Ten Brokerages’ Weekly Strategies: A Turning Point May Be Near as Chinese Assets Gain Appeal

Table of Contents

• You might want to know
• Main Topic
• Key Insights Table
• Afterwards...

You might want to know

• Why do brokerages believe a market turning point may be approaching even though volatility remains elevated?
• Which areas are drawing attention as investors balance technology growth, defensive income, and valuation recovery?

Main Topic

China’s A-share market has been navigating a period of adjustment, policy support, and shifting investor expectations. In their weekly outlooks, ten brokerages describe a market in which downside pressure may be easing, but where a durable rebound still depends on improving confidence, capital flows, earnings delivery, and the ability of individual sectors to withstand global uncertainty. Their recommendations differ in emphasis, yet several common themes emerge: selective technology exposure, domestic substitution, high-cash-flow and dividend-paying businesses, low-valuation consumption, and industries positioned to benefit from policy support or improving demand.

CITIC Securities (中信证券) argues that market adjustment has been brought forward this year and that more opportunities for structural change may appear next year. It expects technology stocks to diverge rather than move as a single group, with broad potential for a structural recovery among non-AI industries. The brokerage cautions that the process of clearing excess market positioning takes time and that investors may gradually return to more reasonable return expectations. In that setting, strategies focused on stable returns, represented by PB-ROE, may outperform strategies that depend chiefly on high growth or strong market momentum. This could mark a significant change in investment style.

At the industry level, TMT and midstream manufacturing are expected to contribute about 63% of the increase in profits in 2027. Technology forecasts have been revised upward continuously, while forecasts for manufacturing and consumption have continued to be reduced. CITIC Securities therefore recommends prioritizing the realization of earnings in electronics, monitoring the stability of forecasts for machinery, and assessing banks’ contribution to dividend income. For manufacturing and consumption, it highlights the scale of forecast reductions and the recovery of fourth-quarter profits. Its portfolio approach is to diversify moderately across four themes: stable returns, high-quality manufacturers with successful overseas expansion, recovery in domestic demand, and new AI technologies.

Huatai Securities (华泰证券) says valuation and investor sentiment in the A-share market are approaching levels seen near previous market bottoms. The bottoming process may be relatively well advanced. Although forced portfolio adjustments by absolute-return investors have become more prominent, the potential for this pressure to expand further may be limited. A rebound, however, may need additional support from policy and incremental capital, since financing-related and trading-oriented funds have not yet returned clearly. Overseas uncertainty has eased after the U.S. midterm elections, but volatility in international markets has increased. Investors are concerned that U.S. data-center construction could face tighter regulatory review and approval requirements; Huatai believes the market may have priced in too much risk of data-center infrastructure projects being halted.

Huatai expects the scale of earnings surprises among U.S. stocks to moderate. For A shares, this could weigh on the AI computing-power supply chain while improving expectations for new energy. As technology competition between China and the United States intensifies, areas such as self-sufficient semiconductor production may benefit; physical AI and AI applications may also be relatively attractive. The brokerage identifies three portfolio lines: select new-energy companies in light of post-election U.S. policy expectations, installation trends, prices, and orders; maintain a dividend-income core in banks, dairy, expressways, hydropower, thermal power, and steel companies with strong dividend delivery; and watch for a potential recovery in consumer sentiment, particularly in baijiu, small household appliances, and home-improvement materials.

China Securities (中信建投) recommends continuing to focus on sectors underweighted by institutions and on valuation-recovery opportunities. A-share indexes rebounded last week, but risk appetite remains fragile. Expectations of easing tensions in the Middle East and tighter AI regulation rose after the Democratic Party regained both chambers of Congress, while international oil prices fell sharply. Weakness in overseas technology shares contributed to a pullback in A-share computing-power stocks on Friday. Earnings forecasts saw notable adjustments in transportation, retail, electronics, banking, and real estate. Coal prices recovered, precious metals stabilized and rose, industrial metals declined, Brent crude fell sharply, chemicals broadly weakened, midstream materials diverged, and DRAM quotations declined.

For sector allocation, China Securities favors defensive sectors and low-valued consumer stocks during a volatile period. It recommends retaining dividend-paying assets that combine low institutional positioning with steady cash flow, including banks, transportation, and utilities. It also highlights food and beverage, retail, and beauty and personal care as consumer areas trading at relatively low levels. This approach reflects a preference for companies whose cash generation may offer some resilience while valuations and sentiment recover.

