Zheshang Strategy: New momentum drives revaluation of traditional industries, with a market value + pro-cyclical combination capable of both offense and defense

CryptocurrencySniper · 2026-03-03T05:12:23+00:00

Affected by multiple factors, global technology asset fluctuations have intensified, and the A-shares market is entering the final stage. It is recommended to focus on large-cap value portfolios with pro-cyclical characteristics, including physical assets and technology manufacturing sectors. In the short term, style will lean more towards large-cap value, with a focus on consumer and cyclical industries. Risk warnings include the subjectivity of model design and the unsustainability of excess returns.

CryptocurrencySniper

2026-03-03 05:12:23

Abstract generation in progress

Core Points

Due to factors such as the nomination of the new Federal Reserve Chair, changes in AI narratives, rising geopolitical concerns, and uncertainties around US tariffs, global technology assets are experiencing increased volatility. Recently, A-shares sectors have been rotating more quickly, and trading styles have become more uncertain. The spring rally may be nearing its end, with short- to medium-term movements likely to be characterized by moderate strength and oscillations. In terms of style rotation, focus on large-cap value sectors with cyclical attributes. Industry allocation suggests that technology is driving a reassessment of traditional capacity values. It is recommended to focus on a balanced “large-cap value + cyclical” strategy: one part benefiting from global resource nationalism and AI capital expenditure, such as coal, oil, chemicals, transportation, non-ferrous metals, electricity, and machinery; the other part being technology manufacturing sectors with sustained growth, such as communications and new energy.

Summary

1. Style Rotation: Market Cap Focuses on Large Caps, Valuation Bias Toward Value, Industry Focus on Cyclical Styles

Market cap (size) style: Large-cap > Mid-cap > Small-cap, favoring large caps; 2) Valuation style: Value indices outperform growth, leaning toward value; 3) CITIC industry style: Consumption > Cyclical > Financials > Stable > Growth, with cyclical styles (consumption + cyclical) expected to perform better. Overall, by March 2026, focus on large-cap value sectors with cyclical attributes.

Halo trading activity is heating up, emphasizing tangible assets. AI technological innovation is rapid, with high barriers to entry and strong physical foundations (e.g., power grids) that are difficult to replace. Tech giants’ capital expenditures are rising sharply; whether this will generate high returns remains uncertain, but traditional heavy-asset infrastructure companies may see valuation re-ratings.

In the first year of the five-year plan, prices tend to rise easily, benefiting cyclical sectors. As 2025 marks the start of the “14th Five-Year Plan,” price recovery may be relatively smooth, driven by: 1) Major projects typically launched early in the plan, boosting fixed asset investment growth; 2) Fixed asset investment growth slowed to -3.8% in 2025, with the economic work conference emphasizing “stabilizing investment”; 3) Historically, PPI tends to rise strongly in the first year of a five-year plan. Additionally, recent global commodity prices have continued to rise, domestic capacity utilization has begun to recover, and the “anti-involution” sentiment remains strong, making price increases and spreading logical.

“Blood flow and rising body temperature”: M1 money supply was strong early on, and with lag effects, PPI is expected to continue warming. M1 usually leads PPI by about six months; the PPI is still about two months away from its previous high, and M1 has shown slight recovery amid fluctuations, indicating a broad downward trend in PPI may be ending. PPI recovery strongly guides net profit growth of listed companies; since Q3 2025, PPI has been rising steadily, and net profit growth across the market has been improving in tandem.

2. Industry Allocation: Under the Surface of Cyclical and Tech Strengths, New Drivers Are Reassessing Traditional Industry Values

Based on industry scoring, the top ten industries are coal, oil and petrochemicals, basic chemicals, communications, transportation, non-ferrous metals, non-bank financials, utilities, power equipment, and machinery.

Combined with fundamentals, technology is driving a reassessment of traditional capacity values. It is recommended to focus on a balanced “large-cap value + cyclical” portfolio: one part benefiting from global resource nationalism and AI capital expenditure, such as coal, oil, chemicals, transportation, non-ferrous metals, electricity, and traditional machinery; the other part being technology manufacturing sectors with ongoing growth validation, such as communications, new energy (space photovoltaics), and robotics (humanoid robots).

3. Next Month Sector Allocation: “Large-Cap Value + Cyclical” Balanced Strategy

In the coming month, style may favor large-cap value, with a preference for sectors with cyclical attributes. Industry focus should be on consumption and cyclical sectors. Allocation advice emphasizes a balanced “large-cap value + cyclical” approach: one part benefiting from global resource nationalism and AI investment, such as coal, oil, chemicals, transportation, non-ferrous metals, electricity, and machinery; the other part being technology manufacturing sectors with sustained growth, like communications and new energy (space photovoltaics).

4. Risk Warning

Subjectivity in model design, short or absent backtesting periods, unsustainable excess returns, high turnover rates that are unachievable or meaningless, and errors or abrupt changes in consensus forecast data.

(Source: Zheshang Securities)

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