Huatai Securities: A-share allocation recommendations focus on thematic investments and prosperity strategies

Huatai Securities points out that the spring rally is one of the more certain calendar effects in the A-share market. This year’s underlying logic of the calendar effect may still be valid, but there are some differences compared to previous years: 1) The high trading volume after the holiday indicates that liquidity remains abundant, but the visibility of further risk premium breakthroughs has decreased. The upward slope of the market may slow compared to previous years, and the need to identify structural opportunities has increased; 2) In terms of style, there is a question whether the shift in funds from technology to cyclical sectors after the holiday is happening earlier. We believe that the transition from small-cap to large-cap stocks still requires a liquidity turning point, a recovery trend in large-cap value stocks, and coordination of capital flows. The observation window may be in March-April. For allocation, it is recommended to focus on thematic investments and prosperity strategies, prioritizing policies, and paying attention to sectors such as communication equipment, minor metals, rare metals, batteries, and building materials.