China Merchants Securities (招商证券) focuses on critical mineral resources, high cash flow, and technological self-reliance. It notes that the Democratic Party’s recovery of both chambers of Congress is constrained by the president’s veto power, so policy changes are more likely to take the form of stronger restrictions than a reversal in direction. Tighter oversight of AI and data centers has prompted concerns about returns on capital expenditure and potential downward revisions to upstream hardware EPS, but the brokerage considers a comprehensive restriction on AI expansion unlikely. Strong nonfarm employment data limit expectations of near-term monetary easing, while cooling AI investment could place downward pressure on longer-term interest rates.

China Merchants Securities recommends looking at semiconductor equipment and materials, domestic computing power and information technology innovation, rare earths, copper and other minor metals, transformers and grid equipment, innovative drugs, and high-dividend banks. In media, AI is spreading across multiple parts of the industry. AI-generated short-form dramas, AI games, and AI publishing have already formed comparatively clear application scenarios and are identified as three areas to watch.

Shenwan Hongyuan Securities (申万宏源) advises investors to prepare for oversold rebounds during a broad adjustment. It sees historically attractive short-term valuations and stronger efforts to stabilize expectations for the capital market, but says the fundamentals of technology sectors remain challenging and near-term positioning is under pressure. The scale and duration of an upward rebound may therefore be limited, while the market could take a long time to establish that it will not make new lows. In its view, thematic opportunities and industries supported by independent investment rationales may outperform heavily held institutional technology assets.

The brokerage’s preferred areas include domestic semiconductors and PCB, where fundamental analysis may again become more effective; embodied intelligence, medical AI, and AI safety, which have attracted attention from both industry participants and private-market investors; and sectors that may be tested by the persistence of trades associated with the Democratic Party’s electoral gains. Shenwan Hongyuan views relative strength in these groups as evidence that a rebound may still have room to run. If all three groups weaken, subsequent thematic rotation could become less robust and signal that the rebound is approaching its end.

China Galaxy Securities (银河证券) expects structural rotation to remain the near-term market pattern. After the market absorbed earlier positioning, the room for further declines may be limited, but the sustainability of a rebound still depends on trading volume. The U.S. midterm elections have reduced some previously priced-in uncertainty, easing upward pressure on Treasury yields and the U.S. dollar index, while the energy risk premium has fallen in the short term. External risks have not disappeared, however. The weak market performance on Friday appears to reflect sentiment transmission rather than a deterioration in fundamentals. The two major U.S. parties still share an interest in preserving U.S. leadership in AI, so China Galaxy recommends watching for recovery opportunities after rapid corrections.

For A shares, the brokerage prioritizes companies with technological breakthroughs, self-sufficiency, and the ability to convert orders into earnings. It recommends a barbell strategy. The growth-oriented side includes domestic computing power, semiconductor equipment and materials, AI applications, innovative drugs, and new energy; investors should note that valuations may fluctuate in some computing hardware and optical communications names even while their business conditions remain strong. The defensive side uses dividend-paying assets, including banks, utilities, and coal. Policy-driven projects may also create opportunities in power grids, energy storage and power equipment, building materials, and construction machinery.

Guosen Securities (国信证券) expects the sector composition of the current A-share rebound to persist. It attributes the recent recovery to supportive signals from regulators and the temporary resolution of some external uncertainties. Institutional positioning in technology may have approached a meaningful clearing point, reducing the pressure from crowded holdings. The prior adjustment has been substantial, and expectations are gradually improving, although risks related to the AI narrative and geopolitics remain. Historically, sectors with fresh catalysts and more complete valuation and positioning adjustments have often shown greater rebound potential.

Guosen’s first focus is technological self-reliance. Domestic technological progress and policy support are shifting the technology narrative from export-oriented technology toward domestic-demand technology, creating opportunities in storage, computing power, and semiconductor equipment and materials. Its second focus is dividends tied to consumer and cyclical sectors. Dividend assets retain medium- and long-term appeal, and investor allocations to them remain relatively low; attractive consumer and cyclical dividend stocks may therefore draw portfolio rebalancing. The brokerage also points to AI applications and agriculture as areas to monitor.

Gfund Securities (国金证券) says the appeal of Chinese assets is increasing. After the U.S. midterm election results and the Democratic Party’s sweep of both chambers, AI computing-power stocks faced concentrated selling and global risk assets came under substantial pressure. Gfund argues that the underlying stability of Chinese assets remains firm and that stronger recent efforts to stabilize the market are adding to their appeal. A slowdown in AI investment makes the path toward lower capital costs clearer: the initial phase may involve a simultaneous decline in returns on capital, but the later phase could create global opportunities. Some signs of earnings resilience and marginal improvement have emerged, leading the brokerage to seek defensive ideas through both macroeconomic and industry analysis.

