitical and tariff issues after taking office; and the successive release of pilot projects for cutting-edge technology products, the narrative of U.S.-China technology competition, and the overseas expansion of Chinese business models.

A-share Market Trend: External disturbances are expected to be concentrated, and market sentiment is likely to gradually warm up.

First, in the last six trading days before the holiday, external disturbance factors such as the U.S. President's inauguration and the Federal Reserve's interest rate cut rhythm, which have caused previous capital caution, are expected to be resolved intensively. According to the Ministry of Foreign Affairs news, on the evening of January 17, President Xi Jinping had a phone call with Trump at Trump's request, and Vice President Han Zheng was also invited to attend the inauguration ceremony on January 20, which is expected to significantly ease market concerns about the short-term intensification of U.S.-China competition, strengthening the main theme of going overseas. Secondly, with the peak consumption during the Spring Festival approaching and the expansion of national subsidies, under the consistent expectations of external disturbances being resolved and China's policy responses, domestic consumption remains a consensus and a focus for thematic investment. Finally, as internal and external expectations become clearer, China's policies and the stock, bond, and foreign exchange markets will move accordingly, with expectations of a stable exchange rate, fluctuations in the bond market, and a gradual launch of the spring offensive in the stock market in the first quarter.

Thematic Environment: External disturbance factors are expected to be concentrated, and investors' participation in themes is likely to continue to increase.

1. Concentrated external disturbances: Expectations for infrastructure manufacturing and business model going overseas are being restored, and the U.S.-China technology competition is tending towards a long-term situation. As Trump officially begins his second presidential term on January 20, the U.S.-China competition will enter a new stage after iteration. In addition to the tariff increase competition responding to domestic policy dynamics, the following three aspects are more worthy of attention for thematic investment. First, Trump's administration is expected to quickly reshape the geopolitical landscape, potentially leading to a situation where the Russia-Ukraine conflict calms down, post-war economic reconstruction occurs, and China-Europe relations warm up, making related infrastructure and manufacturing themes worth paying attention to. Secondly, the protests by American netizens against the ban on TikTok and their shift to Xiaohongshu reflect the competitiveness of Chinese content social platforms in the overseas business model, with domestic companies possessing core competitiveness in content ecology, business models, and efficiency, which are not easily blocked by policy measures, likely to see an increase in pricing. Finally, on the evening of January 15, the U.S. BIS revised the Export Administration Regulations (EAR), further tightening restrictions on advanced storage for China, reinforcing the consensus on the long-term nature of the U.S.-China technology competition, and the theme of semiconductor localization remains strong
2. The market trading activity is not low, and investor participation in thematic investments is expected to increase. First, monitoring data shows that the scale of net outflows from the main forces in both markets has further narrowed, and market sentiment has shown a noticeable recovery, with the proportion of active capital transactions beginning to rise from the bottom. Second, as of the week ending January 10, 2025, according to a survey of the channels of CITIC Securities, the latest position level of the sample active private equity is 80.0%, an increase of 2.5 percentage points from the previous 77.5%, marking the first time it has reached the 80% level since the week of April 7, 2023. Third, based on the constructed thematic liquidity indicator system, last week the money flow indicator MFI (MA5) and the relative strength index RSI (MA5) of the CSI 300 both rebounded, and the deviation of transaction volume compared to the CSI 1000 and CSI 2000 has increased. Finally, the "capital grabbing" indicator shows a significant rebound in market attention to themes such as small and medium-sized stocks. Only considering the constituent stocks of the CSI 1000 + CSI 2000, the latest proportion of transaction volume during the auction phase (MA5) is currently at 90.5% level since 2021. Considering the thematic liquidity indicators and the internal and external macro policy environment, it is expected that investor participation in thematic investments will likely increase in the future.

Catalytic factors: The peak consumption during the Spring Festival is approaching, external disturbances are becoming clearer, and the long-term U.S.-China technology competition.

1. Consumer policies are actively being implemented, and the peak consumption during the Spring Festival is approaching. The details of the new purchase subsidies for consumer electronics and the old-for-new appliance policy have been finalized, and cultural and tourism consumption has become a new growth point. Continuous policy support on the consumption side is expected to inject strong momentum into the consumption market in 2025, especially as the Spring Festival, an important node, is likely to catalyze a consumption boom. In light of the anticipated strengthening of some consumption data during the Spring Festival, it is recommended to focus on spring consumption hotspot themes, specifically including WeChat small stores "gifting," expansion of national subsidy categories, and cultural tourism consumption themes.

2. With Trump's inauguration imminent, the U.S.-China competition is entering a new phase. The clarification of external disturbance factors is the most important change from top to bottom in the coming week, marked by Trump's inauguration on January 20. As mentioned earlier, it is expected that his administration will quickly reshape the geopolitical landscape, potentially leading to a calming of the Russia-Ukraine conflict, post-war economic reconstruction, and warming of China-Europe relations, making related infrastructure and manufacturing themes worth paying attention to.

3. Cutting-edge technology products are being released and piloted, and the narrative of U.S.-China technology competition remains. Yushu Technology recently launched an upgraded version of the G1 humanoid robot, and SpaceX's "Starship" conducted its seventh test flight. This week, the technological revolution represented by humanoid robots and commercial aerospace continues to experiment and advance. For the domestic market, in light of recent events, especially the U.S. tightening restrictions on advanced storage for China, the previously recommended themes of semiconductor localization and AI are in line with the main line of technological transformation and are worth continued attention.

Key focus: Spring Festival consumption hotspots, overseas themes, and semiconductor localization.