Wu Xiaoping: In the next three months, which industries do you hope to focus on?

The economic data at the start of the year shows a strong rebound, and with moderately loose monetary policy continuing to take effect, the market is entering a structural opportunity window. In the next three months, profit recovery, price transmission, and technology differentiation will be the three main lines driving the market. By positioning in high prosperity directions in advance, one can seize opportunities amidst volatility.

I. Profit Upgrades: Manufacturing and High-tech Industries Lead the Way

In January and February, profits of industrial enterprises above designated size increased by 15.2% year-on-year, with over 60% of industries rebounding, as manufacturing and high-tech industries become the core engines. Manufacturing profits grew by 18.9%, while profits in raw materials manufacturing soared by 88.3%, with significant profit recovery in cyclical industries such as non-ferrous metals, chemicals, and non-metallic mineral products.

Profits in high-tech manufacturing surged by 58.7% year-on-year, with the semiconductor industry chain performing particularly well, as profits in discrete components and optoelectronic component manufacturing increased by 130.5% and 56.1%, respectively. The dual drive of demand for AI computing power and domestic substitution highlights the certainty of performance.

II. Price Increase Chain: Resource and Chemical Supply-Demand Mismatch Boosts Profits

Global geopolitical conflicts and supply contractions resonate, triggering a price increase cycle for resource products and basic chemicals. International oil prices stabilize above $100 per barrel, with upstream oil and gas extraction profits exhibiting the greatest elasticity; sulfur, acrylic acid, and other chemical products have seen price increases of over 50% this year, with some varieties reaching historic high prices.

In the electronic materials sector, copper-clad laminates and electronic resins have seen price increases of 30%-55% due to the explosive demand from AI servers, with the price increase effect transmitting along the supply chain. Upstream companies with cost advantages and pricing power will fully benefit from the price increase dividends.

III. Technology Differentiation: Computing Power and Hardware Lead, Consumer Electronics Under Pressure

The technology sector shows significant structural differentiation, with AI computing power and high-end hardware becoming the focus of investment. The storage chip and semiconductor equipment sectors are resilient against declines, benefiting from the acceleration of global AI computing power construction; breakthroughs in frontier fields such as brain-machine interfaces, optical communications, and quantum computing are continuously occurring, speeding up the commercialization process.

In contrast, the consumer electronics sector is experiencing growing pains, with mobile phone sales expected to decline by 10%. Rising costs and weak demand are squeezing profits from both sides, accelerating industry clearing.

Currently, liquidity is abundant, and economic recovery momentum is strong. In the next three months, investments should focus on directions with strong profit certainty, logical price increases, and high technology prosperity. The resonance of cyclical and growth opportunities means that structural opportunities are greater than index opportunities. Grasping the rhythm of industry rotation will enable one to lock in excess returns.

So how should we choose at the bottom?

On the evening of March 28 at 7 PM, we have specially invited the familiar Wu Xiaoping to share with everyone:

Theme: In the next three months, which industries should we focus on?

1. Which industries are seeing profit upgrades?

2. Which industries are part of the price increase chain?

3. Where is the differentiation in the technology sector?

Note: The content of this article is compiled by the editor based on the topic outline provided by the speaker and does not represent the speaker’s personal views, nor does it constitute any form of investment advice.