Gfund expects gold to have an opportunity as U.S. real interest rates peak and move lower, while recommending attention to whether geopolitical tensions between the United States and Iran intensify again. It considers a medium-term bottom to be taking shape. After the near-term pressure test caused by falling prices, the energy chain may continue to benefit from global restocking demand and may prove resilient to changes in capital costs and geopolitical conflict. From an earnings perspective, Gfund highlights medical services and shipping and ports, where favorable business conditions may persist, as well as selected areas in nonferrous metals and chemicals. It also points to potential turnaround opportunities in selected textile and apparel businesses, paper, refining and trading, medical devices, express delivery, and dairy products.

Soochow Securities (东吴证券) expects a rebound accompanied by a moderate recovery in trading volume and prices, as uncertainties such as the U.S. midterm elections have passed. It sees the strongest potential for excess returns in AI applications downstream, particularly growth opportunities at the “0-to-1” and “1-to-10” stages, as well as in areas outside the AI chain where valuations are low and expectations are improving, such as domestic demand and defense. Over the longer term, cash-flow and dividend-oriented value assets may become important contenders for absolute returns.

Soochow Securities considers the decline in A-share computing hardware to have been substantial. Recent weakness in U.S. hardware stocks may represent the final sentiment-driven negative catalyst for A-share computing names over the medium term. Additional market-stabilization measures may constrain liquidity-driven downside risk, and valuations of some leading companies could attract investors with longer investment horizons. During the “lame-duck” period before the new U.S. Congress takes office, the industrial logic for domestic computing-power companies may be stronger than that for overseas peers.

Hu’an Securities (华安证券) says a rebound has begun and calls for confidence. Recent disturbances—including domestic and international third-quarter earnings reports, the midterm elections, and FOMC meetings—have passed. Potential sources of support include regulators’ determination to stabilize the market, the APEC summit meeting, and expectations for the Central Economic Work Conference. The brokerage views the Democratic Party’s restrictive AI proposals as a short-term shock that would be difficult to implement in full and that does not change the current rebound outlook.

Hu’an Securities describes the growth-sector cycle as being in a middle-stage period of consolidation and a late-stage period of accelerated gains. It sees a clear relationship in which large-capitalization stocks may fall less and rise more than smaller stocks during these phases. In the remaining accelerated phase of November, large-capitalization stocks may outperform. Representative AI hardware names similar to “Yi Zhong Tian Sheng” could rise by 20%-40%. The brokerage therefore favors oversold upstream and midstream AI hardware, while also considering high-alpha areas with strong business conditions or catalysts, including AI applications and agricultural products. In its view, dividend assets have become less attractive after an oversold-market rebound and as dividend yields approach a critical point.

Across the ten outlooks, the central message is selective rather than uniformly bullish. Several firms see the market’s adjustment as advanced or its downside as limited, but a sustained recovery is not guaranteed. Capital flows, trading volume, earnings forecasts, policy implementation, and global technology-sector sentiment remain important tests. Technology is still a major source of potential growth, yet the recommendations increasingly distinguish between AI infrastructure, domestic computing, semiconductor self-reliance, and downstream applications. At the same time, stable cash flow, dividends, and low-valuation industries are repeatedly identified as ways to manage market uncertainty.

A particularly important cross-brokerage data point is the forecast that TMT and midstream manufacturing may account for about 63% of profit growth in 2027. This estimate supports continued attention to technology and manufacturing, while the differing forecast trends across industries underscore why selection and earnings confirmation matter. Investors are also encouraged to monitor whether fourth-quarter profits recover in sectors facing downward revisions, whether orders translate into realized earnings, and whether market positioning becomes less crowded.

Key Insights Table

Afterwards...

Looking ahead, the market’s direction is likely to depend less on broad optimism and more on whether individual companies can demonstrate improving earnings, resilient cash flow, and measurable demand. Investors will be watching for evidence that technology and manufacturing forecasts are translating into realized results, while also assessing whether policy support and new capital can sustain the rebound.

The outlooks suggest that portfolios may benefit from balancing growth opportunities with sources of stability rather than relying on a single market narrative. Domestic technological capability, carefully selected AI applications, dividend income, and undervalued sectors linked to a recovery in demand all appear in the brokerages’ frameworks. These are strategic themes, not guarantees of performance: market volatility, global policy changes, and company-specific execution will continue to shape outcomes.

For now, the strengthening appeal of Chinese assets is a view grounded in relative resilience, supportive policy expectations, and the possibility of lower capital costs—not an assurance that uncertainty has passed. The next phase will be determined by how convincingly companies deliver on earnings and how steadily investor confidence returns.